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Tobacco Farmers Survey Report 2019
ZAMBIA
AFRICA REPORTS
II THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA III
SOURCES
Compiled by Lusaka: University of Zambia School of
Medicine and Atlanta: American Cancer Society.
Copyright ©2019 University of Zambia and the American
Cancer Society.
This report was authored by:
Dr. Fastone M Goma – Principal Investigator, Centre for
Primary Care Research, School of Medicine, University of
Zambia (UNZA). Zambia project leader.
Dr. Ronald Labonté – Professor and Distinguished
Research Chair, University of Ottawa.
Dr. Jeffrey Drope – Vice President, Economic & Health
Policy Research, American Cancer Society (ACS). Overall
project leader.
Ms. Qing Li – Sc ientist, Economic & Healt h Policy Research,
American Cancer Society
Mr. Richard Zulu – Research Fellow, Institute of Economic
and Social Research, UNZA (retired).
Mr. Evans Kangwa, Data Manager, Centre for Primar y Care
Research, University of Zambia School of Medicine, UNZA.
The following members of the core team for the overall
project on the political economy of tobacco in Africa were
involved in conceptualizing the project, including the
survey instrument used in this report:
Ms. Adriana Appau (McGill University), Dr. Raphael
Lencucha (McGill University), Mr. Peter Magati
(International Institute of Legislative Affairs – Kenya), Dr.
Donald Makoka (Centre for Agricultural Research and
Development – Malawi) and Firman Witoelar (Australian
Natioanl University).
Research reported in this publication was supported by the
National Institute on Drug Abuse, the Fogarty International
Center, and the National Cancer Institute of the National
Institutes of Health under Award Number R01DA035158.
The content is solely the responsibility of the authors and
does not necessarily represent the official views of the
National Institutes of Health.
Suggested Citation: Goma FM, Labonté R., Drope J,
Li Q, Zulu R, Kangwa E. 2019. The Economics of Tobacco
Farming in Zambia: Tobacco Farmers Survey Report 2019
Lusaka: University of Zambia School of Medicine and
Atlanta: American Cancer Society.
IV THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
TABLE OF
CONTENTS
TABLES & FIGURES v
EXECUTIVE SUMMARY 1
INTRODUCTION 2
CONTEXT 4
RESULTS
socio-demographic characteristics of household head
survey respondents 6
the economics of growing tobacco 8
why farmers grow tobacco 18
satisfaction with tobacco markets 20
food security 21
child labour 22
the harms from curing tobacco 23
future of growing 24
alternatives to tobacco 26
CONCLUSION 28
REFERENCES 30
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA V
TABLE OF
CONTENTS
LIST OF FIGURES
FIGURE 1
tobacco farming survey study sites 5
FIGURE 2
annual profit per acre - wave 1 survey 12
FIGURE 3
annual profit household - 2017 growing season 13
FIGURE 4
annual profit per kilogram - 2017 growing season 14
FIGURE 5
sources of income (zmw) - former v s. current
tobacco farmers 15
FIGURE 6
ranked order of reasons for growing tobacco 18
FIGURE 7
recruitment in to tobacco farming 1 8
FIGURE 8
satisfaction with tobacco selling 20
FIGURE 9
farmers considering switching to non-tobacco crops 24
FIGURE 10
to p reasons for switching from tobacco crops 25
FIGURE 11
farmers self-reported likelihood of future tobacco growing 2 5
FIGURE 12
alternative crops considered 26
LIST OF TABLES
TABLE 1
socio-demographic characteristics of household head
survey respondents 6
TABLE 2
mean production, price and income, excluding extreme outliers 8
TABLE 3
cost of n on -labour inputs 9
TABLE 4
median non-labour input costs, contract v s . independent farmer 9
TABLE 5
household labour, contract & independent tobacco farmers 11
TABLE 6
average sales for tobacco and other crops (zmw) -
former and current tobacco farmer by province 16
TABLE 7
mean difference in non-tobacco crop sales ( zmw),
former tobacco farmers 16
TABLE 8
average household resources ( zmw) - current and
former tobacco farmer, b y province 17
TABLE 9
food security - former and current tobacco farmer 21
TABLE 10
child labour in the zambian tobacco sector 22
VI THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA 1
TOBACCO IS A PRODUCT THAT WHEN USED AS SUGGESTED
BY THE MANUFACTURERS IT WILL KILL MORE THAN HALF
ITS USERS. REDUCING TOBACCO USE SHOULD THEREFORE
BE A CORNERSTONE OF ANY GOVERNMENT’S PUBLIC
HEALTH STRATEGY. YET TOBACCO CONTROL MEASURES
CONSISTENTLY FACE ENORMOUS OPPOSITION, OFTEN
FROM OPPONENTS USING ARGUMENTS WITH A SUPPOSED
ECONOMIC LOGIC. OUR CONTINUING STUDY ON THE
POLITICAL ECONOMY OF TOBACCO CONTROL AND TOBACCO
FARMING IN ZAMBIA CHALLENGES THESE AGRUMENTS
WITH SOLID EMPIRICAL EVIDENCE.
One dominant economic argument is the alleged harm
to smallholder tobacco farmers from tobacco control
policies. This argument has become one of the ubiquitous
reasons promoted by the tobacco industry and its allies for
governments to slow, stop, or even reverse tobacco control
efforts. Moving beyond the well substantiated logic that
demand for tobacco leaf is driven by global, not simply
country-level, consumption – hence Zambia’s tobacco
control efforts are likely to have little short-run effects
on tobacco farmers – it is becoming increasingly clear
that tobacco farming is not a livelihood worth pursuing
for Zambians. In this report, we utilize a representative
survey of 515 tobacco farmers to examine these economic
livelihoods rigorously. Building on previous research on
tobacco farmers, this study also includes in the sample a
large sub-sample of former tobacco farmers, which permits
us to compare the livelihoods of the current and former
farmers.
The findings show that growing tobacco generally compares
poorly with other agricultural livelihoods for most
smallholder farmers. Our research results demonstrate that
most tobacco farmers who have signed contracts with leaf-
buying companies to cultivate tobacco leaf are operating
at a net loss. The farmers usually end up in debt to the leaf-
buying company, compelling them to grow tobacco again
the following season to pay back their debt, precipitating
or continuing a long and generally losing annual cycle. To
make this scenario even worse, tobacco growing appears
EXECUTIVE SUMMARY
to be the most labour-intensive agricultural crop. When
incorporating a minimal economic value of unpaid family
labour (an accepted method in agricultural economics
to estimate the opportunity costs of any agricultural
activity), nearly all Zambian smallholder tobacco farmers
lose income by growing the crop. Most tobacco farmers
would be better off putting their very hard work into other
economic pursuits.
WHEN WE COMPARE CURRENT AND FORMER TOBACCO
FARMERS, THERE IS A STARK DIFFERENCE. ON AVERAGE
THE HOUSEHOLD RESOURCES OF THE FORMER TOBACCO
FARMING HOUSEHOLDS WERE ALMOST 75 PERCENT
HIGHER THE YEAR AFTER SWITCHING COMPARED TO
THEIR NEIGHBOURS WHO HAD CONTINUED CULTIVATING
TOBACCO LEAF. WHILE TOBACCO-FARMING HOUSEHOLDS’
GROSS INCOMES WERE TYPICALLY HIGHER ON AVERAGE,
THEIR COSTS, BOTH DIRECT AND HOUSEHOLD LABOUR,
WERE SIGNIFICANTLY MORE THAN THE FARMERS WHO
HAD SWITCHED TO NON-TOBACCO CROPS AND OTHER
LIVELIHOODS. THE FORMER TOBACCO FARMERS WERE
ALSO PRODUCING SIGNIFICANTLY MORE FOR THEIR
HOUSEHOLD’S OWN CONSUMPTION— INCLUDING FOOD
PRODUCTS— AVOIDING THE NEED FOR THESE HOUSEHOLDS
TO PURCHASE THESE OFTEN COSTLY GOODS.
Zambia is a Party to the WHO Framework Convention on
Tobacco Control (FCTC), which compels Parties to help
tobacco farmers to find viable alternative livelihoods
(Article 17). The results of this research suggest strongly
that finding and promoting alternative livelihoods for
tobacco farmers should be a development priority in
the coming years. This comes in serious and troubling
contrast to the recent 7th National Development Plan for
Zambia, which specifically identified tobacco farming as
a growth sector.
2THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
Tobacco control remains one of the greatest public health
challenges of the first half of the 21st century. Scholars
estimate that the number of tobacco-attributable deaths
in 2018 to be more than seven million 1, and is projected
to grow to 8 million per year by 2030.2 Worldwide, more
than 1.1 billion people smoke and more than half of all
regular cigarette smokers will eventually die from their
habit — unless they quit.³ Even in middle age, stopping
smoking avoids most of the risk of being killed by tobacco,
and stopping earlier avoids almost all of it. The Framework
Convention on Tobacco Control (FCTC), the world’s first
public health treaty under the auspices of the World
Health Organization, provides a highly effective set of
interventions that will drive down consumption, including
many demand-oriented measures such as raising tobacco
taxes, graphic warning labels on tobacco packaging, and
smoke-free public and work places. Furthermore, with
widespread quitting, many more tobacco deaths will
be avoided. The FCTC also emphasizes supply-focused
measures such as moving tobacco farmers to other viable
alternative livelihoods. This report speaks directly to these
supply-side issues.
Many Zambians are under the gravely mistaken impression
that tobacco use is not a significant public health
challenge in Zambia. Key informant interviews conducted
in November 2018 with 15 persons—from both within
government and outside of it—who are engaged in some
aspect of tobacco control, tobacco farming, or economic
development policies consistently found that many
continue to subscribe to the idea that only few Zambians
smoked:
“…the way I see Zambia, we’re definitely not a smoking
country. That you can write: we’re definitely not a
smoking country!” (P5)*
“Smoking is going down. I have friends who used to
smoke and they have stopped.” (P15)
Many informants cited personal anecdotes of minimal
tobacco use rather than scientific evidence to support
their perception. Survey data present an entirely different
picture. Tobacco use prevalence in Zambia in 2015 was
26.5% (adult males) and 4.6% (adult females).4 Moreover,
the most recent Global Youth Tobacco Survey (GYTS)
(2011) and the most recent wave of the International
Tobacco Control (ITC) survey both indicate that a higher
proportion of girls than boys in Zambia now use tobacco
products, suggesting a major and potentially catastrophic
shift (GYTS 2011; ITC 2015). 5 6 These percentages equate to
more than one million adult smokers and more than 56,000
child and youth (<18 years) smokers (tobaccoatlas.org).
But tobacco use is not just a health issue, it is undoubtedly
also a development one. In key informant interviews in 2015
and 2018, the role of tobacco in development is still seen in
almost antithetical ways, even by many directly involved
in efforts to spur economic development in Zambia. For
informants active in the economic sectors of government,
tobacco is considered an important cash crop, a source
of livelihood for smallholder farmers, and an important
source of foreign exchange (FOREX).
“Tobacco is very important…it’s one of the top ten
products that we export.” (P8)
“For many small holder farmers, it’s still seen or
perceived largely as the one crop that brings you cash
at the end of the year.” (P4)
“…there appears to be a scale up of tobacco growing
across the value chain up to the final product of
processing and selling. The government obviously feels
that’s the right way to go…to…bring in more foreign
exchange, bring in more money.” (P3)
Those working in the health sector view the development
argument for tobacco quite differently, noting not only
its role in creating enormous health risks but also in its
economic and social development costs:
“…if the people of Zambia are not healthy, then
it becomes difficult for the country to achieve its
[development] vision 2030.” (P6)
“Treating disea ses caused by tobacco such as cancer and
other health hazards are an added cost on Government
revenue [so] the Government is in a 50-50 situation
on the issue of tobacco: between raising revenue and
treating the health of the people.” (P13)
INTRODUCTION
*Quotes are identified by anonymized participant (P) number only, to retain confidentiality.
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA 3
INTRODUCTION
Other studies back up the claim that tobacco creates a
net economic cost rather than gain, at both personal and
national levels. Buying tobacco instead of using resources
to obtain other vital goods and services like healthcare,
education, or healthy foods, for example, prevents families
from rising out of poverty (Chelwa and Van Walbeek,
2014), thereby dampening economic development. To
smoke daily 10 of the cheapest cigarettes available in
Zambia, a Zambian of average income would have to
spend nearly 20% of his or her income (tobaccoatlas.org).
Tobacco use also increases illness in smokers, leading to
loss in worker productivity, and imposes significant costs
to the health system (both public and private) in treating
tobacco-related diseases, costs which might otherwise
be invested in healthier and more sustainable forms of
economic development.
In 2008, Zambia became a Party to the WHO FCTC,
which compels Parties to implement a number of control
measures aimed at reducing tobacco use. As of early
2019, the Zambian government was considering enabling
legislation that would help implement the treaty’s
provisions. Despite the WHO identifying tobacco control
as a public health ‘“best buy” it continues to face stiff
opposition in many countries, including Zambia. One
of the most common arguments against tobacco control
efforts is the alleged threat these efforts pose to the
economic livelihoods of tobacco farmers. Even though it
is well established empirically that demand for tobacco
leaf is global and a countr y’s tobacco control efforts are
unlikely to affect tobacco farmers’ livelihoods in the short
term, this argument against tobacco control to resonate in
political and policy circles.
“…on the international market, the demand [for tobacco
leaf] is slightly going down, mainly associated with
some of those lobbying, the anti-tobacco laws.” (P12)
“Our friends in the tobacco sector have already gone to
Agriculture and told them this [tobacco control] law is
very bad, it’s going to ruin the economy.” (P9)
Recognizing that tobacco farmers’ livelihoods must
be taken into important account, the FCTC obligates
governments to assist in supporting tobacco farmers to
find viable alternative livelihoods (Article 17).
Provision of support for economically viable
alternative activities Parties shall, in cooperation with
each other and with competent international and
regional intergovernmental organizations, promote,
as appropriate, economically viable alternatives for
tobacco workers, growers and, as the case may be,
individual sellers.
Fulfilling this obligation is much more than just
complying with the government’s legal commitment to
this international treaty; it also addresses the Zambian
government’s commitment to a “healthy and skilled
working population that can meet the demands and
challenges of upper middle income development” as its
most recent national development plan aims to achieve
by 2030.7 At present, there is only limited evidence-based
information about tobacco farmers’ livelihoods in most
countries, which makes it harder for government policy-
makers to counter the dominant narrative that tobacco
is essential to the economic livelihoods of smallholder
farmers. Building on our earlier 2015 survey and report,8
this repor t presents findings from our second survey in 2017
of smallholder tobacco farmers, systematically examining
their economic livelihoods.
4THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
CONTEXT
The Zambian economy continues to experience a shift
away from agriculture as its main engine of growth.
Agriculture, in general, makes only a small contribution
to Zambia’s Gross Domestic Product (GDP), estimated at
just 4.8% in 2017, 9 down from 8.5% in 2014 and from 16%
in 2001.10 Not only has agriculture’s contribution to GDP
declined precipitously, so has its value-added labour
contribution to the Zambian economy (IAPRI 2017). These
declines represent broader structural changes in the
economy. These structural changes, however, have not
led to increased growth in manufacturing or value-added
production (which is one of the key economic development
goals of the present Zambian government), but rather a
transit ion from rura l agriculture to low-paying and inse cure
service sector work in urban centers. This phenomenon
is not unique to Zambia and is broadly characteristic of
many African countries. Importantly, however, and despite
the declining economic importance of agriculture to the
Zambian economy, almost half (48.9%) of the population’s
livelihoods in 2016 were still based on agriculture.
11
It is estimated that 10,000 – 12,000 smallholder farmers
continue to grow tobacco as a cash crop. Given an average
household size of approximately 6.7 people, 67,000 to
80,400 Zambians have some measure of direct reliance
on tobacco farming, bearing in mind that most tobacco
farmers also grow other crops. Economic activities in one
sector are known to have ‘ripple effects’ in other sectors
(backwards and forwards linkages), or multipliers, often
measured as ‘social accountability matrices’ (SAMs). No
estimates of SAMs for Zambia exist, however, making it
difficult to assess claims of the total number of individuals
whose livelihoods depend to some extent on tobacco
farming or manufacturing; although recent increases in
cigarette manufacturing in Zambia claim to provide over
170 new jobs.12 13
Although tobacco continues to contribute to the value
of agricultural exports, it remains quite low in its overall
economic contribution. Despite recent comments by the
Chair of the Tobacco Board of Zambia (TBZ) that tobacco
contributes 3% to Zambia’s GDP (based on the peak year
of tobacco sales in 2013), more recent data estimate its
contributions at between 0.3% and 0.4% (P11, P12). The
value of tobacco exports is only marginally more than the
value of tobacco imports, with tobacco export earnings
outpacing value of the tobacco imports by a margin of less
than 10% in 2016 and 2017.14 This calls into question the
oft-stated economic argument of tobacco’s importance in
generating FOREX made by many of our key informants
working in the Zambian tobacco industry (P4, P5, P8, P9),
since the FOREX value of tobacco imports essentially
cancels out the FOREX value of tobacco exports.
Publicly-stated government policy continues to promote
the narrative that tobacco growing is essential to the
livelihoods of smallholder far mers and a necessar y element
in poverty reduction. Indeed, it is presented as such in
the latest Zambian economic development plan, which
foresees increases in both tobacco leaf production and
value-added leaf processing and cigarette manufacturing.
In the absence of good empirical data for these claims,
we originally set out in 2015 to examine tobacco farmer
livelihoods using a major individual-level economic
survey. Our first survey wave was implemented in 2015 and
found that smallholder tobacco farmers were either losing
income, or not earning enough to justify its continuing
cultivation. Both to validate and build upon these findings,
we conducted a follow-up second wave survey in 2017.
Both surveys were led by researchers at the University of
Zambia’s School of Medicine, in collabouration with the
American Cancer Society. Our 2015 survey sample was 497
farmers. In the follow-up 2017 survey, we interviewed 515
from the same tobacco-growing districts that we visited in
2014. We interviewed both farmers who were continuing to
grow tobacco (335) and those who had stopped growing
tobacco (180). Data collection interviews with 515 farmers
were conducted during the period, March/April, 2017.
Training in data collection for 10 research assistants was
conducted for 3 days prior to the fieldwork. The training
included a field pre-test component after which the survey
instrument was modified to account for concerns raised.
As illustrated in Figure 1, the study was conducted in six
districts of Zambia where tobacco is mostly grown by
small- to medium-scale farmers: Chipata and Lundazi in
Eastern Province; Mkushi and Serenje in Central Province;
and Kalomo and Choma in Southern Province.
As we did with our previous sur vey, we also convened focus
group discussions (FGDs) with tobacco farmers in four of
Zambia’s tobacco-growing regions, in which 57 farmers
participated. Some of their comments are included in this
report’s key findings.
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
CONTEXT
5
Figure 1 – Tobacco Farming Survey Study Sites
Choma
Mkushi
TOBACCO PROMOTION OR TOBACCO CONTROL?
In 2017, the Zambian government released its Seventh National
Development Plan, with the goal of achieving World Bank upper-
middle income country status by 2030, primarily by diversifying
away from copper to greater value-addition in its agricultural
exports. The plan identifies tobacco production as “a very
lucrative investment opportunity in the country because of its
profitability compared to other agricultural crops. It further states
that tobacco “has great potential to contribute to the growth of
the economy through employment and wealth,” although no
references or studies a re cited for these claims. One of its propo sed
“strategic interventions” is to “Provide an enabling policy
environment to facilitate involvement of the private sector in the
marketing and processing of tobacco” (REF 7th NDP p.137). The
reference to marketing of tobacco (considering efforts to legislate
tobacco control efforts) is of some concern given that in 2018
two new cigarette manufacturing plants opened in the Lusaka
Multi-Facility Economic Zone. These plants took advantage of
Zambian government incentives (zero percent tax for five years)
that, during the opening of one of the plants, officials explained
were “in line with the Seventh National Development Plan.”15 The
British American Tobacco Zambia factory is estimated to produce
5 million cigarettes daily; the Zambian-owned Roland Imperial
Tobacco Company states that it will produce 20 million cigarettes
daily. While much of the output will be exported to neighboring
countries, both companies are also targeting, with the intent of
growing, the domestic market. Any value in the 170 new jobs
created in cigarettemanufacturing will be quickly overwhelmed
by the health and economic damages created by increased
domestic tobacco use.16
6THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
Table 1 presents many of the key background characteristics of
the household head of the interviewed tobacco-farming and
former tobacco-farming households. Most of the household
head interviewed were male. It is important to note, however,
that farming is most commonly a family activity, in which
both males and females participate; the preponderance of
male respondents therefore does not accurately represent
the proportion more broadly of who work on tobacco farms.
Most respondents were married, between 36 and 60 years old,
and had primary schooling. Only 25 respondents indicated
work outside of their farms, indicative that the most common
primary occupation of respondents was crop and livestock
SOCIO-DEMOGRAPHIC CHARACTERISTICS OF
HOUSEHOLD HEAD SURVERY RESPONDENTS
farming. Although these characteristics are roughly similar
to those from our earlier survey, there are some differences.
A higher proportion of household head in our second wave
survey are male (93% vs 80%), more likely to be 36 years or
older (76% vs. 60%), and less likely to be single (5% vs. 11.5%).
The notable difference in reported age coheres with the
narrative from one of our informants that youth are less likely
to continue farming (P1), leaving an aging cohort of active
smallholder farmers. An addition to our second wave survey
distinguished current from former tobacco farmers to allow
us to explore why some farmers stop growing tobacco.
industry 1 industry 2 Solutions 1
T1. SOCIO-DEMOGRAPHIC CHAR ACTERISTICS OF HOUSEHOLD HEAD SURVERY RESPONDENTS
CHARACTERISTICS CURRENT (N=335) FORM ER (N=180) TOTA L (N =5 15)
PROVINCE
Central 46 13.7% 53 29.4% 99 19.2%
Eastern 114 34.0% 94 52.2% 208 40.4%
Southern 175 52.2% 33 18.3% 208 40.4%
GENDER
Male 292 92.4% 150 94.3% 436 93.2%
Female 24 7.6% 95.7% 32 6.8%
AGE (YEAR S)
< 21 20.6% 31.9% 51.1%
21-35 82 26.6% 29 18.2% 111 23.7%
36-60 205 64.9% 108 6 7.9% 313 65.9%
61+ 27 8.5% 19 12.0% 46 9.7%
MARITAL STATUS
Single 19 6.6% 32.0% 22 5.2%
Married 256 88.9% 136 90.7 % 392 89.8%
Others 13 4.5% 11 7. 3% 24 5. 5%
EDUCATION
Not yet or no schooling 26 8.2% 14 8.8% 40 8.4%
Primar y 175 55.4% 105 66.0% 280 59.0%
Secondar y 109 34.4% 38 23.9% 147 31.0%
College or University 61.9% 21. 3% 81.7%
TABLE 1
Socio-Demographic
Characteristics of
Household Head
Survey Respondents*
*Numbers indicate tot al response s to each categor y of question. Not all s urveyed farm ho useholds provide d answers to rcent ages are bas ed on total respon ses for each categ ory of data, and not on t he total sample.
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
7
The majority of current tobacco farmers in the survey
(269 out of 354, or 76%) were on contract with a leaf-
buying company. This figure is similar to that found in our
previous survey (73.6%). Notably, the Tobacco Board of
Zambia reports that the figure is closer to 90 percent. The
contract arrangement provides farmers with the required
agricultura l inputs at the sta rt of the season wit h no up-front
payment, and a guaranteed buyer for their product at the
end of the season, although not a guaranteed price or
specified quantity to be purcha sed. The cost s of these inputs
are deducted from the value of their sales at the end of the
season. Three quarters of our sur veyed contract farmers
(156 out of 208 who answered this question) reported
that they were adequately informed about their contract.
A slightly lower percentage (68% or 239 out of 354) repor ted
having a written contract , though only 177 (50%) of those had
a copy. In terms of the type of tobacco cultivated, 54.2% (13
out of 24) of independent farmers and 68.7% (101 out of 147)
of contract tobacco farmers grew Virginia tobacco. All but
39 of the remaining contract and 10 independent farmers
grew Burley tobacco. On average, it took both types of
farmers a little more than 8 months to produce the tobacco.
CONTRACT VS. INDEPENDENT TOBACCO FARMERS
76%
OF TOBACCO FARMERS
WERE ON CONTRACT
WITH A LEAF-BUYING
COMPANY.
8THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
In this sect ion, we examine the centra l dynamics of tobacco
farmers’ economic lives. We begin with an examination
of their income. Note that income alone is an insufficient
economic indicator because it does not always accurately
reflect the overall economic situation of the farming
households. This is largely because there are typically
significant costs to tobacco farming. Thus, it is imperative
to generate accurate cost calculations to combine with
the income calculations. Major costs include not just the
obvious physical inputs such as seeds, fertilizers, and
agricultural chemicals, but also the large amount of labour
necessary to cultivate the crop. It is therefore critical to
move beyond simple income calculations and consider
both the revenue generated by selling tobacco leaf and the
total costs of production.
THE ECONOMICS OF
GROWING TOBACCO
TABLE 2
Mean Production, Price and Income, Excluding
Extreme Outliers
Table 2 presents data on the mean and median quantity
sold, price per kilogram, and the sales for the full prior
growing season, amongst those farmers who provided
these figures, after removing the extreme outliers (n=150).
We show these figures for both contract and independent
tobacco farmers. The results demonstrate that mean and
median contract farmers were typically selling more
tobacco than their independent counterparts in terms of
weight and sales value. The mean contract farmer sold
14,465 ZMW worth of tobacco leaf, significantly more than
the mean independent farmer who sold 8,391 ZMW worth
of leaf..
industry 1 industry 2 Solutions 1
T 2. MEAN PRODUCTION, PRICE AND INCOME, EXCLUDING EXTREME OUTLIERS
QUANTITY
SOLD (KG)
AVERAGE
PRICE
(ZMW)
REPORTED TOBACCO
INCOME(ZMW)
Contract Framer
n129 125 129
mean 1699.7 25.9 14465.9
meadian 1068 23 10000
Independent
Farmer
n21 21 21
mean 822.722.7 8391.4
meadian 700 23.6 4800
Total
n150 146 150
mean 1576.9 25.5 13615.5
meadian 1000 23 8820
THE RESULTS DEMONSTRATE THAT
CONTRACT FARMERS WERE TYPICALLY SELLING
MORE TOBACCO THAN THEIR INDEPENDENT
COUNTERPARTS IN TERMS OF WEIGHT AND
SALES VALUE
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
9
COSTS OF TOBACCO FARMING
NON-LABOUR COSTS
TABLE 3
Cost of Non-Labour Inputs
TABLE 4
Median Non-Labour Input Costs, Contract
vs. Independent Farmer
nQUANTITY SOLD (KG) INPUT C OST PER KG
(ZMW)
Contract Farmer 130 1699.7 18.9
Independent Farmer 20 822.7 3.9
It is well established in the literature that tobacco farming
is both input- and labour-intensive. Accordingly, we
examine these dynamics in depth. Farmers’ non-labour
costs are presented in Tables 3 and 4. Note that the input
costs included are the principal variable costs such as
tools, fertilizer, herbicide, pesticide and seeds, but not the
fixed cost such as land rental, although land rental was not
a large part of most farmers’ production.
In Table 3, the first column identifies the non-labour input
item, and the second column the number of observations
(farmers who provided information on each cost item).
The third column is the median cost and the final column
is the mean (average) cost of farmers who acquired the
item. There is a further 2 percent levy from the government
on tobacco leaf sales. This overall amount is above what an
average small-scale tobacco farmer can afford as working
capital to venture into tobacco farming, which accounts for
the attractiveness of entering into a contract.
industry 1 industry 2 Solutions 1
T 3. MOST O F NON-LABOU R INPUTS
ITEM
TOTAL NUMBER OF
OBSERVATIONS
MEDIAN OF
TOTAL COST OF
THE AMOUNT
USED (ZMW)
MEAN OF TOTAL
COST OF T HE
AMOUNT USED
(ZMW)
Seed 132 3243 204
Water Cans 190 80 88
Pesticides (chemicals) 88 225 289
Herbicides 6208 218
Fertilizer 167 2160 2617
Hoes 215 80 108
Flue Curing Wood 141 300 325
Table 4 examines the cost of inputs per kilogram of
tobacco leaf produced. The results are striking: despite
the attractiveness of contracts because they provide a
form of credit to the farmers, the non-labour input costs
per kilogram of tobacco are substantially higher for
contract than for independent farmers.
industry 1 industry 2 Solutions 1
T 4. MEDIA N NON-
LABOUR INPUT COSTS, CONTRACT VS. INDEPENDENT FARMER
TOBACCO FARMING IS BOTH INPUT- AND
LABOUR-INTENSIVE
10 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
LABOUR COSTS
To determine more accurately farmers’ costs and
therefore their profits, it is critical to examine their labour
costs. There are two main sources of labour costs: hired
and household. We begin with hired labour costs..
HIRED LABOUR COST
Among current tobacco farmer s, 68% of contract farmers and 59% of
independent farmers used hired labour for tobacco farming, while
only 30% of them hired labour for farming other crops. This last
figure is the same (30%) as the number of former tobacco farmers
who similarly hired labour to help farm their non-tobacco crops.
These figures suggest that tobacco growing is labour intensive,
and are consistent with other research findings,17 and also with
how the tobacco farmers in Zambia themselves describe their
efforts:
“labour is too much,” “growing tobacco…is too demanding,”
“it is a heavy job,” “is very demanding, requires a lot of labour.”
Unlike contract farmers, independent farmers, having to cover the
costs of their own start-of-season inputs, may be more reluctant
to expend as much on hired labour, which could account for
the reported difference between the two groups. The difference
between the two groups is more striking when we consider hired
labour in terms of average number of days, or average number of
hours per kg of tobacco. Contract farmers averaged 378 (S.E.=211)
days of hired labour, or 5.1 hours per kg; while independent
farmers averaged only 146 (S.E.=27) days of hired labour, or 1.2
hours per kg. The difference is statistically significant. However,
tobacco extension officers note the relationship between this
lower level of labour intensity and the comparatively poor quality
and yield of the tobacco from many independent farmers.
What is also important to note is tobacco farming, relative to
farming other crops, has very high input costs, even before
considering the value of household labour. Our survey found that
tobacco farmers spent an average of 3,958.3 ZMW on farming all
crops including tobacco, while former tobacco farmers only spent
an average of 1,399.8 ZMW on farming their non-tobacco crops.
Despite three quarters of the surveyed contract farmers
stating that they were adequately informed about their
contracts, a large number of these farmers were unable to
tell us the price of the inputs, most of which would have
been provided by the leaf-buying companies. Less than
half of the contract farmers (133 of 269) knew the price
of their pesticides, and only 33 knew the price of their
herbicides. This dynamic is significant and problematic
since these are two of the costliest inputs according
to those farmers who did know the prices (Table 3).
Although not all tobacco farmers in our focus groups
thought their input prices were unreasonable, most
complained that the costs charged by the companies
were too high, that “retailers…sell chemicals…cheaper
than those offered by tobacco companies.” Others
complained that “for chemicals we don’t know [the
prices],” or that “certain deductions remain hidden until
the time of sales,” leading one farmer to conclude simply
that “it is difficult to know how much money you have
spent growing the tobacco.” None of the farmers in one of
our focus groups had read or knew the contents of their
contract, and complained that if one of the farmers in
their tobacco cooperative defaults on paying the cost of
their inputs, this liability is passed on to other members
of their cooperative. Notably, the leaf-buy companies are
setting up these groups, which is essentially transferring
all of the risk of cultivating tobacco to the farmers, while
the leaf-buying companies have little or no risk.
“[T]hey (the companies) do not tell us those things.
They only tell us [these things] after we’ve grown the
tobacco.”
“LABOUR IS TO MUCH”
“GROWING TOBACCO...IS
TOO DEMANDING”
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
11
It is often argued that household labour should not be
considered a ‘cost’ since family farms have historically often
relied upon family labour. But it is now widely accepted
that family labour can also represent an opportunity cost in
terms of alternative earning possibilities (which admittedly
may be limited in some rural Zambian communities) and,
at a minimum and given the extent of labour involved
in tobacco farming, is a legitimate measure of a farming
household’s net return on investment.18 19 20 The results
presented in Table 5 suggest that the number of hours of
household labour to produce a kilogram of tobacco leaf
is high at more than 10.4 hours for contract farmers (less
for independent farmers, though this difference is not
statistically significant). Incorporating household labour
costs into the equation renders a bad economic situation for
tobacco farmers much worse.
industry 1 industry 2 Solutions 1
T 5. HOUSE HOLD LA BOUR, CON TRACT &
INDEPENDENT TOBACCO FARMERS
HOUSEHOLD LABOUR COST TABLE 5
Household Labour, Contract & Independent
Tobacco Farmers
MONTHS OF
DURATION
HO URS P ER
HOUSEHOLD HOURS PER KG
Contract 8.8 4701.569 10.4
Independent 7.7 4495.439 6.7
Total 8.4 4667.764 9.9
“LABOUR IS TOO MUCH,”
“GROWING TOBACCO…IS
TOO DEMANDING,” “IT IS
A HEAVY JOB,” “IS VERY
DEMANDING, REQUIRES A
LOT OF LABOUR.”
12 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
While gross income and costs are vital measures, putting
the two together to examine profits is arguably more useful
in terms of understanding the overall state of farmers’
livelihoods. In our Wave 1 survey we had accurate data on
the size of far ms for both contract and independent farmers.
We were able to combine the revenue and input cost data
to calculate average profits per acre, effectively the total
cash revenues from selling tobacco leaf minus all input
costs. We estimated these profits for two scenarios, in the
first (the perceived profit) we excluded household labour
while in the second (adjusted profit) we monetized the
household labour as an input cost, using the government’s
official wage for domestic workers. There is no official
government agricultural minimum wage, but we argue that
the domestic wage is a reasonable proxy because the skill
level of these two categories of jobs is similar and because
there is ample evidence that many rural workers have
recently migrated to towns and cities for precisely these
types of jobs.21 In the original report, we used a shorter
work month (23 days), which translated into a higher
minimum wage) and reported the profits in US, but in this
report we recalculated using the hourly wage 3.646 Z ambia
Kwacha in the legislation, and report in Zambian Kwacha
(ZMW). In Figure 2, we observe that in the 2015 growing
season, before including household labour, independent
tobacco farmers on average were making a small profit
of 1,295 ZMW per acre while contract farmers on average
were facing a small loss of 1,627.80 ZMW per acre. When
we incorporated household labour, both sets of farmers
on average were losing significantly: 4,301.9 ZMW per
acre for independent farmers and 13,182.2 ZMW per acre
for contract farmers.
industry 1 industry 2 Solutions 1
FIG 2. AN NUAL PROF IT PER ACRE - WAV E 1 SURVE Y.
PROFIT: PERCEIVED AND ADJUSTED FIGURE 2
Annual Profit per Acre - Wave 1 Survey
WHEN WE INCORPORATED HOUSEHOLD LABOUR, BOTH
SETS OF FARMERS (INDEPENDENT AND CONTRACT) ON
AVERAGE WERE LOSING SIGNIFICANTLY.
-4301.9
1295.4
-13182.2
-1627.8
-ZMW 15,000
-ZMW 10,000
-ZMW 5,000
ZMW 0
ZMW 5,000
Profits including value of household
labour
Profits excluding value of household
labour
Annual Profit per Acre Wave 1 Survey
Independent Contract
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
13
As we noted in our Wave 1 survey report, these figures
differ from the gross margins reported by Tembo and
Sitko,22 which used different years than our own study
(including years when tobacco did well in both quantity
produced and overall sales values) and also incorporated
data from medium- and some large-scale producers.
Our study focused only on smallholder tobacco farmers.
When accounting for the family labour cost of tobacco,
farmers’ income losses are striking; but even considering
only direct input costs, contract farmers lose income
(despite the cash they might receive at some point in the
contract relationship with the leaf-buying company) while
independent farmers make only a tiny profit.
We were unable to estimate farm acreage in our Wave
2 survey and could not undertake the same per acre
analysis. We were able to make a similar estimation,
however, based on profit per farming household, and
per kilogram of tobacco. We again compare contract and
independent tobacco farmers. In Figure 3, we observe
that for both contract and independent tobacco farming
households, without incorporating a value of household
labour, the average household does a little worse than
breaking even (-1,301.7 and -219.3 ZMW respectively). As
we discuss above for the Wave 1 survey, in addition to
these gross margins, we also recalculate profits assigning
reasonable values for household labour. As we did above,
we first use the minimum wage of a domestic worker and
the losses per household are significant: -19,267.5 ZMW
for contract farmers and -16,875.5 ZMW for independent
farmers. Because the minimum wage for domestic
workers had not been adjusted since 2012, we expect
this is a significant undervaluation of the farmers’ labour,
so we recalculated using the average wage paid by the
surveyed farmers to their hired farm help. In other words,
this value would approximate almost perfectly what a
farmer could have made if they had instead worked on
a neighbouring farm. The farmers were paying their help
more than the 2012 minimum wage. When we recalculated
the independent farmers were losing 27,170 ZMW per
household on average, whereas the contract farmers
were losing slightly more at 31,065.8 ZMW per household
on average.
industry 1 industry 2 Solutions 1
FIG 3. ANN UAL PROFI T PER HOUSE HOLD - 2017 GRO WING SEA SON.
FIGURE 3
Annual Profit per Household - 2017 Growing
Season
WHEN ACCOUNTING FOR THE FAMILY LABOUR
COST OF TOBACCO, FARMERS’ INCOME LOSSES
ARE STRIKING.
-16875.5
-19267.5
-27170.7
-31065.8
-219.3 -1301.7
-35000.0
-30000.0
-25000.0
-20000.0
-15000.0
-10000.0
-5000.0
0.0
ZMW
Independent Contract
Annual Profit per Household Wave 2 Survey
Profits including value of household labour(minimum wage)
Profits including value of household labour(hired labour wage)
Profits excluding value of household labour
14 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
Figure 4 presents a similar scenario for profits per
kilogram. Without incorporating household labour,
independent farmers are making a very small profit (0.3
ZMW per kg) whereas contract farmers are losing some
(-7.3 ZMW per kg). Again, like we observe above for per
household calculations, the losses are much greater when
we include household labour. Using the very conservative
2012 domestic worker minimum wage, the losses are -26.6
ZMW/kg for independent farmers and -74.5 ZMW/kg for
contract farmers. Using the more accurate measure of
what the farmers were paying their own hired farm help,
the losses are -44.4 ZMW/kg for independent farmers and
-119.3 ZMW/kg for contract farmers.
industry 1 industry 2 Solutions 1
FIG 4. ANN UAL PROFI T PER
KILOGR AM - 2017 GROWING S EASON -
FIGURE 4
Annual Profit per Kilogram - 2017 Growing Season
Although the actual amounts (in ZMW) are not directly
comparable between the two survey waves, or between
the two different estimations in Wave 2, what is consistent
is that most tobacco farmers appear to be operating at
a net loss, and notably so when considering household
labour, no matter how we calculate it. A possible
criticism of our use of monetized household labour in
both survey waves is that, while an accepted estimation
practice, it assumes the presence of alternative income
sources for household members (i.e.,“opportunity costs”
in economics). As one of our focus group farmers in
Wave 2 noted, a comment shared by several focus group
participants:
“We have no jobs in Zambia. Therefore we have gone
into tobacco.”
But there is widespread and varied agricultural activity
throughout the country and at very least finding casual
farm employment on larger farms is a reliable possibility
for smallholder farmers. Furthermore, the potential earn-
ings from non-tobacco crops (described below) and the
continued involvement of children as part of household
labour in tobacco cultivation (also described later) cer-
tainly challenge the dominant poverty-reduction narrative
of tobacco farming. Given excluding household labour,
tobacco growing reprents, on average, a net loss for most
tobacco farmers, contradicting empirically the dominant
tobacco narrative expressed by the tobacco companies,
some government officials, and even some tobacco farm-
ers themselves. Such evidence also begs the question: if
returns from tobacco farming are so low as to even be
negative, and especially so when considering the oppor-
tunity costs of household labour, why do farmer still grow
the crop? This is a question we explore two sections below.
TOBACCO, OTHER CROPS, AND OFF-FARM ECONOMIC ACTIVITIES
Tobacco is rarely, if ever, the single crop grown by smallholder farmers, as
one of our informants noted of farmers’ decision-making:
“…how do I actually fare in terms of tobacco? How do I fare in terms
pomegranate, [or] in terms of blueberries? I need to not rely on one
particular aspect [crop].” (P8)
In fact, cultivating other crops is a crucial economic component of most
households’ wellbeing both in terms of crops to sell and also crops to
consume by the household. Similarly, many farmers participate in off-farm
economic activities such as non-agricultural businesses and paid employ-
ment. These dynamics are often overlooked by analysts examining rural
livelihoods in Zambia, but our research demonstrates unequivocally that
they are often crucial parts of farming households’ economic lives.
-26.6
-74.5
-44.5
-119.3
0.3
-7.3
-150.0
-120.0
-90.0
-60.0
-30.0
0.0
30.0
ZMW
Independent Contract
Annual Profit per Kilogram of Tobacco
Profits including value of household labour (minimum wage)
Profits including value of household labour(hired labour wage)
Profits excluding value of household labour
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
15
In Figure 5, we report on how sources of income differed
between current and former tobacco farmers. Based
only on the income received by the time of the survey
implementation and including only those incomes that
averaged greater than 50 ZMW, on average, former tobacco
farmers reported almost twice as much average income
from non-tobacco crops as current farmers, and about
20% more income from livestock. Perhaps surprisingly,
considering how labour-intensive tobacco farming is,
current tobacco farmers reported an average of almost
5 times more income from casual labour compared to
former tobacco farmers, but less than a third earned from
business or petty trading. Evidence from Focus Group
Discussions suggests that tobacco farmers often work
on each other’s farms during busy times (both paid and
in-kind exchanges), which might help to explain this
dynamic. Former tobacco farmers r eceived proportionately
more gifts and remittances, as well as from beer brewing.
We urge caution in interpreting the significance of these
differences, since the reported earnings at the time of
the survey do not necessarily include all annual income,
since some tobacco and other crop earnings were not
realized until after the survey. It does suggest, however,
that former tobacco farmers are increasing the diversity
of their revenue streams more than farmers who continue
to grow tobacco.
industry 1 industry 2 Solutions 1
FIG 5. SOURCES OF INCOME (ZMW) - FORMER VS. CURRENT
TOBACCO FARMERS-
FIGURE 5
Sources of Income (ZMW) – Former vs. Current
Tobacco Farmers
0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000
Tobacco Sales
Other Crop Sales
Livestock Production
Natrual Resources Sales
Formal Employment
Casual Labor
Beer Brewing
Petty Trading/Business
Land Rentals
Gifts/Remittainces
Pension
Artisanal Skills
Other
Zambian Kwacha (ZMW)
Current Farmer Former Farmer
FORMER TOBACCO FARMERS ARE INCREASING THE
DIVERSITY OF THEIR REVENUE STREAM MORE THAN
FARMERS WHO CONTINUE TO GROW TOBACCO.
16 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
TABLE 6
Average Sales for Tobacco and Other Crops
(ZMW) – Former and Current Tobacco Farmer by
Province
Our second wave survey found that almost all farmers
(97.3%) are growing other crops, a figure almost identical
to that of farmers in our first wave survey who indicated
crops other than tobacco as important sources of their
livelihoods (96.4%). Maize still tops the list of livelihood
crops, for both current and former tobacco farmers.
Tobacco ranks second, followed by soy beans.
We attempted to further our understanding of these
crop and income dynamics with a crude analysis of
average sales, repeating the caveat from the discussion
above that sales do not incorporate costs, which is vital
to understanding the farmers’ overall livelihoods. When
asked to estimate revenue from all crops in the previous
year, notable differences emerge between current and
former tobacco farmers, particularly when disaggregating
by province (Table 6). In all three provinces, tobacco
farmers on average sold more non-tobacco crops than
their former tobacco farming neighbors. We speculate
that this was often in large part due to land size with larger
landholders “hedging” by growing tobacco and a wide
portfolio of other crops.
industry 1 industry 2 Solutions 1
T 6. AVER AGE SALE S FOR TOBA CCO AND OT HER
CROPS (ZMW) – FORMER AND CURRENT TOBACCO FARMER BY PROVINCE
CURRENT FARMER FORMER FARMER
Region Other Crops Tobacco Other Crops
Central 7449.4 4648.8 5376.0
Eastern 7354.6 4459.5 3134.4
South 5169.6 5648.4 3234.7
Total 6453.5 4947.3 3875.9
Both former and current tobacco farmers have wide crop
portfolios with many farmers cultivating multiple crops in a
growing season. Depending on the region, former tobacco
farmers have taken to several major crops to sustain their
livelihoods. Table 7 examines these dynamics, wherein
a positive value indicates how much more, on average,
a former tobacco farmer is growing of a certain crop
compared to current tobacco farmer average (or those
who grow); a negative value indicates how much more the
average current tobacco farmer is g rowing of a certa in crop.
In Central Province, non-tobacco sales for former tobacco
farmer were mostly driven by switching to sugarcane and
vegetables, followed by sunflower and soybeans. In E astern
province the predominant non-tobacco crop was cotton,
followed (somewhat distantly) by soybeans, but notably, it
was largely tobacco farmers who were also growing this
crop. In Southern province, it was maize and cotton, but
again cultivation was dominated by farmers who were also
growing tobacco.
industry 1 industry 2 Solutions 1
T 7. MEAN DIFF ERENCE IN NON-T OBACCO CROP SA LES (ZMW ),
FORMER TOBACCO FARMERS.
CENTR AL (N=97) EASTERN (N=188) SOUTHERN (N=188)
Maize 240.4 -910.9 -18025.3
Groundnuts 87.5 308.1 3393.8
Soybeans 487.5 1660.6
Sweet potatoes 2775 -333.3
Cassava -957.5 -525
Pigeon peas -1200
Banana -3800
Beans 1700 -1000 -600
Sunower 4000 -1595 1935.7
Sugarcane 13000
Popcorn 713
Vegetables 8000
Tomatoes -366.7 -487.5
Cotton -11774.3 -6750
TABLE 7
Mean Difference in Non-Tobacco Crop Sales
(ZMW), Former Tobacco Farmers
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
17
To compare tobacco and non-tobacco farming households’
economic livelihoods more meaningfully, in Table 8, we
introduce an examination of overall household resources.
The household resource allocation is arguably a more
sophisticated measure of household economic activity
in low- and middle-income countries (LMICs) because
it permits us to examine household own-consumption.
Economists have long acknowledged that many LMIC
households, particularly rural ones, produce significantly
for the household’s own consumption, which means that
they do not need to purchase the goods or services they
are consuming.23 Because households not producing
for own-consumption must purchase such goods or
services, it is therefore critical to assign an appropriate
value to these goods and services and incorporate them
into the calculation of the household’s broader economic
production. Accordingly, total resource is the income from
all crops sold (tobacco and other) plus any wages earned,
plus the value of crops harvested and consumed by the
household (“own” consumption), less the costs of the
physical and other major direct inputs (e.g., seeds, fertilizer,
agricultural chemicals and hired labour). In brief, former
tobacco farmers’ household resources exceeded those of
current farmers, sometimes by a wide margin. The average
household resources across all former tobacco farmers was
3,552.9 ZMW compared to 2,070.1 ZMW for current tobacco
farmers. Note, too, that the household resource calculation
does not include the opportunity (monetized) costs of
household labour, which means that if they were to be
included, the gap between the tobacco-growing and non-
tobacco households due to the far larger household labour
demands of tobacco cultivation would almost certainly
be even larger. There is considerable variation across the
three provinces. In Eastern province, average household
resources between current and former tobacco farmers
was about even. In Southern, former tobacco farming
households’ average resources with about 40 percent
more than current tobacco farmers. In Central province,
however, the former tobacco farmers’ average resources
nearly seven times greater than the current tobacco
farmers. These findings cast serious doubt on the narrative
that tobacco farming is a superior economic livelihood for
most smallholder farmers.
industry 1 industry 2 Solutions 1
T 8. AVER AGE HOUSEHOLD R ESOURCES (Z MW)
– CURRENT AND FORMER TOBACCO FARMER, BY PROVINCE
TABLE 8
Average Household Resources (ZMW) – Current
and Former Tobacco Farmer, by Province
CURRENT FARMER FORMER FARMER
Region nMean nMean
Central 16 740.6 43 5045.3
Eastern 14 2095.1 71 2166.7
South 19 3171.4 25 4922.6
Total 49 2070.1 139 3552.9
THESE FINDINGS CAST SERIOUS DOUBT ON THE
NARRATIVE THAT TOBACCO FARMING IS A SUPERIOR
LIVELIHOOD FOR MOST SMALLHOLDER FARMERS.
18 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
In each of our survey waves we explored the reasons
farmers themselves give for continuing to grow and/or
why they started growing tobacco. Figures 6 and 7 chart
the frequency of the answers current tobacco farmers
provided in Wave 2 by rank order. Both figures indicate
an overwhelming perception that tobacco has a ready
market, is the only viable crop, is highly lucrative, and
comes with incentives from tobacco companies. Other
tobacco producers (presumably their farming neighbours)
also exert some influence. These findings are not novel;
and while the top three reasons for growing tobacco are
the same in Wave 2 as in Wave 1, the emphasis is different.
In our earlier survey the most frequently cited reason was
“only viable crop,” followed by “lucrative industry” and
“ready market.”
In Wave 2 the “ready market” trumps the other two reasons,
and the perception that tobacco as a ‘highly lucrative
enterprise’ slips in the rankings. Since the questions in the
two waves were asked slightly differently, we are cautious
in drawing too much inference from these differences.
The prominence of a “ready market” and less emphasis
on tobacco’s “lucrative enterprise” in Wave 2, however,
may signal a shift in how the tobacco farming market is
perceived by farmers. This finding is consistent with the
research team’s recent field visits to the tobacco-growing
regions where tobacco farmers continue to underscore
above all other dynamics that they prefer the relative
assurance of a market for their tobacco crop regardless of
the ultimate price paid to them for it.
industry 1 industry 2 Solutions 1
FIG 6. RANKED ORDER OF REASONS FOR GROWING TOBACCO
industry 1 industry 2 Solutions 1
FIG 7. RECRUITMENT INTO TOBACCO FARMING
WHY FARMERS GROW
TOBACCO
FIGURE 6
Ranked Order of Reasons for Growing Tobacco
FIGURE 7
Recruitment into Tobacco Farming
0 50 100 150 200 250
Existence of ready market
It was the only viable cash crop
Availability of land
Influenced by other tobacco producers
Good incentives from the tobacco company
It was a highly lucrative enterprise
college or school fees
To repay outstanding debts from the tobacco company
I am used to growing tobacco
# ofobservations
First Second Third
0 50 100 150 200 250 300 350 400 450
Existence of ready market
It was the only viable cash crop
Inherited it from parents
Availability of land
Influenced by other tobacco producers
Good incentives from the tobacco company
It was a highly lucrative enterprise
# of observations
First Second Third
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
19
As with our first wave study, many of the tobacco farmers
in our focus groups maintained that, of all cash crops,
“number one is tobacco”, “no crop can beat tobacco”,
and “tobacco has money.” As one of our key informants
explained, this is largely because “small-scale farmers lack
an understanding of what their labour value is” (P3) and
need to be taught the importance of incorporating their
own labour into their budgeting to get a more accurate
account of their production costs compared to other, non-
tobacco crops.
What remains relatively unique about tobacco is the ready
market, the near guarantee of some cash at the end of
the season, and sometimes, as part of their contract at
the beginning or par t way through the growing season.
Tobacco farmers in both the survey and the focus groups
report that the cash they receive at the end of the season is
essential to cover school fees, children’s school uniforms,
loans undertaken for new inputs during the growing
season (even for contract farmers who often run out of
company-provided inputs), the cost of hired labour, or the
purchase of new livestock or equipment. Current tobacco
farmers, in general, for example, report more farming
assets than former farmers, while independent tobacco
farmers report the greatest diversification in such assets,
perhaps anticipating their usefulness for if (or when) they
choose to cease growing tobacco.
Even as several farmers in our focus groups maintained
the importance of tobacco as the “only viable cash crop”
due to it having a “ready market,” most complained loudly
that the price paid, the input charges and levies, and the
income eventually earned, are far below what they need:
“There are some farmers who still owe from the
previous farming seasons [and] the creditors don’t
give you a chance, they simply unleash bailiffs to
recover the money.”
Whether this farmer is describing private creditors
or the leaf-buying companies with which they enter
into contract is not clear. Since few farmers reported
successfully securing loans from private creditors
outside of tobacco companies, we assume it is likely the
latter. Nevertheless, what is evident, and consistent with
our own profit findings above, is that tobacco farmers
often end up in debt, sometimes owing money to the
leaf-buyers, and are then “forced by the company to
grow the tobacco [the next year] so that [they] repay
the debt.”
“The issue of repaying the debt. That is a big
pr oblem .”
Tobacco farmers’ many complaints above do not mean
that they are necessarily prepared to give up growing it.
For many, tobacco is still seen as the one crop that brings
cash at the end of the year, the one crop upon which
they can rely. But their own experiences recounted
in our focus groups hardly stand as a resounding
endorsement of tobacco as a poverty-reducing and
livelihood-promoting practice for most smallholder
farmers. It also questions the longer-term viability of
tobacco farming.
“SMALL-SCALE FARMERS LACK AN UNDERSTANDING
OF WHAT THEIR LABOUR VALUE IS.”
- SENIOR AGRICULTURAL OFFICAL
20 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
SATISFACTION WITH TOBACCO
MARKETS
Our previous survey (Wave 1) reported a high level
of dissatisfaction with several aspects of the market
economics of tobacco faming. One-third of the contract
farmers in the earlier study complained of not being
accurately informed of what was expected of them from
the contract. Most tobacco farmers (whether contract or
independent) were not satisfied with their leaf grading, or
with the final pricing. We attributed this to the monopsonist
(one buyer, many sellers) market structure of the contract-
driven leaf-buying system in Zambia, which gives farmers
poor to no leverage when negotiating price with the
buyer.24
The Wave 2 results in Figure 8 still show high levels of
dissatisfaction, but with some nuances. Most contract
farmers, for example, report dissatisfaction with their
negotiating pos ition when they decide on a new or renewed
contract (58.8%), and only a few farmers state they are
negotiating from a position of strength. Their satisfaction
increases, however, once the arrangements are confirmed
within a contract, wit h 34% of those ans wering the question
still reporting dissatisfaction with the contract terms,
compared with 159 (56%) reporting at least some degree of
satisfaction, and only 10% reporting being “very satisfied”.
Similar proportions of satisfaction/dissatisfaction are
found for both contract and independent tobacco farmers,
and for both tobacco leaf grading and sales, marking
a considerable improvement in satisfaction levels over
our Wave 1 findings and likely due to the comparatively
higher prices being paid in this growing season. As with
our Wave 1 findings, however, contract farmers are less
likely to report being ‘very satisfied’ with their leaf grading.
This may reflect that, given the high cost of their inputs
deducted at the end of the season, they rationally expected
their tobacco leaf to be graded higher than it was.
Farmers participating in our focus groups were often very
blunt about their dissatisfaction with how the leaf-growing/
leaf-buying ‘system’ is still not working in their favour:
On contracts:
“The contracts we sign with the tobacco companies are
not clear. As a result of not understanding the terms,
farmers have become destitute.”
On grading:
“We’re being cheated on the grading of tobacco.”
On selling price:
“Selling price is too low.”
One reason for some contract farmers’ dissatisfaction is
that the inputs they receive at the start of the season are
recorded in US dollars, but the tobacco leaf they s ell is priced
in Zambian kwachas (ZMW) making them vulnerable to
currency fluctuations (usually not in their favour). As one
farmer captured the general mood (and findings) across
the four groups:
industry 1 industry 2 Solutions 1
FIG 8. TSATISFACTION WITH TOBACCO SELLING
FIGURE 8
Satisfaction with tobacco selling
27 24 39
12
40 7
67
135 127 15 129 21
134
82 87 16 84 15
0%
20%
40%
60%
80%
100%
Contract Farmer Independent
Farmer
Contract Farmer Independent
Farmer
Contract
Negotiation
Position
Contract Grading Sales
Very Satisfied Somewhat Satisfied Dissatisfied
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
21
FOOD SECURITY
Although Zambia continues to regularly generate
agricultural staple food surpluses (notably for maize),
it records a very high level of food insecurity, especially
among its rural population. Some 37% of the population
is estimated to be experiencing hunger, considered to be
an “alarming” rate and amongst the highest of the world’s
countries for which data on a Global Hunger Index exist.25
Rates of childhood malnutrition (stunted, wasted, and
underweight) have fell between 2001 and 2014, but remain
high with around 40% of children in the most recent
demographic health survey found to be underweight.26
The general recommendation to reduce these levels of
food insecurity is to “promote diversified agricultural
production at smallholder and commercial level to
increase availability and affordability of nutritious foods
for all.”27 Survey results in Table 9 indicate that almost all
current and former tobacco farmers produce their own
food. Current tobacco farmers, however, on average report
slightly higher levels of food security, and are less likely
to report always or sometimes lacking food. One possible
explanation is that in the circumstance of food crop
failure or low performance, some tobacco farmers might
possess some cash to purchase food from the marketplace
depending upon where in the production cycle they are.
For example, some farmers reported receiving a cash
advance upon signing a contract, which would occur at
the beginning of the growing season and a more likely time
to be low on food that was grown in the previous growing
season. Tobacco farmers in our focus groups give a more
mixed assessment of food security, noting, for example, that
“sometimes there is [food] shortage,” and that “there
are certain years when we have enough food and others
when we don’t.”
Curiously, given the survey results, tobacco farmers in three
of our four focus groups stated that non-tobacco farmers
were more food secure than themselves, although as one
noted:
“both non-tobacco and tobacco farmers struggle when it
comes to food.”
TABLE 9 FOO D SECURITY - FO RMER AND CURRE NT TOBACCO FAR MER
TABLE 9
Food Security – Former and Current Tobacco Farmer
Region
/Farmer
Central
Eastern
Southern
Central
Eastern
Southern
Central
Eastern
Southern
Former or
current
Former
Former
Former
Current
Current
Current
All
All
All
Staple food
of the family
Maize (98.11%)
Maize (97.87%)
Maize (100%)
Maize (100%)
Maize (95.61%)
Maize (93.71%)
Maize (98.99%)
Maize (96.63%)
Maize (94.71%)
% who
produce their
own food
98.08%
100%
100%
100%
100%
99.39%
98.98%
100%
99.49%
Level of
household
food security
(average)
3.38
2.9
3
3.59
3.17
3.22
3.47
3.05
3.19
1. Always
lacks food
5.66%
0%
0%
0%
0%
0%
3.03%
0%
0%
2. Sometime
lacks food
5.66%
29.03%
18.18%
8.70%
14.04%
14.37%
7.07%
20.77%
14.98%
3. Usually has
sufficient
food
33.96%
51.61%
63.64%
23.91%
55.26%
48.85%
29.29%
53.62%
51.21%
4. Always has
sufficient
food
54.72%
19.35%
18.18%
67.39%
30.70%
36.78%
60.61%
25.60%
33.82%
22 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
CHILD LABOUR TABLE 10
Child Labour in the Zambian Tobacco Sector
TASKS RELATED TO TOBACCO CULTIVATION
TOTAL CASES—
HELP OF CHILDREN
(N=59)
TOTAL CASES—
DURING SCHOOL TIME
(N=30)
Harvesting 79.7% 37.3%
Weeding 81.4% 40.7%
Watering of Nursery 76.3% 45.8%
Planting 76.3% 40.7%
Land Preparation 40.7% 16.9%
Fertilizer application - Nursey 28.8% 8.5%
Nursery Preparation 32.2% 11.9%
Nursery Sowing 30.5% 10.2%
Banding 55.9% 18.6%
Fertilizer Application 2 44.1% 13.6%
Baling/Packaging 37.3% 13.6%
Fertiliser Application-1 44.1% 15.3%
Grading 33.9% 10.2%
Drying shed preparation 33.9% 13.6%
Drying /Curing 37.3% 13.6%
Chemical Application - Nursey 22.0% 6.8%
Chemical Application 23.7% 8.5%
There have been concerted efforts to reduce child labour
in tobacco farming, both to diminish the exposure to
nicotine and resulting green tobacco sickness, and to
maintain their presence in school. Zambia’s Education Act
requires the government to provide free education up to the
seventh grade, and makes school attendance compulsory
for children of “school going age.” 28 There are too few
inspectors and no accurate records of investigations,
violations, or prosecutions.29 This has particular salience
for tobacco farming; as one of our key informants noted,
“…about 90% of child farm labour is in the tobacco sector”
(P3). The International Labour Organization, sometimes
in collaboration with tobacco firms such as JTI (Japan
Tobacco International), offers education and inspection
services. In late 2018, the ILO, under pressure from health
and related groups, ended its engagement with and minimal
funding (around USD 15 million) from tobacco firms, which
violated FCTC obligations and UN model policy regarding
relationships with tobacco companies. The central logic
is sound: the tobacco industry should not be involved in
activities that provide an (inadequate) solution to a problem
that is largely of the tobacco companies’ own doing –
farmers not being paid enough for their tobacco leaf to hire
adult labour.
Our survey identified 59 instances where tobacco farmers
described children working in production, with 30 in stances
where this labour occurred during school time in violation
of Zambian education and child labour policies (see Table
10). We strongly suspect that this number is a significant
under-report because there is serious social stigma attached
to child labour and some farmers were likely embarras sed to
report to the enumerator that they were using their children
to help cultivate tobacco. The most disturbing findings
were the number of households that had children handling
chemicals, including inorganic fertilizer, and tobacco.
Handling tobacco with no protection causes children to
absorb harmful levels of nicotine through their skin.
industry 1 industry 2 Solutions 1
T 10. CHILD L ABOUR IN THE Z AMBIAN TOBA CCO SECTOR
NEARLY 1/2 OF CHILDREN
WORKING IN TOBACCO
FIELDS HANDLED INORGANIC
FERTILIZERS. AND 1/4 HANDLED
DANGEROUS CHEMICALS
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
23
In the focus groups, some tobacco farmers emphasized
that school children might “help in the maize fields” but
never in tobacco production, where “we only work with
children who do not go to school and have grown up.”
Others stated that children “work only weekends when
they are not going to school,” clarifying that “we are not
allowed to ask school children to assist in tobacco farming.
Still other farmers were straightforward in acknowledging
that “yes, children are engaged in tobacco farming and in
some cases don’t even go to school.” One farmer admitted:
THE HARMS FROM CURING TOBACCO
Curing tobacco presents a major additional harm to both
most Zambian tobacco farming households and the
environment more broadly. On a positive note, although
not true for all tobacco farmers, most reported keeping
their children away from the tobacco curing barns for
health reasons. But curing represents a major source of
harm for farmers more broadly. Most tobacco farmers
report curing their leaf before selling it, with the majority
using oven or fire curing. The health risks of such curing
are well known,30 including to the farmers themselves: “my
health was at risk because of…curing tobacco,” “it’s a risk
with temperatures up to 180 degrees, we are so fatigued.”
One of key informants was more emphatic, “they want to
show you where they’re curing their tobacco, [but] they don’t
realize they’re killing [themselves]...” (P8). Tobacco farmers
are also aware of how the need for firewood for curing, even
with tobacco company schemes to initiate reforestation, is
causing deforestation.31 Some farmers are even concerned
that with deforestation there are climate-level effects: “there
is no rain because of tobacco.” Several of our key informants
similarly expressed concern over the pace of deforestation
in Zambia, partly due to tobacco production and wood-fired
curing (P1, P4); and that the tobacco company reforestation
programs just introduced fast-growing tree species, thus
reducing biodiversity.
“Children are deeply involved in tobacco growing because
farmers are trying to save on labour wages. In certain
cases the children work even harder than adults.”
Assuming like other tobacco farmers that these focus group
participa nts knew this was not what they were s upposed to be
doing, the reason they gave was simple: “we have no choice
but to work our children in the fields,” further legitimized by
rationalizing that “this is how we impart farming skills in our
ch ild ren.”
“CHILDREN ARE DEEPLEY INVOLVED IN
TOBACCO GROWING BECAUSE FARMERS ARE
TRYING TO SAVE ON LABOUR WAGES. IN
CERTAIN CASES THE CHILDREN WORK EVEN
HARDER THAN ADULTS.”
24 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
On the one hand, as one focus group participant
expressed, “no one should ban the growing of tobacco,”
a perspective shared by the authors of this study. On the
other hand, tobacco farmers themselves are quite mixed
about how they see their own future with the crop. In our
second wave survey we were interested to know how often
tobacco farmers made decisions to forego production,
at least for a year or longer (that is, becoming ‘former’
tobacco farmers). We asked farmers about whether
they were growing tobacco over three points in time:
the current year of the second wave survey (2016/2017),
and the two previous grown seasons (2015/2016, and
2014/2015). Of the 330 respondents who answered this
question, 92.7% grew tobacco in 2014/2015 but only 66.1%
in 2015/2016 and 67.6% in 2016/2017. The larger number
in active tobacco farming in 2014/2015, and subsequent
decline, possibly reflects farmers’ optimism for that
growing season, given the robust market for Zambian
tobacco leaf in 2013 (its peak year of production and
overall revenue). The subsequent decline in tobacco leaf
production (hence also farming) is also attributed to “a
lack of buyers in the market” (P12), the result of tobacco
leaf buying companies pulling out of Zambia.
We were also interested in knowing the future intentions
of current tobacco farmers. Figure 9 shows the frequency
of responses of current tobacco farmers to the question
of switching to other crops. Although the majority have
not given this any, or any serious, thought, 38% have, with
almost half of those already planning to switch in the next
season. Of the total who answered this question, slightly
more independent farmers (20%) than contract farmers
(17%) were already planning to switch.
industry 1 industry 2 Solutions 1
FIG 9. FARMERS CONSIDERING SWITCHING TO NON-TOBACCO CROPS
FUTURE OF TOBACCO GROWING FIGURE 9
Farmers Considering Switching to
Non-Tobacco Crops
0% 20% 40% 60% 80% 100%
Contract Farmer
Independent Farmer
Considered switching to non-tobacco crops
Very serious already planning to switch Serious - researched other options
Not so serious thought about it No, not at all
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
25
In Figure 10, we examine former tobacco farmers who had
already switched, and find that the main reason for doing
so was low prices for the product. Similarly, in a related
answer, many farmers reported that the grading process
was unfair. Another consistent answer was the farmer’s
relationship with the leaf-buying company, which could
mean a wide range of issues, though price and grading
are likely to factor into this answer, too. Finally, some
farmers complained that tobacco companies simply
stopped contracting in a particular district, which farmers
found difficult to predict. If a farmer had planned to
cultivate tobacco in a given season, they found this lack
of predictability stressful.
industry 1 industry 2 Solutions 1
FIG 10 – TOP REASON S FOR SWITC HING FROM
TOBACCO CROPS
FIGURE 10
Top Reasons for Switching from Tobacco-
Crops
The findings here speak to the fact that, just as one facet
of the economics of tobacco largely determines why
farmers grow it (ready cash at the end of the season),
other facets of the same tobacco economics largely
determine whether farmers will continue growing the
crop. Somewhat paradoxically, this means that the
continued low-income potential or unfair grading that
tobacco farmers experience is likely to continue to drive
them away from tobacco growing, creating an incentive
to switch to alternatives. Improving the livelihoods of
tobacco farmers by ensuring fairer prices and tobacco
leaf-buying and grading practices may ser ve to keep them
involved in tobacco farming, at least in the near term.
At the same time, when asked if they saw themselves
likely to grow tobacco in the future, a surprising number
of current tobacco farmers did not, as reported in Figure
11. Although 47.5% of the tobacco farmers report at least
some likelihood of growing tobacco in the near future,
over half (52.5%) are unlikely to do so, with fully a quarter
reporting they are ‘very unlikely’ to be doing so. This
demonstrates a high probability of tobacco farmers being
open to switching to other crops.
industry 1 industry 2 Solutions 1
FIG 11. FARMERS SELF-REPORTED
LIKEL IHOOD OF FUTURE T OBACCO GROW ING
FIGURE 11
Farmers Self-Reported Likelihood of Future
Tobacco Growing
0 10 20 30 40 50 60
Low prices
Unfair grading
Relationship with contracting company
Company stopped
Cases
30
36
38
35
Do you see yourself growing tobacco again in the future?
Very likely Somewhat likely Not likely Very unlikely
26 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
Echoing the main reason why former tobacco farmers have
switched to other crops, one of the focus group farmers
was blunt about why so many tobacco farmers may now
be considering doing likewise:
“We will not be growing because we will not be making
a profit [and] need to change to a crop that will give us
a profit and no hard labour.”
Other of our focus group participants nuance the oft- stated
role of tobacco as ‘the’ cash crop by noting that it only
becomes profitable “if the farmer does not grow other
crops…because tobacco requires a lot of concentration.”
Over the course of two waves of surveys, our research
team has concluded that total “switching” from tobacco
to other crops and/or livelihoods is often too dramatic a
proposition for farmers as they assess their opportunities
and challenges. Perhaps a more realistic change to expect
and promote would be helping farmers to reduce their land
and resources allocated to tobacco leaf cultivation, and
then reallocating the balance to growing other crops and
other economic activities. This is potentially less risky for
the farmers, more likely to sound more reasonable to them,
and permits the government and other actors seeking to
help with transitions to other livelihoods to enhance the
conditions that engender the success of those non-tobacco
endeavours.
ALTERNATIVES TO TOBACCO
Considering that more than half of current tobacco farmers see
themselves as unlikely to grow tobacco in the future, it is critical
to examine the alternatives that they are considering. Of the 276
current tobacco farmers who answered that survey question:
• 99 haven’t given it any consideration (36%)
• 89 have given it serious or very serious consideration (32%)
• 88 have ‘thought about it’ (32%)
Of the 89 who reported serious or very serious consideration,
81 listed the crops to which they would be likely to switch, as
shown in Figure 12.
FIG 12 ALTERNATIVE CROPS CONSIDERED
FIGURE 12
Alternative Crops Considered
5
1 6 31 2
12
5
14
10
1
0%
20%
40%
60%
80%
100%
Beans Cassava Ground nut Maize Pigeonpeas Soybean Sweat
Potato
Alternative crops considered
Contract Farmers Independent Farmers
RESULTS
MORE THAN 1/2 OF FARMERS REPORTED THAT
THEY’RE NOT LIKELY TO GROW TOBACCO AGAIN.
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
RESULTS
27
The choice of alternatives varies greatly on the province
in which farmers are located, likely reflecting potential
markets and supply chains, or at least perceptions
thereof. Beyond Zambia’s staple crop, maize, a perhaps
obvious choice, soybean comes a close second. Some
of our tobacco farmer focus group participants were
enthusiastic about its prospects, but only “if there can be
some sort of loan scheme like…for tobacco, it is a crop we
would want to grow.” “We can replace tobacco with soya
beans, it is not so labour intensive.” Although not figuring
prominently in the survey data, other crops mentioned by
focus group participants included “cotton, or tomato, or
even water melons.”
Our key informants similarly identified several alternative
crops with a potentially viable future, including
groundnuts (with value-added processing) in Eastern
Province; soya bean and sunflower processing in Central
Province; cashew nuts in Western Province; and cassava
in Northwestern Province where it is being used to
process copper (P1, P3). Almost always, there is a quaifier
form the farmer, that:
“We need more processing plants as an incentive
for farmers to get paid quickly for their alternative
crops” (P1).
28 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
“NO ONE HAS SENSITIZED
[TOBACCO FARMERS] THAT
UNDER THE VEIL OF WHAT
THEY FEEL THAT THEY ARE
BEING EMPOWERED, THEY
FARMERS ARE ACTUALLY
BEING IMPOVERISHED” (P4).
Findings of our Wave 2 study affirm many of those from
our earlier survey and reinforce the observation above
from one of the study’s key informants. Tobacco farming
is neither a very profitable farming venture nor a viable
economic livelihood for many smallholder farmers. It is
challenging for the majority who are contract farmers,
who may not have the requisite capital to go it alone into
tobacco farming. The contract they enter into as a legal
agreement— the details of which they often remain ill-
informed, can trap them in a cycle of perpetual debt,
creating difficulty for them to move to a different pursuit
that is both healthier for them and their family, and
potentially more prosperous for them as farmers.
In contrast, one of the reasons that farmers choose to
contract is the perceived availability of credit (i.e., not
needing cash to pay for inputs at the beginning of the
season) and the certainty of being able to sell at the end
of the season, even if it turns out that the terms of the
sale are very poor and that the costs of their inputs higher
than for independent tobacco farmers. Most independent
farmers, however, and despite reporting lower input
costs and labour hours per kilogram of tobacco than
contract farmers, are also scratching out a living that is
rarely better than other crops, and often worse. For both
types of farmer, their commitment to the crop comes
at the expense of their health and land, since tobacco
growing can cause green tobacco sickness and the
cultivation of tobacco is very fertilizer-, pesticide- and
herbicide-intensive, which puts enormous strain on
the land and surrounding environment. Despite efforts
to curb child labour in tobacco production, it remains
commonplace in Zambia.
At a broader scale, the dominant tobacco narrative that
the crop is important for poverty reduction, agricultural
development, and foreign exchange earning does stand
up well under close empirical scrutiny. Yet it remains a
narrative so well entrenched that it persists in official
government policy (such as the Seventh National
Development Plan) and continues to suffuse the opinions
of many of our Wave 2 key informants, even if some
recognize that overall demand for tobacco leaf will likely
diminish in the near to medium term.
In terms of gross income and farming assets, current
tobacco farmers may be doing better than the former
tobacco farmers who have stopped cultivating the crop,
and whom we added in our 2017 sur vey sample. Former
tobacco farmers may also be slightly less food secure,
a reflection, perhaps, of less income or cash security
whilst not necessarily growing all food items needed by
their family. When we incorporate even basic costs of
cultivating, we see these gains disappear, and in fact, turn
to losses for most households. These comparative findings
also do not account for either the physical or economic
costs of tobacco’s high labour demands relative to other
crops, a frequent complaint made by current tobacco
farmers. Moreover, when we calculate total household
resources, a more accurate measure for capturing total
economic activity, we observe that in two of the three
provinces, former tobacco farmers are doing considerably
better than their peers who continue to grow tobacco.
The proportion of current tobacco farmers seriously
considering switching is considerable. These farmers,
and many of our key informants, were able to identify
alternative crops with potential profitability and long-term
viability. As we found in our 2015 Wave 1 survey, the largest
impediment to switching away from tobacco is the absence
of a cash-ready supply chain similar to the one created by
transnational tobacco companies, with the caveat that the
tobacco supply chain is problematic in that it typically
ultimately leads to loss and even persistent debt.
CONCLUSION
THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA 29
Given the high probability of a long-term, downward trend
in tobacco leaf demand, the low returns (if any at all) for
smallholder tobacco farmers, the marginal contribution
tobacco makes to Zambian revenue streams (including
foreign exchange earnings), and the rising rates of tobacco
use and associated health harms and costs in Zambia, this
is an opportune moment for the government to take action
on at least five fronts:
1. Reduce domestic tobacco demand through tough, new
tobacco control legislation.
2. Reduce tobacco supply by ending all forms of public
subsidies (direct or indirect) to the tobacco sector.
3. Create new incentives for alternative crop supply
chains so that farmers can have reliable markets for selling.
4. Develop viable farmer loans systems so that farmers
do not feel the need to rely on the tobacco industry for
inputs.
5. Allocate resources to extension services to promote
non-tobacco crops.
30 THE ECONOMICS OF TOBACCO FARMING IN ZAMBIA
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CONTACT US
* University of Zambia School of Medicine
Dr. Fastone Goma
gomafm@yahoo.com
*American Cancer Society
Dr.Jeffrey Drope
jeffrey.drope@cancer.org
