Tobacco Transition Payment Program Law and Legal Definition

Tobacco Transition Payment Program is a federal initiative that helps tobacco quota holders and producers in transition to the free market. It is also called tobacco buyout. The program provides annual transitional payments for 10 years to eligible tobacco quota holders and producers. Quota holders are landowners of a farm where a tobacco quota was assigned. To be eligible under this program, quota holders should be producers who grow tobacco in more than one county. If a quota holder dies, the right to receive payment will be transferred to the surviving spouse. If there is no surviving spouse, the right to receive payment will be transferred to the estate of a quota holder. Producers also include owners, operators, landlords, tenants, or sharecroppers who share the risk of producing tobacco.

However, according to 7 CFR 1463.110, a quota holder must refund all payments received under the program, if the quota holder has :

1.Erroneously represented any fact affecting the program;

2.Adopted any scheme or device that tends to defeat the purpose of the program; or

3. Made any fraudulent representation affecting the program.