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Tobacco or not tobacco: predicting farming households’ income in Indonesia
  1. Gumilang Aryo Sahadewo1,
  2. Jeffrey Drope2,
  3. Qing Li2,
  4. Nigar Nargis2,
  5. Firman Witoelar3
  1. 1Faculty of Economics and Business, Universitas Gadjah Mada, Sleman, Indonesia
  2. 2Economic and Health Policy Research, American Cancer Society, Atlanta, Georgia, USA
  3. 3Crawford School of Public Policy, Australian National University, Canberra, Australian Capital Territory, Australia
  1. Correspondence to Dr Gumilang Aryo Sahadewo, Economics, Universitas Gadjah Mada, Sleman, DIY 55281, Indonesia; gasahadewo{at}ugm.ac.id

Abstract

Background Recent research in several countries has demonstrated that small-holder tobacco farming is typically not a profitable enterprise. Many farming households report losing money in this economic endeavour, even without incorporating the value of their household labour. Losses are typically considerably worse when household labour is considered. We take advantage of panel data that include information about both current and former tobacco farming households’ characteristics and economic decisions to be the first to rigorously estimate the effects of both tobacco and non-tobacco farming on income.

Methods We designed and implemented a two-wave economic survey of current and former tobacco farming households in Indonesia’s two largest tobacco-growing regions. We use regression analysis to estimate the effects of tobacco farming on household income per farming area in both survey waves.

Results We find that former tobacco farming households are typically generating profits from their non-tobacco farming, while current tobacco farming households experience greater variability, including experiencing economic losses. Former tobacco farming households’ income were comparable to current tobacco farming households’ even in the period in which tobacco leaf production and prices of tobacco leaf were relatively high. We find a negative and significant effect of tobacco farming on household income.

Conclusions One of the main arguments from those opposing tobacco control policies—especially increasing cigarette excise taxes—is their alleged effect on tobacco farming households’ livelihoods through a lower demand for tobacco leaves. Our finding that there is a negative effect of tobacco farming on household income shows that the narrative is grossly inaccurate. Shifting to non-tobacco farming would allow farming households to reallocate their resources to other more lucrative economic opportunities.

  • low/middle income country
  • economics
  • priority/special populations
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Footnotes

  • Twitter @gasahadewo

  • Contributors GAS, JD, QL, NN and FW contributed to the study design. FW, JD, QL and NN drafted the survey tool and contributed to subsequent refinements of the survey tool in the second wave. FW collected the survey data with SurveyMeter. GAS completed the statistical analysis. GAS and JD wrote the first draft of the manuscript. All team members contributed to the writing and revision of the manuscript. GAS submitted the manuscript on behalf of the team.

  • Funding This research was supported by the Office of the Director, National Institutes of Health (OD) and the National Cancer Institute (NCI) under Award Number R01TW010898; NCI through a CRDF Global grant; the World Bank; and the American Cancer Society.

  • Disclaimer Its contents are solely the responsibility of the authors and do not necessarily represent the official views of these funders.

  • Competing interests None declared.

  • Patient consent for publication Not required.

  • Ethics approval All activities for this research were approved by the Institutional Review Board (IRB) of the Morehouse School of Medicine, the IRB of record for the American Cancer Society, and the IRB of SurveyMeter, the implementation survey organisation in Indonesia.

  • Provenance and peer review Not commissioned; externally peer reviewed.

  • Data availability statement Data are available on reasonable request. Researchers who provide a methodologically sound proposal may request individual participant data that underlie the results reported in this article, after deidentification (text, tables, figures and supplementary materials). Proposals should be directed to JD at jeffrey.drope@cancer.org.

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