General Info on Tobacco Industry

Approximately 7 million tons of commercial tobacco are grown each year, with a value of $39 billion. Leading tobacco-growing countries are China, the United States, India, Brazil, Turkey, and Zimbabwe. Tobacco is an economically important crop for many nations-about 2 million tons of unmanufactured tobacco leaf, at a value of about $6,500 per ton, are exported each year worldwide. Brazil leads in exports, with about 15 percent of the total, followed closely by the United States, with about 11 percent of the total. As smoking has become less popular in the United States and Europe, cigarette manufacturers have found new markets in eastern Europe, Asia, Africa, and the former Soviet Union. Due to the aggressive marketing efforts of the international tobacco industry, tobacco consumption in these areas is expected to rise by almost 3 percent annually.

Since the Great Depression, the federal government has run price support programs for a variety of agricultural products, including rice, peanuts, and tobacco. The tobacco price support program stabilizes prices and ensures tobacco growers a fairly steady income. Farmers registered in the program belong to a cooperative association that sells their tobacco at auction. The cooperative buys, at a price set each year, any tobacco that the grower cannot sell. Although the federal government sponsors the cooperative association, it does not fund the purchase of unsold tobacco; that money comes from tobacco sales and association membership fees. The cooperative stores unsold tobacco and sells it the next year.

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