Farmers in the traditional tobacco growing region in south coastal Andhra Pradesh are upbeat as their produce has fetched a record price during the e-auctions held at 11 platforms in Prakasam and Nellore districts. High demand for the cured leaves globally has led to the upward price correction.
Many farmers in this region endured losses as cyclonic storm Mandous damaged at least 40% of the standing crop in 63,000 hectares in December 2022. Undaunted, many enterprising growers took a calculated risk and went for replanting and gap-filling. Those who grew chick pea also replanted tobacco to cope with the losses caused by the cyclonic storm. Now they are counting their gains as the produce has fetched them a record price.
Farmers have got a price of ₹203.39 per kg for 88.36 million kgs of produce marketed so far with the exporters vying with domestic cigarette manufacturers to quote higher during the e-auctions that reached the fag end, said sources in the Tobacco Board.
Farmers had got only an average price of ₹172 per kg for 76 million kgs of produce sold during the previous season. The market buoyancy followed a short supply of the cured leaves to the tune of 400 million kg at the global level, according to Indian Tobacco Association sources.
It was the medium-grade varieties that attracted the buyers at a high price of ₹207.05 per kg as major global players looked at India as a strategic source of supply, according to Tobacco Board sources. Farmers had no difficulty in marketing 28.8 million kgs of medium-grade varieties as the exporters lapped the ‘‘greens and browns’‘ on par with premium F1 and F2 grades as the sale of authorised quantity of tobacco was completed.
Farmers usually face problems in marketing low-grade varieties. However, it was not the trend this year as farmers got a record price of ₹195.77 per kg for the 25.16 million kgs brought to the auction floors in the wake of the drop in tobacco inventory with global players. Their only grouse was that bright-grade varieties did not get a higher price in proportion to the prices realised for medium and low-grade varieties.
The farmers got ₹205.93 per kg for 34.9 million kgs of produce marketed, a little lower than the prices offered for the medium-grade varieties.
Penalty waiver
Taking into account the farmers incurring additional production expenses in the wake of unseasonal rains, the Union Ministry of Commerce and Industry decided to waive the penalty on excess tobacco with the registered growers as the State government took up cudgels for the beleaguered farmers.
‘‘The 29 million kg of crop produced over and above the authorised quantity will be purchased at zero penalty rate,” said Tobacco Board member M. Subramanyeswara Reddy. Farmers in the Southern Light Soil (SLS) and Southern Black Soil (SBS) regions had grown 115 million kg of crop this year.
Thanks to market buoyancy, the lease rent for tobacco barns, the primary processing unit, had crossed the ₹1.50- lakh mark for the new cropping season. So also the lease rent for land which touched ₹30,000 per acre.
