For a long time, tobacco has been a vital piece of South Carolina’s history.

Dating back

to the 17th century in U.S. growth, it has helped grow the U.S. into what it is today. Not too long

ago, the American tobacco industry completely changed. On October 24th, 2004, President

George W. Bush signed and enacted the Tobacco Transition Payment Program (TTPP), as part of

the Fair and Equitable Tobacco Reform Act, after almost being tragically repealed and left out of

the act, leaving tobacco farmers in economic ruins. Once the TTPP was passed, it triumphantly

provided a safety net to tobacco quota holders and significantly affected South Carolina’s

economic history.

The Tobacco Price Support Program was “first created in the 1930s along with other

commodity support programs” (Womach 1) as part of the Agricultural Adjustment Act (AAA).

The AAA provided federal tobacco quota programs which provided quota limits for tobacco

farmers in the United States. When this act was originally passed, it was helpful to the tobacco

economy and agricultural economy in the United States, but this was short lived. The program

also had no government net cost, which would eventually lead to its demise. Leading up to the

signing and enactment of the Tobacco Transition Payment Program (TTPP), the tobacco market

had been decreasing in South Carolina as well as many other southern states. In 1920, there were

an estimated about of 1.75 million acres dedicated to tobacco farming in the south while there

were only about 0.4 acres dedicated in 2004 when the program was passed. Also, there were

about 500,000 tobacco farms in the south in 1960, while in 2004 there were only around 80,000

tobacco farms (Hart 4). The decreasing market led to the United States federal government

looking to find solutions for their troubles. For multiple years there had been a call for an update
to the federal tobacco market. In May 2004, the Southeast Farm Press published a paper stating

that “at a recent Senate sub-committee hearing (they) point out the economic ‘necessity of a

tobacco buyout” (Yancy 1). There were then plans for the program to be enacted, but then “the

tobacco buyout (was) stalled” (Yancy 1). The U.S. house of representatives had called multiple

hearings in which they “voted… to prohibit a nearly $10 billion to tobacco farmers… just a

month after the same lawmakers approved it,” despite of the “10,000 signatures seeking a

buyout” (Yancy 4). This indecisiveness would create a “battle for the buyout,” through rigorous

trials and hurdles in the coming months.

In truth, there were great arguments on both sides of the tobacco buyout war. From the

government’s point of view, it would be costly to them, maybe even more than they expected. It

would total at “$10 billion asseted on tobacco product makers and importers” (Bracken 1). This

government would be paid federally if it were to succeed, though they were not supporting this.

Even through the countless struggles of the people, the government still denied the buyout.

Through the increasing debt the United States government already had upon themselves, this

would not be great to add on. On the other hand, tobacco farmers needed the buyout or they

would be lead to economic devastation. After the government had been protecting the tobacco

farmers since the passing of the AAA, they were not economically prepared or knowledgeable of

the free tobacco market in the most part, leading to farmers not being prepared for this change.

They would not for the new hurdles they would have to face without the government protection,

many farmers would not be able to sustain themselves anymore. So that the tobacco quota

holders could carry on peacefully without economic struggles, they began to request the
government buy out the tobacco industry through payments which would allow them to adjust to

carrying on independently. Though “​buyouts of the tobacco quotas have been discussed heavily

since the 1990s,” it did not become very apparent until “Rep. Ernie Fletcher of Lexington has

introduced one of the bills.. before Congress” (Skillman 1). It was mostly brought back to the

table when the representative mentioned it, and it was then moved from the House to the House

Committee on Agriculture (United States, House) in March 2004. It would be continued to be

pushed forward through the political ladder in the next few months leading to the bill arriving in

the oval office.

After the struggle made between the government and growers, it would officially end

with the passing of the act. The act was officially passed by the house and then signed by

President George W. Bush on October 24th, 2004, it made history in the tobacco market. The

congresspeople who worked towards the program would call it’s timing a “miracle by the grace

of God” which “took patience and persistence.” The Southeast Farm Press would report that the

“timing was right for tobacco buyout” (Yancy 5). Once the buyout was in place, it would

immediately terminate the previously used and outdated quota and price support programs as

well as provide a payment program for tobacco quota holders to adjust to their new and

ever-changing market. This new program would immediately begin to affect the United States

tobacco market. It would let smaller tobacco farms shrink or cease, while it let bigger time

farmers benefit. While tobacco farms with 0.1-0.9 acres of land would change from 9,519 in

2002 to 235 in 2007 and the number of farms with 1.0-1.9 acres of land would change from

14,323 in 2002 to 1,492 in 2007 (continuous decreasing acres up to 49.9 acres), while tobacco
farms with 50 or more acres would change from 1,821 in 2002 to 1,976 in 2007 (Hart 2). Overall

this shrinks the 56,997 tobacco farms in 2002 down to 16,234 in 2007. These larger farmers

could begin to earn more, while smaller time farmers could either grow to larger sizes or focus

on a different, more beneficial area of farming.

Payments would continue for these farmers until the ten-year date of 2014. At this point,

the farmer's payments would be delivered generally with some exception. North Carolina

farmers would have to “wait a little longer than usual to receive their final payment” (Bracken

1). They would receive the begging of their payments in late February, compared to the usual

early January, coming from the first January payment in 2004. While at this time the NC farmers

would earn the majority of their payments, they would then receive the rest in the fourth quarter

of the year. There was a temporary delay but did not have much of an effect on the overall

impact of the TTPP. On the other hand, other states, including South Carolina, were not affected

by these late payments. Once the program had concluded, it would not be forgotten. It would

continue to affect the economy in the coming years.

Through all the struggles and battles to get the program in place and its ten-year duration,

the TTPP made many effects on not only South Carolina but the entire United States’ economy.

As previously mentioned, it substantially decreased the number of tobacco farms while letting

larger farms to grow. Overall, the program would make over 380,000 payments totaling 6.67

billion dollars, an average of around $17,358 per individual payment to a farmer, much less than

the original $10 billion expected (Blake 5). While states such as North Carolina, which totaled
$1.7 billion in payments, or Kentucky, which totaled at $1.7 billion, were affected the most,

South Carolina and other states were also majorly affected, South Carolina alone receiving half a

billion dollars amongst nearly 18,000 different payments. Without this program, it is hard to

predict the devastating impact of which would be shed down upon tobacco quota holders from

the original Agricultural Adjustment Act. It could be said that without it, it would be a tragedy

for tobacco farmers in the majority. Overall, it was a massive triumph for the American

economic history. The program was able to slow the decreasing tobacco economy in America,

though this was expected as its real purpose was the protection of farmers.

In conclusion, tobacco is a vital piece of South Carolina’s history. The Tobacco

Transition Payment Program (TTPP) helped for tobacco quota holders to adjust to the new

market by providing a safety net. If the program did not become law, and was tragically

repealed, there would have been economic destruction in the southern tobacco industry. Instead,

it was passed and became a triumph for tobacco farmers in South Carolina. All in all, the TTPP

significantly1`` contributed to the country's tobacco markets as well as South Carolina’s

individually and still is, one way or another, helping its economy today. In the coming years, it

will continue to affect the tobacco farmers that still hold up through the years.
Womach, Jasper. ​Tobacco Price Support: An Overview of the Program​. 31 Dec. 2005.
​National Aglaw Center​, nationalaglawcenter.org/wp-content/uploads/assets/
crs/95-129.pdf. Accessed 20 Nov. 2018.
Hart, John Fraser. "The Initial Impact of the Tobacco Buyout Program." ​The
​Geographical Review​, vol. 101, no. 3, July 2001, pp. 447-57,
scsl.idm.oclc.org/
login?auth=discus&url=http://search.ebscohost.com.scsl.idm.oclc.org/
login.aspx?direct=true&db=aph&AN=66592184&site=ehost-live. Accessed 2 Nov.
2018.
Brown, Blake. ​The End of the Tobacco Transition Payment Program.​ ​NC State
​University​, tobacco.ces.ncsu.edu/wp-content/uploads/2013/11/
The-End-of-the-Tobacco-Transition-Payment-Program.pdf?fwd=no. Accessed 8
Oct. 2018. The article helped me further understand the end of the TTPP
with a long summarization, tables, and figures. This will help me form my
project by extensively providing data and personal opinion from a
professional
---. "Growers call for tobacco buyout." ​Southeast Farm Press,​ 5 May 2004, pp.
1+. ​Academic Search Premier​, scsl.idm.oclc.org/
login?auth=discus&url=http://search.ebscohost.com.scsl.idm.oclc.org/
login.aspx?direct=true&db=aph&AN=13027206&site=ehost-live. Accessed 2 Nov. 2018.
---. "Tobacco buyout stalls." ​Southeast Farm Press,​ 19 Nov. 2003, pp. 1-2.
​Academic Search Premier,​ scsl.idm.oclc.org/
login?auth=discus&url=http://search.ebscohost.com.scsl.idm.oclc.org/
login.aspx?direct=true&db=aph&AN=11479540&site=ehost-live. Accessed 2 Nov.
2018.
"House Votes Down $10B Tobacco Buyout." Fox News, 14 July 2004, www.foxnews.com/
story/house-votes-down-10b-tobacco-buyout. Accessed 26 Oct. 2018.
---. "Timing was right for the tobacco buyout." Southeast Farm Press, 5 Jan.
2005, pp. 5+. Academic Search Premier, scsl.idm.oclc.org/
login?auth=discus&url=http://search.ebscohost.com.scsl.idm.oclc.org/
login.aspx?direct=true&db=aph&AN=15603205&site=ehost-live. Accessed 2 Nov.
2018.
Braken, David. "Final tobacco buyout payment comes a bit later for NC farmers."
The News & Observer, 4 Feb. 2014, www.newsobserver.com/news/business/
article10292219.html. Accessed 5 Oct. 2018.
Skillman, Laura. "Proposed Tobacco Buyout A Complex Task." ​University of
​Kentucky News​, 7 Aug. 2002, news.ca.uky.edu/article/
proposed-tobacco-buyout-complex-task. Accessed 17 Dec. 2018.
United States, Congress, House. Fair and Equitable Tobacco Reform Act of 2004.
25 Mar. 2004, www.congress.gov/bill/108th-congress/house-bill/4033.
Accessed 17 Dec. 2018. House Bill 4033.