Tobacco Farming and the Reconfiguration of Co-operatives in Tanzania

Abstract

Tobacco has been grown in Tanzania since the 1950s and remains a designated strategic export crop cultivated under contract farming arrangements. This article examines the role of primary co-operative societies (PCSs) in co-ordinating the tobacco contract farming system. The article traces the transition from public marketing boards to private sector predominance and contributes to an understanding of the dynamics of contractual arrangements between private capital and smallholder tobacco farmers. It draws primarily on data collected through in-depth interviews with tobacco-processing companies and the leaders of PCSs in Urambo district, Tanzania. The analysis shows that the PCSs that are central to this sector need to ensure that their members farm in accordance with good agricultural practices and comply with reforestation and labour practice requirements as part of the industry’s focus on corporate social responsibility programmes and the promulgation of strategies addressing social and environmental concerns. Furthermore, the PCSs have become the gatekeepers for local development projects co-funded by the Tanzanian tobacco processing companies and global cigarette brand owners. The article argues that the PCSs’ ability to capture economic benefits for local development by tapping into the tobacco value chain depends not only on PCS leadership qualifications, capabilities and their capacity to ‘align’ farmers with the required cultivation practices, but also on the bargaining capacity of the PCSs in relation to the tobacco processing companies, which is influenced by whether the supply base is reliable in both quantity and quality. Recent developments in the contract farming arrangements provide new constellations of economic dynamics and opportunities for social and economic development activities at the PCS and village levels. The article ends with a discussion of rural development outcomes based on tobacco revenues, showing how contract farming integrates local communities into the dynamics of the global tobacco value chain while simultaneously reproducing local socio-economic differentiation.