Leaf prices drive Andhra Pradesh growers to suicide

Flue-cured tobacco growers in Andhra Pradesh, India, are being driven to suicide as the prices paid on what this year is a buyers’ market are plunging them into debt, according to a story in the Hindu, relayed by the TMA.

Suicides are not unknown among Andhra’s flue-cured tobacco growers, but the situation is bad enough this year to have forced the government to dismiss Koothati Gopal, the chairman of the Tobacco Board of India, which is responsible for the welfare of flue-cured tobacco growers, and appoint Manoj Kumar Dwivedi, joint secretary at the Ministry of Small and Medium Enterprises, as the new chairman of the board.

Meanwhile, the Indian Minister of State for Commerce and Industry, Nirmala Sitharaman, who is in Andhra to try to address tobacco growers’ problems, said Finance Minister Arun Jaitley was holding talks with cigarette manufacturers, including ITC, to persuade them to purchase the remaining crop.

Flue-cured tobacco growers in the state are said to have grown about 20 million kg more than the authorized crop size of 172 million kg during the 2014-15 season, but that only 143.72 million kg had been sold so far. It is common practice for Andhra growers to produce considerably more flue-cured than is authorized.

Bright grade leaf is being sold at about Rs125 (US$1.90) per kg, about the same as the average for last season’s crop, but low grade leaf is selling for as little as Rs32 per kg, down from an average of about Rs87.44 per kg last season.

After some growers, unable to pay their debts, committed suicide, the central and state governments announced that they would pay Rs15 (US$0.23) and Rs5 (US$0.08) per kg respectively for ‘inferior’ quality leaf tobacco that had not been sold commercially.

Sitharaman said the government would ensure that the entire crop was sold by the end of September.