Tobacco is one of the first Native American crops to be commercially cultivated and marketed. Historical records show that John Rolfe began commercial cultivation of tobacco in Virginia as early as 1612, with subsequent shipments to England. As tobacco cultivation expanded to other areas of the U.S., it soon became apparent that differences in soil and climate caused significant differences in the characteristics of the leaf. In turn, these differences greatly affected the leaf's suitability for use in manufactured forms of tobacco. Each geographic area produces a special type of leaf that is particularly adapted for certain uses -- cigarettes, cigars, smoking or chewing tobacco, and snuff.

Because of the specificity of use by tobacco type, both producers and buyers found a need for uniform standards on which to base marketing decisions. In recognition of this need, Congress enacted the Tobacco Inspection Act in 1935. This act established the framework for development of official tobacco grade standards, authorized the Secretary of Agriculture to designate tobacco auction markets where tobacco growers would receive mandatory inspection of each lot of tobacco to determine its grade and type, and provided for the distribution of daily price reports showing the current average price for each grade. As a result of these services, tobacco growers and buyers know the true grade of tobacco being marketed and the approximate value of that grade. The Agricultural Marketing Service's Tobacco Division was established to provide these services to the Nation's tobacco industry.

The Fair and Equitable Tobacco Transition Act of 2004 eliminated price supports and marketing quotas for all tobacco beginning with the 2005 crop year. Mandatory inspection and grading of domestic and imported tobacco was also eliminated as well as the mandatory pesticide testing of imported tobacco and the tobacco market news program.

Beginning with the 2005 crop AMS, Tobacco Division offered voluntary tobacco inspection and grading on all types of domestic and imported tobacco, as well as pesticide testing, on an expanded list of pesticides, on all domestic and imported tobacco. These services were implemented by contracts between AMS and the individual tobacco dealers and manufacturers.