The farm level economic implications of the political turmoil surrounding tobacco are examined. Tobacco ranks first in crop receipts in the Southeastern United States. Free market advocates typically want to eliminate the tobacco program because of its cartellike nature. Health advocates want to maintain the program because it limits tobacco production. Cigarette manufacturers tolerate the program because of the political support they receive from program stakeholders. The effects of cigarette price increases with and without a program are examined. Whether or not the program is maintained in the face of declining tobacco demand has significant implications for Southern agriculture.
