Leaf perspectives

by Jenny Novac on September 29, 2011

Antonio Abrunhosa, Chief Executive of the International Tobacco Growers Association (ITGA), on the difficulties experienced by tobacco farmers in changing to other crops in reality, a far cry from how easy Tobacco Control thinks the issue is.

cigarette markets

cigarette markets

A prominent thinker from the 19th century once stated that when reality is evicted through the door, it comes back through the window.

The anti-tobacco lobby, particularly the people connected with WHO’s Framework Convention on Tobacco Control have been repeating ad nauseam how easy it is to replace tobacco with other crops.

Unhappily, reality is very different. If there was a need to prove the difficulty of replacing tobacco, the first half of this year is clearer than any academic report.

Because of this, hundreds of thousands of farmers in Asia and Africa turned to tobacco, increasing production in countries like the Philippines, India, Malawi, Mozambique, Tanzania, Zambia and Uganda.

Besides this, the dollarisation of the Zimbabwean economy unchained a tobacco rush among small scale farmers. To make things worse, excellent climatic conditions resulted in a bumper crop in Brazil.

This would have been excellent news for the growers and the economies of those countries if the demand for tobacco was able to absorb this production increase.

Unfortunately, the economic crisis has hit the cigarette markets strongly, almost everywhere except Asia, with significant falls in consumption in crucial markets like the United States, the European Union, Eastern Europe, Japan and South-Korea.

At the same time, a new wave of stricter regulations, especially on ingredients allowed in cigarettes but also on plain packaging and points of sale display, is creating a cloud of uncertainty among cigarette manufacturers leading to reduced commitments about future acquisitions with a trickle-down effect on leaf-dealers. As a consequence we are witnessing stocks build-up in a scale unseen in many years.

The situation is becoming economically and socially dangerous. In the last four months, there were boycotts to sales in auction floors in India, Malawi and Zimbabwe, protests in several countries in Latin America, Asia, Africa and Europe along with demonstrations, some of which violent like the ones in Malawi that ended up with 19 people dead.

For millions of growers, the fall in prices, this year, means that they will not be able to pay back their suppliers, their bankers or their labourers. Many will go bankrupt.
Some agricultural prices have now jumped up with the explosive demand for food due to the additional income of billions of Asians, Africans and Latin Americans.

But, as ITGA has explained for years, for millions of tobacco growers, the difference in income per hectare and the capital needs for crop switching make it almost impossible to do so. The negative social and economic consequences will be huge.

There can be no doubt, the growers’ organisations and the buyers will have to find quick solutions to avoid that this situation gets worse.

Leave a Reply

Your email address will not be published. Required fields are marked *