Tobacco Company
The Changing Political Environment For Tobacco - Implications for Southern TobaccoFarmers, Rural Economies, Taxpayers and Consumers A. Blake Brown, William M. Snell, and Kelly H. TillerSince the early settlers discovered tobacco being grown by native North Americans,tobacco has been an important commodity in the south. But it also been a very controversial one.The tobacco debate has intensified during the 1990's. Existing and proposed regulations andrestrictions, excise tax increases, health issues, changing social attitudes towards tobacco use,litigation, and international competition have induced much uncertainty regarding the future of thetobacco program, tobacco farming, and many southern rural economies. All of these issues wereintensified and highlighted during last year's lengthy debate over a national tobacco settlement.The debate prompted visits to tobacco-producing states by President Clinton and Secretary ofAgriculture Glickman and consumed an unprecedented 3 1/2 weeks of debate on the U.S. Senatefloor. Although national tobacco settlement legislation never materialized in 1998, the tobaccocompanies and the states' attorneys general were successful in developing an agreement to settle
Once a quota owner has capitalized an investment inquota, he has little incentive to abandon the rents that will accrue to that asset. In fact, the program operates to10stabilize price by destabilizing quota. As17tobacco production moves back and down along the upward sloping aggregate restricted supplycurve6, SP, marginal cost declines. While some consolidation of tobaccoproduction is occurring, production in many parts of the South remains concentrated on relativelysmall family farms. Despite support of the program, by program design and policy changes, political pressureto modify or end the tobacco program has been gaining momentum over the past two decades. Parameters Burley Flue-curedhcd Domestic wholesale price elasticity of demand for cigarettes. Under the current structure of the tobacco program, small scale producers may have somecost advantages over larger producers given their access to family labor and the use ofdepreciated assets. cigarette consumption to decline between 15 and 38percent in the long run.
Common topics in this essay:
Program Elimination,
North Carolina,
Senator Lugar,
D0 D1,
Carolina Virginia,
Tobacco Program,
Production Regions,
Sumner Wohlgenant,
Kentucky Appalachian,
Womach Support,
tobacco program,
flue-cured tobacco,
quota owners,
burley tobacco,
tobacco production,
quota rental,
cigarette manufacturers,
tobacco farmers,
cigarette prices,
price elasticity,
current tobacco program,
price elasticity demand,
quota rental rates,
elimination tobacco program,
increase cigarette prices,
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Acceptance Essays
