Kara Keeton, Communications Director
Governor’s Office of Agricultural Policy
tobaccotrust.ky.gov/phase_ii
(502) 564-4627

The amnesty program was developed to allow growers and tenants the opportunity to qualify for Phase II payments if they did not file a valid certification form during the initial sign-up for Phase II funds. The amnesty program is not designed to resolve disputes over pounds or to redistribute pounds already certified. It’s sole purpose is to attempt to reach a 100% certification of tenant and grower pounds for the crop years of 1998, 1999, and 2000 for Kentucky’s Phase II program.

In mid-May, certification forms will be mailed out to farms that have not been certified for all or a portion of the grower and tenant pounds. In addition to the certification form, any grower or tenant that is in association with that farm, for any one of the three years, will be sent an Alternate Contact Letter. In early June, Phase II representatives will hold four regional meetings across the state to answer questions about the Phase II program, Amnesty Certification Program, and provide assistance in completing the forms.

Participants in the amnesty program will not receive retroactive payments. Instead, those who are certified under the amnesty program will begin receiving payments in December 2004.

The Board also adopted its 2004 plan for distributing proceeds from the National Tobacco Growers Settlement Trust. The Board agreed to retain its policy of dividing trust proceeds equally among the owners of quota, the party who owns or controls the land used to produce tobacco, and the party who employs the labor used in burley tobacco production. Payments to owners of quota will be based on basic quota ownership records from the United States Department of Agriculture for the 2003 crop year.

Payments for the land and labor components, referred to respectively as the Growing Farm and Grower/Tenant, will again be based on an average of production and marketing activity in the years 1998, 1999, and 2000. The payment unit, referred to as payment pounds, is determined by averaging the effective quota and actual marketings for the three crop years in question.

Kentucky is scheduled to receive approximately $125 million in 2004, although adjustments built into the trust could reduce that amount by as much as 10% or more. The Board is obliged by the Trust agreement to revisit its compensation plan annually. Since December 1999 the Corporation has distributed over $588 million in direct cash payments to over 530,000 recipients while maintaining an administrative cost of less than 1%.

The Trust was established as a 12-year program by cigarette manufacturers to offset income losses incurred by tobacco growers as a result of the Master Settlement Agreement, the $246 billion deal between major cigarette manufacturers and 46 state attorneys general. 2003 represents the fifth year that payments were made to farmers from the Trust Fund.

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