Economic feasibility and impacts of replacing tobacco with alternative crops in smallholder cropping systems: evidence from Uganda

Tobacco is grown on more than 4 million hectares of global agricultural land in at least 124 countries. As a member state to the World Health Organization Framework Convention on Tobacco Control (WHO FCTC) international treaty, Uganda seeks to support economically viable alternative activities as a means to tobacco control because previous efforts with tobacco control that focused on the demand side have failed to control tobacco supply. This study employed the Tradeoff Analysis-Minimum Data (TOA-MD) model to assess tradeoffs and associated economic impacts of switching from tobacco to alternative crops in smallholder cropping systems. Results revealed that switching from tobacco to alternative crops is economically feasible for most of the farms owing to the higher net economic returns. The proportion of farms that expect higher returns from alternative crops is highest for cassava (97%) followed by maize (87%), rice (83%) and the least for beans (74%). Cassava is the best alternative for both small and large farms because of the highest gains in farm net returns, per capita income and poverty reduction. The next feasible crop alternatives for large farms are maize and rice. Despite their economic feasibility, alternative crops are typical of uncertain markets with unorganised structures for production. Since these are important incentives for tobacco farmers, the study recommends development of institutions that foster value chain development for alternative crops. Supporting agro-processors is likely to guarantee markets and provide for lump-sum payments, input credit for production and a reliable extension service system as way of incentivizing a sustainable switch to alternative cropping systems.