Tobacco farming

How tobacco farmers earn ksh 300 as profit per acre

Tobacco farming in Kenya is not profitable and may never be in future. Most farmers end up making losses of up to Ksh. 1.113.02 per acre per year. This is according to a survey by the American Cancer Society and the Institute of Legislative Affairs.

The revenue generated by the tobacco market in Kenya is projected to be US$832.1m in 2024. The tobacco market is also expected to experience an annual growth rate of 1.90% (CAGR 2024-2028). The largest market segment is Cigarettes, estimated to have a market volume of US$ 73.3M in 2024.

Tobacco farming
Tobacco farming

Tobacco prices in Kenya

In fiscal year 2023, British American Tobacco BAT increased its per kilo price by 5% to KES 198.75. This is even as the cigarette manufacturer’s contracted farmers dropped to 1672 down nearly 20% from the previous fiscal year.

BAT Kenya partners with over 5000 tobacco farmers in the growing of high-quality leaf, mainly concentrated in the counties of Migori, Bungoma and Meru.

The survey was carried out on 585 smallholder tobacco farmers in the main tobacco-growing regions in Kenya.

According to the survey; contract farmers make an average profit of Ksh 22,084.61 per acre and 34,305.20 per acre for independent farmers.

Read: Feeding Kienyeji Chickens for Optimal Health and Productivity

Unfortunately, these profit perceptions are just an illusion because farmers do not account for the cost of labour they provide.

With labour included, contract farmers make an average loss of Ksh 1,113.02 per acre and a profit of Ksh 371.39 per acre.

Poor earnings and anti-tobacco sensitization have forced more farmers in Kenya to abandon tobacco farming.

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