Governor's Office of Agricultural Policy
Farmers to Receive Final $16.5 Million

FRANKFORT, Ky. – The final distribution of 2004 Phase II tobacco settlement payments for certified Kentucky recipients will be made Friday, December 30. Payments in excess of $16.5 million will be mailed to more than 164,000 payees. 

Since 1999, Kentucky tobacco quota holders, growers and tenants received payments to compensate for the anticipated decline in the demand for tobacco and tobacco products resulting from the Master Settlement Agreement. Although the Phase II tobacco settlement program is scheduled to continue through 2010, the tobacco companies’ obligation to fund this program effectively ended when the Federal Tobacco Buyout began. 

In June of this year, Governor Ernie Fletcher and the Kentucky General Assembly provided $114 million along with $10 million from the Burley Tobacco Growers’ Cooperative as a safety net for recipients who did not receive their payment last year, due to pending litigation against the tobacco companies.  Phase II recipients will have received in 2005 over $140.3 million after tomorrow’s check distribution.

“Across the commonwealth, Phase II payments provide much-needed resources for farmers as they explore ways to replace lost tobacco income because of the Master Settlement Agreement,” said Governor Fletcher.

Phase II payees received more than $732.6 million since the beginning of the program. Due to the passage of the Federal Tobacco Buyout in October 2004, this will be the final 2004 Phase II payment. The buyout will provide quota owners and growers $9.6 billion over 10 years paid for by all tobacco companies. The Phase II program effectively ends with this payment due to a provision in the Phase II agreement which allows the companies to take a dollar-for-dollar credit against their obligation if assessed by the federal government. The end of Phase II tobacco payments does not impact the federal tobacco buyout payments. 

For recipients with specific questions regarding this final 2004 Phase II check, please call the JP Morgan Chase toll free number at 1-800-732-9955. If you have any questions regarding your certification that qualified you to receive this check, please contact the Kentucky Phase II processing call center at 1-877-549-2537.