Tobacco Farmer Lawsuit Ends, co-op to Pay $100M

Source from:  By BARBARA GOLDMAN, Staff Writer December 28, 2007 12/29/2007

Almost 200,000 current and former tobacco growers in four states, including Kentucky and their attorneys will share in a $100 million judgment against the Lexington-based Burley Tobacco Growers Cooperative Association, Inc. Eight of the nine counts of the original lawsuit initiated were dismissed, including a request that the co-op be disbanded; the remaining suit questioned the distribution of federal loan tobacco proceeds transferred by the Commodity Credit Corporation in 2005. Association directors voted in March, 2005 to distribute the money. However, distribution was put on hold until the court made a conclusion on the issue, according to coop officials. Payments will finally be made to 198,000 farmers in Kentucky, Indiana, Ohio, and West Virginia. Farmers will receive 85 percent of the $100 million achieved, with each receiving about $430 each. The eight original plaintiffs will receive about $10,000 each. Checks are expected to begin arriving in farmers' mailboxes in early January. Farmers participating in the recent Tobacco Infrastructure Program will not be eligible for distribution. "About everyone will get a little bit of it," said Bracken County tobacco farmer Darrell Williams, who is pleased with the conclusion of the litigation. Some farmers may even be receiving more than one set of checks due to different names and business used throughout sales. With federal tobacco support in decline, the number of tobacco farmers has also declined. Williams said he didn't expect the lawsuit's conclusion to change much for burley farmers. University of Kentucky agricultural economist Dr. Will Snell estimated there may be as few as 5,000-8,000 active tobacco farmers left in the commonwealth. Burley Association President Roger Quarles had encouraging words for burley farmers. "The association has been out buying tobacco from members, and over time we intend to help producers see more stable prices. We have been working hard to attract foreign buyers for burley tobacco, and we are in the process of concluding our current sale of coop burley to China, and are cultivating relationships in Thailand and Indonesia, among other places." The association said members' shares will be reduced after attorney fees and plaintiff awards. Attorneys will receive 15 percent of the settlement. The association has downsized administrative staff but still maintains its storage warehouse in Cynthiana. Quarles said he is optimistic those moves will restore farmers' confidence in the future of the association. Enditem