In this study an attempt is made to compare the efficiency in tobacco leaf production with three other cereals – maize, ground nut and rice – commonly grown by Tanzanian small scale farmers. The paper reviews the prevalence of tobacco use in Africa with that of the developed world; while there was a decline in the latter there appears to be an increase in the former. The economic benefit and costs of tobacco production and consumption in Tanzania are also compared.

Using a nationally representative large scale data we were able to observe that modern agricultural inputs allotted to tobacco was much higher than those allotted to maize, ground nut and rice. Using A Frontier Production approach, the study shows that the efficiency of tobacco, maize, groundnuts and rice were 75.3%, 68.5%, 64.5% and 46.5% respectively. Despite the infusion of massive agricultural input allotted to it, tobacco is still 75.3% efficient-tobacco farmers should have produced the same amount by utilizing only 75.3% of realized inputs. The relatively high efficiency in tobacco can only be explained by the large scale allocation of modern agricultural inputs such as fertilizer, better seeds, credit facility and easy access to market. The situation is likely to be reversed if more allocation of inputs were directed to basic food crops such as maize, rice and ground nuts. Tanzania’s policy of food security and poverty alleviation can only be achieved by allocating more modern inputs to basic necessities such as maize and rice.