British American Tobacco - Sustainable agriculture and farmer livelihoods

Our agricultural supply chain

We do not own tobacco farms or directly employ farmers – but our approach to agriculture and working with farmers means that we have strong influence.

Our global Leaf function has centralised management over our tobacco leaf supply chain. The majority (approximately 63%) of our tobacco leaf is sourced by our own BAT leaf operations in 18 countries, which contract directly with over 81,000 farmers. The remainder is from third-party suppliers that, in turn, contract with an estimated 195,000 farmers.

All our suppliers are managed centrally by our Group's leaf function, which enables global oversight of our supply chain and the sustainability risks and issues inherent in agriculture. We have a defined approach to identifying our most strategic and critical leaf sources, which takes account of a number of parameters, including the tobacco type, geography and commercial factors, such as price and volume. Over 80% of our total leaf purchases are from these strategic sources.

Regarding the farms in our supply chain and the farmers we work with:

• Tobacco is grown on an average of 40% of farmers’ land, generating around 60% of their total farm income.
• 95% of our farmers grow other crops, including fruit, vegetables, wheat, maize, cotton and soy bean.
• Average farmer age is 43 years.
• Majority are small-scale family farms of one hectare or less.
• Approximately 130,000 school-age children live on the family farms.

A strategic approach

Agricultural supply chains are particularly vulnerable to a range of challenges, including climate change and water scarcity, increasing demand for land and natural resources, rural poverty, social inequality, child labour and ageing farmer populations. Tobacco is no exception.

At BAT, we have a long history of working directly with farmers around the world and advancing agricultural practices. This benefits our farmers by giving them the resources and support they need to be successful, as well as helping to secure our long-term supply of tobacco leaf and ensuring the integrity and quality of our products to satisfy our consumers.

We see an opportunity for us to build on this longstanding approach, to work with others to develop multi-stakeholder solutions to increasing challenges and expectations and to further enhance the livelihoods of farmers and their communities.

We focus on two key programmes to ensure the long-term sustainability of our tobacco leaf supply chain and to enhance farmer livelihoods:

• Sustainable Tobacco Programme: We use the industry-wide Sustainable Tobacco Programme to conduct formal assessments and independent on-site reviews for 100% of our tier one tobacco leaf suppliers, including all our own leaf operations, to ensure alignment with international standards, such as for human rights and environmental protection
• Thrive sustainable agriculture and farmer livelihoods programme: Our Thrive programme goes beyond audit and compliance by taking a more holistic and collaborative approach to identifying and addressing long-term challenges that have an impact on the livelihoods of farming communities and the sustainability of agriculture.