Farmer Debt: How the Tobacco Industry Keeps Growers in a Cycle of Dependence
Tobacco farmers in many countries are trapped in debt to the companies that buy their crop. The debt cycle—advances for inputs, repayment at harvest at prices set by the buyer—is a mechanism of control. Breaking it is essential to farmer transition.
In Malawi, a tobacco farmer receives seeds, fertilizer, and technical assistance from the leaf company—on credit. At harvest, the company buys the crop at a price it sets. The farmer repays the debt. If the price is too low, the farmer ends the season in debt—and must grow tobacco again next year to repay it. **The debt cycle is a mechanism of control: the farmer cannot leave tobacco because they owe the company, and the company sets the terms. Breaking the debt cycle—through debt forgiveness, alternative financing, and cooperative bargaining—is essential to farmer transition.**
