The Hindu Business Line : Ministry plans SPV for market intervention in tobacco

The Union Commerce Ministry is considering the proposal to set up a special purpose vehicle for market intervention in the tobacco market to address the frequent problem of price slumps, according to Mr Jairam Ramesh, Union Minister of State for Commerce and Industry.

Addressing the tobacco farmers here, he said a decision may be taken in two or three months. He suggested to farmers that they should not depend on tobacco alone and they should be able to switch over to alternative crops.

The Government and the Tobacco Board would also help them in making the switchover and try to make the transition as smooth as possible.

The Minister pointed out that Prakasam district in particular was accounting for the bulk of the tobacco produced in the State and alternative crops such as subabul, Bengal gram and jatropa should be tried. It was necessary to create irrigation facilities and provide the farmers with the necessary inputs to persuade them to try alternative crops.

Electronic systems

In response to a query regarding the monopoly the ITC was enjoying in the tobacco market and its impact on prices on the auction floors, he said he would shortly convene a meeting in New Delhi with the ITC Chairman and others to discuss the issue. He felt it necessary to introduce electronic system at the auctions.

Earlier, he visited the chilli market yard and there also he spoke of the need to modernise the market yards in the country and to set up electronic systems.

Separate chilli board

Earlier, the minister spoke at a meeting in the branch office of the Spices Board on Wednesday. In response to the demand from the members of Parliament from Guntur district, he said the demand for setting up a separate board for chilli would be considered and a decision would be taken in two months.

The MPs pointed out that the Guntur market yard accounted for 60 per cent of the chilli production in the country and there was a need for setting up a separate board for the crop.

The Spices Board would set up a laboratory here to test pesticide residues on chilli crop to facilitate export of residue-free crop, he said. Five hundred poly houses would also be set up for chilli drying.