OBJECTIVES AND GENERAL APPROACH 

 This study has the following three objectives: 



(1) To measure returns to land and labor used in flue-cured tobacco 

 production for selected periods of time from 1922 to 1960. 



(2) To determine to what extent, if any, tenure arrangements affected 

 returns to land and labor and the distribution of benefits of 

 the flue-cured tobacco programs. 



(3) To estimate the effects of the flue-cured tobacco programs on 

 the distribution of returns to land and labor. 



Accomplishment of the first two objectives is necessary before the final 

 objective can be realized. 



Returns to land and labor are estimated for farms operated under various 

 tenure arrangements in two major flue-cured tobacco production areas — the 

 Piedmont region of Virginia and the Coastal Plains of North Carolina. 



Tenure arrangements serve as the institutional means of dividing costs 

 and returns between landowners and tenants (including sharecroppers) . 

 Agreements (or contracts) between landowners and tenants in flue-cured 

 tobacco production areas have not changed significantly since 1920. The fact 

 that they have remained unchanged suggests that labor's share of the benefits 

 of the flue-cured tobacco programs is increasing. This would negate the 

 hypothesis that land is the only factor of production receiving increased 

 returns as a result of these programs. An alternative hypothesis is that, 

 in the long run, labor used in flue-cured tobacco production receives returns 

 approximately equivalent to its opportunity returns (or what it would earn 

 from other comparable work) regardless of tobacco programs or tenure arrange- 

 ments. Much of this study is devoted to ascertaining whether, as a result 

 of the tobacco programs, labor has received higher returns under various 

 tenure arrangements than it would have in the absence of the programs. 



The opportunity returns to labor are estimated for the study period and 

 compared with estimated earnings of labor in tobacco production. This 

 comparison is made to guage the significance of tenure arrangements in the 

 allocation of program benefits. Terms of agreements between landowners and 

 tenants have been characterized as sticky with regard to economic conditions. 

 In this study, tenure arrangements will be considered flexible if they per- 

 mit labor to receive actual returns approximately equal to opportunity re- 

 turns. That is, the concept of tenure flexibility adopted for this study is 

 related to the economic forces operating in the labor market. 



An estimation of effects of flue-cured tobacco programs on the distribu- 

 tion of Income to land and labor requires the establishment of a quantita- 

 tive relationship between trends in land and labor, returns and trends in 

 tobacco prices, yields, technological changes, and other dynamic variables, 



