Chief Minister N. Chandrababu Naidu directed tobacco companies to immediately procure tobacco at a minimum price of Rs.200 per kg and expressed displeasure over the Tobacco Board's handling of procurement.
Amaravati: Chief Minister N. Chandrababu Naidu on Wednesday directed tobacco companies to immediately commence large-scale procurement operations and ensure that farmers receive the Minimum Support Price (MSP) of Rs.200 per kg, stating that the price should not fall below the level fixed by the State Government.
Chairing a high-level review meeting with officials, Tobacco Board representatives and tobacco companies at the Secretariat, the Chief Minister said immediate procurement was essential to restore confidence among tobacco farmers and accelerate the ongoing auction process.
Expressing dissatisfaction over the functioning of the Tobacco Board, Chandrababu Naidu questioned why procurement had slowed significantly in Andhra Pradesh while Karnataka was not witnessing similar issues. He warned tobacco companies against causing distress to farmers and cautioned that inadequate support could force cultivators to shift to alternative crops, ultimately affecting the industry's long-term sustainability.
The Chief Minister reviewed procurement commitments made by 28 companies and compared them with the actual quantities purchased so far. He warned that companies which had submitted procurement indents but failed to honour their commitments would face strict action.
He particularly expressed concern over the slow procurement by three major tobacco companies, ITC Limited, Godfrey Phillips India Limited and VST Industries. According to officials, the three companies together had committed to procure 95.50 million kg of tobacco but had purchased only 17.6 million kg so far.
Representatives of tobacco companies explained that production had exceeded market demand, while declining exports had further affected procurement. They stated that purchases had already crossed their immediate requirements but assured the Chief Minister that procurement would continue.
Officials informed the meeting that the absence of an open market had worsened the situation. While companies had placed procurement indents for 142 million kg, farmers produced around 232 million kg, resulting in excess supply, slower procurement and downward pressure on prices.
Ministers K. Atchannaidu, Anam Ramanarayana Reddy, Gottipati Ravi Kumar and Dola Bala Veera Anjaneya Swamy also participated in the review meeting.
