Karnataka blasts Tobacco Board

Karnataka has lambasted the Andhra Pradesh-based Tobacco Board's 'step-motherly' attitude towards its farmers.

Deputy chief minister Siddaramaiah, on behalf of the state's tobacco farmers, raised the issue at the Tobacco Institute of India's award function held on Sunday at Mysore.

According to farmers in Karnataka, though international demand for the commodity was high, the Tobacco Board was hindering the state's tobacco prospectus by fixing its crop size.

The state has urged the Tobacco Institute of India to intervene and ask the Tobacco Board to change this attitude. Instead of the size of the crop, it is the quality of produce that matters, feel the farmers.

Farmers have also alleged the board of engineering a slump in the price of tobacco grown in the region and delay in the payment of dues to farmers.

Siddaramaiah said tobacco grown over and above the authorised crop size should be allowed at the board's auction platforms only after imposing a penalty.

"Though tobacco grown in the region was superior in quality and had a huge demand overseas, the discrimination against the state by the board was regrettable," he said.

"There should be no discrimination between tobacco growers in Karnataka and Andhra Pradesh. The board should protect and promote the interests of farmers from both the states," he added.

Siddaramaiah also urged the central government to extend benefits given to the industrial sector to the agricultural sector as well. Favouring a debate on the matter, he said agriculturists should be given financial help and other benefits being given to industrialists.

Speaking on the occasion, Udayan Lall, director, Tobacco Institute of India, New Delhi, expressed the view that the additional of 10 per cent imposed on cigarettes in this year's budget would affect both demand for FCV tobacco.

"The hike in duty is seen as a blow to the sector which was showing signs of revival. In the recent past, the government's policy of providing tax stability on cigarettes had a positive impact on FCV tobacco farming community. For example in 2004-05, FCV tobacco production and exports went up to record levels. But this recovery was expected to be adversely affected by the duty increase on cigarettes," Lall said.

With their 14 per cent share of tobacco consumption, cigarettes currently contribute 85 per cent of the revenue from tobacco. Studies conducted by the Central Tobacco Research Institute have shown that FCV tobacco provides much higher returns to farmers than other types of tobaccos.

Therefore, according to the institute, an equitable tobacco taxation policy, besides increasing government revenues, would greatly benefit farmers, who represent 70 per cent of the total work force of the tobacco industry.