Tobacco Farmer Assistance Totals $328 Million

December 29, 1999

USDA will distribute $328 million to compensate tobacco producers in states that suffered a reduction in tobacco quota or acreage for the 1999 crop year. Quota is established each year based on expected supply and demand.

In recent years allotments and quotas for some kinds of tobacco have been reduced significantly, according to USDA. Between 1998 and 1999 the flue-cured quota was reduced 17%, burley was reduced by almost 30%. Kentucky-Tennessee fire-cured allotments were reduced by 5% and the allotment for Wisconsin binder was reduced 35%. Producers of those types of tobacco will share in the $328 million to defray lost income from the declining quotas and allotments.

States that are party to the National Tobacco Growers Settlement Trust will distribute the additional funds USDA is making available to eligible farmers in the state according to formulas established to distribute trust payments. If a state is not party to the trust, the state may distribute the funds in a manner determined by the state and approved by the Secretary of Agriculture.