Andhra Pradesh Chief Minister N. Chandrababu Naidu has directed tobacco companies to immediately ramp up procurement and expedite the auction process to restore confidence among growers in the State. He issued the instructions at a review meeting at the Secretariat, warning that the government would not tolerate firms that fail to honour their committed procurement indents.
Slow Procurement, Support Price Of ₹200 Per Kg
Naidu expressed displeasure over the slow pace of purchases and asked companies to buy tobacco at or above the minimum support price of ₹200 per kg fixed by the State government. He flagged repeated reviews on the same issue during the current season as unacceptable and criticised the functioning of the Tobacco Board over the continued crisis.
Major Manufacturers Lagging Behind Commitments
The Chief Minister reviewed the commitments submitted by 28 tobacco companies and compared them with actual procurement so far. He noted that leading manufacturers ITC Limited, Godfrey Phillips India Ltd. and VST Industries Ltd. had collectively committed to procure 95.50 million kg but had purchased only 17.6 million kg, calling the shortfall a serious concern for farmers’ livelihoods.
Companies Cite Overproduction, Export Decline
Company representatives told the meeting that farmers had cultivated tobacco well beyond demand projected through indent allocations, creating a surplus that has pushed down prices. They said the industry is also facing a decline in exports, which has affected its purchasing capacity, though they assured the government that procurement would continue despite the challenges.
Demand–Supply Gap And Need For Open Market
Officials informed the Chief Minister that the absence of an open market for tobacco has aggravated the situation, leaving farmers dependent on company indents. While tobacco firms collectively placed indents for 142 million kg, farmers produced 232 million kg this season, a sharp demand–supply gap that has slowed procurement and triggered a price crisis in key growing regions.
