India: Output Stoppage Worries Drought-hit AP Tobacco Growers

Source from:  The Hindu 04/05/2016

Tobacco growers in drought-prone Prakasam district of Andhra Pradesh state are a worried lot as cigarette manufacturers have stopped production to protest against the larger pictorial warnings on cigarette packets.

The development is likely to lead to a market correction in the coming weeks, fears a group of growers coming under the Ongole II auction platform, which is pressing for market intervention by the Union and State governments. The governments should come up with a comprehensive policy, keeping in view the interests of all stakeholders, including growers, according to the growers.

The growers pleaded with the Centre to allow foreign players to directly take part in the auctions and invite foreign direct investment (FDI) into the sector to turn India into a definite market.

The Centre should review its decision and reduce the pictorial warning to 50 per cent as recommended by the Parliamentary Committee on Subordinate Legislation, considering the fact that about 45.7 million people, including farmers, farm labourers, and workers were dependent on the tobacco sector, they said.

The larger pictorial warning would only encourage smuggling of cigarettes further into the country, particularly when illegal cigarettes accounted for one-fifth of the total industry in the country. "The present situation is not at all encouraging for the growers, whose hopes of bright grade tobacco touching Rs.160 per kg during the next one week fading," former Tobacco Board member M. Bangarababu told The Hindu.

"Growers are ready to quit tobacco farming if the Centre announces compensation for dismantling tobacco barns," said SR Congress farmers' wing district president M. Subba Reddy.

Farmers should get least Rs. 25 per kg on an average to breakeven this year, said V. Prasad, Farmers' Association president in Ongole II auction platform. The farmers would be forced to take to the warpath if the governments remained indifferent to their concerns, he said.

Farmers in the district were able to sell 11.50 million kg of the total estimated production of 67.20 million kg at an average price of Rs. 136.08 per kg.

While exporters adopted a wait-and-watch approach, manufacturers bought bright grade tobacco for a price up to Rs.130 per kg, Tobacco Board sources said. Enditem