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The Social Cost of the Tobacco Program

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  • Paul R. Johnson

Abstract

With the use of the traditional welfare tools of consumers' and producers' surplus, a complete accounting of welfare gains and losses for flue-cured tobacco has been made. An aspect of the flue-cured tobacco market has been the strong monopoly position of the U. S. in world trade. The price increasing feature of the tobacco program has provided the U. S. with a monopoly rent from foreign sales—part of which offsets the traditional welfare losses associated with price support programs. Some evidence on the cost of restricting one input is presented. Though the social cost of the program has been small, the longer run implications are that transferring income to tobacco producers will become more costly in terms of lost producer and consumer surplus.

Suggested Citation

  • Paul R. Johnson, 1965. "The Social Cost of the Tobacco Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 47(2), pages 242-255.
    • Handle: RePEc:oup:ajagec:v:47:y:1965:i:2:p:242-255.
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    Citations

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    Cited by:

    1. Johnson, James D. & Baum, Kenneth & Clauson, Annette L., 0. "Income And Asset Valuation Effects Of Food And Agricultural Policy - A Perspective On Data And Analysis," Increasing Understanding of Public Problems and Policies, Farm Foundation.
    2. Schmitz Andrew & Schmitz Troy G., 2010. "Benefit-Cost Analysis: Distributional Considerations under Producer Quota Buyouts," Journal of Benefit-Cost Analysis, De Gruyter, vol. 1(1), pages 1-15, July.
    3. Schmitz, Troy G. & Schmitz, Andrew, 2012. "The Complexities of the Interface between Agricultural Policy and Trade," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 13(1), pages 1-12, February.
    4. Bullock, David S. & Salhofer, Klaus, 2003. "Judging agricultural policies: a survey," Agricultural Economics, Blackwell, vol. 28(3), pages 225-243, May.
    5. Weindlmaier, H., 1977. "Zur wohlfahrtsökonomischen Interpretation der Ergebnisse räumlicher Gleichgewichtsmodelle," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 14.
    6. Beck, Anthony C., 1974. "The Social Cost On Production Control In The Australian Egg Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 42(04), pages 1-17, December.
    7. Buxton, Boyd M. & Hammond, Jerome W., 1973. "Social Cost Of The Dairy Price Support Program," Staff Papers 13738, University of Minnesota, Department of Applied Economics.
    8. Alson, Julian M. & Hurd, Brian R., 1988. "The Hidden Social Costs Of Government Spending In Farm Programs," Working Papers 225823, University of California, Davis, Department of Agricultural and Resource Economics.
    9. Piggott, Roley R., . "Agricultural Selling Cartels: Relative Co-Operator And Non-Cooperator Gains," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 25(1), pages 1-16.
    10. Julian M. Alston & Davide Gaeta, 2021. "Reflections on the Political Economy of European Wine Appellations," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 7(2), pages 219-258, July.
    11. Brandow, G.E., 1977. "PART III. Policy for Commerical Agriculture, 1945-71," AAEA Monographs, Agricultural and Applied Economics Association, number 337215, january.
    12. Alston, Julian M., 1986. "Consequences of Deregulation in the Victorian Egg Industry," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 54(01), pages 1-11, April.
    13. Barnett, Barry J. & Skees, Jerry, 1991. "Ascs Program Yields: Policy Implications For Regional Resource Allocation And Crop Insurance," 1991 Annual Meeting, August 4-7, Manhattan, Kansas 271155, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Johnson, Ruth C. & McManus, B.R., 1979. "A Theoretical Framework For Analyzing Social Costs Of The Tobacco Program," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 11(2), pages 1-4, December.
    15. Semos, Anastasios V., 2001. "Estimation of Producer's Assistance and Evaluation of Agricultural Policy for Olive Oil in Greece," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 2(2), pages 1-12, August.
    16. Seagraves, James A. & Manning, Richard C., 1967. "Flue-Cured Tobacco Allotment Values And Uncertainty, 1934-1962," Department of Economics and Business - Archive 259726, North Carolina State University, Department of Economics.

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