Tobacco Production and Its Socio-Economic Impact on Farm Households in Bangladesh: A Regional Study

Abstract

Tobacco cultivation has increased in Bangladesh over the past few decades, raising significant concerns due to its economic, environmental, and health impacts on farm households. This study explored the socioeconomic aspects of farmers' lives associated with tobacco production, calculated its costs and benefits, identified determinants of net revenue, and suggested potential improvements for related issues. Primary data were collected using a random sampling technique involving interviews with 420 tobacco farmers through structured questionnaires and face-to-face interactions. The financial analysis of tobacco production in Bangladesh employed cost-benefit and multiple linear regression techniques, while the economic analysis utilized descriptive and inferential statistics. The descriptive statistics reveal that net returns average TK 30,466, with significant variation in production costs, particularly in land use, labor, and processing, highlighting the economic complexities of tobacco farming. The results of the regression analysis show that land use and labor costs significantly impact net returns in tobacco farming. Land costs reduce profits, while labor and processing costs increase them, explaining 76% of the variation in net returns. The analysis indicates a net return of TK 32,050 per bigha, with a profit of TK 71.22 per kilogram of tobacco produced. A majority of respondents believe that tobacco farming reduces soil fertility (49.29%) and requires significant fertilizer (76.19%), while a significant number view it as a lucrative opportunity (85.71%) supported by company encouragement (79.37%). Furthermore, 75.47% perceive tobacco farming as a health risk, with nearly half acknowledging its negative environmental impacts (49.29%). Although tobacco production offers higher profitability, it poses severe health and environmental risks. To mitigate these effects, tobacco companies should pay attention to this fact and provide healthcare subsidies to farmers so that they can contribute positively to the national economy. Thus, farmers will benefit, and our country's economy will improve with production as well.

Keywords: Tobacco cultivation, Economic impact, Environmental impact, Net revenue, Cost-Benefit Technique

DOI: 10.7176/CEIS/16-1-03

Publication date: April 30^th 2025