Extra tobacco output for export to be fined

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New Delhi: The government will impose a hefty penalty of 15% of sale proceeds if farmers produce more export quality tobacco than the quota allotted to them by the Tobacco Board for the current year.

The penalty was 5% in 2008-09 season. But farmers exceeded the quota by about 18%, tempted by almost 100% increase in prices of the flue-cured variety (FCV) of tobacco, grown largely in Andhra Pradesh and Karnataka.

“The penalty has been increased to discourage farmers from cultivating surplus FCV tobacco,” Tobacco Board chairman J Suresh Babu said.

India, a signatory to the World Health Organisation-sponsored Framework Convention on Tobacco Control, is under international pressure to bring down tobacco cultivation, he said.

“Now, the planting of 2009-10 season (October-January) has begun in Andhra Pradesh. I hope growers will not violate the quota of 170 million kg fixed for the state,” Babu said.

Last year, the two states cultivated an excess tobacco of 48 million kg.The average price of tobacco, in 2008-09 season, almost doubled to Rs 84 a kg in Andhra Pradesh, while in Karnataka rates rose to Rs 109 a kg from Rs 59 a kg in 2007-08 season.

India, a major tobacco exporter, earned $308 million (around Rs 1,440 crore) from overseas shipments of the commodity in the April-August period of 2009-10.

In 2008-09 season, FCV tobacco production stood at 318 million kg, compared to the quota of 270 million kg, according to the official data.