Tobacco Agriculture
Tobacco farming in South Africa is estimated to contribute only 1% of the total farmworker labour force.
Tobacco farming has negative effects on the environment, farmworkers, and farmers themselves.
This page shows that, despite the tobacco industry’s claims, tobacco agriculture is not a major source of employment in South Africa or economic development in rural communities.
This page:
Presents data on tobacco production and economics in South Africa,
Discusses tobacco agricultural employment trends in South Africa,
Highlights success stories of switching to alternative crops to tobacco and the factors influencing this switch, and
Discusses the environmental and health impacts of tobacco farming.
To learn more about the data and methods used on this page click here.
Tobacco Agricultural Production and Economic Performance
in South Africa
The performance of the tobacco agricultural sub-sector has been deteriorating economically and in terms of production in South Africa in recent years.
The performance of the tobacco agricultural sub-sector in South Africa has been deteriorating economically since 2018 as there has been a reduction in the gross value of the tobacco crop from R802 million in 2018 to R541 million in 2021.
Gross Aggregate Value of Tobacco Crop, South Africa
Source: AgriSETA, 2023
Tobacco Agriculture Contributes Little
to Employment
In South Africa, there are no reliable estimates of the number of farm workers employed in tobacco agriculture. The tobacco industry, however, presents some figures whose origin is unknown. Since the tobacco industry has been shown to intentionally falsify data
, any figures they provide should be viewed with caution.Even using the tobacco industry’s estimates, tobacco farming comprises only a small share of South Africa’s total agricultural employment. In 2017, the tobacco industry reported employing 8 000 to 10 000 farm workers
, approximately 1% of the country’s total of over 750 000 workers who are involved in all forms of agriculture. Compared to South Africa’s total employment number in 2017 (16.1 million), tobacco agriculture only contributed 0.06% of total employment.
Source: 2017
Fruits and vegetables (e.g. potatoes, oranges, grapes, and apples) represented 35% of the agricultural workforce (269 000 fruit and vegetable farm workers).
Animal farming represented 21% of the agricultural workforce (162 000 animal farm workers).
Mixed farming (growing of crops combined with farming of animals) represented 25% of the agricultural workforce (186 000 mixed farming farm workers).
Agricultural services and fertiliser production represented 3% of the agricultural workforce (17 000 workers).
More government-sanctioned and independent research is needed on tobacco agriculture in South Africa. The figures above come from the tobacco industry, which is the only primary data source publicly available. The data could not be supplemented by the current Census of Commercial Agriculture in South Africa,
since they do not collect sufficiently granular data on the kinds of field crops grown.Tobacco-industry Funded Alliance Supports
Relatively Few Emerging Black Farmers
One of the primary South African groups purporting to support Black farmers is the South Africa Tobacco Transformation Alliance (SATTA). SATTA is an umbrella interest group funded by British American Tobacco South Africa (BATSA) and includes the Black Tobacco Farmers Association (BTFA), Limpopo Tobacco Processors (LTP), and the Tobacco Producer Development Trust (TPD). SATTA states that it supports Black tobacco farmers with training, mentorship, and a market to sell their products “in order to become self-sustained commercial farmers”.
However, the amount of transformation in the industry is limited: SATTA supports 125 black tobacco farmers who have 173 hectares of the 5 000 hectares of tobacco farmed in South Africa (i.e. 3.5% of South Africa’s total tobacco crop).SATTA echoes messages that are well-known talking points from the tobacco industry, as they have recently been vocal about the threat of illicit tobacco production and its impact on emerging Black farmers.
However, SATTA has not specified how Black farmers are negatively impacted by illicit cigarettes or why this issue would be of importance to them. In summary, SATTA seems to echo many talking points of the tobacco industry while their impact supporting Black farmers remains unclear.Impact of Mechanisation
on Job Losses
Tobacco job losses are affected more by mechanisation than tobacco control measures
Flawed Tobacco industry-funded research claims that tobacco policies that cause a decline in tobacco consumption lead to job losses and reduce economic growth. The net effect on employment is likely to be negative in the small number of countries that are heavily dependent on tobacco, but South Africa is not one of them. Where there have been large job losses in the tobacco sector in other countries, the losses are largely due to advances in farming techniques and manufacturing processes.
The flawed tobacco industry-funded research overestimates the number of jobs in tobacco by conflating part-time and seasonal work with full-time employment. They also It also ignore that most tobacco farms grow multiple crops.
More importantly, they ignore that a decline in tobacco expenditure is usually associated with increased spending on other goods and services in the economy, leading to growth in those sectors. Thus job losses in the tobacco industry do not necessarily lead to a decrease in employment overall, as jobs are created in other sectors.
Most studies have found that there is a net increase in employment after tobacco expenditure decreases. In the South African context, one study found that eliminating the domestic tobacco industry would result in a net gain in jobs (0.4% increase) if consumer spending switched from tobacco to other goods and services (e.g. clothing, transport, communication, education, and recreational goods).
Demographics of Tobacco Agricultural Workers
in South Africa
The charts in this section show the demographic characteristics of employees registered in the tobacco agricultural sub-sector and were developed using data from AgriSETA. The charts present the average values from 2020 to 2022. The AgriSETA database does not represent all farming enterprises in the country and only includes those registered with AgriSETA. It thus must be treated with a fair degree of caution when applying it to a national context, particularly in terms of absolute numbers, and we therefore only present proportions in the charts below.
The charts below include employees in tobacco agriculture and manufacturing.Most tobacco sub-sector employees are found in the Gauteng and Mpumalanga provinces.
Tobacco Employees by Province
- Tobacco Employee %|
- 0 - 2.99%
- 3 - 5.99%
- 6 - 8.99%
- 9 - 11.99%
- 12 - 13.99%
- 15 - 17.99%
- 18 - 20.99%
- 21 - 23.99%
- 24 - 26.99%
- 27 - 29.99%
Source: AgriSETA, 2023
Switching to Alternative Crops
Increases Profitability and Government Support
Globally, farmers are switching from tobacco to growing other, more profitable crops, despite tobacco industry claims that there are no economically sustainable alternatives to tobacco for small-scale farmers.
In fact, the tobacco industry is often the main reason that switching crops is difficult.
The case studies below show that the tobacco industry locks farmers into tobacco growing by replacing the government’s role in providing market infrastructure, influencing government policy-makers, offering farmers unfair tobacco-growing contracts when they are financially most vulnerable, and keeping farmers’ land suitable to growing only tobacco. Therefore, governments need to create conditions that are economically conducive for farmers to switch to alternative crops.Case Studies
Malawian government needs to shake off the grip of the tobacco industry
Relative to the size of its economy, Malawi is one of the largest tobacco producers in the world. Tobacco has historically accounted for approximately 70% of Malawi’s export revenue and now accounts for more than half.
Most tobacco production (95%) comes from smallholder farms.
“Tobacco-Free Farms” and Kenya’s Success in Supporting the Switch to Alternative Crops
The Migori County Government received the 2023 World No Tobacco Day Award for helping tobacco farmers sustainably transition to other crops.
The Tobacco-Free Farms Project, launched in Kenya in 2022, is a joint initiative between the World Health Organization (WHO), Food and Agriculture Organization (FAO), World Food Programme (WFP), and the United Nations Capital Development Fund, the Kenya Ministry of Health, the Kenya Ministry of Agriculture, and county departments of health and agriculture. The initiative helps tobacco farmers switch to alternative livelihoods, increases awareness about the harms of tobacco growing, demonstrates the economic viability of alternative crops, and builds knowledge of farmers to effectively make the switch. It also helps farmers scale up and sustain the alternative crop production and market ecosystem.
Factors Influencing Uptake
of Alternative Crops
Governments need to address the factors that influence crop choices if they are to successfully encourage tobacco farmers to take up alternative crops: These factors include:
Impact
of Tobacco Farming
Environmental Impact of the Tobacco Life Cycle
Tobacco products harm the environment at every stage
of their production and consumption life cycle, from farming to disposal of the final product. Every year, the tobacco industry produces 84 million tonnes of CO2 and costs the world 600 million trees, 200 000 hectares of land, and 22 billion tonnes of water.Developing countries produce 90% of all tobacco worldwide. Therefore, the environmental costs of tobacco production are mostly borne by poorer countries, whereas the majority of the profits from tobacco production are appropriated by rich countries.
In 2018, global tobacco production was 6.3 million tonnes, around 730 000 tonnes of this in Africa, which is equivalent to 11.4% of global production.Environmental Impact of Tobacco Farming
The tobacco industry portrays tobacco farming as economically advantageous for governments and especially for farmers.
In Africa, more than 20 countries grow tobacco on a commercial scale, with most government officials believing that increased tobacco growing is essential for their economic success.The infographic below shows the various impacts tobacco farming has on the environment.
Tobacco Industry Exploits
The Tobacco Farmers They Claim to Support
The tobacco industry often presents tobacco farming as a lucrative economic endeavour for vulnerable smallholder farmers. However, tobacco farming is a challenging livelihood for most smallholder farmers in countries like Malawi.
Executives of tobacco corporations take home huge salaries. Meanwhile, Malawian farmers are often caught in unfair contractual agreements, earn little profit, and regularly withdraw their children from school to provide additional farm labour. The share of export price received by Malawian tobacco farmers has also decreased over time. The average price received by farmers as a percentage of the export price fell from 32% in 2004 to 18% in 2019.
Malawian Farmers in Financial Distress
After Signing Contracts with the Tobacco Industry
Malawian farmers struggle with cycles of debt and financial distress, and these are exacerbated by the tobacco industry. This pattern is also apparent in other African countries such as Zimbabwe and Kenya.
The tobacco industry encourages Malawian farmers to sign contracts under which tobacco corporations provide seeds, fertilisers, and chemicals on credit, and in return, farmers guarantee to sell the corporations their harvest at the end of the season. However, farmers who use this credit system are not adequately informed about the contract terms (such as interest rates and price guarantees), leaving them with much less profit than anticipated.
While contract farmers generally earn higher profits than independent farmers (see the graph below), contract farmers are at risk of falling into debt-bondage cycles due to the uneven bargaining relationship with tobacco companies. When an unexpected negative event occurs, such as drought, farmers may fail to pay off their loan and end up taking on more debt with the tobacco company, which is carried over into the next growing season. Although this arrangement exploits small-scale farmers, they continue to enter into these contracts due to scarcity of credit.In addition to the debt-bondage cycle, farmers may be discouraged from breaking free of these contracts, as independent farmers’ tobacco may receive a lower grade or a lower price, and they may have their tobacco purchased only after that of the contract farmers.
Tobacco Farmers
Struggle With Low Profits
Perceived Tobacco Profit Per Acre Vs Profit Per Acre Adjusted for Household Labour in Malawi (2013/2014)
Source: Makoka D, Drope J, Appau A, Labonte R, Li Q, Goma F, et al. Costs, revenues and profits: an economic analysis of smallholder tobacco farmer livelihoods in Malawi. Tob Control [Internet]. 2017 Nov;26(6):634–40. Available from: http://dx.doi.org/10.1136/tobaccocontrol-2016-053022
The figure compares farmers’ average profit when the usually unreported household labour is included in the profit calculation versus when it is not (for instance, if a family member helps out on the farm but is not paid for their work). Each household member’s labour is priced at the national rural minimum wage (in the 2013/14 season, approximately $4 USD per day). With labour’s inclusion, independent farmers’ profitability on average becomes negative, while contract farmers’ average profitability drops by nearly two-thirds.
This result shows that for many Malawian smallholder tobacco farmers, both independent and contracted, their perceived profits far exceed their actual profits (after they account for household labour costs). Independent farmers make average annual profits of $417 USD/acre, and contract farmers average annual profits of $630 USD/acre. When we also account for the household labour costs, profits reduce to $224 USD/acre for contract farmers and an operating loss of $37 USD/acre for independent farmers. Given that Malawian farmers have small tracts of land allocated to growing tobacco (on average, 2.8 acres for contract farmers and 1.6 acres for independent farmers), the average overall profits that these farmers make each year place them below national poverty thresholds and are considerably less than average annual profits from crops such as soya beans ($644 USD/acre).
Tobacco Industry
Benefitting From Child Labour
It has been estimated that over 80 000 children work as unpaid farm labourers in Malawi, which prevents these children from attending school and breaking out of the poverty cycle. Moreover, children are particularly prone to green tobacco sickness due to their relatively small size.
Tobacco CEOs Earn Millions
While Farmers Struggle to Survive
Over the 2014 growing season, smallholder (independent and contracted) Malawian tobacco farmers made $170 USD in profit on average. This pales in comparison to the earnings of top tobacco industry executives.
For example, in 2014, Philip Morris International’s CEO received 13 million US dollars in compensation. The executive’s salary can be over 76 000 times that of the average Malawian tobacco farmer.
