The Hindu Business Line : To ensure remunerative prices — Tobacco Board's SPV proposal runs into rough weather

A SPECIAL purpose vehicle (SPV) is necessary for ensuring a remunerative price for the Flue Cured Virginia Tobacco farmers and a proposal is pending with the Union Ministry of Commerce for a long time, according to Dr P. Dayachari, Chairman of the Tobacco Board.

He was speaking at the Formation Day celebrations of the Tobacco Board here on Friday. The Tobacco Board was established on January 6, 1976.

Dr Dayachari said he had made an attempt to get the SPV proposal accepted when the NDA Government was in power and the then Chief Minister of Andhra Pradesh, Mr N. Chandrababu Naidu, was also amenable to the idea. "But unfortunately our farmer friends had certain misconceptions about the proposal. They thought that the price stabilisation fund was a better idea and they conveyed it to Mr Naidu. The proposal, therefore, ran into rough weather. I still feel the SPV is the only solution to the problem of low prices in times of excess production," he said.

He expressed the hope that the people's representatives, farmers and the trade would pursue the idea. The SPV would facilitate market intervention in times of crisis, he said. An amount of Rs 3.80 crore would be granted to the tobacco growers, whose crop had been damaged due to rains in October and November, he said and added that necessary orders might be received from the Union Ministry of Commerce in a day or two.

Dr Dayachari said he had tried for mechanisation of auction floors, online communication systems and electronic auctioning during the past five years, "but not much headway could be made."

Dr Dayachari said he had also mooted a local area bank for the 90,000 tobacco growers in the State. That idea also could not be implemented, but "it is still a workable proposal." Earlier, Dr Y. Sivaji, Honorary President of Indian Tobacco Growers' Association, said the Board had come into existence three decades ago only due to the struggles and sacrifices of the farmers.