Factors Influencing Farmers Turning into Tobacco Cultivation in the Khulna Division of Bangladesh

Background: Tobacco, along with traditional crops has been cultivating in the Khulna division of Bangladesh for few decades. Despite health and social costs, each year new farmers are also entering into tobacco cultivation though there is skipping trend also. The study attempted to identify factors responsible for turning farmers into tobacco cultivation.

Material: Primary data was collected from 285 tobacco farmers (190 contractual) and 174 traditional crop growers (TCGs) from Khulna division in 2015. A number of 157, 160 and 142 farmers were personally interviewed from Kushtia, Chuadanga and Jhenaidah districts respectively. Samples were selected through snowball sampling technique. Logistic regression (with marginal effect) was used.

Results: Regression result showed that nonguaranteed sale and price instability of TCGs dictated them to shift towards tobacco. Tobacco processing companies (TPCs) grabbed these limitations and offered counter-factual incentives towards tobacco. TPCs offered sales guarantee to 67 percent farmers even before production, while it was 0 percent for TCGs. Even non-contractual farmers‘ sale was secured. Input incentive was also statistically significant as TPCs offered inputs to contractual tobacco growers. One-time yield and zero consumption supported tobacco‘s sales-production ratio as 0.98. Despite high production cost, profit per unit land was also higher for tobacco. TPCs provided full cash immediately after sale where 83 percent TCGs sold in credit through middleman. Tobacco cultivated in neighbor‘s plot had statistically significant effect. Poor households and households having family labor had higher tendency to cultivate tobacco than otherwise. Annual average health of tobacco growing households was BDT 4,540 higher than that of TCGs. Social cost and education losses were also associated with tobacco cultivation.

Conclusions: The main factors behind turning into tobacco grower such as unstable price and volatility in sales guarantee along with input incentive in the traditional crops should be taken care by the authority.