Tobacco farmers face losses, rejections at auction centres

Excess production, poor quality crop and adverse weather have caused heavy losses to tobacco farmers in Guntur this season. The unsold stocks of tobacco are piling up due to the high rate of rejection the crop is facing at auction centres in the state.

Though auctions started on March 10, not much has been bought by traders so far. As of August 31, 34.47 per cent of the produce faced rejection by traders at 20 auction centres.

The auction at two centres – Thorredu in West Godavari and Keesara in Krishna district – was closed on August 30, while it continues at the remaining 18 centres. However, at every centre, the percentage of rejection by the traders is on the higher side.

A total of 1.47 million bales (186.76 million kg) were sold by August-end this year at an average price of Rs 84.66 a kg. As against this, 1.63 million bales or 203.94 million kg of tobacco were sold during the same period in 2009, at an average price of Rs 103.39 a kg.

The highest price paid to the farmers was Rs 113.97 a kg in 2009, while the lowest was Rs 99.45. However, this year, the highest price being offered to the farmer is Rs 70.74 a kg while the lowest is Rs 54.77 a kg.

The difference is due to the poor quality of the tobacco leaves this year, which is a result of excessive moisture, immature cutting and improper curing. “In their rush to get better prices, farmers are not following the best farming methods and the leaf is full of moisture, which leads to low prices in the market,” a senior official of the Tobacco Board said. Tobacco is one crop, which is damaged by moisture – both in the air and the soil. The farmer has to keep the soil dry through inter-cultivation, which helps keep the leaf moisture-free. Such an activity is not being carried out by the farmers, which is damaging the crop.

“If the moisture is not dried out, the leaf gets affected and turns yellow at an early age. Once the leaf turns yellow, the farmers harvest it and keep it for curing. The immature leaf loses its quality in the curing process and the price falls at the auction centre,” said the official.

Whether cultivated in the southern black soils, southern light soils or even the northern light soils, the crop is of poor quality. In addition, excess cultivation and supply are giving an edge to the trader to bargain. The Tobacco Board has permitted just 170 million kg of tobacco for this season, while the actual produce is a little over 230 million kg.

“Our own assessment pegs the production at 215 million kg and that keeps the traders in the safe zone, while the farmer is at the traders’ mercy. Unfortunately, our farmers follow the trend. If one crop gets a good price this season, all the farmers will shift to it in the next season. With everyone producing the same crop, the price will come down,” the official said.

Meanwhile, honorary president of the Virginia Growers Association, Yalamanchili Sivaji, expressed concern over the high rejections at auction centres. He wants the state and central governments to procure the rejected tobacco to help farmers overcome the losses.