On October 22, 2004 Congress enacted the, “Fair and Equitable Tobacco Reform Act of
2004 which repealed the tobacco quota system for certain types of tobacco grown in
the United States and provides for compensating tobacco quota holders and quota producers
with the value of lost quota. The United States Department of Agriculture (USDA),
in its regulations, established the TTPP also known as the Tobacco Buyout, whereby
eligible quota holders/producers, who apply for the program, can receive annual installment
payments over a 10-year period (2005-2014) as compensation for lost quota.
The TTPP does not provide for a lump sum payment in lieu of the installment payments.
However, it permits the quota holder/producer to enter into an assignment or successor-in-interest
contract and receive a discounted cash payment in exchange for the installment payments.
The successor-in-interest option to contract with financial institutions first became
available 10/14/2005 after receipt of the 2005 installment payment. The successor-in-interest
option to sell the contract to a family member was effective 03/20/2006.
An individual could have multiple USDA contracts if they owned quota or produced eligible
tobacco in different counties.