ITGA, Tobacco, AGM, Tobacco types, social responsability, agriculture, farmers, tobacco production, alternative crops, fctc, tobacco leaf, tobacco courier, tobacco growers, crop, growing countries

ITGA, Tobacco, AGM, Tobacco types, social responsability, agriculture, farmers, tobacco production, alternative crops, fctc, tobacco leaf, tobacco courier, tobacco growers, crop, growing countries

ITGA, Tobacco, AGM, Tobacco types, social responsability, agriculture, farmers, tobacco production, alternative crops, fctc, tobacco leaf, tobacco courier, tobacco growers, crop, growing countries

ITGA, Tobacco, AGM, Tobacco types, social responsability, agriculture, farmers, tobacco production, alternative crops, fctc, tobacco leaf, tobacco courier, tobacco growers, crop, growing countries

ITGA, Tobacco, AGM, Tobacco types, social responsability, agriculture, farmers, tobacco production, alternative crops, fctc, tobacco leaf, tobacco courier, tobacco growers, crop, growing countries
Media Inquiries
Francois van der Merwe ITGA's President
Economic Benefits to Growers and Communities

Seven presentations dealt with this subject. Professor Mattas (Greece) reported that tobacco plays a dominant role in supporting agricultural output, exports, household income and employment generation in his country. On the basis of theoretical and empirical input-output analyses he showed that the presence of the tobacco sector (cultivation and processing) in the country as whole and in its northern, mountainous region, which is most dependent on tobacco, is very significant. Apart from the people that are directly engaged in tobacco activities, both sectors (mainly processing) have strong linkages in the regional economy. This high degree of interrelation, shown by the empirical multipliers in his models, makes clear that a restrictive policy for tobacco will induce negative impacts (output, employment and income) not only to the tobacco sector but also all over the regional economy. This was proved by the impact analysis which showed that only 25% of the lost jobs in the regional economy were coming from the processing sector, while 75% came from the remaining economy.

Any policies planning to reduce tobacco support create multiple problems to the country as a whole and particularly to the regions that are most dependent on the crop. The average income per producer is in the range 7,000 – 10,000 euro/ha; no other culture is able to provide this return.

Although Che Ke did not produce any economic data for China, the size of the industry in the country is in itself a pointer to the economic importance of the crop. China produces nearly one third of the world’s leaf. Of the 324 million persons engaged in agriculture, 22 million are involved in leaf growing. In view of the high value of the crop, there is consequently a close link between the country’s agricultural economy and that of the tobacco sector.

In Brazil, another giant amongst tobacco producing countries, 160,000 farmers grow around 600,000 tonnes of leaf in an industry that involves 800,000 people. Annual income of growers from the sale of tobacco leaf is currently 2.4 billion R$ and the industry generates US$1.15 billion from exports.

Malawi (Dr Thyangathyanga) is one of the poorest nations with a population of 11 million and GDP of US1.8 billion. 80% of the population is rural, depending on peasant farming for their livelihood. Tobacco generates over 70% of the nations’ foreign exchange. It contributes 38% of the country’s GDP and employs 25% of its labour. All of this is reported to be generated from 2% of the country’s arable land. Other cash crops are sugar, tea and coffee. The soils on which tobacco is grown are not suitable for these crops. There are also only very limited opportunities for other exportable cash crops, in part because markets are uncertain and usually very distant.

Ferat and Matossian showed how leaf tobacco production in Europe is concentrated in relatively small pockets in the eight countries that grow the crop, defined by suitable soil and climatic conditions.

Each pocket reflects a lively and balanced economy. Whilst these areas are suitable for tobacco, they are invariably not so for profitable production of other crops. Any destruction of the core crop in these micro-economies would bring about serious economic collapse and mean an important cost to society.

Dr Snell (Kentucky) reported that production of both burley and flue-cured tobaccos is declining in the USA because of a combination of factors, including increased competitiveness of imported leaf, declining domestic consumption of tobacco products and pressures from the health lobby. In his State of Kentucky, cash earnings from tobacco were in the order of US$800 million, representing 24% of total earnings in the 1990’s. It has now fallen to around US$500 million, 16% of total earnings. 50% of farms grow tobacco and the crop accounts for over half of total agricultural sales for 75% of farms. Although there is a concerted effort to diversify into other crops and farming activities, it is seriously constrained by relatively poor profitability and a lack of market opportunities.

There is no single enterprise to replace tobacco and no single crop can replace tobacco in the vast number of farms where tobacco is grown. The agricultural sector is therefore in crisis. Opportunities to diversify and to find alternative sources of income are probably better in the USA than in most other countries, especially those that are heavily dependent on agriculture. Thus, what are the chances of maintaining a reasonable living in the absence of a cash crop, such as tobacco, in these countries?

George Gilvesey began by stressing that tobacco generates C$12 billion to the Province of Ontario in Canada. The value added by the efforts and inputs of the growers from seed to the processors door is C$513 million. Yet, the industry is today in a similar positions to that of Kentucky. Production has dropped from around 85 million lbs to 62 million lbs in the last seven years. This is having serious consequences for the community of tobacco growers. Again, diversification is not a solution. The reasons for this include the uncertainty of market potential and the fact that many of the alternative crops are already being produced to capacity. Also, local produce is not competitive in the face of imported commodities, plus the seasonal nature of horticultural produce does not suit the major outlets which prefer a constant supply from diverse sources abroad.

The examples of Canada and Kentucky serve a common purpose because they focus on the effects of diminishing leaf production on communities. Tobacco, probably more than any other crop, is grown in concentrated, usually well-delineated areas. The reality of the situation is often lost in national statistics. To assess the real situation, data-gathering and socio-economic studies need to focus on the community.