Tobacco: sustainable agribusiness

The product ranks second in Brazilian agribusiness exports 

Brazil is the second largest producer of tobacco in the world and leader in exports. Nowadays the crop is cultivated in 640 municipalities in South Brazil, involving more than 185 thousand families in the rural setting and creating 30 thousand direct jobs in the processing industries. According to data from the 2012/13 crop, the 332 thousand hectares planted to tobacco resulted into a crop of 706 thousand tons – of which, 50% were produced in Rio Grande do Sul, 30% in Santa Catarina  and 20% in Paraná. Afubra – the Tobacco Growers’ Association of Brazil – estimates at R$ 5.3 billion the income the growers derived from the crop.

To represent the common interests of the tobacco companies, the Tobacco Industry Union (now SindiTabaco) was founded in Santa Cruz do Sul, in 1947. It is an entity that represents the tobacco agribusiness before federal, state, municipal, juridical and international organs. Its main task is to ensure the sector’s sustainability status. In addition, it acts in negotiations and agreements with representatives of the tobacco industry employees in the southern states.

The entity comprises 15 affiliated companies: Alliance One Brasil Exportadora de Tabacos Ltda., ATC – Associated Tobacco Company (Brasil) Ltda., Brasfumo Indústria Brasileira de Fumos S/A, China Brasil Tabacos Exportadora S.A., CTA – Continental Tobaccos Alliance S.A., Industrial Boettcher de Tabacos Ltda., Intab – Indústria de Tabacos e Agropecuária Ltda., JTI Kannenberg Comércio de Tabacos do Brasil Ltda., JTI Processadora de Tabaco do Brasil Ltda., Philip Morris Brasil Indústria e Comércio Ltda., Premium Tabacos do Brasil Ltda., Souza Cruz S.A., Tabacos Marasca Ltda., Tabacos Novo Horizonte Ltda, Unifumo Brasil Ltda., e Universal Leaf Tabacos Ltda.

Grower Profile – Tobacco in Brazil is basically grown on small family farms, 16.1 hectares on average, of which, only 16.5% are devoted to tobacco. In spite of the small planted area, the crop represents 64% of the income earned by the families (data from the Tobacco Growers’ Association of Brazil – Afubra). The remaining hectares are for subsistence crops, livestock operations, pastureland, ponds and forest stands.

Aware of this profile, for decades the processing companies have been encouraging the growers to diversify into other activities, so that they do not depend exclusively on tobacco. Through parallel activities, the growers reduce their costs on food for the family and livestock reared on the farm, and boost their income selling the surpluses. It is a manner to improve the quality of life of these families, urging them to stay in the rural setting, thus curbing the rural-urban drift.

Integrated Production System

For more than 90 years, the Integrated Tobacco Production System (ITPS), an agreement between the growers and the processing companies, is the foundation for this crop in the country. The system has set an example now being followed by other countries, too. The success of the system resulted into the significant figures of the sector: 70 thousand rural families joined the activity over the past 20 years and now are part of a group of 160 thousand.

The integrated growers derive numerous advantages from the system, ranging from the purchase of the entire contracted crop, technical and financial assistance and transportation of the crop from farm gate to the company. For the companies, the benefits include appropriate planning, in accordance with the volumes needed and market perspectives, assurance of product quality and integrity. The following are the most significant items of the ITPS:

Crop Planning - The companies define the volume to be produced according to their processing capacity and sales perspectives, based on domestic and international market analyses. Later, company and producer sign a leaf tobacco purchase and sales contract for the coming crop.

Total contracted crop purchase assurance – The companies are under obligation to acquire the entire contracted and actual crop from the integrated growers. They also bear the transport expenses to the processing facilities.

Cost survey and price negotiation – The production cost surveys are conducted jointly with the companies and grower representative organs. The price is in turn negotiated directly between the companies and grower representatives.

Technical and financial assistance – The industries are constantly doing research on varieties, best cultural practices and inputs to be utilized in production. This is the basis for the technical assistance given to the growers during all the stages of the crop. The companies also make it easy for the farmers to get rural credit loans from the banks, and co-sign these operations.

The use of high quality inputs – All seed is registered and certified, and is subject to client approval. The fertilizers are based on tested formulations appropriate for tobacco farming. All agrochemicals require client approval and are registered in the Ministry of Agriculture.

The Environment

Over the years, the tobacco processing companies have invested heavily in practices and projects intended to preserve the environment and provide grower safety. Other constant concerns include research work, the development of safe and efficient technologies with the target to gradually reduce the use of chemical products, particularly agrochemicals. Only 1.1 kg of active ingredient is used per hectare. This specific aspect inserts the tobacco farms in Brazilamong the crops that least resort to agrochemicals.

The sector is also very active when it comes to empty chemical packaging. In Rio Grande do Sul and Santa Catarina, the companies are running the Empty Chemical Packaging Return Program, which collects triple rinsed packaging in more than 2.600 municipalities where tobacco is grown. In the state of Paraná, similar initiatives are getting support from local industries.

Other permanent initiatives run by the companies are the chemical residue analyses of the areas planted to tobacco, including directives as to handling, correct use of agrochemicals, soil management, conservation of water resources and constant incentive to reforestation moves and environment preservation.

Social responsibility
The Growing Up Right Program, an effort of SindiTabaco, associated companies and the Tobacco Growers’ Association of Brazil (Afubra), are aimed at preventing children and adolescents from working on tobacco farms, raising awareness among society and integrated growers, insisting on the need for the growers’ children to attend educational institutions, whilst the young should engage in capacity building programs through social projects, at educational and leisure levels. The Growing Up Right Program is intended to contribute towards complying with Brazilian legislation, seeking to be a reference, in sustainable manner, in preventing child and adolescent labor on tobacco farms. Furthermore, it is a reflection of the commitment signed in 1998, when the Future Is Now! program, a pioneer in the sector, was launched.

Contact with Press:

Andreoli MSL Brasil
Eliana Stülp – – (51) 3713-1777 / (51) 9708-5539
Leandro Bornacki – – (11) 3169-9359

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