By By Lisa Tindell – news reporter
Peanut farmers in Escambia County have an opportunity to sell the equity they hold in the Alabama Farmers Cooperative. The only choice is to take the money now or wait for annual payments over the next 33 years.
Peanut farmers who sold peanuts through the AFC between the years of 1975 and 1998 are eligible for the buy-out program, according to information from Tommy Paulk, president of the AFC.
Paulk said since the period of time since the program was in use addresses for many of the farmers have changed under the 911 address programs across the state. Due to that fact, the deadline for accepting a buyout officer with AFC has been extended to Nov. 1 instead of the original Sept. 1 deadline.
Brown said an estimated 30 to 40 percent of the farmers in Escambia County would be affected by the buyout offers from AFC. Although not a lot of peanut farming has been seen in the county for several years, more peanut farmers have appeared over the last several years. &#8220We didn't have a lot of peanut farmers in this area before 1998,” Brown said. &#8220Since then we have seen peanut farming crop up a bit in Escambia County.”
Brown, who also works with farmers in Baldwin and Mobile counties, said farmers who choose to sell their equity in the organization will certainly have to take a hit when tax time rolls around in January.
Brown said under the buyout program, farmers who choose to take a lump sum settlement would be taking a loss in respect to the taxes they have already paid.
As an example, Brown said if a farmer had $200 in profit for the year, they may only received $100 in cash and have $100 in equity with the association. The farmer is required to pay income tax on the entire $200 amount. If they take an 18 percent buyout settlement, they will only receive $36 and lose the remaining $164, for which they have already paid income taxes.
Farmers certainly have options to consider in their decision on how best to handle the equity buyout offer. &#8220It is certainly something to consider with respect,” Brown said. &#8220It is taking a chance if you want to get all of your money. If I were to take the cash, I'd invest it over the 33 years on my own, and wait for my return.”
Brown said the co-op has indicated that annual payments over that 33-year period would only be made in years when the co-op shows a profit. The association makes no guarantee of payments.
For farmers in Escambia County who may have concerns with a buyout offer from FAC, Paulk suggests contact representatives with AFC.
To make notification of correct addresses, farmers who may be a part of the equity buyout offer are urged to send the equity holder's name or names under which peanuts were sold to: AFC, Inc., Equity Offer, P.O. Box 2227, Decatur, AL 35609.