Costs, contracts, and the narrative of prosperity: An economic analysis of smallholder tobacco farming livelihoods in Kenya

Abstract

Background—The tobacco industry has used the alleged negative impacts on economic livelihoods for tobacco farmers as a narrative to oppose tobacco control measures in low-and middle-income countries. However, there is still a paucity of rigorous empirical evidence to counter this argument. Accordingly, we assess how much money households earn from selling tobacco, and the costs they incur to produce the crop, including labour inputs. We also evaluate farmers’ decision to operate under contract directly with tobacco companies or as independent farmers. Methods—A stratified random sampling method of carrying out a systematic nationally representative household-level economic survey of 585 households was designed and implemented across the three main tobacco growing regions in Kenya. The survey was augmented with focus group discussions to refine and enrich our interpretation of the findings. Results—Tobacco farmers generally experience small margins per acre, with contract farmers operating at a loss. Even when family labour is excluded from the calculation, income levels are not high. Generally, tobacco farmers enter into contracts with tobacco companies because they have a “guaranteed” buyer for their tobacco leaf and receive the necessary agricultural inputs (fertilizer, seeds, herbicides, etc.) without paying cash up-front. Conclusions—We conclude tobacco farming households contract with tobacco companies to meet perceived economic benefits. The narrative that tobacco farming is a lucrative economic undertaking for smallholder farmers in Kenya is inaccurate in the context of Kenya.