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Farm income

Maintaining stability

Maintaining a stable income in agriculture can be challenging in the face of an unpredictable climate and changing market forces.

If our farmers have profitable businesses, they and future generations are likely to feel more motivated to remain in agriculture and look after their environment, which helps secure our long-term supplies of tobacco.

Tobacco: a profitable choice

Often farmers choose to grow tobacco because it’s hardy and can generate high profit margins. For example, on an average farm in southern Brazil, tobacco grown on 16% of the land accounts for 55% of the farmer’s income [1].

I get a fair price for the leaf I supply, the seeds are of good quality, and the training and technology I have accessed through Souza Cruz have helped me get the most out of my land – not just for tobacco, but for my maize crops too. That’s why I have chosen to work with them for the last 13 years."
Sanges Alberto Klafke, Brazilian tobacco farmer supplying our subsidiary company, Souza Cruz.

We want all our farmers to get a fair deal. That’s why we guarantee to buy a certain amount of tobacco from them each year. This gives them a regular income, enabling them to invest in their farms and build successful businesses.

For our farmers, tobacco isn’t the only crop they grow. It’s part of a diverse crop portfolio, grown alongside or in rotation with other crops such as cereals, fruit and vegetables.

We also provide seeds that offer greater yields, quality and resistance to diseases and drought. These can lead to better returns for the farmers and higher quality leaf for our products.

This is all a great way of helping to support food security and self-sufficiency for our farmers – which, in turn, makes them less vulnerable and more resilient to market forces and other challenges they may face.

80% of farmers surveyed in Pakistan stated that they cultivate tobacco because it generates more profit compared to other crops [2]

Tobacco’s contribution to the total farm income

Tobacco is just one part of a total farm income. For many years, our leaf operations have assessed farmers’ profit margins from tobacco and compared them to other crops.

We are now building a more comprehensive and consistent picture of tobacco’s contribution to overall farmer livelihoods. We’re conducting a detailed analysis, using a standardised approach, to calculate the overall profitability of tobacco and the other local crops our farmers grow.

[1] The Tobacco Growers’ Association of Brazil (AFUBRA), data from 2012/13 growing cycle, www.afubra.com.br .
[2] Nielsen study, Economics of Tobacco Crop: An Assessment of the Contribution and Impact in Pakistan, June 2014.