PRICE VERSUS QUOTA REDUCTIONS: U.S. FLUE-CURED TOBACCO POLICY

Declining domestic cigarette consumption, increased global competition, and loss of import restrictions indicate decreased demand for U.S. flue-cured tobacco. The effects of 10% declines in domestic and export demand are evaluated under a policy of reducing quota to maintain price versus a policy of allowing price to fall to maintain quota. Changes in prices, quantities, revenues, and economic rents are simulated. Losses to nonfarming quota owners are minimized under a policy of price maintenance, while losses in revenues to tobacco-producing areas are minimized by a policy of quota maintenance. Aggregate losses to tobacco growers are greater under a policy of quota maintenance.


Issue Date:
1996-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/15112
Published in:
Journal of Agricultural and Applied Economics, Volume 28, Number 2
Page range:
445-452
Total Pages:
8




 Record created 2017-04-01, last modified 2017-08-23

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