The Federation of All India Farmers Associations (FAIFA) on Monday urged cigarette companies to resume production following new rule for pictorial warnings on all tobacco products.
Tobacco crop worth approximately Rs.1,200 crore was lying unsold in Telangana and Andhra Pradesh due to shutdown of production by leading cigarette companies after the government mandated 85 percent package area of tobacco products to be covered with pictorial warnings from April 1, the association said.
"Farmers have taken loans of Rs.700 crore, which will be at high risk if the situation continues to linger," an association statement said.
Many cigarette firms stopped production after the new rule was enforced, citing ambiguity.
The government decision came even after a parliamentary committee recommended that the pictorial warnings be brought down to 50 percent from 85 percent of package surface area, saying the latter will be too harsh on the tobacco industry.
The farmers have been providing Flue-Cured Virginia tobacco to cigarette companies till now, used in cigarette manufacturing.
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The association said the crisis has come at the worst time for growers as it is the peak season for them to sell tobacco crop.
"Already, Indian farmers are facing severe challenges of water crisis and expensive credit etc. The ongoing tobacco industry closure will leave a big hole in the farmers' pockets," said FAIFA president B.V. Javare Gowda.
India earns Rs.6,000 crore from tobacco exports every year.