ITGA
The World Tobacco Growers' Day (WTGD), an event promoted by the International Tobacco Growers' Association (ITGA) since 2012, was celebrated on October 28. This year, the event was marked by initiatives carried out throughout the month of October by ITGA member associations together with different United Nation agencies and governments of tobacco-growing countries with the goal of promoting a consistent and comprehensive diversification agenda in their home countries.
Initiatives started the first week of October on the occasion of the Eighth Conference of the Parties (COP8) to the WHO Framework Convention on Tobacco Control (FCTC). Delegates of ITGA member associations from different countries traveled to Geneva with a full schedule of meetings with leading UN agencies, such as the FAO, ILO, and the World Bank, among others. Growers also met with their respective countries' ambassadors to Geneva. These meetings sought to convey growers' and their communities' concerns about the lack of realism on which the main assumptions of FCTC are based when proposing solutions to issues related to diversification in the sector. ITGA’s president, Daniel Green, thinks that these conversations should have taken place 10 years ago when the convention started discussing issues related to tobacco growing. The conclusions of this COP8 left real evidence of the lack of progress on articles more related with growers and of utmost importance to them, as is the case of article 17 of the treaty. According to FCTC’s own statistics (1), article 17 (alternative livelihoods to tobacco growers) is the least implemented of the treaty and Green considers this a failure due the lack of inclusiveness of the convention. Green regards the meetings with UN agencies in Geneva as a very positive sign: “Now ITGA is working on a follow-up plan with pragmatic objectives to be taken at the regional level because we cannot miss this opportunity to help growers depend less on tobacco given the fall in demand.”
As a result of these meetings, ITGA plans to provide national growers' associations with the necessary tools for this dialogue initiated in Geneva to be translated and adapted to their specific domestic fronts and conditions.
ITGA insists on the imperative need of a well-articulated strategy for countries like Zimbabwe and Malawi where the subject of diversification is as urgent and complex given the high dependency of these countries and their economies on the income provided by tobacco (2). The issue of diversification has to be seen from a macro-economic perspective because we are talking about changing whole agro-economic structures in these countries and not only switching from one crop to another as FCTC puts it.
One week after the COP8, ITGA held its 33rd annual general meeting, a yearly event that brings together delegates of growers' associations and cooperatives from different countries around the world, as well as expert speakers on different subjects of interest for the sector. The AGM was held in one of the world's tobacco capitals - Santa Cruz do Sul, Brazil. It revolved around sustainability, highlighting social and environmental responsibility as the means to achieve such sustainability.
Among market prospects discussed at the meeting, the most alarming one was the trend mentioned by Shane MacGuill from Euromonitor International, who put cigarette consumption decline at 28% until 2020 in the best-case scenario and at 39% in the worst-case scenario. One of the main contributing factors to this forecast is the growth of the so-called new generation products, which could reach 64 million consumers by 2022, in particular, "heat-not-burn" (HNB) devices, which could reach a market value of US$35 billion by said year. According to MacGuill, other challenges facing the sector are regulations, which will certainly increase in the coming years.
About the market, António Abrunhosa, ITGA c.e.o., also pointed out increased production in countries such as Zimbabwe and Malawi (3). This production increase is the result of the lack of economically viable alternative crops in said countries and could destabilize the world market, which faces growing supply in the face of declining demand at varying rates, according to different forecasts. One of the explanations for this, according to Abrunhosa, is that many buyers refuse to reduce their annual contracting levels with the growers.
Statements made by Philip Morris (PMI) regarding the implementation of its HNB products, which contain almost half of the quantity of tobacco needed in a conventional cigarette, has rung many bells in the tobacco sector. Moreover, the Foundation for a Smoke Free World, funded by PMI supporting diversification in the sector, has settled its priorities in Malawi where a conference on diversification will take place next December.
Growers are the weakest link in the tobacco value chain and the ones to be left with no alternatives if the market trends are confirmed or get even worse. This is not a far-away future anymore. Companies are developing products closer to substitutes to traditional tobacco products but more and more distant from growers. FCTC continues with the same line of implementation of the treaty, insisting on ways to carry on with this never-ending phase that was never translated into practical assistance to growers. However, growers are subject to an ever-increasing number of challenges that involve new market requirements and changes forcing them to make bigger investments every year without getting better prices for it. ITGA witnesses every year the effort made by growers around the world to try to fit into this loop, but at the same time, we also witness the lack of consistency from the demand side denying the growers a future in which they can live with dignity.
- FCTC graphic on articles implementation http://www.who.int/fctc/reporting/WHO-FCTC-2018_global_progress_report.pdf
- Tobacco represents 60% of Malawi total exports and in Zimbabwe tobacco is the most valuable crop accounting for more than 30% of foreign currency (World Bank, Tobacco Association of Malawi, TAMA and Tobacco Association of Zimbabwe, ZTA)
- Malawi burley production 2018= 164,000 million kg (m.kg) vs 2017= 81,447m.kg. Zimbabwe Virginia production 2018= 247,000m.kg vs 2017= 187,000m.kg. (Tobacco Association of Malawi, TAMA, and Tobacco Association of Zimbabwe, ZTA)