Tobacco Farmers Can Apply for Share of Settlement Trust Tunds

Source from:  JASON LICHTENBERGER Daily Reporter Staff Writer  08/31/2004

A year after the nation's tobacco companies reached an agreement with the country's attorneys general to pay billions of dollars for tobacco-related health-care costs, the companies made another agreement with the 14 states that grow tobacco. Four of the country's largest cigarette manufacturing companies established the National Tobacco Grower Settlement Trust to compensate tobacco farmers for lost sales and encourage them to branch out into other crops. As a result of the settlement trust, Ohio tobacco farmers will receive more than $70 million over 12 years. In order to receive a share of the trust, farmers are required to apply for the money every year. The 2004 deadline is Oct. 18, and those who qualify for funds will receive a check in January 2005. "The Ohio Department of Agriculture has facilitated the Phase II (settlement trust) certification and distribution process for Ohio tobacco farmers since 1999 and has so far distributed more than $23.7 million to growers and quota owners associated with more than 8,000 tobacco farms in Ohio," said Fred L. Dailey, director of the ODA. "For trust year 2004, we expect to distribute an additional $6 million to Ohio tobacco farmers who apply," Dailey said. According to the ODA, Ohio is the eight-largest tobacco-producing state in the nation. The bulk of Ohio's tobacco production comes from the southern part of the state: Brown, Adams, Gallia, Clermont, Highland, Lawrence, Scioto, Jackson and Pike counties. There are several types and grades of tobacco, but one of the most common is burley, which is the breed of choice among Ohio farmers. About 5,300 acres of burley were planted on Ohio's 7,618 tobacco farms last year, but the numbers are dwindling every year, according to Ed Cruttenden, executive director of the Ohio Tobacco Programs for the ODA. Cruttenden noted that there were 8,510 tobacco farms in the state in 1998, but the numbers dropped to 8,091 in 2000, then to 7,813 in 2002. Although tobacco is the most profitable crop for Ohio farmers, Cruttenden said, the need for tobacco has decreased as cigarette smoking has increasingly fallen into disfavor in the United States and throughout the world. "Many cities and a few states across the country prohibit smoking in public places, and it's even outlawed throughout Ireland - so it's just not in the United States," he said. Cruttenden added that another reason cigarette companies are losing customers is because various anti-smoking groups have targeted teens - a demographic group on which companies have relied for years. "They would hook them at an early age by placing cigarettes near the candy isles in some stores. The tobacco companies wanted stores to place them there so it would be easier for kids to slip them in their pockets...and the tobacco companies would reimburse stores for their losses," Cruttenden said. "This type of practice just isn't allowed anymore. Fewer kids are smoking now." Another factor contributing to the decline in tobacco production and the number of tobacco farms are production quotas set by the United States Secretary of Agriculture. Tobacco production has been federally regulated since the 1930s and the amount of tobacco allowed to be grown in the U.S. has been lowered each of the last few years, Cruttenden said. "This loss goes right down to the farm. This has created a crisis. The limits imposed at the federal level are based on the most recent tobacco export figures to foreign countries and the production goals of U.S. cigarette companies for the next year, which have all been in decline, explained Cruttenden. This is where the settlement trust comes in, he said. The program assists farmers who are hurting.. "Along with assistance at the state levels, farmers have been able to move on to other things such as expanding their herds and getting into genetics or breeding programs." Enditem