India: Govt. to Pay Rs. 20 a kg for Low-grade Tobacco

Source from:  The Hindu 09/21/2015

The Central and the State governments will pay Rs. 15 and Rs. 5 respectively per a kg of inferior quality tobacco crop, which is barely fetching between Rs. 32 to Rs. 35 at auction platforms, with immediate effect. The governments have also resolved to allow the unauthorised low grade varieties to be admitted for auctions to offload the stocks lying with farmers, and to buy the entire leftover stock of authorised crop of nearly 28.29 million kg by September end.

Announcing these at a press conference, along with Chief Minister Chandrababu Naidu here on Friday, Union Ministry of State for Commerce and Industry Nirmala Sitharaman said that of the authorised crop of 172 million kg, around 143.72 million kg were purchased at Rs. 125 per kg for bright varieties and less than that for the low grade produce. Of the total authorised crop, nearly 9 million kg fell in the rejection category.

Similarly, of the unauthorised crop size of 21 million kg, 7 million kg were being rejected. These stocks of poor variety would be given the support price, but it would not be applicable to the crop already sold. Ms. Sitharaman said the Prime Minister took tobacco farmer suicides seriously and put her on the job of setting things right. She monitored the price on a weekly basis but a major quantity of the unsold crop turned out to be of poor quality. While contributing to auction prices, the Centre has kept the dialogue open with the manufacturers.

Finance Minister Arun Jaitley was holding parleys with leading manufacturers like ITC to achieve the targeted procurement, she said, assuring that the Tobacco Board would quickly respond to any contingency. Meanwhile, Mr. Naidu thanked the Centre for agreeing to pay Rs. 15 per kg at a time when farmers were in deep distress, and appealed to Ms. Sitaraman to keep a tab on procurement. Enditem