Tobacco growers told to retain current crop size
Despite pressure from sections of stake-holders like industry for hiking the ‘07 authorised flue-cured Virginia (FCV, smoked in cigarettes) tobacco crop-size in Andhra Pradesh to 171m kg, a full board meeting in Hyderabad of the Tobacco Board deci...
By Raghu Krishnan, TNN |
BANGALORE: Despite pressure from sections of stake-holders like industry for hiking the ‘07 authorised flue-cured Virginia (FCV, smoked in cigarettes) tobacco crop-size in Andhra Pradesh to 171m kg, a full board meeting in Hyderabad of the Tobacco Board decided to retain the next season’s crop size at this season’s level of 129m kg.
Andhra Pradesh is the main FCV tobacco growing state. The industry, which includes domestic cigarette manufacturers and traders and exporters, had argued for a substantial hike on the grounds that the recently concluded auction-season in AP had seen over 145m kg transacted in a record span of 122 days, with average per-kg realisations of Rs 46.3 being some 28% higher than the previous season’s level of Rs 36.2 a kg.
Acting Tobacco Board chairman J Suresh Babu told ET: “The full board has taken a pragmatic decision in the light of three factors. We cannot be sure that the export demand for Indian tobacco, used as filler in blends, will adjust to a much higher authorised AP crop or sustain at the existing level. Then, there is no guarantee that the tobacco growers will get the price-level recorded in the recently concluded auction if the authorised crop-size for ‘07 is hiked. Finally, there was a perception that the board should not be seen as encouraging consumption at a time when the hazards to health are being highlighted.”
The president of the Indian Tobacco Association, Maddi Venkateshwara Rao, told ET: “We are disappointed at the decision to maintain the AP crop-size at the existing level at a time when exports for Indian tobacco are looking up.” The ITA is the country’s apex association for FCV tobacco exporters, traders and cigarette manufacturers.
To somewhat soften the blow for those stake-holders who wanted a hike in the authorised crop-size, the board has recommended to the central government that the existing penalty of 15% on the sale-value of excess unauthorised crop for each barn be reduced to 10% and that the per-kg penal levy at the auction-floor be halved from Rs 2 to Rs 1.
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The Tobacco Board has also recommended to the Centre that compensation be paid for damage suffered from sporadic incidence of fusarium wilt in the Karnataka Light Soil growing regions like Periapatna. Download
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