Persuasive Report 2000 Words - Academic Writing

Example persuasive essay on the economics of the tobacco industry

The tobacco industry has become increasingly controversial in the 20 th

century because of health

issues and associated costs to the tax payers. This essay will show that the economic effects of the

tobacco industry are beneficial to the global community. It will show that at the primary, secondary

and tertiary levels of the industry the economic benefits of this industry far outweigh the health

concerns.

Firstly, at a primary level there will be significant benefits to farmers. Because tobacco is easy to

cultivate it provides instant cash to small farmers who make up the majority of the producers for the

industry (United Nations Food and Drug Organisation 2008:22). Further, having a cash crop will

ensure a stable employment for small farm operators and a stable income. However, as the recent

report from UNFAO (2008) disclosed, there is concern that the farming of tobacco will take priority

over the farming of food crops and thereby present problems with malnutrition in the developing

countries. Nevertheless these fears and concerns are undue. The positive aspects and main

advantages of the farming of tobacco in developing countries is the considerable progress in

agricultural practice and being able to use this as a foundation to employ locals (Gray & Walter

2006). This in turn provides agriculture expertise to locals so they can establish and grow their own

foods.

Another positive economic aspect is the economic benefits to the secondary level of industry.

Tobacco at this level creates employment and a stable small business economy. As the Small

Retails Association Report (2002) discloses, ‘thousands of small retailers would be severely limited

in their ability to continue their business and employ shop assistants if not for the sale of tobacco’.

This indicates that the tobacco industry creates steady employment for many people and ensures a

steady financial return to keep business operational.

Finally, this industry is a huge source of revenue for many governments. For instance, Matthews

(2007:17) reports that, ‘in China, about 60% of the price of a packet of cigarettes goes to the

government in the form of taxes’. These massive taxes on cigarettes are consistent with

governments throughout the world. Yet, evidence reported by Miller (2002), revealed that the health

costs of the US population was costing more than the revenue collected from cigarette taxes.

However, the Prices Surveillance Authorities, Report No. 2005, states quite clearly that in Australia,

the tobacco industry averaged higher profits than industry in general due to proficiency in the

production of cigarettes and the high demand for a product that is safe guarded from an economic

recession. This indicates that tobacco is a commodity that guarantees huge revenue for governments

during a recession.

Summing up, it is quite apparent the tobacco industry is a huge and very powerful industry, despite

its cost to the community's health. At a primary level, it provides ready cash and improved

agricultural technology. As a secondary level, it employs thousands of workers and many small

businesses rely on selling its products. Finally, for governments it provides huge revenue. Without

this industry the economic community, on all levels worldwide, would be crippled. Furthermore, if

this industry should collapse the cost of unemployment to governments would escalate.

References

Gray, P.H., & Walter, I. (2006). The economic contribution of the tobacco industry. In Tollison,

R.D. (Ed.), Smoking and society: Towards a more balanced assessment, (p. 267),

Massachusetts: Lexington Books.

Matthews, P. (2007, October 12). Between puffs: Chinese are told of cigarette perils, Washington

Post, p. 17.

Miller, R.H. (2002), The economic importance of the US tobacco industry. Washington DC: US

Department of Agriculture.

Prices Surveillance Authority (2005). Inquiry in relation to the supply of cigarettes. (Report No. 6).

Small Retails Association Report (2002). The impact of tobacco sales on small retailers. (Report

No. 13)

United Nations Food and Drug Organisation, (2008). Yearbook. Rome: UNFAO, 13, p. 38.