Tobacco growers in Pakistan claim delayed quota announcements and reduced allocations have triggered overproduction, a price crash, and losses exceeding Rs6.56 billion ($23 million). According to the Dawn, the government normally sets quotas by October, but this year’s lower quota was delayed until December, forcing farmers to sell surplus tobacco at the minimum indicative price (MIP) of Rs548 ($1.92) per kg—far below the market average of Rs720 ($2.52). Growers accuse multinational and local companies of exploiting the situation by purchasing surplus cheaply.
According to the Dawn, industry figures warn that farmers are being squeezed between rising production costs and falling incomes, with many unable to recover expenses. According to the Tobacco Growers Association, companies have failed to meet quota commitments, while export figures tell a different story—Virginia tobacco exports jumped 129% to 48 million kilograms in 2024-25, even as domestic quotas were cut, the newspaper said. Farmers claim losses of up to Rs3 million ($10,500) per hectare under current pricing.
The downturn threatens broader economic impacts, including reduced government revenue, falling exports, and job losses in tobacco-producing regions. Growers also point to climate-related crop damage this year, for which they have received no compensation. The National Assembly’s standing committee on tobacco is set to meet in Islamabad on September 23 to discuss possible relief measures, though farmers remain skeptical about immediate action.