March, 2003

Quotas for dark air-cured, fire-cured, sun-cured, cigar filler & binder tobaccos are treated differently than burley and flue-cured tobaccos. The U.S. Department of Agriculture (USDA) calculates a quota that is converted to an allotment. The marketing year for all tobaccos covered in this fact sheet begins October 1.

The Agricultural Adjustment Act of 1938, as amended, authorizes marketing quotas on an acreage allotment basis for various kinds of tobacco, except cigar wrapper and perique. The Agricultural Act of 1949, as amended, sets the price support at the previous year's level, with an annual adjustment based on the change in a parity index average.

Marketing quotas, having been approved by more than two-thirds of the producers, are in effect for the following tobaccos and crop years:

Producers in March 2001 disapproved marketing quotas for 2001, 2002, and 2003 crops of Maryland (type 32), Pennsylvania cigar-filler (type 41), and Connecticut Valley cigar-binder (types 51-52) tobaccos. The next referenda for those three kinds are scheduled to be held in March 2004. In addition, a referendum was held in March 1996 for Cigar Filler (Type 46) tobacco in which no one voted. Because this kind of tobacco is no longer grown, a special ruling was made accepting the referendum as a "No" vote and absolving producers from future referenda unless they actively petition the Secretary of Agriculture to reinstate the quota process.

Following are 2002 national acreage allotments compared to 2001:

Producers who exceed acreage allotments for tobaccos under marketing quotas are subject to marketing quota penalties. The penalty rate is 75 percent of the previous year's average market price.

National support levels for the 2002 crops are up around 2 percent from 2001 levels. USDA sets individual grade rates before the marketing season begins:

Nonrecourse loans are available on 2002 production for the five quota tobaccos listed. Price support is provided to growers through producer associations under contractual terms with USDA's Commodity Credit Corporation (CCC). The associations receive the tobacco not sold at the support rate, using funds loaned by CCC.

Producers are required to certify that they have not nested their tobacco and also that pesticides used in producing tobacco have been approved by the Environmental Protection Agency and that these products have been used in accordance with label directions.

As a condition of price support eligibility, producers of these various kinds of tobacco must pay an assessment on each pound of tobacco marketed to ensure the price support program operates at no net cost to taxpayers, as required by the No Net Cost Tobacco Program Act of 1982.

Note: Please see Other Tobaccos PDF for the following table:

Other Tobaccos Program Summary

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (braille, large print, audiotape, etc.) should contact USDA's TARGET Center at 202-720-2600 (voice and TDD).

To file a complaint of discrimination, write USDA, Director, Office of Civil Rights, Room 326-W, Whitten Building, 1400 Independence Avenue, SW, Washington, D.C., 20250-9410, or call (202) 720-5964 (voice or TDD).

USDA is an equal opportunity provider and employer.