Tobacco farmers fear price fall

Tobacco farmers in Andhra Pradesh are getting uneasy over what they persistently complain the stepmotherly treatment meted out to them by buyers in paying remunerative prices for their produce.

Though auctions in the Tobacco Board platforms in Prakasam and West Godavari districts entered the second and penultimate phase three days ago, only buyers representing two cigarette manufacturers and five export firms are participating in the auctions. This, farmers say, would affect competition.

Andhra farmers have also been pricked as buyers paid an unprecedented rate of Rs 72 per kg of tobacco to their Karnataka counterparts on Monday.

The prices in the auctions at the 16 floors in Andhra remain fickle between Rs 21 and Rs 52 with the lone freak rate of Rs 61 at only one platform even though auctions began a month ago.

The second phase auctions began at six platforms in Prakasam district and four floors in West Godavari district: Vellmapally, Medarmetla, Ongole-1, Ongole-2, Tangutur and Kondepi in Prakasam and Devarapalli, Jangareddygudem-1, Jangareddygudem-2 and Koyyalagudem in West Godavari.

While five buyers were present at all floors in West Godavari district, seven buyers were present at Ongole-2, six each at Vellampally and Ongole-1, five each at Tangutur and Kondepi and four at Medarametla. The numbers indicate the low key trend of auctions.

The crop harvested in southern black soils (SBS) is being sold in the six floors in Prakasam and the crop from northern light soils (NLS) is brought to the four floors in West Godavari.

The first phase of auctions began on January 19 at Podili-1, Podili-2, Kandukur-1, Kandukur-2, Kaligiri and DC Palli, which are in Prakasam district.

So far 15,972 bales (22,50,003 kg) were sold in these six floors till February 20 and 1,084 bales on February 21. And 256 bales (35,939 kg) tobacco and 304 bales (39, 622 kg) were sold in the second phase floors in Prakasam and West Godavari respectively till February 20, while 238 bales and 193 bales in the two districts respectively.

In all, 16,532 bales (23,25,564 kg) were sold so till February 20 and 18,047 bales till February 21.

The final phase of auctions are slated to begin at Bhadrachalam and Thorredu in Khammam district and Keesara in Krishna district and Guntur on March 28.

According to Tobacco Board projections given to Business Standard by its auction manager Veera Reddy, the crop in southern black soils (SBS - Prakasam) has been estimated at 49.03 million kg (authorised 34.20 million kg), the crop southern light soils (SLS - Prakasam) at 47.05 million kg (authorised crop of 34.88 million kg), and the crop in northern light soils (NLS - West Godavari) at 35.60 million kg (authorised 27.99 million kg), and that in central black soils (CBS "� Krishna, Guntur) at 4.40 million kg (authorised 5.36 million kg), and that in northern black soils (NBS - Khammam) at 4.23 million kg (authorised 5.93 million kg).

Farmers received the highest price of the season Rs 61 per kg at only one floor out of 16 floors, that was at Devarapalli in West Godavari district, while the highest prices of Rs 52, and Rs 49 were paid for SLS and SBS tobacco respectively.

The lowest price given to SBS tobacco is Rs 30, to SLS crop Rs 20.40, and to NLS harvest Rs 30 per kg. In one day (February 18-19), the average prices fell from Rs 47.16 to Rs 47.06 for SBS crop; from Rs 47.43 to Rs 47.32 for SLS crop and from Rs 50.90 to Rs 50.26 for NLS crop.

The overall average price realised by farmers has already come down to Rs 47.37 per kg. Farmers fear that when the season reaches peak during final phase of auctions next month, the prices would further fall down and take the average price to less than last year's average of Rs 34.90, which would put them in losses.

The companies, participating in the auctions, are ITC, GPI, Premier, Transcontinental, Messrs PSS, Bommidala Ventures, and that of Bellam Kondiah.