That was in 2008, when a huge global demand for tobacco led to a surge in prices, even touching R115 per kg, enticing several farmers to jump on to the tobacco gravy train. Tobacco Board data also indicates that while the registered area under tobacco cultivation was 1.96 lakh hectares during 2008-9, the crop was actually grown on 2.31 lakh hectares.
But owing to excess global stocks and a petering demand, prices have been on a steady downslide since then, touching an average of R89 per kg in 2011. Adding to this disappointment is rising cost of labour and fuel, reasons enough for farmers to look at alternate crops.
The final straw could be this years prices, to be determined from February 23, when auctions for tobacco start in Andhra Pradesh. With over a hundred million kg stock still lying unsold from last year, farmers are not hopeful of good prices. Koteswar Rao kind of sums it up for his community when he tells FE: This years price would decide whether I could continue with growing tobacco or not.
For small farmers like him, alternate crops seem the only answer. It is estimated that of the 1.25 lakh-odd registered tobacco farmers, mostly in Andhra Pradesh and Karnataka, over 40% have small land holdings.
In Andhra Pradesh, farmers who were earlier cultivating palm oil, cotton and chilies shifted to tobacco cultivation thinking the boom would continue. But now we are thinking of returning to our traditional crops, says Marella Banegarubabu, a tobacco farmer from Guntur.
An official in the Andhra Pradesh agriculture department also told FE that many tobacco farmers have shifted to alternate crops such as Bengal gram (chickpea), cotton and jowar (sorghum).
Interestingly, this is a trend that is in line with government policies. The Tobacco Board of India and Central Tobacco Research Institute (CTRI) plan to reduce crop size every year by around 5%, which will not only help India comply with the WHO Framework Convention on Tobacco Control, but also result in lower produce, which would fetch better prices for farmers.
Our aim is to reduce the crop size by minimising the target and also encouraging farmers to go for alternative crops. Farmers have taken up cotton and maize in Nellore and Prakasam districts in place of tobacco, says G Kamala Vardhana Rao, chairman of the Tobacco Board.
Accordingly, while the registered crop area was reduced to 1.94 lakh hectares, the actual crop area also came down to 2.1 lakh hectares last fiscal.
V Krishna Murthy, director, CTRI, tells FE that the institute has conducted several identification programmes in Karnataka, Andhra Pradesh and others states on the possibility of growing remunerative alternate crops such as maize, Bengal gram, cotton and jowar. We will soon start demonstrations in the fields for generating awareness about such crops, he adds.
Government agencies also contend that while tobacco farmers mostly take up only a single crop in a year, as post-harvest processes take considerable time, land remains unused for at least six months in a year.
While tobacco is found to be remunerative when compared to any other single crop, increasing crop intensity by growing three crops in kharif, rabi and summer could be a viable proposition, says an official of the agriculture ministry.
The Tobacco Board has also presented a proposal to the commerce ministry on rehabilitating tobacco farmers wanting to surrender their licences. As per the proposal, R5 lakh would have to be given to each tobacco farmer to encourage them to take up alternate crops. However, since this works out to be around R4,800 crore, the commerce ministry is yet to take a call on it. But Rao of the Tobacco Board is optimistic. Through systematic reduction in crop size and regulated cultivation, we would ensure better remuneration for tobacco farmers as more land is freed for food crops, he says.