The Costs and Profitability of Tobacco Compared to Other Crops in Zimbabwe

This study compares the financial costs
and returns to tobacco growing with twelve (traditional and
non-traditional) alternative crops, looking at
profitability, costs, labor intensity, financial support,
technical infrastructure, land-suitability, marketing
difficulties, world demand, and production risks. It aims to
provide an improved understanding of the trade-offs farmers
face in deciding what crops to grow. The analysis is based
on an original set of 91 production budgets estimated in
January 2001 specifically for this study. The study finds
that tobacco is a highly profitable cash crop for both large
and small farmers. however even if global demand for tobacco
were to fall significantly in the future, the impact on
employment and the broader economy would depend on the
extent to which commercial farmers were able to switch to
other high value export crops. Changes in Zimbabwe's
land policy in 2001/2002 are likely to have a much larger
impact on tobacco growing and exports and on the economy
than demand-induced changes in the global market for tobacco.