Lula Government Delays Tobacco Growing Phase-Out Program

The Brazilian Tobacco Growers Association (Afubra) estimates there were over 138,000 tobacco producers in the 2024/25 harvest, most of them family farmers from the South, like Padilha. Two decades earlier, in 2004/05, that number was about 236,000.

The same trend is seen in foreign trade. Brazil, the world’s largest exporter of tobacco leaf, shipped 446,000 tons abroad in 2024 — down 28% from 2005, according to the Ministry of Development, Industry, Trade, and Services (MDIC). The decline reflects a global drop in cigarette consumption, driven by public health measures.

Negotiated in the early 2000s, the global Framework Convention on Tobacco Control (FCTC) — coordinated by the World Health Organization (WHO) and ratified by 192 countries — is partly behind the drop in demand. Brazil joined the treaty in 2006, but only after facing fierce resistance from the tobacco industry and farmers. As a result, when signing it, the Brazilian government promised to create policies to support farmers in diversifying their crops into alternatives to tobacco, given that efforts to curb cigarette use would lead to a reduction in demand for the leaf.

Nearly two decades later, those alternatives remain elusive. Aging farmers, no longer able to handle the grueling labor tobacco demands, often lease or sell their land. Their children have little interest in rural life, let alone tobacco farming. Larger producers snap up smallholdings, shifting the profile of family farming — once based on tobacco, poultry, and subsistence crops — toward large-scale commodities like soybeans.

According to data from the Brazilian Institute of Geography and Statistics (IBGE), 41% of the planted area in Sinimbu in 2003 was devoted to tobacco, with not a single square meter planted with soy. Twenty years later, in 2023, tobacco still covered 35% of the municipality’s farmland, while soy had expanded to nearly 19% of the total. In the same period, the area planted with beans, for instance, shrank from 7% to just 2%.

The industry itself offers little help. Tobacco companies and rural associations tend to view diversification programs as “attacks” aimed at “eliminating” tobacco farming — the primary source of income for family farmers in several southern regions of Brazil. At the same time, the sector insists that small producers are not dependent on the crop. The strategy is to portray any public policy linked to tobacco control as a direct blow to tobacco growers — and, by extension, to family farming.

“It becomes ingrained in farmers’ minds that tobacco is the only crop capable of generating income and profit on a small property, ” says geographer Virgínia Etges, a professor at the University of Santa Cruz do Sul (Unisc) — a city that hosts the headquarters of the industry’s main companies. “And they shut themselves off to anything else. ”

According to Afubra, tobacco accounts for an average of 56% of growers’ gross income, with food crops and livestock making up the remainder. In practice, though, much of this so-called “alternative” production is destined for the farmers’ own tables.

In early 2024, during the latest Conference of the Framework Convention, the Ministry of Agrarian Development (MDA) even announced the resumption of the PNDACT. But the measure has been stalled in Minister Paulo Teixeira’s office since December of that year. When questioned, the ministry dodged explaining the reason for the delay. Speaking to Joio, the ministry promised to relaunch the program by March 2026.

In April this year, the Federal Audit Court (TCU) released an audit that flagged several problems in MDA initiatives, including the absence of clear project guidelines, contracts and partnerships with incorrect timelines, and failures in monitoring outcomes. Unsurprisingly, little data exist on the most recent editions of the PNDACT—such as whether producers returned to tobacco once the projects ended, or whether alternative crops proved successful.

Padilha tried selling vegetables and potatoes, and invested in a small preserved-foods agribusiness, but eventually had to return to cultivating tobacco. In order to leave the tobacco bussiness, he decided to sell his rural property (Photo: Isabelle Rieger/O Joio e O Trigo)

According to Freedom of Information Act (LAI) requests made by reporters, the only evaluation document available at the ministry is a nine-page report covering calls for proposals implemented between 2018 and 2023. Without offering details, the report claims that nearly half of the 1,200 tobacco farmers who benefited had replaced tobacco with corn as their “main activity,” supposedly proving the program’s success. Dairy farming, horticulture, and bean production also appeared as alternatives in other cases. The report does not specify, however, in which regions these crops took hold, how much income they generated, or whether tobacco was in fact abandoned on those properties.

Speaking to Joio, the National Agency for Technical Assistance and Rural Extension (Anater), which was responsible for implementing the latest editions of the diversification program, said that “through its Technical Directorate, it has not received any guidelines or official communication regarding a new tobacco diversification program” to date. The agency also stated that it carries out its programs and actions based on the objectives, target audiences, territories, and resources defined by the MDA.

The ministry has drawn up a work plan to address the problems identified by the TCU audit, which includes negotiating a new “management contract” between the MDA and Anater by December this year. The relaunch of the PNDACT is expected to take place only after this document is signed, since the agency will be responsible for implementing it. According to the ministry, the program guidelines are in their final drafting stage.

We in civil society have long called for this program to be resumed because, although it gained international recognition for a time, it was greatly weakened,” says Mônica Andreis, director of the NGO ACT, which advocates tobacco control measures. “We welcomed the announcement of its resumption, but we have yet to see it materialize.”

Even so, the plan under discussion remains modest. The pilot project is expected to serve 300 family-farming households in the South through calls for proposals and public tenders for technical assistance, in a format similar to previous editions. Funding has been earmarked—around R$3 million, according to ministry officials who spoke to Joio in April. That is far below previous levels, when PNDACT calls reached R$26 million and supported up to 7,000 farmers, as in 2018.

When asked, the MDA did not explain why the diversification program has yet to be relaunched. In a note, the ministry said only that “the matter is being handled with the seriousness and responsibility required, considering the challenges and necessary coordination.” The ministry also declined to address the TCU audit findings, saying merely that it was unaware of any audits “specifically” or “directly related” to the PNDACT

Even so, the plan now under discussion is modest. The pilot version would serve just 300 family-farming households in the southern region through public calls for technical assistance, following a format similar to previous editions. Funding has even been earmarked—around R$3 million, ministry officials told Joio in April. That is a small amount compared to previous years, when PNDACT calls for proposals reached R$26 million and supported up to 7,000 farmers, as in 2018.

When questioned by reporters, the MDA did not explain why the diversification program had yet to be launched. In a statement, the ministry said the issue “is being addressed with the seriousness and responsibility required, considering the challenges and necessary coordination.” The ministry did not address questions about the TCU audit, which highlighted long-standing management failures, saying only that it was unaware of any audits “specifically” or “directly related” to the PNDACT.

The cattle graze around Padilha’s house, on the property that the farmer maintains with his wife in the interior of Sinimbu (Photo: Isabelle Rieger/O Joio e O Trigo)

At the same event, SindiTabaco also announced a partnership with the Brazilian Agricultural Research Corporation (Embrapa), a federal government agency. The program, called Protected Soil, will select 33 farms in southern Brazil to test best management practices in tobacco production through 2029. The initiative is adapted from the Auêra Project, a partnership Embrapa has maintained with cigarette maker Philip Morris International since 2019, created to “promote sustainable tobacco production. ”

“This is the logic: strengthen and improve the soil so that we have tobacco with higher productivity and better quality, but also so that we work on crop diversification, ” researcher Waldyr Stumpf told Joio. At the time, Stumpf was head of Embrapa Clima Temperado and signed the cooperation agreement with the union. “We’re not focusing on replacing [tobacco], but rather on having the producer also grow other crops alongside the leaf, because he already has an established market — but we’d also like him to work with beans, corn, vegetables, peaches, strawberries, ” he said.

The initiatives, however, offered no indication of support for marketing these alternative crops — the main obstacle to diversification. “Today, we already have other crops that bring in more money than tobacco, but marketing is the big bottleneck, ” says Sergiki, of Ceasol, who has worked with vegetable and fruit growers — such as lettuce and strawberries — who quit tobacco and never went back. “The farmer knows how to produce, but doesn’t know how to sell. ”

Mayor of Vera Cruz, Gilson Becker has been president of Amprotabaco since March of this year (Photo: Isabelle Rieger/O Joio e O Trigo)

A rural producer from the interior of Sinimbu, Valderi de Moura retired from tobacco and is now investing in citrus fruits, such as oranges and bergamots, to try to make his property profitable (Photo: Isabelle Rieger/O Joio e O Trigo)

The rise of electronic cigarettes could hasten that decline, since nicotine from tobacco grown by just a few hundred farmers can supply thousands of vapes. It is no coincidence that leaf suppliers — Alliance One among them — view these new products as a business risk. 

“Some of our most significant customers, including Philip Morris International and British American Tobacco [maker of the Kent and Lucky Strike brands], have publicly announced intentions to move toward smoke-free products [vapes, heated tobacco, and pouches] that would replace traditional cigarettes,” states the 2024 investor report of Pyxus, the holding company that owns Alliance One. 

“Generally, smoke-free products require less tobacco in their production than traditional cigarettes. The increasing trend of replacing traditional cigarettes with smoke-free products, driven by our customers or consumers, could materially and adversely affect the results of our operations, ” reads an excerpt from the business risk section of the report.

Another major tobacco supplier, U.S.-based Universal Leaf, also addresses the issue with caution. In a 2024 shareholder presentation on the company’s activities, it noted that the “effects on leaf tobacco demand” from new nicotine products are “still uncertain or developing. ” Even so, the company acknowledged that “all major tobacco manufacturers are creating next-generation products” and that these “use fewer tobacco leaves in a strict one-to-one comparison with a combustible cigarette. ” To avoid losing ground in the vape supply chain, the multinational is already investing in liquid nicotine production.

Even so, entities that in theory should defend the public interest such as Amprotabaco — the network of mayors from tobacco-producing municipalities — support the legalization of electronic devices without addressing how this growth could affect tobacco farmers in their regions. Since Brazil exports about 90% of the tobacco it produces, the risk exists regardless of whether the domestic market is legalized. Today, companies like BAT and Philip Morris already earn between 17% and 40% of their profits from “smoke-free products” — and both state in their annual shareholder reports that, by 2035, this new portfolio is expected to capture the revenue currently generated by traditional products.