Tobacco industry seeks policy changes to boost exports

The Indian tobacco industry needs policy intervention in order to fully exploit the potential of tobacco exports, particularly in the Flue Cured Virginia (FCV) variety.

The Indian FCV tobacco enjoys certain competitive advantages in the global market such as low prices, low tobacco-specific nitrosamines (TSNA) levels and the availability of good quality filler. However, the government policies need to be proactive to leverage these advantages.

"Policy intervention in this sector is crucial and should include an equitable tobacco taxation, pragmatic regulations and greater export thrust," Udayan Lall, director, The Tobacco Institute of India told Business Standard.

Lall said India's tobacco-related regulations do not take into account the fragmented nature of the domestic tobacco industry.

To exploit the potential of FCV tobacco exports, the government should treat it on par with other commercial crops for farmers to avail benefits. There is a need to differentiate between tobacco as product and tobacco as an agricultural crop, which provides significant economic benefits.

"FCV tobacco is widely grown in southern Karnataka and the central government should take measures to boost yield and also should increase the area under tobacco cultivation. Quota system must be done away with as it hits production," said Lall.

He said the policies must be pro-farmer and help tobacco farmers in the country to grow.

Around 70 per cent of the people employed in the tobacco industry are farmers. In Karnataka, 50,000 farming families and around one million agricultural workers are directly dependent on FCV tobacco for their livelihood.

FCV tobacco has been one of the most remunerative of dryland crops in the state for the last 40 years. The bulk of the tobacco is produced in Mysore and Hassan districts.

Ever since FCV tobacco was introduced in the state in 1964, the area under FCV tobacco cultivation has seen a quantum jump from 1,000 hectares to the current levels of 70,000 hectares. Due to the scanty rainfall in southern transitional zone, farmers have relied on the drought-resistant FCV tobacco for their sustenance, said Lall.

He also added: "Since these are predominantly rural and agrarian districts, tobacco has always held centrestage in these districts' economies."

In order

• India's tobacco-related regulations do not take into account the fragmented nature of the domestic tobacco industry
• To exploit the potential of FCV tobacco exports, the industry wants the government to treat it on par with other commercial crops and not to differentiate it between tobacco as product and tobacco as an agricultural crop