Kenya: High Premiums Push Farmers Out of Tobacco

Source from:  The Nation 01/31/2011

Nairobi — Tobacco farmers are making the shift to other crops due to high premiums and lack of information on crop insurance. Mr Joseph Etyang from Teso North District said he abandoned the crop after spending more on premiums than what he got from the harvest. "It does not make sense to pay premiums that cannot be recouped due to low returns," said Mr Etyang. Another farmer, Mr James Ayeso, decided to continue with tobacco farming, but opted to do without insurance against poor weather and disease. However, BAT Kenya leaf operations manager James Opiyo said that farmers' response to the insurance scheme, which is in its second year, has been remarkably positive. Mr Opiyo said that the company negotiated a favourable premium rate based on crop value with UAP Insurance. He said the tobacco firm pays this premium on behalf of the farmers as a loan which is only recovered later from tobacco sales without any interest being charged. Mr Opiyo also noted that the company had a strong afforestation programme that has been running since tobacco growing began in Kenya. "Apart from ensuring security of supply of wood for curing the tobacco, the programme contributes to environmental conservation and economic empowerment of farmers who engage in commercial tree farming," he adds. Conserve environment This was in response to claims by a civic leader that little effort was being put in place by players in the industry to conserve the environment. "Farmers are cutting down trees to cure their leaves," Mr Jack Wambulwa, the Bukhayo North councillor, lamented. BAT has contracted 1,700 farmers in the greater Teso District. Mr Joseph Kamiri of UAP said farmers' whose crop was affected by disease and bad weather last year were compensated.