Farmers in the traditional tobacco growing areas in Prakasam and Nellore districts are in a quandary in view of lacklustre market conditions for the second year in a row in the wake of the second wave of COVID-19 sweeping the region.
It was a truncated marketing season for the farmers last year as the lockdown imposed to combat COVID-19 coincided with the auctions. As a result, Tobacco Board officials had a tough time arranging auctions in select auction platforms outside the containment zones.
Now again, they are in trouble as the market price of various grades of tobacco moved southwards after starting at an encouraging price of ₹180 per kg during the auctions that had been delayed by about a month, especially in the Southern Light Soil (SLS) platforms.
Exporters stay away
“We have decided to bring only half the number of bales to the auction floors as domestic cigarette manufacturers ruled the roost and exporters kept away from the market on the pretext of lack of confirmed orders from overseas buyers,” lamented a group of farmers in Ongole II auction platform.
“We will have no option but to stall the auctions completely if there is no improvement in the market conditions by first week of May,” said farmer leader V.V. Prasad.
A section of the farmers was of the view that the auctions should not be boycotted at this stage as any lockdown imposed to prevent the spread of the virus would come in the way of marketing the produce, said former Tobacco Board member P. Bhadri Reddy.
Farmers have reduced by half the number of bales offered for sale to about 300 to 400 as a total boycott at this stage may go against their interests, going by the bitter experience last year.
Market intervention
They wanted the Union Government to press into market the State Trading Corporation as domestic players drove down the prices for various grades of tobacco, taking advantage of the near absence of exporters in the market.
The State government should ask the Markfed, which had for the first time entered the market to buy low-grade varieties last year, to follow suit, they said.
Farmers are in an unenvious position as they could market only 16.02 million kg in the 11 auction platforms in the two districts out of the total estimated crop of 71 million kg.
The growers in the Southern Black Soil (SBS) region sold 7.78 million kg, at an average price of ₹164.96 per kg, as on Wednesday, while their counterparts in the SLS region got an average price of ₹165.53 per kg for 8.24 million kg marketed till date, an auction report released by the Tobacco Board said.