Farmers set to turn new leaf as they shun tobacco

Tobacco has been Gu Jiewa's main source of income for two decades. Yet, this year, he decided to kick the habit and grow alternative crops, much to the dismay of his local authority.

The 58-year-old, who farms more than half a hectare in Shui'niugeng village, said it has become increasingly difficult in recent years to make a profit due to rising costs and "the greedy exploitation" of workers by tobacco officials.

"The costs involved in planting tobacco, such as land rent, fertilizer and pesticide, have all risen sharply, but the price of the leaves has not," he said.

In return for toiling in the fields from April to October, Gu said he made on average 16,000 yuan ($2,500) a year, which was "not enough compared with the effort involved".

To make matters worse, it has also become difficult to recruit pickers during harvest seasons.

"Young men in our village are reluctant to do farm work, even though I offered more than 100 yuan a day during busy periods, which last about a month," the farmer Gu said. "Most would rather go to urban areas for easier jobs."

He now plans to grow corn, which has seen a steady rise in price due to the growing demand for pig fodder.

Gu is one of many planters in this area of Henan province - a major source of tobacco for China's cigarette industry - that are turning their back on a crop that has underpinned the local economy for more than 30 years.

"There used to be more than 100 mu (6.6 hectares) of tobacco in our village, and now there is less than 50," said Yao Huiling, 45, who this year planted tobacco on about one-third of a hectare in Shui'niugeng, part of Xiangcheng county.

Farmers used to dry fresh tobacco leaves with coal fires, she said, but rising coal prices have hit planters' profits. "The yard where we used to dry tobacco is now home to a plastics company," she added.

Taxing times

The tax on tobacco is a key revenue stream for Xiangcheng. Official figures for last year show that it accounted for 30 percent of the county's total income.

"In the 1980s, when other industries were not as developed as today, the tobacco tax accounted for more than 80 percent," Sun Yongjun, a tobacco bureau official, said on Friday.

The county aims to plant 6,000 hectares of tobacco this year, up from 5,300 hectares last year, he said, adding that the increase is to make up losses caused by the lengthy drought in Yunnan province, which produces one-third of China's tobacco.

A notice issued on Thursday by the Xuchang city tobacco monopoly bureau, which covers Xiangcheng, also stated that the crop will be planted on more than 11,000 hectares across the region.

All bureau officials, the notice said, must encourage farmers to plant tobacco in the next few weeks, when sprouting tobacco strains will be transferred from greenhouses to outdoor areas.

With a growing number of planters deciding to ditch the crop, authorities have promised incentives to lure them back.

"The prices for peppers and sweet potato have risen greatly in recent years and, as a result, many farms have switched to these crops and quit planting tobacco," the notice said. "Supportive policies and subsidies should be used to encourage tobacco farmers."

Sun added that his bureau plans to increase the purchase price by an average of 20 percent this year, and help planters cover the costs of fertilizers, pesticides and tobacco seeds.

"Planters' incomes have decreased in recent years, taking the inflation factor into consideration," he said.

'Unfair system'

Among the chief complaints for many tobacco farmers, however, is how the quality of leaves is measured.

Gu, the farmer, said the process is unfair and claimed that his superior leaves were regularly classified as inferior, which command a much lower price.

"Superior tobacco leaves can fetch about 20 yuan a kilogram, while inferior leaves are valued at only 16 yuan," he said.

The Xiangcheng tobacco bureau is the sole buyer of locally grown tobacco and has the final say on setting the prices. Gu said that planters who do not have guanxi (connections) have to bribe officials to ensure they get the right price.

"I don't have any acquaintances in the (county) tobacco bureau, nor do I want to pay a bribe," he said. "As a result, my leaves are always undervalued."

The problem is one that, Sun said, the government is aware of and attempting to solve, with new measures including surveillance cameras and extra platform scales at trading stations.

However, Sun conceded that the unfairness is a result of the fact the classification of tobacco leaves relies much on workers' experiences, which is difficult to gauge.

"The malpractice of some bureau workers, who have taken advantage of planters, has gravely undermined the reputation of the bureau and will harm the planters' enthusiasm in the long run," he said.

"Those workers who are found breaking the rules will be dismissed," he warned.

Incoming, outgoing

Unlike tobacco planters who make very little profit, bureau workers and officials can enjoy high incomes thanks to the monopoly sales mechanism.

Henan collected 17 billion yuan in tax revenue from the tobacco industry last year, the most generated among all industries, according to data released by the provincial tax bureau on April 1.

Sun said the annual income of a worker at his bureau is at least 50,000 yuan, twice as much as the county average, while the income of a city tobacco bureau chief can even reach 600,000 yuan.

"The wages of tobacco bureau workers are lower than that of other industries, such as banking and telecommunications, or tax office employees," he said.

As the monopoly mechanism allows bureaus to set the prices of both tobacco leaves and cigarettes, analysts say that the sector is the only one steered by the government rather than the market.

For example, it costs Dihao, a Henan brand, about 6.23 yuan to produce a pack of cigarettes, yet smokers pay 25 yuan in stores, according to a report by Oriental Outlook Weekly, a magazine owned by Xinhua News Agency.

Besides their salaries, tobacco officials also have access to illegal income.

After the diary of Han Feng was published online in 2010, disciplinary officials discovered that the then-tobacco bureau chief for Laibin county in the Guangxi Zhuang autonomous region had taken at least 482,000 yuan of cash in bribes, and had been given an apartment valued at 300,000 yuan.

He was sacked and sentenced to 13 years in prison, Xinhua reported.