The role of government in tobacco leaf production in China: national and local interventions

Abstract

China produces about one-third of the world's supply of tobacco leaf and is the largest consumer of cigarettes. Any discussion of tobacco control in China requires an understanding of the government's role in this sector because China's tobacco production and cigarette marketing are all under the control of the State Tobacco Monopoly Administration. Compared to other cash crops, tobacco leaf has the lowest economic rate of return. Currently, China has a large surplus of tobacco leaf. One of the factors contributing to this surplus is local governments' encouraging farmers to plant tobacco leaf, in part because of their incentive of collecting tax revenue from tobacco leaf sales.