The liberalisation of tobacco production through the repeal of the Special Crops Act has led to the entry of many smallholder farmers into tobacco production. Smallholder farmers interact with a number of institutions providing various services to farmers including extension services, credit extension and tobacco marketing. Some smallholder farmers belong to clubs affiliated to national level institutions and sell tobacco through various marketing institutions. This study tests the hypothesis whether smallholder farmers benefit from these institutions in terms of profitability of tobacco farming. The results show that gross profits from tobacco are not positively associated with membership to farmer clubs or affiliation institutions. We however, find evidence that profitability is positively related to productivity, specialisation, the marketing of tobacco to intermediate buyers but negatively related to distance to the market.