Centre, Andhra Pradesh announce relief package for tobacco farmers

Union Minister of State for Communications and Rural Development Pemmasani Chandra Sekhar on Sunday announced a relief package for tobacco farmers, comprising interest-free loans and price support measures. The package follows consultations involving the Tobacco Board, buyers, and exporters, and will take effect from August 3.

Under the package, the Union government will provide interest-free loans of ₹50,000 each to approximately 45,000 tobacco farmers. The loans, repayable over two years, involve a total outlay of about ₹250 crore. Additionally, the Andhra Pradesh government will offer an incentive of ₹10 per kilogram for low and off-style tobacco varieties, with the amount credited directly to beneficiaries' bank accounts.

Exporters have agreed to pay minimum purchase prices for different tobacco varieties: ₹230 per kg for bright, ₹190 per kg for medium, ₹130 per kg for off-style, and ₹110 per kg for low variety. The Tobacco Board has been directed to auction at least two million kilograms of tobacco per day, aiming to complete the marketing process before the arrival of crops from other states.

The minister said the Tobacco Board had approved production of 140 million kg of Flue-Cured Virginia (FCV) tobacco for the 2025-26 season. However, production exceeded the target by about 90 to 100 million kg. Combined with the impact of global conflicts on exports, this excess production led to a steep fall in prices, causing significant hardship for farmers. The interest-free loans and price support are intended to provide much-needed relief to the farming community.

Mr. Chandra Sekhar also alleged that the previous YSR Congress Party government had procured tobacco only once during its five-year tenure, spending ₹105 crore. In contrast, he said, the present coalition government had procured black burley tobacco worth ₹146 crore through AP-Markfed last year. These remarks were made during his media address in New Delhi.