Sequester Cuts Could Cost Kentucky Tobacco Farmers Millions of Dollars

Nov 20, 2013

Kentucky tobacco farmers stand to lose an estimated $12 million because of federal budget cuts related to the sequester. Those cuts are scheduled to hit the next round of price support payments sent to about 100,000 Kentucky tobacco farmers and quota holders.

Kentucky Farm Bureau President Mark Haney told WKU Public Radio the payments should be exempt from the federal spending cuts.

"This shouldn't even be considered for sequestration because it's actually a contract that was signed between the tobacco producers and the tobacco manufacturers. Really, the federal government was just holding the money and making the program work."

Haney says members of Kentucky's congressional delegation and farm lobby are teaming up with their counterparts in other states as the next tobacco quota payment nears.

"The North Carolina delegation, Tennessee, and Virginia--states that really had the lion's share of this tobacco quota that was sold. We are in unison working with those groups.”

Congress passed a 10-year buyout in 2004 to help tobacco farmers after a price-support system was ended. That program was to pay $10 billion a year for a decade.