Markfed’s entry brings in buoyancy to tobacco market

Farmers happy as traders offer better prices for low grade varieties

The tobacco growers, who have been groping in the dark with traders shying away from buying their produce in the wake of COVID-induced economic downturn till now, are a happier lot now as buoyancy is returning to the market owing to the intervention of the Markfed.

There were no takers for medium and low grade varieties of tobacco before the Marfed’s entry into the market. Now, the traders are offering a better price for the F3, F4, F5 and F8 grades.

The traders are now offering ₹150 to ₹160 for a kg of medium grade F3 variety to farmers, which is ₹20 to ₹30 per kg more than the earlier price, said an elated group of farmers at the Ongole II auction platform.

“The rejection rate used to be 25% to 30% hitherto. Now, the traders are offering more than the prices fixed by the Markfed for the low grade varieties such as F4, F5 and F8,” they said.

Tobacco trade picked up pace after the Markfed gave a bank guarantee of ₹120 crore for making purchases from all tobacco platforms in the Southern Black Soil (SBS) and Southern Light Soil (SLS) regions.

Sources in the Tobacco Board said that 50% of the arrivals had been lifted by the Markfed at D.C. Palli.

After taking stock of the situation, Markfed Commissioner P.M.Pradyumna assured the farmers that rejections would be a thing of the past.

NOG produce

“The Marfed will purchase all the produce brought to the auction platforms by farmers irrespective of the quantity. In deference to the wishes of farmers, the Markfed will fix the price for non-original grade (NOG) tobacco and start making purchases from Monday,” he added.

“I am glad that the Marked has lifted 14 lakh bales of produce so far, offering better prices. I thank Chief Minister Y.S. Jagan Mohan Reddy for the decision of a bold market intervention,” said former MP and Virginia Tobacco Farmers Welfare Association Honorary president Y.Sivaji.

Contract farming

Meanwhile, farmers led by former Tobacco Board member P. Bhadri Reddy pressed for announcement of a minimum guaranteed price for various grades of tobacco at the time of fixation of crop size so that the farmers could decide whether or not to cultivate the crop.

They also suggested introduction of contract farming as in the case of white burley tobacco, saying that the farmers had become captive growers while meeting the needs of domestic cigarette manufacturers and exporters without any assured return.

If needed, the government should consider declaring crop holiday for the farmer, taking advantage of the demand-supply situation.

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