HIGHLIGHTS 



This study shows that, in the long run, landowners in the Coastal Plains 

 of North Carolina and the Piedmont area of Virginia, two major flue-cured 

 tobacco production areas, were the principal beneficiaries of Federal pro- 

 grams to control the price and production of flue-cured tobacco. It was 

 estimated that, in both areas, returns to land increased continuously between 

 the early 1920* s (or before the initiation of the flue-cured tobacco pro- 

 grams in 1933) and 1960. 



Increases in returns to factors of production attributable to the flue- 

 cured tobacco programs cannot be calculated precisely. In this study, 

 benefits from the programs were expressed as influences on variables, such 

 as prices, yields, labor requirements, and costs, affecting income from 

 tobacco production. As a result of the programs, yields and prices of tobacco 

 increased and labor required per pound of tobacco produced decreased. These 

 changes had a positive effect on the increase in income to land per acre; 

 increase in price per pound of tobacco had the largest effect. Increases 

 in labor earnings and overhead and operating costs tended to decrease re- 

 turns to land. Between the early 1920 's and 1960, changes in these variables 

 resulted in an increase in returns to land of $190 per acre in North Carolina 

 and $88 in Virginia. 



Although income to labor also increased during this same period — up 70 

 cents per hour in North Carolina and 61 cents in Virginia — the increases, 

 in the long run, were not due to the flue-cured tobacco programs. It was 

 estimated that, in the study areas, increases in income to labor were 

 approximately equal to increases in their opportunity returns (or returns to 

 other labor for comparable work) . 



It appeared that tenure arrangements, although unchanging in their 

 agreements between landowners and laborers, were flexible in relation to the 

 general labor market economy. Thus, the tenure arrangements allowed laborers 

 to receive incomes equal to their opportunity returns and did not, therefore, 

 appreciably influence the distribution of the benefits of the flue-cured 

 tobacco programs in favor of the laborers. There were evidences that these 

 arrangements were influential for short periods of time, such as a sequence 

 of a few years. However, since the primary interest in the study was in the 

 long-run effect of the tobacco programs, it was concluded that labor returns 

 were what they would have been without these programs. 



1.11 



