The economic of tobacco farming in North Macedonia

The economic of tobacco farming in North Macedonia

Authors: Bojana Mijovic Hristovska, MSc Tamara Mijovic Spasova, MSc Marija Trpkova-Nestorovska, PhD Biljana Tashevska, PhD, Borce Trenovski, PhD, Kristijan Kozheski, MSc

Tirana, November 2, 2022

General Facts about Tobacco consumption and Tobacco cultivation in North Macedonia

  • In North Macedonia, almost half of the adults (48.4 percent) smoke tobacco which implies that North Macedonia is far above the EU average (EU average = 18.4% and global average = 22.3%)
  • Average price of cigarettes in North Macedonia is 1.3 USD per pack which is very low compared to regional and EU prices
  • A public smoking ban was introduced in 2010 to prohibit smoking in all public places, including schools
  • North Macedonia is a well-known tobacco-growing area for oriental tobacco, mainly the Prilep, Jaka and Basmak varieties
  • 20,000 agricultural households are engaged in tobacco production, around 80,000 family members (4% of the total population in the country is engaged in tobacco production)
  • With a production of average 26,234 tons of tobacco, the country represents a share of nearly 14% of European production, and is among the top 30 tobacco-producing countries in the world and among the top 20 exporters of raw tobacco
  • Tobacco is the crop receiving the largest amount of subsidies compared to other crops (25% of the total agricultural subsidies and 2% of GDP)
  • A legal commitment for North Macedonia was made when it ratified the Framework Convention on Tobacco Control (FCTC) in 2006 (decrease tobacco production and increase excise)
  • North Macedonia as an EU candidate country will have to comply with the CAP restrictions on tobacco production and the obligation to eliminate direct subsidies. This will place significant restrictions on tobacco production in North Macedonia.
  • As part of the new National Strategy for Tobacco (2021-2024), the Macedonian government is considering reforming direct payments to tobacco farmers and providing alternatives for other crop cultivation