A trade war between the US and China could have a devastating impact on North Carolina’s tobacco growers, according to a story by Brian Murphy and Zachery Eanes for the News & Observer.
North Carolina exported leaf tobacco worth more than $156 million to China last year, making China the biggest national consumer of the state’s tobacco.
However, the value of North Carolina’s tobacco exports to China was already down – from more than $184 million in 2015 and $166 million in 2016 – when, on Wednesday, China announced plans to impose higher tariffs on more than 100 US products, including tobacco.
Tariffs on unmanufactured tobacco would be raised from 10 percent to 35 percent, while duties on cigarettes and cigars would be pushed up from 25 percent to 50 percent, according the US Department of Agriculture.
The tariffs are only proposals at this time and would not go into effect until at least the middle of May, leaving time for negotiations between the two nations.
Zippy Duvall, president of the American Farm Bureau Federation, urged the nations to negotiate and “produce an agreement that serves the interests of the world’s two largest economies”.
Meanwhile, Larry Wooten, president of the North Carolina Farm Bureau, said the situation was troubling, to say the least, in relation to tobacco. “When you add pork and soybeans, it really hits North Carolina,” he added.
In addition to being the US’ largest producer of tobacco, North Carolina plants 1.6 million acres of soybean.
In total, North Carolina exported $2.3 billion in goods to China in 2016 up from $1.4 billion in 2006, according to the US-China Business Council. China was the state’s third-largest trading partner after Canada ($6.2 billion in goods) and Mexico ($3.1 billion).
The News & Observer story is at: http://www.newsobserver.com/news/politics-government/politics-columns-blogs/under-the-dome/article207952919.html.
Category: Leaf
Tariff threats ‘troubling’
Hoping for better prices
Malawi’s all-types tobacco production is estimated to have dropped by 12 percent this season, according to a story on Journalducameroun.com.
The country is thought to have produced 149 million kg during the 2017/18 production season, down from 171 million kg during the 2016/17 season.
The Tobacco Control Commission’s CEO, Kayisi Sadala, said on Wednesday that growers had not produced enough tobacco this season to meet buyers’ demand.
He attributed the production decline to natural causes. “The country faced natural disasters like prolonged dry spells in the southern part and erratic rains in the central region where tobacco is largely produced, hence the output drop,” Sadala was quoted as saying.
The upside of this is that the Commission is optimistic that the forces of demand and supply will lead to a smooth marketing season.
There was hope that this year’s leaf would attract better prices than those of previous seasons, when supply was high and demand was low, Sadala said.
The 2017/18 tobacco marketing season is expected to open on April 11, with farmers due to deliver their crops to the Kanengo and Lilongwe auction floors.Agitation threat in Pakistan
A tobacco-grower representative has asked the Pakistan government to provide incentives and lower taxes in respect of tobacco production, according to a story by Muhammad Riaz Mayar for The News.
Niamatullah Shah Roghani, vice-president of Anjuman-e-Kashtkaran Khyber Pakhtunkhwa, was quoted as saying that tobacco contributed to the federal exchequer more than Rs114 billion a year in sales tax and federal excise duty (FED).
However, he said that while tobacco growing could provide a good income, tax increases had made it almost impossible for poor farmers to continue with tobacco cultivation.
Niamatullah added that the government had imposed FED of Rs10.00, an advance withholding tax of Rs8.80, a federal government cess of Rs3.67, and a provincial excise cess of Rs5.00 on each kg of leaf tobacco.
All these taxes were deducted by tobacco companies from the prices paid to growers.
“This was the reason that in 2017 there was no competition in the market and tobacco prices were even below the production cost,” he said.
“The government allowed the companies to bring down prices of cigarettes and this was reason the farmers didn’t get a good price which resulted in billions of rupees loss to them, besides reduction in price of third slab’s cigarettes,” he added.
Niamatullah demanded that the five percent advance withholding tax, the FED on tobacco leaf of Rs10.00 per kg and the federal government cess of Rs3.67 per kg on leaf tobacco be included in the federal excise duty on cigarette production.
He said that tobacco farmers in Swabi, Mardan, Charsadda, Nowshera, Buner, Swat and Mansehra had been suffering due to the apathy of the government.
Either the government met their demands, he added, or else they would start agitation all over the province.Labor issues won’t go away
The tobacco industry is being challenged over claims that it is committed to the future of tobacco-growing communities.
In a piece in the Manila Times, Tih Ntiabang, the Framework Convention Alliance’s regional co-ordinator for Africa, said that last week the International Labor Organization’s (ILO) governing body had ‘postponed yet again a decision to stop accepting money from the tobacco industry for its projects to end child labor in the tobacco growing sector’.
‘A majority of countries and workers in the governing body want to finally break financial ties with the tobacco industry,’ he said. ‘However, there is still opposition from the employers group and a few countries, mostly in the African region.’
Later in his piece, he said that ending child labor in tobacco growing could be achieved without accepting money from the tobacco industry. ‘The ILO governing body should embrace the proposed integrated strategy which would mobilize international development partners instead of relying mainly on funds from an industry whose products kill seven million people each year,’ he said.
‘Last week, more than 200 public health and sustainable development organizations called on the ILO’s governing body to institute “the strongest possible policies to prohibit co-operation and public-private partnerships with the tobacco industry”.
‘While the ILO governing body keeps deferring its decision, the tobacco industry and organizations it funds are ramping up publicity that they are committed to the future of tobacco growing communities. The reality is rather different.
‘The ILO partnerships with the tobacco industry provide limited results, which do not address the root causes of child labor. Tobacco farm workers remain trapped in labor exploitation, poverty and illness despite the claims of the industry, which benefits the most from an extremely harmful but highly profitable business.’
Tih’s piece is at: http://www.manilatimes.net/ilo-fails-to-cut-ties-with-tobacco-industry-yet-again/388402/More labor issues coming
In a report scheduled to be made public on April 5 in Harare, Zimbabwe, Human Rights Watch (HRW) is expected to highlight ‘abusive practices such as hazardous child labor and the exposure of insufficiently-informed tobacco farmers and workers to nicotine poisoning,’ according to a story in New Zimbabwe relayed by the TMA.
HRW is an international non-governmental organization that conducts research and advocacy on human rights.
It reportedly told New Zimbabwe that families involved in tobacco cultivation were vulnerable to nicotine poisoning and abuse, adding ‘[o]ur research revealed an industry fuelled by impoverished small-scale farmers and vulnerable workers – including young child workers – who need greater protection from Zimbabwean authorities and tobacco companies’.
The report, authored by Margaret Wurth, HRW researcher in the Children’s Rights Division, found that adults and children who were interviewed reported symptoms consistent with nicotine poisoning such as nausea, vomiting, headaches and dizziness.
And it found evidence of ‘excessive working hours without overtime compensation on large-scale farms, and problems with wages, including having their wages withheld or delayed, and or being paid less than they were owed’.Good prices predicted
Tobacco growers in Malawi are being told to expect good prices for their leaf because production is thought to be well down on demand, according to a story in The Maravi Post.
After its second tobacco assessment, the Tobacco Control Commission (TCC) has put the country’s all-types tobacco production at 147. 8 million kg down by almost 14 percent on buyers’ requirements of 171 million kg.
The smaller-than-targeted crop has come about because of prolonged dry spells that affected some districts in the southern and central regions.
The TCC is optimistic that the smaller crop might attract high prices.
The marketing seasons is due to open on April 9 in Lilongwe, on April 11 in Chinkhoma, on April 16 in Limbe, and on April 23 in Mzuzu.Zimbabwe’s sales open
Zimbabwe’s 2018 flue-cured-tobacco marketing-season started on a ‘high note’ with the opening price of US$4.99 per kg about 8.5 percent higher than that of the previous year, according to a story in the Daily News.
However, the average price on the first day of sales, at US$2.22 per kg, was less than one percent up on that of the previous season, US$2.20 per kg.
During the whole of the 2017 selling season, the average grower price for flue-cured in Zimbabwe, at US$2.96 per kg, was lower than it was in 2009, US$2.98 per kg.
In 1996, the average price was US$2.94 per kg; so, in 21 years, the price rose by 0.6 percent.
The lowest price on the first day of this year’s sales was US$0.30 per kg.
The sales volume on the first day, at 156,000 kg, was down on that of the first day of the 2017 season, 192,000 kg.Flue-cured market opens
Zimbabwe’s flue-cured-tobacco growers were said to be in upbeat mood ahead of the opening of the 2018 sales season, but history is not on their side.
The average grower price for flue-cured in Zimbabwe in 2016, at US$2.95 per kg, was lower than it was in 2009, US$2.98 per kg. Last year, the average price was thought to have been about US$2.96 per kg.
In only two of the seven years from 2009 to 2015 was the price lower than it was in 2016: in 2010, when it was US$2.88 per kg, and in 2009, when it was US$2.73 per kg.
In 1996, the average price was US$2.94 per kg.
According to a story in The Chronicle, Zimbabwe’s flue-cured-tobacco auctions were due to open today, while contract sales are scheduled to begin tomorrow.
Zimbabwe National Farmers Union director, Edward Dune, was quoted as saying that tobacco farmers were upbeat in terms of their expectations.
“We are expecting better prices and hopefully the Reserve Bank of Zimbabwe will pay part of our money in foreign currency,” he said
Dune urged farmers to send their crop estimates on time and book before delivering their crop for sale to avoid congestion at the floors.
“We also welcome the decentralization efforts by some contractors,” he said. “We hear that there are floors that will be operating in Rusape, Karoi and Mvurwi.
“This will definitely go a long way in reducing our production costs and ultimately also reduce congestion at the centralized floors.”Cultivation ban opposed
The government of Sri Lanka has been urged to withdraw a proposed ban on tobacco cultivation in the country, according to a story in The Colombo Gazette.
The All Ceylon Cigarette Tobacco Barn Owners’ Association said that since 2015, the Presidential Task Force (PTF) on Drug Prevention had recommended ‘unreasonable restrictions’ on tobacco cultivation, such as the prohibition of using even barren marginal paddy lands for such production.
In a letter to the President, the association said that despite tobacco farmers being the key drivers of national and rural economic growth, they were not consulted before such adverse recommendations were made.
‘Tobacco is a cash crop which was introduced to farmers by the Sri Lankan government in the 1950’s and fully supported by successive governments until very recently,’ the association said. ‘Under the patronage of previous governments, tobacco cultivation has been an integral part of the agriculture communities spanning around 80 years and three farmer generations.’
It said that while the proposed ban on tobacco production was understood as being driven by a World Health Organization agenda, it was clearly not the solution for the smoking problem in society.
The association urged the government to continue to allow tobacco production until an alternative crop that matched tobacco in economic value was introduced to farmers.Tobacco abandoned
Farmers in Tanzania’s Ruvuma Region have significantly improved their livelihoods and health after abandoning tobacco in favor of more profitable crops, according to a story in The Daily News.
Tobacco was said to have trapped the farmers in a vicious cycle of poverty and to have increased deforestation.
The Executive Officer of the Tanzania Tobacco Control Forum, Lutgard Kagaruki, said that more than 70 percent of tobacco growers had abandoned the crop in favor of alternatives such as maize, paddy and legumes, which had proved to surpass tobacco in respect of the total net profit and rates of return they engendered.
Kagaruki said data from Namtumbo District Council indicated that between 2006 and 2014 there had been increased tonnage of both food and cash crops, though a decrease in tobacco production.
Tobacco production had increased by 587 percent from 2006 to 2009 but had dropped by 491 percent between 2010 and 2014.
The News story said there had been considerable debate in recent years about the social, environmental and economic impact of tobacco growing. While Tanzania remained a poor country, it said, tobacco growers were ‘worse off’.
At the same time, the country was losing more than 61,000 ha of forest annually because of tobacco growing and curing.
Despite tobacco’s being a vital foreign currency earner, most local growers of the crop were languishing in abject poverty with nothing tangible to show for their hard work.
