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Alternatives to Tobacco cultivation—Towards an evidence based approach
Land Use Policy 45 (2015) 199–203
Contents lists available at ScienceDirect
Land Use Policy journal homepage: www.elsevier.com/locate/landusepol
Alternatives to Tobacco cultivation—Towards an evidence based approach Udo Kienle a , Basil Manos b,∗ , Thomas Jungbluth a a b
Universität Hohenheim, Stuttgart, Germany Aristotle University of Thessaloniki, Thessaloniki, Greece
a r t i c l e
i n f o
Article history: Received 10 October 2014 Received in revised form 7 December 2014 Accepted 3 January 2015 Keywords: Tobacco alternatives Phasing-out of tobacco Multicriteria mathematical programming model Impact assessment
a b s t r a c t The discussion about alternatives for tobacco cultivation is a very conflicting issue as it strikes into the heart of the tobacco industry which is the tobacco leaf. The aim of the paper is to contribute to this discussion and support the policy makers. To this end, the paper provides an evidence based approach for modeling the phasing-out of tobacco which describes the possible effects on farm income, labor demand and environmental impacts. In the context of the EU Research Project DIVTOB a model was developed to study the impacts of tobacco phasing-out on a specific region approach. The methodological approach can support the policy makers to overcome constraints related with the future implementation of alternative livelihoods to tobacco cultivation on the basis of evidence. In the broader context of tobacco control, the paper presents a method for an effective implementation of articles 17 and 18 of the WHO Framework Convention of Tobacco Control (FCTC). The paper also shows a transparent approach to overcome in an effective way the uncertainties spread by the tobacco industry and their allies about phasing-out of tobacco especially in low-income and middle-income countries. The application of the proposed model to four case studies in Greece and Spain achieves, under different scenarios, important results useful for policy makers and policy implications. © 2015 Elsevier Ltd. All rights reserved.
Introduction One of the objectives of the international Framework Convention on Tobacco Control (FCTC), that has been in force since 2005, is laid down in article 17 which deals with the implementation of economically sustainable alternatives to tobacco growing in the concerned world regions (WHO FCTC, 2014a, 2014b; Geist et al., 2009). In the same framework article 18 deals with the environmental impacts of Tobacco production (Geist et al., 2009). Alternatives for tobacco cultivation are considered to improve the livelihood of the tobacco farmers especially in Developing Countries. It is well understood that the tobacco industry will never accept any alternative to tobacco cultivation. There exist a lot of hints that they actively hinder all activities on alternative livelihood in all levels they can reach and influence. Any alternative will strike into the heart of the tobacco industry which is the tobacco leaf. It is necessary to make the whole process for alternative livelihood more transparent and based on evidence. The implementation of alternatives to tobacco growing will reduce the tobacco growing
∗ Corresponding author. Tel.: +30 2310998805; fax: +30 2310998828. E-mail address: [email protected] (B. Manos). http://dx.doi.org/10.1016/j.landusepol.2015.01.009 0264-8377/© 2015 Elsevier Ltd. All rights reserved.
area in a certain region. The possible reduction will bring up uncertainties and probably changes on the social development of the concerned rural areas, e.g. impact on labor demand. During our work on alternatives for tobacco cultivation in the context of the EU research project DIVTOB (Universität Hohenheim, 2008) an evidence-based model was developed to study the impact of phasing-out tobacco cultivation. These changes can be studied by using a multi-criteria model in order to evaluate the possible impacts of different tobacco diversification alternatives on income, employment and environment. The detailed economic model description can be found in Ref. Manos et al. (2009). The model can significantly help in implementing the decisions of the Sixth Session of the Conference of the Parties to the WHO Framework Convention on Tobacco Control (WHO FCTC, 2014a, 2014b) in connection with the adopted policy options and recommendations on economically sustainable alternatives to tobacco growing. Actual status of alternatives for tobacco cultivation Tobacco cultivation is mainly concentrated in certain well defined regions in the Tobacco producing countries. The main economic activity of the vast majority of the Tobacco farmers is the cultivation of crops. Animal husbandry as an additional main
200
U. Kienle et al. / Land Use Policy 45 (2015) 199–203
income is not wide-spread. Most of the tobacco farmers have very limited land property or have access to arable land only by renting. Therefore they need a crop with a high profitability. Most of the tobacco farmers lack also of funds for investments in their farms. Wide-spread implies the tobacco farmers receive loans for buying farm inputs, like fertilisers, pesticides etc. by concluding a supply contract for raw tobacco delivery. Such loans are high incentives for the farmer to cultivate Tobacco. It is understood that the vast majority of tobacco farmers in Developing Countries depend heavily on such loans and have not the economic capacity to cultivate tobacco without such loans. The farmers rely on tobacco cultivation because of the following factors:
• A delivery contract established between tobacco farmers and tobacco processors gives security in tobacco sale. • Loans and other incentive for the tobacco crop by tobacco industry. • It is assumed that the Gross Income from the tobacco crop is higher than for any other crop. • Uncertainties about alternative income opportunities. • Uncertainties about market opportunities for alternative crops. • In regions where no irrigation is available Tobacco is recognized because of its drought resistance. Under these agricultural conditions the net profit of Tobacco is more than for any other crop. • Tobacco provides a high money cash once a year.
One of the strongest arguments brought up against a phasingout of tobacco cultivation is the social aspect of rural farm workers. As tobacco cultivation is labor intensive it is supposed that a reduction of tobacco cultivation will reduce in the concerned regions the economic opportunities for farm workers and will result in a drastic job loss – so far the arguments. This concern is true where tobacco is cultivated in a fully mechanized farm crop environment as it is the case in the USA, EU and other countries with a strong farm work mechanization. When a farmer will phase-out tobacco, the alternative crops may be full mechanized and the labor demand shrinks strongly compared to tobacco cultivation, e.g. instead of tobacco cultivating wheat. If the farmer opts instead of cultivating tobacco e.g. set-up fruit trees then the labor demand will not be reduced so much. In most countries however, hand labor demand for tobacco is competing with hand labor demand for other crops. Under low mechanized farm conditions the hand labor demand remains high even the farmer phases-out tobacco and switches to another crop. Therefore the job loss is only relative and not absolute – if any real job loss occurs.
Table 1 Labor demand for different working concepts in tobacco cultivation. Working concept Land preparation Plantlet preparation Planting Weeding Topping Hand hoeing Harvesting and Drying Field cleaning Preparation and Packing Total
Male work
Female work
Total
Remarks No data given
45
40
85
60 60 80 200 40 100 585
40 40 40 500
100 100 120 700 40 250 1395
No data given
150 810
Data for Africa estimated the required work hours per hectare of tobacco on 1395 h per year (Viebig, 1981) with the following concepts (all data working hours/hectare) are shown in Table 1: No data have been provided for the concepts of land preparation and planting. The working concepts of fertilizing and pesticide application were not included in the above mentioned reference. Adding around 200 working hours per hectare for the missing working concepts we will assume the total labor demand for tobacco cultivation to about 1600 working hours per hectare. In a study done for the European Parliament (Kienle et al., 2009) the labor demand was evaluated for different European tobacco growing regions. In Northern Greece the cultivation of Oriental Tobacco required a labor demand of 1500 working hours per hectare with only a low mechanization used for land preparation. The labor demand for food crops have been evaluated in Ghana for several agro-climatic zones typical for West Africa (Negeleza et al., 2011). Table 2 provides an overview of the lower and upper level of necessary working hours per acre for the food crops Cassava, Maize, Rice and Yam reflecting only a hand labor scenario without any mechanization and another scenario with very low mechanization. Compared to tobacco cultivation the working hour demand for the food crops are not so different or even higher on the same cultivation area basis. Usually non-family workers are employed for some of the working concepts. This means that shifting from one crop to another crop will probably not reduce too much the labor demand. In Ghana e.g. the demand for non-family hired workers is higher than the supply. Sometimes land preparation and harvesting for food crops is delayed due the lack of labor supply. In a case study from Kenya (Ochola and Kosura, 2007), a total of 227 working days per acre were estimated to be required for tobacco production (a requirement of 561 working days per hectare). In the Kenya study, 73.6% of the working days were performed by family members and only 60 working days by hired workers. This shows that the demand of the hired labor for tobacco cultivation is very often over estimated.
Table 2 Working hours demand for several food crops within different agro-climatic zones. A. Only manual labor (working hours/acre) Crop
Land preparation
Sowing
Crop maintenance
Harvesting
Total
Cassava Maize Rice Yam
125–250 75–175 175–300 250–300
25–50 25–80 25–175 20–40
125–340 75–275 50–200 150–250
50–300 20–225 120–300 25–75
325–940 195–755 370–975 470–665
B. Mixed manual and very low mechanized labor (working hours/acre) Crop
Land preparation
Sowing
Crop Maintenance
Harvesting
Total
Cassava Maize Rice Yam
75–150 10–125 10–220 75
15–50 25–100 5 40
120–160 50–150 50–175 150
75–275 75–225 100–150 50
285–635 160–600 165–550 315
U. Kienle et al. / Land Use Policy 45 (2015) 199–203 Table 3 Working demand for crops in India.
model allows an evaluation of the impact of alternatives to tobacco cultivation based on evidence.
Crop
Total person-days per hectare
Sugar cane Wheat Paddy Groundnut Cotton
166–325 37–60 71–150 58–87 87–148
How works the model?
Table 3 shows the working demand (person-days per hectare) for different crops in subtropical and tropical parts of India (Sharma and Prakash, 2011). Family labor accounts from 9 to 75% of the labor demand, non-regular family labor for 20–80% and regular non-family labor between 1.5 and 12% depending on the crop and the practises in the different cultivation areas in India. The implementation of tobacco alternatives will not automatically mean that the labor demand will decrease. It may increase as shown in Fig. 1. The labor demand with full hand labor will increase by 36% when Stevia rebaudiana is cultivated instead of e.g. Virginia tobacco. Figures present data obtained under European conditions by test trials for Stevia rebaudiana during 1998–2002 (Kienle, 2002) and research on mechanization of the tobacco crop (Kleisinger and Sinn, 2002). However, uncertainties are high regarding the change of labor demand by switching to alternatives and are pushed by the tobacco industry. It is known that the job argument has always a strong influence on policy makers. The uncertainties can be reduced by applying a model to study the impacts of phasing out of tobacco in a specific region. The results of this model can help the policy makers to find evidence based decisions. Modeling phasing-out of tobacco cultivation The multi-criteria model utilizes a weighted goal-programming approach and estimates the farmers’ utility function taking in account various conflicting criteria that can explain the farmers’ behavior (e.g. maximization of farm income, risk minimization, labor, use of fertilizer, use of pesticides, water demand by irrigation and also demand for fire wood etc.). The model is based on previous methodologies work of Sumpsi et al. (1993, 1997) and Amador et al. (1998) for the analysis and simulation of agricultural systems by using multi-criteria techniques. These authors propose weighted goal programming as a methodology for the analysis of decision making. This methodology has been successfully implemented on real agricultural systems (Amador et al., 1998; Berbel and Rodriguez, 1998; Gomez-Limon and Berbel, 2000; Manos et al., 2004, 2006, 2007, 2013; Viaggi et al., 2011). The model shows a very good coincidence to the actual real situation in an evaluated region or agricultural system. Therefore the application of this
4.000
Farm Net Income and Labor demand of Stevia and Virginia Tobacco Cultivation in the EU 3.347 €/ha
3.500
Virginia Tobacco manual labor
3.000 2.500 2.000
201
Stevia manual labor 1.954 €/ha
The model was used to simulate the effect of step-wise phasingout of tobacco cultivation in a study region and in a second approach to evaluate the effect of alternative crops on the farm production plans that achieve different levels of income, labor and environmental impacts. The approach is based on the real situation in each region of tobacco cultivation which is going to be evaluated. Each farmer cultivates a set of crops. These are the decision variables that can assume any value belonging to the real actual situation. The first step consists of defining a tentative set of objectives which seeks to represent the real objectives of the farmers. Three objectives have been regarded as belonging to the farmer’s decision-making process: (a) Gross margin: Farmers wish to maximize profits. Gross margin (GM) is a good estimator of profit, and maximization of profit is equivalent in the short run to maximization of gross margin. Max GM =
GMi × Xi
where GMi is the gross margin of the crop Xi. (b) Risk minimization: Agricultural production is subject to price and yield fluctuations, and risk is therefore always present in any agricultural system.
Min Total Risk = x¯i [Cov] x¯i where [Cov] is the variance/covariance matrix of gross margins during a specific period of time, and Xi is the crop decision vector. (c) Minimization of labor inputs: This objective implies not only a reduction in the cost of this input but also an increase in leisure time and the reduction of managerial involvement. Labor is computed as the sum of labor for all farming activities (TLi).
Min TL =
TLi × Xi.
The constraints of the model concern the total cultivation area, CAP, market and other constraints, rotational and agronomic considerations (Manos et al., 2009). Environmental impacts are public objectives. For this reason it is not considered in the decision process by farmers (Zekri and Romero, 1993). It is assumed that the three objectives mentioned above are enough to explain farmers’ behavior in different agricultural systems. However the environmental impacts can be estimated afterword e.g. by means of fertilizers and irrigation water use, comparing the existent and proposed by the model production plans. The environmental impacts can be also evaluated directly from the model considering additional objectives like e.g. the minimization of fertilizers use.
1185 Wh/ha
1.500 871 Wh/ha
1.000 500 0 Farm Net Income
Working hours/ha
Fig. 1. Economic key figures of Stevia and Virginia tobacco cultivation in the EU.
What data are required to study a specific region where tobacco is cultivated? To execute the model some data are required which must be gathered in the study region and/or can be collected by national or regional statistics, if available. The necessary data are:
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U. Kienle et al. / Land Use Policy 45 (2015) 199–203
Fig. 2. Economic, social and environmental impact under 5 scenarios in Toumba Kilkis, Northern Greece.
• Actual production plan of the study area: Distribution of agricultural crops in the study region. • Technical and economic coefficients: Yield of typical agricultural crops grown in the study region, prices for the different crops, variable costs of crops, labor hours per hectare for crops in the study region, any data of alternative crops not cultivated yet in the study region. • Characteristics of the selected agricultural area: Socio-economic characteristics like structure and number of farm holdings in the study region, family size, number of tractors and harvesters in the study region, family labor. • Environmental issues: Applied fertilizer per hectare per crop grown in the study region, kg of firewood used for tobacco drying or any other activity (e.g. cooking), type and amount of pesticides per hectare per crop grown etc.
Fig. 3. Economic, social and environmental impact under 5 different scenarios in Elassona Larisas, Central Greece.
Fig. 4. Economic, social and environmental impact under tobacco decoupling scenarios in Extremadura, Western Spain.
The model allows the following insights (a) Economic impact: The economic impact of changes in tobacco cultivation will be measured as agricultural income in US-$/ha (or any other currency). (b) Social impact: Since agriculture is one of the main sources of employment any change in tobacco cultivation may affect the social structure of the concerned rural areas. This attribute is measured in labor hours per hectare (hours/ha). (c) The environmental impact: The fertilizers use is a criterion relevant for policy analysis. It represents the environmental impact (non-point pollution caused by nitrogen fertilization). The change in fertilizers used can be expressed in kg/ha. Another important environmental attribute is the irrigation water use. The change in irrigation water used can be expressed in m3 /ha. The demand for fire wood can be also integrated in the model. This will allow establish actual real figures for the use of environmental important farm input in the study regions and the impact of tobacco cultivation can be measured directly. (d) Food security: The actual level of food security in the study region can be evaluated by the provided data in a further analysis step. (e) Children labor: On the data provided the evidence for child labor for any crop cultivated in the study region can be estimated. Figs. 2–5 show the results achieved using the model in four study regions, two in Greece (Toumba Kilkis and Elasona Larisas) and two in Spain (Exremadura and Granada) under 5 different scenarios according to the decoupling rates and the participation or not of alternative crops in farm plans (Manos et al., 2009; Kienle
et al., 2009; CAP reform, 2003). Specifically, scenario 1 represents the baseline (decoupling 0% – no alternative crops) used as reference to assess the impact of decoupling through comparison with scenarios. Scenarios 2, 3, 4, 5 represent the adoption of alternative crops by the farmers under different scales of tobacco decoupling (0%, 40%, 50%, 100%). Comparing the results achieved by the proposed model in the four study regions we observe a slight but continuous decrease from scenario 1 (baseline) to scenario 5 (total decoupling with alternative crops) of farmers income from 1.2% to 4.1%, an important decrease from 10.2% to 20.4% of fertilizers use and a very significant decrease from 39.2% to 69.6% of labor used. The total tobacco decoupling brings to the case study regions a decrease of farmers income, a very significant increase of unemployment
Fig. 5. Economic, social and environmental impact under tobacco decoupling scenarios in Granada, Andalusia, Spain.
U. Kienle et al. / Land Use Policy 45 (2015) 199–203
and has an important positive impact to the environmental pollution. Conclusions The model works in a step-wise approach. First the actual situation in a study region is evaluated. In a second step the effects of a step-wise phasing-out of tobacco cultivation will be simulated for its impacts on income, labor demand and the environment. In the third step the step-wise introduction of alternative crops will be evaluated. The application of this model requires not many data. Within a very short time (once the data are available) the impacts of phasingout of tobacco in a specific region can be studied. The following questions can be answered based on evidence: (a) What happens with the farm income without tobacco cultivation? Will the farm families have sufficient income to match their life without tobacco cultivation? (b) What happens with the agricultural workers in the concerned rural area? Will they find adequate jobs and payment without tobacco cultivation? (c) Is there any negative impact on the income basis in countries where tobacco is cultivated? (d) What will be the impacts on the environment by implementing alternatives for tobacco cultivation in the study region? The execution of this model is an easy method to overcome all uncertainties which have been brought-up by the tobacco industry. This model provides full transparency and will give evidence based scenarios to the policy makers. The application of the proposed model to four case study regions in Greece and Spain showed that this can achieve interesting and useful results. The total tobacco decoupling brings to these case study regions a decrease of farmers income, a very significant increase of unemployment and has an important positive impact to the environmental pollution. Finally, the recent decisions of the Sixth Session of the Conference of the Parties to the WHO Framework Convention on Tobacco Control in October 2014 for policy options and recommendations on economically sustainable alternatives to tobacco growing, make the proposed model a timely and useful tool. The model can significantly help in implementing the decisions of the Conference of the Parties and support the Convention Secretariat and WHO Parties in their implementation of the adopted policy options and recommendations. Acknowledgements The authors want to thank Mr. Francois Constantin, Project Officer of the DIVTOB Project, DG Research, European Commission Dr. Thomas Bournaris, Parthena Chatzinikolaou, both from Aristotle University of Thessaloniki, Department of Agricultural Economics, and Dr. Jason Papathanasiou from University of Macedonia, Thessaloniki, Greece, on their contribution to develop the multi-criteria model for tobacco phasing-out, data processing and data evaluation. For collecting the data in EU Tobacco growing regions in the EU Prof. Mario Reis, Universidade do Algarve, Faro, Portugal, Prof. Hans-Peter Kaul, BOKU, Vienna, Austria, Mrs. Pilar Solano, ADESVAL, Coria, Spain, and Mrs. Carmen Diaz, Granada, Spain.
203
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FAIR5-CT97-3751. Coordinated by Universität Hohenheim, Department of Agricultural Engineering, Stuttgart, Germany. Kienle, U., Manos, B., Kaul, H.P., et al., 2009. Alternative and Sustainable Production for Tobacco Cultivated Areas in the European Union. IP/B/AGRI/IC/2008 109. EUROPEAN PARLIAMENT, Directorate General for Internal Policies, Policy Department B: Structural and Cohesion Policies, Agricultural and Rural Development. Kleisinger, S., Sinn, H., 2002. Wissenschaftliche Betreuung des Pilotprojektes zur Entwicklung und Erprobung des Einsatzes einer Vollerntemaschine für Virgintabak, Midterm-Report. Universität Hohenheim, Institut für Agrartechnik, Stuttgart, Germany. Manos, B., Bournaris, Th., Kamruzzaman, M., et al., 2004. The case of Greece in sustainability of European irrigated agriculture under water framework directive and agenda 2000. In: Berbel, J., Gutierez, C. (Eds.), Sustainability of European Irrigated Agriculture. European Commission, ISBN 92-894-8005-X. Manos, B., Bournaris, Th., Kamruzzaman, M., et al., 2006. The regional impact of irrigation water pricing in Greece under alternative scenarios of European policy: a multicriteria analysis. Reg. Stud. 40, 1055–1068. Manos, B., Begum, A.A., Kamruzzaman, M., et al., 2007. Fertilizer price policy, the environment and farms behavior. J. Policy Model. 29, 87–97. Manos, B., Bournaris, Th., Papathanasiou, J., et al., 2009. Evaluation of tobacco cultivation alternatives under the EU common agricultural policy (CAP). J. Policy Model. 31, 225–238. Manos, B., Bournaris, Th., Chatzinikolaou, P., Berbel, J., Nikolov, D., 2013. Effects of CAP policy on farm household behaviour and social sustainability. Land Use Policy 31, 166–181. Negeleza, G., Owusuwa, R., Jimah, K., et al., 2011. Cropping Practises and Labor Requirements in Field Operations for Major Food Crops in Ghana. International Food Policy Research Institute Discussion Paper, pp. 01074. Ochola, S.A., Kosura, W., 2007. Case Study on Tobacco Cultivation and Possible Alternative Crops – Kenya. Technical Document for the First Meeting of the Ad Hoc Study Group on Alternative Crops Established by the COP, Available at: http://www.who.int/entity/tobacco/framework/cop/events/2007/kenya case study.pdf (downloaded on 12.12.13). Sharma, A.K., Prakash, B., 2011. Causes and consequences of supply-demand gap for labour in sugarcane in India. Agric. Econ. Res. Rev. 24, 401–407. Sumpsi, M.J., Amador, F., Romero, C.,1993. A research on the Andalusia farmers’ objectives: methodological aspects and policy implications. In: Aspects of the Common Agricultural Policy. VIIth EAAE Congress, Stresa, Italy. Sumpsi, M.J., Amador, F., Romero, C., 1997. On farmers’ objectives: a multi-criteria approach. Eur. J. Oper. Res. 96, 64–71. Viaggi, D., Raggi, M., Gomez y Paloma, S., 2011. Understanding the determinants of investment reactions to decoupling of the Common Agricultural Policy. Land Use Policy 28 (3), 495–505. WHO FCTC – World Health Organisation Framework Convention on Tobacco Control, 2014a. Economically sustainable alternatives to tobacco growing (in relation to articles 17 and 18 of the WHO Framework Convention on Tobacco Control). In: Report by Working Group, Sixth Session of the Conference of the Parties, Moscow, Russian Federation, 13–18 October. WHO FCTC – World Health Organisation Framework Convention on Tobacco Control, 2014b. Outcomes of the Sixth Session of the Conference of the Parties, Report, Moscow, Russian Federation, 13–18 October. Viebig, K., 1981. Grundlagen der Anspann- und Gerätetechnik. In: Munzinger, P. (Ed.), Handbuch der Zugtiernutzung in Afrika, GTZ, Eschborn. Taken from Wienecke F, Friedrich Th: Agrartechnik in den Tropen, Band 1, 1982 Göttingen. DLG-Verlag, Frankfurt/Main, Germany. Universität Hohenheim, Department of Agricultural Engineering, 2008. Diversification for Tobacco Growing Regions in the Southern European Union. 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Contents lists available at ScienceDirect
Land Use Policy journal homepage: www.elsevier.com/locate/landusepol
Alternatives to Tobacco cultivation—Towards an evidence based approach Udo Kienle a , Basil Manos b,∗ , Thomas Jungbluth a a b
Universität Hohenheim, Stuttgart, Germany Aristotle University of Thessaloniki, Thessaloniki, Greece
a r t i c l e
i n f o
Article history: Received 10 October 2014 Received in revised form 7 December 2014 Accepted 3 January 2015 Keywords: Tobacco alternatives Phasing-out of tobacco Multicriteria mathematical programming model Impact assessment
a b s t r a c t The discussion about alternatives for tobacco cultivation is a very conflicting issue as it strikes into the heart of the tobacco industry which is the tobacco leaf. The aim of the paper is to contribute to this discussion and support the policy makers. To this end, the paper provides an evidence based approach for modeling the phasing-out of tobacco which describes the possible effects on farm income, labor demand and environmental impacts. In the context of the EU Research Project DIVTOB a model was developed to study the impacts of tobacco phasing-out on a specific region approach. The methodological approach can support the policy makers to overcome constraints related with the future implementation of alternative livelihoods to tobacco cultivation on the basis of evidence. In the broader context of tobacco control, the paper presents a method for an effective implementation of articles 17 and 18 of the WHO Framework Convention of Tobacco Control (FCTC). The paper also shows a transparent approach to overcome in an effective way the uncertainties spread by the tobacco industry and their allies about phasing-out of tobacco especially in low-income and middle-income countries. The application of the proposed model to four case studies in Greece and Spain achieves, under different scenarios, important results useful for policy makers and policy implications. © 2015 Elsevier Ltd. All rights reserved.
Introduction One of the objectives of the international Framework Convention on Tobacco Control (FCTC), that has been in force since 2005, is laid down in article 17 which deals with the implementation of economically sustainable alternatives to tobacco growing in the concerned world regions (WHO FCTC, 2014a, 2014b; Geist et al., 2009). In the same framework article 18 deals with the environmental impacts of Tobacco production (Geist et al., 2009). Alternatives for tobacco cultivation are considered to improve the livelihood of the tobacco farmers especially in Developing Countries. It is well understood that the tobacco industry will never accept any alternative to tobacco cultivation. There exist a lot of hints that they actively hinder all activities on alternative livelihood in all levels they can reach and influence. Any alternative will strike into the heart of the tobacco industry which is the tobacco leaf. It is necessary to make the whole process for alternative livelihood more transparent and based on evidence. The implementation of alternatives to tobacco growing will reduce the tobacco growing
∗ Corresponding author. Tel.: +30 2310998805; fax: +30 2310998828. E-mail address: [email protected] (B. Manos). http://dx.doi.org/10.1016/j.landusepol.2015.01.009 0264-8377/© 2015 Elsevier Ltd. All rights reserved.
area in a certain region. The possible reduction will bring up uncertainties and probably changes on the social development of the concerned rural areas, e.g. impact on labor demand. During our work on alternatives for tobacco cultivation in the context of the EU research project DIVTOB (Universität Hohenheim, 2008) an evidence-based model was developed to study the impact of phasing-out tobacco cultivation. These changes can be studied by using a multi-criteria model in order to evaluate the possible impacts of different tobacco diversification alternatives on income, employment and environment. The detailed economic model description can be found in Ref. Manos et al. (2009). The model can significantly help in implementing the decisions of the Sixth Session of the Conference of the Parties to the WHO Framework Convention on Tobacco Control (WHO FCTC, 2014a, 2014b) in connection with the adopted policy options and recommendations on economically sustainable alternatives to tobacco growing. Actual status of alternatives for tobacco cultivation Tobacco cultivation is mainly concentrated in certain well defined regions in the Tobacco producing countries. The main economic activity of the vast majority of the Tobacco farmers is the cultivation of crops. Animal husbandry as an additional main
200
U. Kienle et al. / Land Use Policy 45 (2015) 199–203
income is not wide-spread. Most of the tobacco farmers have very limited land property or have access to arable land only by renting. Therefore they need a crop with a high profitability. Most of the tobacco farmers lack also of funds for investments in their farms. Wide-spread implies the tobacco farmers receive loans for buying farm inputs, like fertilisers, pesticides etc. by concluding a supply contract for raw tobacco delivery. Such loans are high incentives for the farmer to cultivate Tobacco. It is understood that the vast majority of tobacco farmers in Developing Countries depend heavily on such loans and have not the economic capacity to cultivate tobacco without such loans. The farmers rely on tobacco cultivation because of the following factors:
• A delivery contract established between tobacco farmers and tobacco processors gives security in tobacco sale. • Loans and other incentive for the tobacco crop by tobacco industry. • It is assumed that the Gross Income from the tobacco crop is higher than for any other crop. • Uncertainties about alternative income opportunities. • Uncertainties about market opportunities for alternative crops. • In regions where no irrigation is available Tobacco is recognized because of its drought resistance. Under these agricultural conditions the net profit of Tobacco is more than for any other crop. • Tobacco provides a high money cash once a year.
One of the strongest arguments brought up against a phasingout of tobacco cultivation is the social aspect of rural farm workers. As tobacco cultivation is labor intensive it is supposed that a reduction of tobacco cultivation will reduce in the concerned regions the economic opportunities for farm workers and will result in a drastic job loss – so far the arguments. This concern is true where tobacco is cultivated in a fully mechanized farm crop environment as it is the case in the USA, EU and other countries with a strong farm work mechanization. When a farmer will phase-out tobacco, the alternative crops may be full mechanized and the labor demand shrinks strongly compared to tobacco cultivation, e.g. instead of tobacco cultivating wheat. If the farmer opts instead of cultivating tobacco e.g. set-up fruit trees then the labor demand will not be reduced so much. In most countries however, hand labor demand for tobacco is competing with hand labor demand for other crops. Under low mechanized farm conditions the hand labor demand remains high even the farmer phases-out tobacco and switches to another crop. Therefore the job loss is only relative and not absolute – if any real job loss occurs.
Table 1 Labor demand for different working concepts in tobacco cultivation. Working concept Land preparation Plantlet preparation Planting Weeding Topping Hand hoeing Harvesting and Drying Field cleaning Preparation and Packing Total
Male work
Female work
Total
Remarks No data given
45
40
85
60 60 80 200 40 100 585
40 40 40 500
100 100 120 700 40 250 1395
No data given
150 810
Data for Africa estimated the required work hours per hectare of tobacco on 1395 h per year (Viebig, 1981) with the following concepts (all data working hours/hectare) are shown in Table 1: No data have been provided for the concepts of land preparation and planting. The working concepts of fertilizing and pesticide application were not included in the above mentioned reference. Adding around 200 working hours per hectare for the missing working concepts we will assume the total labor demand for tobacco cultivation to about 1600 working hours per hectare. In a study done for the European Parliament (Kienle et al., 2009) the labor demand was evaluated for different European tobacco growing regions. In Northern Greece the cultivation of Oriental Tobacco required a labor demand of 1500 working hours per hectare with only a low mechanization used for land preparation. The labor demand for food crops have been evaluated in Ghana for several agro-climatic zones typical for West Africa (Negeleza et al., 2011). Table 2 provides an overview of the lower and upper level of necessary working hours per acre for the food crops Cassava, Maize, Rice and Yam reflecting only a hand labor scenario without any mechanization and another scenario with very low mechanization. Compared to tobacco cultivation the working hour demand for the food crops are not so different or even higher on the same cultivation area basis. Usually non-family workers are employed for some of the working concepts. This means that shifting from one crop to another crop will probably not reduce too much the labor demand. In Ghana e.g. the demand for non-family hired workers is higher than the supply. Sometimes land preparation and harvesting for food crops is delayed due the lack of labor supply. In a case study from Kenya (Ochola and Kosura, 2007), a total of 227 working days per acre were estimated to be required for tobacco production (a requirement of 561 working days per hectare). In the Kenya study, 73.6% of the working days were performed by family members and only 60 working days by hired workers. This shows that the demand of the hired labor for tobacco cultivation is very often over estimated.
Table 2 Working hours demand for several food crops within different agro-climatic zones. A. Only manual labor (working hours/acre) Crop
Land preparation
Sowing
Crop maintenance
Harvesting
Total
Cassava Maize Rice Yam
125–250 75–175 175–300 250–300
25–50 25–80 25–175 20–40
125–340 75–275 50–200 150–250
50–300 20–225 120–300 25–75
325–940 195–755 370–975 470–665
B. Mixed manual and very low mechanized labor (working hours/acre) Crop
Land preparation
Sowing
Crop Maintenance
Harvesting
Total
Cassava Maize Rice Yam
75–150 10–125 10–220 75
15–50 25–100 5 40
120–160 50–150 50–175 150
75–275 75–225 100–150 50
285–635 160–600 165–550 315
U. Kienle et al. / Land Use Policy 45 (2015) 199–203 Table 3 Working demand for crops in India.
model allows an evaluation of the impact of alternatives to tobacco cultivation based on evidence.
Crop
Total person-days per hectare
Sugar cane Wheat Paddy Groundnut Cotton
166–325 37–60 71–150 58–87 87–148
How works the model?
Table 3 shows the working demand (person-days per hectare) for different crops in subtropical and tropical parts of India (Sharma and Prakash, 2011). Family labor accounts from 9 to 75% of the labor demand, non-regular family labor for 20–80% and regular non-family labor between 1.5 and 12% depending on the crop and the practises in the different cultivation areas in India. The implementation of tobacco alternatives will not automatically mean that the labor demand will decrease. It may increase as shown in Fig. 1. The labor demand with full hand labor will increase by 36% when Stevia rebaudiana is cultivated instead of e.g. Virginia tobacco. Figures present data obtained under European conditions by test trials for Stevia rebaudiana during 1998–2002 (Kienle, 2002) and research on mechanization of the tobacco crop (Kleisinger and Sinn, 2002). However, uncertainties are high regarding the change of labor demand by switching to alternatives and are pushed by the tobacco industry. It is known that the job argument has always a strong influence on policy makers. The uncertainties can be reduced by applying a model to study the impacts of phasing out of tobacco in a specific region. The results of this model can help the policy makers to find evidence based decisions. Modeling phasing-out of tobacco cultivation The multi-criteria model utilizes a weighted goal-programming approach and estimates the farmers’ utility function taking in account various conflicting criteria that can explain the farmers’ behavior (e.g. maximization of farm income, risk minimization, labor, use of fertilizer, use of pesticides, water demand by irrigation and also demand for fire wood etc.). The model is based on previous methodologies work of Sumpsi et al. (1993, 1997) and Amador et al. (1998) for the analysis and simulation of agricultural systems by using multi-criteria techniques. These authors propose weighted goal programming as a methodology for the analysis of decision making. This methodology has been successfully implemented on real agricultural systems (Amador et al., 1998; Berbel and Rodriguez, 1998; Gomez-Limon and Berbel, 2000; Manos et al., 2004, 2006, 2007, 2013; Viaggi et al., 2011). The model shows a very good coincidence to the actual real situation in an evaluated region or agricultural system. Therefore the application of this
4.000
Farm Net Income and Labor demand of Stevia and Virginia Tobacco Cultivation in the EU 3.347 €/ha
3.500
Virginia Tobacco manual labor
3.000 2.500 2.000
201
Stevia manual labor 1.954 €/ha
The model was used to simulate the effect of step-wise phasingout of tobacco cultivation in a study region and in a second approach to evaluate the effect of alternative crops on the farm production plans that achieve different levels of income, labor and environmental impacts. The approach is based on the real situation in each region of tobacco cultivation which is going to be evaluated. Each farmer cultivates a set of crops. These are the decision variables that can assume any value belonging to the real actual situation. The first step consists of defining a tentative set of objectives which seeks to represent the real objectives of the farmers. Three objectives have been regarded as belonging to the farmer’s decision-making process: (a) Gross margin: Farmers wish to maximize profits. Gross margin (GM) is a good estimator of profit, and maximization of profit is equivalent in the short run to maximization of gross margin. Max GM =
GMi × Xi
where GMi is the gross margin of the crop Xi. (b) Risk minimization: Agricultural production is subject to price and yield fluctuations, and risk is therefore always present in any agricultural system.
Min Total Risk = x¯i [Cov] x¯i where [Cov] is the variance/covariance matrix of gross margins during a specific period of time, and Xi is the crop decision vector. (c) Minimization of labor inputs: This objective implies not only a reduction in the cost of this input but also an increase in leisure time and the reduction of managerial involvement. Labor is computed as the sum of labor for all farming activities (TLi).
Min TL =
TLi × Xi.
The constraints of the model concern the total cultivation area, CAP, market and other constraints, rotational and agronomic considerations (Manos et al., 2009). Environmental impacts are public objectives. For this reason it is not considered in the decision process by farmers (Zekri and Romero, 1993). It is assumed that the three objectives mentioned above are enough to explain farmers’ behavior in different agricultural systems. However the environmental impacts can be estimated afterword e.g. by means of fertilizers and irrigation water use, comparing the existent and proposed by the model production plans. The environmental impacts can be also evaluated directly from the model considering additional objectives like e.g. the minimization of fertilizers use.
1185 Wh/ha
1.500 871 Wh/ha
1.000 500 0 Farm Net Income
Working hours/ha
Fig. 1. Economic key figures of Stevia and Virginia tobacco cultivation in the EU.
What data are required to study a specific region where tobacco is cultivated? To execute the model some data are required which must be gathered in the study region and/or can be collected by national or regional statistics, if available. The necessary data are:
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U. Kienle et al. / Land Use Policy 45 (2015) 199–203
Fig. 2. Economic, social and environmental impact under 5 scenarios in Toumba Kilkis, Northern Greece.
• Actual production plan of the study area: Distribution of agricultural crops in the study region. • Technical and economic coefficients: Yield of typical agricultural crops grown in the study region, prices for the different crops, variable costs of crops, labor hours per hectare for crops in the study region, any data of alternative crops not cultivated yet in the study region. • Characteristics of the selected agricultural area: Socio-economic characteristics like structure and number of farm holdings in the study region, family size, number of tractors and harvesters in the study region, family labor. • Environmental issues: Applied fertilizer per hectare per crop grown in the study region, kg of firewood used for tobacco drying or any other activity (e.g. cooking), type and amount of pesticides per hectare per crop grown etc.
Fig. 3. Economic, social and environmental impact under 5 different scenarios in Elassona Larisas, Central Greece.
Fig. 4. Economic, social and environmental impact under tobacco decoupling scenarios in Extremadura, Western Spain.
The model allows the following insights (a) Economic impact: The economic impact of changes in tobacco cultivation will be measured as agricultural income in US-$/ha (or any other currency). (b) Social impact: Since agriculture is one of the main sources of employment any change in tobacco cultivation may affect the social structure of the concerned rural areas. This attribute is measured in labor hours per hectare (hours/ha). (c) The environmental impact: The fertilizers use is a criterion relevant for policy analysis. It represents the environmental impact (non-point pollution caused by nitrogen fertilization). The change in fertilizers used can be expressed in kg/ha. Another important environmental attribute is the irrigation water use. The change in irrigation water used can be expressed in m3 /ha. The demand for fire wood can be also integrated in the model. This will allow establish actual real figures for the use of environmental important farm input in the study regions and the impact of tobacco cultivation can be measured directly. (d) Food security: The actual level of food security in the study region can be evaluated by the provided data in a further analysis step. (e) Children labor: On the data provided the evidence for child labor for any crop cultivated in the study region can be estimated. Figs. 2–5 show the results achieved using the model in four study regions, two in Greece (Toumba Kilkis and Elasona Larisas) and two in Spain (Exremadura and Granada) under 5 different scenarios according to the decoupling rates and the participation or not of alternative crops in farm plans (Manos et al., 2009; Kienle
et al., 2009; CAP reform, 2003). Specifically, scenario 1 represents the baseline (decoupling 0% – no alternative crops) used as reference to assess the impact of decoupling through comparison with scenarios. Scenarios 2, 3, 4, 5 represent the adoption of alternative crops by the farmers under different scales of tobacco decoupling (0%, 40%, 50%, 100%). Comparing the results achieved by the proposed model in the four study regions we observe a slight but continuous decrease from scenario 1 (baseline) to scenario 5 (total decoupling with alternative crops) of farmers income from 1.2% to 4.1%, an important decrease from 10.2% to 20.4% of fertilizers use and a very significant decrease from 39.2% to 69.6% of labor used. The total tobacco decoupling brings to the case study regions a decrease of farmers income, a very significant increase of unemployment
Fig. 5. Economic, social and environmental impact under tobacco decoupling scenarios in Granada, Andalusia, Spain.
U. Kienle et al. / Land Use Policy 45 (2015) 199–203
and has an important positive impact to the environmental pollution. Conclusions The model works in a step-wise approach. First the actual situation in a study region is evaluated. In a second step the effects of a step-wise phasing-out of tobacco cultivation will be simulated for its impacts on income, labor demand and the environment. In the third step the step-wise introduction of alternative crops will be evaluated. The application of this model requires not many data. Within a very short time (once the data are available) the impacts of phasingout of tobacco in a specific region can be studied. The following questions can be answered based on evidence: (a) What happens with the farm income without tobacco cultivation? Will the farm families have sufficient income to match their life without tobacco cultivation? (b) What happens with the agricultural workers in the concerned rural area? Will they find adequate jobs and payment without tobacco cultivation? (c) Is there any negative impact on the income basis in countries where tobacco is cultivated? (d) What will be the impacts on the environment by implementing alternatives for tobacco cultivation in the study region? The execution of this model is an easy method to overcome all uncertainties which have been brought-up by the tobacco industry. This model provides full transparency and will give evidence based scenarios to the policy makers. The application of the proposed model to four case study regions in Greece and Spain showed that this can achieve interesting and useful results. The total tobacco decoupling brings to these case study regions a decrease of farmers income, a very significant increase of unemployment and has an important positive impact to the environmental pollution. Finally, the recent decisions of the Sixth Session of the Conference of the Parties to the WHO Framework Convention on Tobacco Control in October 2014 for policy options and recommendations on economically sustainable alternatives to tobacco growing, make the proposed model a timely and useful tool. The model can significantly help in implementing the decisions of the Conference of the Parties and support the Convention Secretariat and WHO Parties in their implementation of the adopted policy options and recommendations. Acknowledgements The authors want to thank Mr. Francois Constantin, Project Officer of the DIVTOB Project, DG Research, European Commission Dr. Thomas Bournaris, Parthena Chatzinikolaou, both from Aristotle University of Thessaloniki, Department of Agricultural Economics, and Dr. Jason Papathanasiou from University of Macedonia, Thessaloniki, Greece, on their contribution to develop the multi-criteria model for tobacco phasing-out, data processing and data evaluation. For collecting the data in EU Tobacco growing regions in the EU Prof. Mario Reis, Universidade do Algarve, Faro, Portugal, Prof. Hans-Peter Kaul, BOKU, Vienna, Austria, Mrs. Pilar Solano, ADESVAL, Coria, Spain, and Mrs. Carmen Diaz, Granada, Spain.
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