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Tobacco:

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1492: Christopher Columbus discovered tobacco smoking in America and brought it to Europe ... Framework Convention on Tobacco Control (WHO) ... – PowerPoint PPT presentation

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Title: Tobacco:


1
Tobacco
  • Global Policy

2
Overview
  • Tobacco History
  • Social Costs of Tobacco Consumption
  • Social Benefits of Tobacco Production
  • Global Tobacco Trends
  • Effects of Socioeconomic Policies
  • Conclusions and Recommendations

3
Tobacco History
4
Tobacco Timeline
  • 100 BCE indigenous Americans began smoking
    tobacco
  • 1492 Christopher Columbus discovered tobacco
    smoking in America and brought it to Europe
  • 1500 tobacco smoking was introduced to the
    Middle East via Turkey
  • 1530 tobacco was introduced to China
  • 1560 the Portuguese and Spanish shipped tobacco
    to Africa
  • 1612 tobacco was grown commercially for the
    first time
  • 1788 tobacco was introduced to Australasia with
    the first fleet from Europe

5
Modern Tobacco Consumption
  • The principle mode of tobacco consumption in the
    West has changed as follows
  • 18th century snuff
  • 19th century cigars
  • The switch from snuff to smoking tobacco was
    partially made possible by the invention of
    phosphorous friction matches in 1833
  • 20th century cigarettes
  • In 1881 the cigarette machine was invented
  • In 1901 Imperial Tobacco and the British American
    Tobacco Company were formed
  • These are two of the biggest cigarette producers
    today

6
Tobacco Legislation and Research Timeline
  • 1633 Turkey institutes death penalty for tobacco
    smoking
  • 1939 American scientists discover a link between
    tobacco smoking and lung cancer
  • 1981 Japanese researchers report on dangers of
    second hand smoke
  • 1987 State of Victoria (Australia) institutes
    the first tobacco tax to establish a health
    foundation countering tobacco
  • 1993 South Africa passes the Tobacco Products
    Control Amendment Act

7
Social Costs
8
Healthcare
  • Cigarette consumption is at higher than socially
    optimal level
  • Overall annual healthcare cost attributed to
    smoking 6-15 of total healthcare costs
  • High-income countries 6 GDP
  • Low- and middle-income countries 2 GDP (World
    Bank)

9
The Environment
  • Deforestation
  • Pesticides and herbicides
  • Soil depletion and erosion

10
Social Benefits
11
Employment
  • Total Industry 60 million employed
  • Manufacturing 1.2 million
  • 840,000 are in China, India and Indonesia
  • More labour intensive in developing world
  • Higher salaries than similar industries
  • Growing 38.9 million
  • 31 million are in developing countries
  • Global average female earnings are 78 of male
    earnings
  • Home industries 20 million

12
Production and Exports
  • Over 6.3 billion tonnes of tobacco is produced
    annually
  • 5.7 billion tonnes is produced in 7 countries
  • China, India, Turkey, Indonesia, S. Korea,
    Pakistan and Japan
  • Annual earnings from exporting tobacco is over
    21 billion
  • For some developing countries tobacco represents
    a large percentage of export earnings
  • Malawi 58
  • Zimbabwe 32
  • Macedonia 16
  • Kyrgystan 8

13
Biotechnology
  • The tobacco plant is useful to biotechnology
  • Tobacco generates biomass quickly
  • The tobacco genome is relatively easy to
    manipulate
  • Much of the genome has be sequenced due to
    research by tobacco companies
  • Bioremediation is a promising potential new use
    for tobacco plants

14
Net Loss
  • According to the World Health Organization, net
    social loss (social benefit minus social cost)
    for the tobacco industry is
  • US27.2 million for every additional 1000
    tonnes of tobacco traded in the global market

15
Tobacco Trends
16
Tobacco Consumption
  • From observation of world maps of cigarette
    consumption there are low levels of cigarette
    consumption in
  • South America
  • Africa
  • South Asia
  • There are high levels of
  • cigarette consumption in
  • North America
  • Central and East Asia
  • Europe
  • Australasia

17
Economic Indicators
  • There is a higher percentage population of
    smokers in developed countries than in developing
    countries
  • The percentage population of smokers in a country
    is not tied to
  • GDP
  • Taxes
  • Level of cigarette production

18
Agriculture
  • In countries where there is a higher than average
    percentage population of smokers, a higher
    proportion of agricultural land will be devoted
    to tobacco crops

19
Tobacco Legislation
  • Countries that spend more per capita on public
    health care have stricter tobacco legislation
  • These countries have a slightly lower percentage
    of smokers
  • Smokers in countries that have stricter
    legislation smoke fewer cigarettes

20
Price of Cigarettes
  • The number of cigarettes smoked per smoker is
    correlated to the price of tobacco
  • Tobacco is an elastic good

21
Price of Cigarettes
  • Countries that produce more cigarettes are likely
    to have lower taxes on cigarettes
  • Like most natural resources,
  • the real price of
  • Tobacco has been
  • decreasing since the
  • 1960s

22
Socioeconomic Policy
23
Barriers to Trade
  • International trade agreements moving towards
    reducing trade barriers
  • Increased trade increased smoking
  • High-income versus low-income
  • Liberalized trade versus closed market
  • Cigarette consumption increase of 10
  • GATT has provisions to protect public health if
    applied to domestic and foreign products

24
Subsidies
  • Direct price support or indirect input subsidies
  • Example European Union, India, Turkey
  • Prices high and stable
  • Support for small family farms
  • Control imports of tobacco from abroad to
    conserve foreign exchange
  • Maintain political support
  • Encourage tobacco production and thus tobacco
    consumption

25
Taxes
  • Cost-effective policy instrument
  • Tax Revenue
  • Burden on high-income versus low-income
  • Tax has positive correlation with social policies
  • Tobacco tax would allow poor people to live
    better, work cheaper, and to send their goods
    cheaper to market (Smith, 1776)
  • Is there an optimal tobacco tax level?

26
Social Policies
  • Information shocks
  • Turkey 8 decrease
  • Advertising ban
  • High-income countries 6 decrease
  • Counter-advertising
  • Sweden 11 decrease
  • Smoking restrictions
  • Function of tax

27
Conclusions and Recommendations
28
Conclusions
  • Framework Convention on Tobacco Control (WHO)
  • Tax increases are a highly effective way to
    reduce tobacco consumption
  • High-income versus low-income countries
  • Social policies are also effective and can be
    funded using a portion of tobacco tax revenue
  • Health risk issues

29
Recommendations
  • Global tobacco policy should be implemented based
    on shared principles
  • Multi-pronged approach
  • Raising taxes
  • Disseminating information
  • Banning advertising and promotion
  • Restricting smoking by location

30
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