Cigarette Makers Agree to Farmers Fund

The nation’s largest tobacco companies agreed to fund a $5.15-billion, 12-year plan to bail out tobacco farmers facing lower leaf demand in the wake of November’s national tobacco settlement, officials involved in the talks said. The compromise deal, promised to tobacco-producing states as part of the $206-billion settlement of state Medicaid lawsuits against the industry, was reached after R.J. Reynolds Tobacco Co. agreed to participate in setting up a trust fund for the farmers, they said. “It really was just a matter of rearranging the numbers in a way that all the companies could afford,” said Phil Carlton, lead negotiator for the nation’s largest tobacco companies, who met with politicians from tobacco-growing states. R.J. Reynolds was initially reluctant to commit to the payments. The deal had appeared in jeopardy after Reynolds signaled it would stick with a plan to purchase more domestic tobacco instead of contributing to a state-managed trust fund supported by the other major companies.