Review of Andhra Pradesh Auctions for Sale of FCV Tobacco

Review of Andhra Pradesh Auctions for Sale of FCV Tobacco 
Minister of State for Commerce & Industry (IC) Smt. Nirmala Sitharaman reviewed the recently concluded 2015 AP auctions for sale of FCV tobacco. It was noted that a quantity of 190.05 million kg was sold as against of a target of 172 million kg and an estimated production of 193.27 million kg. The average price realised this season was Rs.93.07 per kg. 

2014-15 AP auctions were prolonged upto November 2015 because of difficult market conditions on account of subdued demand for tobacco and because of production of more of low grade tobacco due to abnormal weather conditions and outbreak of tobacco root parasite “Orabanche”. The farmers faced many difficulties in the form of low prices for their produce and liquidity problems. With the timely intervention of Smt. Nirmala Sitharaman, Minister of State for Commerce & Industry (IC) in July 2015 the trade agreed to procure entire authorised tobacco at a mutually agreed price ranges. This mutual consensus worked out well for marketing of entire NLS region tobacco and bright grade tobacco in traditional soils. But trade could not honour the agreed prices in case of medium and low grades. In order to provide relief to growers in sale of low grade tobacco Smt. Nirmala Sitharaman, once again intervened in the market and after discussion with Hon’ble Chief Minister of Andhra Pradesh, announced a compensation package providing for payment of Rs.20/- per kg for the identified low grades which were being rejected at Rs.40/-. Accordingly, the compensation was paid for the identified low grade tobaccos i.e. Dark Greens and BX2 tobacco covering F9, NDG, F10 and NOG grades auctioned between 19/09/2015 to 02/11/2015 with the contribution from the Central Government and State Government of Andhra Pradesh @ Rs.15/- per kg and Rs.5/- per kg respectively.

The Minister was also briefed about the compensation paid to the growers. A total of 27,950 growers were benefited out of 45,923 growers of AP and an amount of Rs.22.40 crore consisting of Rs.16.80 crore from Central Govt. and Rs.5.60 crore from AP State was paid towards compensation covering 11.23 million kg of low grade tobacco.

With all the efforts of Central Government and State Government, Board could liquidate the entire tobacco of 190.05 million kg produced by the farmers in AP during 2014-15 crop season.

2015-16 FCV tobacco crop status: 

Smt. Sitharaman reviewed the current AP crop season. Tobacco Board has fixed a target of 120 million kg for Andhra Pradesh for the crop season 2015-16. A total of 44,958 growers are registered with the Tobacco Board for 39,220 barns. A total of 33,163 ha. was planted under tobacco.

Board has taken all the measures to provide necessary inputs to the tobacco farmers for the current 2015-16 season. Board has supplied 14,471 M.tons of fertilizer to the farmers in Andhra Pradesh. Board is also focusing on improving the quality and productivity of tobacco by implementing good agricultural practices through educating the farmers to avoid reoccurrence of marketing problems. Hon’ble Minister of State for Commerce & Industry (IC) impressed upon officers of Tobacco Board to organize mass contact programmes and intensive interaction with the farmers should be taken up by Board. CIM also emphasized on enhancing the extension activities of the Tobacco Board.

The Minister instructed the Tobacco Board to impress on famers through conduct of mass interaction with the farmers through its field functionaries to educate them and generate awareness not to indulge in excessive borrowing from money lenders. The Field Officers and functionaries should advise the farmers for good crop yield and should ensure quality crop for the current season.

The Minister instructed the Tobacco Board to take all measures so that the crop should be restricted to 120 million kg as notified by the Board and discourage the un-authorised crop.

2015 Karnataka FCV tobacco auctions:

Commerce & Industry Minister also reviewed ongoing Karnataka auctions. The auctions for sale of 2015-16 Karnataka crop are commenced on 07/10/2015. After 36 days of auctions, a quantity of 19 million kg was sold at average price of Rs.137.28 per kg i.e. up by Rs.20/- per kg or 17% over last year. Though the farmers are realizing good prices, the rejections in auctions are around 30%. Board was directed to focus on reducing the rejections and marketing the entire crop of Karnataka within 100 days i.e. by the end of January 2016.

Besides, representatives of Indian Tobacco Association called on the Commerce and Industry Minister on 23rd November 2015 and made representations for providing incentives for export promotion of tobacco. 
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Review of Foreign Direct Investment (FDI) Policy on Various Sectors 

            The Government of India has reviewed the extant Foreign Direct Investment (FDI) Policy  on various sectors and made amendments in the Consolidated FDI Policy Circular of 2015 (FDI Policy) effective from May 12, 2015 and as amended from time to time.  The amendments may be seen in the Press Note No.12 (2015 series) dated 24th Nov. 2015 on DIPP’s website

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