For Immediate Release, Aug. 24, 2000
Contact: Mark Pfeiffer or John-Mark Hack (502)564-2611

Governor Announces Tobacco Phase II and Marketing Initiative

Governor Paul Patton announced today a plan for finding new ways to market Kentucky’s burley tobacco crop. At a press conference in the FFA tobacco display area of the Kentucky State Fair, Governor Patton described some efforts underway and a new tobacco marketing initiative.

“Our focus is on taking the steps necessary to link our present situation with a promising future. Burley tobacco sales in Kentucky have accounted for close to a billion dollars in recent years. This year’s crop looks better than most in recent memory. But looks can be deceiving, and in this case they are,” Governor Patton said.

Recent drastic changes in the economics of tobacco production necessitate aggressive coordination and collaboration among farm leaders, industry representatives, and state and federal government officials.

“This industry has a dire need for both short and long-term solutions,” the Governor said.

Governor Patton stated that more changes in tobacco production and marketing are on the horizon, and it is the responsibility of leadership to ensure we do all we can to best prepare ourselves, to manage these changes and their effects on the people of Kentucky.

Governor Patton described his efforts to address short-term concerns and to begin developing a viable plan for the future of Kentucky burley tobacco. The short-term help is coming in the form of compensation from the National Tobacco Growers Settlement Trust and the federal Tobacco Loss Assistance Program.

Otherwise known as Phase II, the Trust compensates tobacco quota holders and growers for income losses they are incurring as changes in the tobacco industry occur. This year is the second year of the 12-year Trust Fund, and the Governor’s office will be working in the coming weeks to certify the eligibility of tobacco quota holders, growers and tenant farmers to receive compensation from the trust.

Application forms will be mailed, like last year, to all farm operators involved in tobacco production. The forms will go out in mid-September and will be due back at the end of October. In order to receive compensation from the Phase II trust, these applications forms must be completed and returned in a timely manner. Applicants will find this year’s form looks a bit different than last year’s. It’s easier to understand and easier to complete.

A toll-free phone help line will be up and running a week before applications are distributed. You can get answers to any questions you have about Phase II funds by calling 1-877-549-2537 beginning September 10.

Governor Patton said he expects to distribute somewhere around $75 million from the Trust. These funds will be supplemented by an additional $40 million appropriated by the General Assembly from Phase I Tobacco Settlement Funds. The total for this year will roughly equal the amount of money distributed last year from the Phase II Trust. Payments are expected at the end of December.

In the 12 month period from December, 1999 to December, 2000, Kentucky’s tobacco quota holders and growers will have received approximately $489 million: $189 million from Phase II, $260 in federal TLAP funds, and $40 million in state funds.

“This is much needed short term relief, and it will help offset impacts in the near future, the Governor said. “But we also have to focus on the long-term.”

Governor Patton also announced that the University of Louisville International Affairs office has joined with the Governor’s Office of Agricultural Policy and the Burley Tobacco Growers Cooperative to help spread the word on Kentucky tobacco to officials in China. U of L sent a delegation of officials this week to China to meet with the State Development Planning Commission and the State Economic and Trade Commission. They are sharing information about our burley industry with these government groups to continue to build the relationships necessary for doing business in Asian markets.

“It’s a long slow process to establish these business relationships in Asian markets. There are no overnight answers to the questions involved in establishing a business presence in China and other places,” stated Governor Patton.  “We’ll be seeking to use all the tools at our disposal, seeking to bring together as many organizations and institutions as possible, to look for  potential new markets for our tobacco.”

To help coordinate these and other approaches and to develop a strategic plan to guide our marketing efforts, Governor Patton announced his creation of the first ever Governor’s Tobacco Marketing and Export Advisory Council. The Governor will ask to develop an action plan to ensure the global competitiveness and future growth of Kentucky’s burley tobacco industry.

“I am asking them  to explore all marketing opportunities for Kentucky burley; to assess our current marketing infrastructure and to identify the system’s assets, needs and opportunities for change,” the Governor said.

Governor Patton said the plan developed should address grower concerns, industry needs, and should identify opportunities in conventional, emerging and new markets, and the steps necessary to take full advantage of these opportunities. A broad consensus among farmers, industry representatives and government officials is necessary to make the hard decisions faced by tobacco growers in Kentucky.

The Governor’s Office will facilitate a broad-based discussion of tobacco’s future in Kentucky, relying on the expertise of farm group representatives, state and federal governmental officials.

The Governor asked State Senator Joey Pendleton to serve as an ex officio non-voting chair of this group. Senator Pendleton brings years of experience to these issues as both a tobacco farmer and longtime chair of the legislature’s Tobacco Task Force.

Other members of the new group are:

Marshall Coyle, of the Kentucky Farm Bureau
Fred Edwards, of Ridgeway Brands Incorporated and a member of the Burley Auction Warehouse Association
John-Mark Hack, Governor’s Office of Agricultural Policy
Hampton H. “Hoppy” Henton, Jr., of the Farm Service Agency/USDA
Rod Kuegel, of the Burley Tobacco Growers Cooperative Association
Danny McKinney, of the Burley Tobacco Growers Cooperative Association
Tommy Norvell, of Universal Leaf North America
Terry Garmon, of the Kentucky Department of Agriculture
Derrick Vaughn, of Vaughn Tobacco Company
Dr. Will Snell, Agricultural Economics, University of Kentucky, and,
Dean Wallace, of the Council for Burley Tobacco

Governor Patton stated: “These are the experts. We can help them to build the consensus they need, and we plan to begin doing just that in the very near future.”