Anger over delay in buying low-grade Andhra leaf

Andhra Pradesh’s State Chief Minister, N. Chandrababu Naidu, is said to have taken strong exception to the fact that buyers failed to meet a September 30 deadline set by the Indian Minister of State for Commerce, Nirmala Sitharaman, for buying Andhra’s entire flue-cured crop.

Andhra overproduced in 2014-15 at a time when demand was low, and the situation was exacerbated by the fact that unhelpful weather conditions meant that much of the crop was of low quality.

According to a story in the most recent issue of the BBM Bommidala Group newsletter, Naidu issued an order that the unsold Andhra tobacco had to be sold within three weeks.

“Traders should buy 10 million kg of low grade [F9 and F10] crop every week and complete the process in three weeks,” he said, while emphasizing that traders had to be sensitive to the problems of farmers.

At the time, 169.08 million kg of the 193.27 million kg of tobacco produced had been sold.

Andhra Pradesh’s Agricultural Minister, P. Pulla Rao, cautioned tobacco manufacturers and traders not abiding by the price range set by the government for the purchase of low grade leaf from farmers that they would not be allowed to take part in future auctions.

“Those not purchasing tobacco at the agreed prices will be banned from auction platforms in the future,” he said.

The minister directed board officials to stop auctions if traders kept rejecting tobacco and said that stringent action would be taken against such traders.

Growers had complained that rejection rates had reached eight percent and that no bids had been made for some low-grades.

Growers are appealing to the Indian Commerce Ministry to extend the Rs20 per kg, one-time compensation declared by Sitharaman to all of the low grades.

A notification issued by the board had limited payments to certain tobaccos, but the growers believe the objective of the financial relief was to ameliorate the acute distress suffered in respect of all the low grade tobacco.

Meanwhile, flue-cured production in the state of Karnataka is thought to have fallen by 20 percent this year due to poor rainfall.

The crop size had been set by the board at 100 million kg, but it believes that no more than 83.5 million kg has been produced.