Well organized, the tobacco supply chain bets on its integration potential and
on its competitiveness to face international projection of possible declines in glob-
al consumption over the next decades, thus minimizing the impacts that this sce-
nario – and the antismoking and government initiatives – could have on the pro-
duction of tobacco in Brazil. As far as the market goes, the tobacco supply chain
knows how to impose and defend itself, and has done its best to continue some
steps ahead of the competitors.
Theproblemsurfaceswhena supply chain that comprises hundreds of thousands
of people comes up with unquestionable arguments about the damages caused by
high taxation on tobacco to the economy of the Country, to the health of the smok-
ers, who consume cigarettes coming from the illicit trade, with no certificate of origin
or quality control, ladenwith residues, inparticular, has no success in creating govern-
ment awareness of the problem. This government, by corroborating all requirements
for keeping tobacco products under control in the domestic market, strangely fails to
collect taxes whenever taxation over legal tobacco products is increased, thus paving
theway for the illicit cigarette trade, which now reaches upwards of 45%of the Brazil-
ianmarket and reduces thepresenceof legallyestablishedcompanies.
This leads the industries to bet on the foreign market and keep their compet-
With the expectation tomaintain its productive
and commercial stability, the tobacco sector believes
in its competitiveness to continue strong
itiveness. In the meantime, they explore in the
best manner possible the scarce chances in the
domestic scenario. On the other hand, the farm-
ers need to trust the Integrated System and
avoidoversupply, if theywant tokeep their qual-
ity of life, which stems from the income brought
by the crop. In general, in the production zones,
the farmers acknowledge the fact that, because
it is labor intensive the crop requiresmuchman-
ual work, but the compensation comes in the
form of income, which could be ten times as
much as income derived from cereal crops that
are usually present in small farms.
The sector is an international reference in en-
vironmental preservation, in social initiatives and
labor relations, besides farmers’ safety. The same
holds true for income generation. In a year when
several supply chains are going through crises re-
lated to high production costs, tobacco is an is-
land of prosperity, which continues steady in its
mission to produce, export more than 90% of
what is produced, and is an assurance of a life of
quality for thosewho produce the crop.
Productionseeks
toadjust to the
sizeof demand inorder
tokeep its income
Aheadof
its time
Inor Ag. Assmann
12
