RALEIGH -- Tobacco farmers are speaking out about federal government plans to reduce their final Tobacco Buyout Payment. This 10-year deal is set to end in January and was meant as a way to transition tobacco producers to the free market. But now, the final check will be less than promised due to federal sequestration cuts.
Dudley Langdon is a fourth generation tobacco farmer. His family has been working the land in Harnett County since 1888. For him, tobacco farming is a way of life, although he says, it is a tough row to hoe.
“My wife and I were married 30 years ago,” said Langdon. “We are in the same house. There's no bass boats, there's no motorcycles. There's no luxury items in our household.”
In 2004, The American Jobs Creation Act was signed off on by Congress. Part of the act was the Tobacco Transition Payment Program, which is commonly referred to as the "tobacco buyout."
In the buyout, tobacco producers would get a 10-year payment to transition the market from a government price support program to a free market. The buyout money is being paid by cigarette manufacturers and dispersed by the USDA. But now, the US Department of Agriculture says the final check will be smaller due to federal sequestration.
“To me it doesn't seem any rhyme or reason why the federal government can say these funds are general obligation funds in the us treasury, and therefore, subject to a seven and half percent cut,” said Sen. Kay Hagan, a North Carolina Democrat.
Hagan has joined the rest of North Carolina's Congressional delegation and other members of Congress opposed to this cut by sending a letter to the USDA late last month, saying:
The "USDA has a responsibility to honor its commitment to our farmers, and the financial institutions that securitized TTPP payments."
The North Carolina Farm Bureau agrees.
“This is tantamount to a taking by the federal government, we think,” said Larry Wooten with the Farm Bureau.
The Farm Bureau has joined forces with farmers, quota holders and elected leaders to try to reverse the decision, but time is running out. The final check is expected to be sent out in January.
“In this area, typical farm land will rent anywhere from $40 to $100 an acre. And if you've got a 40 acre farm and half of it is crop land, that is not a lot of income. So they are really dependent on this buyout money.”
The USDA sent a statement about the decision to sequester the Tobacco Transition Payment Program funds saying sequestration specifically exempted certain programs from the cuts, but the buyout was not one of them. It went on to say because the farm bill will run out, there is no extra money to cover the cuts in 2014.