ON

Tobacco Industry: It’s socio-economic

effect in Bangladesh 9

Submitted To: Submitted By:

Md. Saiful Islam Md. Mannun Islam
Lecturer B.B.A (Hon’s) 2nd Year
Department of Management Class Roll No:
NU Roll No:
Govt. B.M. College, Barisal.
Reg. No:
Session: 2012-2013
Department of Management
Govt. B.M. College

Date of Submission: 05 August 2015

Latter of Transmittal
Tobacco Industry: It’s socio-economic effect in Bangladesh
5th August, 2015
Md. Saiful Islam
Term Paper Supervisor
Department of Management
Govt. B.M College, Barisal.
Sub: Submission of Term Paper on Tobacco Industry: It’s Socio-economic effect
in Bangladesh.
9
Dear Sir,
The term paper submitted is on “Tobacco Industry: It’s Socio-economic effect in
Bangladesh” done as a partial fulfillment of the requirement of BBA. You assigned
me to prepare this term paper as a requirement of the BBA course curriculum. I am
enthusiastic to you for giving me the opportunity to undergo such an experience.
This term paper is a partial requirement of the BBA program go in making this report
worthy on. I have tried my level best to gather all relative information from the
various sources. I hope that it will meet your expected demand.
I sincerely, hope the this report meets your fulfillment and its appraisal would
demonstrate my ability to prepare a formal report. I would be glad to furnish you with
clarifications, if required.

Thanking you
Sincerely yours

Md. Mannun Islam

B.B.A (Hon’s) 2nd Year
Class Roll No: 26283
NU Roll No: 8326464
Reg. No: 2360709
Session: 2012-2013
Department of Management
Govt. B.M. College, Barisal.

Student’s Declaration
Tobacco Industry: It’s socio-economic effect in Bangladesh
Md. Mannun Islam a student of BBA 2nd year department of Management Govt.
B.M. College, Barisal declare that this term paper title “Tobacco Industry: It’s
Socio-economic effect in Bangladesh” is a presentation of my own research work
and complied by me. It does not reproduce others work. Every effort is made to
indicate this clearly, with due reference to the literature & acknowledgement of
collaborative research and discussion. This work was done under the guidance
Md. Saiful Islam, Lecturer, Department of Management, Government B.M. College, 9

Barisal.

Md. Mannun Islam

……………………….
Signature
Date: ………………

Supervisor’s Authentication
Tobacco Industry: It’s socio-economic effect in Bangladesh
Md. Mannun Islam Class Roll-26283, N.U Roll- 8326464, Reg. No- 2360709, BBA
Program has submitted the term paper on “Tobacco Industry: It’s Socio-economic
effect in Bangladesh”
Which he has covered some ideal, realistic and practical parts of the study in the term
paper. So, I recommend the term paper can be accepted.

9
Md. Saiful Islam

……………………
Signature
Date:

Tobacco Industry: It’s socio-economic effect in Bangladesh

 Acknowledgement

Find of all, I would like to convey my sincere thanks to GOD because he has
given me the opportunity to complete my term paper of course, I acknowledge
the support and assistance given by a number of people. I am grateful to many
individuals for the completion of the term paper successfully.

9
I have gathered an enormous deal of experience while going through the
internship period and preparation of this term paper. I would like to thank to
my term paper supervisor Md. Saiful Islam for his excellent guidance and
support during the preparation of the report. I really want to express my heartist
gtatitude to him for his valuable advice and time that he gave me, which helped
me to prepare this Term Paper.

Lastly, my heartiest thanks go to others who were involved and helped directly
and indirectly in completion of term paper and preparing this report. Special
thanks go to all workers of online Services for who spared this time generously
and took the trouble of answering detail information and helped me to complete
my study. Without them all these wouldn’t be made possible.

Abstract

Tobacco Industry: It’s socio-economic effect in Bangladesh

To review the literature on environment health impact of tobacco farming and to
summaries the finding and research gaps in this field.

A standard literature search was performed using multiple electronic databases for
identification of peer-reviewed articles. The internet and organizational database were
also used to find other types of documents (eg, books and report). The reference lists
of identified relevant documents were reviewed to find additional sources. 9

The selected studies document many negative environmental impacts of tobacco

production at the local level, often linking them with associated social and health
problems. The common agricultural practices related to tobacco farming, especially in
low-income and middle-income countries, lead to deforestation and soil degradation.
Agrochemical pollution and deforestation in turn lead to ecological disruptions that
cause a loss of ecosystem services, including land resources, biodiversity and food
sources, which negatively impact human health. Multinational tobacco companies
policies and practices contribute to environmental problems related to tobacco leaf
production.

Tobacco Industry: It’s socio-economic effect in Bangladesh

 Executive summary

Tobacco has been introduced since mid sixties of the last century into the fields where
food crops were grown, and more widely after liberation in 1971 by the British
American Tobacco Company in Teesta silt in Rangpur area. Although Bangladesh
Agricultural Research Institute (BARI) has conducted research and development
activities of tobacco and abandoned in 1995, tobacco production has mainly been 9
pushed by big multinational companies such as British American Tobacco Company
through contract growers.
Bangladesh, with a population of 144 million people, is one of the poorest countries in
the world, with a promise of emergence in the form of economic drive and growth by
utilization of the enormous labor. However, Bangladesh has a low literacy rate,
estimated at 61.3% for males and 52.2% for females in 2010 (Cia.gov, n.d.). The
agriculture based economy is quite prevalent in rural sectors of Bangladesh, residence
to majority of the Bangladeshis. Before going directly into the findings concerning the
impact of tobacco on the health status of the tobacco workers, it is appropriate to
examine profiles of the tobacco workers. If we look at table-1 we observe that
maximum respondents were illiterate (63.0 %) and only a fewer portion of them
having secondary level education (8.0%). With respect to the types or work the
workers involved in the factory we see that about 56.0 % involved in bidi making,
24.2% in gull processing and the rest of 19.8% workers involved in jarda processing.
Alcohol is different in that about nine out of 10 adults use alcohol in limited amounts
with no adverse outcomes. The other one in ten abuses alcohol, which results in a
range of negative health and social outcomes including an estimated 100,000
premature deaths per year.

Table of Contents

Tobacco Industry: It’s socio-economic effect in Bangladesh

SL Topics Page Number
1 Letter of Transmittal 2
Student’s Declaration 3
Letter of Acceptance 4
Acknowledgement 5
Abstract 6
Executive Summary 7
2 CHAPTER-1 (Introduction)
1.1 Introduction 9 9
1.2 Objectives of the term paper 10
1.3 Background Scenario 11
1.4 Methodology 12
1.5 Results 12
3 CHAPTER-2 (Conceptual Issues)
2.1 The Effect of Advertising on Tobacco Consumption 13
2.2 Tobacco Growing and Manufacturing 14
2.3 Tobacco Control Efforts 15

4 CHAPTER-3 (Database)
3.1 The production of tobacco in Bangladesh 16-17
3.2 Occupational considerations 18

5 CHAPTER-4 ( Finding of the study)

4.1 Finding of the study 19-20
4.2 Age Distribution of the Respondent 21
4.3 Occupational Status of the Respondent 21
4.4 Educational Status of the Respondent 22
4.5 Smuggling 23-27
4.6 Impacts of Tobacco Cultivation 28
4.7 Microeconomic effects of tobacco use – poverty 29

6 CHAPTER-5 ( Conclusion)
5.1 Conclusion 30
5.2 Summary of major finding
5.3 Recommendation
5.4 Encluding Remarks 31
Reference 32

Chapter-1 (Introduction)

Tobacco Industry: It’s socio-economic effect in Bangladesh

1.1 Introduction:
Bangladesh is one of the largest tobacco consuming countries in the world. Over 58%
of men and 29% of women use some form of tobacco, whether smoked (both
cigarettes and bidis) or smokeless. In 2012, an estimated 46.3 million adults used
some form of tobacco product, smoked or smokeless. Most smokers are male —
28.3% of adult men smoke manufactured cigarettes and 21.4% smoke bidis. In
contrast, smokeless tobacco use is substantial across both genders, with 26.4% of men 9
and 27.9% of women using some form of smokeless tobacco. Most smokeless tobacco
use is of betel quid with tobacco (zarda) though other forms of smokeless tobacco
products, including gul, sada pata, and khoinee, are also commonly used. Youth
tobacco use is a growing problem in Bangladesh. In 2007, 6.9% of in-school youth
ages 13 through 15 years reported current use of some tobacco product, including
2.0% who reported cigarette smoking. Overall cigarette and bidi consumption have
been rising in Bangladesh in recent years, with cigarette smoking rising by over 40%
between 1997 and 2010, and bidi consumption rising by over 80% during the same
period. While its population has been growing rapidly, the increases in consumption
have outpaced population growth so that per capita consumption of both grew sharply
over this period. Given the high levels of tobacco use, Bangladesh faces considerable
health and economic consequences from tobacco. Over 57,000 deaths are attributed to
tobacco use each year, about one in six of all deaths among Bangladeshis 30 years and
older. In 2004, nearly 51 billion taka were spent to treat the diseases caused by
smoking, including 5.8 billion taka spent to treat non-smokers exposed to tobacco
smoke. In addition, smoking harms the economy, with a conservative estimate that
smoking-attributable lost productivity was 59 billion taka in 2004. Together, the
economic costs of tobacco use in Bangladesh accounted for over 3% of GDP in 2004.
Tobacco usage accounted for 4.1% of the global burden of ill-health in 2000.. Almost
4.9 million deaths in 2000 were attributed to tobacco usage. According to a recent
study on smokers, the average loss of life expectancy per tobaccorelated illness in
India was estimated at 20 years, with middle-aged smokers having twice the death
rates than non-smokers . Thus, tobacco usage results in loss of life – and in turn
productivity – during the active years of experienced workers.

1.2 Objectives of the study

Tobacco Industry: It’s socio-economic effect in Bangladesh
 The objective of the study was to obtain information on the economic costs of
illnesses resulting from tobacco usage in Bangladesh. It entailed calculating the
opportunity costs borne by the government attributable to tobaccorelated illnesses,
and an analysis of the extent to which these may frame tobacco control policy.
The specific objectives were to determine:
(1) the prevalence of tobacco usage;
(2) the prevalence of tobacco-related illnesses; 9
(3) utilization of health services (in a partial way);
(4) hospital costs borne by the health system due to tobacco-related illnesses;
(5) out-of-pocket expenditure of households, either when people are hospitalized or
attend outpatient departments, due to tobaccorelated illnesses;
(6) deaths and disabilities due to tobacco-related illnesses;
(7) the impact of second-hand smoking; and
(8) benefit of tobacco consumption for the economy. Using the above criteria we
attempted to test the following hypotheses:
(1) tobacco-related illnesses impose substantial costs to the society;
(2) total expenditure (household out-of-pocket, health system and indirect costs)
exceeds total income (public and private) earned from, domestic consumption of
tobacco; and
(3) the cost of tobacco usage is disproportionately high for the poor. The prevalence
of tobacco-related diseases and the average private and public costs of treating them
were estimated using data collected in 2004 from various sources, including a national
household survey, hospital costs
and patient surveys (from three public medical college hospitals and one private one),
and an expert survey that determined the survival rate and quality of life after
occurrence of the diseases attributable to tobacco. These data were supplemented by
others from the institutes that provide
specialized care for the diseases.

1.3 Background Scenario

Tobacco Industry: It’s socio-economic effect in Bangladesh

Bangladesh, with a population of 144 million people, is one of the poorest countries in
the world, with a promise of emergence in the form of economic drive and growth by
utilization of the enormous labor. However, Bangladesh has a low literacy rate,
estimated at 61.3% for males and 52.2% for females in 2010 (Cia.gov, n.d.). The
agriculture based economy is quite prevalent in rural sectors of Bangladesh, residence
to majority of the Bangladeshis. It has become visible that most of the studies on
socio-economic, particularly poverty, in Bangladesh are concerned with measurement
of poverty by estimating income and nutritional deprivations. Basically, the tobacco 9
consumption is more of a habitual condition due to different cultural factors.
Traditionally this habit is passed down in generations from elders to the younger
generations. Further, tobacco consumption behavior is fueled by being a form of
entertainment in the rural areas. Co-existing with extreme poverty is a thriving
tobacco industry. The tobacco products are quite the part of the daily consumption for
almost 38.7 million smokers (Nationmaster.com, 2003). Tobacco consumption
exacerbates the effects of poverty and causes significant deterioration in the living
standard of the rural and semi-urban dwellers. On average, the poor in Bangladesh
spend most of their money on food and other essential goods, yet are still unable to
provide even the basic necessities for their families. However, despite the high level
of poverty in Bangladesh, smoking rates are relatively high. Men aged 35-49 years
have the highest smoking prevalence at 70.3% and smoking prevalence is the highest
among the poorest.Cigarettes are the most expensive form of Tobacco products
followed by bidis.

1.4 Methodology
This is a field study research which has been made on the basis of a survey. A well
structured questionnaire has been developed after an intensive review of the literature
and practical experience. The target population of the study is the tobacco growers of
Kushtia in Bangladesh. The sample unit of this study is the individual farmer (tobacco
grower). Social Sciences 2013; 2(3): 128-134 131 The sample size is 262 farmers
consisting male and female. Non-probability convenience sampling procedure has
been used to collect primary data. Research was conducted in one of the most tobacco
growing areas: Kushtia (Daulatpur and Mirpur Upazilla). Data collection was
conducted on June-July of 2012.

Tobacco Industry: It’s socio-economic effect in Bangladesh

1.5 RESULTS
Before going directly into the findings concerning the impact of tobacco on the health
status of the tobacco workers, it is appropriate to examine profiles of the tobacco
workers. If we look at table-1 we observe that maximum respondents were illiterate
(63.0 %) and only a fewer portion of them having secondary level education (8.0%).
With respect to the types or work the workers involved in the factory we see that
about 56.0 % involved in bidi making, 24.2% in gull processing and the rest of 19.8%
workers involved in jarda processing. We also see from the table 1 that majority of the 9
workers produced 5-6 thousands bidi per day and the percentage being 45.5 and about
60.5 and 50.5 % workers processing 20-25 gm gull and 10 gross jarda per day. The
table also unveils that major portion of the respondents monthly income lies below
2000 Tk. and a few portion of them earned 4000 tk. and more (12.5%) and 50.3 and
39.5% respondents lived in kancha and tinsheed house. Regarding type of drug
addiction of the workers we see that vast portion of them was smokers followed by
gull and jarda users. The respondents were asked what is their cause of involvement
in tobacco industry then 51.0% of them said that due to financial problems, 41.0%
due to unavailability of work and the rest of 8.0 % said that they involved in such
hazardous work because of the industries are near to their home.

Chapter-2 (Conceptual Issues)

Tobacco Industry: It’s socio-economic effect in Bangladesh
2.1 The Effect of Advertising on Tobacco Consumption

Researchers study the effects of tobacco and alcohol advertising because the
consumption of these substances is known to have potentially adverse health
consequences. Tobacco use results in illness in proportion to its consumption, with
about one-third of tobacco consumers dying as a result of these illnesses. Alcohol is
different in that about nine out of 10 adults use alcohol in limited amounts with no
adverse outcomes. The other one in ten abuses alcohol, which results in a range of
9
negative health and social outcomes including an estimated 100,000 premature deaths
per year. There have been a number of empirical studies on the effects of tobacco and
alcohol advertising. The bulk of these studies indicate that advertising does not
increase tobacco and alcohol consumption. However, many public health advocacy
organizations do not accept these results. An examination of the methods and data
commonly used in empirical studies provides an explanation for these divergent
opinions. The key to understanding the empirical problems lies in the advertising
response function and the type of data used to measure advertising.

My most recent study, with Dhaval Dave, examines the effect of alcohol
advertising on alcohol consumption by adolescents. We use the Monitoring the Future
(MTF) the National Longitudinal Survey of Youth 1997 (NLSY97) datasets for the
empirical work. These datasets are augmented with alcohol advertising data,
originating aton the market level, for five media. Use of both the MTF and the
NLSY97 datasets improves the empirical analysis because each has unique
advantages. The large sample size of the MTF makes it possible to estimate
regressions with race and gender-specific subsamples. The panel nature of the
NLSY97 makes it possible to estimate individual fixed-effects models.

Finally, I am involved currently in a project with Melanie Wakefield, Chaloupka, and

others to examine the effect of tobacco counteradvertising on youth smoking. This
study uses data from Nielsen Media Research (NMR) on the 75 largest media markets
in the United States between 1998 and 2002. These data were merged with the
Monitoring the Future data.

2.2 Tobacco Growing and Manufacturing

Tobacco Industry: It’s socio-economic effect in Bangladesh
 Employment in tobacco farming accounts for less than 0.5% of agricultural
employment in Bangladesh. Tobacco is grown throughout the country, with the
largest tobacco growing areas including Rangpur, Kushtia, and Chittagong Hill. After
many years as a net importer of tobacco leaf, acreage and yields rose beginning 1999,
and Bangladesh has become a net exporter in recent years, exporting about one-third
of the tobacco grown. The cigarette market in Bangladesh, as in much of the world, is
highly concentrated. The premium segment of the market in Bangladesh is dominated
by British American Tobacco Bangladesh (BATB), a subsidiary of multinational 9
tobacco company British American Tobacco. The largest local tobacco company is
Dhaka Tobacco Industries (DTI), a part of the Akij Group. DTI dominates the market
for lower-priced cigarettes. In 2007, DTI entered into an agreement with Philip Morris
International to market Marlboro cigarettes in Bangladesh. By contrast, bidi
manufacture in Bangladesh is more fragmented, with Akij Bidi Factory, Ltd. (another
part of the Akij Group) the largest firm, accounting for over one-quarter of the
market, and the top 4 firms accounting for less than 50% of the market. Very few
Bangladeshis are employed in cigarette manufacturing, while more are involved in
bidi manufacturing, including many women and children working in household based
establishments where they make low wages and live in poverty. Overall, employment
in tobacco manufacturing is estimated to account for less than 1% of overall
manufacturing employment in Bangladesh.

2.3 Tobacco Control Efforts

Tobacco Industry: It’s socio-economic effect in Bangladesh

 The World Health Organization’s Framework Convention on Tobacco Control
(FCTC), the world’s first public health treaty, calls for governments to adopt
comprehensive policies to curb tobacco use. Bangladesh signed the FCTC on 16 June,
2003, and ratified it less than one year later, on 14 June, 2004. Bangladesh’s
participation in the FCTC has resulted in some advances in tobacco control policy,
most notably the Smoking and Tobacco Products Usage (Control) Act, 2005. The
2005 Act restricted smoking in a variety of places, but the only fully smoke-free
environments in Bangladesh are health care facilities and educational facilities (not 9
including universities), sports facilities and taxis. Smoking is restricted in other
venues, including restaurants, bars, and workplaces, but smoking is allowed in
designated areas. The Act also mandated rotating, textual warning labels that cover
30% of the front and back of cigarette packs. Efforts to strengthen these warnings to
include more prominent, rotating graphic images are ongoing. Additionally, the Act
prohibits a variety of tobacco product advertising, some promotions, and
sponsorships, but point-of-sale advertising and promotional discounts continue to be
allowed. Bangladesh does have a national agency for tobacco control and tobacco
prevention is a national objective, but significant progress is required to reach the set
of strong, comprehensive policies recommended by the World Health Organization as
part of the MPOWER package. Tobacco use in Bangladesh is split among a variety of
different products, with 23% of adults smoking tobacco, and 27.2% consuming
smokeless tobacco products. Men are much more likely to smoke than women, with
smoking prevalence among men at nearly 45%, as compared to 1.5% among women.
Most female smokers smoke bidis, while men are more likely to smoke manufactured
cigarettes, although many consume bidis. In contrast, smokeless tobacco use rates
among women are slightly higher than they are among men. In addition, a significant
number of Bangladeshi youth are taking up tobacco use, with over 9% of boys and
5% of girls ages 13 through 15 consuming some tobacco product.3 The growing
recognition of the health and economic consequences of tobacco use have led many to
call for the adoption and implementation of strong tobacco control measures,
prompting some policy makers to introduce a variety of legislation.

Chapter-3 (Database)

Tobacco Industry: It’s socio-economic effect in Bangladesh

3.1 The production of tobacco in Bangladesh

Compared to the total European production of almost 340,500 tons in 2001,

the overall quantity of raw tobacco harvested in Italy is stable at around 129,000 tons
(approximately 38% of the European total), involving an area of little more than
39,000 hectares. It should be noted that the top three producing countries (Italy,
Greece and Spain), represent alone almost 90% of the area grown and the total
tobacco production in the EU. Italian production is limited to the maximum 9
guaranteed quantity allocated to Italy that amounts to around 131,965 tons. The crop
area dedicated to tobacco has a very peculiar geographical distribution: in only four
regions (Campania, Veneto, Umbria and Puglia) almost 90% of the total production
can be found, with more than 85% of the total tobacco areas. In particular, six
provinces along cover almost 80% of the national production: Perugia (20.2%),
Benevento (16.3%), Verona (14.5%), Caserta (12.2%), Avellino (7.0%) and Lecce
(8.1%). There are however very strong structural differences: for example, in Puglia,
with almost 3,000 farms, just under 2,000 hectares are cultivated, with an average
farm investment of less than a hectare. A similar situation can be found in Campania,
while the average increases to 12 hectares in Umbria and 9 hectares in Veneto (table
1). This territorial concentration runs alongside a production concentration, which can
be seen from the analysis of the distribution of quotas per farm. On average, for each
farm, in Italy 4.88 tons of production quotas are allocated, compared to the EU
average level of only 3.35 t/farm.
According to the above, we can state that Bright tobacco (Group I) is cultivated using
a more industrial approach, as the average area dedicated to this crop variety reaches
almost 30 hectares in Veneto, while the cultivation of the oriental varieties (Group V),
typical of Puglia, and Burley (Group II), practised in Campania, involve a higher
number of small farms that, on average, dedicate less then one hectare of AAU to this
variety. The average subsidy can also be noted for each region, calculated as the ratio
between the total subsidies and the total regional production. This value represents the
weighted average of subsidies, according to the varieties of tobacco produced in each
region. In other words, we can state that regions such as Umbria and Veneto receive
on average a higher subsidy than Puglia and Campania. This is due to the
concentration of the production of varieties in Group I in the former regions, which
benefit from a higher subsidy compared to the varieties in the other groups.

Tobacco Industry: It’s socio-economic effect in Bangladesh

Finally, we also need to remember that tobacco farming also has important
repercussions within the national agricultural panorama, as it is very labour-intensive,
requiring in man-hours terms from 4,000 hours/ha to 1,000 hours/ha. Overall, it is
estimated that approximately 16,300 “full time equivalent workers” (FTEW) are
involved in tobacco farming, most of them obviously also concentrated in the four
above-mentioned regions. In addition to these figures, we obviously also need to
consider the workers “downstream” of the supply chain, as the tobacco crop triggers
the later phases of tobacco transformation and connected goods and services 9
production activities. In particular, the first transformation is the second phase of
the tobacco processing chain, prior to the preparation of the final product destined for
consumption. This industry, which is generally carried out in areas adjacent to the raw
tobacco harvest, lead to the creation of “tobacco districts”, which in the last three
decades have undergone restructuring, with a drastic reduction in the number of
companies. While at the beginning of the 1970s there were more than 1,200 first
transformation plants across the national territory, the progressive expulsion of the
smaller companies has led to the current situation, where there are only 59 companies
in the whole of the country (Nomisma, 2002). At the same time, this sectoral
reorganisation has led to the growth in average transformed tobacco volumes per
company. These considerations allow us to state that the possible introduction of
modifications to the current CMO to reduce or de-incentivate the tobacco industry
could have very severe consequences on the local economic systems, both in terms of
income and in terms of employment.

3.2 Occupational considerations

Tobacco Industry: It’s socio-economic effect in Bangladesh

 According to the report prepared by the Equal Project (2002) working group,
during the year 2002, over 125,000 workers were employed throughout the entire
tobacco agro-industrial processing chain, comprised of the agricultural segment and
the processing segment strictly connected to the base production phase. Of these,
approximately 6,000 were directly employed in the processing phase and just under
2,000 in various chain-related activities (shipping, handling, services, etc.), while in
the agricultural segment, approximately 119,000 were employed in tobacco
cultivation. Full-time agricultural phase employees, comprised almost exclusively of 9
independent farmers and their families, were estimated to number around 62,550 units
(52.4% of the total). The remaining 47.6% (56,799 units) were seasonal employees.
In general, it could be stated that the agricultural component of the tobacco
processing chain is characterised by the use of temporary labour (the number of
employees hired on a permanent basis is marginal). This factor is the reason behind
recourse to the labour market on the basis of seasonal peaks in manpower demand,
primarily during the months from June to October during transplantation and harvest
periods.
In analysing regional data, it can be seen that the employment structure is
closely tied to the type of farm prevalent in each region. In areas such as Campania
and Puglia with high numbers of small farms, less use is made of extra-family labour
in tobacco cultivation compared with the work performed by the farmer and his
family. Viceversa, in Umbria and Veneto where medium-to-large farms have a strong
presence, there is a significant presence of seasonal workers and, generally, a net
prevalence of extra-family labour.
The data collected from the 8th Italian Census of Industry and Services (Istat,
2001), clearly show a contraction of the Italian tobacco industry. Over the last ten
years, the number of tobacco processing plants has been reduced by approximately
35%, while the number of employees has been more than halved in the same period.
According to Census data, in 2001 the number of employees in the tobacco industry
are approximately 7,800 and the production plants 169. The average data per
production unit has decreased in the considered period, passing from 69 employees
per plant in 1991 to 46 in 2001.

Chapter-4 (Finding of the Study)

Tobacco Industry: It’s socio-economic effect in Bangladesh

4.1 Finding of the Study

One possible explanation for under-reporting includes concealment of

smoking by younger, more acculturated women, which was our a priori hypothesis.
Given the number of participants born in England who reported no tobacco use but
did not provide a saliva sample, it is reasonable to speculate that at least some of these
women may be smokers. Owing to limitations with the data, we cannot prove or
9
disprove that some of the under-reporting could also be attributed to these more
acculturated women. However, the socio-demographic characteristics of the under-
reporters were very similar to those who reported chewing tobacco but differed
markedly from the cotinine-validated non-users of tobacco, whose socio-demographic
profile matched the group our a priori hypothesis identified as likely undisclosed
smokers.

The most likely explanation for the discrepancy between self-reported non-use
of tobacco and saliva cotinine levels indicating personal tobacco use in participants in
the Health Survey for England is chewing paan that actually contains tobacco. The
regression analysis revealed that under-reporting tobacco users were more likely to
report chewing paan without tobacco compared with both self-reported tobacco
chewers and cotinine-validated non-users. Presumably the validated non-users do not
chew paan at all, whereas the self-reported chewers report chewing paan with
tobacco. It would seem, then, that at least some of the under-reporters are
unknowingly chewing paan that contains tobacco. Qualitative analysis would
contribute to testing this hypothesis and to discovering whether the responses
indicated concealment or a lack of awareness that the paan they use contains tobacco.
Heavy exposure to passive smoking would be another possible explanation, as values
up to 20 ng/ml can be caused by heavy exposure. However, only 5 of the 46 women
who did not report any tobacco use but whose cotinine levels were ≥15 ng/ml had a
cotinine level <20 ng/ml. It is important to note that six self-reported tobacco users
had a cotinine level <15 ng/ml, a standard cut-off for personal use. Recent work
points out that some tobacco users who smoke (or chew) infrequently or have low
consumption are likely to have lower cotinine levels, particularly if they did not
smoke (or chew) within the preceding 24 h. These ‘false-negatives’ are less important

Tobacco Industry: It’s socio-economic effect in Bangladesh

because this is a relatively small number of women and because we included all
women who reported chewing tobacco as tobacco users, regardless of cotinine level.

To what extent are participants who provided a saliva sample representative of those
interviewed? Women who reported no tobacco use and who did not give a saliva
sample were significantly different in a number of respects from women who reported
chewing tobacco and did provide a saliva sample. However, those with no self-
reported tobacco use and no saliva data did have a similar profile to those who
9
reported no tobacco use and had a salivary cotinine level of <15 ng/ml. This latter
group was also significantly different in a number of respects from women who
reported chewing tobacco or whose cotinine levels indicated personal tobacco use.
These differences make it less likely that women who were concealing their personal
tobacco use chose not to provide a saliva sample. Moreover, it is unlikely that a
participant would refuse to provide a saliva sample in an attempt to conceal a false
response, as the nurse requested the saliva sample in a separate part of the interview
process: at that stage of interview, they did not know that a saliva sample would be
requested at a nurse visit, nor what it was for. Very few participants who had a nurse
visit refused to provide a saliva sample.

Tobacco Industry: It’s socio-economic effect in Bangladesh

4.2 Age Distribution of the Respondent

From the Table 1, we observe that among 262 respondents on an average 66

percent of the respondent’s age less than 45 years. It is also observed that 8 percent of
the respondent has age less than 25 years and about 11 percent of the respondent has
age more than 55 years.

Table 1. Age of the Respondents: 9

Age in Years Frequency Percent

<25 21 8.0
25-35 73 27.9
35-45 80 30.5
45-55 59 22.5
55+ 29 11.1
Total 262 100.0

4.3 Occupational Status of the Respondent

From Figure 1, we may conclude that among the respondents most of the
respondent i., e., 83 percents were Farmer and also we observe that students also
involve in tobacco cultivation but there involvement is too poor. Business man and
service holder also engaged in tobacco cultivation.

Tobacco Industry: It’s socio-economic effect in Bangladesh

 4.4 Educational Status of the Respondent

As individual becomes educated s/he knows the hazards of tobacco use. It is,
therefore, expected that an inverse relationship would exist between the level of
education and the tobacco cultivation. Educated people are more aware about the
harmful effects of it. But this study shows that not only illiterate people but also
educated people are related to grow tobacco. In this study around 47 percent of the
respondents were reported as illiterate. Respondents with educational attainment up to 9
SSC are about 45 percent. Around 8 percent of the respondent have educational
qualification H.S.C. and above [Table 2]. This increase in the educational attainment
may be attributed to the overall increase in literacy as well as the encouragement by
the successive governments.

Table 2. Educational Status of the Respondent

Educational qualification Frequency Percent

Illiterate 123 46.9
Five 42 16.0
Eight 32 12.2
S.S.C 44 16.8
H.S.C 11 4.2
B.Sc 10 3.9
Total 262 100.0

Tobacco Industry: It’s socio-economic effect in Bangladesh

 4.5 Impacts of Tobacco Cultivation

Tobacco smoking and other forms of tobacco use impose a large and growing public
health burden globally and in Bangladesh. Globally, tobacco use currently causes 5.4
million premature deaths each year, and current trends predict that one billion people
will die from tobacco use in the 21st century (WHO, [16]). Smoke-free policies are
limited to health care and educational (excluding university) facilities and do not
cover bars, restaurants, government buildings, transport, indoor workplaces and other 9
indoor public places. Tobacco advertising is banned on television and radio, in local
magazines and newspapers, and on billboards, but is allowed at the point of sale.
Tobacco company sponsorship of tournaments is banned, but promotional discounts
and distribution of free samples are allowed. Health warnings are required on
cigarette and bidi packages, but do not include graphic images, and no warnings are
required on smokeless tobacco products.
Tobacco excise taxes have increased over time, but tobacco products have become
more affordable over time and significant tax increases have not been adopted to curb
tobacco use. Currently, tobacco use causes nearly six million deaths per year
worldwide — more than one in ten adult deaths. About 70% of current tobacco-
attributable deaths occur in low and middle-income countries (Jha P. et al., [6]).
Tobacco use is estimated to kill approximately 57,000 people in Bangladesh each year
— about one in six of all deaths among people ages 30 years and older.14 As in other
countries, the majority of these deaths result from lung and other cancers, strokes,
ischemic heart and other cardiovascular diseases, and respiratory diseases. Estimates
indicate that there are about 1.2 million cases of lung cancer, cerebro-vascular
disease, coronary artery diseases, chronic obstructive pulmonary disease and other
tobacco-attributable illnesses in Bangladesh annually. Given the numerous diseases
caused by tobacco use, the health care costs of treating these diseases are substantial.
Estimates for 2004 indicate that the annual health care costs attributable to tobacco-
related illnesses in Bangladesh were 50.9 billion taka (US$ 856 million), including
5.8 billion taka (US$ 98 million) to treat the diseases caused by exposure to
secondhand tobacco smoke.

Tobacco Industry: It’s socio-economic effect in Bangladesh

 Table 3. Opinions of the respondents about tobacco cultivation

Opinions of the Respondents Yes No

Tobacco cultivation pollutes 163 (62.2%) 99 (37.8%)

environments

Tobacco cultivation decreases soil 9

fertility 174 (66.4%) 88 (33.6%)

Tobacco cultivation is more profitable 250 (95.4%) 12 (4.6%)

Tobacco cultivation gives more money

at a time 202 (71.1%) 60 (22.9%)

Tobacco cultivation is harmful for health 197 (75.2%) 65 (24.8%)

Tobacco cultivation needs a lot of

Fertilizer 175 (66.8%) 87 (33.2%)

Tobacco cultivation is inspired by any

company 241 (92%) 21 (8%)

Company give loan for tobacco

101 (38.5%)
cultivation 161 (61.5%)

Tobacco Industry: It’s socio-economic effect in Bangladesh

 Tobacco as a ‘crop’ is harmful in many ways. For example, it has direct
impact on soil depletion, pollution of soil and water from excessive use of chemical
fertilizers, pesticide and irrigation water and worst of all is the damage to forest,
homestead trees, road side trees etc. Tobacco is prone to many diseases therefore
requires huge chemical inputs, upto 16 applications of pesticides including those
which are banned for use such as Aldrin, Dieldrin, DDT (Md. R. A. Khan, [12]) .
There are studies which have shown the environmental, social and health impact of
the tobacco cultivation but yet no strong step is taken by the government to stop such 9
hazardous and aggressive crop. Its impact on food production is clearly understood
because it occupies land of food crops for the entire year, it takes away the inputs
needed for growing food crops and most importantly the areas growing tobacco
become food deficit areas. The social impacts are also very much visible. In the
families of tobacco growers, the stress situation hampers the family peace and
happiness; children are deprived of going to school in tobacco harvesting and curing
time (march-April) and also during firewood collection time in August-September.
Men in all the families of the respondent get allured by cash income earned from
tobacco. They see large amount of cash money which they receive after selling
the leaves. But soon this money is spent for treatment of diseases that the family
members suffer, paying for the debts, managing food costs as every food item has to
be bought. At one point, they say that they do not have money anymore. Since the
start of tobacco cultivation and its gradual expansion without any regulation, the
acreage and production of food crops started declining in the research areas. The trend
is such that the production of vegetables has become negligible. The diversity of crops
has been reduced with the introduction of tobacco. Only rice and some vegetables are
grown in the kharif season. The farmers do not have any seed of food crops in their
hand. The farmers have lost the tradition of maintaining seeds as food crops were not
grown anymore. In case of urgent need for food production the farmers buy seed from
the market mainly High yielding varieties (HYV) and hybrids. In this situation, a
holistic approach is needed to invigorate the base of crop variability and diversity
(Md. Mosharraf Uddin Mollah) From Table 3 we can say that among 262 respondents
163 (62.2%) says that tobacco cultivation pollutes the environment. About 66 percent
tobacco grower says that soil fertility has been decreased by tobacco cultivation.
Around 95 percent respondents reveal that tobacco cultivation is more profitable than
cultivation other crops. This is a great threat to other crop production and continuing
this one creates food crisis in our country in long run. By tobacco cultivation the
Tobacco Industry: It’s socio-economic effect in Bangladesh
tobacco growers get more money at a time from the company related to tobacco
cultivation. It is observe that 92 percent of the respondent says that they are inspired
to tobacco cultivation by any company situated in Kushtia. Tobacco cultivation
requires large investments of cash causes farmers to borrow from moneylenders with
high interest, leads to chronic indebtness. About 62 percent of the respondent says
that they get loan for tobacco cultivation from a company. The major companies
involved in tobacco leaf production as well as cigarette and bidi production in Kushtia
areas are British American Tobacco (BAT) Company, Akij Tobacco, Abul Khair, 9
Dhaka Tobacco, Nasir Tobacco. Around 67 percent tobacco grower says that they
have to use more fertilizer in tobacco production and it affects the further production
of other crops in the same land. Exposure to green leaves causes acute sickness
making farmers often bedridden and causing vomiting, headache and breathing
problems. In this study around 75 percent respondent says that they face some health
related problem. They also say that the harvesting process of tobacco is so risky.
Though farmers face some problem to tobacco cultivation but it is more profitable.
This sort term profit continues the tobacco cultivation though the long term effect is
negative.n The profits depends on so many factors some of them are cost on seed,
fertilizer and other pesticides, labor, irrigation, etc.

Tobacco Industry: It’s socio-economic effect in Bangladesh

Table 4. Model Summary

R R Square Adjusted Std. Error F P Value

R Square of
The
Estimate

0.996 0.992 0.992 5083.246 4009.269 .000 9

From the Table 4 we may conclude that the fitted model is well and good since the
value of 2 R is too high. Also the value of F statistic shows that the model is fitted
well.

Profit of Tobacco Cultivation = 983.622 867.485x 1 + 4.437x2 + 1.637x3 + 3.33x4 + 0.629x5

+1.872x6 + 4.042x7 + 1.265x8

4.6 Smuggling
Tobacco Industry: It’s socio-economic effect in Bangladesh
 Tobacco tax increases seem to offer a win-win situation: higher revenues for
governments, and a strong incentive to people to quit smoking, with a particularly
strong deterrent to young people, who tend to be much more price-sensitive. Why
don’t more governments raise cigarette taxes? Some fear that higher taxes would
cause a huge increase in smuggling, that would cheat governments of tax revenues.
But the evidence suggests a different conclusion. This clearly suggests that prices and
taxes are not the whole story. It is not a simple case that higher taxes and prices will 9
lead to more smuggling. Corruption is a key factor in explaining smuggling levels:
countries with high general levels of corruption also have high levels of cigarette
smuggling, irrespective of their price and tax levels, and vice versa for countries with
little corruption (Figure 9 and World Bank, 1999). Organised crime and low risks of
being caught or facing serious sanctions play a big role. 2000 The higher taxes are,
the stronger the incentive to smuggle. Some countries have experienced increases in
smuggling after implementing tax increases, but even so, they have seen total tax
revenues rise as a result of the tax increases. This gap provides a strong incentive in
itself to smugglers, since they can easily buy cigarettes cheaply from the
manufacturers or from middlemen, and then sell them for a good profit, even in
countries with relatively low prices and taxes. New analysis by the World Bank
suggests that even when one builds in a causal link between higher prices/taxes and an
increase in smuggling, an average global increase of 10% in cigarette prices would
raise revenues by about 10%, lower consumption by about 3.5%, and increase the
volume of smuggling slightly. These include higher penalties for smuggling; more
resources for detecting and prosecuting smugglers and better collaboration among
customs officials around the world; and various measures to make exporters and
traders responsible for their cigarettes while in transit from their initial to their final
destinations, including requiring manufacturers to place unique identifying codes on
all packs of cigarettes to enable smuggled cigarettes to be tracked and traced.

4.7 Microeconomic (household) effects of tobacco use – poverty

Tobacco Industry: It’s socio-economic effect in Bangladesh

 There are important microeconomic or household level economic effects of
tobacco use and tobacco control. High prevalence rates of tobacco use among
lowincome men in developing countries put them at high risk of serious diseases and
premature death, and their sidestream (“secondhand”) smoke can harm their children
and wives. Part of a large recent study covering more than 20,000 poor men and
women in 23 countries found that sickness or injury of a family member was by far
the most frequent trigger for a downward slide into or exacerbating poverty. 20 Health 9
care costs and lost income because of ill health and premature death are frequently
cited by poor people as their gravest concerns. Very few poor people have health
insurance or unemployment benefits. Many poor people have few assets, apart from
their ability to work. The poorer, less educated and less skilled people are, the more
likely it is that their livelihood entails physical work. When a breadwinner in a poor
family becomes too ill to work, the family’s food and income supplies often stop.
Paying for treatment further impoverishes the family, and may force them to sell
animals, take children out of school, and forego buying food. Medical care may be
inaccessible, requiring many hours of walking and waiting; the quality of care may be
poor, and drugs are often unavailable.21 This makes their chances of recovering from
illness lower than for people better able to afford and access health care. Policies and
interventions to help poor smokers quit, and to discourage others from starting are an
important part of national and international efforts to improve the health and well-
being of poor people, a core goal of development assistance.

Chapter-5 (Conclusion)
Tobacco Industry: It’s socio-economic effect in Bangladesh
5.1 Conclusion

This paper aims to evaluate the socio-economic effects of the coming tobacco
reform in Bangladesh through a farm model based on the Positive Mathematical
Programming approach. The micro-data used for the present analysis is related to the
farm accounting information contained in the Bangladesh database for the tobacco
specialized farms. In this framework, each farm models reproducing the farm 9
behaviour are implemented in order to have some relevant information to the future
farmers responses to the introduction of the new tobacco reform. In a more specific
manner, the information obtained by the models concerns the modification in the land
allocation, the consequent changes in farm revenue and the impact on the employment
in agriculture and in the tobacco industry. The variation in production supply is
accompanied by a strong farm reorganisation process, which implies the partial (and
total) substitution of tobacco crops with other processes present in the farm (above all
wheat and protein crops). The variation in production organisation differs from region
to region, precisely as a consequence of the various alternative processes. The greatest
economic effect caused by the Reform is represented by the reduction in overall aid
that farms would receive in the form of coupled and decoupled payments. Despite this
reduction, the general effect on farm gross margin is positive in almost all scenarios
and farm typology considered, mostly because of the parallel decrease in variable
costs.
In conclusion, the theory of an industry advertising response function is
supported by the empirical results from my own prior studies and reconciles the
contrary findings from other prior studies based on aggregated time-series data. Taken
together, these empirical studies suggest that time-series advertising data for alcohol
and tobacco are not appropriate for measuring the effect of advertising. However,
further studies using cross-sectional data are also likely to find positive effects of
advertising; studies of advertising bans will find effects if they are comprehensive
bans; and studies of counteradvertising are likely to find that counteradvertising
reduces consumption.

5.2 Concluding Remarks And Direction For Future Research:

Tobacco Industry: It’s socio-economic effect in Bangladesh
 This paper examined withes financial reporting standards cash be used as a
device for monitoring the environs behavior of environment sensitive companies. The
paper reviewed the literature in ergonomics. Finance, environmental accounting and
examined the voluntary- mandatory mechanisms of corporate disclosure, the
researches surmise that the proprietary cost (Verrecchia, 1983) and voluntary
disclosure mechanism is infeasible for monitoring public goods such as the
environments.
Furthermore, using qualitative and case research methodology the paper examined the 9
annual reports of sixty five local companies that are listed on Dhaka stack exchanges.
The researchers find that the social and sustainability repents that were studied do no
have standard formats, and the GRI guidelines appear to be inadequate.
The financial statement though claim to comply with BFRS they dos not enable firms
to disclose key environmental information. Consequently, the paper proposed two
policy options of either requiring the disclosure of minimum set of environmental
information through the existing set of comprehensive financial statements.
The separate statement on the environments that is prepared in accordance with BFRS
has a number of advantages, including the decoupling of reputation management
efforts of environments ally sensitive firms from third genuine information disclosure
efforts.
The proposed statement is consistent with the REA (resource, event and agent)
accounting concept, and contain information can be aggregated for planning and
monitoring at sector, macro, regional and global levels. The information can be used
by both market and on market actors. Furthermore, since environmental reports the
incremental financial statements.

References

Tobacco Industry: It’s socio-economic effect in Bangladesh

  Assotabacco, 2003, La filiera del Tobacco in Italia, draft version.
EC Commission – DGVI, 1998, Tobacco sector Reform, Fact-sheet.
EC Commission Regulation 1193/02 dated 3 July 2002, establishing the quantities
that can be transferred from one variety group to another within the framework of the
guarantee limits for the harvest of 2002 in the raw tobacco sector.
EC Commission Regulation 1983/02 dated 7 November 2002, modifying EC Reg.
2848/98 concerning the means of application of the quota buy-back system in the raw
tobacco sector. 15 EC Commission Regulation 2848/98 dated 22 December 1998, 9
including the means of application of the EC Council Reg. 2075/92 in terms of
subsidies, production quotas and specific assistance for raw tobacco producers.
EC Commission Regulation 640/03 dated 9th April 2003, establishing the quantities
that can be transferred from one variety group to another within the framework of the
guarantee limits for the harvest of 2003 in the raw tobacco sector.
EC Commission, 2002, Report of the European Parliament and the European Council
on the operation of the CMO in the raw tobacco sector, working document of the EC
Commission services, Brussels.
EC Council Regulation 1636/98 dated 20 July 1998, modifying EC Reg. 2075/92
concerning the common organisation of the markets on the tobacco sector.
EC Council Regulation 2075/92 dated 30 June 1992, concerning the common
organisation of the markets in the raw tobacco sector.
EC Council Regulation 546/02 dated 25 March 2002, fixing subsidies and guarantee
limits for leaf tobacco, per variety group and member state, for the harvests of 2002,
2003 and 2004 and modifying EC Reg. 2075/92. EC Council Regulation 660/99 dated
22 March 1999, modifying EC Reg. 2075/92 and fixing subsidies and guarantee limits
for leaf tobacco, per variety group and member state, for the harvests of 1999, 2000
and 2001. ISTAT, 2000, Results of the 5° General Agricultural Census, Bangladesh.
MOAF, 2002, Gli aspetti occupazionali della filiera Tobacco in Italia, Progetto Equal
IT – MDL – 200.

Tobacco Industry: It’s socio-economic effect in Bangladesh