Covid hits tobacco industry, lack of demand in global markets

MYSURU: Tobacco farmers in the state are an unhappy lot despite harvesting a bumper crop this season. Prices of tobacco have hit the rock bottom, forcing them to plead with the government to intervene.
Last year, farmers had managed to get a better price as the quality of produce had suffered because of low rainfall. This year, however, the crop is good as the region received timely and sufficient rainfall.

The Virginia variety of tobacco that is grown here is in great demand world wide. But farmers are worried as the tobacco market is yet to open, prices have crashed and less than 20 per cent of tobacco has been sold. Bales of tobacco have piled up at markets in Hunsur, Periyapatna, Arakalgud and H D Kote.

It is said that the buyers who are busy at Andhra Pradesh markets have not turned up in Karnataka because of the Covid pandemic. The buyers too are not keen to pick up the stocks because of lack of demand in international markets due to Covid-19.

Ramesh, a tobacco grower, said that prices have crashed by Rs 30-40 a kg, and it may go down further for medium and low-grade tobacco. The government should prevail upon traders to do justice to the farming community, he pleaded.

Prakash, a buyer, said that the situation may look up once buyers from Andhra Pradesh turn up. But, he warned, that medium and low-quality tobacco will not get a good price like last year.Suggesting that the government should take steps similar to Andhra Pradesh by offering remunerative prices for the produce, former MP and Congress leader R Dhruvanarayan accused the Centre and state BJP governments of not controlling the fall in tobacco prices.

He said that the government collects18 per cent GST on tobacco, which helps improve the revenue of the government. “But the Centre and state have failed to fulfill the demands of tobacco growers,”€he added.
Over the last three years, the cost of production has gone up, while the price has gone down.

“In 2017-18, one kg of tobacco was purchased for Rs 130.30. In 2018-19, it was 142.28, but it came down to Rs 124 in 2019-20. The tobacco board should purchase tobacco at least at Rs 170 per kg,” he said.

Hunsur MLA H P Manjunath said that if multinationals and auctioneers bid, the price will be competitive, but ITC has held its monopoly. “Though banks do not lend money for any crop, they do so for tobacco,”€he added.