LEXINGTON, KY - Philip Morris will hold meetings in Atlanta next week to outline what some tobacco growers believe may lead to the end of the auction system.
If the company, the nation's largest tobacco buyer with nearly half the U.S. cigarette market, pushes for a different system of sales, burley growers are threatening to support President Clinton's proposed 55-cent increase in the tax on cigarettes.
"We'd be fools not to pursue looking at what the administration has to offer," said Rod Kuegel, president of the Burley Tobacco Growers Co-operative Association.
Cigarette-makers have often relied on farmers to lobby Washington, and that has given farmers some leverage with the companies.
Kuegel said that, during talks earlier this year on the tax increase, White House policymakers indicated that some of the $8 billion expected to be generated by the tax increase could go to provide economic help for tobacco growers.
In January, Kuegel told the White House he could not support an increased tax on cigarette companies while negotiating for a trust fund for farmers hurt by the tobacco master settlement.
But if the companies move to kill off the auction system, all bets are off despite language in both the $206 billion (phase one) master tobacco settlement and the $5.15 billion (phase two) grower trust fund deal that links payments to consumption and taxes.
"If I can get a nickel of excise tax, I'll take it over both phase one and phase two," Kuegel said.
That nickel would be enough for a buy-out - farmers who wanted to could get out of the business; those who stay face contract growing or selective buying.
Philip Morris has invited burley and flue-cured tobacco growers to separate meetings in Atlanta next week to clarify the company's position on selling by auction.
"We hear it's to announce a pilot project of nonauction sales for burley and flue-cured tobacco," Kuegel said.
Philip Morris spokesman Mike Pfeil said the company plans "to explore options relative to the purchase of tobacco ... but we are clearly not moving away from the auction system."
Most farmers don't see it that way, however. Pfeil said that while Philip Morris has been thinking about alternatives, it has no concrete plan to propose to the growers. He said the company is eager to hear what ideas the growers might have.
Growers are concerned that any changes to the U.S. auction system - which some tobacco sources say costs roughly five times as much as the auctions systems in Canada and Zimbabwe - could jeopardize their quota and price support system.
The federally administered quota system limits the amount of leaf growers may sell, but guarantees a minimum price for their tobacco.
Now, almost all tobacco is sold at warehouses by what is ostensibly an auction, a system set up during the Depression. The tobacco is classified by USDA graders, and a minimum price is set for each grade. Buyers for tobacco companies walk down row after row of pallets of tobacco, indicating at each one how much more than the support price they are willing to pay. Tobacco they don't buy is eventually sold to the "pool" of surplus stock owned by the co-op.
Most burley growers support the auction system as a way of maintaining the guaranteed price.
But some farmers would support the idea of a more free and open market.
"Ending the auction system has short-term appeal," Kuegel said, "but it's a danger to the price support system...and a danger ultimately to the quota system."
As the companies develop relationships with large growers, he said, the cigarette-makers will persuade them to get rid of quotas so the farmers can grow as much tobacco as they want.

RICHMOND, Va. (AP) - U.S. Rep. Virgil Goode, D-5th, and his district's Democratic leaders have begun to patch up some of the differences that only recently had key Democrats talking about throwing him out of the party.
Goode - one of the House of Representatives' most conservative  Democrats - met with local leaders 10 days ago in Lynchburg,  explained many of his votes against President Clinton and promised to help elect Democrats to the General Assembly this fall.
''Everybody acknowledged that Virgil is very conservative, as is the 5th District,'' said Tom Proulx, a 5th District committee member from Afton. ''I think the committee had put the impeachment vote behind it. They also were delighted that Virgil planned to help elect Democrats to the General Assembly.''
Goode, 52, a former state senator and second-term congressman, was one of six Democrats in the House of Representatives to vote to impeach Clinton. A Congressional Quarterly study found that he voted against Clinton 74 percent of the time on 82 bills last year.
Three months ago, the 5th District committee adopted a resolution urging Goode to meet with the members and explain himself. Some, including 5th District Chairman Carl Eggleston of Farmville, talked about putting up a candidate to oppose Goode for the Democratic nomination in 2000.
But at the recent meeting, the atmosphere was cordial, Goode said.
''I read through a list of 15 votes (against the president) and explained that my votes are in touch with the people of the 5th District,'' he said.
While not everyone agreed with his positions, they listened, Goode said.
''It goes without saying that Virgil is honest and votes his conscience,'' said Democratic committee vice chairwoman Josephine Blue of Charlottesville. ''He's definitely concerned about the 5th District and the legislative races.''
Committee member Sheila Baynes of Danville said local Democrats decided the main focus should be the General Assembly elections. After that, there still might be repercussions against Goode, she said.
But committee member Carol W. Black, the clerk of Bedford County's circuit court, said some Democrats are concerned about driving the Rocky Mount lawyer into the opposition party. When Goode was under fire from Democrats this winter, Republicans invited him to join their party.
''Virginia can win however he chooses to run,'' Ms. Black said.

Instead of serving time in prison, the three young men who went on a vandalism spree in South Boston last September will pay their debt to society by completing 300 hours of community service.
Last week Halifax County Circuit Court Judge William L. Wellons ordered Richard Gus Wells, 19, of Indian Trail Road, Buffalo Junction, Byron Edward Hunt, 20, of Yates Street, South Boston, and Jamie Allen Seamster, 19, of Good Trail, South Boston, to complete 300 hours of community service as part of their punishment for egging and spray painting the exterior and sidewalks at the Halifax County High School, painting insulting messages at Merritt Hills and vandalizing several vehicles September 20.
Wellons sentenced each of the three men to serve a total of three years behind bars but suspended their sentences on certain conditions.
While Wellons suspended all prison time, he ordered Hunt and Wells to serve one weekend in jail, complete 300 hours of community service, and demonstrate good behavior for a three year period.
Seamster's sentence was even further reduced, as Wellons suspended 100 of the 300 hours of community service, reducing it to 200 hours, and did not give him any jail time.
As part of the conditions of their suspended sentences, all three men will be required to make restitution in excess of $1,300 to cover the cost of repairs to the school, Merritt Hills, the vehicles they damaged.
In other cases heard last week in Halifax County Circuit Court:
· Christopher Allen Davis, 24, of Cowford Road, Halifax, was sentenced to serve a total of four years and two months in prison. As part of a written agreement in exchange for his testimony in the murder trial of Denny Melton earlier this month, Wellons nol prossed the four grand larceny and one vandalism charges against Davis. Judge Wellons sentenced Davis to serve five years in prison on each of four remaining third conviction-larceny charges for a total of 20 years and suspended all but two years and two months. Wellons added an additional two years to Davis' sentence for violating the conditions of his probation outlined during an earlier trial in March of 1995. Wellons based the suspended sentence on the condition that Davis be on good behavior for a 20 year period following his release from prison.
· Harry Lee Hayes, 38, of Bethel Road, Halifax, was sentenced to 12 months for misdemeanor sexual battery. Judge Wellons suspended six months of the 12 months sentence on the condition of Hayes' good behavior for a 12 month period following his release from incarceration.
· Tywan Harold Miller, 22, of Millner Lane, Nathalie, pleaded guilty to hit and run, driving on a suspended operators license and reckless driving. He was found guilty to all three counts and will be sentenced during the May term of court.
· Mack Arthur Kincy, 33, of Wise Loftis Road, Virgilina, was sentenced to five years in prison each of two counts of distribution of a schedule II controlled substance, namely cocaine, and two counts of conspiracy to distribute cocaine for a total of 20 years. Judge Wellons suspended all but 12 months of the 20 year sentence, with authorized work release, on the condition of Kincy's completion of one year active supervised probation and good behavior for a five year period following his release from prison. Wellons nol prossed a charge of possession of a firearm while possessing cocaine.
· William J. Sydnor, 39, of Easley Street, South Boston, was in court on a disposition concerning his first offender status. On a joint motion, Judge Wellons dismissed the charge of possession of cocaine against Sydnor upon the payment of court costs and related fees.

Narcotic task force officers re-arrested a Street Sweep suspect on federal drug charges Thursday.
According to Sgt. Richard Pulliam, Halifax/South Boston Regional Narcotic Enforcement Task Force coordinator, Clarence Junior Herndon, a.k.a. "Huckabuck", was arrested near his home at Punk's Self Service Store in Nathalie Thursday evening.
"Huckabuck" who was out on bond from conspiracy and distribution of cocaine charges stemming from the task force's recent Operation Street Sweep, has been named in a Federal multi-count indictment for distribution of cocaine, conspiring to distribute cocaine, use of a firearm while trafficking cocaine, and possession of a sawed off shot gun.
This most recent arrest came as a result of a subsequent and extensive investigation by the task force into Herndon's alleged drug operation.
The investigation of the 50-year-old Herndon and the "Huckabuck Operation" is continuing, according to Pulliam.
"Additional federal indictments are anticipated for individuals involved in the organization at all levels from distribution to purchasers and users of illegal drugs," Pulliam said.
"The Task Force would like to thank all the concerned citizens that called with information. Without the assistance of our citizens, our goal, which is to alleviate illegal drug use in our town and county, could not be accomplished," he added.

Halifax County Sheriff's deputies arrested a Vernon Hill man Friday on multiple rape charges dating back to 1983.
According to reports from the Halifax County Sheriff's Department, Eddie Ewis Barksdale, 47, of Nunally Bridge Road, Vernon Hill, was arrested and charged with three counts of rape and two counts of taking indecent liberties with a child by a custodian.
The alleged offenses occurred on December 15, 1983, July 2, 1986, and December 21, 1988.
In other county reports, deputies arrested Terrence Kirby, 25, of Ball Park Road, Halifax, Sunday at 1:55 a.m. on felonious assault charges.
The charges stem from an alleged assault on Tyrone Acree, reports indicated.
Deputies arrested Darryl Duane Hand, 35, of Hunting Creek Road, Nathalie, on felonious assault charges Friday.
According to reports, Hand allegedly assaulted Angela Rae Wright Thursday.
Otis T. Bray, 51, of Virgie Cole Road, South Boston, was arrested last week and charged with issuing a bad check.

Domestic disputes resulted in several arrests late last week, according to reports from the Halifax County Sheriff's Department and South Boston Police Department.
Quentin Lee Jennings, 27, of Old Grubby Road, South Boston, was charged with assaulting his wife, Terri P. Jennings Thursday.
Halifax County Sheriff's deputies S. Britton and T. Lewis arrested Jennings and charged him with assault and battery on a family/household member.
The same day Deputy L.S. Yeatts arrested Sharon Bowman, 36, who reportedly resides at the Hillcrest Motel in South Boston on charges of assault and battery on Terrence Bowman Sr.
Friday, Sandra Denise Faucette, 34, of Springdale Drive, South Boston was arrested by Deputy T.K. Redd and charged with assaulting Maurice Faucette, a family/household member.
All three individuals are scheduled to appear in Halifax County Juvenile and Domestic Relations Court April 21.
A brother and sister were charged with assaulting each other following a domestic dispute at their home at 412 Grove Ave. Saturday, Sgt. D.L. Blanks with the South Boston Police Department said.
South Boston officer Don McGregor responded to the call on Grove Avenue around 4 a.m. Saturday and charged both Christopher P. Simmons, 18, and his sister, Melissa M. Simmons with assault and battery on a family/household member.
McGregor also charged Ms. Simmons with destruction of property and underage possession of alcohol.
The following afternoon at 12:15 p.m. South Boston officers responded to a domestic dispute on Ferry Street.
When Officer F.N. Daniel arrived at 315 Ferry Street, he spoke to the complaintants and arrested Oscar Mosely Jr., 37, and charged him with assaulting his girlfriend, Denise Chappell, also 37.

The Vaughan Street Bridge suffered minor damage when it was hit by a loose log Friday afternoon.
According to reports from the South Boston Police Department, a log sprang loose from a loaded tractor trailer and struck the bridge as the vehicle passed below it on John Randolph Boulevard at 4 p.m.
The driver of the 1995 Western Tractor logging truck, Steven Ray Toombs, 39, of Sax, was not charged in the incident.
Town officials contacted the Virginia Department of Transportation, and the bridge will be checked for damage during a routine inspection scheduled to take place in two weeks, Sgt. D.L. Blanks with the South Boston Police Department said.
In other reports, four people suffered minor injuries in a two-car collision on River Road Thursday afternoon at 4 p.m.
Shirleta Sydnor, 22, of Halifax, had stopped to turn off of River Road when she was hit from behind by a 1996 Geo driven by John Otey Irby II, 61, of Halifax.
Sydnor, as well as three passengers riding with her in the 1994 Mercury, Virginia Price, Diante Medley and Jaqueta Byrd, complained of injury, reports indicated.
Damage to the Sydnor vehicle was estimated at $2,000, while the Otey vehicle sustained an estimated $2,000 in damages as well.
Investigating South Boston Officer T.M. VanAernem charged Otey with following too closely.
Officers were called to investigate a two-vehicle collision at the intersection of Wilborn Avenue and Edmunds Street earlier that day around 1 p.m.
According to reports, Chandra Claiborne, 23, of South Boston was attempting to make a left turn from Wilborn Avenue on to Edmunds Street when she was struck by a 1985 Ford pick-up truck driven by Kris Albert Mele, 24, of South Boston.
Damage to Claiborne's 1988 Ford was estimated at $2,000, while the truck sustained an estimated $1,500 in damages.
VanAernem charged Claiborne with failure to yield the right of way.
Early yesterday morning South Boston Police Officer R.D. Edmonds charged Shannon Moore, 28, of Edmunds Street, South Boston, with failure to give his full attention to driving after he struck a parked car on College Street.
Reports indicated that Moore was driving a 1992 Mitsubishi at 4 a.m. Sunday when he struck the left side of a 1982 Buick parked on the side of College Street.
Damage to the Buick, owned by Shirley Majors of College Street, was estimated at $1,000, while the Mitsubishi sustained an estimated $1,500 in damages.
A driver who allegedly cut through traffic to make a right turn from a left-turn lane contributed to the collision of two tractor trailers Wednesday.
Reports from the Virginia State Police indicated that Elizabeth F. Guill, 58, of South Boston, made a right turn on to route 501 from a left lane of U.S. 58 at 3:25 p.m., cutting across the path of a tractor trailer driven by Otha Sneed, 36, of Richmond.
Sneed, who was operating a 1995 Ford tractor trailer owned by Oliver Sneed Trucking out of Richmond, stopped to avoid the Guill vehicle and was struck in the rear by another tractor trailer driven by Ricky Don Norton, 37, of Scottsburg.
Investigating Trooper J.V. Bavely charged Guill, who was driving a 1993 Honda, with improper turning. Norton, who was driving a 1996 Volvo tractor trailer for K.R. Snead Trucking out of Scottsburg, was charged with following too closely.
Damage to the Norton truck was estimated at $4,000, while Sneed's truck sustained an estimated $50 in damages.
Approximately five minutes later at 3:30 p.m., a Halifax man lost control of his vehicle on Waltman Trail six tenths of a mile north of Route 360.
State Police records show that Tracy Marcel Marabel, 36, approached a curve in Waltman Road (Route 622) traveling too fast in a 1988 Chevrolet van. The van slid and Marabel reportedly lost control.
The van crossed the road and overturned after striking an embankment. The van sustained an estimated $1,500 in damages.
Investigating State Trooper M.S. Roark Jr. charged Marabel with reckless driving.

A plea from the widow of an Air Force pilot killed two years ago in a collision with a German air force jet, has started a legislative chess game, that could end with Congress tying U.S. reparations to families of German victims killed when a Marine Corps jet slashed a cable holding an Italian ski gondola to German payments to the families of the men killed in the Air Force crash.
South Boston's Captain Jason Ramsey was one of the nine killed in the September 13, 1995 crash when an Air Force C-141 transport was hit head-on by the German aircraft off the coast of Namibia.
Monica Cindrich, widow of Captain Gregory Cindrich, who was also killed in the crash, spent last week lobbying Congress to seek restitution from the German government for the families of those killed.
Sen. Strom Thurmond, R-S.C. has sponsored legislation the would put pressure on German to make the payments.
But Virginia Sen. Charles S. Robb is pushing for humanitarian payments to families of the victims killed in the ski gondola crash.
Thurmond wants to block the payments until such time Germany makes similar payments to the families of the U.S. servicemen.
Robb, who had initially disagreed with the plan, late last week, through an aide, indicated his support, according to a published article in yesterday's Richmond Times-Dispatch.
Cindrich who has a four-year-old son, is seeking $3.9 million in restitution from Germany based in part on projected lifetime earnings by her husband, according to the article.
The Senate, in March, adopted a Robb proposal that would pay as much as $40 million to families of the gondola crash victims, that included seven Germans.
When the Robb proposal came out, Thurmond aides approached the Senator with an amendment that would tie the two restitution payments together.
Robb, although willing to cooperate, the article said, claimed he was approached to late by Thurmond's people and wanted to study the proposal more.
Meeting last week, aides to both Robb and Thurmond, were able to work out an agreement with Robb approving the Thurmond proposal and came out Thursday in support.

Beatrice Milam White of Keeling died Saturday, April 17 at her home. Born December 18, 1918 in Halifax County, she was 80 years of age.
She was the daughter of the late James Edward Hall and Carrie Chaney Hall.

Mrs. White is survived by three sons, Woodrow W. Milam Jr. of South Boston, James K. Milam of Keeling and Joe C. Milam of Greensboro, N.C.; one brother, Wilson Hall of Roxboro, N.C.; six grandchildren and six great-grandchildren.
She was preceded in death by her first husband, Woodrow W. Milam Sr. and her second husband, Edward E. White, and by a daughter, Audrey F. Milam.
The funeral for Mrs. White will be held at Brooks Funeral Home Chapel tomorrow at 2 p.m. with the Rev. Jim Smith officiating. Burial will take place in the Oak Ridge Cemetery in South Boston.
The family will receive friends at Brooks Funeral Home tonight from 7:00 until 8:30, and at other times at the home of the deceased, 697 Richardson Lane, Keeling.

Willie Cephas Jones of Halifax died Saturday, April 17 at his residence at the age of 55.
Mr. Jones was born in Halifax County August 25, 1943 and was the son of the late Cephas Jones and Mary Royster Jones. He was a member of the Owens Grove Baptist Church and was a Vietnam Army veteran.
Survivors include his wife, Mattie Mitchell Jones of the home; two daughters, Maranda Cousins of Alexandria and Wanda Crowder of Durham, N.C.; one son, Randy Cephas Jones of Texas; three sisters, Dorothy Gunn of South Boston, Esther Edmondson of Scottsburg and Geraldine Jones of South Boston; one brother, John Edward Jones of South Boston; and four grandchildren.

Funeral services for Mr. Jones will be held Wednesday at 2 p.m. at the Owens Grove Baptist Church with Rev. John Leigh officiating. Burial will follow in the Oak Ridge Cemetery.
The family will receive friends at the home of the deceased, 4060 Mountain Rd., Halifax.

Willie Morton of South Boston died Thursday, April 15 at Halifax Regional Hospital at the age of 77.
He was born in Charlotte County June 5, 1921 and was the son of the late Willie Morton Sr. and Anna Wilson Morton. He was married to the late Helen Richardson Morton.
Mr. Morton is survived by two daughters, Delores Woody and Helen L. Jeffreys, both of South Boston; one son, Alexander Morton of Richmond; seven grandchildren; three great-grandchildren; and two step-children, Dorthann Coleman of Halifax and June Hankins of New York.
Funeral services will be held tomorrow at 11 a.m. at Fellowship Baptist Church with the Rev. Robert Wimbush officiating. Burial will follow in the Rose Garden Cemetery.
The family will receive friends at the home of Mr. and Mrs. John Woody, 805 Berry Hill Rd., South Boston.