Glacier FarmMedia COVID-19 & the Farm

Tobacco transition funds to flow by March 31

The federal government’s plans for a program to ease Ontario farmers out of the tobacco sector are now moving toward a March 31 start.

In a new fact sheet issued Monday, the federal agriculture department said the approval and launch of the $286 million program, originally announced in late July 2008, now depend on two “key conditions.”

The province must commit to eliminate production controls and to implement a new licensing system for flue-cured tobacco grown in Ontario, the federal government said.

To that end, Agriculture and Agri-Food Canada (AAFC) said it has worked “diligently” with the province and the Ontario Flue-Cured Tobacco Growers’ Marketing Board to make sure these conditions will be met. “There has been significant progress on these conditions and it is expected that continued collaboration will be successful,” AAFC said.

Once those conditions are met, federal funding worth $1.05 per pound of basic production quota (BPQ) will be released for producers who want to transition out of the industry. Farmers who take part in the program must commit not to re-enter tobacco production.

“There is adequate funding available under the program to allow all producers to exit the industry,” AAFC said.

“Each producer will need to examine his or her own situation and make a choice as to whether or not to participate in the program,” the government said. “Producers who do not participate in the program and remain in tobacco production will not receive funding and will require a license to produce tobacco.”

On top of the $286 million in transition funds, AAFC in July pledged another $15 million for community development, to help affected communities transition to a “non-tobacco based economy.”

Once the details of the program are set, officials from AAFC and the Ontario tobacco growers’ marketing board will convene a briefing, which the government said will provide producers with the information needed to help them make “informed choices” about their participation.

“Tobacco money”

The $301 million in transition program funds are the result of a settlement between the federal government and tobacco manufacturers, AAFC noted. “This is tobacco money for tobacco farmers.”

The Ontario Flue-Cured Tobacco Growers’ Marketing Board said in October 2008 it would “redouble” its efforts to get “fair and reasonable” terms for a transition program, after having accepted what it called “dreadful” terms from the tobacco trade for the sale of growers’ 2008-09 crop.

The board’s deal for 2008-09 with the trade’s Tobacco Advisory Committee ultimately called for a total crop size of 23.15 million pounds, down 27.7 per cent from the 2007 target of 32 million and equal to 8.52 per cent quota utilization, the board said.

“At this price, the 2008 crop will generate only $45 million — $28 million less than the gross value of the 2007 crop and a whopping $169 million less than the crop brought a mere five years ago,” the board said in October.

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