India: Like all smokers, Tobacco Growers Want to Quit

Source from:  The Hindu 06/19/2015

Tobacco has enabled the Union and State Governments to mop up more than Rs. 28,000 crore in revenue and precious foreign exchange to the tune of Rs 5000 crore. Yet, growers in Prakasam district are in a quandary this year, clueless as to how to break even, leave alone making a profit, given the sluggish market conditions.

This year, they have been able to market only 32 million kg at an average price of Rs 110.61 per kg as against 100 million kg sold during the corresponding period last year at an average price of Rs 119 per kg.

Farmers have become captive to cigarette manufacturers and exporters who have kept away from the market after giving indents, said Virginia Tobacco Growers Association President, Mr. Ch. Seshaiah. "There is a case for the Centre to announce Rs 8 lakh per tobacco barn as compensation. The crisis is as big as in 1999-2000 when a crop holiday had to be announced," he recalled.

As a short-term measure, farmers want the Centre to direct the Tobacco Board as also the State Trading Corporation to lift 20-25 million kg of tobacco and help them quit tobacco cultivation altogether in the long run. "We plan to go to New Delhi in a delegation to impress upon the Union Minister of State for Commerce Ms. Nirmala Sitaraman shortly to press for our demand to allow international cigarette manufacturers and tobacco leaf merchants to directly take part in the auctions," said former Tobacco Board member, Mr. M. Bangarababu.

Another former Tobacco Board member, Mr. Ch. Ranga Rao pointed out another anomaly: the Centre wants foreign direct investment in the defence sector but it has not permitted FDI in cigarette manufacturing, tobacco processing and research and development relating to tobacco.

Some growers urge the Tobacco Board to announce a crop holiday next season if it is not in a position to ensure a remunerative price for their produce. "We are not in a position to grow tobacco in hostile market conditions any longer," says Ongole I Auction Platform Tobacco Growers Association President, Mr. S. Gurava Reddy. "We are mentally prepared for a loss of Rs 1 to Rs 1.50 lakh per tobacco barn. But the loss may cross Rs. 2 lakh per barn this year," said Andhra Pradesh Rythu Sangham District Secretary, Mr. D. Gopinath.

In the first 71 days of trading, tobacco farmers in Andhra Pradesh have been able to market only 17.23 million kg of bright-grade tobacco at an average price of Rs 117.46 per kg. The quantity of medium-grade tobacco traded was only 12.73 million kg at an average price of Rs 105.10 per kg and low-grade 1.23 million kg at an average price of Rs 75.06, Tobacco Board sources said. Enditem