The Hindu Business Line : AP farmers reap tobacco bonanza

A senior manager of a wealthy corporate house, who drove up in an Indica car for an important meeting with tobacco farmers in Rajahmundry town last week, arrived a bit late at the venue only to find himself in for a big surprise.

Most of the cars parked outside the venue premises were Ford ikons and Honda Citys. And virtually every single vehicle at the lot outranked his Indica.

Tobacco farmers of Andhra Pradesh have apparently had good income following record prices at auctions and most of them seem to have upgraded from the entry level Maruti 800s to bigger, swankier cars.

Talking to some of the farmers at the recent Tobacco Institute of India awards function in Rajahmundry, Business Line found out that they were not only investment-savvy, but also possessed a sound head on their shoulders.

No extravagance

Extravagant spending, the farmers said, was a strict ‘no, no’.

Says Garikapatti Seetharamiah, an octogenarian tobacco farmer: “Cost of all inputs, particularly that of fertilisers, has shot up; no doubt record prices at auctions have made us cash-rich this year. But thisis international demand-driven, and may be a one-time phenomenon. Thefortunes may reverse next year.” (International leaf tobacco shortfall this year is said to be around 120 million kg. The AP crop size this year was around 170 m. kg).

Says Murali, a young, educated third generation tobacco farmer from the Ongole region:” Farmers now use the surplus cash to retire old debts and buy up new farm land. From land-on-lease for cultivation to owning of the land is happening now, as lease charges have mounted.”

Trend is to save

According to Seshagiri Rao, many of the farmers are now spending cash on buying up gold and a few other items including essential farm implements. But the trend clearly is to save for difficult days ahead, what with a raging inflation plaguing the economy. Some are now spending more on health and education of family members.”

Many village fairs are held during May, June and July, and more cash for spending this year has brought smiles all around.

Gadde Satyanarayana said “we are certainly not on a spending spree, as we know it may be foolhardy to do so.”

But then, why on cars?

Replies Satyanarayana with gusto: “Ah! Why not? Have money, spend on wheels applies to us also. Who does not want to upgrade to a bigger, comfortable car, at least once.”

Karnataka auctions

The bumper price reaped by the AP tobacco farmers has made the Karnataka farmers somewhat jittery. The Mysore auctions begin in September, and will such runaway prices happen here too? Traditionally, the Light Soils Mysore crop always fetches good export prices, but will there be such a phenomenal increase as in AP is a question on everybody’s mind.

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