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Know Your Tobacco Buyout Options

The USDA has approved three ways to receive payments from the Tobacco Transition Payment Program (TTPP). Be sure to check with your financial advisor to discuss the tax implications of the TTPP.

The Standard Ten-Year Payment Program

  • The Federal Government will continue to make annual payments to you in January of each year

  • This provides a steady income

  • You have to wait until 2014 to receive your full payment

  • Increased inflation and rising taxes can cut into your profit margin

Assignment of Payments to Credit Banks or Other Local Banks (Loan)

  • An assignment of your payments qualifies you for a loan of the full amount up front

  • Only recourse loans are available for the TTPP program

  • You must repay the full amount of the loan

Successor in Interest Contract - FB TEN (Lump-Sum Payment)

  • You’ll receive a lump-sum amount up front

  • You’ll have full control over your funds, meaning you can invest, retire, use your money for equipment purchases or to transition into a new crop

  • Through FB TEN, you will receive competitive rates

  • Eliminates the risks related to inflation

  • Once your lump sum payment is received, you will no longer be compensated from the TTPP program

  • You'll receive a discounted rate based on the future value of money
How do I know which payment option
is best for me?
There are many different scenarios surrounding the TTPP. Which payment option you should take depends on your individual needs. The following checklist can help you determine which payout option might be best for you and can be a great planning tool when discussing your payout options with your local Farm Bureau Agent.

Business Planning
  • Transition of Agri-Business Needs

  • Continue Growing Tobacco

  • Undertake a New Agri-Business
        venture

  • New Non-Agri-Business Venture

  • Operating Capital Needs

  • Capital Business/Expenditures
        Plan

  • Balance Sheet Management


    • Economy Expectations
  • Current Interest Rates

  • Projected Interest Rate Trends

  • Fixed Rates vs. Variable Rates


    • Personal Factors
  • Age/Planned Retirement Age

  • Current Health Status

  • Need/Desire for Current Cash


    • Financial Planning
  • Retirement Planning and
        Time Frame

  • Tax Consequences

  • Gifting, Heirs or
        Charitable Donations


    • Sponsored by 

    FB TEN is provided by Farm Bureau Bank. Farm Bureau, FB and the FB National Logo are registered service marks owned by the American Farm Bureau Federation and are used under license by FB BanCorp and its subsidiaries, including Farm Bureau Bank FSB. Farm Bureau Bank FSB is a service to member institution that provides banking services to Farm Bureau members. Services are not available in AL, GA, IL, MI, MO, MS, OH, or WY and may not be available in some counties or parishes. FB BanCorp is an independent entity and the AFBF does not own, is not owned by, and is not under common ownership with FB BanCorp or its affiliated entities.