Raleigh, N.C. — Members of North Carolina's congressional delegation are lobbying the U.S. Department of Agriculture to head off an attempt to lump federal payments to tobacco farmers into the budget that's subject to across-the-board cuts in January.
The second round of sequestration is set to take effect Jan. 15 unless Congress can reach a new budget deal, but U.S. Sens. Richard Burr and Kay Hagan and U.S. Reps. Mike McIntyre, Renee Ellmers and Richard Hudson maintain that the Tobacco Transition Payment Program should be excluded from the process.
The TTPP is part of a settlement the government reached with tobacco farmers in 2004, when the tobacco quota and price support system was eliminated. The government promised to provide farmers with annual payments through 2014 to ease the transition to the free market.
The North Carolina members of Congress say that, since the TTPP is funded by fees paid by tobacco companies and not by tax revenue, it shouldn't be part of the sequester.
"TTPP was a 10-year commitment to our farmers and their families," the three U.S. House members wrote in a letter to Agriculture Secretary Tom Vilsack and Sylvia Burwell, the director of the Office of Management and Budget. "USDA has a responsibility to honor its commitment."
"Using sequestration as a mechanism to siphon a portion of these non-tax payments and using them for the purpose of deficit reductions runs counter to Congressional intent," Burr wrote in his own letter to USDA and OMB officials.
North Carolina farmers are owed the largest portion of the $1 billion in 2014 TTPP payments. It's unclear how much of that could be withheld under the sequester.
"It does not matter whether the U.S. government decides to hold hostage all or just a portion of the millions of non-taxpayer dollars owed to North Carolina tobacco farmers, our state's economy and its largest industry – agriculture – will be negatively impacted," Larry Wooten, president of North Carolina Farm Bureau, said in a statement. "We understand the fiscal realities that led to the sequestration of funding for other federal programs, but North Carolina citizens, in good faith, signed these binding contracts with their own government, and many have already factored these payments into their business plans for 2014."