The Hindu Business Line : Tobacco industry told to ensure stable market

“It is gratifying to note that the Government has heeded the call of the farmers and is reconsidering the proposed graphic warnings on tobacco product packs.”

Mohan Padmanabhan

Mysore, Aug. 26 The tobacco industry, particularly large players like ITC and GPI, along with the Tobacco Board and institutions like the Tobacco Institute of India (TII) have been urged to ensure and take responsibility for maintaining a stable market (in terms of auction prices) and also take up bulk-shed initiatives through sizeable subsidies and loans to tobacco farmers in Karnataka.

Commercial Crop

Speaking at the 8th TII-Tobacco Farmers’ Awards (Karnataka and Andhra Pradesh) function, Mr Vijay Shankar, Member of Parliament from Mysore, said input costs for tobacco farmers in the producing States such as Karnataka and Andhra Pradesh have shot up in the last few years, and this called for intervention by all concerned, as tobacco was the only commercial crop in the country, which warranted a substantial forward and backward linkages.

Pointing out that in the current scenario, producing optimum quantity of quality leaf in India in alignment with the international market demand assumed great importance.

Mr Vijay Shankar said more than the Tobacco Board, the companies should lead in providing the necessary technical inputs to farmers during the crop development stage.

Higher Production

According to him, demand for the Mysore crop (described as a high quality neutral filler) has shot up significantly in the international leaf markets in the last few years, and this called for sincere efforts by all concerned to pursue the matter of issuance of licences for new barns with the Centre.

In the same breadth, he also urged the farmers to arrive at a consensus with regard to the problem of unauthorised barns, which may lead to higher production (well over the board stipulated crop size) and lower prices at auctions.

Mr Udayan Lal, Director, TII, said despite being a large producer and exporter of tobacco (estimated production at 700 million kg annually, and exports of Rs 1,713 crore during 2006-07), India had one of the most stringent tobacco control regulations in the world.

“In some areas, our Central legislation on tobacco goes even beyond the recommendations of the Framework Convention on Tobacco Control.”

Pointing out that regulations should not undermine the livelihood opportunities of the large tobacco farming community (the crop provides direct and indirect employment to 38 million people), Mr Lal said: “It is gratifying to note that the Government has heeded the call of the farmers and is reconsidering the proposed graphic warnings on tobacco product packs.”

Taxation policy

Seeking a “rational and equitable” tobacco taxation policy, keeping in the “unique and fragmented nature of our industry,” Mr Lal said regulation should be equitable, pragmatic and implementable and should not stifle the livelihoods of the nation’s large farming community.

Criticising the Tobacco Board’s policy of penalising the farmers for producing more, Mr Mahadev, Member of Legislative Assembly, from K.R. Nagar Assembly segment of Mysore, urged Mr Vijay to take up the issue of taxation on cigarettes with the Ministry of Commerce, for suitable benefits to flow down to the farmers.

Mr L. Anand, President, Karnataka Tobacco Growers Association, appealed to the Tobacco Board and the trade to adopt a pragmatic approach while deciding average prices for the ensuing Karnataka auction season, as labour and other input costs for tobacco cultivation have gone up substantially.

He said the yields were down owing to incessant rains during June and July months.

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