Tobacco Quota Buyout

RS22046 -- Tobacco Quota Buyout

Updated December 31, 2005


Tobacco quota buyout legislation (Title VI of P.L. 108-357 (H.R. 4520)) terminated U.S. tobacco farm price support (nonrecourse loans) and domestic production controls (marketing quotas) after the 2004 crop year. An assessment on tobacco product manufacturers and importers will generate about $9.6 billion over 10 years for compensatory payments to tobacco quota owners and active tobacco producers. Beginning with the 2005 crop, there are no restrictions on who can grow and market tobacco, where it can be grown, and the amount that can be grown and marketed. (This report will not be updated.)