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Ohio’s tobacco growers are entering a new era in the marketing of their product thanks to a quota buyout program that was included in the federal JOBS Act that President Bush signed in late October.

Included in the Jumpstart Our Business Strength Act was a tobacco quota buyout plan that would return the commodity to a free market system for the first time since 1938, according to David White, OFBF director of commodity relations.

"This is something tobacco quota owners and producers have wanted for years," White said.

He said burley tobacco is grown in 22 Ohio counties, and in some cases "we’ve had four generations of tobacco farm families used to a quota system." But after the Master Settlement Agreement several years ago, tobacco producers knew they’d have to leave the quota system behind and operate under a different system that the JOBS Act’s buyout is intended to create.

White explained the tobacco quota system restricted the amount of tobacco individual producers could produce and market. There are more than 7,500 tobacco quota owners in Ohio and about 2,500 tobacco growers. Simple math shows that one in three tobacco quota owners is also a grower. Those quota owners who chose not to grow the crop could lease their quotas to growers for about 50 cents per pound.

The buyout approved in the JOBS Act would provide nearly $10 billion spread out over the next 10 years for U.S. tobacco quota owners and growers. That means about $100 million will come Ohio’s way with quota owners getting $7 per pound and growers $3 per pound over the next 10 years.

Industry wide, it is predicted that quota owners of less than 1,500 pounds will likely choose to exit the tobacco industry.

With basically three tobacco companies buying the commodity, the new system may be a free market but it won’t be an open market, White said. "We may have a situation that if a grower can’t put together enough pounds, he may not be able to get a contract" and would not be able to market his tobacco.

The buyout is funded through assessments on tobacco products.

The loss of the industry could mean the loss of a way of life, White said. "(Tobacco production) is so much a part of the culture and heritage of the regions where it is produced," he said.

"This is the end of one era and the beginning of another," White said. "We probably won’t have a good handle on what this will mean for maybe a year or two."

Caption: Burley tobacco dries in a barn in Highland County.