The Hindu Business Line : Tobacco growers to seek FDI

Guntur March 15 Two hundred tobacco farmers from the two major tobacco-producing states of Andhra Pradesh and Karnataka are planning to leave for New Delhi and meet the Prime Minister, Dr Manmohan Singh, on March 18 to voice their demands, in particular a plea for foreign direct investment (FDI) in the sector, according to Dr Y. Sivaji, President of the Andhra Pradesh Virginia Tobacco Growers' Association.

In a statement issued here, Dr Sivaji said the delegation would be in New Delhi from March 19 to 21 and during the period, it would meet the Prime Minister.

Returns

He said that during a recent visit to Zimbabwe and Brazil, Indian farmers could learn, to their consternation, that the per-kg price in both the countries on the aggregate was $2 in comparison with less than a dollar in our country.

"Even allowing for a higher cost of cultivation, the net return for the Indian farmer is much less than that of the Zimbabwean, or Brazilian, farmer. Tobacco farmers in the US, and elsewhere, are getting much higher returns. So unless the FDI is allowed into the sector, the Indian farmer will continue to be cheated," he said.

Allow major companies

He said the two companies - Alliance One and Universal - accounted for procurement of 40 per cent of the tobacco produced in the world and 50 per cent of the crop produced in India. "Unless these majors are allowed to invest here, the lot of the Indian farmer will not improve. In fact, the Indian Institute of Management, Ahmedabad, in a study conducted in 1999 recommend such a step. It is high time the Union Government heeded to the plea," he said.

Absence of competition on the auction floors, and the lack of manufacturing and processing facilities, was costing the Indian farmer dear, he said.

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