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A Kentucky judge’s recent ruling against the Burley Tobacco Growers Cooperative could affect other tobacco co-ops nationwide.

On March 15, Fayette County Circuit Court Judge Pamela Goodwine ordered the co-op based in Lexington, Ky., to give its members proceeds from the sale of tobacco acquired from the 2004 tobacco buyout. The co-op has sold more than 59 million pounds of the surplus tobacco for nearly $118 million. It still has more than three million pounds to sell, which is expected to result in $12 million.

The co-op has tens of thousands of members in Ohio, Kentucky, Indiana, Missouri and West Virginia. Eligible members could receive about $600, said Pat Raines, a co-op member who lives in Adams County, Ohio.

Roger Quarles, president of the co-op, told the Lexington Herald-Leader that he thought that when Congress gave the co-op the surplus tobacco that it could do whatever it wanted to with it … "dispose of it, sell it, burn it, whatever." But the judge ruled that by selling the tobacco, the co-op had to share the proceeds with members.

Raines said the co-op had already planned to distribute some of the money made from the surplus tobacco sold in 2006. The group uses some of its funding for lobbying and the marketing of burley.

"We may be required to distribute more than we planned to," Raines said. "It’s up to the judge on how much."

The lawsuit was filed in 2003 and originally dealt with the proceeds from a 1982 tobacco sale but was expanded to cover the recent sale. Goodwine ruled that the farmers were not entitled to the proceeds from the 1982 sale.

The co-op now has to submit a yearly budget to the judge for approval and work out a timeline for distributing the 2006 tobacco proceeds, Raines said. It has not been determined how much money will be distributed, he said. As of press time, the co-op had not decided whether to appeal the ruling.

"The ruling will, no doubt, force the Burley Tobacco Growers Co-op, as well as similar associations that exist in the nation’s tobacco production regions, to re-examine how they may benefit and support growers as the post tobacco buyout era begins," said David White, Ohio Farm Bureau’s senior director of policy development and research.

Despite the judge’s ruling, the Kentucky co-op will continue to effectively function, Raines said.

White noted that the ruling could impact the availability of funding for programs that the co-op had set up to help growers address post buyout transitional issues and challenges.