No Net Cost Tobacco Act of 1982
Encyclopedia
The No Net Cost Tobacco Act of 1982 (P.L. 97-218) required that the Tobacco Price Support Program
operate at no net cost to taxpayers, other than for the administrative expenses common to all price support
programs. To satisfy this mandate, sellers and buyers (including importers) of tobacco were assessed equally to build a capital account that was drawn upon to reimburse the Commodity Credit Corporation (CCC) for any losses of principal and interest resulting from nonrecourse loan operations. Other provisions of this law provided for reducing the level of support for tobacco and made various modifications to the marketing quota and acreage allotment programs. No net cost assessments ended when price support was terminated after the 2004 crop.
Tobacco Price Support Program
In the United States the Tobacco Price Support Program used a combination of marketing quotas and nonrecourse loans to keep prices stable and higher than they would be otherwise. The tobacco quota limited production in order to raise prices...
operate at no net cost to taxpayers, other than for the administrative expenses common to all price support
Price support
In economics, a price support may be either a subsidy or a price control, both with the intended effect of keeping the market price of a good higher than the competitive equilibrium level....
programs. To satisfy this mandate, sellers and buyers (including importers) of tobacco were assessed equally to build a capital account that was drawn upon to reimburse the Commodity Credit Corporation (CCC) for any losses of principal and interest resulting from nonrecourse loan operations. Other provisions of this law provided for reducing the level of support for tobacco and made various modifications to the marketing quota and acreage allotment programs. No net cost assessments ended when price support was terminated after the 2004 crop.