Congressman Proposes Buying Out Tobacco Quotas

A North Carolina congressman has introduced a bill calling for a buyout of the federal tobacco quota system.

"Our farmers want to have an element of certainty with their futures," Rep. Mike McIntyre, D-N.C., said Wednesday.

"What we are trying to do in this legislation is bring all elements together that would positively help the farmers and help us move forward in constructive ways to help communities and the agricultural economy in North Carolina."

The legislation would affect farmers all over the country.

Each year, the federal government decides how much tobacco will be grown and sets a quota. Quota holders may grow their portion of that quota, or lease it to farmers.

If farmers or quota holders exceed the quota, they pay a penalty.

Under a buyout, quota owners would be paid to give up their quota. Farmers would be paid as well, giving them the option of growing other crops or getting out of farming altogether.

In the buyout McIntyre proposed, quota owners would be paid $8 a pound for their quota, and farmers would be paid $4 a pound. Money for the buyout would come from a user fee charged to tobacco companies.

The tobacco stabilization program and the quota system have been in place since the 1930s to keep prices stable. But the system has been faltering as farmers contract directly with cigarette companies and bypass auctions.

Robeson County tobacco farmer Larry Sampson said the buyout was needed.

"The program has been around for so many years, and it's just not working anymore," Sampson said. "This moves us into another tradition with tobacco farming in America. If the program failed without compensation, it would be a disaster."