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Tag: Brazil

  • Meeting Fails to Ease Growers’ COP Fears

    Meeting Fails to Ease Growers’ COP Fears

    Photo: SindiTabaco

    Tobacco growers representatives are unlikely to be admitted to the November meeting of the Conference of the Parties (COP10) to the Framework Convention on Tobacco Control (FCTC) in Panama, according to Vera Luiza da Costa e Silva, who leads Brazil’s National Commission on the Implementation of the FCTC.

    Speaking during a round table in Brasília promoted by the House of Representatives. Costa e Silva said the COP has a strict policy of denying access to those who have a conflict of interest. “The secretariat, based at the WHO headquarters, has the credentials to deny participation if some kind of relationship with the industry is at stake,” she explained.

    Costa e Silva also insisted that the FCTC does not mention actions that will directly impact the supply chain, but industry representatives participating in the Brasilia meeting weren’t buying it. “Today were told […] that there has never been any attempt to endanger the production of tobacco, but we know that this is not true,” said Iro Schunke, president of the Interstate Tobacco Industry Union, in a statement.

    He pointed to actions in what he described as a methodical battle against the production of tobacco in Brazil. “They accuse the sector of deforestation, but it is the segment that has the biggest forest areas,” said Schunke. He also countered allegations of tobacco farmer vulnerability, pointing to recent research suggesting that tobacco farmers earn up to twice the national average income.  

    Despite concerns about global demand, Brazilian tobacco production and exports have been stable, Schunke noted. Farmers in southern Brazil have planted enough tobacco to harvest 604.73 million kg in 2023—7.95 percent more than in 2022, according to the country’s tobacco growers’ association, Afubra.

  • Survey: Tobacco Grower Relatively Wealthy

    Survey: Tobacco Grower Relatively Wealthy

    Photo: Taco Tuinstra

    Tobacco farmers in southern Brazil earn an average monthly income of BRL3,935.40 ($785.08) from their crops, according to new research conducted by the Federal University of Rio Grande do Sul at the request of the Interstate Tobacco Industry Union (SindiTabaco).

    By comparison, the average per capita income in Brazil was BRL1,625 in 2022, according to the Brazilian Institute of Geography and Statistics. Taking into account all sources of income, the tobacco farmers in southern Brazil earn an average monthly income of BRL11,755.30. Seventy-three percent of tobacco farmers in the region have additional income sources, which may include earnings from the cultivation of other crops, land leases or financial investments.

    Nearly 73 percent of the tobacco farmers live in masonry houses; nearly 72 percent have three or more bedrooms per household; and all households have at least one bathroom or toilet, according to the study. Almost all households (98.6 percent) have access to electrical energy, via national power grid, while practically 100 percent have heated water.

    The results come as no surprise to those who know the tobacco sector, but they could come as a surprise to those who still believe in information based on ideology.

    Iro Schuenke, president, SindiTabaco

    One hundred percent of the tobacco farmers surveyed had an automobile, while 137 percent owned a property in addition to their home.

    Nearly 60 percent of those surveyed have more than eight years of schooling, meaning they have competed their elementary education, or more; among them, 32.2 percent have more than 11 years of schooling, corresponding to high school, and some have taken college courses.

    Conducted June 30-July 20, 2023, the survey covered 37 municipalities in the tobacco growing states of Rio Grande do Sul, Santa Catarina and Parana.

    According to SindiTabaco President Iro Schuenke, the results reaffirm the economic and social importance of tobacco in rural areas. “At several moments we have heard that the tobacco farmers endure vulnerability conditions, but the research destroys this tale,” he said in a statement. “Just like in 2016 [when the previous survey took place], the results come as no surprise to those who know the tobacco sector, but they could come as a surprise to those who still believe in information based on ideology,” Schuenke said.

  • Brazilian Stakeholders Speak Up for Tobacco

    Brazilian Stakeholders Speak Up for Tobacco

    Photo: SindiTabaco

    Industry representatives stressed the importance of considering tobacco growers viewpoints in the tenth Conference of the Parties (COP10) to the Framework Convention on Tobacco Control (FCTC), which is scheduled to take place Nov. 20-25 in Panama City.

    During a panel discussion at the Expointer 2023 agricultural and livestock exposition in Esteio, Rio Grande do Sul, which concluded Sept 3, experts highlighted the economic significance of the tobacco industry to Brazil in general and the country’s southern provinces in particular.

    “We have almost 600,000 people living directly from the crop,” said Marcilio Drescher, president  of the Brazilian Tobacco Growers Association, Afubra, according to a SindiFumo report.

    “On average, 51 percent of our income comes from tobacco and is supplemented by diversification. The average property is 10.5 hectares. Farmers support their families on this small area of land and use an average of just 3.29 hectares for tobacco. A small area under tobacco provides an excellent income combined with diversification. In the last harvest, the farmer’s gross income reached BRL88,000 [$17,859] per capita per family, on average, and there’s also the income from diversification,” he said.

    The topic of diversification is likely to feature prominently during the COP discussion, given that the FCTC encourages countries to move tobacco farmers into other crops. While supporting agricultural diversification, participants in the Expointer panel discussion lamented the exclusion from the discussions of those most impacted by COP decisions. “We cannot have a discussion on producer diversification without involving the primary stakeholders,” said one panelist.

    Rio Grande do Sul’s secretary for economic development, Ernani Polo, stressed his government’s commitment to protecting the tobacco sector.  “We know that the industries and the sector are working hard to diversify, but tobacco production is still what keeps producers in the countryside,” he said.

    The event was also attended by Iro Schunke, president of the Interstate Tobacco Industry Union; Vinicius Pegoraro, the president of the Association of Tobacco Producing Municipalities; Giuseppe Lobo, executive manager of the Brazilian Tobacco Industry Association; and Gualter Batista Júnior, the president of the Federation of Tobacco Industry Workers and the Santa Cruz do Sul and Region Tobacco and Food Industry Workers Union.

  • Top Court Poised to Rebuff Land Claim Cutoff Date

    Top Court Poised to Rebuff Land Claim Cutoff Date

    Photo: alexlmx

    Brazil’s Supreme Court is likely to rule against attempts by the country’s farm lobby to limit land claims by indigenous peoples to areas they occupied before 1988, according to Reuters.

    The case stems from a dispute in Santa Catarina state where the government rejected a land claim by the Xokleng people, who were evicted by tobacco farmers from what was their ancestral land.

    Congress has pushed ahead with bills allowing indigenous reservations only on land that was occupied by native communities when Brazil passed its constitution in 1988. The lower house passed a bill last month and its backers want the Senate to follow suit before the Supreme Court rules on the issue.

    On Aug. 31, Justice Cristiano Zanin cast a crucial vote that all but ensures the 1988 cut-off date will be rejected by the court. Zanin said indigenous communities that were not present on their lands in 1988 may have been forced to leave.

  • Court Poised to Rebuff Land Claim Cutoff

    Court Poised to Rebuff Land Claim Cutoff

    Photo: alexlmx

    Brazil’s Supreme Court is likely to rule against attempts by the country’s farm lobby to limit land claims by indigenous peoples to areas they occupied before 1988, according to Reuters.

    The case stems from a dispute in Santa Catarina state where the government rejected a land claim by the Xokleng people, who were evicted by tobacco farmers from what was their ancestral land.

    Congress has pushed ahead with bills allowing indigenous reservations only on land that was occupied by native communities when Brazil passed its constitution in 1988. The lower house passed a bill last month and its backers want the Senate to follow suit before the Supreme Court rules on the issue.

    On Aug. 31, Justice Cristiano Zanin cast a crucial vote that all but ensures the 1988 cut-off date will be rejected by the court. Zanin said indigenous communities that were not present on their lands in 1988 may have been forced to leave.

  • Brazil: Most of Crop Already Planted

    Brazil: Most of Crop Already Planted

    Image: Tobacco Reporter archive

    Brazil’s tobacco crop for the 2023/2024 season is mostly planted already, according to Kohltrade.

    Transplanting began earlier this year than in previous years and is being finalized in most of the southern Brazil properties. Farmers are hoping to avoid excessive summer heat and to grow more quality leaf. 

    Traditionally, the majority of planting took place in August. Recently, however, farmers have been planting early to harvest earlier to avoid issues created by lack of rain and excessive heat, which have been constant in recent seasons.

    The Department of Mutuality of the Brazilian Tobacco Growers Association stated that recurring droughts have forced farmers to start their work earlier in the season. Planting early has risks as well, though, with the potential for some of the plants to die after a winter frost.

  • Brazil Ag Minister Asked for Support Prior to COP

    Brazil Ag Minister Asked for Support Prior to COP

    Photo: Taco Tuinstra

    Tobacco supply chain representatives met with the Brazilian minister of agriculture, Carlos Favaro, on July 12, to ask his support ahead of the upcoming 10th Conference of the Parties (COP10) to the World Health Organization’s Framework Convention on Tobacco Control (FCTC).

    “Brazil is the top exporter of tobacco worldwide and has occupied this position for 30 years now and is the second largest producer,” said Iro Schunke, president of the Interstate Tobacco Industry Union (SindiTabaco), in a statement.

    “For this leadership role, Brazil should be a protagonist in defending a crop that contributes decisively to the socioeconomic progress of several cities, especially in the south region of the country. Historically, the Ministry of Agriculture has been an ally of the productive sector within this context because it has a good grasp of the impacts of the directives coming from the FCTC could have on the thousands of people who derive their livelihood from this crop, which is processed and exported. This is the stance we again expect from the ministry.”

    Brazil should be a protagonist in defending a crop that contributes decisively to the socioeconomic progress.

    Iro Schunke, president, SindiTabaco

    The meeting was also attended by Benicio Albano Werner, the president of the Tobacco Growers’ Association of Brazil (Afubra); Giuseppe Lobo, executive director of the Brazilian Tobacco Industry Association (Abifumo); Guido Hoff, executive director of the Association of the Tobacco Growing Municipalities (AmproTabaco); Carlos Joel da Silva, president of FETAG-RS; Romeu Schneider, president of the Tobacco Sectoral Chamber; and Helena Hermany, mayor of Santa Cruz do Sul. 

    COP10 is scheduled to take place in November in Panama.

  • Brazilian Lawmakers Debate COP10

    Brazilian Lawmakers Debate COP10

    Photo: SindiTabaco

    Brazil’s House of Representatives held a public hearing June 15 to clarify the country’s position in the upcoming conference of the parties to the World Health Organization’s Framework Convention on Tobacco Control, which is scheduled to take place in Panama in November (COP10).

    The debate had been requested by federal deputy Alceu Moreira, who lamented the degree of “injustice, disinformation and ideologically oriented political correctness” he claimed to have witnessed in the runup to the conference.

    “We produce a licit crop; we are not committing a crime,” said Moreira. “We are proud of engaging in constructive debates with the aim to protect a licit crop and we refuse to be reprimanded for growing tobacco.”

    As one of the world’s largest exporters of leaf tobacco, Brazil could be heavily impacted by the decisions made at COP10. In the most recent season, the southern region of Brazil alone produced 560 million kg of tobacco, generating BRL9.5 billion ($1.98 billion) for 128,000 farm families.

    The public hearing was attended by representatives of the ministry of foreign affairs, the ministry of agriculture and livestock, and the ministry of agrarian development and family farming. The ministry of health declined to take part, saying that the debate was premature, given that the WHO had yet to publish an agenda for COP10.

    The tobacco industry was represented by the tobacco growers association Afubra and the interstate tobacco industry union SindiTabaco, among other organizations.

    SindiTabaco President Iro Schünke lamented the lack of transparency in the FCTC meetings. “The Framework Convention on Tobacco Control is the worst dictatorship I know, where the real interested parties are not allowed to take part in the debates,” he said.

    The tobacco industry, said Schünke, produces a licit crop that generates income and jobs for millions of Brazilians and is committed to sustainable production. “My intervention is to discover what stance the Brazilian delegation will adopt at the upcoming COP 10 meeting and warn about the consequences from a poorly conducted positioning at the COP,” he said in a statement.

  • Anticipating Growth

    Anticipating Growth

    Image courtesy of SindiTabaco

    Following last year’s record earnings, Brazil’s leaf tobacco sector expects a larger crop in 2023.

    By Marissa Dean

    As global markets ebb and flow with impacts of the Covid-19 pandemic, inflation and the Russia-Ukraine conflict, the tobacco sector has not been spared. Labor shortages, shipping issues and price inflation have all impacted tobacco growing and sales over the past few years. Through this, though, Brazil has come out in the positive in the last year and expects to see another good crop season in 2023.

    Increased Earnings

    Brazil’s 2022 tobacco leaf exports brought in the most earnings since 2014, when the country sold $2.3 billion worth of tobacco leaf internationally (see “The Way Forward,” Tobacco Reporter, February 2014). The $2.5 billion earned from leaf exports in 2022 reflected a 67.44 percent increase in value and a 25.93 percent increase in volume from 2021, with the negative impacts from the pandemic beginning to subside and logistical bottlenecks easing.  

    In 2021, Brazil exported 464,429 tons of tobacco leaf, amounting to $1.46 billion, according to the Interstate Tobacco Industry Union (SindiTabaco). In 2022, the country exported 584,861 tons of tobacco leaf, amounting to $2.45 billion.  

    The 2021/2022 crop fetched a price of brl17.02 ($3.28) per kilogram in southern Brazil versus brl10.54 per kilogram for the 2020/2021 crop, according to Afubra, the Tobacco Growers’ Association of Brazil.

    The majority of exports last year were headed to Europe, with Belgium accounting for 26 percent of shipments. China bought 19 percent of Brazil’s tobacco while the United States purchased 6.3 percent.

    While there were many factors that contributed to the substantial earnings last year, “The decisive factors that contributed to the higher-than-expected exports in 2022 were the 2021 unsold stocks, which were shipped abroad in early 2022, and the improvement to the shipping and container logistics in the second half of 2022,” said Iro Schunke, president of SindiTabaco.

    What’s to Come in 2023?

    Following the strong 2022 season, Brazil is expected to harvest a slightly larger crop this year. According to Afubra, the planted area in southern Brazil should yield an estimated 604,732 tons, 7.95 percent more than in 2022.

    To reach these estimates, the growers’ organization uses the number of plants registered in the entity’s Mutual System, by type of tobacco, according to Benicio Albano Werner, Afubra’s president. “To these numbers, we add the number of plants on properties that are not registered in the system,” he said. “It is considered also the percentage that producers planted above or below the quantities registered. These three factors give us the planted area.”

    “The Brazilian tobacco crop is expected to reach approximately 600,000 metric tons,” said Schunke. “The quality of the crop will be good enough to meet the requirements of the different clients.”  

    In the Rio Grande do Sul region, tobacco growers increased their planted area by 3.17 percent and production is estimated to be 3.8 percent higher. In Santa Catarina, planted area was increased by 10.22 percent and production is estimated to be 11.49 percent higher. In Parana, planted area was increased by 6.99 percent and production is estimated to be 10.93 percent higher.

    When asked about how the expected increase in crop size would affect 2023 sales and earnings, Schunke said, “The Brazilian tobacco crop has remained around 600,000 metric tons over the past five years, and the average shipments abroad over the same period have remained little above 500,000 metric tons. Therefore, the current crop fits into this context.”

    The increase in production area was expected, according to Werner. “The past crop was, for a large part of tobacco growers, very profitable, with high lucrativeness,” he said. “This encouraged some producers to increase their planted area.”

    Hurdles

    Globally, the past few years have been hard; beginning with the Covid-19 pandemic in 2020 and followed by supply chain issues, global labor shortages, global inflation and the conflict in Ukraine, many sectors have been impacted in some way. Tobacco farming is not exempt.

    Brazil’s tobacco industry is dominated by small-scale farming, with a total of 142,190 producers, the majority of whom are in southern Brazil (128,448) followed by the northeast (13,390) and a marginal amount located elsewhere in the country (352). The overall number of producers has decreased from the 2020/2021 season, which counted 151,388 producers.

    The Covid-19 pandemic exacerbated the problem of child labor around the world due to increases in poverty, school closures and labor shortages. The International Labor Organization and the United Nations Children’s Fund released a report showing that 160 million children and adolescents ages 5 to 17 were subjected to child labor in early 2020.

    The tobacco industry in Brazil has made considerable headway in addressing the problem. The Growing Up Right Institute, which focuses on eliminating child labor, is an initiative of SindiTabaco and its associated companies, supported by Afubra, helping to keep teenagers and children of tobacco farmers out of the tobacco fields. Companies associated with the institute hire young apprentices and pay them a salary equal to 20 hours a week to attend a rural management and entrepreneurship course after regular school hours.

    In July 2022, the Growing Up Right Institute held a seminar in Santa Cruz do Sul with associates and partners, discussing progress made in combatting child labor and the work that needs to be done going forward. “The institute was founded with the mission to fight child labor and generate opportunities for adolescents from the rural setting, especially in tobacco growing regions,” said Schunke, who is also president of the Growing Up Right Institute. “It is a complex task, but with good partnerships, we have achieved great results. We have already become known nationally and internationally for the innovative method of offering opportunities to adolescents from the countryside through the learning law.”

    Additionally, “The increase in [cost of] farm inputs, along with higher international freight costs, were responsible for pushing up the production costs of all agricultural crops, including tobacco,” said Schunke. While, based on last year’s earnings and expectations for this year, Brazil’s tobacco income seems well positioned, the industry will still have to fight against global inflation and the remaining supply chain issues.

    “It is worth emphasizing that Brazil has been the largest tobacco exporter for 30 years due to the quality and integrity of the crop whilst complying with ESG [environmental, social and governance] questions,” said Schunke. “It is important for the tobacco growers to continue in line with these principles, always acting in compliance with good agricultural practices.”

    A Rural Tradition

    Image courtesy of Palheiros Paulistinha

    Brazil is a prominent player in the global tobacco industry, known not only for its leaf tobacco but also for its cigarette manufacturers, including market leader BAT Brasil, which is perhaps better known as Souza Cruz. Within the larger commercial industry, however, lies a smaller, more rural niche of straw cigarette makers. 

    Palheiros Paulistinha is located in Bebedouro, Sao Paulo, Brazil, and specializes in the production of straw cigarettes, an artisanal product of Brazilian tobacco filler with a corn husk wrapper. The company was started in December 2004 with the aim of preserving the tradition of Brazilian straw cigarettes as well as adding value to the corn production process, making straw a high-scale raw material.

    Palheiros Paulistinha produces about 168 million cigarettes per year, with the possibility of expanding local production to 300 million cigarettes annually. The company offers seven product lines, including flavored and nonflavored products.

    Straw cigarettes are popular in the rural communities and among young adults, according to the company, partly because they lack chemical additives, with the exception of flavorings such as menthol. “We are experiencing a change of habits when it comes to tobacco customers in Brazil,” said Eduardo Pierini, export director of Palheiros Paulistinha. “While in the rest of the world, they are migrating to e-cigarettes and vapes, in Brazil, despite those products, they are more attracted to straw cigarettes because they are more natural and ‘stronger.’” This change has led to an increased market share for the company.

    Each cigarette is handmade by trained individuals who prep the tobacco and corn leaves, cut the leaves, sterilize them and roll the cigarettes. Because of the handmade aspect, these products are more expensive than traditional cigarettes; however, the lack of chemical additives and “lack of smell,” according to the company, make them very popular as a “natural” cigarette alternative.

    The company works with many small farms to procure corn husks “because the biggest suppliers sell the corn leaves to industries to produce animal feed,” according to Renata Grasseschi Dunck, export consultant for the company. They have eight suppliers, who buy corn leaves from different farms and from different states. The tobacco used in the cigarettes comes from Bahia in the northeast region of Brazil. Dunck went on to explain that Palheiros Paulistinha helps tobacco farmers buy “corn leaves for a higher value than the market. We also offer training, growth prospects, etc. [for the farmers].”

    There’s a big focus on community within the company—“We also work in the rehab of prisoners, offering to them the opportunity to have a job,” said Dunck. “The prisoners have a lot of benefits working,” added Pierini. Prisoners are paid, and the work they do shaves down their sentences; “So if you are condemned for nine years in prison, you would serve six years of [the] sentence,” said Pierini. “So it’s good for all the society.” The company has manufacturing set up in prison workshops and works with signed contracts, following all rules and requirements of regulating organizations. More than 3,000 inmates work for the company.

    While the company is looking to expand internationally, having recently registered with the U.S. Food and Drug Administration, Palheiros Paulistinha puts a lot of stock in sourcing locally and keeping the tradition in Brazilian straw cigarettes. –M.D.

    Marissa Dean joined Tobacco Reporter in the summer of 2018 as a copy editor. Since that time, she has taken on additional responsibilities, including feature writing. Her skills span the publishing industry from layout and design to copy editing to content creation.
  • Brazil Anticipates Larger Crop in 2023

    Brazil Anticipates Larger Crop in 2023

    Photo: Ronaldo Almeida

    Farmers in southern Brazil have planted enough tobacco to harvest 604.73 million kg in 2023—7.95 percent more than in 2022, reports Kohltrade, citing the country’s tobacco growers’ association, Afubra.

    In Rio Grande do Sul, the production estimate points to 256.73 million kg of tobacco, cultivated in an area of 117,675 hectares with a productivity of 2,182 kg per ha. Compared with the past crop, tobacco growers in the Rio Grande do Sul increased their area by 3.17 percent and production should be 3.8 percent higher, Afubra estimates. Average productivity during the 2021–2022 harvest was 2,168 kg per ha.

    In Santa Catarina, the projection is 191.55 million kg, produced in an area of 77,489 hectares with a productivity of 2,472 kg per ha. The planted area increased 10.22 percent from last year, and production is estimated to be 11.49 percent higher. Santa Catarina’s farmers average productivity was 2,444 kg per ha in the past season.

    In Parana, production should reach 156.46 million kg in an area of 66,576 hectares with an estimated productivity of 2,350 kg per ha. The producers of Parana increased their area under tobacco by 6.99 percent. Afubra estimated increased production will be up by 10.93 percent. Productivity in the past season was 2,267 kg per ha.

    Afubra President Benicio Albano Werner said the increase in the production area was expected. “The past crop was for a large part of tobacco growers very profitable,” he said. “This encouraged some producers to increase their planted area.”