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News Release

Release No. 0415.05
Ed Loyd (202) 720-4623
Stevin Westcott (202) 720-4178

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Date Extended to December 2, 2005 for Those Electing to Sell Contract Payments to a Successor in Return for a Lump Sum

WASHINGTON, Oct. 4, 2005 - Agriculture Secretary Mike Johanns today announced that tobacco quota holders and producers have received more than $900 million under the Tobacco Transition Payment Program (TTPP), concluding the first of ten annual payments.

"Since the sign-up period closed in mid-June, USDA has quickly and efficiently delivered close to $1 billion in payments to tobacco quota holders and producers," said Johanns. "These payments are important to helping quota holders and producers transition from the old marketing quota system to the free market."

The Fair and Equitable Tobacco Reform Act of 2004 (P.L. 108-357), signed by President Bush on Oct. 22, 2004, ended the Depression-era tobacco quota program and established the TTPP, which provides annual transitional payments for 10 years to eligible tobacco quota holders and producers. Payments occur annually from 2005 through 2014 and are funded through assessments of approximately $10 billion on tobacco product manufacturers and importers. TTPP payments for 2005 have been completed and 2006 and subsequent year payments will be made every January 15th. Quota holders and producers who wish to sell their remaining nine annual payments to a successor in return for a lump-sum payment must do so by Dec. 2, 2005. Quota holders and producers who did not sign-up for the 2005 payment must enroll by Dec. 2, 2005 to receive future year payments.

The following TTPP payments have been made to date:

State Producer Payments Quota Holder payments Total Payments
ALABAMA 148,956 347,306 496,263
FLORIDA 3,414,362 7,953,531 11,367,893
GEORGIA 18,169,917 42,554,024 60,723,941
INDIANA 2,535,832 5,944,422 8,480,254
KANSAS 7,287 24,144 31,431
KENTUCKY 69,907,501 171,838,639 241,746,140
MINNESOTA   26,755 26,755
MISSOURI 946,184 2,219,206 3,165,390
NORTH CAROLINA 114,671,594 268,944,452 383,616,045
OHIO 3,049,126 7,416,097 10,465,223
OKLAHOMA 257 713 971
SOUTH CAROLINA 21,380,501 49,378,962 70,759,463
TENNESSEE 22,564,500 50,325,131 72,889,631
VIRGINIA 17,665,602 41,544,245 59,209,848
WEST VIRGINIA 697,074 1,371,541 2,068,615
WISCONSIN 1,213,672 4,538,152 5,751,823
Total 276,372,364 654,427,321 930,799,685


Quota holders and producers are permitted, at their option, to transfer their payments to third parties through two different mechanisms: assignments of payments and successor-in-interest contracts. Quota holders and producers may assign their payments to another party, or parties, beginning with the 2005 payment by submitting Form CCC-959, Tobacco Transition Payment Program Assignment of Payment. Assignments are revocable only by the assignee; the assignor retains all rights and obligations under the contract.

Successor-in-interest contracts facilitate lump-sum payments to quota holders or producers. Successor-in-interest contracts are not revocable upon approval and the successor assumes all rights and obligations under the contract in return for consideration equal to or greater than the USDA Commodity Credit Corporation's (CCC) TTPP discount value rate. Entities wishing to be successors-in-interest are required to first register with CCC by submitting Form CCC-963, Tobacco Transition Payment Program Account Registration to:

U.S. Department of Agriculture Tobacco Division, Room 4080-S 1400 Independence Ave, S.W. Stop 0514 Washington, DC 20250-0514 or by fax to (202) 720-1288.

Beginning Oct.17, 2005 successors may submit to CCC, Form CCC-962, Agreement to Purchase Tobacco Transition Payment Contract and Form CCC-968, Tobacco Transition Payment Program Master Successor-in-Interest Contract. In order to succeed to the remaining nine annual payments, successors must submit these forms no later than Dec. 2, 2005. Form CCC-968 is an optional form that allows for all contracts submitted by a successor to be consolidated automatically. It also allows for the division of payments. If a successor does not submit Form CCC-968, consolidation or division of contracts will likely not be available before the Jan. 15, 2006 payment. Therefore to facilitate successor-in-interest contracts, CCC recommends successors submit Form CCC-968 with their registration form. Information on how to submit these forms will be available on FSA's tobacco Web site, by Oct. 17, 2005.

A list of the names of the original contract holders, the contract numbers, the 10-year value of the contract and those entities or persons that have registered to be successors are posted to the USDA Farm Service Agency (FSA) Web site at Required forms may also be found at this Web site or at Forms that allow consolidation or division of contracts will be available later this year.

Beginning in early November, quota holders and producers may transfer contract rights: among family members; to persons who assigned permanent quota to their land prior to Oct. 22, 2004; or due to the death of the original contract holder by visiting the county office where the original contract was approved.