North Carolina Court Orders Cigarette Makers to Pay Farmers

Source from:  tobaccoreporter.com 08/24/2005

The North Carolina Supreme Court has ordered tobacco companies to hand over a payment to tobacco farmers that has been in dispute since the end of last year, reversing the decision of a lower court from December, reports The News & Observer. The money is the last of the yearly payments that farmers get to compensate for reduced leaf purchases as part of the 1998 Master Settlement Agreement. Nationwide, the ruling means about $430 million will go to tobacco growers in 14 states. The payments are based on how much tobacco a farmer grew, or owned rights to grow, in 2003. The battle over the payments started last fall, when Congress passed a federal tobacco buyout, which gave farmers and quota holders $10.1 billion over 10 years, to be paid by cigarette companies and tobacco exporters to ease the transition to a free-market system. All sides agreed that the buyout would mean an end to yearly tobacco settlement payments. But they didn't agree when the settlement payments should stop. The tobacco companies argued that, because the buyout passed in 2004, they did not have to make the 2004 payment. The only recourse for the tobacco companies is to petition to the U.S. Supreme Court, which is unlikely to take up the case. Enditem