Development of Indonesia´s tobacco farming and business in the era of FCTC
 
 
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Bogor Agricultural University (Institut Pertanian Bogor), Resource and Environmental Economics, Indonesia
Publication date: 2018-03-01
 
Tob. Induc. Dis. 2018;16(Suppl 1):A396
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ABSTRACT
Background and challenges to implementation:
Indonesia is one of the biggest producers and consumers of tobacco products (mainly cigarettes) and also one of the largest producers of tobacco. Indonesia is one of eight countries who has not ratified the WHO FCTC. Currently, Indonesia is at a crossroad in controlling production and consumption of tobacco and tobacco products. The government is reluctant to effectively implement the existing regulations on controlling production and consumption of cigarettes and tobacco since he receives a large amount of tax incomes from tobacco products, and tobacco farming also absorb a large amount of agricultural labors.

Intervention or response:
The existence of regulation that explicitly and comprehensively control production and consumption of tobacco and tobacco product is a necessary condition to Indonesia. Indonesia´s policy should be adapted to be inline with the situations in FCTC era. Strategies and programs in development of tobacco farming and business need to develop to support tobacco farmers in meeting the local tobacco demands and at the same time increase farmers' welfare.

Results and lessons learnt:
Most of the farmers are poor, since they operate at low area of land, low productivity, high production costs, and low price of output. In addition, under the current policy regime, Indonesia imports a large amount of tobacco, ranging from 45 to 75 percent of total domestic tobacco production, thus has negative consequences on the prices of tobacco and the incomes of farmers.

Conclusions and key recommendations:
The affirmative programs in developing tobacco business, including: development of alternative crop to tobacco, provision of support programs to the farmers in implementing this crop conversion, reducing tobacco import level by promoting the use of domestic tobacco, and improvement in tobacco marketing are needed in the future. These programs have to be firmly and consistently implemented to optimize local tobacco production, increase farmers' incomes and at the same time reducing the poverty level.

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