Open Access Research Article

Farmer’s Response to Tobacco Processing Company in Tobacco Cultivation in Bangladesh

Khan Mehedi Hasan1,2*

1 Department of Economics, Lingnan University, Tuen Mun, Hong Kong

2 Department of Economics, Khulna University, Bangladesh

Corresponding Author

Received Date:December 13, 2019;  Published Date: January 13, 2020

Abstract

Several tobacco processing companies patronize tobacco cultivation in Bangladesh. The major objective of the project was to assess farmers’ response against the strategies of tobacco companies in the Jhenaidah district of Bangladesh. Farmers’ perceptions were taken through focused group discussion. Tobacco companies’ activities and strategies were discussed initially. After that, farmers’ reactions on companies’ strategies in both positive and negative directions were analysed in the context of traditional agriculture of the district. Tobacco companies’ sales guarantee at prefixed price motivated farmers to go for contract with tobacco cultivation. Tobacco company provided full revenue at a time which was another point of motivation for tobacco cultivation that was not generally observed in other crops. Though cost of cultivation from tobacco was very high, it provided higher profit in compared with other crops cultivated in the tobacco season. Some crops provided higher profit than tobacco but those were not guaranteed in every season due to high price fluctuation. Companies input support free of cost and at loan but was repaid after harvest attracted many famers into tobacco. In addition to these company supported incentives, farmers considered the option of using family labor, and unique features of tobacco like high cash crop, safe from disease as motivation for cultivating tobacco. Farmers’ negative considerations over tobacco companies were high charge for inputs, subjective grading system of cured tobacco, less address of health safety issues, wide range of hidden and unaccounted cost associated with tobacco cultivation. Non-guaranteed sales and unstable price were main challenges for traditional crops in the district for which tobacco companies’ offers become lucrative to cultivate tobacco. As tobacco is the substitute to the food security of the overburden people of Bangladesh, the research suggests making control over tobacco companies by limiting quota on acres of land to be contracted for tobacco and forcing companies to internalize all health and environmental related costs. Farmers’ awareness need to be created by assessing and publicizing all the unaccounted cost components associated with tobacco farming. At the same time, it is essential to assure sales of general crops at stable price.

Keywords: Contract farmer; Deforestation; Tobacco curing; Tobacco processing company; Sales guarantee

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