Tobacco farmers in Kenya to earn up to 4 times in export market

Tobacco farmers in Kenya are likely to earn up to Sh800 if they import their yield China, India, Argentina, Chile or Taiwan. This will see farmers earn up to 4 times the current rate in Kenya where a British American Tobacco ( BAT) is paid Sh220 per kilo of grade A tobacco.

Although China is the leading tobacco producer in the world with 2.4 million tonnes which represents a third of the global production, most of it is processed into cigarettes to meet the huge domestic appetite. The FAO report shows that at least 83billon packets of 20 cigarettes are smoked per year, triggering huge demand for tobacco leaves.

China is buying a kilo of grade A cured tobacco at $8.83 or Sh891 at the current currency exchange rate in Kenya. Other countries that are offering food prices includes India which is currently buying a kilo of tobacco from farmers at $7.62 or Sh769, Argentina and Chile at $7.30 or Sh737 while Taiwan is paying tobacco farmers $7.12 or Sh720.

With cured tobacco yield estimated at 7 tonnes per acre n Kenya, it means that a farmer is likely to earn up to Sh6.2 million per acre per season if he export his yield to China for instance. The same yield is likely to earn a farmer Sh1.54 million if he sell it locally.

This comes at a time when tobacco farmers in the country in Migori County which produces up to 71 percent of the country’s 22000 tonnes of tobacco are contemplating abandoning the crop, citing poor prices from cigarette manufacturers in the country.

Early this year, over 5000 contacted tobacco farmers in the country faulted BAT’s pricing model which is based on leave quality, terming it oppressive.  Tobacco is divided into grades A,B and C. Farmers are paid Sh50 per kilo of the lowest grade.

Tobacco farmers through the Kenya Tobacco Farmers Association (Ketofa) have been demanding for at least Sh300 per kilogramme for the highest grade leaf since 2014. According to the Association’s Chief Executive Officer, Joseph Wanguhu, and farming is a time and resource consuming venture that demands proper remuneration.

The average cost of production of a kilo of tobacco is estimated at $2.68 or Sh271. This means, a tobacco farmer in Kenya is incurring a loss of at least Sh70 per kilo, considering that the highest quality is paid at Sh220 per kilo