Kenya: Lobbies Ask for Sh25 Billion Fund to Help Stop Tobacco Farming

Source from:  Business Daily (Nairobi) 09/07/2011

Anti-tobacco lobbyists have asked the government to set up a fund to help about 20,000 farmers stop cultivating the crop. The move has set the stage for a new round of contest between the civil society and cigarette manufacturers. Civil society groups allied to the initiative said Sh25 billion would be needed over five years to set up the Tobacco Control Fund to help farmers to venture into alternative agribusiness activities. The move by the Institute for Natural Resources and Technology Studies (INRS), the Kenya Tobacco Control Alliance (KETCA) and the Institute of Legislative Affairs (ILA) appears to be a response to recent moves by cigarette makers to have the Tobacco Control Act watered down and taxation on cigarettes reviewed. KETCA argues that tobacco has a negative net impact on the economy because of money spent on treating tobacco related diseases (Sh15 billion) against a contribution to the economy of Sh5.7 billion. "The Government is losing huge resources in treating cancer, lung diseases as well as environmental degradation brought about by the tobacco industry," INRS coordinator Samuel Agonda Achola, said. Dr Achola said INRS studies found that tobacco growing regions could engage in fish, livestock and bee keeping, horticultural, bamboo tree and cereals farming. Soya-beans which take three months to mature, he said, would be an immediate alternative to tobacco which takes nine months to mature. KETCA's programme co-ordinator Fred Odhiambo said the fund would be financed through public private partnerships and co-ordinated by the Tobacco Control Board. Seed capital for the fund, the lobby says, would be raised through stiffer taxation on cigarettes and other tobacco products. ILA has recommended that excise duty on tobacco products be raised from 42 per cent to 70 per cent of the retail price. This would see cigarette prices rise by at least 10 per cent, discouraging its use and potential spread of the habit among low and middle income groups, which are more sensitive to pricing. "From 1994 to 2001 excise revenues more than doubled as a result of tobacco tax increases in South Africa," said ILA programme co-ordinator Emma Wanyonyi. "In Thailand tax increases between 1994 and 2007 raised cigarette excise tax from 60 per cent to 80 per cent of the wholesale price." Article 6 of the WHO Framework Convention on Tobacco Control (FCTC) requires the finance minister to implement tax and price policies on tobacco that protect public health especially for minors. Kenya domesticated the convention through section 12 of the Tobacco Control Act 2007. The constitution of Kenya gives citizens the right to the highest attainable standard of health. British American Tobacco (BAT), which has been urging for fair treatment of tobacco farms and manufacturers as legal business entities said some of the demands by activists amounted to restrictive trade practices. During a recent meeting with Trade Minister Ali Mwakwere, BAT chairman Mr Evanson Mwaniki said theresurgence of war on tobacco farming and trade in its products was bad for business. "We are dealing with a sensitive issue of trade and opportunities where the side effects of this propaganda war will be job cuts, salary downsising and lower tax for the exchequer," he said. BAT contracts 17,500 small-scale farmers to cultivate tobacco over an estimated 15,000 hectares. Enditem