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When longstanding marketing quota systems were eliminated (“bought out”) in 2002 for peanuts and 2004 for tobacco, producers lost quota-related price supports and other quota system protections, and were exposed more directly to a market-oriented system. The nature of the peanut and tobacco marketing quota programs, the structure and magnitude of the buyouts, and market dynamics influenced the ensuing structural changes that occurred at the farm, regional, and aggregate market levels. Analysis of USDA’s Agricultural Resource Management Surveys (ARMS) on peanut and tobacco producers over a multi-year timeframe provides insights on, and a basis for comparing and contrasting the buyout impacts along multiple dimensions. Notable developments include a consolidation in the number and increased scale of farms, regional shifts in production regions, and increased use of contracting to manage price risk.

This comprehensive overview of local food systems explores alternative definitions of local food, estimates market size and reach, describes the characteristics of local consumers and producers, and examines early indications of the economic and health impacts of local food systems. There is no consensus on a definition of “local” or “local food systems” in terms of the geographic distance between production and consumption. But defining “local” based on marketing arrangements, such as farmers selling directly to consumers at regional farmers’ markets or to schools, is well recognized. Statistics suggest that local food markets account for a small, but growing, share of U.S. agricultural production. For smaller farms, direct marketing to consumers accounts for a higher percentage of their sales than for larger farms. Findings are mixed on the impact of local food systems on local economic development and better nutrition levels among consumers, and sparse literature is so far inconclusive about whether localization reduces energy use or greenhouse gas emissions.

This paper presents a model of estimated demand for four tobacco products: cigarettes, cigars, chewing tobacco, and smoking tobacco products. Own elasticities and cross-price elasticities are used to obtain insights into the effectiveness and implications of new policy measures. Of particular interest is whether substitution of various tobacco products varies by market outlet. Several variations of the tobacco product outlet-choice model were estimated using iterative SUR. Four separate product-specific models where also estimated and represent consumers’ choice of a retail market outlet to purchase a particular tobacco product. In contrast to the joint product-outlet choice model, the two stage budgeting model rests on the assumption that consumers first choose a tobacco product, and then choose where to purchase it. In addition to estimating overall demand for the four tobacco products, models are estimated for tobacco products from three specific outlets: grocery stores, drug stores, and convenience stores. The paper investigates whether the various outlets substitute or complement each other and briefly deals with the issue of the premium consumers pay when purchasing tobacco products at convenience stores.

Marketing quota and price support programs for peanuts and tobacco were a longstanding feature of U.S. farm policy, from the 1930s until the Government enacted quota buyouts, in 2002 for peanuts and 2004 for tobacco. Quota owners were compensated with temporary payments, but elimination of the quota programs exposed producers more to market risks and brought about structural changes at farm, regional, and marketwide levels. Since the buyouts, many peanut and tobacco farms have exited production. The farms that remain are mostly larger and have adopted new risk management strategies, such as contracting. Freed of the planting restrictions in the quota programs, production of peanuts, and to a lesser extent of tobacco, has been relocated to regions better suited to their growth. While total acreage and prices for peanuts and tobacco have remained below pre-buyout levels, the lower prices—along with increased production efficiency— have supported renewed growth in demand, particularly in export markets.

Though U.S. peanut and tobacco acreage contracted with removal of quotas, efficiency gains have sparked export growth.