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Tobacco farming on rise as growers bag lucrative deals

FINANCIAL STANDARD
By TITUS OTEBA | November 25th 2014

The tobacco crop has over the centuries been a controversial plant, but its appeal as a source of income for smallholder farmers has sustained its popularity.

The crop takes six months to grow and mature, from the nursery to the time it is harvested, and at least for farmers in Teso and Bungoma West, it has been minting cash and providing stability for an estimated 30,000 farmers.

The farmers and co-operative unions Business Beat spoke to in Kolanya, Malakisi, Changara and Tamlega said they make more than Sh250,000 every six months.

Market demand

They are currently planning to increase the acreage under tobacco, despite sustained efforts by several local non-governmental organisations to get them to grow more wholesome food crops.

However, these farmers maintain the returns from more traditional crops, such as maize and beans, are nowhere near what they get from tobacco.

“We spend Sh3,500 to grow a 12-kilogramme bag of maize, but the market price for this is around Sh1,800,” Joseph Nyongesa, a farmer and businessman at Changara market, said. He is among farmers contracted by the Nairobi Securities Exchange-listed tobacco manufacturer BAT Kenya.

He said tobacco has been a boon to smallholder farmers, despite the crop dominating headlines for “all the wrong reasons”.

He added that alternative crops hold lower appeal particularly because their cost of production is higher than tobacco’s.

Alternative crops

“We decided to stick to tobacco because there is less competition and the market is assured because we supply to our respective tobacco companies,” Mr Nyongesa said.

“Other alternative crops in the area are prone to pest and disease attacks, leading to huge losses. Maize farmers are also suffering from poor marketing and pricing strategies. We have seen farmers selling their crop at throwaway prices because the existing pricing structure is based on supply and demand. In most cases, the maize market is saturated.”

He added that farmers are unwilling to stop growing tobacco because of the stability and financial freedom it gives them.

The tobacco companies that have contracted farmers in Western Kenya include BAT Kenya, Mastermind Tobacco, Cut Tobacco and Alliance One.

“At the beginning of each season, we get seeds and fertiliser on credit from our companies. The costs of the farm inputs are recovered later on when we sell the harvested leaves. This strategy of giving farmers inputs at no immediate cost is what encourages us. It allows us to plan our financial future,” said Nyongesa.

“I have been able to buy a lorry, three acres of land and build rental houses. I am now financially stable and am regarded as a successful farmer, and this has motivated me to invest even more in tobacco farming because even our weather favours the crop.”

Tobacco was introduced to local residents in Busia and Bungoma counties in 1978. The rich volcanic soil in the region is ideal for the crop. Today, Western Kenya contributes the largest amount of tobacco produced in the country at 3.1 million kilogrammes, or 41 per cent of national production. The other major producers are in Nyanza and Eastern Kenya.

Fred Simiyu is yet another tobacco farmer from Sitabicha sub-location who says he is not about to uproot his crop for more traditional options.

“I started growing tobacco in 1995 after acquiring a loan, and since then I have not looked back because I am happy with how the tobacco companies buy my crop. They also support us with training through field officers,” Mr Simiyu said.

The father of five added that with his earnings, he has been able to buy a two-acre farm, build a house and educate his daughters.

The challenges

But it is not all smooth sailing. Farmers said their main challenges have been unexpected hailstones destroying their crop, seasons of drought or entire harvests being destroyed by fire.

To mitigate against such problems, some of the tobacco firms have introduced insurance cover to compensate farmers.

International organisations, such as the World Health Organisation (WHO), however, have been working to get farmers to limit and eventually stop growing tobacco, citing the numerous health problems associated with the crop.

Through measures contained in the Framework Convention on Tobacco Control (FCTC), WHO is seeking to get farmers to grow alternative crops, including bamboo.

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