Growing tobacco is not an easy choice for Lao farmers. For starters, tobacco is a much more expensive crop to cultivate than, say, rice, sweet corn or peas. In fact, the cost of growing tobacco is almost double that of most other crops. That’s why Lao Tobacco Limited supports the farmers who grow its product by supplying the fertiliser and any other materials they require. These are “loaned” to the farmer, who repays the loan once the crop is sold .
But while tobacco is expensive to grow, the returns are much higher, with farmers often making double the profit of more traditional crops like rice or cucumbers. This is why many of the 1544 farmers contracted to Lao Tobacco Limited have been growing tobacco for 15 years or more. Not only do they know that their work will pay off, they are also able to plant rice in the rainy season, before using the same fields to plant their tobacco in the dry season. Ultimately, tobacco crops have provided higher incomes to rural households, funds that can be used to develop infrastructure and improve their standard of living.
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