Local News

Tobacco Companies, States Reach Agreement on Farmer Aid Fund

Posted January 20, 1999 6:00 a.m. EST

— Tobacco companies, includingR.J. Reynolds,have reached an agreement with state representatives to create a $5.15 billion farmers aid fund. Nearly half of that fund could go to North Carolina farmers.

Governors from five states, including North Carolina, met Wednesday and again Thursday with tobacco company representatives to hammer out the deal.

The greatest stumbling block was R.J. Reynolds C.E.O. Steven Goldstone, who opposed the fund, saying tobacco companies should buy more U.S. leaf instead.

Goldstone did not attend the Durham meetings, but was involved in negotiations by phone.

"I'm hopeful," Governor Hunt told WRAL just hours before the agreement was reached. "I had a good conversation with Mr. Goldstone yesterday, after this meeting. And we're trying to see if we can work something out."

The other governors who cleared their schedules for the meetings were also encouraged.

Virginia Governor Jim Gilmore said Goldstone did not want to be the holdout who caused the collapse of the aid package for the farmers.

"He didn't give us any sort of commitments but he said that he was concerned, particularly that the governors' position was that there was a deal, that there had been a commitment, and that he was a man of his word, and therefore he was concerned about that aspect of it, and he wanted to consult a little bit with some of his people," Gilmore said.

There was a lot of consulting going on at the Durham Convention Center. When the governors and big tobacco's lead negotiator retired to a private room around 11 a.m. it raised the hopes of tobacco farmers.

"I just think the tobacco family, as we call ourselves, you have to have strong spokes in the wheel, and I think R.J. Reynolds realizes this and I think they'll come forth and join in the pact," said tobacco farmer Lemar Deloach.

And join they did. R.J. Reynolds,Philip Morris,Brown and Williamsonand Lorillard have agreed to contribute to the fund over a 12-year period.

Philip Morris representatives initially proposed the trust fund last November, after the major cigarette makers agreed to a$206 billion settlementwith 46 states to reimburse them for health care costs related to smoking.