In the southern African country of Malawi, tobacco is the major export crop - responsible for 70 per cent of all export earnings. Agriculture is the mainstay of Malawi's economy - accounting for over 90 per cent of GDP. Out of a total population of 11 million, the majority of Malawians are farmers - and seven million owe their livelihoods to the tobacco industry.

But economic dependency on tobacco has not brought the country wealth. According to the World Bank, over 60 per cent of Malawians live below the poverty line - with limited access to land, little education and poor health. Despite the poor returns from tobacco growing, the government has actually increased the land under cultivation. Malawians are now questioning if the wealth promised from growing tobacco is really an illusion.

The Consumers Association of Malawi is one of the main critics of the government's policy. "Do you see anywhere that this economy is booming because of tobacco? It's a sick economy," says John Kapito. For while tobacco leaf exports have gone up, export revenue from tobacco has fallen steadily.

Says Miriam, a tobacco tenant farmer: "I don't profit from the work I do. We work all year. But in the end we get nothing because the crop we grow gets low prices on the auction floors. Sometimes we make so little we have to find extra work to buy food and clothes."

The tenant farmers on the big tobacco estates become, effectively, bonded labourers. For Miriam, that means the whole family must now work to repay the landlord, and her daughter Alice must sacrifice going to school.

The headmaster at Alice's school, Frederick Sambo, explains: "Many of the students here do come from tobacco estates. They don't come to school frequently because they are always busy with their work and because of that they are always backward in class. The students from tobacco estates are forced by their parents to help them do the work."

The tobacco workers' union in Malawi is now trying to end the practice of child labour and improve working condition for the tenants on the tobacco estates. Another problem is pesticide run-off into local rivers which are used for drinking water. Labour organiser Leo Agrippa says: "When the fertilizer goes into the river through the water, they are making poison. And when the people drink that water, they are going to get sick with these chemicals which are coming from the fertilizers."

Food is short too, and it all turns on the price of tobacco and the cost of growing it. Estate landlord Elisa Phiri says he cannot afford to improve conditions: "The prices have stagnated at one dollar. Since 1987 they stayed at one dollar. But now they are going down a lot.... In 1997, we were buying 50 kilograms of fertilizer for 100 or 150 kwacha. But now we are buying at 1750 kwacha."

The price that is paid to the producer is ultimately set by the cigarette manufacturer. The fact is that, as inputs go up, auction floor prices have dropped around 30 per cent in the last six years. Farmers feel they are the ones losing out. During the same period, earnings for the CEOs of multinational tobacco companies increased. The head of Philip Morris made over ten million dollars in 2002.

Tobacco purchases in Malawi are dominated by one company, Limbe Leaf, which buys over half the crop. Albert Kamulaga of the Tobacco Association of Malawi explains: "The price is driven mainly by the largest buyers, and the others just give way. The way it is, it is monopolistic, because once you see a giant like Limbe Leaf on the floors, you know they will control the price that day."

Charlie Graham of Limbe Leaf denies any price fixing, and says that the Tobacco Association should stop focusing on the auction side of the industry and concentrate on "the side of the industry that is not working very well, which is the growers - they are definitely suffering." He says that if prices went up, "People would replace their tobacco from other countries, and Malawi would lose its opportunity."

As the multinational tobacco companies have encouraged more and more countries to grow tobacco, world prices have come down. But in today's globalized economy, tobacco farmers must now compete with other farmers halfway round the world.

As well as using up valuable agricultural land, tobacco is also a major consumer of wood. It's used to build drying sheds and for the production of flue-cured tobacco. According to Malawi's Department of Environmental Affairs, the result is that Malawi has one of the highest rates of deforestation in the world.

So why doesn't Malawi diversify its agriculture instead of relying on one crop which definitely hasn't made them rich? Derek Yach of the World Health Organization says the reason is very simple: "The very strong stranglehold by tobacco companies on agricultural ministries has blocked this happening because they fear that farmers would eventually start seeing they could get a better return on their money in a diverse range of other product areas."

WHO's tobacco treaty - the Framework Convention for Tobacco Control - will shortly enter into force - the first time that the organisation has used hard law or treaties to control a major public health problem. It will almost certainly lead to a decline in smoking. Derek Yach says this is an opportunity for countries like Malawi: "We have often heard the argument that as the rest of the world reduces consumption, a country like Malawi will become increasingly more impoverished. The dependence they have on tobacco has certainly not brought them wealth. The treaty may allow Malawi to seek additional financial resources to start doing the research required to reduce their dependence on tobacco. We're not saying people should switch tomorrow out of tobacco. We're saying - 'let's see demand reduction happen, and let's make sure that countries start looking at sustainable livelihoods for their people.'"

Collins Magalasy of the Malawi Economic Justice Network agrees: "There is no hope in relying on tobacco. They should stop using child labour. I only hope that one day one time, we will have a real replacement. Because if there is a replacement of this tobacco business, then we can forget about all these concerns."

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