Phase II Board Announces 2003 Payment Rates

Applicants who successfully completed their applications or verification forms by the October 21 deadline can expect to receive payment in early January 2004. Flue-cured tobacco quota owners and producers will receive 15.35 cents per pound. Burley tobacco producers will receive 12.23 cents per pound while burley quota owners will receive 14.445 cents per pound. Payments are based on 1998 quota.

The announcement was delayed until Lorillard Corporation and Brown & Williamson Inc. pledged to meet their full obligations to fund the National Tobacco Growers Settlement Trust, Phase II last week.

In September, these companies declared intention to withhold more than $24 million dollars in payments to the Trust because of a dispute related to the potential of a refund should Congress pass legislation in 2003 providing for a buyout of tobacco quota. The Virginia Tobacco Trust Certification Board Inc., joined by the certification boards of Kentucky and North Carolina, and the Trustee, J.P. Morgan Chase, sued the two companies to compel the payments.

The companies made their payments by the December 15th deadline, enabling the Virginia Phase II board to certify complete Phase II payments by J.P. Morgan Chase on December 31 as planned, and as accomplished in the previous four years of Phase II payments.

The Phase II payments are the result of the National Tobacco Grower Settlement Trust agreement negotiated between tobacco growing states and cigarette manufacturers. More than $80 million in Phase II payments has been distributed to Virginia tobacco producers and quota owners since 1999.