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January/February 1988, 
Vol. 70, No. 1
Posted 1988-01-01

Farm Policy and Mandatory Supply Controls—The Case of Tobacco

by Kenneth C. Carraro

Kenneth C. Carraro examines U.S. tobacco policy to analyze the likely consequences of extending mandatory supply controls to other major U.S. crops. Carraro shows that the United States was able to use mandatory supply controls successfully for many years only because both world supply and world demand were inelastic. As the world elasticity of both supply and demand increased over time, however, the effectiveness of U.S. tobacco policy eroded. The author concludes that mandatory supply controls for other crops would not be successful because the conditions of elasticity that worked well previously for tobacco are not present for other major crops.





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