Peanut Quota Buyout Program

To terminate the marketing quota program for peanuts and offer compensation to the peanut quota holders for losses in quota asset value.

The 2002 Farm Bill repeals part IV of subtitle B of Title III of the Agricultural Adjustment Act of 1938, thereby ending the quota system.

Agency - Department of Agriculture

Established in 1862, the Department of Agriculture serves all Americans through anti-hunger efforts, stewardship of nearly 200 million acres of national forest and rangelands, and through product safety and conservation efforts. The USDA opens markets for American farmers and ranchers and provides food for needy people around the world.

Office - Farm Service Agency State Offices can inform applicants of county office locations where applicants may sign up.

Program Accomplishments

None. This is a new program.

Uses and Use Restrictions


Eligibility Requirements

Applicant Eligibility

A peanut producer who owned a farm and was eligible for a permanent peanut quota for the 2002 through 2006 crop years.

Beneficiary Eligibility

Peanut quota holders.


The Secretary shall consider a person to be an eligible peanut quota holder if the person , as of May 13,2002, owned a farm that, also as of May 13, 2002, was eligible for a permanent peanut quota under section 358-1(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358-1(b)), irrespective of temporary leases, transfers of quotas for seed, or quotas for experimental purposes. If there was a written contract for the purchase of all or a portion of a farm described above, as of May 13, 2002, and the parties to the sale are unable to agree to the disposition of eligibility for payments, the Secretary, taking into account any incomplete permanent transfer of quota that has otherwise been agreed to, shall provide for the equitable division of the payments among the parties by adjusting the determination of who is the eligible peanut quota holder with respect to particular pounds of the quota. If the Secretary determines that there was in existence, as of May 13, 2002, an agreement for the permanent transfer of quota, but that the transfer was not completed by that date, the Secretary shall consider the peanut quota holder to be the party to the agreement who, as of that date, was the owner of the farm to which the quota was to be transferred. A person that owns a farm with a peanut poundage quota which is protected under a conservation reserve program contract entered into under section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) shall be considered to be an eligible quota holder with respect to the protected poundage.

Aplication and Award Process

Preapplication Coordination

There is no preapplication coordination related to this program.

This program is excluded from coverage under E.O.


Application Procedures

Applicants contact their local county Farm Service Agency Office or U.S. Department of Agriculture Service Center for sign-up information. The signup period for PQB benefits was announced as beginning September 03, 2002,and ending November 22, 2002. Because of heavy workloads in County Farm Service Agency Offices, it was difficult to enroll all eligible quota holders by November 22, 2002. Notice DCP-55 was released to inform State and County Farm Service Agency Offices that the final date for signup for PQB was extended to January 15, 2003.

Award Procedures





The Farm Security and Rural Investment Act of 2002 (2002 Farm Bill), Public Law 107-171, Section 1309, enacted May 13, 2002.

Range of Approval/Disapproval Time

1 to 30 days.





Assistance Considerations

Formula and Matching Requirements

The amount of payment for a fiscal year to an eligible peanut quota holder under a contract shall be equal to the product obtained by multiplying (1) $0.11 per pound by (2) the number of pounds of quota with respect to which the person qualifies as a peanut quota holder. The provisions of section 8(g) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(g)), relating to assignment of payments, shall apply to the payments made under the contracts. A person making an assignment of the payment, or the assignee, shall provide the Secretary with notice, in such manner as the Secretary may require, of any assignment made.

Length and Time Phasing of Assistance

The Secretary shall make payments under the contracts during fiscal years 2002 through 2006. The payments required under the contracts shall be provided in 5 equal installments not later than September 30 of each fiscal years 2002 through 2006. At the request of an eligible peanut quota holder entitled to payment under a contract, the Secretary shall provide the entire payment amount for the 5 fiscal years in a single lump sum during the fiscal year specified by the eligible peanut quota holder.

Post Assistance Requirements




Recipients under this program are subject to audit by the Office of the Regional Inspector General, U.S. Department of Agriculture.


Peanut quota holders or any other individual or entity receiving payment for PQB shall maintain and retain financial books and records which will permit verification of all transactions for at least 3 years, following the end of the calendar year in which payment was received.

Financial Information

Account Identification



(Direct Payments) FY 07 $0; FY 08 est not available; and FY 09 est not reported.

Range and Average of Financial Assistance

The eligible quota peanut holder is entitled to a payment of $0.11 per pound or $220 per ton. The eligible quota holder is entitled to the number of pounds of quota with respect to which the person qualifies under the 1938 Act taken in conjunction with other factors such as quota transfers. Total quota pounds cannot exceed 2001 crop year quota.

Regulations, Guidelines, and Literature

Program is announced through news media and in letters to agricultural producers in the county. Regulations published in the Farm Security and Rural Investment Act of 2002, Public Law 107-171, Section 1309, enacted May 13, 2002.

Information Contacts

Regional or Local Office

Farm Service Agency State Offices can inform applicants of county office locations where applicants may sign up.

Headquarters Office

U.S. Department of Agriculture, Farm Service Agency, Production Emergency and Compliance Division, Washing ton, DC 20250.

Criteria for Selecting Proposals

All producers meeting eligibility requirements may receive assistance subject to the national payment factor. Applications are non-competitive.

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Edited by: Michael Saunders

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