The Social Costs of Tobacco

By Cameron Barker - Communications and Marketing Lead

Introduction

It might not come as much of a surprise, but it is highly likely that tobacco companies will be excluded from any funds, pensions, or other investment products described as ethical, responsible, or sustainable.

This is partly a case of tobacco companies being seen as an unacceptable risk by the likes of fund providers offering responsible investment options, and partly a case of supply and demand. Most consumers looking to invest in line with their values demand funds and products that avoid links to tobacco, and providers of these products therefore supply them.

The reason for this demand, and also for fund providers’ views regarding the risks of tobacco companies, often comes down to the obvious - smoking is simply not good for people. That said, this is not the focus here. Instead, we’ll be looking at the wider (and often overlooked) social impacts associated with the tobacco industry.

Exploitation of Developing Countries

The cultivation of tobacco primarily occurs in developing countries, with India, Brazil, and Indonesia ranking as the second, third, and fourth largest producers of the crop in a 2023 report by the World Health Organisation. China ranked as the number one global producer in this report, and while a major economic power, this does not guarantee adequate compensation and protections for growers of tobacco in the country.

As highlighted in the “Tobacco Slave: Imperial practices in the modern age” film (produced by the University of Bath’s Tobacco Control Research Group), farmers producing tobacco barely seem to benefit from their efforts. Malawi is the focus of this film, and here farmers do not earn enough from their crops to hire employees or even purchase protective equipment.

While the film focused on Malawi, the struggles of the farmers here are seen across the global tobacco supply chain, in spite of the clear profitability of tobacco-related products. Philip Morris International, for example, reported revenues of 37.878 billion US dollars in the 2024 fiscal year, and gross profits of USD 24.549 billion. Hardly the figures associated with a struggling industry.

This is the basis of the argument that the tobacco industry is a prime example of modern colonialism. Large, multinational corporations based in wealthy nations are generating huge profits, and distributing these to their shareholders, using raw materials produced by impoverished farmers in low-income countries.
 
Even tax revenues deriving from the sale of tobacco products fail to reach farmers, instead being used to try and limit the damage done by tobacco companies in developed nations. Levies are based on the health impacts of tobacco use, and not the impacts on farmers exploited by the tobacco companies.

Furthermore, by creating an environment in which farmers are left with little choice but to grow tobacco, land which could be used for other purposes is set aside purely for the benefit of the tobacco industry. As stated by Talha Burki, writing for The Lancet Respiratory Medicine, over 3 million hectares of arable land across 124 countries has been dedicated to growing tobacco, which is effectively drawing farmers away from producing crops that could improve the nutritional status of populations, and help with food security in these locations.

Child Labour

As discussed, tobacco farmers rarely receive a price for their crops that would allow for the employment of additional workers, and the growing of tobacco is by no means an easy process; families are often forced to turn to their children to help with the work.

A child simply engaging in work is not necessarily child labour, but Article 32 of the UN Convention on the Rights of the Child (UNCRC) states that children are to be “protected from economic exploitation and from performing any work that is likely... to interfere with the child's education.”

As stated by Unfairtobacco, criteria of the UNCRC are often breached in cases of children working on tobacco farms. In terms of economic exploitation, it is claimed that low prices paid by tobacco companies and/or plantation owners causes the conditions which necessitate families using their children for work. Debt is one such reason, as families are forced to grow more crops than they are able to manage with existing labour, meaning children are required make up the short-fall.

In terms of interference with education, this is a result of children being unable to attend school during peak times of the year, such as harvesting season. This lack of education often results in the inability of these children to obtain higher-paying work later in life, and effectively traps them in the cycle of poverty.

Finally, Article 32 of the UNCRC also states that children are to be protected from “performing any work that is likely to be hazardous” or “harmful to...health or physical...development”. Working on tobacco plantations happens to be both of these things.

Occupational Illness

Tobacco farming is a high-risk occupation, especially where personal protective equipment (PPE) is not available or accessible, with the most direct impact being in the form of green tobacco sickness (GTS). Caused by handling tobacco leaves and absorbing nicotine through the skin, GTS
 
is effectively acute nicotine poising, with those affected often suffering from nausea, vomiting, dizziness, and headaches.

As noted by the US Occupational Safety and Health Administration, vomiting associated with GTS also increases the probability of dehydration among those affected, exacerbating health risks faced by plantation workers.

I addition to GTS, workers on tobacco farms and plantations face health risks from other sources. As stated once again by Unfairtobacco, workers (including children) can suffer from bone and joint deformation, snakebites, and mosquito-borne diseases, as well as complications resulting from exposure to chemicals such as pesticides and fertilisers. Such complications can include:

• Vision impairment
• Liver damage
• Infertility
• Neurological diseases

It is often the case that occupational illnesses and diseases can be easily prevented by the correct use of PPE, but low prices paid for tobacco crops can prevent farmers from being able to access this. When margins are tight, farmers are forced to prioritise living essentials and materials that are required to continue growing in future seasons (fertilisers, etc.).

To Conclude

The social costs of tobacco extend beyond the health and financial impacts on users, with a large proportion of these costs occurring before tobacco products are even manufactured, let alone used.

If you are investor seeking to invest in an ethical fashion, then preventing your money being linked to the tobacco industry is, fortunately, not overly difficult. That being said, by having an awareness of the impacts of the industry, you as an investor are in a better position to play a role (if you choose to do so) in increasing awareness more broadly.

Perhaps by explaining why you chose to invest in line with your ethics, you can encourage others to do the same, and by extension send signals to tobacco companies and the investment world that this industry needs to change, if it is to continue.