Our integrated pest management approach aims to protect crops by drawing on all available methods to achieve a significant reduction in the use of manufactured chemical agents. Our growing programs lead the industry in reducing the use of agrochemicals.

Integrated pest management does not mean completely eliminating synthetic pesticides, but making sure they are used appropriately, and against pests whose numbers cannot be controlled any other way. The approach requires training for farmers, provided by our companies in the growing programs where they provide direct agronomy support, and has seen a significant reduction in the average amount of synthetic crop protection agents applied in the tobacco growing areas which we can directly influence. Our growing programs use alternative crop protection practices, such as resistant varieties, natural extracts or crop rotations, which reduce the use of synthetic pesticides.

If agrochemicals are used, our companies' contracted farmers are required not only to adhere to all local legal requirements, but to use only formulas labeled specifically for tobacco and to ensure that anyone using them is properly trained. We encourage the use of safer agrochemicals and actively discourage the use of highly hazardous active ingredients.

The procedures for our growing programs include selecting approved chemicals, safe use in handling, application, storage and disposal, appropriate training for employees and farmers, and monitoring through regular residue testing.

Alternatives to agrochemicals
Our Group companies are working on various alternatives to reduce or avoid the use of agrochemicals in pest control, and the range of these used by contracted farmers has increased. They include 'natural enemies', such as types of insects which deal naturally with pests and natural products such as the leaves of the Neem tree, which can be ground up into a solution to make a natural pesticide.

In line with our Integrated Pest Management approach, Group companies providing agronomy support to growers monitor and report on the use of manufactured crop protection agents. Active ingredient used per hectare, per annum, which varies from year to year due to growing conditions, averaged 1.5 kg per hectare in 2004 compared to 1.41 kg per hectare in 2003, still meeting the Group's long term standard of 1.5kg per hectare per annum average.

While efforts will continue, conditions in individual growing seasons will impact chemical usage and we anticipate that active ingredient usage of 1.5 kg per hectare per annum will continue to be an appropriate long term standard. This technology has been implemented in Ecuador and Nicaragua.

____________________________