2017年-世界发展银行全球_The_Economics_of_Tobacco_Farming_in_Indonesia_88页_1mb

Summary of "The Economics of Tobacco Farming in Indonesia"

Core Content

This report examines the economic viability and livelihood conditions of smallholder tobacco farmers in Indonesia, focusing on the potential impacts of tobacco excise tax reforms on these communities. It is based on a nationally representative survey of 1,350 current and former tobacco farming households across the largest tobacco-growing regions: Central Java, East Java, and West Nusa Tenggara. The study also includes focus group discussions (FGDs) to provide qualitative insights into farmers' experiences and decisions.

Main Findings

• Tobacco farming is not profitable for most farmers:

  • Most tobacco-farming households spend more on cultivation than they earn from it, even when excluding household labor.
  • Including household labor costs, profitability drops significantly.
  • Input costs for tobacco are higher than for most other crops.

• Limited capital and reliance on loans:

  • 53% of tobacco farmers reported needing loans to cultivate tobacco.
  • This indicates a lack of financial resources and the need for external support.

• High opportunity costs of tobacco farming:

  • Tobacco farmers spend disproportionately more time on tobacco cultivation compared to non-tobacco farmers.
  • Former tobacco farmers, who spend fewer hours in the fields, are more likely to engage in other economically productive activities.

• Widespread poverty among tobacco farmers:

  • 72.2% of tobacco farmers are poor, compared to 11.1% of the general population.
  • Most tobacco-farming households participate in social assistance programs, including the "rice for the poor" initiative.

• Food insecurity:

  • Over 60% of tobacco-farming households reported insufficient food at some point during the year.

• Health issues:

  • Tobacco farmers are more likely to suffer from Green Tobacco Sickness (GTS) compared to former farmers.
  • Many engage in child labor, including during school hours.

• Economic performance of former vs. current tobacco farmers:

  • Former tobacco farmers had higher average total incomes ($3,797.68) compared to current farmers ($2,921.19).
  • Former farmers are more likely to engage in non-agricultural enterprises and have lower non-labor costs.

• Factors influencing farmers' decisions:

  • Many farmers switch to other crops due to low tobacco prices, more viable alternatives, and favorable weather conditions.
  • Contract farmers are more willing to switch than independent farmers.
  • Farmers who experienced recent sickness are more likely to switch.

Key Information

• Tobacco farming in Indonesia:

  • Accounts for approximately 0.3% of the agricultural sector and 0.03% of GDP.
  • Indonesia is a net importer of tobacco leaf, importing 75,353 tons in 2015 to meet domestic demand.
  • Most tobacco cultivation occurs in East and Central Java (around 85%), with smaller proportions in West Nusa Tenggara.

• Survey Methodology:

  • The survey included 1,350 households across three major tobacco-growing provinces.
  • FGDs were conducted in selected villages to complement the quantitative data.
  • Data were analyzed using STATA (V.13.1) and included both descriptive and multivariate approaches.

• Demographics:

  • Most tobacco farmers are middle-aged males with limited formal education (mostly SD or less).
  • Agriculture is the main economic activity for 80% of households.
  • Over 96% of household members participated in tobacco farming as a first or second job.

Recommendations

• Utilize tax reform revenues to support transition:

  • The government could use additional tax revenues (estimated at 129–147 trillions of IDR) to assist tobacco farmers in switching to alternative crops.

• Improve supply chains for non-tobacco crops:

  • Enhancing supply chains for crops like corn, sweet potato, and green vegetables could improve farmers' incomes.
  • Encouraging processing of these crops could add value and increase profitability.

• Expand markets for non-tobacco agricultural products:

  • Promoting both domestic and international markets for non-tobacco crops would create more sales opportunities.

• Provide better agricultural extension services:

  • Many farmers do not receive support for non-tobacco crops, despite the potential for diversification.
  • Training on crop diversification and business practices could help farmers make better economic decisions.

• Improve financial access and business skills:

  • Offer grants or low-interest loans to support farmers transitioning to alternative crops.
  • Provide education and training in financial literacy and business management.

• Address child labor and health issues:

  • Implement policies to reduce child labor in tobacco farming.
  • Monitor and mitigate the health risks associated with Green Tobacco Sickness.

Conclusion

The report concludes that tobacco farming in Indonesia is not economically viable for most smallholder farmers. It highlights the need for policy reforms that support a transition to more sustainable and profitable agricultural activities, emphasizing the role of government in facilitating this change through financial assistance, improved market access, and enhanced agricultural education and support.