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Karnataka tobacco growers have sought ‘kg per barn' parity in quota with Andhra Pradesh growers.
The Federation of Karnataka Tobacco Growers Association submitted a memorandum to this effect to Mr Bykere Nagesh, special representative of Karnataka Government at New Delhi, who is touring the tobacco growing regions in the State.
The Federation said, “In spite of Karnataka tobacco growers harvesting higher yield per hectare, Andhra Pradesh farmers are allowed to grow 2,150 kg per barn while the farmers in Karnataka are authorised to grow only 1,740 kg per barn, which is 410 kg less per barn.”
With the continuous increase in crop size, the infrastructure for conducting auctions in Karnataka needs to be revamped to meet the requirement on increased crop.
“These auction floors, which are built to auction 60 million kg of tobacco, are currently selling more than 120 million kg and causing lot of hardships to the growers, in terms of undue delays for getting their turn to market their produce,” said Mr B.V. Javare Gowda, President of the Federation of Karnataka Tobacco Growers Association.
“Currently farmers are getting a turn to sell his produce once in 20 to 25 days and the infrastructure should be improved to ensure every farmer gets a turn to sell his produce once in seven days,” he added.
As for the introduction of E-auctions, majority of the farmers in Karnataka are very small and they are often exploited by members of the trade and a few Tobacco Board officials as well.
“Fast tracking the introduction of E-auctions, which has proved to be beneficial to the farmers, will bring in full transparency in the auction system and help in better price discovery to the farmers,” said Mr Gowda.
FDI in tobacco
Though the Karnataka (Mysore) crop is predominantly exported, it is the domestic manufacturers who have always stood by the tobacco farming community during difficult times.
“The outsiders have always been business minded and have exploited the farmers by being opportunists. Hence, we strongly object the entry of Foreign Direct Investment (FDI) into tobacco industry,” explained Mr Gowda.
Regarding taxation, the association felt growers were in a desperate situation because the demand for domestic cigarette tobaccos, which is produced, is rapidly going down in favour of cheaper alternative tobacco.
“This is because of the discriminatory taxation policies followed by the Government. As you are aware, cigarette tobaccos only form a small portion (15 per cent) of the total tobacco consumption in the country, but contributes to most (nearly 80 per cent) of the revenues generated by all tobaccos for the Government.
“The punitive taxation on cigarettes as well as exemption on other cheaper products is resulting in a shift in demand and stagnation in domestic cigarette industry leading to steep decline in the requirements of the domestic cigarette manufacturers.
“The wide differences in tax rates between cigarettes and other tobacco products should be reduced to protect the cigarette tobacco-growing farmer's interest,” said Mr T. Vikram Raje Urs, Secretary, The Federation of Karnataka Tobacco Growers Association.
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