R.J. Reynolds Pulls Out of Farmer Aid Plan

R.J. Reynolds Tobacco Co. said that it has pulled out of a $5-billion plan to help tobacco farmers absorb the expected fallout from the $206-billion tobacco settlement with the states. Reynolds said it will not give money to foundations that the industry plan would have established to help farmers who are expected to grow less tobacco as higher cigarette prices go into effect, possibly depressing sales. Instead, the nation’s No. 2 cigarette maker said it will help growers through a plan announced earlier this week to buy more U.S. tobacco next year and maintain purchases at least at that level for the next 10 years. The Reynolds decision may jeopardize the tentative industry plan. “What Reynolds has done is force everything back to the drawing board,” North Carolina attorney Phil Carlton, the lead industry negotiator in the tobacco plan, told the News & Observer of Raleigh, N.C.