Is it Illegal to Grow Tobacco in Australia?

Given the negative impacts of tobacco on human health and the environment, you might wonder if it is legal to grow tobacco in Australia. The answer is no, it is not. 

We all know that tobacco is a highly addictive product that can cause various health problems when smoked or consumed. It’s not surprising that it’s the leading cause of preventable death in Australia, killing more than 15,000 people every year.

Aside from smokers, tobacco smoking also kills the environment. It’s a known fact that tobacco cultivation requires large amounts of water, pesticides, fertilisers, and wood for its processes.

In fact, growing tobacco in Australia has been illegal since 2006, and anyone caught doing so can face hefty fines or even imprisonment.

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But why is it illegal to grow tobacco in Australia, and how did the tobacco industry decline in this country? Let’s find out.

Can You Grow Tobacco in Australia?

It’s illegal to grow tobacco in Australia, unless you have a valid excise licence from the Australian Taxation Office (ATO).

The purpose of the excise licence and duty is to regulate the production and supply of tobacco in Australia, and to collect revenue from the tobacco industry. 

It’s worth mentioning that the excise duty on tobacco is one of the main sources of income for the Australian government, generating more than $1,800 per one kilogram of tobacco in 2022-23. 

The imposed excise duty is a deterrent against heavy tobacco consumption and sale. With excise, the country can increase tobacco prices and limit access to consumers.

Its hope is to cause long-term smokers to think twice about buying tobacco and mind their health and savings.

Excise licences for tobacco is a challenge to obtain. The ATO has strict requirements and conditions for anyone who plans to apply.

Tobacco is a sought-after product, especially for unscrupulous parties.

The ATO requires that applicants demonstrate they can secure their tobacco-growing property and have precise record-keeping and reporting systems, aside from the relevant laws and regulations on the growing and selling of tobacco.

Even after you’ve complied with all these requirements, you’ll still have to pay a hefty application fee and an annual licence charge that depends on how big your tobacco business is.

Fortunately, while it gives anyone freedom to grow tobacco in a regulated and protected environment in Australia, it has deterred many parties planning to grow tobacco and sell it locally or export it worldwide.

Currently, there are no tobacco factories in Australia — the last one shut down in 2015. The last tobacco harvest was in 2006.

What tobacco and cigarette products we see today in groceries and corner shops are imported from overseas.

Why is it Illegal to Grow Tobacco in Australia?

Knowing the dangers of tobacco to anyone’s health, it’s also worth seeing the other problems tobacco causes to the country — to any country for that matter.

Unregulated growing and production and supply control of tobacco will decrease its price due to the unmanaged supply and demand. What will happen is that anyone can just buy tobacco — even young children and teenagers who shouldn’t have anything to do with it.

Tobacco being an excisable good subject to excise duty helps ensure this doesn’t happen. With complete control in terms of production, supply, and pricing, cigarettes will only have limited presence in the market.

Lastly, tobacco requires plenty of resources. It may cause growers to take the risk of illegal deforestation, water pollution, and child labour.

The Steep Decline of Tobacco Farming in Australia

It’s true that tobacco was once the biggest and most thriving industry in Australia. Queensland, New South Wales, and Victoria were the biggest tobacco exporters worldwide during the time.

It was in the early 18th century that Indonesian farmers brought tobacco to the country. Many colonists during this period grew tobacco for their personal use or locally trading as product quality varied in how they were grown.

Tobacco farming grew and became its own industry by the 19th and 20th century in Australia, expanding outward as demand for tobacco increased nationally and internationally.

It was in the 1950s and 1960s that tobacco farming established itself as a standardized industry that became profitable for tobacco company founders and their farmers and distributors. With its stable margin, tobacco became a valuable cash crop for the country.

However, tobacco farming in Australia began to decline in the 1970s and 1980s, as a result of several factors, such as:

• The growing awareness of the health risks of smoking, which led to a decrease in tobacco consumption and demand
• The increasing competition from cheaper and better-quality tobacco imports, eroded the profitability and viability of domestic tobacco production
• The rising costs of labour, land, water, and inputs, reduced the margins and returns of tobacco farming
• The environmental and social concerns about the negative impacts of tobacco cultivation, such as deforestation, soil erosion, water pollution, and child labour
• The pressure from the World Health Organization (WHO) and other international bodies, which urged Australia to adopt measures to reduce tobacco supply and demand, in line with the Framework Convention on Tobacco Control (FCTC)

In response to these challenges, the Australian government implemented a series of policies and programs to phase out tobacco farming in Australia. These included:

• The removal of subsidies, quotas, tariffs, and other forms of assistance for tobacco growers and manufacturers, consequently causing the rise of tobacco prices up to this day.
• The introduction of excise duty and other taxes on tobacco products, to increase their price and reduce their affordability
• The enactment of legislation and regulations to ban or restrict tobacco advertising, promotion, sponsorship, packaging, labelling, and display
• The provision of grants and incentives for tobacco farmers to exit the industry and switch to alternative crops or activities
• The establishment of education and awareness campaigns to inform the public about the harms of smoking and the benefits of quitting

These policies and programs were successful in reducing tobacco production and consumption in Australia, as well as improving public health and the environment.

Perhaps one downside to all these laws, a consequence that cannot be avoided at all, is the emergence of illicit tobacco trade and production, which evaded taxes and regulations and posed risks to consumers and law enforcement. 

To this day, illegal tobacco growing and importation remains a huge problem in the country.

Summary

It’s clear to see that there are legal, moral, and environmental issues in growing tobacco in Australia. It’s not possible to just grow tobacco in your backyard and consume rolled cigarettes. You may face huge fines and legal action if you do so.

If you find yourself craving cigarettes and feel that the cost of cigarettes is becoming too high, it might be time to stop smoking.

And we can help you with many strategies to stop smoking for good.

Smokefree Clinic gives you access to many medically reviewed and trustworthy resources that can inform and aid you in your path to wellness, so have a look around! 

If you’re ready to get started, Smokefree can connect you to Australian healthcare professionals who excel in helping patients quit smoking for good.

Link Reference

• https://www.who.int/westernpacific/news-room/commentaries/detail-hq/australia-leading-the-war-on-tobacco
• https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4669730/
• https://www.ato.gov.au/about-ato/tax-avoidance/the-fight-against-tax-crime/our-focus/illicit-tobacco
• https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/tobacco-and-excise/tobacco-licence-processes-and-obligations
• https://www.tobaccoinaustralia.org.au/chapter-13-taxation/13-2-tobacco-taxes-in-australia
• https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/tobacco-and-excise/tobacco-licence-processes-and-obligations
• https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/tobacco-and-excise/how-excise-applies-to-tobacco
• https://www.tobaccoinaustralia.org.au/chapter-10-tobacco-industry/10-3-the-manufacturing-and-wholesaling-industry-in-australia
• https://www.sunshinecoast.qld.gov.au/news/Backward-Glance-tobacco-industry-13-Jan-2016
• https://wits.worldbank.org/trade/comtrade/en/country/AUS/year/2019/tradeflow/Imports/partner/ALL/product/240220
• https://www.tobaccoinaustralia.org.au/chapter-1-prevalence/1-1-a-brief-history-of-tobacco-smoking-in-australi
• https://fctc.who.int/who-fctc/overview
• https://www.ato.gov.au/about-ato/tax-avoidance/the-fight-against-tax-crime/our-focus/illicit-tobacco