Buyout wil bring millions to Wayne
By Staff and Wire
Published in News on October 12, 2004 2:01 PM
Wayne County farmers and quota owners should be receiving around $134 million spread over 10 years thanks to the passage of the tobacco buyout, and many are pleased with the results.
"I'm tickled to death, it was more than I thought we would get," said Ros Ballance with W.R. Ballance and Sons in Fremont.
Ballance has around 16,780 pounds in the family corporation and about 10,000 more pounds outside the corporation. Three family members own the pounds and lease them out.
This means they should be receiving around $187,460 total over the next 10 years to be divided between the three of them.
The payments are based on the 2002 tobacco quota allotment. The allotment for Wayne County was 13.4 million pounds, according to Rick Tharrington with the Farm Service Agency. There were 6,000 acres of tobacco in the county in 2002.
The buyout provides payments of $7 per pound to quota holders and $3 per pound to growers. The payments, based on the 2002 quota level, would be distributed over a 10-year period.
Quota owners in Wayne County would receive a total of around $93.9 million.
Tharrington estimated that there are 4,500 owners in the county, so they would receive, on average, around $20,865 spread over 10 years. But some will receive much more than that. The larger farms in the county could receive as much as $1 million to $4 million.
Growers would receive a total of around $40.2 million. There are 436 growers in the county, so they would receive, on average, around $92,292 spread over 10 years, Tharrington said.
Ballance said he has felt that the tobacco program has been on the way out since the early 1980s. He said having FDA regulation does not make a whole lot of difference if the quotas are bought out. The final version does not have FDA regulation of tobacco products.
He hopes that tobacco will still be raised in the area because it affects the economy greatly, and he hopes that, from an owner's perspective, farmers continue to lease their land.
Jake Price, 61, has 100 acres of tobacco in Wayne County and 50 in Duplin County. He said this is the first time he has experienced something like this.
"I don't know what the future will bring," he said.
He said he is not sure how much money the growers and quota owners will have after it is all over, although some is better than none.
"It is the best of the choices," he said.
Andy Evans has tobacco in northern Wayne, Wilson and the edge of Johnston counties. He said he is glad the buyout passed, but is disappointed that the congressional representatives did not hang on to the $8 and $4 provision in addition to continuing to have the phase II payments. As far as he understands, those payments, which were to pay farmers for the difference of lost quota, will go away because of the buyout.
He said the aftermath is uncertain. It is hard to say who will stay in the business. Some people may feel as if it is a good time to retire, while others may say they are too young to quit farming.
A final version of the tobacco buyout was passed Monday by the United States Senate.
"Passing the Tobacco Quota Buyout has been my top priority since arriving in the US Senate and I'm thrilled that we were able to get this done," said Sen. Elizabeth Dole.
"It is critically important for our farm families and will provide an economic ripple effect throughout rural North Carolina. Today is truly a historic day for the state of North Carolina."
Sen. Dole, U.S. Rep. G.K. Butterfield and U.S. Rep. Walter Jones all voted in favor of the buyout.
Sen. John Edwards did not vote, he was absent due to campaigning.
The $10.1 billion buyout deal was part of a $136 billion corporate tax package approved 69-17 in the Senate and now headed to President Bush to be signed into law.
"We have crossed the finish line," U.S. Rep. Mike McIntyre, D-N.C., said after the Senate gave final approval. "And a dream has come true for North Carolina."
The buyout is poised to end decades of leaf production under a Depression-era quota system that kept prices artificially high and critics said put U.S. growers at a disadvantage.
Payments, to be made over 10 years and funded by a fee on tobacco manufacturers, will be based on 2002 production levels. Those who quit farming before 2002 will receive nothing.
With about 76,000 tobacco farmers and allotment holders, North Carolina should receive the largest portion of the $10.1 billion buyout. About $500 million of the money will be used to buy all tobacco left in reserve from the quota system.
Democratic vice presidential nominee and North Carolina Sen. John Edwards was campaigning Monday and didn't vote. With the bill projected to pass by a wide margin, Edwards didn't see the need to return to Washington, said Mike Briggs, an Edwards spokesman.
Jimmy Lee, a Johnston County quota holder worried that the buyout comes too late to save the state's tobacco industry.
"It didn't have to wind up this way," said Lee, who this year rented out his allotment for the first time since starting to grow leaf 32 years ago. "It would have been a lot better if we had gotten it three or four years ago."
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