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Knoxville — Tennessee tobacco farmers are receiving financial payments as part of the settlement of the lawsuit filed by states against tobacco companies.

A tobacco specialist with the University of Tennessee Agricultural Extension Service said the money will compensate farmers hurt by a projected decline in demand.

“As part of the agreement, it was deemed that tobacco companies would likely raise prices to cover the cost of the settlement,” said Dr. Don Fowlkes. “A side agreement in the settlement provided for money to compensate producers for an eventual decline in production.”

Legal issues prevented the checks from being distributed in Tennessee last winter, Fowlkes said.

“This first year, payout will be in the neighborhood of $29 million in Tennessee,” Fowlkes said, “which sounds like a lot, but that’s divided among many producers and quota owners.”

Tennessee will also receive payments to compensate for treating people with smoking-related illnesses.