Andhra's Ongole farmers unhappy over tobacco auction prices

Ongole farmers allege buyers forming syndicates to curb price rise
Andhra's Ongole farmers unhappy over tobacco auction prices

ONGOLE: Tobacco farmers in Ongole district are expressing dissatisfaction with the ongoing auction process, as they are not receiving the higher prices they expected for their produce. The farmers allege that buyers have formed a syndicate to curb the prices offered to them.

There are 11 auction platforms in operation this season, including Vellampalli-2, Ongole-1, Ongole-2, Tangutur-1, Kondapi (5), Podili-1, Kanigiri, Kandukur-1, Kandukur-2, Kaligiri, and DC Palli (6), in the Southern Black Soil (SBS) and Southern Light Soil (SLS) regions.

On Friday, prices across these platforms ranged from `204 per to `331 per kg, with an average of `278.22 per kg in the SLS region and `284.46 per kg in the SBS region. The farmers are dissatisfied, believing that buyers and exporters are conspiring to control prices by forming a syndicate.

“In this season, we once received `360 per kg for our bright (No-1 quality) grade tobacco. Now, for several days, we are getting only `331-335 per kg, with an average of `270-280 per kg. We strongly suspect that buyers are colluding to keep prices low. We request the Tobacco Board to intervene and ensure all buyers participate in the auction to benefit farmers with higher prices in line with international market demand,” said Mandalapu Seshagiri Rao, a tobacco farmer from Ongole.

Despite high international market demand, tobacco exporters and agents are attempting to purchase the highest grade tobacco at lower prices. The season began with nominal prices around `230 per kg and gradually increased, reaching up to `360 per kg for bright grade tobacco, much to the growers’ delight. However, prices have now fallen back to `330-335 per kg.

Meanwhile, the board authorities are cautioning growers against increasing tobacco cultivation next season based on this year’s high prices. Landowners have already increased tenancy amounts and lease rates for tobacco barns. “Tobacco product demand is highly dynamic. The international market demand we saw this year may not be the same next year. Therefore, we are advising growers to maintain the current cultivation area to ensure good returns,” explained M Lakshman Rao, Ongole-SBS & SLS Regional Manager.

The growers’ frustrations highlight the tension between farmers seeking fair compensation and buyers aiming to control costs. The board’s advice to maintain current cultivation levels reflects concerns about market volatility and the potential risks of overproduction. The situation calls for careful management to balance farmer interests with market realities and to avoid future financial losses.

In summary, the district’s tobacco growers are facing challenges due to suspected price manipulation by buyers, despite high international demand. The board’s cautious approach and recommendations aim to prevent market instability and ensure sustainable returns for farmers. As the season progresses, all eyes will be on the auction platforms and the Board’s actions to address these pressing issues.

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The New Indian Express