JTI: Putting Tobacco Farmers First

Paulo Saath has been surrounded by farming for as long as he can remember. 

The grandson of a German migrant who moved to Brazil following the First World War, Paulo grew up on a farm where tobacco was and remains an important crop. In fact, his youngest brother is still looking after agricultural activity on the same land. 

“My upbringing created not only a passion for tobacco farming, but for farming in general,” he says. 

These days he serves as Global Head of Leaf Operations at JTI, one of the largest tobacco manufacturers in the world, but that original passion reared its head in 2018 when Paulo couldn’t resist the lure of buying a farm of his own. 

“As we say in Brazil, you can take a farmer out of the farm, but you can’t take the farm out of a farmer,” he enthuses. 

Supply chain responsibility

Since joining JTI in 1999, Paulo has taken up a variety of senior positions in the company's global supply chain function. 

Having spent time in Malawi, Malaysia and his native Brazil, he is now based in Geneva, Switzerland, looking after the supply chain for leaf and a host of other agricultural raw materials. 

“In general, we produce and we source because we are vertically integrated, with direct contracts with 70,000 farmers in 10 countries around the world,” Paulo explains. 

“I also have a procurement team that sources leaf from third-party suppliers which hold contract relationships with the growers.”

Within Paulo’s wider department is an ESG team, which coordinates the development of JTI’s sustainability agenda with directly-contracted growers and leaf suppliers.

“Of course, where we are vertically integrated, our relationship with farmers is direct," he continues. "Nevertheless, we encourage all our suppliers to make sure the leaf is produced and sourced responsibly." 

Farmers first 

Unsurprisingly, Paulo has witnessed his fair share of evolution and change in the tobacco farming industry over the years. 

In the past, he says, tobacco farming was largely based on a commercial relationship between buyer and supplier, where companies – through agronomy teams – were beginning to help farmers increase quality and productivity.

However, over the past decade or so, the focus on agronomy practices and improved yields has intensified dramatically.

“It all begins with the farmer,” Paulo notes. “And really, it’s because the farmer is key to our success – not only when it comes to delivering for our business, which is measured by volume, quality and efficiency, but also in driving sustainability. 

“When you consider climate change and nature, the farmer has a big part to play in terms of reducing CO2 emissions, improving biodiversity, soil health and so many other aspects of environmental sustainability.”

Paulo goes on to highlight the growing industry focus on farmer livelihoods, including working conditions and health and safety. 

“We’re dealing with small-scale farmers around the world, so we cannot forget the people element, which goes down the value chain,” he adds. 

“Of course, we always need to keep an eye on human and labour rights in the value chain, making sure farmers and their workers are operating in a compliant way.”

The Living Income Calculator

JTI’s focus on farmer livelihoods is perhaps best demonstrated by its innovative Living Income Calculator, which is being developed with its directly-contracted growers. 

The calculator represents a concerted effort to identify ways to further improve productivity, quality, efficiency and, therefore, growers’ incomes. Historical progress shows some impactful results, with output per hectare more than doubling over the past decade in some origins. 

“It’s not so complicated for a grower to get a decent living income with around four or five hectares,” Paulo continues. “But the data indicates how challenging it is in places where birth rates are quite high, families are big and farmers have small plots of land (less than 1-2 hectares).

“This exercise helps us form a useful foundation and define how we could positively contribute into it.”

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