Tobacco farmers contracted by the British American Tobacco (BAT) received the lowest pay in 2017 compared to the previous three years, a 12 percent decline from the 2016 crop earnings. BAT says it paid out Ksh1.2 billion to its 5,000 tobacco farmers down from Ksh1.3 billion in 2016 and half a million less the 2015 payments.
The firms points to adverse weather conditions as having spawned a sharp fall in leaf volumes delivered by the farmers, standing at 6.9 million tones last year while the crop submitted 1.6 million more tonnes of leaf volume in 2015.
BAT Kenya Head of Legal and external affairs Mr Simukai Munjanganja says the harsh weather conditions not only struck down the leaf production but also compromised leaf quality, thus impacting downwards the yield pay to the growers.
“The tobacco yield declined in 2017 due to adverse weather conditions including floods and persistent drought which to date are still being felt in parts of the country,” says Mr Simukai.
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A sustainability programme by the multinational has its growers listed under insurance covers by UAP Old Mutual, which compensates those whose crop is affected. In 2017, the insurer settled at least 2,210 claims to the tune of Ksh79.5 million.
Higher excise taxes and the overstretched political stalemate in Kenya pushed BAT Kenya revenues down. The company closed the year with a net profit of Ksh3.3 Billion while the previous year had starred Ksh4.2 billion. This was as a result of a six percent drop in revenues to Ksh34.4 billion in 2017 compared to the earlier year.
Each share will now attract Ksh26, shrinking from Ksh46 paid to shareholders in 2016 per share. 76 percent of the company earning will be paid as dividends. A number of tobacco growers have also abandoned the industry over poor remuneration as they seek to embrace diversification.
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