VIJAYAWADA: Chief Minister N. Chandrababu Naidu on Wednesday directed tobacco companies to immediately accelerate tobacco purchase operations to instil confidence among farmers and expedite the auction process.
He made it clear that all tobacco must be procured at the Minimum Support Price (MSP) fixed by the State government and that the price should not fall below Rs 200 per kg.
Reviewing the current status of tobacco procurement with officials and traders at the Secretariat on Wednesday, the Chief Minister questioned why traders had slowed down purchases in Andhra Pradesh when the problem did not exist in Karnataka.
Expressing sharp dissatisfaction over the functioning of the Tobacco Board, the Chief Minister warned tobacco companies against causing hardship to farmers.
He cautioned that companies should consider the long-term consequences if frustrated farmers shifted to alternative crops due to inadequate support.
The Chief Minister reviewed the procurement commitments made by 28 companies and the actual purchases completed so far.
The CM has warned that companies which had submitted procurement indents but failed to honour them would not be spared, noting that having to review the same issue five times this season points to clear negligence.
He particularly criticised the slow pace of procurement by the three largest manufacturing companies—ITC Limited, Godfrey Phillips India Limited, and VST Industries. Together, these companies had submitted indents for 95.50 million kg of tobacco but had procured only 17.6 million kg so far.
Representatives of the trading companies explained that the present crisis was mainly due to tobacco cultivation vastly exceeding market demand.
They stated that purchases had already exceeded their actual technical requirements and that declining global exports had further sluggish procurement.
