1. Tobacco Quota Buyout Impacts Workshop Washington, DC September 20, 2005

2. William Coats Associate Deputy Administrator Tobacco Programs

3. “Change is the law of life. And those who look only to the past or present are certain to miss the future”. “ Change is the law of life. And those who look only to the past or present are certain to miss the future”. John F. Kennedy

4. U.S DEPARTMENT OF AGRICULTURE AGRICULTURAL MARKETING SERVICE TOBACCO PROGRAMS 2004 169 Employees OFFICE OF THE DEPUTY ADMINISTRATOR MARKET INFORMATION AND PROGRAM ANALYSIS BRANCH MARKET NEWS LEXINGTON, KY SEASONAL WORK FORCE MARKET NEWS RALEIGH, NC SEASONAL WORK FORCE STANDARDIZATION AND REVIEW BRANCH STANDARDS AND REVIEW IMPORT PROGRAM LEXINGTON, KENTUCKY REGIONAL OFFICE SEASONAL WORK FORCE RALEIGH, NORTH CAROLINA REGIONAL OFFICE SEASONAL WORK FORCE ADMINISTRATIVE GROUP AMS MARKET NEWS SUPPORT UNIT

5. Original Importers

6. U.S DEPARTMENT OF AGRICULTURE AGRICULTURAL MARKETING SERVICE TOBACCO PROGRAMS 2005 46 Employees OFFICE OF THE DEPUTY ADMINISTRATOR Washington, DC FIELD OPERATIONS Raleigh, NC Richmond, VA, Danville, VA, Winston-Salem, NC Area Wilson, NC, Lexington, KY, Springfield, TN Area

7. Tobacco Programs Provide Voluntary Inspection and Testing Services.Provide Voluntary Inspection and Testing Services. Development & Maintenance of Grade StandardsDevelopment & Maintenance of Grade Standards Stocks Reporting & Market InformationStocks Reporting & Market Information Training of Industry Personnel on USDA Grade StandardsTraining of Industry Personnel on USDA Grade Standards

8. Inspection and Testing Services Domestic TobaccoDomestic Tobacco Imported TobaccoImported Tobacco RMA Quality AdjustmentsRMA Quality Adjustments Research FacilitiesResearch Facilities Dispute ResolutionDispute Resolution FeesFees Grading – $.0062 Testing – $.0085

9. USDA EXPANDED PESTICIDE LIST PESTICIDEPPM*PESTICIDEPPM* Sum of DDT, DDE, and TDE; (a, b)0.4Methoxychlor (a)0.1 Sum of Aldrin and Dieldrin (a, b)0.1Endrin (a)0.1 Sum of Heptachlor and Heptachlor epoxide; (a. b)0.1Chlordane (a)3.0 Hexachlorobenzene (HCB) (a, b)0.1Toxaphene (d)3.0 Cypermethrin (a)1.0Formothion (a)0.5 Permethrin (a)2.02,4-D (a)5.0 Ethylene Dibromide (EDB) (a)0.1Dicamba (a)0.5 2,4,5-T (d)5.0Trichlorfon (b)0.5 Fonofos (b)0.1Diazinion (c )0.7 Sum Methidathion and parent + metabolite (b)0.1Monocrotophos (b)0.1 Benfluralin (b)0.1Lindane (b)0.5 Sum Dimethoate and Omethoate (b)0.5Parathion (c )1.0 Methyl Parathion (c )1.0Fenthion (b)0.1 C-IPC(chlorpropham (c )0.3Methamidophos (b)1.0 Fenitrothion (b)0.1Trifluralin (b)0.1 Mevinphos (E&Z isomers) (c, d)0.5DBCP (a) 1.0 Captan (b) 1.0

10. a - PPM – Parts-Per-Million (Administrative Tolerance Levels referenced at 7 CFR §92), b - CORESTA –July 2003 published values c - Based on an EPA food tolerance d - Set by limit of determination Endosulfan (b)1.0Metalaxyl (b)2.0 Flumetralin (b)5.0Aldicarb (b)0.5 Acephate (b)1.0Methomyl (b)1.0 Chlorpyrifos (b)0.1EBDC (b)5.0 a Fenamiphos (b)0.5MH-30 (b)80.0 b Additional Pesticide Analysis

11. Lessons Learned Being able to adapt and respond effectively in a constantly changing industry has become a necessary management skill.

12. Questions?