Farmers in Prakasam district, who have grown tobacco with great hope, are in an unenviable position in view of dull export and domestic demand scenario. The average price may fall to Rs. 90 per kg this year as against Rs 109.56 per kg last year in view of global oversupply position, higher crop production and lower farm prices across the world, feared the farmers.
An estimated 2,163 m.kg. of leaf tobacco crop was produced globally (excluding China, which produced another 2,350 m.kg.) last year and the projection for 2015 is 2,091 m.kg (excluding China), Indian Tobacco Association sources said. The prices fell by eight per cent in USA, 14 per cent in Brazil and Zimbabwe and 4 per cent in Tanzania, the major producers of the Flue Cured tobacco crop.
“The tobacco auctions in Karnataka, which are about to close now, are not at all encouraging,” Ongole Auction Platform-I Ryots president S. Gurava Reddy said and referred to cumulative average price fall to Rs.111.27 in 2014-15 as against Rs. 129.39 per kg in 2013-14.
“Due to uncertain demand for the crop grown already, we are in a distress situation. While the export market is uncertain, the domestic players are shying away in the wake of adverse taxation policy,” he said.
The Union and State governments which earned a revenue of Rs. 28,000 crore, besides a foreign exchange of Rs. 6,500 crore, had a responsibility to protect the organised tobacco industry, said Ongole Auction Platform-II Ryots president V. Prasad.
Pressing for market intervention by the Centre, he said the government should come down heavily on illegal cigarette trade which accounted for almost 20 per cent of the total legal market. Andhra being a tobacco growing State, the government should consider bringing down the VAT on cigarettes considerably from the very high 20 per cent as over three million farmers, farm labourers & families were depended upon on this crop for their livelihoods, they said.
(Reporting by S. Murali)
