Tobacco to be Cut to Size

Source from:  The Hindu 05/13/2009

BANGALORE: After the price of tobacco reached an all-time high and brought rich dividends to farmers last year, the Tobacco Board has recommended a 30 per cent penalty on unauthorised cultivation of the crop this year. The recommendation to increase the penalty on unauthorised tobacco from the existing five per cent of sale proceeds to 30 per cent comes in the wake of reports that farmers in Karnataka and Andhra Pradesh have cultivated tobacco on a large scale after the price almost doubled last year, riding on rising global demand for the commodity. The huge turnaround in the prospects for tobacco cultivation comes at a time when India, which is a signatory to the World Health Organisation-sponsored Framework Convention on Tobacco Control (FCTC), is reported to be under international pressure to bring down tobacco cultivation in the country. Tobacco Board Chairman J. Suresh Babu told The Hindu on the phone that the recommendation to increase the penalty was awaiting clearance from the Union Government. "Any decision on the recommendation can be taken by the Government only after the ongoing election process is over," he said. Regulatory measure Though Mr. Babu denied that the Board had made the recommendation in line with India's obligation under the FCTC, he said the hefty penalty had been proposed to deter farmers growing other crops from switching to tobacco in view of the huge global demand and the high price for the commodity. Also, the intention was to regulate the crop and ensure that the interests of licensed farmers were protected. With international cigarette-manufacturing companies flocking to auction centres in Karnataka and Andhra Pradesh for the export quality Flue-Cured Variety (FCV) of tobacco and almost doubling their bids, Board officials said the two States, which have collectively been given a crop size of 270 million kg, could produce at least an additional 50 million kg. Licensed tobacco growers, estimated to be around 1,00,000 in India, will, however, be given a margin up to five per cent production in excess of their quota. "If licensed tobacco farmers grow beyond the five per cent ceiling on excess tobacco, they will also have to cough up the 30 per cent penalty," a Board official said. Almost double The average price of tobacco went up by almost 90 per cent in Karnataka, from Rs. 59.63 a kg during the auction season 2007-08 to Rs. 109.97 during 2008-09. Tobacco Board officials claimed that the farmers had never had it so good and their efforts to wean away farmers to alternative crops in view of the FCTC commitment had come a cropper. In Andhra Pradesh, where the auction season has begun, the price of superior quality tobacco is said to have breached Rs. 140 a kg. Enditem