March, 2003

Marketing quotas limit the amount of tobacco that a producer can sell in a given year. Farm marketing quotas on a poundage bases are in effect for 2002-crop burley tobacco. The marketing year for burley tobacco begins October 1.

Since 1971, the Agricultural Adjustment Act of 1938, as amended, has authorized burley poundage quotas in lieu of acreage allotments. The statutory authority was further amended in 1986 to revise the formulas for the marketing quota and price support level. By 97.4 percent, producers voting in a February 2001 referendum approved the poundage program for the 2001-2003 crops.

The national marketing quota for the 2002 burley crop is 324.2 million pounds, 2.3 percent less than the 2001-crop quota. Under poundage marketing quotas: if the marketings from a farm are less than the poundage quota for the farm, the difference is added to the farm's quota for the next crop year. Marketings above a farm's poundage quota are deducted from the next year's quota.

The national support level for the 2002-crop burley tobacco is 183.5 cents per pound, 0.9 cents above that for 2001. The U.S. Department of Agriculture (USDA) sets individual grade rates before the marketing season begins.

As a condition of price support eligibility, both burley tobacco producers and buyers must pay a no-net-cost assessment for the 2002 crop. The no-net-cost assessment has been set at 1 cent per pound for both producers and buyers for the 2002-crop year.

Price support is available to qualified growers through the Burley Tobacco Growers Cooperative Association and the Burley Stabilization Corporation under contractual agreement with USDA's Commodity Credit Corporation (CCC). The stabilization cooperatives automatically buy the tobacco not sold at the support rate, using funds loaned by CCC. Up to 103 percent of a farm's poundage quota is eligible for support. Producers are required to certify that pesticides used to produce their tobacco crop have been approved by the Environmental Protection Agency and that these products have been used in accordance with label directions.

As of December 31, 2001, the two stabilization cooperatives held 58 million pounds of tobacco, packed weight, with an outstanding debt of $197 million.

Note:

A chart containing burley tobacco national marketing quota and other information can be found at: Burley Tobacco PDF

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