Farmers hoped for different ruling

December 24, 2004|EMILY BURTON

There will be plenty of icy weather during Christmas, but what is leaving local tobacco farmers cold is the sudden loss of the promised Phase II money once slated to arrive from the tobacco industry this week or next.

Instead, farmers received word that a North Carolina Business Court judge ruled Wednesday in favor of tobacco companies, releasing them from the required pay-outs of a 1998 settlement.

Farmers who had expected the judge to rule in their favor were "shocked," said Dan Grigson, Lincoln County Cooperative Extension agent for agriculture. "It's a big loss to the county."

"I've talked to a lot of farmers who are very concerned, because they were counting on that money to make end-of-the-year payments," said Grigson.


According to the Associated Press, millions of dollars had been slated by the tobacco industry to be paid to tobacco farmers for losses they incurred due to high cigarette prices, the product of an agreement between the companies and the states. The recent lawsuit contended that, due to the government's $10.1 billion tobacco buyout in the fall, the companies were no longer responsible for the imposed $189 million payment.

Tobacco farmer William K. Teater, of Lancaster, said the decision is a frustrating one after several years of financially-devastating crop quota cutbacks.

"I thought we were due the money, and they had it in the bank account ready to come out. If the tobacco companies weren't making money, it would be a different thing," said Teater.

Appeal wouldn't provide immediate help

Grigson echoed the predictions of many analysts. "More than likely the attorney generals of the tobacco states will appeal that case," he said, but the process could take months, whereas farmers had been expecting the money this week or next.

Garrard County Extension Agent Mike Carter said, "We have long felt that this would be the initial ruling in what will be a long legal process."

Some producers say they are prepared to wait out the legal storm. At Mercer County's Anderson Circle Farm, which produces 50 acres of tobacco, the size of the farm might help mitigate the financial loss.

"It's going to hurt," said Records and Nutrition Manager Mark Straw, but "I think we're in a unique position because of our size. We'll probably be in a better position than the small quota holders," who were expecting the money to help pay for tractors, new equipment or even diversification.

"Those payments are still going to be due, whether the Phase II payments come or not," added Straw.

The producers' struggles with their payments will negatively affect the businesses they owe, such as the bank or farm supply store, Grigson said.

In the meantime, farmers are not yet predicting if their futures will still include tobacco. "I haven't really made up my mind yet," said Teater.

Others looked to the courts for relief. Carter said that in the very best-case scenario, "perhaps we'll see this case overruled in a higher court, or perhaps by some act of Congress."

Though Teater disagreed. "I don't think we have any ground to stand on."

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