To, Dr. Manmohan Singh,
Hon'ble Prime minister of India.

Your Excellency ,

With this petition, we request the Hon'ble Prime Minister on behalf of tobacco farmers of Andhra Pradesh to get the remunerative price and allow liberalization policies in tobacco trade.

The Indian Tobacco industry contributes a significant amount  to the national economy , the government earned central excise revenue of RS 13,500 crore by selling cigarettes and foreign exchange of RS 4,163 crore from exports of tobacco and tobacco products during 2010-11. Tobacco board estimated crop size for this year (2011 and 2012) is 264 millions i.e. Andhra Pradesh  at 162.5 million kgs and Karnataka at 101.3 million kgs. Board has fixed the crop size by consulting all the traders  and  based on their projected demand . Tobacco board has got 45 registered predominant  traders, only 4 traders were participated in the auctions from past 40 days and they purchased around 20 million kgs only. Farmers are worried about the delays which can cause to discolor and weight loss that leads to heavy losses. Tobacco board  has failed to convince the traders to make them actively involved in auctions . Tobacco board should intervene to hold the talks with traders and support them  to get more export orders.

A few companies are operating the tobacco trade, the major players are ITC ( India Tobacco Company) , GPI ( Godfrey Phillips India), (VST) (Vazir sultan Tobacco company) some others. These traders are not paying suitable price to farmers and they  are misguiding the farmers by all unjustifiable reasons like;  they don't have enough export orders, International market has excess stocks ,Non tobacco materials in the tobacco bundles and so on.  The frustrated  farmers have been  demonstrating  their agony and unrest in various forms i.e.  boycotting the auctions and staging the dharnas,  but the traders are not flexible to pay the remunerative price. These trade cartels are controlling  the tobacco trade and  deceiving   the farmers by not offering  prevailing market price,  their business practices are unethical, monopolistic and unfair.

The tobacco prices were peak in 2008- 2009 i.e. Rs.115/ kg and the price came down to Rs.90/kg in 2010- 2011 and now the average price is lesser than last year price. Farmers are in misery  and inescapable position to sell their crop with lesser price,  their distress is not only with the fallen price but also with increase of associated costs from plantation to packing. The labor wages have gone up for grading & bundling, and the  barn fuel  ( firewood & char coal) cost is also increased. Farmers are not getting remunerative price and the net realization is negative by calculating all these expenses, farmers have no choice to switch to other crops since they don't have proper irrigation facilities.


So, we request that under your leadership:

The liberalization process / Foreign direct investments in tobacco industry to be initiated.

Control and prevent the tobacco cartels deceptive ,monopolistic, unethical and unfair trade practices.

In order to get remunerative price for farmers, Central Government has to finance the State Trading corporation or Tobacco growers societies to participate in auctions.

Market stabilization fund to be allotted to the tobacco board to bailout the distressed tobacco farmers.

Requesting for your kind action


Yours sincerely

Yashwanth KC

Links