The Conversation by Julia Smith 29 May 2018
Imagine this: You are a farmer in one of the poorest countries of the world. Each year, the price of your harvest falls, but you keep growing the same crop because it is what your mother and, before her, your grandmother farmed.
Due to low prices at the auction house, you sign a contract, even though you can’t read, with a company that loans you money for fertilizer and seeds. You use some of this to pay your children’s school fees.
You fall sick with headaches and dizziness. Your children stay home from school to help farm. They fall sick too. At the end of the season, the amount paid for your crop is less than the loan plus interest. The purchasing company says prices are low because people on the other side of the world are trying to shut down your business. Apparently, tobacco is deadly.
Malawi is the most tobacco-dependent country in the world. In 2015, tobacco leaf comprised 30 to 40 per cent of its total exports, making up 11 per cent of the country’s gross domestic product and 60 per cent of its foreign exchange earnings. While tobacco leaf is clearly an important source of foreign exchange earnings at the national level, most tobacco farmers in Malawi live in poverty.World No Tobacco Day is May 31, and while it generally focuses on the health risks of smoking, the harms the tobacco industry inflicts are even broader. It has benefited from exploiting farmers in low-income countries like Malawi.
A 2016 study found that Malawian tobacco farmers make an average profit of US$79 per acre, substantially less than the average in the agricultural sector (US$351). It concludes “tobacco farmers are not earning enough to support a sustainable livelihood.”
Since the 1990s, there have been accusations that the prices at the tobacco auction are fixed by companies acting like a cartel.
Despite denials, documents from company records suggest cartel-like behaviour. A British American Tobacco (BAT) report admits that “prices are dictated by the manufacturers.” A Philip Morris document reads: “We understand from our suppliers that all major manufacturers present… agreed with our viewpoint that these prices were totally unrealistic and after several discussions… prices started to ease back.”
And a representative of the Malawi Tobacco Control Commission is quoted as saying: “The price that is paid to the producer, it starts from the cigarette manufacturer.” While prices at this year’s auction (currently ongoing) are US$1.58 a kilogram, previous years’ prices have been as low as US$0.80/kg, leaving many farmers in debt.
Companies provide seed, fertilizer
As an alternative to the auction, tobacco companies encourage farmers to sell tobacco through contracts: Companies provide seed, fertilizers and chemicals in return for a guarantee to sell to that merchant. In 2015, 80 per cent of tobacco in Malawi was sold on contract. Farmers are reportedly not always informed of the details of their loans, such as interest rates, and are not assured a set price.
There are also reports of buyers extending more credit to farmers than they pay for the crop at the end of the season, and failing to buy the agreed-upon quota. Farmers themselves have accused contract leaf buyers of operating a cartel on the auction floors to keep prices low.
In February 2015, tobacco farmers petitioned the government to recall or change contract farming legislation to better protect their rights. In response, the head of Malawi’s Tobacco Control Commission stated: “Malawi is now part of the global village. So it is not so easy to say ‘we recommend this or that’ … it is also important that we take into account the global demands in the production of leaf, knowing full well that we do not buy the leaf on our own. We rely on exports.”
In other words, Malawi is dependent on global tobacco companies to buy its leaf, and therefore corporations — not citizens — dictate government policy.
Lack of government power over corporate practices results in weak enforcement of existing regulations.
Uninformed about nicotine poisoning
In neighbouring Zimbabwe, Human Rights Watch recently reported that companies were failing to inform farmers about the risk of nicotine poisoning. Handling tobacco leafs can cause nicotine to be absorbed into skin resulting in nausea, dizziness and headaches. Nicotine poisoning particularly affects brain development in children, and the industry has a long history of relying on child labour.
The government of Malawi continues to describe tobacco as the backbone of the country, frequently blaming tobacco control advocates for the struggles faced by farmers.
At the opening of the 2015 tobacco market, President Peter Mutharika stated that he is “aware that the tobacco industry is facing a lot of challenges and key among them is the issue of the anti-smoking lobby,” and that “this has had and will continue to have negative effects on demand for tobacco worldwide and may therefore seriously affect Malawi’s foreign exchange earnings and the livelihoods of our tobacco farmers.”
It’s not surprising that many Malawian politicians support the industry. Since colonization by the British, political leaders have benefited from tobacco by owning large farms, collecting rents from the auctions and maintaining close relationships with the big tobacco companies.
The government is now promising a new Tobacco Bill, to be tabled in Parliament this June, to revitalize the industry and better protect farmers. Considering the long history of exploitation and influence of Big Tobacco within the government, as well as declining demand for a product that is harmful on many levels, reforming the industry seems to be a case of too little, too late.
The government would do better to honour its earlier promises to diversify the agricultural sector.
It’s time for Malawi to quit tobacco.
Research Associate at Simon Fraser University.