Tobacco Payments
Tobacco Transition Payment Program (TTPP) Or “Tobacco Buyout”
On October 22, 2004, Congress enacted the Fair and Equitable Tobacco Reform Act of 2004 (the “Tobacco Act”) as part of the American Jobs Creation Act of 2004. The Fair and Equitable Tobacco Reform Act of 2004 or “Tobacco Act”, enacted by Congress, repeals the federal tobacco quota programs and price supports.
Because of this, the government has agreed to buyout the tobacco quota holders and producers by paying Tobacco quota holders and producers equal annual payments over a 10-year period beginning in 2005 through 2014. These payments are collected through assessments charged to tobacco manufacturers and importers.
The Tobacco Act also allows quota holders and producers to transfer or assign the payments to a financial institution, such as Tobacco Funding Advance, giving that institution the right to receive the contract payments in exchange for a lump sum or other payment to the quota holders.
For more information about the Tobacco
Transition Payment Program, visit the
USDA Farm Service Agency website.