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| Title: | The Post-Buyout Experience: Peanut and Tobacco Sectors Adapt to Policy Reform |
| Authors: | Dohlman, Erik
Foreman, Linda F.
Da Pra, Michelle |
| Authors (Email): | Dohlman, Erik (edohlman@ers.usda.gov)
Foreman, Linda (lfarmer@ers.usda.gov) |
| Keywords: | Policy reform
farm policy
buyouts
marketing quotas
peanuts
tobacco
adjustment
structural change |
| Issue Date: | 2009-11 |
| Series/Report no.: | Economic Information Bulletin
Number 60 |
| Abstract: | Marketing quota and price support programs for peanuts and tobacco were a longstanding
feature of U.S. farm policy, from the 1930s until the Government enacted quota
buyouts, in 2002 for peanuts and 2004 for tobacco. Quota owners were compensated
with temporary payments, but elimination of the quota programs exposed producers more
to market risks and brought about structural changes at farm, regional, and marketwide
levels. Since the buyouts, many peanut and tobacco farms have exited production. The
farms that remain are mostly larger and have adopted new risk management strategies,
such as contracting. Freed of the planting restrictions in the quota programs, production of peanuts, and to a lesser extent of tobacco, has been relocated to regions better suited to their growth. While total acreage and prices for peanuts and tobacco have remained below pre-buyout levels, the lower prices—along with increased production efficiency—
have supported renewed growth in demand, particularly in export markets. |
| URI: | http://purl.umn.edu/56628 |
| Institution/Association: | United States Department of Agriculture>Economic Research Service>Economic Information Bulletin |
| Total Pages: | 54 |
| Collections: | Economic Information Bulletin
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| EIB-60.pdf | | 1224Kb | PDF | View/Open |
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