Tobacco farming also remains one of the most labor-intensive crops, often driving cash-poor farmers to employ their own and other children, and causes green tobacco sickness, a form of acute nicotine poisoning, among many farmers. The nature of tobacco production is also changing with the increasing use of often precarious contractual relationships between farmers and tobacco companies. Often tobacco companies incentivize production by providing credit, inputs, and other resources that farmers would not otherwise be able to access. Yet farmers across LMICs continue to grow tobacco and in some countries, tobacco production is increasing. In the last five years, research has documented empirically that in many low- and middle-income countries (LMICs), tobacco farming is rarely an economically lucrative endeavor for smallholder farmers. Most of these variables are affected by the unequal relationship between the tobacco firms that buy tobacco and the farmers, wherein the farmers are consistently at a disadvantage in terms of negotiating key parameters such as prices and evaluation of leaf quality. The qualitative results confirm these findings and further illuminate that access to credit, education (agricultural and otherwise) and information play substantial roles in farmers’ economic decision making. The results of the quantitative analysis suggest that farming profits and positive rainfall shocks are two of the key variables that affect the decision to cultivate tobacco. It finds that tobacco farmers’ decision making is complex but also predictable. The research focuses on the variables that affect tobacco farmers’ decisions to continue tobacco farming or shift to non-tobacco farming. This study employs complementary quantitative and qualitative methodologies to identify variables that affect tobacco farmers’ economic decision making in Indonesia, a major tobacco producer. Understanding the variables that affect farmers’ decisions as to whether to grow tobacco and/or other crops provides important insights into their economic lives and can help to inform the development and implementation of policies that shape both tobacco production and tobacco control, such as increasing tobacco excise taxes.
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