Ch.R.S Sarma

Guntur, July 21

The tobacco crop size for the coming season (2006-07) in Andhra Pradesh has been fixed at 129 million kg.

The decision was taken at a meeting of the production committee of the board in Hyderabad on Thursday. Allowing for a 10 per cent margin, which is usual, it means that the crop size should not exceed 141-142 million kg.

The Indian Tobacco Association, it is learnt, asked for a crop size of 171 million kg, as the current export scenario is bright for Indian tobacco.

Conscious decision

But the trade was not willing to commit itself on the minimum guaranteed price and the Tobacco Board seems to have a conscious decision to peg the crop size at a much lower level than the one indicated by the trade.

The farmers could get a good price at Rs 46.33 a kg, and 145.4 million kg could be sold on the auction floors during 2005-06. The farmers could get a good price in decades and in a bid, perhaps, to ensure the same price level, the board seems to have decided to keep the crop in the range of 140-150 million kg.

But it is doubtful, going by the past trend, whether the board will succeed in regulating the crop as it wants. As the trade has already indicated a quantity of 171 million kg, the farmers will be encouraged to grow more and, if the conditions are favourable, there is likely to be a substantial surplus. However, the surplus may be to the advantage of the farmer, for a change.

(This article was published in the Business Line print edition dated July 22, 2006)
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