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South Carolina Farm Bureau Offers Lump-sum Tobacco Buyout
Payment The tobacco buyout is a result of Congress passing legislation that ended the depression era tobacco quota system. The quota program limited the amount of and location where tobacco could be grown to help stabilize and increase prices to farmers. Tobacco quota has increased in value and tobacco production land prices have increased over the years. By ending the quota system, the Federal Government agreed to compensate quota owners and tobacco growers for their lost assets. Payments are to be made over a ten year period, starting later this year. SCFB President and Farm Bureau Bank Vice President David Winkles said Farm Bureau’s financial service is being made available to all tobacco growers and allotment holders through county Farm Bureau offices across the state. The Farm Bureau settlement plan will allow buyout recipients to be paid for the full amount of their buyout proceeds through a single transaction, less the cost to the bank of financing the upfront payment. The settlement program will deal with years two through 10 of the 10-year buyout period. The initial payment is expected to be made later this year directly to recipients. Winkles said full details of the service will be announced as soon as relevant information and documents are available from USDA’s Farm Service Agency, which will administer the buyout program. “The settlement service we are offering will be competitive with other plans being offered,” Winkles said. “We will offer the same attractive financial options to all allotment holders and growers, regardless of their crop size.” Winkles added, “The handling of tobacco buyout payments will be a very important financial transaction for many families, providing money to operate and expand farms for some, and retirement funds for others. We want to do everything possible to assist our families as they plan to receive and invest these dollars.” SCFB Insurance Companies Sales Manager Carl Derrick said he is planning for full details of the Farm Bureau plan to be announced by July, with county Farm Bureau offices ready to begin offering the service in August. “Farm Bureau is offering this financial settlement as a service to tobacco growers and allotment holders,” Derrick said. “The South Carolina Farm Bureau organization will not receive any compensation from the plan, but will work to assure competition in the marketplace so that farmers receive the highest return possible for their buyout payments.”
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