Tobacco production falling by about 10 million kg in SLS

Tobacco farmers in Prakasam district are a miffed lot. So miffed that they have urged the Centre to show them an “honourable exit route” by announcing compensation for dismantling their barns - the primary tobacco processing unit. Their grouse? Uncertain and poor prices for their produce in the ongoing auctions.

“We have been made captive growers by the Tobacco Board to meet the needs of cigarette manufacturers and exporters, who give an overestimate of the leaf requirement at the time of fixing of the crop size and keep away from the market during auctions,” they complained. “We want the Centre to finalise a financial package for ryots wanting to dismantle tobacco barns so that we can quit its cultivation once for all,” they added.The market has been listless as domestic cigarette manufacturers drove down the prices taking advantage of the exporters’ lukewarm response at the auction platforms on the pretext that they are yet to get confirmed orders from the overseas buyers, say a group of farmers at the Ongole II auction platform.

“The market is dull due to lack of buying interest among exporters. Only ‘super bright grade’ variety is attracting buyers at more than 160 per kg. There has been a cut of 10 in case of medium grade tobacco, which attracts buyers paying between 120 and 130 per kg. However, demand for low grade tobacco is little encouraging fetching farmers a price in the range of 80 to 110 per kg,” Tobacco Board Southern Light Soil (SLS) Regional Manager G.Ratnasagar explained to The Hindu. He expects the market condition to improve during June when exporters get confirmed orders from foreign companies.

Traders keep the dollar gains.“With tobacco production falling by about 10 million kg in SLS and Southern Black Soil (SBS) put together over the crop size of about 85 million kg, we were expecting a decent price,” says Tobacco Growers Association Secretary in Ongole II auction platform V.V.Prasad.“Moreover the traders have not passed on the benefit of rupee weakening against US Dollar to the farmers,” he complains.Meanwhile, YSR Congress Chief Whip in Parliament Y.V. Subba Reddy, who led a delegation of farmers from Prakasam district and called on Union Commerce Minister Suresh Prabhu, feels that the Centre should direct the Tobacco Board to provide a compensation of 10 lakh per barn to farmers who are ready to dismantle it.

“Having invested huge sums in modernising their barns - about 10 lakh each - the farmers are caught in a quandary,” says former Tobacco Board member Ch. Ranga Rao, who was part of the delegation that called on Union Agriculture Minister Radha Mohan Singh on Thursday to impress upon him to take up the ryots’ cause with the Commerce Minister.Tobacco is one of the main commercial crops in the district. Production in SLS and SBS region is estimated to be around 75 million kg as against the crop size of 85 million kg, and in value terms it is about 1,000 crore.Value realisations are fluctuating depending on market conditions. So are farmers’ fortunes.