Publication: Smallholder Tobacco Growing in Indonesia : Costs and Profitability Compared with Other Agricultural Enterprises
Loading...
Published
2005-02
ISSN
Date
2013-06-05
Author(s)
Editor(s)
Abstract
This supply-side study compares the financial costs and returns for smallholder tobacco farming with a selected range of smallholder crops that either complement tobacco or offer long-term diversification potential. It is a first step to understanding how tobacco farmers might be affected if the demand for tobacco fell in Indonesia, and to what extent farmers might be able to adjust by shifting to other crops, and the implications this might have for their incomes. The analysis is based on a set of 24 original per hectare crop budgets estimated specially for this study to reflect the actual costs and returns for tobacco and other farm enterprises in upland and lowland tobacco growing regions of Central Java to the best extent possible. These original budgets cover eight distinct crop enterprises including Virginia-kretek tobacco and seven other crops that either complement tobacco or offer diversification potential. To provide the broadest possible indication of relative costs and profitability of different enterprises, several production levels are considered for each commodity including low, medium, and high-input management. The analysis suggests that chilli, potatoes, nilam, and oranges offer a potential for similar (or better) net profits and rates of return than tobacco. However, the markets for these alternative enterprises are generally far more limited than those for tobacco, and considerable investments may be needed to help smallholders to succeed with these crops, such as the development specialized support services and the expansion of private trading networks. Especially in the case of perennial crops with a long maturity period, a shift away from tobacco can be difficult or risk because of less certain cost structures, unknown market outlets, high establishment costs, and limited availability of seasonal and long-term credit. Considerable efforts will be required to overcome these and other practical barriers for tobacco farmers to take advantage of the diversification opportunities this report suggests are available.
Link to Data Set
Citation
“Keyser, John C.; Ratna Juita, Nila. 2005. Smallholder Tobacco Growing in Indonesia : Costs and Profitability Compared with Other Agricultural Enterprises. Health, Nutrition and Population (HNP) Discussion Paper;. © World Bank. http://hdl.handle.net/10986/13769 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
Publication The Costs and Profitability of Tobacco Compared to Other Crops in Zimbabwe(World Bank, Washington, DC, 2002-06)This study compares the financial costs and returns to tobacco growing with twelve (traditional and non-traditional) alternative crops, looking at profitability, costs, labor intensity, financial support, technical infrastructure, land-suitability, marketing difficulties, world demand, and production risks. It aims to provide an improved understanding of the trade-offs farmers face in deciding what crops to grow. The analysis is based on an original set of 91 production budgets estimated in January 2001 specifically for this study. The study finds that tobacco is a highly profitable cash crop for both large and small farmers. however even if global demand for tobacco were to fall significantly in the future, the impact on employment and the broader economy would depend on the extent to which commercial farmers were able to switch to other high value export crops. Changes in Zimbabwe's land policy in 2001/2002 are likely to have a much larger impact on tobacco growing and exports and on the economy than demand-induced changes in the global market for tobacco.Publication Agricultural Policies and Trade Paths in Turkey(World Bank Group, Washington, DC, 2014-10)In 1959, shortly after the European Economic Community was founded under the 1957 Treaty of Rome, Turkey applied for Associate Membership in the then six-member common market. By 1963, a path for integrating the economies of Turkey and the eventual European Union had been mapped. As with many trade agreements, agriculture posed difficult political hurdles, which were never fully cleared, even as trade barriers to other sectors were eventually removed and a Customs Union formed. This essay traces the influences the Turkey-European Union economic institutions have had on agricultural policies and the agriculture sector. An applied general equilibrium framework is used to provide estimates of what including agriculture under the Customs Union would mean for the sector and the economy. The paper also discusses the implications of fully aligning Turkey's agricultural policies with the European Union's Common Agricultural Policy, as would be required under full membership.Publication Mozambique Agricultural Sector Risk Assessment(World Bank, Washington, DC, 2015-08)Agricultural risk management is a central issue that Mozambique faces in development, and multiple stakeholders have analyzed this challenge, sometimes with different terminology and focusing on varying aspects. The government of Mozambique has adopted the strategic plan for agricultural development (PEDSA 2010-19) that focuses on: (i) increasing the availability of food in order to reduce hunger through growth in small producer productivity and emergency response capacity; (ii) enlarging the land area under sustainable management and the number of reliable water management systems; (iii) increasing access to the market through improved infrastructures and interventions in marketing; and (iv) improving research and extension for increased adoption of appropriate technologies by producers and agro-processors. The World Bank’s agriculture sector risk assessment takes a holistic approach and relies on long time-series historical data to arrive at an empirical and objective assessment of agricultural risks and their impacts on Mozambique. This assessment will form the basis of the second step, solution assessment, whose final findings will inform National Investment Plan for the Agrarian Sector in Mozambique (PNISA). This document considers the many aspects of assessing risk in the Mozambican agriculture sector. Chapter one gives introduction and context. Chapter two introduces the major characteristics of the agricultural system leading into chapter three, which presents a comprehensive picture of the risks that exist in the sector. Chapter four, in quantifying the risks that have been observed, comments on the losses that have been incurred by the sector because of production risks, whereas chapter five provides a qualitative discussion of how risk has an effect on the different stakeholders present in the sector. Chapter six delves into the risk prioritization carried out by the team and then comments on various management measures. The report concludes with chapter six, in which recommendations are provided for improving risk management in Mozambique.Publication Rwanda Agricultural Sector Risk Assessment(World Bank, Washington, DC, 2015-10-06)Agriculture is the dominant sector of the economy, contributing a third of the country’s gross domestic product (GDP) and about half of Rwanda’s export earnings. The government of Rwanda has therefore made agricultural development a priority and allocated significant resources to improving productivity, expanding the livestock sector, promoting sustainable land management, and developing supply chains and value-added activities. At the same time, Rwanda’s agriculture sector faces a series of challenges. Agriculture is dominated by small-scale, subsistence farming under traditional agricultural practices and rain-fed agriculture. As a result, average crop yields are low compared with potential yields, and exposed to risks such as weather related shocks and pest and disease outbreaks. The purpose of this report is to assess existing risks to the agriculture sector, prioritize them according to their frequency and impacts on the sector, and identify areas of risk management solutions that need deeper specialized attention. Three levels of risks are assessed: production risks, market risks, and enabling environment risks to selected supply chains. The report takes a quantitative and qualitative approach to risks. The report is structured as follows: chapter one gives introduction. Chapter two provides an overview of Rwanda’s economy and the role and structure of the agriculture sector. Agriculture sector risks (production, market, and enabling environment risks) for the selected food crops, export crops, and livestock are analyzed in chapter three. Analysis of the adverse impacts of agricultural risks at aggregate and provincial levels, along with a stakeholder risk assessment and a discussion of particularly vulnerable groups, is presented in chapter four. Chapter five prioritizes identified risks, discusses potential solutions areas, summarizes feedback from consulted stakeholders, and recommends solutions areas for further assessment.Publication Zambia - Commercial Value Chains in Zambian Agriculture : Do Smallholders Benefit?(World Bank, 2009-06-01)Agriculture and agroprocessing are important in Zambia's economy, representing more than 40 percent of gross domestic product (GDP) and contributing about 12 percent of national export earnings. Agriculture employs some 67 percent of the labor force and supplies raw materials to agricultural industries, which account for some 84 percent of manufacturing value-added in the country. Smallholder agriculture dominates the rural economy. It provides livelihoods for the overwhelming majority of rural households. The commercialization of smallholder agriculture is an important element of Zambia's strategy to increase economic growth in an equitable manner and diversify smallholder agriculture. This study therefore asks: 'do Zambian smallholders benefit from greater participation in value chains?' It provides an evidence-based analysis of the benefits and constraints associated with smallholders' integration into specific commercial value chains. The study also investigates whether the benefits of participating in these value chains can be increased for smallholders and provides corresponding policy and investment recommendations.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Morocco Economic Update, Winter 2025(Washington, DC: World Bank, 2025-04-03)Despite the drought causing a modest deceleration of overall GDP growth to 3.2 percent, the Moroccan economy has exhibited some encouraging trends in 2024. Non-agricultural growth has accelerated to an estimated 3.8 percent, driven by a revitalized industrial sector and a rebound in gross capital formation. Inflation has dropped below 1 percent, allowing Bank al-Maghrib to begin easing its monetary policy. While rural labor markets remain depressed, the economy has added close to 162,000 jobs in urban areas. Morocco’s external position remains strong overall, with a moderate current account deficit largely financed by growing foreign direct investment inflows, underpinned by solid investor confidence indicators. Despite significant spending pressures, the debt-to-GDP ratio is slowly declining.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.