Southern States - Andhra Pradesh   

CM sanctions Rs. 5 cr. more to Tobacco Growers Coop. Union

By Our Special Correspondent

VIJAYAWADA JUNE 19. The Chief Minister, N. Chandrababu Naidu, has sanctioned an additional Rs. 5 crores to the Andhra Pradesh Tobacco Growers Cooperative Union to participate in the auctions, create competition and help farmers get a better price.

The union has already purchased 8.96 million kg of tobacco by making use of Rs. 10 crores released by the Government from market cess at 12 per cent interest. It is expected to dispose of the produce and repay the loan.

Tobacco auctions have come to an end at several platforms like Torredu, Bhadrachalam, Medarametla, Kandukur, D.C. Palle, Kaligiri where farmers sold out their produce. Surprisingly, tobacco grown in the NLS (northern light soils) is remaining unsold. As 80 per cent of NLS tobacco is meant for export, it is in great demand and fetches higher price. Though the exporters offered the produce at 30 cents less than the normal price, they could get orders only for 500 tonnes this year, as against the normal 5,000 tonnes causing dismay among farmers. Out of 34 million kg tobacco grown in NLS, only 17.75 million kg has been sold out until now.

The Andhra Pradesh tobacco growers association president, Y. Sivaji, expressed happiness that the growers could sell 82 million kg till now at an average price of Rs. 37.16 per kg. He hoped that the auctions would come to an end by the month-end at all the platforms.

He pointed out that tobacco growers had been concerned as the auctions had dragged on for nearly eight months making it difficult for them to keep the quality of the produce, braving rain and shine. Also, their money had got locked up for too long.

Some of the farmers were thinking aloud whether they should dispense with the auction system and revert to the old system that existed before 1980s. Before introduction of the auction system by the Tobacco Board, traders used to go to villages and buy the produce at the doorstep of the farmers. They mopped up the stocks by March itself. But the farmers had to wait several months before the traders processed and disposed of the stocks and paid them.

The auction system has helped farmers recover their money quickly in the initial years. But the traders have been adopting delaying tactics of late and purchased tobacco only after they got the order either from the manufacturer or exporter. By delaying purchases at auction platforms, the traders could reduce their inventory, interest burden, storage charges, etc. But the farmers had to suffer holding the stocks at their own cost and risk till the traders got orders.

To surmount this problem, some growers suggest that the Tobacco Board should dispense with the auction system and allow traders to buy tobacco from farmers directly. The Tobacco Board can issue coupons to the traders to the extent they provide bank guarantee. Farmers can encash the coupons at the board. This would hasten the sales and ensure prompt payment to farmers, they feel.

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