• Replace inflammatory rhetoric, stereotyping, and automatic enmity in favor of civil, problem solving dialogue;
• Understand each others' needs, values and concerns;
• Identify areas of common ground and even interdependence, while acknowledging areas of difference; and, finally,
• Work together to create realistic, sensible and sustainable options for communities and families facing pressures associated with transition.

Greetings participants in the Southern Tobacco Communities Project listserve.

We have been speaking with a number of you this past week about activities affecting tobacco producing communities and states.  Many of you have also forwarded us newspaper articles of interest.  There is an extraordinary amount of activity going on.  We plan on providing updates of this sort about every 2 weeks from now through spring’s state legislative sessions.  Please feel free to forward me items of interest.  Here are some items in brief format that may be of interest:

General:

The tobacco settlement reached final approval status Nov. 12.  That means the Master Settlement Agreement has approved in at least 45 jurisdictions.  States that have not reached formal approval of the Master Settlement Agreement include Alabama, Arizona, Arkansas, Missouri, New Jersey, Pennsylvania, and Tennessee (Minnesota, Florida, Texas, and Mississippi reached separate agreements with the companies).  Tobacco industry payments that have already been made will move from escrow accounts to state treasuries.  All states with approval will receive their first payment (for 1998) within two weeks followed by payments in January (for 1999) and April of 2000.  Tobacco payments will continue in perpetuity and will total up to $206 billion over the first 25 years nationwide.

Al Pires, a Washington, D.C., attorney plans to file an $18 billion class action lawsuit against cigarette manufacturers, state attorneys general and the USDA on behalf of farmers by Nov. 24.
He is one of the lawyers who brought a lawsuit against the U.S. Department of Agriculture over discrimination against black farmers. Pires says he has close to 2,000 farmers signed up at $100 each to be part of the lawsuit.

The American Legacy Foundation, which was formed as a requirement of the settlement, has sent letters to Attorneys-General and legislators in the six states.  The letter states that, in order for states to receive grants from the American Legacy Foundation, they will have to have a youth tobacco survey completed.  Tennessee already has one, and North Carolina is working on one.

A number of tobacco insiders are suggesting that a revolution in tobacco production may not be far away.  Domestic cigarette manufacturers are experimenting with low nitrosamine tobacco.  These manufacturers are approaching farmers and offering to give them the technology for free in exchange for farmers’ contracting directly and exclusively.  This movement has the potential to totally change the tobacco marketing system.  Star Scientific, familiar to many of you who attended the Orlando tobacco control conference last August, or toured their plant in the same month, or who heard their presentation at the conference in Abingdon, Virginia in October, is supporting FDA supervision.  The question of what constitutes a “safer” cigarette, and to what extent harm reduction is served by nitrosamine removal, is one that will produce a lot of controversy.

Price increases following the settlement are credited with a 7.5% decline in cigarette consumption in 1999.  Some analysts are predicting that the next 10 years will most likely see a 20% decline.  Such a rate of decline will mean (at current import levels) an 8% drop in leaf demand at least - probably even greater.

Next year’s quota announcement for flue-cured tobacco may bring another large cut, given the amount taken in under loan this year.

On December 1st, 1999 the U.S. Supreme Court will be hearing oral arguments on the question of whether the FDA has the ability to regulate tobacco.  Any decision is not expected until later this spring or summer

North Carolina

Prominent lawyer Eugene Boyce, who has won several prominent cases against North Carolina, has filed suit to block a plan to put half of the state’s $4.6 billion share of the settlement into a foundation.   The claims that Attorney General Mike Easley improperly used the court system to force the settlement distribution and left the public and the General Assembly out of the loop.

The state’s plan may be in jeopardy anyway.  Funding for the hurricane recovery efforts may very well affect the legislative fight to keep settlement monies for tobacco control and tobacco communities relief.  State legislative leaders are angry that far less federal money than requested was approved. A special session of the legislature is likely, and ideas for sources of funding include the settlement money and even a short-term sales tax increase.  The state has $322 million in its so-called ''rainy day'' fund for emergencies and another $100 million that can be saved through budget reductions, including hiring freezes, that have already been ordered.

One proposed plan for flood-relief would benefit tobacco farmers by forgiving 75 percent of the principal flue-cured farmers owe on flooded crops to the Commodity Credit Corp.  It could also reduce next year's expected cut in the tobacco quota by allowing the Flue-Cured Tobacco Cooperative Stabilization Corp. to sell flood-damaged tobacco at a 45 percent discount over the current government-controlled price.  Less leaf in warehouses would reduce the expected quota cut because the amount of surplus tobacco is figured into quota calculations.

South Carolina

Governor Hodges wants basic agreement about uses of settlement money upfront rather than having to deal with decisions on the settlement dollars year after year. He said the basic need is to quantify what the real costs to communities are before deciding what to allocate to communities.  He did not mention direct payments to farmers.  Some editorials in major papers have been supporting the use of settlement funds for tobacco-related health purposes, suggesting that Phase II payments should be sufficient compensation for all but the most hard-hit farmers.

Tennessee

Tobacco farmers are wondering if those who have removed themselves from tobacco farming already or who will have by the time of the next payment still remain eligible to receive money from Phase II funds.  At the Nov. 3 meeting of the Tennessee Tobacco Working Group, a state Phase II Board member asserted that Phase II actually does provide incentives for producers to continue to produce tobacco in order to receive payments.  However, even if all the payments under Phase II are made at the maximum allowable level, economists are saying that they are significantly less than the value of the quota ($1.38/lb. over 12 years versus the $8 hoped for in the McCain bill of 18 months ago).  And few farmers or analysts expect all the Phase II funding to come through, given offsets; many expect very little of the money to actually reach farmers’ hands.

Georgia

Georgia’s tobacco control coalition has called for dedication of one third of tobacco settlement dollars to fund comprehensive tobacco prevention and control program.  Other health groups such as the Hospital Association and Medical Association are supporting tobacco prevention as one of their goals for use of settlement funds.

Virginia

Virginia’s tobacco control coalition has been pressing for use of the remaining 40% of settlement money to be devoted to tobacco-related activities, including cancer research, voluntary cessation programs, and health education.  Because the Governor has already called for spending that money on transportation, and the Democratic caucus endorsed a substantial investment for transportation, the prospects for funding for public health is uncertain.  A press conference advocating for this spending on tobacco-related health issues held on Nov. 16 received a lot of coverage.

Information about settlement funds for Virginia is at http://www.ext.vt.edu/vce/specialty/tobacco/settlement

Kentucky

A group of Kentucky health and farm leaders are planning a conference for Jan. 18 bringing together 50 farmers and 50 public health advocates.  They are developing a bimonthly insert that will be placed in Farmer’s Pride Magazine to educate farmers about the coalition of health and agricultural interests (contact is Pride@kih.net)

The Kentucky Tobacco Settlement Trust Corp. board is distributing $112 million divided among 167,000-plus quota holders, operator farmers and tenant farmers in so-called Phase II tobacco money to Kentucky burley tobacco growers and quota holders by the end of the year.

Quota holders get 8.65 cents per pound of quota. Farm-operator growers and tenant growers get 7.84 cents a pound, with qualifying pounds calculated on 1998 sales as an average of what they were entitled to grow and what they actually got to market.