Delayed $25 Million Tobacco Payment is in the Mail

Source from:  ELLIOTT MINOR Associated Press ALBANY, Ga. 12/05/2005

Georgia tobacco farmers, reeling from their worst season ever, will soon receive $25 million in delayed payments from a 1998 settlement between states and tobacco companies. The checks were mailed this week, Gov. Sonny Perdue said Friday. "Eligible tobacco growers and quota holders in Georgia should check their mailboxes for their tobacco settlement payment," he said. "After a year of court proceedings, the farmers of our state are finally getting these much-needed funds." Under a so-called Master Settlement reached seven years ago, tobacco companies agreed to reimburse 46 states for health costs associated with cigarette smoking. Those payments are known as Phase I payments. The companies also agreed to pay millions to growers to help offset their losses due to declining cigarette consumption. They are known as Phase II payments. Georgia growers were supposed to receive $24 million in Phase II money last year, but the payments were delayed because of a dispute over the date of a government buyout that officially ended the Agriculture Department's commodity program for tobacco. The $10 billion buyout relieved companies of the obligation to make further payments to farmers. Cigarette companies contended the buyout took place on Oct. 22, 2004, when President Bush signed the legislation, so they withheld last year's payment. The dispute ended up in court, with growers and quota owners arguing that the buyout didn't begin until they received the first of their buyout payments this year. A North Carolina judge settled the dispute in October, ordering the companies to pay $106 million in payments and interest to growers and quota holders in 14 states. The $25 million is Georgia's share. J. Michael Moore, a University of Georgia tobacco specialist, said the yearlong delay was a burden for growers, who needed the money to pay debts. "This is tremendously important," Moore said. "They've had their worst season in Georgia history and they've waited all year for these moneys." Colquitt County grower Lawton Matthews, 62, chairman of the Georgia Tobacco Commission, said he'll use the money to pay off some debts. He said he's giving up on tobacco, a crop he's grown for 40 years, because of the constant threat from a viral disease that attacks tobacco plants and because of lower prices offered by tobacco companies under a new contracting system. "I'm going to attend one more commission meeting and then resign," he said. "Here, we're just rolling dice every year not knowing what this virus is going to do. And with contract prices like they are, it's tough to make a profit." Enditem