Tobacco farmers fear loss of income
By Sam Atkins
Published in News on December 23, 2004 1:58 PM
Wayne County tobacco farmers are facing the loss of money they had been counting on for this year, an official says.
Rick Tharrington, executive director of the Wayne County Farm Service Agency, said that some farmers are on the verge of not being able to pay their operating expenses for 2004. A judge ruled Wednesday that tobacco companies do not have to make their final quarterly installment toward the 2004 Phase II payments.
The judge also ruled that the companies should get a refund on payments made earlier this year.
"They were really counting on this money," said Tharrington.
Tharrington said the Phase II money goes into an account and the money is held until the end of the year when the payments are dispersed. Farmers have not yet received any money from the 2004 Phase II.
This would be the sixth year of a 12-year cycle of the Phase II payments, so farmers are used to receiving the money and were depending on it to either finish paying their operating expenses or for profit, he said.
Expenses have increased because of rising fuel costs for equipment. Some landowners were also counting on this money to pay their property taxes for 2004, he added.
This year's Phase II payments would be based on the 2003 tobacco quota. Last year's payment, which was based on the 2002 quota, was around 20 cents per pound, he added.
Keith Parrish with the National Tobacco Growers Association is a tobacco farmer in Johnston and Harnett counties. He said this ruling, although it will likely be appealed, means some farmers will start the new year in the hole financially.
He has received calls from farmers who were in tears and others who were just mad. For some, the Phase II money would be all the money they have until the buyout payments come in, he added.
"It is just a terrible situation."
Andy Evans has tobacco in northern Wayne, Wilson and the edge of Johnston counties. He said the ruling is going to hurt people.
"It's going to make a difference in everybody's budget," he said. "How they are going to deal with it, I don't know."
He said farmers should not be surprised because elected officials from North Carolina would not support the Phase II payments in the buyout package. The Senate version of the package would have provided more buyout money and included Phase II payments.
Tony Ballance is a tobacco-quota owner in northern Wayne and southern Wilson County. He said the ruling is disappointing, and he really does not see what the buyout and Phase II have to do with each other. The buyout takes care of the quota from 2002 forward, and the Phase II was to help offset the loss of quota from 1996 to 2001.
"I fail to see the judge's logic in that," he said.