Declining domestic cigarette consumption, increased global competition, and loss
restrictions indicate decreased demand for U.S. flue-cured tobacco. The effects of
declines in domestic and export demand are evaluated under a policy of reducing quota
to maintain price versus a policy of allowing price to fall to maintain quota. Changes
prices, quantities, revenues, and economic rents are simulated. Losses to non farming
owners are minimized under a policy of price maintenance, while losses in revenues
tobacco-producing areas are minimized by a policy of quota maintenance. Aggregate
to tobacco growers are greater under a policy of quota maintenance.