In a strategic move to secure the raw material for cigarettes, British American Tobacco (BAT) Kenya has increased its spending on a kilogram of tobacco to nearly Sh200. This decision comes in response to the sustained decline in the number of contracted farmers, which has put pressure on the company’s tobacco supply.
BAT Kenya, faced with a dwindling pool of contracted farmers, has implemented a bold strategy to maintain its tobacco production. Despite the challenges posed by shifting agricultural practices and declining farmer numbers, the company is committed to sustaining its raw material supply.
The Numbers
The latest disclosures reveal that BAT raised the pay per kilogramme by five percent, reaching Sh198.75 in the financial year ending December 2023 (compared to Sh189.2 the previous year). This increase in payment per kilogramme reflects the company’s determination to support its contracted farmers even as their numbers decline.
Farmer Exodus
Over the past decade, the number of contracted farmers has plummeted from more than 5,700 to below 2,000. Many of these farmers, primarily from western Kenya, have transitioned away from tobacco leaf farming. Projects supported by anti-tobacco advocates have encouraged them to explore alternative high-yielding crops like beans and maize.
BAT’s Response
BAT has taken several measures to address this decline:
- Free Seedlings and Fertilizer: The company offers free tobacco seedlings and fertilizers to farmers.
- Crop Diversification: To supplement their income, farmers receive free or subsidized maize and avocado seeds, promoting crop diversification without abandoning tobacco.
- Personal Protective Equipment: BAT ensures that farmers have the necessary protective gear.
Impact on Payout
Despite the rise in payout per kilo, BAT closed last year with only 1,672 farmers—a 19.7 percent drop from the previous year. The total payout to farmers in 2023 was Sh954 million, marking the second consecutive year that the payout fell below Sh1 billion. The reduced number of farmers has significantly impacted the overall tobacco leaf delivered to BAT.
Looking Ahead
BAT’s commitment to retaining farmers and securing its tobacco supply remains unwavering. As the company navigates the changing landscape of agriculture, it continues to explore innovative ways to support its contracted farmers.
Maria Garcia is an award-winning author who excels in creating engaging cannabis-centric articles that captivate audiences. Her versatile writing style allows her to cover a wide range of topics within the cannabis space, from advocacy and social justice to product reviews and lifestyle features. Maria’s dedication to promoting education and awareness about cannabis shines through in her thoughtfully curated content that resonates with both seasoned enthusiasts and newcomers alike.
