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Monday, May 12, 2025
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From Seed to Community: How Lao Tobacco Limited Partners with Lao Farmers

This Week

Across the provinces of northern and central Laos, Lao Tobacco Limited (LTL) is working on developing rural livelihoods through its LEAF Department, a division focused not only on producing quality tobacco but by supporting farmers, their families, and their communities.

LTL, under the Imperial Tobacco Group, has built a dominant presence in Laos’ tobacco industry. 

Since 2001, through a joint venture with the Lao government under the Investment License Agreement (ILA), the company has expanded its operations. By managing its entire supply chain, from tobacco leaf procurement to cigarette sales, LTL has been able to increase production capacity and maintain low prices for its popular A Deng brand.

The LEAF Department sits at the core of this model. 

“We are involved from the moment a farmer plants a seed until the cigarette is manufactured,” said Lynch Carlos, LEAF Manager at LTL. 

The department manages every step: providing farmers with agricultural inputs, technical guidance, and purchasing their harvest under pre-agreed contracts, the Ecuadorian manager explained.

Today, more than 1,400 farmers work under contract with LTL in provinces such as Oudomxay, Phongsaly, Bolikhamxay, and Khammouane. This marks a sharp rise from 900 contracts last year. 

Carlos explained that the number of contracted farmers had increased by about 40 percent compared to the previous year. He noted that this growth translated not only into more farmers but also into more jobs in the local economy.

In provinces like Phongsaly, where the company had recently expanded, tobacco farming was now creating new opportunities in areas that previously saw little economic activity.

Supporting Farmers and Safeguarding Health

Supporting this growth is a team of around 30 Lao field technicians who advise farmers daily. Each technician works with about 50 farmers, providing training and monitoring compliance with quality and safety standards. 

“Our technicians are the link between the farmers and the company. They ensure that best practices are followed in the field,” Carlos said.

The LEAF Department emphasizes sustainability in every stage of production. One of its key initiatives is supplying traceable, sustainable wood for tobacco curing to reduce pressure on forests. 

“We’ve been buying sustainable timber from local companies like Acacia mangium plantations. This wood is distributed to farmers for use in their curing barns,” the LEAF manager noted.

Health and safety remain a constant focus. LTL requires farmers to use personal protective equipment (PPE) during pesticide application and harvesting, including gloves, hats, and other necessary farming gears.

LTL also enforces a strict ban on child labor. The company profiles each contracted farmer, recording household details to identify risks.

“We track how many children they have and their ages. If there’s a higher risk of child labor, we monitor more closely,” Carlos said. “This year, thankfully, we haven’t found any cases.”

Building Stronger Communities Beyond Tobacco

Beyond production, LTL invests in community development. The company has funded school refurbishments, built sanitation facilities, and supplied educational materials in the tobacco-growing communities of Oudomxay, Phongsaly, Bolikhamxay, and Khammouane provinces.

More recently, it has piloted a waste management project to reduce harmful garbage burning in schools. 

“We noticed that in many schools, kids were burning trash. So we’re testing small waste burners with filtration systems to minimize pollution,” Carlos explained.

The company is also promoting alternative income sources for farmers, such as fish and frog farming. 

“Diversification is important. We want farmers to have food security and extra income,” Carlos said.

Mechanization pilots, including the introduction of small tractors, aim to ease labor demands and improve efficiency.

LTL is currently expanding production, targeting the procurement of 2,000 tons of tobacco this season, a clear sign of growing demand. However, the company’s deep integration with the government and its influence over national policy have drawn criticism. 

While the tobacco industry is seen by officials as a contributor to economic growth, health advocates point to rising tobacco consumption and an estimated USD 144 million in lost government revenue over the past decade, despite Laos’ obligations under the World Health Organization Framework Convention on Tobacco Control.

Still, for the farmers working with the LEAF Department, the benefits are tangible, according to Carlos. Steady income, technical support, community projects, and access to safer agricultural practices have improved lives in many areas.

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