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Our Bureau

Call to end monopoly of a few companies

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Guntur Feb. 13 Foreign direct investment in tobacco processing and cigarette manufacturing is necessary to create competitive atmosphere on the auction floors and ensure a remunerative price to the farmer, said Mr J. Suresh Babu, Chairman of the Tobacco Board.

Mr Suresh Babu, who returned to Guntur after a 14-day trip to Brazil and Zimbabwe along with a delegation of farmers, said at a press meet on Tuesday that leaf tobacco was being exported from India in large quantities and there was not enough processing and value addition. Therefore, he felt, there was greater unit value realisation in Brazil and Zimbabwe.

"They are getting $2 for a kg of tobacco, whereas in India we are only getting $1.2 a kg," he said.

Dr Y. Sivaji, President of the Andhra Pradesh Tobacco Growers' Association, who also toured the two countries, said that for long he had been advocating FDI in the sector. He said his visit to the two countries had only reinforced his opinion.

"The Union Government's reluctance to break the monopoly of certain companies in the tobacco processing and manufacturing sectors has dealt a blow to the farmers. It is high time FDI is allowed into the sector," he said.

He said contract farming was also proving to be beneficial to the farmers in Brazil and Zimbabwe. "The Brazilian and Zimbabwean Governments have allowed the MNCs to invest in processing units and contract farming. The farmers are benefited there," he said.

In justification of his plea, Dr. Sivaji said that the farmer in India was getting less than one per cent of the price of the final product, cigarettes. In those two countries, it was 26 per cent.

Mr Suresh Babu said the production in Zimbabwe had fallen from a level of 240 million kgs to 60 million kgs and India could take advantage of the situation to push its tobacco in the international market.

"However, Zimbabwe is also making concerted efforts to train the farmers and improve production levels. Some of the methods could be adopted here," he added.

More Stories on : Tobacco | Foreign Direct Investment | Andhra Pradesh

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