The Hindu Business Line : Tobacco auctions still sluggish in AP

TOBACCO sales have not yet picked up momentum in Andhra Pradesh and only 10 million kgs of the crop has been sold so far at an average price of Rs 44.10 a kg on the floors in the State.

The authorised crop in the State is 111 million kg. It is expected that there will be a substantial surplus and the actual production may be in the range of 140-145 million kg, according to current estimates. The auctions, it may be noted, opened in January.

However, auctions in Karnataka ended last week and a total quantity of 90 million kg was sold on the floors in that State against the authorised 65 million kg. In Karnataka, too, there was a substantial surplus. With the closure of auctions in Karnataka, it is expected that the sales may gain momentum in Andhra Pradesh. But the trend so far has not been encouraging.

Trade sources, however, say the surplus in the State may cross the 150 million kg mark and the huge surplus is leading to depressed prices on the floors. Crop regulation has failed and that is the basic reason for the crisis in the market.

Rebutting the charge, Dr Y. Sivaji, president of the Andhra Pradesh Tobacco Growers' Association, said the trade as well as the board were to blame for the present state of affairs. "Strangely, the trade which talks of surplus in Andhra Pradesh seems to be unmindful of the surplus in Karnataka. Against the authorised size of 65 million kgs, the production is 90 million kgs. But surprisingly the average price in that State has gone up from Rs 40 a kg last season to Rs 47 a kg during the season just concluded. It clearly exposes the trade and its double talk," he alleged.

He alleged that the Tobacco Board was also to blame as it had regularised 29,000 unauthorised barns at a stroke of the pen in Karnataka and "still there are 15,000 unauthorised barns in the State. In fact, there seems to be no check on Karnataka."

Dr Sivaji, who had organised a crop holiday in the late nineties, said the farmers in Andhra Pradesh "are not enamoured of growing tobacco. If the Government shows them an honourable exit route and gives compensation for dismantling barns, I shall persuade my farmers to go in for alternative crops."

He said the Chief Minister, Dr Y.S. Rajasekhara Reddy, had written to the Union Commerce Minister, Mr Kamal Nath, on the issue of low tobacco prices in Andhra Pradesh and urged the latter to take the requisite steps. "The Chief Minister has also called a meeting later this week in Hyderabad with the trade, farmers and Tobacco Board officials to sort out the issue," he said.

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