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Abstract

The objective of the paper is to establish an empirical relationship between household characteristics and tobacco growers’ perception of the impact of the FDA regulation. A logistic model is applied on primary data that came from the Center for Tobacco Grower Research’s (CTGR’s) 2011 mail survey of tobacco producers. Results indicate that over 80 percent of the sample tobacco growers are concerned about the impact of the FDA regulation. The profiles of growers who reported to be concerned about the impact of the FDA regulation are not significantly different from those of growers who reported that they are not concerned or somewhat concerned. This result highlights the importance of engaging all groups of growers in discussion to elaborate whether, and if so how the FDA regulation would actually affect tobacco production, and how growers should adjust in light of the expected changes. This would help growers build confidence in the industry, and work towards making the necessary changes in agricultural practices that would help address the regulatory issues related to the contents of tobacco products. Given the widespread concern, the failure to do so could have a negative impact on resource allocation and investment decisions because of an overreaction to a potentially erroneous perception of the impact of the FDA regulation.

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