Union Minister of State for Commerce and Industry Nirmala Sitharaman assured tobacco farmers here on Saturday that the entire production of 172 million kg in Andhra Pradesh in the 2014-15 crop season would be procured by September 30 but within a price band based on five years’ average prices. It would be around nearly Rs 125 a kg for bright varieties and farmers could expect that price only if the crop has negligible or no pesticide residue, she said.
Addressing tobacco farmers from West Godavari, Krishna, Guntur, Prakasam and Nellore districts after holding deliberations with manufacturers and traders for close to three and a half hours, Ms. Sitharaman said tobacco was a restricted crop, so a minimum support price was not being fixed for it for the last four years.
But she said she had persuaded the industry to agree to a minimum price band. However, she pointed out that farmers were under obligation not to produce excess. If they do so, they cannot expect unrealistic prices.
She said only about 46 million kg of tobacco has been purchased so far because of the global economic turmoil, which has rendered even basmati rice non-remunerative.
However, the Ministry of Commerce was doing its best to enable tobacco farmers earn remunerative prices while discouraging excess production. Tobacco cannot be compared with food crops, she pointed out.
Ms. Sitharaman clarified that Foreign Direct Investment (FDI) was permitted for purchasing and exporting tobacco from India.
It was a misinterpretation that FDI was not allowed in the tobacco sector, due to which foreign investors have stayed away. FDI was in fact not allowed only in tobacco manufacturing; there was no objection to letting FDI flow into trading of the commodity.
This anomaly has been set right and communicated to the Reserve Bank of India, which has disseminated the information to all countries through Indian embassies.
This would be of great help to farmers as their produce would be purchased by foreign investors, subject to quality norms.
Earlier, Ms. Sitharaman held parleys with manufacturers and exporters in the presence of ministers Pratthipati Pulla Rao and P. Sujatha and MP Rayapati Sambasiva Rao, M. Murali Mohan and Maganti Venkateswara Rao (Babu) and Tobacco Board chairman K. Gopal spoke about the bleak export scenario for tobacco.
Union Commerce Minister sets a
price band, but spells out the reality to tobacco farmers
