The Tobacco Board of India has decided to restrict the crop size in Andhra Pradesh to 170 million kg for the upcoming season.
Speaking at a press conference here on Friday, G Kamalvardhana Rao, who recently took over as chairman of the board, said there was a tobacco glut globally.
Farmers would end up getting lower returns if they were allowed to grow more tobacco, he said explaining the reasons for turning down Indian Tobacco Association’s appeal for an increase of 10 million kg.
The board had earlier refused any increase in the crop size for Karnataka from 100 million kg.
The Centre has decided to double the penalty from Rs 1 to Rs 2 on every kg grown extra and 15 per cent of the value (from 5 per cent) of that output, he said. However, a group of MPs from Andhra Pradesh had sought a reduction in penalties for farmers who grew more tobacco than the supposed limit.
The board has also decided to introduce electronic auction at all the 31 platforms — 20 in Andhra Pradesh and 11 in Karnataka — from the next auction season to ensure better price for farmers.
It would call for expressions of interest and initiate talks with public sector IT firms to put in place the e-auction system.
The European Union in 2008-09 had rejected 3 million kg tobacco citing presence of non-tobacco material. Rao asked the farmers not to use plastic bags to store the commodity.