Centre to launch e-auctioning of tobacco

The Centre is planning to introduce e-auction system to break the monopoly in tobacco purchase.

"Presently, only one company is procuring about 65 per cent of the country's total tobacco produce. To break this, we are studying possibilities of introducing electronic auction system," Jairam Ramesh, Union minister of state for commerce, told mediapersons here on Thursday.

The government is taking steps to reduce the tobacco cultivated area by 50 per cent over the next 10 years in the country, and at the same time it is encouraging crop diversification.

Some farmers in Andhra Pradesh have already shifted to other crops. The government is setting up biotechnology parks in Guntur and Ongole districts as part of the steps to reduce tobacco cultivation, according to the minister. The other steps being taken in this direction include promotion of medicinal plants.

"In place of tobacco, we are encouraging cultivation of medicinal plants. As part of this, the Union government has decided to set up four medicinal plant special economic zones across the country," Ramesh said.

One of the four proposed SEZs will come up in Chhattisgarh while the location for the others has not been finalised. There is a lot of scope for India to tap the export market as China is exporting $7 billion worth of herbals to America every year.

On FDI in the tobacco industry, the minister said, "We have no objection to FDI in 100 per cent export oriented units, which will procure tobacco in India, and export products to other countries after processing. But, it is not advisable for allowing FDI in local tobacco industry, which will sell their products in the country, as this will harm our society and people's health," he said.