Growth and Sustainability in India’s Tobacco Industry
The Tobacco Board of India plays a crucial role in the development and sustainability of the tobacco industry. Established on January 1, 1976, under the Tobacco Board Act of 1975, the Board aims to enhance the livelihoods of tobacco farmers while ensuring the industry’s growth. With India being the second-largest producer of tobacco globally, the Board’s strategic initiatives are vital for meeting both domestic and international demands. This article explores the Board’s activities, the doubling of farmers’ incomes, the surge in tobacco exports, and the record-breaking production in the 2023-24 season.
Strategic Initiatives for Sustainable Growth
The Tobacco Board has implemented several strategic activities to ensure the sustainability and growth of the tobacco industry. These initiatives include crop planning and production regulation to meet the demands of both domestic and export markets. The Board provides essential support to farmers, offering handholding assistance to help them produce high-quality tobacco that meets international standards.
Financial assistance is also a key component of the Board’s strategy. Farmers receive loans and necessary inputs to cultivate quality tobacco. The Board actively engages in extension and developmental activities, promoting sustainable cultivation practices. This holistic approach not only supports farmers but also strengthens the overall tobacco farming system in India.
India’s position as the second-largest producer of tobacco, following China, highlights the significance of these initiatives. The country ranks fourth in the production of Flue Cured Virginia (FCV) tobacco, trailing only China, Brazil, and Zimbabwe. Furthermore, India is the second-largest exporter of unmanufactured tobacco, contributing significantly to the national economy. In the fiscal year 2023-24, Indian tobacco exports reached a remarkable value of ₹12,005.89 crore (approximately $1.45 billion), showcasing the effectiveness of the Board’s strategies.
Doubling Farmers’ Incomes
One of the most notable achievements of the Tobacco Board is the doubling of incomes for FCV tobacco farmers. Between 2019-20 and 2023-24, the average earnings of these farmers increased from ₹124.00 per kilogram to ₹279.54 per kilogram. This significant rise in income can be attributed to effective government policies and the implementation of efficient market mechanisms.
The Tobacco Board’s electronic auctioning system has played a pivotal role in this success. This IT-enabled system enhances price discovery and ensures that farmers receive fair and remunerative prices for their produce. The Board’s commitment to welfare measures, including financial relief in the form of grants and loans, has further supported farmers during challenging times.
Approximately 83,000 farmers have benefited from these initiatives, demonstrating the positive impact of strategic support. The Board’s efforts have not only improved the livelihoods of farmers but have also contributed to the overall growth of the tobacco sector in India. The focus on doubling farmers’ incomes aligns with the government’s vision for agricultural development, showcasing the Board’s dedication to enhancing the economic well-being of tobacco growers.
Surge in Tobacco Exports
The Tobacco Board’s initiatives have led to a remarkable increase in tobacco exports from India. Over the past five years, export growth has surged by 87%. The export value reached a record high of ₹12,005.89 crore in the fiscal year 2023-24, compared to ₹6,408.15 crore in 2019-20. This growth is a testament to the effectiveness of government policies and the Board’s efforts in promoting Indian tobacco on the global stage.
During this period, export volumes also increased significantly, rising from 218.84 million kilograms to 315.51 million kilograms. The surge in international demand for Indian FCV tobacco has played a crucial role in achieving these unprecedented figures. This not only benefits farmers but also contributes to the national exchequer by generating foreign exchange through exports.
The Board’s commitment to export promotion activities has been instrumental in sustaining and improving India’s tobacco exports. By focusing on quality and meeting international standards, Indian tobacco has gained a strong foothold in global markets. The Board’s strategic initiatives ensure that Indian tobacco remains competitive, benefiting both farmers and the economy.
Record-Breaking Production in 2023-24
The 2023-24 crop season has been a landmark year for FCV tobacco farmers in Andhra Pradesh. Despite facing natural calamities, farmers demonstrated remarkable resilience, achieving a record-high production of 215.35 million kilograms of tobacco. This achievement is complemented by a record-high price realization of ₹288.65 per kilogram.
The surge in international demand for Indian FCV tobacco has significantly contributed to these outstanding figures. The auctions for the sale of the 2023-24 Andhra Pradesh FCV tobacco crop commenced on February 29, 2024, and concluded on October 14, 2024. Over 43,021 growers participated in 178 auction days, resulting in the marketing of 215.35 million kilograms of FCV tobacco.
Farmers realized an average price of ₹288.65 per kilogram, the highest ever recorded. This season’s average price was ₹62.92 higher than the previous year’s average. Additionally, 38,751 registered growers benefited from a penalty waiver for the sale of excess tobacco, resulting in savings of ₹184 crore for the farmers. The Tobacco Board’s efforts, combined with the farmers’ hard work, have led to unprecedented success, showcasing the potential of the tobacco industry in India.
The Tobacco Board’s strategic initiatives have significantly impacted the tobacco industry in India. From doubling farmers’ incomes to achieving record-breaking exports and production, the Board’s efforts have strengthened the livelihoods of tobacco farmers and contributed to the nation’s economy.
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