The Hindu Business Line : Subsidy on sulphate of potash likely for tobacco growers

New Delhi, March 18 The Department of Fertilisers is preparing a Cabinet note on providing subsidy to tobacco growers for sulphate of potash (SoP), involving a sum of Rs 1,200 crore a year, the Minister of State for Commerce, Mr Jairam Ramesh, said on Tuesday in the Lok Sabha.

Responding to a calling attention motion moved by former Prime Minister Mr H.D. Deve Gowda on the subject, the Minister said as murate of potash (MoP) was banned in tobacco cultivation due to its adverse effect on crop quality , farmers were using only SoP. With SoP prices increasing steeply in the 2008-09 season, the Commerce Ministry took up the subsidy issue with the Department of Fertilisers, which agreed to prepare a note for the Cabinet..

Mr Ramesh defended the ceiling on tobacco cultivation, saying excess production in successive years had caused a glut, exacerbating the plight of growers and India as a signatory to Framework Convention on Tobacco Control (FCTC) under the World Health Organisation (WHO) had to cut down tobacco cultivation progressively. He said as production continued to be high, the Government had to resort to levying penalty on excess crop produced. Though originally fixed at Re 1 per kg and normal service charges of 1 per cent, this has been hiked to Rs 2 per kg and 15 per cent service charge over the years.

No discrimination

He denied the charge that there was any discrimination in the levy of penalty between the growers of Karnataka and Andhra Pradesh. He also asserted that there was “no politics in the fixation of the crop size”. Mr Ramesh said the penalty charge on excess crop would be reviewed in the next meeting of the Tobacco Board.

Mr Ramesh said during 2007-08, the country exported $410 million of tobacco. He added that the crop grown in Karnataka was of premium variety and the State exported 62 per cent of its produce, while Andhra Pradesh exported 58 per cent.

Good demand

As tobacco crop from Zimbabwe has ceased and the US is phasing out tobacco production, the demand for Indian tobacco in the global market has increased, he said, adding that Karnataka’s premium tobacco had better prospects. Mr Ramesh said that following the visit of the Prime Minister Dr Manmohan Singh to China recently, China would take 10 million kg of Indian tobacco every year, after a break of 14 years. This would help tobacco exporters of India, he said.

The Minister said his department and the Tobacco Board would devise a special project to popularise the non-carcinogenic use of tobacco. He said efforts would be made to extract chemicals from tobacco to be used in pharmaceutical and nutraceutical purposes.

In his observations, Mr Gowda said when the fertiliser subsidy for the next fiscal was pegged at Rs 90,000 crore, poor tobacco growers numbering some 60,000 in Karnataka should not be slapped a penalty of Rs 9 crore for excess production as the soil in particular districts, where the crop was grown, was suited only to tobacco cultivation.