Breakout session 6

“Sustainability and economic development”

In the discussions about tobacco harm reduction and a potentially smoke-free world, the future role of the tobacco farmer is hardly ever talked about. How will he be able to make a living when significantly less tobacco is needed?

In some regions of the world, continuously shrinking global cigarette consumption has already left its mark on agriculture. In Australia, for example, one of the most heavily regulated markets for tobacco products, legal tobacco growing has disappeared. Farmers were offered compensation packages to quit tobacco cultivation, yet many did not find similarly viable alternative crops. In North Carolina, the U.S.’ tobacco heartland, big industry sectors, such as technology, pharmaceutical, banking or food processing, rose in the late 20th and 21st centuries as tobacco declined. These industries, however, require more skilled and higher educated workers; tobacco farmers are usually not qualified for them.

The future situation of the farmer is likely to become even more difficult in countries whose gross domestic product (GDP) is highly dependent on tobacco. In Malawi, tobacco accounts for 48 percent of the country’s exports and 7.68 percent of its GDP, according to data from the Food and Agriculture Organization of the United Nations and World Trade Organization. Zimbabwe, Mozambique, Tanzania and Zambia are among the African countries that also rely more or less heavily on tobacco cultivation.

Creating new livelihood options through diversification is not as simple as switching crops. Economic incentives need to exist to persuade smallholder farmers to switch from tobacco to alternative crops, and the demand for those substitute crops must be high enough to make the switch economically feasible. A lot of challenges are involved in ensuring that such crops create and capture more value within the value chain. To be viable alternatives, substitute crops would have to generate a net value that is the same as or higher than tobacco. The costs of production, and possibly labor intensity, must be the same as or lower than those of tobacco. In addition, these substitute crops must be suitable for local soil and climate conditions. Market and regulatory infrastructures, tuned for tobacco cultivation, are additional obstacles to diversification, as is the lack of knowledge of conditions in, and demand for, new markets and industry-specific know-how.

Improving farmers’ knowledge in sustainable agriculture and environment-friendly cultivation is an approach British American Tobacco (BAT) has taken in Bangladesh. The country is the eighth most populous nation in the world and the second-largest garment producer after China. It has a young population with many smokers. Now termed the “new Asian tiger,” Bangladesh is expected to become a middle-income country by 2024. The fast-moving industrialization has brought about many challenges for the environment.

BAT has launched a comprehensive program to teach farmers to think about the whole ecosystem. They are being made familiar with Good Agricultural Practices and are taught in a three-month training how to do proper year-round farming. As early as 1980, BAT started the largest private sector-driven afforestation initiative in Bangladesh to fight against the adverse impact of climate change. Through its afforestation program, the company also built a refugee camp during the Rohingya crisis. Another project, initiated in 2009, focuses on providing arsenic-free drinking water for the communities; as a result, the frequency of water-borne diseases like diarrhea and typhoid in the neighborhood has decreased significantly. Furthermore, the company has installed solar home systems for off-grid communities in 23 remote villages with 12,000 people.

To make tobacco farmers fit for the future, the Foundation for a Smoke-Free World (FSFW) has developed a novel approach. As part of its Agricultural Transformation Initiative (ATI), the not-for-profit organization announced that it would invest $10 million to create and operate a platform for scientists, investors and researchers in the shape of a new center for agricultural transformation in Malawi. The center, basically a research farm with laboratories, will be set up in phases starting next year. It is scheduled to be finalized within approximately three years. According to the foundation, the center’s objective will be to build a structured value chain that also brings the country hard currency.

To achieve this, FSFW will take a three-pronged approach. The first phase requires understanding the fundamentals of economic diversification—Malawi brings in a stream of assets and a large labor pool but no structure. The country doesn’t attract foreign investment. The FSFW project will try to create an economic incentive for tobacco farmers to want to grow something else because that is key to transformation of the market. Second, farmers must have the tools to be able to compete globally. They need to be able to have access to markets that will make them competitive with farmers who are growing the same crop no matter where they are in the world. Third, the government needs support to be able to make the transformation happen.

Principally, the role policy plays should not be underestimated. To end tobacco production would be the result of a policy, not a decline in market demand, bringing about unintended consequences, which are most likely to hit those at the bottom end of the supply chain the worst.

South Africa has seen a number of industries in which policy making has led to negative consequences for the rural population. To help those people, the Fair Play Movement was founded in October 2016. In alliance with existing organizations and experts, the not-for-profit trade movement formulates and promotes strategies to defend communities made vulnerable by predatory trade practices and promote sustainable livelihoods. Its main goal is to effect policy change to support the people mostly affected.

While the organization has been reasonably successful, its work remains an ongoing process. In the South African mining industry, for instance, the complete infrastructure built around a mine used to break down when the mine had worked out, and there was no more money for schools, railway lines, hospitals, etc. By now, the mining industry and the government have learned—when a new mine is opened, everything around it is designed with the end in mind.

Lessons learned from various projects show that policy-led destruction of a sector will require policy-led resuscitation. To achieve this, different thinking as well as the setup of purposeful programs on the part of organizations such as Fair Play or FSFW will be needed.