The Economics of Tobacco Farming in Indonesia: Results from Two Waves of a Farm-Level Survey

This Report was written by researchers from Tobacconomics, University of Gadjah Mada, Australian National University, McGill University and the American Cancer Society. The report examines the economics of smallholder (<5 hectares) tobacco farming in Indonesia. The results from the research challenge the claim by the tobacco industry that tobacco farming is lucrative. In reality, tobacco farmers often lose money in the tobacco season because costs are so high and prices for their crop typically low. The research demonstrates that tobacco farming is a negative predictor of income. It also finds that these farmers are typically growing other crops and were they simply to shift completely to them, their household resources are very likely to increase. Finally, the research explores and recommends some market-oriented solutions that the government can undertake to address this issue including investing in rural credit programs, supply and value chain enhancement for non-tobacco crops, and agricultural education, among other interventions.


A Fact Sheet based on this Report can be found here.

Read the blog based on the study in English and Bahasa.

January 2021

Location(s): Asia, Indonesia

Content Type: Report

Topic(s): Crop substitution, Economic impacts of tobacco control, Jobs and productivity, Supply-side issues and interventions

Authors(s): Gumilang Aryo Sahadewo, Jeffrey Drope, Ph.D., Firman Witoelar, Qing Li, Raphael Lencucha