LEXINGTON, Ky. (AP) - Philip Morris has agreed not to pursue contract-grown tobacco, at least for this year.
The cigarette maker's proposal had angered tobacco growers, who in turn threatened to support President Clinton's plan to add 55 cents to the excise tax on cigarettes if manufacturers tried to move away from the current auction buying system.
The growers' threat, which prompted a call from White House policy-makers and talks with Philip Morris executives, persuaded the largest cigarette-maker in the country to continue buying leaf off the warehouse floor instead of off the farm.
''We have listened to the growers' concerns about our proposed partnering program, and ... we will not begin any contract purchase pilot programs during this marketing season,'' said a letter from Philip Morris senior vice president David Milby. ''However, we want to continue our dialogue on this alternative.''
Several growers said Philip Morris' change of heart means they won't have to support the president's excise tax plan.
Both burley and flue-cured growers opposed the pilot program, which would have involved farmers growing tobacco under contract specifically for Philip Morris. Under the current system, farmers take tobacco to a warehouse where buyers for the four major U.S. cigarette-makers, as well as foreign interests, bid to pay pennies above the federally established price for each grade.
Although any farmer can grow tobacco under contract - and some do - most growers think the idea limits their ability to control their fate with the companies.
''We didn't see any advantage to the farmers and a lot of disadvantages,'' McKinney said. ''I can't believe major companies would be out here buying from the 1,000-pound or even the 2,000-, 3,000-pound grower.''
Instead, only large growers would find buyers, he predicted.
Philip Morris controls 54 percent of the domestic cigarette market and 17 percent of the world market and buys about 65 percent of U.S.-grown tobacco. If the company were to switch to contract buying, other cigarette-makers might be forced to abandon the auction system because the stream of tobacco would dry up, industry experts said.
Farmers view the end of the auction system as the end of ''the program'' - controlled prices in exchange for controlled supply.
''The pilot program was not a pilot program; it was a done deal,'' McKinney said. ''When Philip Morris tries something, it's a done deal because they're so big.''
Larry Forgy, spokesman for Louisville-based Brown & Williamson, which is part of British American Tobacco, the second-largest public cigarette company in the world, refused to speculate on what Philip Morris' actions might mean for the other tobacco companies.
''If the actions of some other company were to have the effect of substantially destroying the system, or if farmers voted it out, then we would have to make other purchasing decisions,'' Forgy said. ''We support the allotment and the price-support system, as well as the auction system, as long as farmers want it. ... We're not out here making barn-door deals.''

By MARK R. CHELLGREN
Associated Press Writer
LEXINGTON, Ky. (AP) - Two of the nation's giant tobacco companies say they are working on plans to remove a potentially carcinogenic compound from their products.
Brown & Williamson Tobacco Corp. is experimenting with a curing process developed by a small Richmond, Va., firm to remove some of the nitrosamines from tobacco. Nitrosamines, which are related to nicotine, cause cancer in laboratory animals.
''The problem is you have to do it in a way that makes the tobacco still acceptable to consumers,'' Brown & Williamson spokesman Mark Smith said Thursday. ''If nobody smokes them, then you haven't come up with a product that's less hazardous.''
R.J. Reynolds Tobacco Co. said it has also found a new way to cure tobacco that reduced nitrosamines but said its findings were limited to lab studies.
Both companies were careful not to make broad claims about finding a healthier tobacco. Even without nitrosamines, cigarettes contain multiple agents that have been found to cause cancer.
''We agree with the scientific community that more research has to be conducted and we believe it would be irresponsible to claim, or imply, that cigarettes with low nitrosamines are somehow safer,'' said Gary Burger, senior vice president for research and development at Reynolds.
But an anti-smoking activist said the message the companies want to convey is clear. Dr. Jim Roach, a Midway, Ky., physician, said the effort to improve cigarettes is laudable, but suspicious.
''There are at least 34 cancer-causing agents in cigarettes,'' Roach said. ''Removing one will help and I'm glad they're doing it.
''The ulterior motive (of the manufacturer) is to say cigarettes are safer and you don't have to stop. That's the message that we've got to be careful does not get transmitted,'' Roach said.
Reynolds is the second-largest cigarette in the United States, has brands including Winston, Camel and Salem. B&W is No. 3 in the nation, with brands such as Kool, Lucky Strike and Viceroy.
The companies are working to make sure the removal of a compound doesn't alter the taste that appeals to smokers. Harold Burton, a University of Kentucky chemist who has been assisting Star Scientific, the Richmond company working with Brown and Williamson, said taste remains a stumbling block.
The company bought 100,000 pounds of tobacco last year that was cured with the new process. It hopes to buy 1.2 million pounds this year.
Paul L. Perito, a spokesman for Star Scientific, which began as a small manufacturer of discount cigarettes, said it will use the improved tobacco in its products and license the process to other cigarette manufacturers.
Roy Burry, a tobacco industry analyst with Brown Brothers Harriman, said cigarette manufacturers can use any edge they can get. A company that succeeded in removing nitrosamines without repelling consumers would likely get some boost.
''It seems to be a pretty small thing. But why not?'' Burry said.

South Boston Police arrested a local man after he allegedly tried to deposit a $150,000 sweepstakes promotion check in his account Friday.
Lt. Rick Loftis with the South Boston Police said Landouph Lee Palmer, 23, of 911 Owen Avenue, South Boston, was arrested on charges of forgery and uttering after he allegedly marked out the "Non negotiable" notation on the sweepstakes promotion check made out to him and deposited it at the ATM machine in his account at One Valley Bank on Wilborn Avenue.
Palmer is scheduled to appear in Halifax County General District Court for an advisory hearing this week.
A domestic argument turned violent early yesterday morning and resulted in a local woman's arrest.
South Boston Police officer M.T. Moreno arrested Latasha Katherine Reaves, 24, of 320 G Willow Oaks Apartments in South Boston, and charged her with malicious wounding.

Loftis said Reaves had been arguing with Keith Link of Glendale Drive, South Boston, around 2 a.m. Sunday when she allegedly cut his arm with an eight-inch stainless steel knife.
Link was taken to the emergency room at Halifax Regional Hospital where he was treated for his wound and released.

A Halifax County man was arrested and charged with his third domestic violence offense, according to reports from the Halifax County Sheriff's Department.
MacArthur Lewis, 31, of Tobacco Road, Nathalie, was arrested Thursday and charged with domestic violence, third offense.
The charges stem from an incident that allegedly took place March 7.

Several people were found guilty of drug charges last week in Halifax County Circuit Court before Judge Charles L. McCormick III.
Roscoe Waller, 30, of Drive-In road, Nathalie, was remanded to the Blue Ridge Regional Jail in Halifax after he was found guilty of distributing and conspiring to distribute cocaine.
Waller pleaded not guilty to the charges and was found guilty of both. On a motion of Regional Drug Prosecutor George Buzzy, a second count of distributing cocaine was nol prossed.
Paul L. Lawhorne, 28, of Ronalds Lane, Nathalie, pleaded not guilty to charges of conspiracy and distribution of cocaine, but was found guilty on both counts.
Lawhorne will remain free on bond until a presentence report is presented during the July court term.
Frankie Nicole Stone, 25, pleaded guilty and was found guilty of distributing cocaine and conspiring to distribute cocaine.
A presentence report was ordered for the July court term.
Matthew A. Morgan, 46, of North Main Street, South Boston, went on trial for charges of possessing cocaine, being drunk in public and disorderly conduct.
He entered an Alford Plea on the drug charge and was found guilty.
McCormick nol prossed the remaining charges and allowed Morgan to remain free on bond until he is sentenced in July.
Mary Kathryn Jordan, 40, of Old Richmond Road, Keeling, was found guilty as charged after she entered an Alford Plea to the charge of possessing cocaine and pleaded guilty to possession of cocaine and trespassing on church property after hours.
McCormick ruled that Jordan could remain free on bond until she is sentenced in July.
Corey Latroy Crawley, 20, of Clover, pleaded not guilty to the charge of possession with intent to distribute crack cocaine.
After reviewing the evidence, McCormick ruled that the would take the case under advisement.
Crawley remains free on bond.
Scott Hadley Rottler, 41, of Noblin Avenue, South Boston, who was found guilty last August of distributing cocaine, was sentenced to five years on each of three counts.
McCormick suspended all but 12 months jail time of this 15-year sentence on the condition of Rottler's good behavior for a 15-year period.
McCormick also ordered Rottler to complete two years supervised probation upon his release from incarceration.
Tony Ezra Cunningham, 37, of Sandy Beach Road, South Boston, was sentenced to 90 days in jail after McCormick found him guilty of operating a vehicle after being declared an habitual offender.
On a motion by Commonwealth Attorney J. Turner, the McCormick amended the felony indictment to misdemeanor status.
McCormick also authorized work release for Cunningham while he is serving his sentence.

After three years of wet weather conditions, organizers of the annual Cluster Springs Volunteer Fire Department "Support Day" are crossing their fingers that the sun shines on this year's festivities being held this Saturday.
"We've been rained on for the past three or so years, but we're hoping for some sunny weather this year," said Rob Ford with the Cluster Springs Volunteer Fire Department.
But even if it does rain, individuals attending the festivities May 8th at the Cluster Springs Fire Department on Route 501 south can count on having a good time.
The gleaming fire trucks, fancy old vintage cars, floats and horses will begin winding their way along Cluster Springs Road as the 7th Annual Cluster Springs Volunteer Fire Department Support Day Parade begins at 11 a.m.
Throughout the day there will be ride and games for all the youngsters, exhibits, arts and crafts, vendors, a variety of delicious food, and lots of local music and entertainment including the Mixed Result Band, Bostonaires, Jo Beth Cole, Country Club House Dancers, Harold Young & Friends, Crystal Day and the Knite Rider Band, and the Shop.
The Lifeflight Helicopter out of Duke Medical Center in Durham, N.C., is also scheduled to make a landing around noon.
A streetdance featuring Southern Steel will kick off at 7 p.m. and will boogie the evening away until 10 p.m.
Raffle tickets are still available for the two night trip to Las Vegas, but they are going fast.
Ford said this year the fire department wanted to do something a little bit different and teamed up with Uniglobe Travel to offer this generous package.
"We only printed up 300 tickets at $10 a chance, and right now there are probably just under 100 left," Ford Said.
Raffle tickets can be purchased from any member of the Cluster Springs Volunteer Fire Department.
Sponsors for the 7th Annual Support Day include: Boston Lumber Company, Puryear Trucking, Rogers Electrical & Air Control, Green Auction & Reality Co., South Boston True Value, Haley's House of Carpets, Ratliff Grocery/Riverdale Auto Sales, U.S. Oil Cox Oil & Gas, Crossroads Food Shop, Newbill's Body Shop, Riverdale Amoco, Bloomers Florist, Riverdale Dairy Dell, Fallen Trucking/Flashback Auto Sales, South Boston Livestock Market, Ragans Electric Co. Inc., J.W. Shelton Auction & Reality, Wilborn's Snack Bar, Franklin's Garage, Bobby Tree Service, Camp Chemicla, Elliott's Auto Sales/John Deere Dealer, Brooks Funeral Home Inc., Wyatt Chevrolet, Olds, Buick, Pontiac, Nelson's Backhoe & Trenching Service, Reagan Repair Service, Puryear's Tire Distr./Puryear Farms, Slagle's Fire Equipment & Supply Inc., Oval Engineering, Walker's Auto Repair, Ed's Inc. Honda-Yamaha, Tangles, Pet Dairy Milk & Ice Cream, Ready Oil Co., Harrison Conner Construction, Fisher Auto Parts, Mac Ragan's Auto, Crestview Restaurant, Roger Slagle Excavating, Bob Ford, Ray's Home Repair Service, Blue Ridge Livestock Inc., E.C. Lewis Jr. Construction, Bo's Hydraulic Inc., Uniglobe Travel Inc., The Office Shop, Mike's Home Repair, and Emmitt Link Exterminating Co.

"We're having a party," exclaimed a grinning Halifax County Senior High special education student as he danced his way across the floor of the auxiliary gym which had been converted into a fantasy of lights and sounds for a special Junior Senior Prom Friday.
Strobe lights flashed and the music resonated against the streamer-lined walls as students grooved and mingled during this very special afternoon at Halifax County High School.
Students and faculty members began work on the auxiliary gym Monday in preparation for the second PEOPLES (Physical Education Opportunities for Exceptional Learners) Junior and Senior Prom for special education students at the Halifax County middle and high school.
Jill Satterfield, who graduated from Halifax County High School last year, came up with the idea to hold a special prom for students who otherwise probably would not have the opportunity to attend the regular prom, according to Halifax County High School Special Education teacher Jim Barczak, who likes to treat his students to picnics and other activities at his home and throughout the community.
"Some of these children would never get the chance to get close to something like this," said HCHS Special Education Assistant Kathy Bowan. "You really have to see these children's expressions to understand. They need patience, caring and love. These children are motivated by love."
The days preceding the prom were filled with anticipation, Bowan said.
"'We're going to party, aren't we, Mrs. Bowan?' That's what I've heard all week," Bowan said with a smile as she straightened a satin bow on one of the student's gowns.
What made the event even more special was the community's response, Barczak and Bowan agreed.
"When the word got out that we were going to do this again this year, the community really responded. Some of the local cleaners donated dresses, and several local grocery stores and restaurants donated refreshments," Bowan said. "So many people have had a part in this. Teachers, students, Sunday school classes...this took a lot of time and a lot of planning."
The result was well worth the effort, according to HCHS Principal Larry Clark.
"Too often these children don't get the opportunity to participate in these activities, and this prom gave them a chance to be part of our student body and enjoy something as traditional as a junior and senior prom. It really makes these kids' high school years special," Clark said, who thanked the numerous individuals and local businesses for their support.

Mr. Lonnie Lee Ewell of Vernon Hill died Friday, April 30, 1999 in Duke University Medical Center, Durham, NC at the age of 35.
Born April 24, 1964 in Halifax County, he was the son of Johnnie R. and Susie W. Ewell. He was a member of Mountain Grove Missionary Baptist Church and was an employee of O'Sullivan Furniture Company.
In addition to his parents, he is survived by a son: Tyriek J. Deshazor of Danville; brother: Robert S. Ewell of Vernon Hill; sisters: Christine E. Anderson, Blairs, Carol M. Tanner and Doris A. Ewell, Ringgold, and Penny M. Wilson, Vernon Hill; and a maternal grandmother, Charolotte Williams, Keeling.
A funeral service will be conducted at 1 p.m. Tuesday, May 4, at Mountain Grove Missionary Baptist Church by Rev. Arthur E. Crews. Interment will be in the church cemetery.
The family will receive friends at the residence of his parents, Mr. and Mrs. Ewell, 1080 Ewell Lane, Vernon Hill.

Eddie Mae Carr of Brooklyn, NY died Monday, April 19, 1999.
Ms. Carr was born October 4, 1914 in Halifax County the daughter of Henry and Sirlene Ewell Carr. She was a member of Cornerstone Baptist Church, an active member of the Virginia Club, the Sunday School Adult Department, was a Sunday School teacher for many years, was a member of the Order of the Eastern Star, Gate City Chapter #2 and the Elks Excelsior Temple #35. She was a beautician and also worked as a Nurse's Assistant.
A service was held at Cornerstone Baptist Church in Brooklyn on Thursday, April 22 at 10 a.m. with Dr. Harry S. Wright and Rev. Henry G. Scott officiating. A final funeral service was held Saturday, April 24 at 2 p.m. at Sunflower Baptist Church in Nathalie with burial in Sunflower Baptist Church Cemetery.
Survivors include one sister, Dr. Bessie Carr; four brothers, John Pleasant Carr of Halifax, James Carr of Richmond, Robert Carr of Brooklyn and William Carr of Bowie, MD; three sisters-in-law, Lucy Willie Carr of Nathalie, Bettie M. Carr of Brooklyn and Louise Carr of Bowie. She was preceded in death by her husband, Alexander Smith; two brothers, Henry Moses Carr and Charlie Carr.