The hidden cost of Bangladesh's tobacco frontier

Bangladesh's tobacco industry has a consumption problem and a production problem. The country has made real and recognised progress on the plain packaging debates, taxation reform, and the Tobacco Control Act. 

The second problem, though, has barely been discussed. This piece is about the production problem, and specifically about what is happening in the Chattogram Hill Tracts (CHT).

In Alikadam upazila, Bandarban, commercial tobacco now covers an estimated 85% to 90% of cultivable land at peak season. 

British American Tobacco (BAT) Bangladesh and affiliated companies have operated a contract farming system here since the mid-1980s, expanding steadily through a procurement architecture that provides seeds, fertiliser, and advance credit in exchange for exclusive purchase of cured leaf at company-fixed prices. 

Bangladesh Bureau of Statistics (BBS) data show that tobacco cultivation in Bandarban district grew from 127 hectares in 1995–96 to over 1,437 hectares by 2007–08, an elevenfold increase in 12 years. Growth has continued since.

Field evidence shows that this expansion has generated three categories of cost that do not appear in any corporate account or government monitoring report: ecological, economic, and social. Each demands a policy response. 

The ecological bill

Tobacco leaf cannot reach commercial grade without heat-curing. In Alikadam, curing happens in taandur kilns, cylindrical structures burning continuously for up to 72 hours per batch. 

The fuel comes from the surrounding hill forest. With thousands of kilns operating across Alikadam, Lama, and Naikhyongchhari at peak season, the cumulative fuelwood extraction is among the most significant drivers of deforestation in Bandarban. 

There is no official monitoring system to track it. There is no company to report it either. The fuelwood volume used per kilogramme of cured leaf, a figure that would make the ecological cost immediately legible, does not appear in BAT Bangladesh's sustainability reporting.

The Matamuhuri River, which runs through the tobacco cultivation zone, receives agrochemical runoff from the intensive use of fertilisers and pesticides across tens of thousands of bighas of farmland each season. 

Farmers across all three study villages reported declining fish catches over the past decade. Soil fertility in tobacco fields was described as declining after repeated cultivation cycles. Neither indicator is captured in any government or corporate monitoring system currently in operation.

The economic structure

The contract farming system operating in Alikadam shifts the risks on to farmers, while the profits flow to the company.  

Before farmers even begin planting, they receive advances, input packages and, in some cases, cash. But these are deducted from the value of the harvest, leaving many households tied to the next season's contract before the current one has even ended. 

A 2008 crop input report from BAT Bangladesh's own division found that 80% of registered farmers would not cultivate tobacco without the company's fertiliser supply. That level of dependence makes it extremely difficult for farmers to walk away from the system. 

Grading, which determines the price a farmer receives, happens at the company collection point, using criteria that are not published and cannot be independently appealed. 

The biggest losses often come when tobacco is graded. Small differences in quality can mean large differences in price, giving buyers considerable power over what farmers ultimately earn. Mahajan intermediaries and company-linked local traders also profit from advance-credit arrangements without taking part in the hard work of growing or curing the crop. 

"Every year we say this is the last tobacco season. But then we have the debt, and there is nothing else that pays. So we begin again."

This is not a market relationship between equals. It is a procurement architecture designed to bind smallholder households into a commodity system on permanently asymmetric terms. The language of farmer welfare and contract security that appears in company communications does not survive contact with the field evidence.

The social dimension

Mro indigenous communities in Alikadam occupy the most structurally vulnerable position in this system. 

Many lack formal land title and are excluded from direct company registration. They participate in the tobacco economy primarily through informal arrangements with registered Bengali settler farmers paying a commission share in exchange for market access, an arrangement that in some cases consolidates into de facto tenure transfer over successive seasons.

The replacement of jhum, the rotational shifting cultivation system that has sustained Mro food systems and ecological knowledge for generations, with tobacco monoculture has consequences that extend far beyond agriculture. 

Land previously producing rice, vegetables, and mixed crops has been converted to tobacco fields. The seed varieties, fallow rotation practices, and forest-agriculture knowledge systems that jhum sustains are eroding alongside the practice. 

A 63-year-old Mro elder in Palong Para described the change with a clarity that no survey could capture: "Our children do not know the old ways of the field. They know tobacco. And tobacco knows only the company." 

What a responsible policy response looks like

Three measures follow directly from the evidence and are achievable within existing legal frameworks.

First, mandatory corporate disclosure. Tobacco companies operating in the CHT should publish annual data on the amount of fuelwood used to cure each kilogram of tobacco, the volume of fertilisers and pesticides they distribute, and the average grades and prices paid to farmers in different areas. This is not a radical new regulation. It is simply applying the same environmental disclosure standards expected of other industries to a sector that has largely escaped such scrutiny. 

Second, contract reform. A transparent and contestable grading system, a published minimum price referenced to verified input costs, and a legal right of exit without penalty after a defined contract period would materially alter the balance of structural power in the farmer-company relationship. None of these requires the abolition of contract farming.

Third, substantive tenure protection. The 1997 CHT Peace Accord's protections for indigenous customary land rights require enforceable mechanisms, not declarations, to become operative. Documentation of existing Mro landholding before disputes arise, and enforceable restrictions on informal land transfer under conditions of economic duress, are the minimum requirements.

Bangladesh's tobacco sector contributes to government revenue and employs hundreds of thousands of people. These are real considerations. They do not, however, justify the permanent externalisation of ecological and social costs onto the communities least equipped to absorb them. The CHT tobacco frontier is not a development success story with some rough edges. It is a corporate commodity system operating in a regulatory vacuum, and the evidence for that assessment is sitting in the hills of Bandarban, one burned forest at a time.

Sketch: TBS

Nur Nishat Anjum is a researcher at the Department of Anthropology, University of Dhaka.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.