EFFECTS OF FLUE-CURED TOBACCO PROGRAMS ON RETURNS TO 



LAND AND LABOR 



by 



J. L. Hedrtck, G. S. Tolley, and W. B. Back 1/ 



INTRODUCTION 



Programs to control production and to support the price of flue-cured 

 tobacco have been in effect for more than 30 years. 2/ There has, however, 

 been limited study of the effects of these programs on income to land and 

 labor. The few studies directly concerned with the effect of these programs 

 on income to factors of production have emphasised how a tobacco allotment 

 affects the sale value of land. Land with a tobacco allotment is estimated 

 to be much more valuable than comparable land without an allotment. 2/ Some 

 studies have been made of the effects of acreage allotments and price supports 

 on production practices. 4/ Previous studies have suggested that income to 

 land has been affected more by the tobacco programs than income to labor. 



1/ J. L. Hedrick, formerly an agricultural economist with the Economic 

 Research Service of the U. S. Department of Agriculture, is now Senior 

 Research Analyst at the Resource Management Corporation. G. S. Tolley, for- 

 merly professor of economics at North Carolina State University, is now pro- 

 fessor of economics at the University of Chicago. W. B. Back is an agricul- 

 tural economist in the Natural Resource Economics Division, Economic Research 

 Service, U. S. Department of Agriculture. 



2/ For a description of the legislative history of flue-cured tobacco 

 programs, see Brooks, R. C.,and Williamson, J. C, Jr. Flue-Cured Tobacco 

 Programs, 1933-1958. N. C. Agr. Expt. Sta. A. E. Inform. Ser. No. 66, 

 1958. Although poundage quotas were introduced in 1965, this study applies 

 to the acreage allotment and price-support programs in effect for most of 

 the period since 1933. 



3/ Malar, F. H., Hedrick, J. L., and Gibson, W. L., Jr. The Sale Value 

 of Flue-Cured Tobacco Allotments. Va. Agr. Expt; Sta. Tech. Bui. No. 148, 

 1960. Mason, J. E. Acreage Allotments and Land Prices. Jour. Land and 

 Pub. Utility Econ., Vol. 22, pp. 176-181, 1946. 



4/ Hartman, L. M., and Tolley, G. S. Effects of Federal Acreage Con- 

 trols on Costs and Techniques of Producing Flue-Cured Tobacco. N. C. 

 Agr. Expt. Sta. Tech. Bui. No. 146, 1961. 



