about 60 percent. The decline averaged about 1,300 

 acres per year. Also during this period, yields 

 increased about 4 pounds per year, but production 

 dropped about V2. Wisconsin growers produced about 

 V2 of the U.S. binder acreage in 1950, but by 1971 , they 

 produced 88 percent. During this period, acreage 

 declined by about 95 percent in Connecticut, 10 

 percent in Massachusetts, and 50 percent in 

 Wisconsin. 



Among the variables used in the estimating 

 equations for cigar binder acreage were farm prices of 

 binder tobacco, farm wage rates, acreage in diversion 

 programs, time, and acreage reallocations 

 (beginning in 1970). Results of some of the equations 

 are summarized in table 5. Equation 2.3 (based on 

 farm price of tobacco lagged 1 year, diverted acreage, 

 time (1957=57), and reallocated acreage) gives a 

 satisfactory fit — that is, coefficient signs are as 

 expected, and two of the variables are significant at 

 the 1-percent level and one at the 5-percent level. This 

 equation explains 98 percent of the year-to-year 

 acreage variations (R 2 =98). 



Equation 2.3 indicates that a farm tobacco price 

 increase of l<t per pound for binder tobacco brought 

 an increase of about 175 acres harvested the 



following year. Introducing farm wage rates in the 

 statistical equations did not improve the fit as it did 

 for filler and wrapper. 



The Soil Bank Program (1956-58) and the Cropland 

 Adjustment Program (beginning in 1966) 

 significantly reduced acreage. For each acre of binder 

 tobacco allotment idled under these programs, the 

 equation indicated .53 fewer acres were harvested. 

 Since 1970, USDA has allowed transfers of filler and 

 binder allotments from growers who do not wish to 

 use their allotments to growers who want to increase 

 their plantings. The equation indicates that for each 

 acre of binder allotment transferred, harvested 

 acreage increased 1.5 acres. Coefficients differ from 

 unity because other variables such as price and trend 

 affect program participation. 



Cigar Wrapper Acreage Changes 



Cigar wrapper is the most difficult and costly 

 tobacco to grow. Since it is used primarily for the 

 outside cigar covering, the leaves must be elastic, 

 thin, free of injury, smooth, uniform in color, and 

 have good burning qualities. To obtain these 

 qualities, the wrapper tobacco is grown in fields 



CONNECTICUT VRLLEY WRAPPER TOBACCO 

 ACREAGE AND PRICE/LABOR RATIO 



HARVESTED 



-X RATIO 



1951 53 55 57 59 61 63 65 67 69 71 



U.S. DEPARTMENT OF AGRICULTURE NEG.ERS 8977-72(11) ECONOMIC RESEARCH SERVICE 



Figure 9 



10 



