	Price Support Program

From the late 1930s through the 2004 crop, the USDA operated the tobacco price support program. 108-357 ), the tobacco support program came to an end. Because of this tobacco buyout, CCC support program expenditures have been eliminated, and it is not anticipated there will be any future ad hoc assistance to tobacco farmers. Federal Crop Insurance

The federal crop insurance program, administered by USDA's Risk Management Agency, provides farmers with subsidized multi-peril insurance on tobacco and other crops. Net federal outlays are estimated to be $27.9 million in FY2006, and are budgeted at $28.7 million for FY2007. Tobacco Research

In the past, USDA-funded research related to tobacco production, processing, and marketing. Annual research spending by the USDA averaged about $6.6 million until it was terminated under the FY1995 agricultural appropriations law and subsequent laws. The restriction does not apply to research on medical, biotechnological, food, and industrial uses of tobacco. No similar spending is anticipated in FY2007. In FY1997, CSREES spent $680,000 on tobacco-related extension activities. All state and county extension activity related to tobacco is funded by the states. The USDA estimates that the cost of this effort for tobacco will be $200,000 in FY2006, and the budget for FY2007 is $205,000.
The U.S. Department of Agriculture (USDA) has long operated programs that directly assist farmers and others with the production and marketing of numerous crops, including tobacco. In most cases, the crops themselves have not been controversial. However, where tobacco is involved, the use of federal funds has been called into question. Taken together, all of the directly tobacco-related activities of the USDA generated net expenditures of an estimated $30.8 million in FY2006, and the budget anticipates net expenditures of $29.5 million for FY2007. Over 90% of this spending is related to crop insurance.
The federally financed tobacco price support program, once the major form of tobacco farmer assistance and in some years a costly program, was terminated at the end of crop year 2004. The USDA is prohibited by language in the annual appropriations law from spending funds to help promote tobacco exports and to conduct research relating to production, processing, or marketing of tobacco and tobacco products. Other tobacco-related activities have been subjected to congressional scrutiny. The USDA does operate numerous programs that are not tobacco-specific, but are available to farmers that produce tobacco and other crops. These are not examined in this report.