TOBACCO QUALITY-PRICE INSURANCE POLICY U.S Tobacco Forum 2009

1. TOBACCO QUALITY-PRICE INSURANCE POLICYU.S Tobacco Forum 2009

2. SUCCESS!!! • MAY 7, 2009 – USDA Federal Crop Insurance Corporation (FCIC) Board of Directors APPROVED the BTGCA Tobacco Quality-Price Insurance Policyfor BURLEY AND FLUE-CURED TOBACCO

3. Tobacco Quality Policy • Provides coverage up to 95% of “Expected Price” based on quality grades (1 through 5); USDA subsidizes premium from 38 to 48% • Producers must provide at least the prior year’s production grade records • Producers must insure all production, with single unit up to 150% of county T yield • Does not cover yield or effect APH policy, only grade • Expected Priceis producer’s historic data calculated to determine maximum policyholder coverage • Claims are adjusted by certified graders prior to sale • Covers only Burley and Flue Cured

6. BUYER SELECTS TOTAL POUNDS TO BE COVERED PER ACRE AND PERCENT OF COVERAGE UP TO 95%

7. CLAIMS PAID ON HIGHER OF ADJUSTERS OR BUYERS GRADING RESULT

8. CLAIMS PAID ON HIGHER OF ADJUSTERS OR BUYERS GRADING RESULT NO YIELD COVERAGE WITH THIS POLICY

9. CLAIMS PAID ON HIGHER OF ADJUSTERS OR BUYERS GRADING RESULT

10. NEXT STEPS TO COMPLETION • FINALIZE POLICY LANGUAGE, CLAIMS HANDBOOK & FORMS • PROVIDE MEMORANDUM OF AGREEMENT (MOA) TO RMA STATING THAT BTGCA WILL ANNUALLY PROVIDE INDUSTRY PRICES (NOT BTGCA' S) • RECEIVE MOA FROM RMA SO THEY GIVE AGGREGATED SALES DATA TO SET EXPECTED PRICE • SALES SHOULD START FOR 2010 CROP • ADJUSTER TRAINING SPRING OF 2010

11. Questions Brian Furnish Burley Tobacco Growers Coop brian@burleytobacco.com