N.c. Court Rules Against Tobacco Payments

November 07, 2009|By Laura Smitherman | Laura Smitherman,laura.smitherman@baltsun.com

Maryland tobacco farmers won't receive about $13 million in payments from cigarette manufacturers under a ruling Friday from the North Carolina Supreme Court.

Officials with the Maryland Department of Agriculture said the state had sought to require that Philip Morris, R.J. Reynolds Tobacco Co. and Lorillard Tobacco Co. honor an agreement to compensate farmers for the declining sales of tobacco expected from a settlement between the tobacco industry and states over the health care costs of smoking.

"Our farmers have been done a big injustice," said Patrick McMillan, assistant agriculture secretary. "The source of income they were led to believe they were going to get has been taken away from them."

The case stemmed from a disagreement over whether the manufacturers were obligated to continue paying farmers under that agreement after Congress approved in 2004 a $10 billion buyout for tobacco farmers nationally, to be financed by taxing the cigarette industry. McMillan said farmers in Maryland and Pennsylvania, where they were due $9 million, didn't benefit from that buyout so they should have continued to receive payments.

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