A federal program of $285-million designed to encourage tobacco farmers to leave their tobacco fields. The federal government has been clear from the beginning that people who will receive the money from the Tobacco Transition Program would exit from the Tobacco Industry.
According to the Tobacco Transition Program, the federal government will pay farmers $1.05 per pound for their production “quota,” on condition that they will exit the industry forever.
Industry insiders said that many farmers will have the chance to transfer their quota to anyone who is not their spouse or dependent child, and then apply for a license to produce tobacco and cigarettes under a new regime being developed by the Ontario government.
One of the Ontario tobacco farmer explained: “I’ll give you an example. You own tobacco quota. You want to continue to grow tobacco, so what you do is you transfer your quota to me, but I don’t even grow tobacco. I take the buyout and give you the dollars back, so now you’re eligible for a license to grow tobacco, and plus you get all that money.”
Industry representatives pointed out that those farmers who have performed such transfers are technically not breaking any rules. And they added that all the maneuvers could end up being disputable, because of the ongoing decline of the tobacco market in Canada.
Garry Proven, co-chair of the New Tobacco Alliance Committee, which represents tobacco farms, said: “This thing is a huge confusion. This little aspect of it looks pretty foolish, but the impact isn’t going to be that great, because there aren’t going to be a lot of people able to grow tobacco anyway at the price being offered.”
Critics said that the program should be frozen until the federal and provincial governments figure out how to track the money and ensure that farmers actually leave the sectors.