Friday, March 23, 2007

Chop chop

A tax on tobacco will encourage the use of illegal, untaxed sources of tobacco or chop chop*. Smoking chop chop means that the Commonwealth Government loses out on revenue (in 2003 the estimated loss was $500 million) but, more importantly, that the tax on legal tobacco to avoid health problems will indirectly create new health problems since chop chop is, in many ways, a less healthy product than legally-produced tobacco. Fungi spores, caused by inadequate drying of tobacco, cause severe medical conditions (in addition to those caused by legal tobacco) in the use of chop chop that might be related to what are called ‘tobacco grower’s lung’ problems.

This means that the tax set to restrict legal tobacco use must be set lower than you would otherwise set it in order to restrict tobacco consumption**. To put the matter equivalently: Tobacco consumption could be better controlled by taxes if substitution towards chop chop could be reduced.

There has been some work done in the past on chop chop consumption by Gilbert Geis , The NSW Cancer Council and Renee Bittoun. Today I went to RMIT University too learn some more about chop chop consumption from Professor Tim Fry. I learnt that in the past, chop chop consumption has been concentrated in the tobacco-growing states Victoria and NSW. This suggests that chop chop is illegally diverted tobacco from commercial plantations. As in previous studies Tim found that chop chop consumers tended to believe it was healthier to smoke chop chop than legally sold tobacco because it was free of industry-added chemicals – an incorrect belief.

That all tobacco production will cease in Australia, from 2008, suggests that a dramatic reduction in the supply of chop chop will occur, so that taxation revenue from tobacco should be boosted. So too should the demand for legally-produced tobacco increase. This also means tobacco taxes can be raised further to reduce cigarette consumption with less concern over substitutions towards chop chop.

One thing that occurred to while I was listening to Tim was whether it is in fact easy to grow and cure tobacco. There are plenty of websites out there showing you how to grow it, how to cure it and marketing seed for the home grower (they will export 600 cigarette tobacco seeds to Australia for $24). If it is as easy as it seems then the disappearance of diverted chop from commercial tobacco plantations may be replaced by backyard production. If it is imported then it will presumably be expensive enough so that the supply restriction will still bite.

I’d be interested if readers have experience of chop chop. I am particularly interested if you have ever heard of it and, if so, on information about where it is sold, its quality and how much it costs.

* The term most likely originates from use of the expression 'chop chop' in Australia to refer to chopped up fodder and sugar cane fibre used for feeding animal stock.

** To the extent there are complementarities with other untaxed, socially-undesirable goods, such as cannabis or alcohol, one might wish to set the tax higher than without such complementarities.


Francis Xavier Holden said...

Long experience of chop chop. More later. Anything else you want to know about it?

hc said...

Could I walk up to a vendor and buy it? I'd be interested if others you knew with experience could also comment. Very little known.

Sinclair Davidson said...

It's not often that we have eminent economists at our seminar series - so Harry's visit was good. In the last couple of years, we've had three seminars on chop-chop and a couple on (legal) cigarette smoking. This is actually a very intersting area because it involves a range of different economic areas, consumer choice, taxation (evasion), public health, policy.

With the decision not to grow tobacco in Australia after 2008, taxation may be more effective as public policy but we don't know what chop-chop consumers will substitute into (if anything). Ironically, this may lead to either an improvement in public health or a deterioration.

If you get the oppourtunity either get Sophie Cartwright to present her PhD or read her PhD into the supply of chop-chop - it is facsinating research.

Francis Xavier Holden said...

As far as I know chop chop has always been "excess" or leakage from commercial crops and not from small specialised "market gardeners". (mainly as I understand you shave a bit extra of the legit bales and sell it for cash on the knocker - no GST, no Income,....

I was put onto it years ago from two seperate friends who from memory paid around $25 a K about exactly 10X less than packaged retail.

I mainly used to get it off someone who would by a K and sell on smaller bags.

There was a milkbar I knew of in Northcote and another one down in Moorabin.

We believed it was "healthier" than processed weed. It seemed to be well dried and cured.

Keep in mind it only sells to those who like to "roll yr own" - so it's a limited market and was probably replacing mainly DRUM and other rollies brands. Again from memory DRUM Is imported and I think most loose packs are.

My funniest story of chop-chop was a few years ago - I was walking up at Box Hill Station / Mall, slightly toward the end of its heyday as a dealing ground. I was smartly dressed, in a suburban dad business suit type attire, when I was approached by several weedy types in trackies "Psst, wanna by a K of chop-chop? only $25"

I knew then that something had changed.

(I'm not sure what it said about me)

I'm pretty sure one of my mates who I havent seen for a while still smokes chop chop I could ask him anything you want or I could put him onto you as a research associate :) (hes got a background in Psychology research and also an MBA)

Tobacco is opretty easy to grow and as far as I know its legit to grow and smoke but not to sell. I grew a few plants as a youth on the farm and hung it up etc and used it to smoke. But in those days tailor made were cooler.

I have seen the odd tobacco plant in gardens and most people dont know what they are.

It's a bit like booze. You can make pretty good and damn cheap home brew these days but not many people bother.

From memory there is a lot of buggerising around to make good smoking tobacco and it would be more akin to making your own wine than making beer. That is it would need some basic machinery in dryers etc and certain economies of scale. So it might get to like home bottling or shared facilities for wine.

There woudl be plenty of access to good seeds from up around Griffith and surrounding districts well suited to oz conditions.

From what I smoked of it I'd say it was akin in taste and smell and feel to say DRUM LITE not a bad smoke.

Most I knew would flavour it with say an Apple or Plum or apricot cut up in the pack to keep it moist and flavoured. Or throw a packet of cloves, and cinamon and into grinding bowl, motor and pestel, and place it in with chop chop for sweet indonesian type ciggarettes.

hc said...

fxh, Why not ask you cobber to post on his experiences here?

If you follow the links above you will see that moisture in chop chop is the thing that causes the very nasty fungal infections. The RMIT verbal records indicate some very nasty experiences so be careful.

I am sure you are right that there are big transaction costs in growing/curing tobacco - these will become less important if the price of chop chop rises because leakage from local producers disappears because they disappear.

Francis Xavier Holden said...

A personal explanation if you please:

For the last 25 years or so I've been a "social smoker" (with the occassional 2 month binge of smoking most days in that 2 months)

Last ciggarette I had would have been about a month ago - one of about 4 at a BBQ. I had a huge cuban cigar last weekend at a wedding.

I consider myself a non-smoker but will always have one or two every now and again. I enjoy it.

I don't think smoking is anything but bad for humans. I support most bans on smoking inside except I'd like a few bars / coffee shops where it is possible to smoke inside in comfort.

hc said...

fxh, You are a chipper - one who can maintain a low long-run level of consumption.

I still think you should give up completely:

1. You are still being exposed to toxins and carcinogens.
2. You validate the views of those who believe they can control their smoking. Most cannot - I never could when I smoked.

I have a fantastic post (I hope) in preparation on harm reduction in smoking. After this your anti-smoking preferences will intensify.

Francis Xavier Holden said...

A chipper? - I am out of touch - never heard of the term.

I still think you should give up completely:
1. You are still being exposed to toxins and carcinogens.

But not much, say even compared to walking along the road breathing in fumes

2. You validate the views of those who believe they can control their smoking. Most cannot - I never could when I smoked.

Hang on - on that basis you should stop drinking red wine and apply for your paid up ticket to The Nanny Statists.

hc said...

fxh, The term 'chipper' is used to define someone who can maintain a low-level long run rate of consumption of an addictive good. I first saw it in the 'drugs, set and setting' literature. There are many heroin chippers.

OK I may have overreacted to your occasional fag. As a heavy ex-smoker myself I can hardly point the finger.

I've been reading almost nothing over the past two weeks except literature on smoking. It interests and disgusts me - the costs in terms of human suffering are just so awesome.

As Yul Brunner said on his death bed 'Just don't smoke'.

Francis Xavier Holden said...

actually now you mention chipper in regard to heroin I remember it being used alongside "skin poppers"

I'd agree that unlike other drugs there isn't much upside to tobacco. Whilst I enjoy a good smoke there isn't a great effect.

I'm not sure society would be any worse or even any different if we didn't have tobacco around.

Alcohol has a lot more going for it.

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