The millions of dollars expected to pour into Southern Maryland from the tobacco litigation settlement would be used to preserve agricultural land and help tobacco farmers shift to other crops, according to a plan drafted by political leaders and members of the agricultural community.

No program to compensate farmers for the tobacco they continue to produce is envisioned under the plan, though many tobacco farmers have advocated such a subsidy.

Maryland Gov. Parris N. Glendening (D) has agreed that Southern Maryland, home to most of the state's tobacco farmers, should receive 5 percent of the $4.6 billion the state expects to receive over 25 years under terms of the settlement with tobacco companies. That will work out to $2.5 million in fiscal 2000, and $9 million to $12 million for each of the following 25 years, all channeled through the Tri-County Council for Southern Maryland.

"Amongst the farming community, this is probably one of the most exciting times that we've ever had," said state Sen. Thomas McLain Middleton (D-Charles), a tobacco farmer and a leader in efforts to devise the best uses for the tobacco funds. "It's the first sizable infusion of money to help us diversify our agricultural businesses in anyone's memory."

The Tri-County Council, a regional planning agency, is now helping to draft an executive order to create a semi-independent commission that would oversee a host of endeavors, including an agricultural land preservation effort, genetic research, and transition and buyout programs.

The ultimate goal of the new commission would be to keep land in agricultural uses while phasing out tobacco production and finding alternative crops for the approximately 700 tobacco growers remaining in the state.

Earl "Buddy" Hance, a Calvert County farmer with 350 acres of tobacco fields, is optimistic that the plan -- which he helped draft -- will be good for the region and its farmers.

"In the past, there has always been talk of growing alternative crops, but there's never been enough money to do the research necessary," Hance said. "Now we actually have some money."

Hance has started to grow strawberries, and expects to farm more of them as he reduces his tobacco production. But strawberries -- or mushrooms, vineyards and aquaculture, all examples Middleton offers of possible alternative crops -- will probably not be as lucrative as tobacco.

Tobacco accounts for two-thirds of Southern Maryland's agricultural revenue, even though the region farms only 8,000 acres of tobacco a year, compared with 158,000 acres of other crops.

"For income per acre, not much else will match tobacco," said Steven Walter, a Hughesville tobacco farmer and president of the Southern Maryland Tobacco Board. "That's where the settlement money would come in to help you transition."

Though Walter supports the current plan, he hardly exudes enthusiasm. "I guess it's okay," he said of the proposal. He would have liked to have seen subsidies that would pay farmers $1 per pound on tobacco they continue to produce, but says he understands that they are not "a political reality," since Glendening is staunchly opposed.

Subsidies "would be like having your cake and eating it too," Walter said. "Some farmers didn't understand that."

Under the transition program, participating growers would cut back their tobacco production by 10 percent each year, and be paid $1.50 per pound of production reduced. Or they could opt for a buyout program, in which they would stop producing tobacco immediately and accept similar compensation. In either case, the land would stay in agricultural production for at least 10 years, helping to preserve farmland and slow development.

Many in Southern Maryland view tobacco farming as a practice at the end of its lifespan, because of rising costs and falling demand. But the proponents of the transition plans expect that some farmers will be reluctant to abandon what they know best.

"A lot of farmers want to do nothing but raise tobacco," Middleton said. "It's a family tradition and a culture they know. They've been successful with it, and they've bought homes and raised kids off of tobacco."

Middleton said he hopes that plant genetics might provide a solution for farmers who don't want to give up their traditional crop. Tobacco is an easy plant to genetically engineer, he said, suggesting it could be used to produce other products -- components for cosmetics, for example. Thus, the plan includes a request for a partnership with the state to pay for $6 million in genetic research.

"The ultimate goal is to keep farmers farming," Hance said.

CAPTION: Earl "Buddy" Hance, shown tending to his 350-acre tobacco farm in Calvert County, says that "we actually have some money" to pay for research needed to develop new farming strategies.