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May 19, 2010 8:21 AM by Bea Karnes, News First 5

Tobacco companies cutting contracts with US farmers

Cigarette makers are cutting contracts with tobacco farmers as smoking continues to decline in the U.S.

University of Kentucky economist Will Snell says his state, the nation's top producer of burley tobacco, could lose a fourth of its contracts this year. Many contracts also have been lost in North Carolina, South Carolina, Tennessee and Virginia.

The cutbacks mean farmers who've lost contracts might not be able to pay mortgages, and rural communities could lose jobs and income as farmers have less money to spend.

Some top tobacco companies acknowledge cutting contracts, but won't say by how much. An R.J. Reynolds spokesman says they're just doing what any business would do to keep supply in line with demand.

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