The Economics of Tobacco Farming in Kenya: A Longitudinal Study

This Report was written by Peter Magati, Doug Hecock, Qing Li, and Jeffrey Drope. The report examines the economics of tobacco farming in Kenya using two waves of a nationally-representative household survey, follow-up focus groups and key informant interviews. The researchers find that the median former tobacco farming household has nearly twice as many resources as current tobacco farmers. Most smallholder (< 2 hectares) tobacco farmers are actually losing money in the endeavor when the value of labor is accounted for. Tobacco farming is very labor-intensive and often requires over 1000 hours of unpaid labor per acre. On average, these farmers spend more than 1.5x the working hours farming compared to non-tobacco farming households. Contract farmers in the country are stuck in a debt cycle, growing tobacco to pay their existing debt to leaf-buying companies. In addition to these challenges, there are social and environmental issues associated with tobacco farming. Due to labor needs of tobacco farming, many households rely on child labor to grow tobacco. The land used for tobacco displaces food crops and may increase food insecurity. Furthermore, the process of cultivating and processing tobacco leaf requires the use of harmful chemicals and toxicants, exposing farmers to health threats and placing stress on ecosystems. Despite these concerns, farmers continue to choose tobacco for a variety of reasons. Many operate under leaf buying companies, which ensures that they have a buyer and gives them access to credit. They also may perceive tobacco as a viable crop, especially if they do not have access to training to grow other crops. Finally, tobacco farming is more likely than other crops to generate small amounts of cash. The report concludes with viable alternatives for current tobacco farmers, as well as a set of policy recommendations to assist their transition to a more profitable livelihood.