UGA Tobacco -- Some Economic Effects of Tobacco in Georgia

Tobacco annually generates from $150 to $200 million in cash farm receipts in Georgia. This ranks third in cash receipts from row crops in the state.

This constitutes more than 10% of total farm receipts in 12 counties and greater than 20% of these receipts in one county. These monies are used to buy tobacco inputs, which generates income for many businesses in these localities.

The net return to tobacco is relatively high compared to other crops grown, generating nearly $30 million in annual returns to holders of land and quota. This amount will buy nearly 600 tractors (100 h.p.) Or more than 1,100 pickup trucks. On a statewide basis, the crop generates in excess of $300 million total economic activity, which does not include any manufacturing or distribution of tobacco products. This total economic activity accounts for more than 5,600 jobs in the state's economy.

Effects for Governments

Tobacco contributes to the assessed value of crop land, benefitting local governments. This amount is difficult to quantify, but two public service benefits that can be estimated are sales and excise taxes.

An estimated $8+ million in sales tax (non-tobacco) is collected on all levels of economic activity resulting from tobacco production. Further, using figures obtained from the Tobacco Merchants Association (cigarette sales in Georgia), the state annually collects more than $80 million in tobacco excise taxes - and more than $60 million in sales tax on tobacco sales. In addition, most localities have local sales taxes.

Additionally, federal excise taxes are generated from tobacco sales. If 60% of the local grown crop is consumed domestically, an estimated $770 million is generated from federal excise taxes.

In total, almost $1 billion in taxes are generated from a crop with a field value of approximately $150 million. And this is a conservative estimate, as the manufacture and processing of the crop generate many wages, which are spent, and generate further spending. In addition, many other states have higher cigarette excise and state sales taxes.

In summary, tobacco is a significant part of Georgia's agricultural and total economies. It produces income, which generates additional economic activity and tax receipts.

ECONOMIC EFFECTS OF TOBACCO PRODUCTION IN GEORGIA
County / State	xxx	Georgia
Acres Tobacco Grown	xxx	44,000
Average Yield / Acre (lbs.)	xxx	2,030
Average Price per Pound	xxx	$1.71
	Calculations Below

Economic Effects
TOTAL CROP VALUE ($)	xxx	$152,737,200
TOTAL ECONOMIC EFFECT Non Tobacco Manufacturing ($)	xxx	$381,843,000	2.50	Multiplier
CASH PRODUCTION EXPENDITURES ($):
Total Cash Operating Capital (6 mos. basis)	xxx	$95,040,000	2,160	Costs Per Acre
Lime & Fertilizer	xxx	4,224,000	96
Herbicides, Insecticides	xxx	4,312,000	98
Fungicides, Nematicides	xxx	5,412,000	123
Sucker Control	xxx	4,972,000	113
Fuel	xxx	10,824,000	246
Labor (80 hrs. @ $7.00)	xxx	24,640,000	560
Warehouse Fees, (3.5%)	xxx	5,345,802	0.035

TOTAL NET RETURNS TO LAND & QUOTA ($)	xxx	$28,437,200	660.00	Per Acre Net to Land & Labor

THIS WOULD BUY:
Pickup Trucks (no.) -or-	xxx	1,185	24,000
100 h.p. Tractors (no.) - or-	xxx	569	50,000
Sets of Den Furniture (no.) -or-	xxx	9,479	3,000
Sport Utility Vehicles (no.) -or-	xxx	1,016	28,000
Ladies Suits (no.)	xxx	142,186	200

TAXES GENERATED ($)			89,320,000	Tobacco Produced (Ga.)
			5,359,200,000	Packs Cigarettes (Ga. Tob.)
Georgia Sales Tax, Non Tobacco, (6%)	xxx	$9,164,232	0.06	Sales Tax
Georgia Sales Tax, Cigarettes (6%) ##	xxx	63,000,000
Georgia Cigarette Excise Tax, ($0.12) ##	xxx	84,000,000	700,000,000	Packs sold in Ga.
Federal Cigarette Excise Tax, ($0.24) ##	xxx	771,724,800

JOBS CREATED - Full Time (no.)	xxx	5,621	36.80	Jobs/$1 mil. new income

NOTE: ##Georgia Sales Tax and Cigarette Excise Taxes are State Totals for All Cigarettes Sold Annually in the State. The Federal Excise Tax Estimate is Based on 60% of the Tobacco Consumed Domestic.