Evaluating Tobacco Excise Sharing Fund as Policy Instrument for Farmers’ Viable Alternatives in Indonesia: Case Study of Four Municipalities in Indonesia

The Indonesia’s Tobacco Excise Sharing Fund (DBHCHT) policy mandates that part of the fund should be allocated for tobacco crop diversification – reducing the farmers’ reliance on tobacco industry as well as implementing Article 17 of Framework Convention on Tobacco Control (FCTC). However, very little is known on practical implication of this fund on tobacco farmers livelihood. We collected primary data from key stakeholders in four main tobacco producing municipalities. The data were analyzed using qualitative content analysis with NVivo 12. Numbers of challenges on DBHCHT utilization remained at sub-national levels. The sub-optimal use of DBHCHT could partly be explained by: (i) constantly changing central government regulation; (ii) farmers’ unawareness of DBHCHT regulation; (iii) the delay in DBHCHT allocation; and (iv) supply and demand mismatch. Although Indonesia has not been a part of the FCTC ratification, the DBHCHT mandate is in line with the FCTC article 17, i.e., promoting economically viable alternatives for tobacco farmers. This study concluded that DBHCHT utilization needs to go a long way to void this mandate given the challenges at sub-national level. Therefore, this study recommends more technical and practical regulations involving multisectoral stakeholders and the use of DBHCHT to facilitate financial needs of crop diversification.