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Abstract

When longstanding marketing quota systems were eliminated (“bought out”) in 2002 for peanuts and 2004 for tobacco, producers lost quota-related price supports and other quota system protections, and were exposed more directly to a market-oriented system. The nature of the peanut and tobacco marketing quota programs, the structure and magnitude of the buyouts, and market dynamics influenced the ensuing structural changes that occurred at the farm, regional, and aggregate market levels. Analysis of USDA’s Agricultural Resource Management Surveys (ARMS) on peanut and tobacco producers over a multi-year timeframe provides insights on, and a basis for comparing and contrasting the buyout impacts along multiple dimensions. Notable developments include a consolidation in the number and increased scale of farms, regional shifts in production regions, and increased use of contracting to manage price risk.

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