A fixed interest savings account is one option, with little risk involved. If the grower quit growing tobacco, the buyout monies received for a pound of quota could provide one of these amounts of income. The intention here would be to compensate individual farmers for a lost asset and associated annual revenues. But monies received generally are subject to income taxes. We have experienced this with past and present government programs, and this proposal would probably be no different.
Payments are usually subject to tax laws currently on the books.
For example, current Market Transition Payments are considered ordinary income. In the past, crop deficiency payments were income and CRP payments are also income. Final tax status of the payments will depend on the features of the settlement. The tax status of any buyout payments will likely be classified on one or two provisions. Here, the quota is considered an asset.