The cultivated areas of Lebanon are estimated to be in the region of 2,479,396 dunum (one dunum=1,000m2), distributed over the various mohafasaz as in Table 1.

Tobacco cultivation is of great importance to both farmers and the public, as it constitutes a minor portion of the overall cultivated areas (not exceeding 3.7%), but receives a great deal of financial support from the government. Financial backing reached approximately LL 60 billion ($39.8 million) in 2001, at a time when the government abolished subsidies for the cultivation of beetroot. Assistance is now restricted to tobacco, wheat and cocoon raising (silk worms), making the cultivation of tobacco a politically-related agricultural issue.

Areas of tobacco cultivation

In the year 2000, cultivated land, mainly in the areas of the South (which represents almost two-thirds of the cultivated land), the North and the Bekaa, reached approximately 91,820 dunum (legal and illegal), distributed according to Table 2.

Tobacco cultivation requires a permit from the Regie, however, some farmers continue to cultivate without one. The area of illegal cultivation reached 9,700 dunum in 2000, but due to political considerations, the Regie also purchases the production of such land at prices lower than those adopted.

Quantities of production

Various factors play an important role in the rise or decline of production (soil, natural factors, availability of water, diseases), in addition to the increase or decrease in of areas of cultivation. Production has risen from close to 990,000 kg in 1991 to approximately 9.5 million kg in 2000. The quantities are distributed according to the cultivated areas in Table 3.

Purchase of tobacco

The Regie purchases the production from farmers at prices laid down by the Ministry of Finance. These prices differ according to the quality and category of production, and those detailed for the 2001 season (which remain unchanged since the 1997 season) can be seen in Table 4.

 

Based on the prices and production figures, the government has spent approximately LL 100 billion ($66.3 million) to buy the production of the 2001 tobacco season for 2001. These prices were distributed over the different areas according to Table 5.

Tobacco export prices

Beyond specifying the cost of purchasing tobacco production, the Ministry of Finance also designates the sale value of the various tobacco and leaf categories that are produced for export. The prices for the 2000 season are shown in Table 6.

The cost of supporting the tobacco sector

The political support and subsidized prices of the government’s purchase of tobacco production (for example, the government’s purchase of 1kg. of the category Saada, first rank, at LL 15,950 for resale at LL 10,000) cost the government an estimated LL 60 billion last year.

The Regie

Established in January 1935, the Regie was based on a decree issued from the French, who organized a monopoly in the cultivation, production and trade of tobacco in the Lebanese territories. Exclusivity was awarded to one company for a period of 25 years, that ended in 1960. In that year, the government extended the mandate until 1964. New conditions governed the relationship between the state and the company for ten years, until in 1974 the company was given the authority to continue to monitor the sector.

In 1991, the government ended the company’s services and assigned a committee to administer the sector. A general manager was assigned to the Regie in 1993 with duties and rights comparable to those of public institution heads.

Although the Regie plays a major role in the national economy, it still does not enjoy a specific legal identity, The Regie specifies areas authorized for tobacco cultivation and works alongside the Ministry of Finance to designate purchase prices. Farmers deliver to the Regie and it takes over the manufacture of one portion and exports the other.

Moreover, it bears the cost of supporting the cultivation of tobacco based on the subsidized prices adopted and supports this cost from the revenues of tobacco trade exclusivity. This institution’s budget is estimated at LL 750 billion ($497 million) per year.

At a time when the government is leaning toward the addition of more fees and taxes, and limiting unnecessary expenditures, the support of tobacco cultivation at close to LL60 billion per year is an issue that can be reassessed. The orientation of farmers to alternative, more beneficial and sustainable crops for development, without such sizeable state support, should be explored.