Tobacco Growers Finding Phase II Checks in the Mail

Source from:  12/21/05 roxboro-courier.com 12/23/2005

Santa Claus came early to Person County tobacco growers and quota holders this year. Not only are they receiving checks owed them for more than a year, but they also have a good chance of making money off their crops in 2006. Derek Day, Person County Cooperative Extension Service director, said Tuesday that growers here have begun receiving checks for the final Phase II payments. The payments are a result of the 1998 Master Settlement agreement between attorneys general and governors of 14 tobacco producing states and four major tobacco manufacturers. Not only will growers here get their Phase II payments, but three tobacco companies have begun recruiting Person County farmers to grow tobacco for them next year, Day said. More than $152 million was scheduled to be sent to about 77,000 North Carolina tobacco growers and quota holders in the final quota pay out of the year. In Person County, said Day, the amount will be between $2 and $3 million. Day said farmers here were pleased to finally get their payments, which include interest owed since last year. The Phase II payments were meant as a means to offset income lost by tobacco farmers and quota holders after sharp declines in cigarette sales following the Phase I settlement. The payment dispute started in October 2004 when tobacco manufacturers claimed that the tobacco buyout, passed that year, would end their obligations under Phase II. The question, according to Day, was in the timing, however. The buyout payments were not received until this year, so farmers who expected to receive some compensation for their losses under the Master Settlement got nothing until their buyout checks arrived earlier this year. And although tobacco companies fought the Phase II payments, the state Supreme Court ruled this summer that they had to honor their Phase II commitment to farmers and quota holders. According to the North Carolina Farm Bureau, “Tempered wisdom led the North Carolina Supreme Court to determine that the tobacco companies must make good on agreements previously made with tobacco growers and quota holders and make payments.” This year’s Phase II payments are the last growers will receive. The Farm Bureau has said that Phase II funds will assist farmers with crop production costs for next year, which are expected to be higher due to rising energy costs. Regarding next year’s crops here in Person County, Day said the three companies now recruiting growers, which he declined to name, had said they would need more leaf than originally anticipated next year and would therefore “be willing to pay more.” So, said Day, “if a man wants to grow flue-cured next year, I’d say it’s his choice.” Between the Phase II payments and the news that companies are looking for growers, Day said, things are looking good “right here at Christmas.” Enditem