Tobacco Farmers Switch Crops In Face of Anti-Smoking Laws

KOH PRALONG, Kampong Cham province – New anti-smoking legislation may knock out tobacco as a cash crop in Cambodia.

Only a few years ago, tobacco was the king of the cash crops for farmers in central and eastern Cambodia. But cheaper imports and rising input costs steadily pushed down production. Now, many farmers here are switching to other crops, mainly corn, hoping for better margins and promised government subsidies.

“Next year, maybe everyone will stop,” said Then Koung, 67, the village chief here. He, too, used to grow tobacco. He plans to switch to corn next year, and he says most of his neighbors will follow suit.

The Farmers Balk

On a hot morning on Koh Paen island in the middle of the Mekong River, Kha Sat Eam, 64, harvests the crop he planted in November. His hands are stained black with tar, the same stuff that accumulates inside people’s lungs, contributing to 11,000 tobacco-related deaths in Cambodia, according to the World Health Organization.

“People smoked it, so we grew it,” he said. “In the past, no other crop could earn as much as tobacco. But the younger generation isn’t smoking anymore.”

He said that if the anti-smoking law passes, he will switch to corn. The new law would ban smoking in bars and restaurants.

A neighbor, Hay Phal, 56, echoed these concerns. He said his once tidy profit steadily eroded over the last four years, plunging especially hard from 2013 to 2014.

One kilogram of tobacco used to net him $3.  Now, it gets him only $1.5. This season, he expects to forego thousands of dollars on expected earnings from a harvest of 6 to 7 tons.

“People will stop growing tobacco based on the market, regardless of the law,” said Mr. Phal. “Next year, I will stop.
According to Mr. Phal and Mr. Koung, 150 families used to grow tobacco in the villages on their island. Now, that number has fallen to 10.

Cambodia’s Industry

According to the Ministry of Commerce’s Trade Promotion department, the country produces about 13,116 tons of tobacco per year, from 8,744 hectares. Much of the tobacco is sold to other countries, mainly Vietnam, according to Thourn Sinan, chairman of B2B Cambodia Group Co Ltd, which distributes goods.

Less than 5,000 tons is sold inside the country, said Mr. Sinan. Cambodians spend over $100 million on tobacco products. 

Mr. Sinan said that almost all of Cambodia’s tobacco comes from Kampong Cham, Thbong Khmum and Kratie provinces, along the Mekong. This climate is also favorable for corn, another major regional crop. 

The trade promotion department says that a network of 800 families produce tobacco for the Cambodian branch of the British American Tobacco company, a major exporter and distributor.

Mr. Phal, who sells to BAT, said he heard that some British shareholders associated with the company recently decided to pull out of Cambodia’s market. BAT’s press department did not immediately respond to requests for comment.

Unfriendly Markets

Mr. Koung said tobacco’s margins started falling over four years ago, and then accelerated recently. He and Mr. Phal attribute the decline in tobacco prices to the international push to cut smoking, spearheaded by the WHO and national health ministries.

At the same time, Cambodia’s growing GDP leads to higher labor prices, requiring higher input costs. Tobacco is a labor-intensive crop, requiring quick harvesting, drying and curing. Any delay in the process may result in an inferior product.

“Tobacco is a lot of work,” said Mr. Koung, the village chief here. “Hiring a laborer for a few hours costs 20,000 riel. With corn, all I need is my family.”

B2B Cambodia’s Mr. Sinan said that the spread of electronic cigarettes in the U.S. and Asia is further cutting demand. Finally, he said, greater taxes on tobacco and restrictions on its sales turn people off from buying cigarettes.

Similar restrictions are expected to become law next month in Cambodia. According to WHO polling, 90 percent of Cambodians support the new draft legislation which would restrict cigarette sales to minors, ban smoking in restaurants, raise taxes on cigarettes and require large graphic warning labels on cigarette packs.

Though corn historically has brought in less than tobacco, farmers in Kampong Cham hope demand for corn will remain steady, ensuring a stable income. They are also excited about Prime Minister Hun Sen’s promise to provide subsidies to farmers who switch to other crops.

“A subsidy would be the best move for the people,” said Mr. Phal, one of the farmers here who says he is growing his last tobacco crop.