Buy tobacco at Rs 200/kg or face action, Naidu warns companies

Vijayawada: Chief minister N Chandrababu Naidu on Tuesday directed tobacco companies to step up procurement of tobacco and ensure purchases are made at the minimum support price (MSP) of Rs 200 per kg. He warned that firms that fail to honour their commitments would face action.Reviewing the status of tobacco procurement with officials and traders at the state secretariat, Naidu said large-scale purchases should begin immediately to instil confidence among farmers. He questioned why a problem that did not arise in neighbouring Karnataka is surfacing in Andhra Pradesh and expressed dissatisfaction over the functioning of the Tobacco Board.The chief minister cautioned companies against harassing farmers and asked them to be aware of the long-term consequences if farmers shifted to alternative crops due to uncertainty in the tobacco market.Naidu reviewed indents submitted by 28 companies and the corresponding procurement levels. He warned that companies that gave procurement commitments but failed to buy tobacco would not be spared. He reiterated that the state govt’s MSP of Rs 200 per kg must be maintained and directed buyers to complete procurement operations.The chief minister specifically flagged the procurement performance of major manufacturers ITC Ltd, Godfrey Phillips India Ltd and VST Industries. While the three companies submitted indents for 95.50 million kg of tobacco, they have so far purchased only 17.6 million kg, he noted.

Naidu said the issue has come up for review for the fifth time this season, reflecting the seriousness of the situation.Trade representatives told the chief minister that the current crisis was caused by cultivation far exceeding demand. According to them, purchases have already crossed industry requirements while exports have also declined. Despite these challenges, they assured the govt that procurement would continue.Officials informed Naidu that the absence of an open market for tobacco aggravated the problem. They said companies collectively gave indents for 142 million kg, whereas farmers produced 232 million kg during the current season. The mismatch between procurement commitments and production led to a fall in prices and slower purchases, they explained.Ministers K Atchannaidu, Anam Ramanarayana Reddy, Gottipati Ravi Kumar and Dola Bala Veeranjaneya Swamy, legislators from the erstwhile Prakasam district, and senior officials attended the review meeting.