Nigeria: BAT - An Economic Multiplier in Agriculture

Source from:  Daily Trust (Abuja) November 30, 2006 12/04/2006

As the largest stock market-listed tobacco group by market share outside the USA, with over 16% of global market, operating in 180 countries, British American Tobacco is today the world's most international tobacco group. It equally has the closest links to some 250,000 farmers who grow tobacco all over the world. This has enabled the group to be very proactive in addressing relevant social and environmental issues associated with tobacco growing and processing, through its Social Responsibility in Tobacco Production programme. The programme consist integrated crop management; soil and water conservation; reducing the use of agrochemicals; environment, health and safety standards in Green Leaf Threshing operations (tobacco leaf processing); eliminating exploitative child labour; encouraging alternatives to wood in tobacco curing and sponsoring and promoting reforestation progra-mmes to enable those farmers who require wood for curing to obtain it from renewable sources. Since the 1970s, the BAT Group has been responsible for the planting of 264,000 hectares of managed wood-lands, representing some 540 million trees currently growing worldwide. In 2003 alone the group operated 22 leaf programmes in 21 countries, covering some 265,000 hectares under cultivation. Over 80 per cent of the volume of BAT's leaf purchases is from farmers and suppliers in emerging economies; with Nigeria playing a key role. Since inception of its operations in Nigeria, British American Tobacco Nigeria, through its 100% owned subsidiary company, BAT Iseyin Agronomy (BATIA), in Oyo State, has been providing direct support to some 1,306 registered farmers. The comp-any's partnership has resulted in volume increase of tobacco produced in Nigeria from 1,260 tons in 2001 to 2,230 tons in 2004 valued at N320.6 million and 2,945 tons in 2006, valued at N568.04 million. Domestic tobacco inclusion is currently 40% in the Value For Money (VFM) segment of BAT's brands. BAT's approach in Nigeria has been to work through dedicated BATIA employees in the field alongside farmers. The company trains, advises and supports farmers, providing seed and advice on all aspects of crop production. This initiative benefits the environment and benefits both the farmers and it in improving crop yields and quality. To underscore its commitment to environmental conservation, BAT Nigeria, has two tree plantations, one in Iseyin and another in Ogbooro; with a combined total planted area of 1,130 hectares and over 1 million surviving trees. An annual average of 5000 tons of wood is sourced from these plantations for our leaf operations. In Nigeria, as in all BAT Group companies, farmers are also encouraged to grow trees of their own. Each farmer is required to grow a minimum of 100 trees per annum as part of the company's contract with them. In the last 3 years, a total of 180,000 trees were planted by farmers, while over 80 hectares of marginal farmland have benefited from tree planting specifically to control erosion and to serve as wind breakers. BAT Nigeria today has interest-free loans as an integral part of its crop operations to economically empower farmers. The aim is to improve crop yield. Farmers repay their loans conveniently. The firm's Central Procurement Unit purchases all inputs in bulk. It uses its expertise to obtain the most competitive bargains available. In this way, the quality of inputs and their prompt delivery to strategically located stock points in growing areas is assured. Harvested leaves are graded according to quality and prices are negotiated and agreed with the Nigerian Independent Tobacco Farmers Association at the beginning of each growing season. To be market relevant and globally competitive, the company tries to ensure that its domestic processed tobacco is priced according to international standards. The goal at BAT is to meet its commercial objectives in a manner that is consistent with reasonable public expectations of a responsible company in the 21st century. This involves appropriately responding to business challenges and modifying the company's structure, systems and processes to drive productivity and ensure that its relationships are built on the principle of mutual benefit. Registered farmers constitute a critical segment of BAT's stakeholders. This is why the firm strives to work closely with them to improve crop quality and quantity. It is BAT's plan to continue to ensure that the registration of tobacco farmers remain a voluntary exercise. And at the same time retain farmers who have embraced and effectively utilised best tobacco growing practices to improve yields. The existing registration requirement of engaging farmers with proven records of productivity will remain in place. BAT is confident that the incentives it provides will be better utilised by resourceful growers. BATIA has set aside one day in each year as 'Farmers' Day'. This is aimed at recog-nising and rewarding farmers who have excelled in the practical application of best practices in tobacco cultivation and have obtained the best results from their work. In 2005, Mr. Alani Adewunmi, produced more than 14,000 kilograms of tobacco and planted 1,100 surviving trees to clinch the star prize, a brand new Toyota pick-up truck. A brand new motorcycle was given to each of the 5 farmers that came first in their zones, while 5 others who came second went home with a portable electricity generating sets each. In tobacco cultivation, one important topic which has been part of public discourse for long is Child Labour. As one of the three founding members of the Elimination of Child Labour in Tobacco Growing (ECLT) Foundation, along with the trades unions (IUF) in the sector and the International Tobacco Growers Association, the BAT Group has continued to maintain active support through annual funding and membership of the Found-ation's Board. The Foundation is now established as the global reference point on child labour in tobacco growing, with an emerging good profile in the labour standards and related social arenas, and the International Labour Organisation (ILO) acts as an adviser to its Board. BAT Nigeria has a child labour policy in which the company's commitment to the universal principles of protecting the health, welfare and safety of children are articulated. The company believes that its interests and the interests of host communities and the countries where it operates are best served through education. BAT has signed a legally binding agreement with each of its registered farmers to uphold the principles of child protection from labour exploitation. Any registered farmer who violates the agreement on child labour is instantly deregistered. However, BAT recognises that it is customary in agrarian communities for children to assist in farm activities in order to acquire essential skills from their parents for the long term sustainability of their communities. BAT Nigeria is however educating farmers, through field extension services, about its commitment to ensuring that traditional practices of skill acquisition are acceptable only if they do not impede or conflict with the right of children to sound education through regular school attendance. BAT Nigeria's child labour policy document provides that "each department is responsible for introducing program-mes and procedures to implement the policy and to proac-tively demonstrate the comp-any's commitment to corporate social responsibility". The document has been circulated to BAT associate companies and has since been adopted as best practice worldwide It is the company's belief that for Nigeria to fully achieve its full agricultural potential, there is need to replace subsistence agriculture with large scale cultivation using state-of-the-art techniques. The company therefore identified good education as critical to the realisation of this dream and is thus committed to demonstrating that a tobacco company can be a major force in educational development and community enhancement. Harnessing private sector / government synergy is necessary to provide much needed boost to the education sector. Since 2003, the BAT/BATIA scholarship scheme has been targeted at students of agriculture in tertiary institutions above the age of 18. Keep looking, keep gazing, keep scrutinising, or observing; whichever way you look at the company, it is more than just a manufacturer of tobacco products. It is a proudly Nigerian company, committed to economic enhancement by doing the right thing for Nigeria. BAT will continue to encourage modern cultivation practices and register farmers with demonstrable adaptability to best practices and reward those with exceptional abilities in their productivity, environmental conservation and remain within the Growers' Agreement which prohibits child labour in tobacco growing activities. Enditem