1

TOBACCO INDUSTRY
OF
BANGLADESH: GREED
OR DILEMMA

Group: Halogen, 90th Batch

 2

Department of Economics

University of Dhaka

": Greed or Dilemma”

Course Title and Code

Business Communication (406)

Submitted To

Md. Safayat Hossain

Course Instructor
 3

Submitted By

Nujhat Shama :084

Tasnova Tasnim :110

Nazmul Hasan Rumi :208

Group: Halogen

5th Batch, 8th Semester

DEPARTMENT OF ECONOMICS

UNIVERSITY OF DHAKA
 4

Letter of Transmittal

November 19, 2014.

Md. Safayat Hossain

Course Instructor

University of Dhaka

Dhaka - 1205

Subject: Submission of the term paper.

Dear Sir:

This is our pleasure to submit you the Term Paper on “Tobacco industry in Bangladesh, greed or
dilemma” under our Business Communication course (406). We have studied broadly how tobacco
industries in Bangladesh are creating health hazards to people though they pay a large number of taxes to
the government. This paper aims to discuss the whole paradigm analytically and todraw a conclusion
about the necessary steps that must be taken without any delay.

Moreover, we hope that our work will please you. We want to have the privilege to give answers to any of
your quires.

Sincerely;

Nujhat Shama

On behalf of the group: Halogen

90th Batch,

Department of Economics
 5

Acknowledgement

Praise the Almighty Allah.

This report has been accomplished with the contributions and encouragements from many people. We
would like to express our gratitude to all supports. Without their supports we would have had a tough
time.

We express our heartiest gratitude to our course instructor Md. Safayat Hossain, Associate Professor,
Department of Accounting, University of Dhaka for his valuable guidance, scholarly direction and
unconditional support during the preparation of this Term Paper. We have learnt a great deal from him.

We would like to thank Patrick Kanny Sarkar, Executive, Sheltech Brokerage limited.

We would also like to express our sense of gratitude and appreciation to Mr. Jahangir Hossain Sharif;
Deputy Director, Bangladesh Center for Communication Programs (BCCP).

Finally our deep appreciations towards all the people who had read and gave the information and advice
that have made this paper possible.
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Acronyms
BAT British American Tobacco

BATA Bangladesh Anti- Tobacco Alliance

FY Fiscal Year

GATS Global Adult Tobacco Survey

GDP Gross Domestic Product

SD Supplementary Duty

TVC Television Commercial

WHO World Health Organization

FAO Food and Agriculture Organization

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Table of Contents

List of Tables --------------------------------------------------------------------------------------------- 10

List of Figures ------------------------------------------------------------------------------------------- 10

Executive Summary ----------------------------------------------------------------------------------- 11

1.0 Introduction ---------------------------------------------------------------------------------------- 12

1.1 Methodology ---------------------------------------------------------------------------------------- 12

1.2 Limitation of the Study ---------------------------------------------------------------------------- 12

2.0 An Overview of Tobacco Industry ------------------------------------------------------------- 13

2.1 Market Share ---------------------------------------------------------------------------------------- 14

2.2 Brands ------------------------------------------------------------------------------------------------ 14

2.3 Consumption of Tobacco products in Bangladesh --------------------------------------------- 15

2.3.1 Smoking Tobacco Consumption -------------------------------------------------------------- 15

2.3.2 Smokeless Tobacco Consumption ------------------------------------------------------------- 16

3.0 Benefits from Tobacco Industry --------------------------------------------------------------- 16

3.1 Share in GDP --------------------------------------------------------------------------------------- 16

3.2 Employment ---------------------------------------------------------------------------------------- 17

3.2.1 Agricultural Sector ------------------------------------------------------------------------------ 17

3.2.2 Manufacturing Sector --------------------------------------------------------------------------- 17

3.2.3 Retail Shops -------------------------------------------------------------------------------------- 17

3.2.4 Investment --------------------------------------------------------------------------------------- 18

3.3 Health Benefit -------------------------------------------------------------------------------------- 18

4.0 Negative Impacts of Tobacco Industry ------------------------------------------------------ 19

4.1 Exploitation of Tobacco Farmers ---------------------------------------------------------------- 20

4.2 Health Issues ---------------------------------------------------------------------------------------- 20

4.3 Environmental Hazard ---------------------------------------------------------------------------- 22

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4.4 Food Insecurity ------------------------------------------------------------------------------------ 22

4.5 Impact on Society --------------------------------------------------------------------------------- 23

4.6 Women-The invisible victims in tobacco growers’ families -------------------------------- 24

5.0 Tobacco Industry: A Dilemma for Everyone ---------------------------------------------- 25

5.1.1 Reasons for Growing Tobacco --------------------------------------------------------------- 25

5.1.2 A Trap not Debt -------------------------------------------------------------------------------- 26

5.1.3 A Myth of High Profitability of Tobacco Farming ---------------------------------------- 26

5.2 The Economics of Tobacco and Tobacco Taxation in Bangladesh ------------------------ 27

5.2.1 Taxation and Policymaker’s Dilemma ------------------------------------------------------- 29

5.2.2 Mixed Message --------------------------------------------------------------------------------- 30

5.3 Ethical Dilemma of the Retailers --------------------------------------------------------------- 30

6.0 Manipulation of Tobacco Industry Owners ----------------------------------------------- 31

7.0 Opinion -------------------------------------------------------------------------------------------- 33

7.1 Recommendation --------------------------------------------------------------------------------- 34

8.0 Conclusion ---------------------------------------------------------------------------------------- 36

Bibliography ------------------------------------------------------------------------------------------ 37

Appendix ----------------------------------------------------------------------------------------------- 38
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List of Tables

Table 1: Cigarette and Bidi Brand Shares based on household survey data, 2009..................... 14

Table 2: The operative brands in Bangladesh tobacco industries............................................... 14

Table 3: Average expenditures on cigarette and bidi per month among manufactured

cigarette smokers and bidi smokers age ≥15.............................................................................. 15

Table 4: Effects of Tobacco on Health, Multiple Responses (N=428)....................................... 21

Table 5: Related risk (RR) and population attributable risk (PAR) diseases for tobacco

usage from the hospital survey ................................................................................................... 21

Table 6: The major food crops, in terms of acreage 2008-09....................................................... 23

Table 7: Tobacco Taxation and Price of Cigarette FY 2010-11 and 2011-12.................... 28

Table 8: Bidi price, tax and consumption .................................................................................. 28

List of Figures

Figure 1: Profit share of BATB’s products in the market............................................................. 14

Figure 2: Retail Audit Figures....................................................................................................... 18

Figure 3: Knowledge about diseases caused by tobacco consumption.......................................... 21

Figure 4: Percentage of card holding farmers.................................................................... 24

Figure 5: The comparative cost of production of tobacco with some other crops
grown during the same season.......................................................................................... 27

Figure 6: Tax Rate Assessment of FY 2013-14........................................................................... 29

Figure 7: Why selling cigarette is ethical? .................................................................................. 30

Figure 8: Why selling of cigarette is unethical? .............................................................................30

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Executive Summary:

Bangladesh is a developing country, a nascent economic power in the world, semi-subsistent in nature
and a little developed in industrial sector. Despite this fact, tobacco industry with full of modern
manufacturing equipment and marketing strategies are growing like a monster and making large profits
year after year. Though they pay a large number of taxes and create opportunities to develop a prestigious
career there for highly professionals, it is merely like a parasite to the whole industrial sector.

Tobacco companies are currently facing severe problems in the developed countries. Most of the EEU
countries implied ban on them and they are now helming to the underdeveloped countries. As there
implementation of proper legislation is weak and corruption is established informally.

Tobacco is the second major cause of death worldwide and this rate is too high that even more than two
world wars jointly. Each year the global death toll from tobacco use is about five million. In Bangladesh
57,000 people, aged 30 and above, died in 2004 and 382,000 became disabled due to tobacco-related
illnesses. These deaths and disabilities could be minimized, even prevented through, among other things,
increasing public knowledge about the hazards of tobacco and developing and implementing strong
legislation and policies to reduce tobacco use.

After ratifying the WHO Framework Convention on Tobacco Control (FCTC), Bangladesh enacted
tobacco control law in 2005 and framed rules for implementation in September 2006. This paved the way
for the creation of the National Tobacco Control Cell (NTCC) - a national organization located in the
Ministry of Health and Family Welfare (MOHFW) for controlling tobacco use.

In 2008, WHO introduced the MPOWER package of tobacco control measures to facilitate the
implementation of the WHO FCTC:

* Monitor tobacco use and prevention policies

* Protect people from tobacco use
* Offer help to quit tobacco use
* Warn about the dangers of tobacco
* Enforce bans on tobacco advertising, promotion and sponsorship
* Raise taxes on tobacco

While many people are aware of the health hazards of tobacco consumption, the practice is on the rise in
Bangladesh. Cultivation of tobacco is spreading every year. Tobacco attributed illnesses are rampant,
malnourished children in smoking households are increasing, healthcare costs associated with tobacco-
related illnesses are increasing, deforestation is widening and many other costs related to health care are
increasing. At the same time, household expenditures are being reduced.

So the aggression of this giant should be stopped at any cost. Bangladesh seems to be in a quandary to
take a strong step against it. This study overviewed the dilemmas of Bangladesh government thoroughly
and expressed the health hazards caused by tobacco industries.
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1.0 Introduction:

This report draws an insight on tobacco industry arguments analyzing the benefits and dilemmas
qualitatively. Tobacco industry is a prospective industry which is creating many controversies in policy
making for Bangladesh government. Bangladesh earns a huge proportion of national revenue from
Tobacco industry hence, finds it difficult to take an ultimate step against it concerning health hazards.

According to various reports, in the developed countries smoking is on the declining trend, but due to the
socio-economic condition of the developing countries like Bangladesh the trend is absent here. Again, it
is facing severe difficulties in reducing the number of smokers. Although a number of anti-smoking,
policies are being implemented effectiveness of such campaigns are not sufficient. The socio-economic
condition of Bangladesh is also another major factor leading to the growth of the Tobacco Industry and
consumers. This report examines the economic aspects of tobacco production, consumption and control in
Bangladesh.

1.1 Methodology:

The paper will be an exploratory study of why despite restrictive policies the tobacco consumption is not
decreasing as per the anticipation of the society. Before going into the research, we first analyzed the
online papers available, government policies and opinions from different classes and industry trend. The
data here represented are secondary data. This secondary study gave us the needed reasons to look into
different literatures relating tobacco and develop a model to find out the underlying gap and the causes of
the behavior.

Both qualitative and quantitative methods are taken into consideration in this paper.The survey was
mostly generating nominal, ordinal, interval and ratio data. For statistical data analysis: frequency
distribution, pie chart and other data tables have been used.

1.2 Limitation of the study:

 There are some confidential matters inside companies which include actual business plans and profit
document that they prefer not to share publicly.
 We, here used secondary data broadly which were actually conducted by other statistical
organizations.
 Due to the lack of related text books and previous study in Bangladesh the report could not be
extensive.
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 The statistical data are hackneyed and updated rarely.

2.0 An Overview of Tobacco Industry:

Although Bangladesh is a Muslim country and tobacco is generally considered haram (forbidden) under
Islam, tobacco use is widespread.

Over 58% of men and 29% of women use some form of tobacco, whether smoked (both cigarettes and
bidis) or smokeless.

Tobacco has been introduced since mid sixties of the last century into the fields where food crops were
grown, and more widely after liberation in 1971 by the British American Tobacco Company in Teesta silt
in Rangpur area (Sarkar and Haque, 2001). British American Tobacco Bangladesh (BATB) is the number
one tobacco company in tobacco industry of Bangladesh, which was incorporated in 1972 under the
Company Act 1913:7. of Although Bangladesh Agricultural Research Institute (BARI) has conducted
research and development activities of tobacco and abandoned in 1995, tobacco production has mainly
been pushed by big multinational companies such as British American Tobacco Company through
contract growers (Sarkar and Haque, 2001). The cigarette market in Bangladesh, as in much of the world,
is highly concentrated. The premium segment of the market in Bangladesh is dominated by British
American Tobacco Bangladesh (BATB), a subsidiary of multinational tobacco company British American
Tobacco. The largest local tobacco company is Dhaka Tobacco Industries (DTI), a part of the Akij Group.
DTI dominates the market for lower-priced cigarettes. In 2007, DTI entered into an agreement with
philipmoris international to market marlboro cigarettes in Bangladesh.

By contrast, bidi manufacture in Bangladesh is more fragmented, with AkijBidi Factory, Ltd. (another
part of the Akij Group) the largest firm, accounting for over one-quarter of the market, and the top 4 firms
accounting for less than 50% of the market.

The cigarette industry is growing at a rate of 3.4%. The Biri market which was 70.3% of the total market
is declining, now it is 69%.The smokers are upgrading from biri to low segment of cigarettes.

Besides BATB, the other companies in the same industries are: Dhaka Tobacco Company, AlphaTobacco
Company, Sonali Tobacco, AbulKhair Group, Nasir Gold Tobacco, Imperial Tobacco etc.
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2.1 Market Share:

In Bangladesh cigarette manufacturing is highly concentrated, while bidi manufacturing is much more
fragmented.

 Cigarette markets are dominated by two firms – British American Tobacco (BATB,
multinational) and domestic Dhaka Tobacco Industries (DTI of Akij Group).(In 2010) BATB
market share 46% (largely focuses on premium segment), DTI’s 40% (lower prices brands)
 Total number of bidi manufacturers 9,624 (96% household based).Top 4 firms account for almost
50% market (Akij, Aziz, Ansar, Nasir).

Table 1: Cigarette and Bidi Brand Shares based on household survey data, 2009.It shows market share of
different brands of cigarette and bidi (Appendix- 1)

Figure 1: Profit share of BATB’s products in the market. The chart shows the profit share of various
brands in the market. Star Filter contributes about33% and JPGL contribute 23% of the total profit. The
contribution of the lower segment is about49%. This means roughly the fifty percent of the cigarette
consumers are the consumers of the lower segment. So brand dilution occurs basically in lower segment
where the alternative and brands are greater.( Appendix 2)

2.2 Brands:

Brands are names which give a reliance of quality product. As the customers’ taste varies andalso the
price of a product is a vital matter the segment and brands are different. One common characteristic is in
every segment the different brands are almost at the same prices.

Table 2: The operative brands in Bangladesh tobacco industries.

BATB Dhaka Tobacco Abul Khayer Sonali

Tobacco Tobacco
Premium B & H- Regular Marlboro N/A N/A
and Light
Medium JPGL - Regular Castle N/A N/A
and Light, PALL
MALL
Lower Star, Capstan, Navy, Gold Mine, Marise, Gold Sunmun,
Scissors, Pilot, Sheikh, K2. Life, Tope 10. Gold Hill.
Gold
Flake
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2.3 Consumption of Tobacco Products in Bangladesh:

Bangladesh, a developing country in South Asia has a large consumer base for tobacco consumption in
different forms such as tobacco leaf oral consumption, cigarettes, bidi etc. The tobacco products are quite
sthe part of the daily consumption for almost 38.7 million smokers (Nationmaster.com, 2003). Tobacco
consumption worsens the effects of poverty and causes significant decline in the living standard of the
rural and semi-urban dwellers. On average, the poor in Bangladesh spend most of their money on food
and other essential goods, yet are still unable to provide even the basic necessities for their families.
However, despite the high level of poverty in Bangladesh, smoking rates are relatively high. Men aged
35-49 years have the highest smoking prevalence at 70.3% and smoking prevalence is the highest among
the poorest.

2.3.1 Smoking Tobacco Consumption:

Cigarettes are the most expensive form of smoking tobacco products followed by bidis. The number of
people using tobacco in Bangladesh is 41.1 million. According to the Global Adult Tobacco Survey
(GATS) in Bangladesh (2009) there are 43.3% of adults (41.3 million) are using tobacco in smoking
and/or smokeless form. The gender disaggregation shows that 44.7% of men and 1.5% of women are
using smoking tobacco.1

On average a current cigarette smoker spends 377.8 taka/month on manufactured cigarettes whereas a
current bidi smoker spends 130.5 taka/month. The highest-spending age group for manufactured
cigarettes is smokers aged 25-44 years at 398.5 taka/month, while for bidi, the highest-spending age
group is 15-24 years, at 227.6 taka/month. Urban cigarette smokers spend 516.1 taka/month, which is 210
taka higher than the average amount spent by rural cigarette smokers. For bidi, urban smokers spend
about 87.5 taka/month while rural smokers spend 135.2 taka/month.
Among the occupational categories, smokers from the business category spend the highest amount (484.8
taka/month) on cigarettes. Bidi smokers from the farmer category spend the highest amount (160.0
taka/month) on bidis. It is estimated that in Bangladesh total expenditure on cigarettes is 1.0% of gross
domestic product (GDP) and on bidis 0.4% of GDP.

Table 3: Average expenditures on cigarette and bidi per month among manufactured cigarette
smokers and bidi smokers age ≥15. It shows demographic characteristics of tobacco users and their
expenditure per month on tobacco products. (Appendix-1)

2.3.2 Smokeless Tobacco:

Over 13 million women in Bangladesh consume tobacco products in smokeless forms; particularly oral.
The number is higher than that of men using smokeless tobacco. Around 700,000 to 750,000 women in
 15

the country are smokers [Daily Sun, 1 January, 2011]. Studies in Bangladesh, India, Indonesia, Sri Lanka
and Thailand have revealed that both smoking and smokeless tobacco use are more prevalent among less
educated and illiterate population, poor in general [ primenews.com.bd , Accessed on September 11,
2013]. Among the 25.9 million adults (27.2%) of smokeless tobacco users, there are more women
(27.9%) than men (26.4%). The percentage is higher among rural women (29%), i.e. over 14 million.

3.0 Benefits of Tobacco Industry:

3.1 Share in GDP:

Tobacco is considered as one of the most profiting cash crop for farmers, though a study showed acreage
under cultivation and production of tobacco both reduced significantly. But the production of cigarette
increased. Between 1974/75 and 2003/04 the total production of cigarettes has increased by 2.2 times
while per capita availability of cigarettes has increased 25%. The share of GDP value of tobacco
manufacturing has increased from 5.4% in 96-97 FY to 6.23% in 04-05 FY. 05. Again, the tobacco
industry contributed approximately 30.5% of Government’s revenue in FY 2007-2008. Cigarette taxes
include Value Added Tax (VAT) and Supplementary Duty – both are imposed on retail price printed on
the packs. Bangladesh has a tiered ad valorem tax regime for cigarette and bidi. Taxation rate is
comparatively lower at the bottom end of cigarette and for bidi, allowing low-priced brands to maintain
their prices and restricting consumer up trading to international brands. Bat Bangladesh contributed taka
28.28 billion (us$ 415 million) to the government’s revenue in FY 2011-2012 as vat and supplementary
duty.

3.2 Employment:

3.2.1 Agricultural Sector:

A statistics suggests that share of tobacco manufacturing constitute less than 1 percent of all
manufacturing employment. Another source says that only in bidi manufacturing annual employment
amounts to 621,000 labors with 155,000 direct labors and 466,000 indirect labors. Bangladesh is an
importer of tobacco products too. Tobacco has the reputation of being a very profitable crop with few
 16

‘equally lucrative’ substitutes. Among the various reasons cited by the farmers for cultivating tobacco, the
profitability aspect was overwhelmingly dominant. Eighty-five percent considered this a very profitable
crop. Ancestral occupation was another reason that was often quoted, particularly in Rangpur. In this
region, tobacco farming has been going on for generations, and farmers are well conversant with the
techniques of growing this crop. In fact, tobacco has become so much a part and parcel of their lives that
they are reluctant to give it up, sometimes even citing that their soil is unsuitable for cultivating any other
crop. Another attraction to tobacco is the fact that it provides a guaranteed market and ready cash. Unlike
other competing food crops, this crop is non-perishable and can be easily stored. Moreover, tobacco is
harvested within a short period while other competing food crops are harvested over a relatively longer
period. Therefore, the tobacco farmer can lay his hands on hard ready cash the moment his produce is
disposed of unlike most other crops which yield returns as and when the output is ready for sale. This acts
as a major centripetal force for the farmers, particularly the marginal and small farmers to grow this crop.

3.2.2 Manufacturing Sector:

A lot of people are engaged in manufacturing sector. Such as: cigarette processing, marketing and
administration in various companies. Engineers, technicians, business school tops work at the
administrative sector. Tobacco companies like BATB, Phillip- Morris etc. pay lucrative salaries. So,
professionals find this arena an attractive place to work.

3.2.3 Retail Shops:

An economic theory exists which shows that availability is directly correlated to inducing demands. Due
to the poor economic condition of most of the population, setting up business withhigh start-up cost is not
possible for them. The startup capital needed to start a cigarette selling retail shop is very low and easy.
On an average startup capital constitutes 2000 taka for a cigarette retail shop. Every minute in whole of
Bangladesh 11-20 outlets are started by the low margin based entrepreneurs; this has been a major cause
of increase in tobacco consumption despite restrictive advertising. Both direct and indirect distribution
methods are employed by the tobacco companies to ensure that their brands are placed in each of these
shops. Direct distribution involves third party/company distributors to ensure placement of the products
through sales represent lives. Thus, cigarette is available in all the corners of the land. No less than 7-8
million small shops are working all around the country.

Figure 2: Retail Audit Figures. From the figure, it can be seen that over the past 3 years the industry
remained in a very stable position. It shows that the restrictive laws do not have any effect in the off-take
volume in the cigarette industry. (Appendix-2)
 17

3.2.4 Investment:

Socioeconomic Condition of Bangladesh: Bangladesh, with a population of 144 million people, is one of
the emerging countries in the world with a promising economic drive and growth by utilization of the
enormous labor. Basically, the tobacco consumption is more of a habitual condition due to different
cultural factors. The tobacco products are quite the part of the daily consumption for almost 38.7 million
smokers (Nationmaster.com, 2003). On average, the poor in Bangladesh spend most of their money on
food and other essential goods, yet are still unable to provide even the basic necessities for their families.
However, despite the high level of poverty in Bangladesh, smoking rates are relatively high. Men aged
35-49 years have the highest smoking prevalence at 70.3% and smoking prevalence is the highest among
the poorest. Cigarettes are the most expensive form of Tobacco products followed by bidis. The
economic condition coupled with a culture to spend leisure activities in rural tea stalls make cigarette a
medium of stress reliever. The typical male cigarette smoker spends over five times as much on
cigarettes as the per capita expenditure on house rent, 18 times as much as for health, and 20 times as
much as for education (Effroymson et al., 2001).So investment in this sector is quite profitable for the
other tobacco industries. Their annual financial report also shows this trend.

3.3 Health Benefits:

It is believed and proved that tobacco is harmful for human body. Surprisingly smoking cigarette has
some positive impacts too.

1. It is believed, smoking improves human information processing.

Cigarettes containing higher nicotine produce greater improvements [in information processing] than low-
nicotine cigarettes.

a) Nicotine can reverse the detrimental effects of scopolamine on performance.

b) Smoking effects are accompanied by increases in EEG arousal and decreases in the latency of the late
positive component of the evoked potential.1

2.2Smoking lowers risk of obesity: Nicotine itself acts as both a stimulant and appetite suppressant; and
the act of smoking leads to a behavior modification that induces smokers to snack less. As an appetite

1
University of Reading, Department of Psychology (England).Warburton., D.M.; Wesnes, K. “The Effects of Cigarette Smoking
on Human Information Processing and the role of Nicotine in These Effects”)

2Kentucky State University, Lee. C.J., Panemangalore. M. “Obesity among Selected Elderly Females in Central Kentucky.”
FUNDING: USDA 0942. University of Louisville.Belknap Campus School of Medicine Satmford, B.A.; Matter, S.
 18

suppressant, nicotine appears to act on a part of the brain called the hypothalamus, at least in mice, as
revealed in a study by Yale researchers published in the June 10, 2011, issue of the journal. Obviously no
responsible doctor would recommend smoking for weight control, given the toxic baggage accompanying
cigarettes.3

3. Smoking lowers risk of Parkinson's disease. Long term smoking somehow works against Parkinson
disease published on a well-conducted study in a March 2010 on an issue of the journal Neurology.

Again, a group of Harvard researchers were among the first to provide convincing evidence that smokers
were less likely to develop Parkinson's. In a study published in Neurology in March 2007, these
researchers found the protective effect wanes after smokers quit. In conclusion they added that they
weren’t sure about the reason

4.0 Negative impacts of Tobacco Industry:

Tobacco use is a leading cause of death and disability around the world. Currently, there are 41.1 million
people who use tobacco in Bangladesh, including 20.9 million people who smoke. The level of tobacco
consumption has been moved even higher in Bangladesh because of heavy demographic structure,
widespread illiteracy and poverty. Tobacco use represents a critical threat to the health and welfare of the
Bangladeshi people and imposes present and ever-deepening threat.

4.1 Exploitation of tobacco farmers:

The tobacco industry has exploited farmers in Bangladesh and around the world by encouraging them to
cultivate tobacco and then intentionally keeping prices too low to be profitable. There is a general feeling
that the workers in the tobacco industry are not working for a long time in the same factory.

The workers are fired any time for any faults. A regular worker may get Tk. 3000‐3500 a month and an
irregular worker may earn Tk. 1500‐2000 a month. This income is not enough for them to meet the barest
minimum needs.

3Kentucky State University, Lee. C.J., Panemangalore. M. “Obesity Among Selected Elderly Females In Central Kentucky.”
FUNDING: USDA 0942. University of Louisville Belknap Campus School of Medicine Satmford, B.A.; Matter, S.
 19

Tobacco farmers often find themselves in a cycle of debts to repay loans in the event of a bad crop or low
prices of tobacco. Those employed in tobacco factories or selling tobacco on the streets often earn
starvation wages. Far from growing rich from their work, many of those working in tobacco are facing
multi-generational poverty compounded by illiteracy and poor health.

4.2 Health Issues:

Health and illness is directly being affected among tobacco-cultivators through smoking and leaf chewing
practices as well as through cultivation and drying of tobacco leafs. The mean age of death in tobacco
cultivating households is 55, during last 10 years, which is 11years less than non-tobacco cultivating
households.

a) Malign environment:
The environment in the tobacco industry is very much harmful to health. Workers have to work in toxic
environment and amidst smoke. They are often forced to work without safety measurements.

b) Harmful effects of tobacco:

Tobacco abuse harms every organ in the body. It has been conclusively linked leukemia, cataracts and
pneumonia and accounts for about one third of all cancer deaths. The overall rates of death from cancer
are twice as high among people who smoke comparing to people who don’t. Foremost among the cancers,
caused by tobacco use is lungs cancer. In fact, cigarette smoking has been linked to about 90 percent of
all lung cancer cases, the number one killer of both men and women. Tobacco abuse is also associated
with cancers of the mouth, pharynx, larynx, esophagus, stomach, pancreas, cervix, kidney, ureter and
bladder.

The following table expresses about the effect of tobacco curing on health where almost one fifth percent
of the respondents said that they face difficulties in terms of smooth breathing. Eye irritation represents
the second highest value. Similarly, Headache, abdominal also shows higher value.

Table 4: Effects of Tobacco on Health, Multiple Responses (N=428).

Effect of Tobacco on Health Respondents Percentage

Vomiting 45 10.51
Eye irritation 69 16.12
Abdominal pain 55 12.85
Headache 65 15.19
Breathing difficulties 85 19.87
Pain in leg 38 8.88
Ulcer in hand and leg 48 11.21
Others 23 5.37
Total 428 100.00

Source: Field Survey, 2011

 20

There are also harmful effects of smokeless tobacco consumption. According to the World Health
Organization (WHO), oral cancer is the most common cancer caused by smokeless tobacco. Oral cancer
affects the poor, who have a greater exposure to smokeless tobacco. Smokeless tobacco is associated with
a 2–4 times increase in risk for cardiovascular diseases. Asian studies indicate that mortality risk for
women who consume smokeless tobacco is higher than that for men. Use of smokeless tobacco in
pregnancy is linked to stillbirths and has 2–3 times higher risk of low birth weight babies [DNA,
September 11, 2013].Other health effects of smokeless tobacco use include caries of tooth, receding of
gums, high blood pressure, a debilitating condition known as oral sub‐mucous fibrosis (OSF), and cancers
of the mouth and food pipe.

Figure 3: Knowledge about diseases caused by tobacco consumption (Appndix-2)

Table 5: Related risk (RR) and population attributable risk (PAR) diseases for tobacco usage from the
hospital survey. From the table we see the relation between tobacco usage and illness interms of RR and
PAR using hospital inpatient data. We noted that the relation between tobacco usage and illness was
stronger in the hospital setting than that found in the household. (Appendix-1)

c) Pregnant woman:

Tobacco use is a significant factor in miscarriages among pregnant smokers and it contributes to a number
of other threats to the health of the fetus. Environmental tobacco smoke exposure and maternal smoking
during pregnancy plays huge role in lower infant birth weights. Environmental tobacco smoke conduct
disorder in children. As well, post-natal tobacco smoke exposure may cause similar behavioral problems
in children

4.3 Environmental Hazard:

Serious environmental costs are associated with tobacco production, especially deforestation, erosion and
desertification. Tobacco-growing contributes to poverty by harming the environment on which people
depend for livelihood.

(a)Tobacco cultivation destroys biodiversity in Bangladesh:

Hilly districts which are the potential and resourceful regions of the country, is losing its biodiversity and
ecology as some tobacco companies enforce farmers to grow tobacco instead of other crops .This has
finally resulted in where tobacco is not only destroying human race also destroying our nature.

Although there is no specific calculation, experts and local authorities assumed that over 80 percent of all
arable lands in the district are presently under tobacco cultivation, losing land fertility and causing serious
and rapid deforestation and public health hazards. Visiting the hilly remote areas, it was found that British
American Tobacco (BAT), Dhaka Tobacco and Abul Khayer Tobacco, among other companies, are
enforcing the farmers to grow tobacco and collect dried leaves for their factories.
 21

(b)Tobacco needs excessive chemical fertilizer & pesticides:

Tobacco cultivation requires 10 times fertilizers than other crops. Some farmers put even table salt at the
rate of 40-45 kg/acre. Some farmers also use soda, sugar, boric powder etc. These materials are generally
used in the leased land. The farmers don’t want to use these materials in their own land because they
know that these are harmful for soil health. They also use different kind of pesticides to control disease
and insects.

(c)Negative impact on soil earth:

Tobacco farming has negative impact on soil health. Tobacco can’t be grown in a land continuously more
than two years which indicates the exhaustion of soil fertility status. Moreover, tobacco farming needs
about ten times chemical fertilizers compared to the other crops which is harmful for soil and
environment. Organic fertilizers can’t be used in tobacco field because it cause harm to tobacco leaf
which is also a limitation to maintain soil fertility. Farmers face various problems to grow other crops in
the tobacco land. For example, if they grow rice in the tobacco land then the vegetative growth becomes
excessive that reduce the yield. Growing jute or sesame in tobacco land suffers from stem rot disease.It
takes at least two or three years to recover the fertility of tobacco land.

4.4 Food Insecurity:

Tobacco cultivation has an indirect impact on the labor market of the locality .The labor wage for tobacco
cultivation (US$3.60 /person/day) is more than double than any other activities. This has increased the
overall demand of daily laborers wage in the area, but reduced the availability of laborer for other jobs.
Similar indirect impact can be seen in the local fuel market as well. The price of fuel wood has gone quite
up because of high demand of fuel wood for curing tobacco leaves.

If a large group of farmers [switch] to tobacco cultivation, it might affect food grain production in
Bangladesh. The country will face a severe food crisis in the near future, if tobacco cultivation cannot be
stopped immediately. When farmers cultivate tobacco [December to March] this is the time for paddy and
winter crop cultivation. So, expanding tobacco cultivation will certainly cause food insecurity problem.
“Arable land is on [the] decrease in Bangladesh. It will be a threat if the land is used for tobacco
cultivation rather than the food cultivation. According s to the UN World Food Programme.28 million
people - 20 percent of the total population - are “ultra-poor” and face chronic food insecurity.

In Bangladesh, the cropped areas are divided as single, double, triple and current fallow area. As of 2008-
2009, the total cropped land is 35,614,000 acres. The triple cropped area is 3,158,000 acres, double
cropped area is 9677 acres, single cropped area is 6786 acres and current fallow land is 1171 acres and net
cropped area is 19621 acres12.

In the research areas of Kushtia, Bandarban and Chakaria (Cox’sbazar) tobacco is mostly grown in the
double and triple cropped areas. That is, the land which was used for growing winter crops and for Aus
crop.
 22

For tobacco and its replacement of food crops, two cropped areas mean primarily Rabi season (November
to March for crops such as Boro Rice, wheat, Maize, Potato, pulses, vegetable, oil seeds etc.) and Kharif-I
season April to July for Aus, growing Jute, Maize, pulses, vegetables). So in terms of seasons and land
areas covered, tobacco plays a significant role in replacing food and important agricultural crops such as
Jute.

Table 6: The major food crops in terms of acreage, 2008-09. The table shows the amount of increase and
decrease in major food crops because of tobacco cultivation. (Appendix-1)

4.5 Impact on Society:

(a) Child labor:

Child labor inside the bidi factory is really shocking. Over half of the bidi workers (60- 65%) are children
aging from 4– 14. Since most of the children are malnourished, their actual age could not be known. The
child labors are engaged in Zarda and gul factories at a very low wage Tk. 50‐80 a day. In some cases
they get one third of wage of an adult. The child workers are generally affected by coughing, lack of
appetite, disability, headache vomiting and skin disease. In general they are compelled by situation of
family poverty. One direct impact of child labor engagement is that they cannot go to schools. They work
6 days a week, even on Fridays if there is more demand. During a day, they work 9 hours .In the family
based factories; children are used as unpaid family labors.

The exploitation of child labor in bidi factories, one of the most dangerous work environments for their
health, goes on unabated. It is a sad truth that the right of children to the securities and safeties of
childhood is a casualty in this country, when these are the people who should one day have been the
upholders of the future of our nation.

(b)Demoralization of youth:

Youth tobacco use is a growing problem in Bangladesh. In 2007, 6.9% of in-school youth ages 13through
15 years reported current use of some tobacco product, including 2.0% who reported cigarette smoking.In
most of the cases we see that young people who are now engaged in drugging activities started it from
smoking. It leads to juvenile crime.
 23

4.6 Women-The invisible victims in tobacco growers’ families:

(a)Risk of breast cancer:

Secondhand smoking increases the risk of breast cancer. The more secondhand smoke you are exposed to,
the higher the level of getting cancer.
(b)Secondhand smoke:
Smoking doesn't just affect the person who smokes. People who do not smoke are exposed to
"secondhand smoke," which comes from both the exhaled smoke and from the smoke floating from the
end of a cigarette, cigar, or pipe. Inhaling secondhand smoke increases a person's risk of developing heart
disease by 25 to 30 percent and lung cancer by 20 to 30 percent. In fact, secondhand smoke is estimated
to contribute to as many as 40,000 deaths related to heart disease and about 3,000 lung cancer deaths per
year among people who do not smoke. Secondhand smoke also causes respiratory problems in people
who do not smoke, like coughing, phlegm, and reduced lung function.

Children exposed to secondhand smoke are at an increased risk for sudden infant death syndrome, acute
respiratory infections, ear problems, and more severe asthma.

5.0 Tobacco Industry- A Dilemma for Everyone:

5.1 Tobacco Cultivation-A Trap of Poverty or Scope of Profitability:

“When the imperialists were here, we were forced to grow indigo. Now we are tricked into growing
tobacco.” –a tobacco farmer
The key factor of tobacco cultivation is that it is more profitable than other crops. Like other developing
countries in Bangladesh, tobacco is grown in by poor marginal and small farmers as the only cash crop.
Thus emerges a dilemma – profitable crop on one hand and a harmful one on the other.
In the short run, tobacco farming is financially profitable. But, in the long run, the scenario is opposite.
The cultivation of tobacco is concentrated in Rangpur, Kushtia and Jhinaidaha districts. Recently, it has
been reported that forests are being cleared in the Chittagong Hill Tracts to cultivate tobacco. From the
macro-economic point of view, it is seen as a good source of revenue for the government. However, the
reality is quite different.
 24

5.1.1 Reasons for Growing Tobacco:

The main incentive for the farmers to cultivate tobacco is the marketing facilities. Despite the profitability
aspect, guaranteed market and ready cash play an important role in the farmers’ decision to grow tobacco.
Tobacco farmers enjoy more satisfaction in tobacco marketing than other crops like rice, jute, potato,
cotton, sugarcane, vegetables etc. The reasons for cultivating tobacco are:

 It is a cash crop which gives farmers a fair amount of money at a time.

 The company provides inputs (in credit) and field level technical support which are not
available for other crops.
 The farmers often suffer a lot to collect fertilizers for other crops during crisis periodbut for
tobacco the company supply fertilizers and pesticides to their doors.
 Company provides quality seed in free of cost.
 The problems for other crops are increasing which are also increasing for tobacco butthey get
technical support from the company to solve the problems.

Another reason for tobacco cultivation is that it has a noticeable impact on socio-economic status of the
farmers. Farmers say that they cultivate tobacco for the enhancement of the condition of their family.
Around 70% of the farmers want to change the socio-economic status. After adopting tobacco cultivation,
there are some significant changes in their lifestyle. 96% of farmers now purchase food, 92% of farmers
send their children to school and 72% farmers build new houses.4

5.1.2 A Trap not Debt:

The tobacco companies follow French general Ceaser’s ‘divide and rule’ policy. Their motto is like- ‘prey
everyone’. Tobacco companies provide cards to the farmers. According to the local farmers, these
companies have distributed cards among 80% of the farmers who are influential. They are known as
‘contract growers’ who act as middlemen. The card holding farmers are usually committed to farm
tobacco on five or 10 acres of lands. But, they usually grow tobacco on one or two acres of lands.
Moreover, they sell the agro-inputs supplied by tobacco companies at a higher rate to the other farmers or
use them in growing other crops. Also, very few numbers of small and marginal farmers are given these
cards.

Figure 4: Percentage of card holding farmers. From the figure we can see that large farmers hold the
higher percentage of cards. (Appendix-2)
Also, loans are provided primarily by tobacco companies. The tobacco companies have different loan
strategies for different areas. In greater Kushtia, they usually provide in-kind assistance through the
provision of seeds, fertilizers, pesticides and extension services. However, in the Chittagong Hill Tracts,

4
Indian journal o traditional knowledge-volume 10, July 2011
 25

the tobacco companies provide cash. This region is relatively less developed, and the people here are very
poor. For these people, getting hard cash in hand is an advantage. The tobacco companies are well aware
of this and try to exploit the situation as much possible. In 2005, these companies gave a loan of 4000
taka per acre. The year after, the amount was increased by 25% to 5000 taka per acre. Once a farmer
accepts a loan from any company, he is bound to sell his produce to that company only. When the harvest
is ready for sale, the loan is deducted and the balance is given to the farmer. That’s how the cycle of
poverty is continued.

5.1.3 A Myth of High Profitability of Tobacco Farming:

The key benefits of tobacco growing are mainly received by the registered farmers only. While
unregistered farmers often receive a lower price for their tobacco leaf, compared to the registered farmers.
While, accurate statistics throughout the country are not available, observation and previous research
suggest a figure of 10% of tobacco farmers being registered, with unregistered farmers receiving very
little economic benefit from cultivating tobacco. In one area of Meherpur, fieldwork results find that there
are 495 tobacco farmers, of whom 211 are registered—a far higher percentage than the above-noted
average. Nevertheless, this figure still represents only 43% of the total tobacco farmers, meaning that the
majority receive little benefit from growing tobacco. Also, tobacco cultivation is highly capital intensive.

Figure 5: The comparative cost of production of tobacco with some other crops grown during the same
season. It shows that cultivation cost of tobacco is much higher than any other crops.

It is estimated that including land lease value and family labor one acre of tobacco cultivation require as
high as Tk.82609 while it is requiredTk.36956, Tk.13695, Tk.8260, Tk.48043, Tk.8260, Tk.12608 and
Tk.16956 for boro rice, lentil, khesari, onion, pea, mustard and sesame respectively. In terms of material
inputs as well, tobacco involves higher costs than most other crops. It was estimated that the bulk of this
cost a rises on account of fertilizers and curing fuel. These two items also account for more than 50% of
the total cost of production.
Given the input-intensive nature of tobacco, substantial capital is required during its production. Although
the company provides fertilizers and pesticides in credit but often the farmers have to access loans or
credit from external sources for meeting up the other costs. Needless to mention, most of these farmers
belong to the marginal and small farm size categories. Since the majority of these loans are tied to
tobacco, it works to enhance the poor farmers’ circle of dependency.
Moreover, with high transaction costs, farmers are forced to seek loans from the exorbitant village
moneylender rather than approach formal financial institutions which disburse loans on easier terms.

5.2 The Economics of Tobacco and Tobacco Taxation in Bangladesh:

 26

There are value-added taxes, customs duty, and supplementary taxes and duties on domestically produced
tobacco products as well as on imported tobacco are the sources of tobacco tax revenue. Over 95% of
tobacco products are manufactured domestically and others are imported both in legal and illegal ways.
So, the main source of tax revenue is generated from domestic source. Value added tax is not only
invariant among various price levels of cigarettes, it is invariant over all other products and their imports.
It is the supplementary duty (SD) that varies among different price levels of cigarette as well as other
tobacco products. Various tobacco taxation options imply various options of supplementary duty.
Because of the multiplicative method of calculating VAT and supplementary duty, the rate of increase of
overall tax becomes lower than the rate of increase of supplementary duty. For a given change in the
supplementary duty, the immediate impact will take place in the overall tax and duty rate, which in turn
gets reflected in the price change. Given the baseline supplementary duty, which is 49 %, the various rates
of price increases of 10%, 33%, 50%, and 70% corresponds to increase of the supplementary duty of
64%, 98%, 124%, and 153 % respectively. The price consumption relationship of cigarette shows that at
10%, 33%, 50%, and 70% price increase, the corresponding decrease in the consumption will be 4 %,
14%, 21% and 29%.

Table 7: Tobacco Taxation and Price of Cigarette FY 2010-11 and 2011-12

FY 2010 -11 FY 2011-12

Category of Price per Supplementary Tax Price per Supplementary Tax (%)
cigarette pack of Duty (%) (%) pack of Duty (%)
10 (in Tk) 10 (in Tk)
Low 8.40-9.15 33 58 11.00- 36 60
11.30
Medium 18.40- 53 56 22.50- 55 58
19.00 23.00
High 27.00- 56 53 32.00- 58 55
32.00 36.00
Premium 52 and 58 33 60 and 60 36
above above
Source: www.nbr.org

Table 8: Bidi price, tax and consumption:

2009 2010
Average cigarette price (Tk per pack of 10) 6.0 5.7
Average SD (%) 20.0 20.0
VAT 15.0 15.0
Average SD as% of average price 10.0 12.0
Number smoked per day 13.6 13.8
Source: ITC Bangladesh Survey, 2009, 2010.
 27

Respectively, in the short run and 6%, 19%, 29%, and 40% respectively in the long run. At the same rate
of price increase the short run increase in the government revenues will be 18%, 53%, 72%, and 88%
respectively and the long run increase 16%, 44%, 55%, and 58% respectively. However, eventually there
will be a situation when the increase of price will have no impact on increasing the level of government
revenue. This will occur at a situation where the supplementary duty rates are 319% in the short run and
219 % in the long run. The corresponding level of decrease of employment at 10%, 33%, 50%, and 70%
of price increase will be respectively 4%, 14%, 29%, and 40% in the short run and 6%, 19%, 29%, and
40% in the long run. Although the rates of decline in the employment appear to be high, however, this
should not cast a shadow on the prospect of tax rate increases. This is because the non-tobacco industry
constitutes more than 99% of all industrial employment. Moreover, the enhanced revenue earned from the
higher taxes can be used in supporting other productive activities to compensate the loss in employment
in tobacco manufacturing. The benefits of tobacco consumption are derived from two sources: tax
revenue collected on domestic tobacco consumption and net wages earned in the tobacco sector.
Considering 25% inpatient department (IPD), the total annual direct cost of medical care due to tobacco
related illness is 67.6 billion Tk. of which health system costs 21.6 billion Tk. and out-of-pocket costs
45.8 billion Tk. The total indirect costs of tobacco related illness is 80.3 billion Tk. of which loss off net
wage due to death accounts 40.6 billion Tk. and current year loss of net wages due to disability accounts
39.8 billion Tk. Therefore, the total costs imposed on society, due to prevalence of tobacco related illness,
at 25% IPD, is 147.7 billion Tk. (67.6 billion Tk. plus 80.3 billion Tk.), of which total cost imposed on
society directly due to tobacco usage is 60.6 billion Tk. (41% of cost attributed to tobacco usage). Total
benefit due to tobacco usage is 33.3 billion Tk. of which benefits due to total revenue collected amounts
27.3 billion Tk. and benefit due to net wage earned is 6.0 billion Tk. The net costs on society due to
tobacco usage is 27.3 billion Tk. per year (US $ 0.40 billion) which is equivalent to 1% of the current
GDP of Bangladesh, About 10.5 million people currently malnourished could have an adequate diet if
money spent on tobacco were spent on food instead. Therefore, vigorous efforts in reduction of tobacco
usage will have high positive impact on poverty reduction, public health, and on the overall economy of
Bangladesh.

5.2.1 Taxation and Policymaker’s Dilemma:

The necessity of tobacco control is an important issue. The use of taxation of tobacco products as a way
to control tobacco use creates debate from political, economic, and social points of view. It is a fact that a
policy change to benefit some people often comes with a cost. On the contrary, increased taxes on
tobacco can yield significant health benefit to its users by cutting down tobacco consumption. However,
reduction of tobacco cultivation and reduced demand for tobacco use in manufacturing sector may cause
unemployment in this sector. For the policymakers’ point of view, this is a dilemma of employing
tobacco taxes.
 28

Imposing tax on tobacco products will increase the price of tobacco products. It is viewed as one of the
most effective tools to control tobacco use as it reduces tobacco consumption significantly. Moreover, it
generates substantial increases in revenues.

Bangladesh imposes a variety of taxes on tobacco products. It includes supplementary duties on

cigarettes, bidis, chewing tobacco and pipe tobacco, duties on imported tobacco products and on both
imported and exported tobacco leaf, and a value added tax on the retail prices of all tobacco products.

The National Board of Revenue (NBR), an arm of the Ministry of Finance excise tax on tobacco products.
It frequently adjusts the supplementary duty rates applied to different tobacco products, mainly based on
revenue needs.
Figure 6: Tax Rate Assessment of FY 2013-14. It shows that manufacturing and publicly manufacturing
cigarette companies give the larger share of tax rate. (Appendix-2)

5.2.2 Mixed Message:

The government of Bangladesh has sent mixed messages about tobacco. It is believed that tobacco
spending is a waste of money and that redirecting the money spent toward food purchases could lower the
rate of malnutrition (BATA 2001). Yet, BAT was awarded a trophy for being one of the country’s largest
exporters. BAT is apparently the biggest taxpayer in the country. BAT Bangladesh contributed taka 28.28
billion (us$ 415 million) to the government’s revenue in FY 2011-2012 as vat and supplementary duty.

But, export earnings and tax payments are not enough to provide a complete economic picture of the
tobacco industry in Bangladesh. They miss the items like trade deficit, the costs associated with tobacco-
related health problems, and the effect of smokers purchasing tobacco rather than food.In fiscal year
1997–98 Bangladesh earned US$5.4 million in tobacco exports, but it also imported US$19.93 million
worth of tobacco, for a net loss of over US$14.4 million (Bangladesh Bureau of Statistics 1998b).

5.3 Ethical Dilemma of the Retailers:

According to socio-cultural values of Bangladesh, people are supposed to stop smoking. But reality is
quite different. Reasons of smoking are known to all. So, researchers focus on the characteristics of
cigarette sellers to find a way out of smoking; specially smoking by minors.

A study showed that 35% retailers smoke 65% don’t smoke. Also 95% retailers sell cigarette to the young
people. 80% of retailers think selling cigarette to minors is unethical. Around 97% respondents believe
 29

that minors smoke at their own responsibility and they discourage the smoking by the minors. But, there
is no proof of it.

Surprisingly, 20% of sellers think that selling cigarette is ethical. The survival of themselves and their
families is more important than protecting the minors. They think without satisfying the basic needs, one
cannot think of individual ethics let alone societal ethics.

Figure 7: Why selling cigarette is ethical? The figure shows the percentages of the reasons why people
think selling cigarette is ethical. The biggest reason is the unconsciousness of the minors. Another reason
is that it is the source of earning. (Appendix-2)

Figure 8: Why selling of cigarette is unethical? (Appendix-2)

About 32% of the retailers are willing to switch the business with the condition that the new business will
offer them at least the minimum turnover. They do care for a better society, but majority (62%) refuses
because they think that their switch won’t bring anything positive. Also they don’t want to lose the
market of minor smokers which is currently 37% with an approximate growth rate of 16% per year.

6.0 Manipulation of Tobacco Industry Owners:

The tobacco companies have fought the opinion, data, and the interpretation of the data relating to
negative judgment about the existence of tobacco industry. They have established a set of strategies and
arguments to contradict the unconstructive effect of the industry.

6.1 The Strategies of the Tobacco Industry:

1. Cautiousness of the Owners:

The current anti-tobacco era began with medical and scientific research linking tobacco use to a variety of
health problems. The first action of the industry was to dispute the research findings. The image conveyed
is that industry leaders are concerned professionals cautiously studying the issues. Until these executives
receive proof of the ill effects of their product they will continue as before. It is never stated, but the
indications are that they operate from a classic American jurisprudence idea of 'innocent until proven
guilty' view. For example BAT has promoted itself as a responsible company. It has done it in several
ways:
 30

 A voluntary code of conduct was issued by the company in 2001 that narrowed tobacco
advertisements on television and radio to the hours of 10 p.m.to 6 a.m. (BAT 2000).

 BAT claims that it does not offer samples to smokers or tobacco users less than 18 years of age.

 In newspaper advertisements and in programs distributed at cultural events sponsored by BAT,

messages such as “Our events promote more than just our brands” are displayed.

2. Conducting CSR Activities:

The tobacco manufacturing companies do some corporate social responsibility (CSR) activities to show
their concern about the society. Here are some CSR activities of BATB:

 A project of BATB is ‘PROBAHO’. The aim of this project is to supply safe drinking water to
the rural areas.. So far, the ‘PROBAHO’ initiative has installed 34 plants to remove arsenic and
toxic elements from groundwater. Also, it is providing with approximately 95,000 liters of pure
drinking water for 47,000 people every day in districts like Manikganj, Satkhira, Meherpur,
Kushtia, Jhenidah and Tangail.

 BATB has started their forestation program when they joined hands with the Forest Department
in 1980 to preserve the forests and fight the negative impacts of climate change. Till now, they
have contributed around 67.5 million saplings throughout Bangladesh. Today, after more than
two decades, BATB have contributed more than 4 crore 60 lac saplings to the country’s
forestation initiative. Most of these plants are located in Kushtia, Rangpur, Manikganj and
Chittagong regions including the hill tracts which are the tobacco producing districts of
Bangladesh.

 Another activity of BATB is a project to install Solar Home Systems in remote areas of
Chittagong Hill Tracts without any cost. The project is called ‘DEEPTO’. Under this project
BATB has already installed 576 units of Solar Home Systems in four remote villages in
Bandarban and Khagrachari districts.

3. Financing the Medical Research:

Another strategy of the tobacco industry is it offers millions of dollars to research personnel exploring
various issues. The specified series of topics for these studies is interesting: genetic differences between
smokers and non-smokers, personality traits of smoker s, immunologic factor in cancer, general studies
on heart diseases, lung defense mechanisms and on smoking and other behavioral factors in heart diseases
(Tobacco Institute, 1986). This list of topics is vague and incomplete. The industry is conducting
research, but it is not examining the same topics as those sponsored by the government or health groups.
 31

4. Blaming the Victim:

 PEOPLE SHOULD SMOKE LESS- they argue that the whole health problem would end if
people would only restrict themselves to smoking four or five cigarettes a day.

 YOU WERE NOTIFIED- they defend themselves by saying that we notified you of the hazard.
Because, each package of cigarettes and each advertisement carries a warning label.

For example: BAT launched a so-called Youth Smoking Prevention Campaign on July 28, 2001. It
consisted of 30-second television advertisements, three 1-minute radio scripts, billboards, and stickers. In
all materials, it was claimed that smoking is an adult choice. BAT tried to convey the message that people
under age 18 should not smoke and company feels responsible to prevent youth smoking. More
perceptive young people easily see through this campaign and identify the contradiction between the
company’s heavily advertising its brands and yet telling youths not to smoke (WBB and PATH Canada
2001).

5. Advertising:

The massive advertising budget of the industry is an attempt to undercut the health warnings. They use
warnings in promotions in such a way that these warnings often remain unnoticed. Many of the
advertisements conveyed the message that smoking makes one strong, healthy, and irresistible to women.
One example will illustrate the point:

 An oxcart gets stuck in the mud, and the driver is unable to push it out. A young man approaches,
watched with great admiration by a pretty girl. He takes a few puffs of a cigarette, then pushes the
oxcart out of the mud and offers a cigarette to the driver. The girl is thrilled. ( Advertisement of
Navy)

Also researchers monitored a renowned TV channel of the country and found that on a Saturday evening,
from 8 p.m. to 10 p.m. a time when young people are fairly likely to be watching TV 38 tobacco
advertisements were showed. (Shaha, Dhar and Efroymson 2000) .

6. Revenue:

The biggest justification for the industry owners is that this industry is one of the important sources of
revenue. They pay huge tax every year. Like other countries, a huge part of revenue earning of
Bangladeshi government comes from taxation of tobacco. Government of Bangladesh imposes a
significant amount of tax rate on cigarette manufacturing companies.

7.0 Opinion
 32

The outcome from the deep and analytical assessment there is no way but to stand strongly against the
growing tobacco industry in Bangladesh. The short run benefit is very significant when we look at the
revenue sectors but policy making for a country is totally a different idea. Here, we have to account the
net loss for a severe malpractice. There is a huge opportunity cost for enduring the tobacco industry for a
long time. In the long run, if proper policy is not implied, it will be the major cause of death and poverty
in our country.

Bangladesh has enacted a tobacco control law in 2005 in accordance with some of the provisions of WHO
FCTC. Its regulations also came in to force in September 2006. However, these guiding documents are
not sufficient for implementing the tobacco control programs. National guidelines and a detailed plan of
action are needed. The provisions of the FCTC/Law should be appropriately reflected in the strategic plan
of actions in order to reduce tobacco consumption, to promote cessation of tobacco use, to protect
nonsmokers from environmental tobacco smoke and to protect present and future generations from the
devastating health, social, environmental and economic consequences of tobacco consumption and
exposure to tobacco smoke. This strategic document provides a framework for comprehensive tobacco
control in Bangladesh

Since we have got mixed messaged observed in the dilemma section, it is impractical to expect a tobacco
free society overnight. Moreover, it’s a continuous process. Consciousness should come from every
sectors and subsectors from the society. When we set policy through economics, we also measure and
include the health economics subsection. This illustrates the total debate. So, net cost benefit analysis
results against the tobacco continuation.

As this comes from a habitual behavior we may allow this for a small scale. In developed countries,
tobacco purchasing is very costly. Therefore, young people hardly find it easy to manage budget from
their pocket money. This is a method to prevent new smokers. But tobacco controlling does also include
current smokers to restrain from this bad habit.

Sad but true tobacco consumption in Bangladesh is increasing, especially among the youth and the poor.
The increase in tobacco consumption is due to many reasons. Recent socio-economic development and
increase in population size make the country a lucrative market for the tobacco industries. Easy
availability of cheap tobacco products (such as bidi), lack of strong tobacco control regulations and weak
enforcements of existing regulations are also important factors. The tobacco consumption scenario in
Bangladesh is also very different from others in its complexity. There is great variation in the pattern and
mode of tobacco use. Smokeless form of tobacco use is highly acceptable in the society.

7.1 Recommendation:
 33

It is not easy to counter the aggressive promotional activities of the tobacco industry. These giant
companies have enormous wealth directed towards developing countries and the underprivileged. In spite
of this, we have strong evidence against tobacco. Countering Tobacco Industry’s strategies will focus on
key interventions to combat promotional marketing.

There are several recommendations to reduce the smoking percentage socially. The overarching branding
campaign will be comprised of different materials and activities. TV and radio commercials will be
produced and aired to restate other focused messages. Posters and stickers and will be developed,
produced and distributed. Billboards will also be instated with consistent messaging in strategic locations
across the country.

Television Commercials:

Since TV viewership is high among urban and rural populations and is considered to be influential, this
media will be utilized to disseminate campaign messages. Selected pre-tested TV commercial(s) will be
aired. An additional TV Commercial will be produced and aired to supplement the health hazards
message of WLF. Five TV commercials for each category campaign (Advocacy, Tobacco Control Law
and Public Places, Farmers’ Campaign, SHS and Branding Positive Behavior) will also be developed.

Radio Commercials:

In line with TV messages, five radio commercials will be produced and aired.

Billboards:

About 164 billboards are proposed for 64 districts of Bangladesh. Each of 57 districts will receive two
billboards at the entrance point and important junctions. Every divisional district will have 5 billboards
and the Dhaka City will be provided with 20 billboards. These 30 x 15 foot billboards with Anti-Tobacco
Brand and Health Hazards messages will be designed and installed at the entrance of 64 districts. The
Health Hazards billboards will be changed at the 2nd year with the message of Branding Positive
Behavior.

Posters:

Four posters will be designed, one poster each on Anti-Smoking Brand, Health Hazards, World No
Tobacco Day (WNTD) and Branding Positive Behavior.

Advocacy Video:

A live documentary video containing useful information related to tobacco use and its harmful effect, the
Tobacco Control Law and Public Places, information on the health effects of exposure to secondhand
smoke (SHS) will be produced and distributed widely. This video will have a multi-purpose use:
community mobilization and policy advocacy.

Documentary video for farmers:

 34

This documentary video will contain useful information for farmers about the harmful impact of tobacco
cultivation on their land and will address the question of cultivation alternatives that are economically
viable. Research studies reveal that tobacco cultivation reduces the fertility of the land and the real
economic loss related to tobacco cultivation will be depicted in this video. The video will be shown
during the local level campaign in the tobacco cultivated districts.

Cinema Slides:

Three cinema slides will be developed and screened through cinema halls in the country. Among the
three, one cinema slide will be on Health Hazards and the other two will be on SHS and Branding
Positive Behavior. Young people will be targeted by the cinema slides.

Folk song:

A generic script for a folk song with messages of the dangers of smoking and tobacco use will be
produced and distributed to the partner agencies. This song will be used to organize related events in the
community. A guideline will be developed for organizing the event and generating discussion after the
performance.

Street Drama:

Two Street Drama scripts will be developed, pre-tested and delivered to the NGOs and partner agencies
for staging in the community as needed. A guideline will also be delivered along with the scripts.

SMS (Short Message Service):

Two SMS, one on Health Hazards and the other on behavior branding will be developed and broadcast
through an established cell phone company.

Drama Serial:

One 13-episode drama serial applying the “enter-educate” approach will be produced and aired through
BTV and other popular channels.

Observe “World No Tobacco Day”:

Technical assistance will be provided to partners to launch special campaigns at the divisional
headquarters on World No Tobacco Day. The NTCC will take the leadership role to coordinate with
partners to organize a television talk show, newspapers ads and special supplements on this day.

8.0 Conclusion:
 35

Restricting the tobacco companies will reduce the negative externalities from the society It will maximize
the social welfare. In turn, the economy of Bangladesh would benefit as a whole by avoiding the
deadweight loss attributable to tobacco usage in the country. From another point of view, the urge for
tobacco control on health grounds is undeniable. It would also be beneficial to tobacco users to stop their
tobacco consumption. A well designed Strategic Plan may provide an ambitious progress in the Tobacco
Control Program in Bangladesh. It has to be planned in such a way that it might undertake
communication involvements that create a common platform for the tobacco control program and raise
public awareness by repeating messages through different channels which will ultimately strengthen the
existing activities of tobacco control stakeholders, including external partners, grantees and NGOs
countrywide. To achieve this goal, support from every stages not only from government but also from
various organization is required. We are dreaming of a tobacco free world. We know it is very much
possible.

Bibliography:

Barkat,A.,et al.:(2008).The Economics of Tobacco and Tobacco Taxation in Bangladesh. Dhaka: Human
Development Research Centre.

Rahman,M.(2010).Consumers’ Perception on Product Quality and Brand Dilution in Tobacco Industry of

Bangladesh.Dhaka. ( ASA University Review, Vol. 4 No. 2, July–December, 2010).

Zarda and Gul: Smokeless Tobacco Products in Bangladesh.(2013).Dhaka:Ubinig.

Mursalin,A.,et al.:(2013) .An analysis of Factors Contributing to the Increase of Tobacco Consumption in
Bangladesh despite Restrictive Anti-Smoking Policies .Dhaka: Journal of Social and Development
Sciences ( Vol. 4, No. 7, pp. 325-331, July 2013 (ISSN 2221-1152).

Efroymson, D.,et al.:(2001). Hungry for tobacco: an analysis of the economic impact of tobacco
consumption on the poor in Bangladesh. Dhaka.(Tobacco control, 10(3), 212-217).

National Strategic Plan of Action for Tobacco Control, 2007-2010, Dhaka: World Health Organization,
Country Office for Bangladesh.

Chowdhury,A.,et al.:(2002). To Produce or not to Produce: Tackling the Tobacco Dilemma. Dhaka:
BRAC Research and Evaluation Division.( Research Monograph Series No. 23).

Islam,M.(2012)Ethics Pops up, Economy Constrains: Ethical Dilemma of Tobacco Retailers in Selling
Cigarette to Minors. Dhaka.( European Journal of Business and Management ISSN 2222-1905 (Paper)
ISSN 2222-2839 (Online) Vol 4, No.2, 2012)

Global Adult Tobacco Survey Bangladesh Report 2007.(2009).Dhaka: World Health Organization,
Country Office for Bangladesh.

Motaleb,M.,et al.:(2011).Tobacco cultivation in Bangladesh: is it a threat to traditional agro-

practice?.Dhaka.(Indian Journal of Traditional Knowledge Vol. 10 (3), July 2011, pp. 481-485)
 36

Mamun,A.,et al.:(2013).Minimization of health and environmental hazards of Tobacco among the folk
community in rural Bangladesh. Dhaka.(International Journal of Research in Humanities, Arts and
Literature (IJRHAL)Vol. 1, Issue 2, July 2013, 69-76 © Impact Journals).

Nargis,N.Pricing and Taxation of Tobacco Products in Bangladesh:Findings From Wave 1(2009) and
Wave 2(2010) of the ITC Bangladesh Survey.Dhaka.

Tobacco Companies ‘Aggression and Ill Tactics to Boom Tobacco Cultivation in Bangladesh.
Dhaka:PROGGA.

Ahmed,S.,et al.:(2014).Building Momentum for Tobacco Control: The Case of Bangladesh. Dhaka.(2850-
Ch02 4/14/03 2:29 PM Page 13).

Bangladesh Centre for Communication Programs.2010-2011 Annual Report.Dhaka: Bangladesh Centre

for Communication Programs, 2011.

Appendix:

Appendix 1: Tables:

Table 1: Cigarette and Bidi Brand Shares based on household survey data, 2009

Cigarette
Brand 2010
Stsar 25.6%
Sheikh 18.3%
Navy 13.7%
Gold leaf 10.3%
Marise 8.9%
Others 23.2%
Bidi
Akij 29.1%
Aziz 10.8%
Ansar 4.8%
Nasir 4.7
Others 50.6%
Source: GTTS 2009

Table 3: Average expenditures on cigarette and bidi per month among manufactured cigarette smokers
and bidi smokers age ≥15

Demographic Characteristics Cigarette expenditure Bidi expenditure per

per month (Taka) months (Taka)
Overall 377.8 (348.2, 407.4) 130.5 (91.9, 169.0)
Gender
Male 378.4 (348.8, 408.1) 131.1 (91.1, 171.0)
 37

Female 128.2 (55.2, 201.1) 114.2 (25.1, 203.2)

Age
15-24 340.8 (264.1, 417.6) 227.6 (-60.5, 515.7)
25-44 398.5 (361.4, 435.5) 124.4 (79.7, 169.2)
45-64 385.8 (329.8, 441.8) 129.9 (71.6, 188.1)
65+ 241.2 (175.6, 306.7) 61.7 (47.1, 76.4)
Residence
Urban 516.1 (470.9, 561.2) 87.5 (72.7, 102.3)
Rural 306.4 (270.9, 341.9) 135.2 (92.4, 178.0)
Occupation
Employed 416.9 (353.3, 480.6) 70.4 (55.3, 85.5)
Business 484.8 (426.2, 543.4) 96.7 (79.8, 113.7)
Farmers 278.1 (229.5, 326.7) 160.0 (73.8, 246.3)
Laborers 363.1 (308.0, 418.2) 121.9 (73.7, 170.0)
Students 417.4 (87.4, 747.4) 0
Source: GATS Bangladesh Report, 2009

Table 5: Related risk (RR) and population attributable risk (PAR) diseases for tobacco usage from the
hospital survey

Smoking Smokeless
Diseases tobacco tobacco

RR PAR% RR PAR%
Men
IHD1 1.7 33.6 2.6 32.5
Stroke 1.5 25.9 2.1 23.8
Buerger’s disease 5.8 54.7 1.8 16.1
Oral cancer 4.5 71.3 4.9 48.1
Lung cancer 6.2 79.4 1.2 3.9
Laryngeal cancer 12.6 89.4 1.5 10.2
COPD2 5.6 77.2 1.7 15.0
Pulmonary tuberculosis 1.9 39.1 1.9 18.8
All 2.3 50.6 1.5 12.9

Women

IHD1 6.4 18.2 1.7 22.6

Stroke 2.1 6.3 2.6 41.2
Oral cancer 6.3 21.8 4.7 59.3
Lung cancer 10.0 35.9 12.6 82.7
Laryngeal cancer 3.8 12.7 7.8 73.1
COPD2 15.6 61.6 1.8 24.6
Pulmonary tuberculosis 1.7 3.2 3.5 51.0
 38

All 3.7 21.7 2.0 33.1

Combined
IHD1 1.5 21.4 2.0 25.3
Stroke 1.2 10.7 2.2 29.1
Buerger’s disease 28.1 93.4 1.4 10.4
Oral cancer 4.8 66.3 2.5 30.5
Lung cancer 5.3 69.8 1.4 11.3
Laryngeal cancer 10.0 82.7 1.4 9.9
2
COPD 3.0 52.5 1.8 18.5
Pulmonary tuberculosis 2.2 38.7 1.4 11.1
All 2.0 36.6 1.6 16.4
Source: World Health Organization

1. Ischaemic heart disease

2. Chronic obstructive pulmonary disease

Table 6: The major food crops, in terms of acreage 2008-09

Major food crops in Bangladesh 2006-7 2007-8 2008-9 Increased/

between 2006 to 2009 (in Acres, 000 Acres, 000 Acres, 000 decreased
thousand acres of land) Crop

Rice (Aus) 2238 2270 2633 +

Rice (Aman) 13382 12474 13584 +

Rice Boro 10522 11386 11654 +

Wheat 988 958 975 +-

Potato 852 993 977 +

Jute 1034 1089 1039 +-

Pulses 769 558 559 -

Oil seeds 841 875 877 +

Spices and condiments 860 738 680 -

Winter Vegetables 435 453 453 same

Source: UBINIG Information Collection 2010.

 39

Appendix 2-Figures:

Figure 1: Profit share of BATB’s products in the market.

Star filter
33%
49%

JPGL

23%

Contribution of
the lower
segment

Source: BATB Report.

Figure 2: Retail Audit Figures.

 40

450
400
350
300
250
200
150 Industry
100
50
0
Jan-10

Sep-10

Jan-11

Sep-11

Jan-12

Sep-12

Jan-13
Mar-10

Jul-10

Mar-11

Mar-12
Nov-10

Jul-11

Nov-11

Jul-12

Nov-12
May-10

May-11

May-12
Source:
Retail Audit Jan 2013.

Figure 3: Knowledge about diseases caused by tobacco consumption

35
30
25
20
15
10
5
0

Source: World Health Organization.

Figure 4: Percentage of card holding farmers

 41

50

45

40
Card holding farmers (%)

35

30

25

20

15

10

0
Marginal Small Medium Large

Source: Survey by BRAC 2002

Figure 5: The comparative cost of production of tobacco with some other crops grown
during the same season.

90000
80000
production cost (Tk/acre)

70000
60000
50000
40000
30000
20000 Comperative cost of tobacco
compared to other rabi crops
10000
0

crop name

Source: Survey by Unnayan Dhara, 2010

Figure 6: Tax Rate Assessment of FY 2013-14

 42

Publicly Traded Mobile Company 40

Mobile Phone Operator Company 45

Publicly Traded Cigarette Company 40

Cigarette Manufacturing Company 45

Bank, Insurance & Financial Company 42.5

Non Publicly Traded Company 37.5

Publicly Traded Company 27.5

Source: National Board of Revenue

Figure 7: Why selling cigarette is ethical?

8%
source of earnings
33%

cigarette does not harm

42%
The minors will buy it
17% anyhow
Others

Source: Primary Data Collection 2010

Figure 8: Why selling of cigarette is unethical?

 43

Minors will be addicted

15% Smoking is harmful

31%
10%
I don't want minors to
6% smoke
4%
15%
It hampers the study of the
19% minors
It encourages other minors

Moral degradation

Others

Source: Primary Data Collection 2010