Greece's Dramatic Decline

Source from:  tobaccojournal.com 04/03/2008

06 Mar 2008. Greek oriental tobacco output continues to tumble as growers react to the European Union's single farm payment system and drought hits the agricultural economy. Greek flue-cured and Burley production has all but disappeared. Greek production of oriental tobacco dropped by nine per cent in 2007 to an estimated 20 million kg. This is down from 22 million kg in 2006 as Greek growers continued to react sharply to changes in European Union (EU) agricultural support funding that went into effect in 2006 and a devastating drought slammed into the farm economy, according to Universal Corporation. The American tobacco company, which is one of the world's leading leaf tobacco merchants, also stated in its world leaf production summary that flue-cured and Burley production had all but ceased in the Hellenic Republic, once the EU's top tobacco producer. Foreign economic analysts based in Athens have concluded that tobacco growers in Greece are facing economic hardship. Disappearing oriental "Tobacco growing, a traditional way of life in rural Greece and one of the country's main sources for agricultural exports, is coming to an end," said an analyst with a western trade mission. "This situation is multiplying the problems of certain farmers who make their living from this type of agriculture. The country's unemployment rate is increasing and its exports are declining." Many Greek growers were reportedly abandoning tobacco farming in favour of other cash crops. A Greek-US partnership has been promoting an eco-friendly substitute crop for tobacco farmers in northern Greece, the country's main tobacco-growing region, the US trade mission in Athens reported. "Known as 'kenaf', the alternative crop can be used to produce eco-friendly products, ranging from paper to car parts," the trade mission said. In 2005 Greek farmers produced a total of 109 million kg of tobacco, of which 46 million kg were flue-cured, while 9 million kg were Burley. The nation's tobacco output averaged around 122.5 million kg from 1999 to 2005, the Athens Chamber of Commerce and Industry reported. Industry officials said that cultivation of quality Basma and Katerina varieties remained but at 50 to 60 per cent lower volumes than in 2006. They also stated that the lower-quality oriental and semi-oriental tobaccos, such as S-79, K. Koulak Classic, Esessona, Myr. Agrinon, Tsebella and Mavra, were all but phased out. In 2005, Greece produced 40 per cent of the EU's tobacco and 92 per cent of its oriental tobacco. However, by 2007, it turned out less than ten per cent of the EU's tobacco output. The sharp fall in the output of tobacco in Greece and neighbouring Turkey has led to a major scarcity in global oriental tobacco, forcing international tobacco merchants to scurry to buy old stocks of inferior tobacco accumulated from the 1990s in countries such as Turkey. Oriental tobacco is used in blended cigarettes to add flavour and aroma. On 1 January 2006, the EU's council of agriculture ministers introduced measures aimed at the gradual phasing out of tobacco subsidies in the economic pact. The reform package has led to a de-coupling, or a separation of aid from production, of tobacco grower subsidies. The subsidies will come to an end in 2010. While the new policies have adversely affected farmers in every one of the EU's 14 tobacco-growing countries, they are having the most impact on Greece and Italy, which once produced 65 per cent of the EU's tobacco crops, tobacco specialists said. Poland, Bulgaria, Spain and France are also significant to tobacco producers, with Bulgaria a large supplier of oriental, too. Turkish minority problems The decline of Greek production has also deeply hurt the country's Turkish minority, whose livelihood largely depends on tobacco growing. The economic hardship could once again strain recently improved relations between Athens and Ankara, Turkish embassy officials said. Some 200,000 ethnic Turks live in the north-eastern Greek province of western Thrace, which borders Turkey and Bulgaria, and 90 per cent are involved in tobacco production and trade. "When it comes to growers, the Turkish minority has been the hardest hit with regard to the plunge in Greek tobacco production," an official from the trade mission noted. Enditem