The Hindu : New Delhi News : Tobacco output target in State hiked

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Wednesday, Mar 19, 2008
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Tobacco output target in State hiked

Special Correspondent

NEW DELHI: The Centre will increase the crop size for tobacco production in Karnataka for the year 2008-09, subject to a mid-term review. The Tobacco Board has recommended a crop size of 100 million kg as against 95 million kg, which is the highest crop size ever fixed, and even higher than the actual production ever recorded.

Making a statement in the Lok Sabha here on Tuesday — in response to a calling attention by Janata Dal (Secular) supremo H.D. Deve Gowda on the need to increase the per barn quota for excess production of tobacco in Karnataka and to supply fertilisers at subsidised rates to tobacco growers — Minister of State for Commerce and Industry Jairam Ramesh said, in keeping with the long-standing demand from tobacco farmers for subsidy on Sulphate of Potash (SOP) fertiliser, the Ministry is in consultation with the Department of Fertilisers to bring SOP in the subsidy regime and a note would be put up before the Cabinet in a couple of months. He said the total subsidy would be to the tune of Rs. 12,000 crore.

Views sought

Mr. Ramesh said, in the wake of the wishes expressed by the tobacco growers, the Government has also sought views of the Tobacco Board on whether instead of reducing penalties, the crop size needs to be increased keeping in view the market demand. The higher crop size, if supported by market demand, would amount to lower overall penalties even with penalty rate remaining the same. The view of the board is awaited, Mr. Ramesh said. The penalty for excess production, beyond authorised crop size, is currently Rs. 2 a kg and 15 per cent service charges, fixed after deliberations in 2005-06 when the Government came to the conclusion that penalties imposed on marketing of excess or unauthorised crop will have a deterrent value if they are large.

Annual decision

Every year, the Tobacco Board fixes a crop size after considering the domestic and international demand, left over stocks, the projected demand by traders and exporters and the international production scenario. According to the Minister, India is also a signatory to the Framework Convention on Tobacco Control under the World Health Organisation and it is mandatory for India to fulfil the commitment by taking up appropriate measures to reduce the demand as well as supply of tobacco.

However, the crop size was being increased because of an increase in the demand for Indian traditional tobacco the world over, particularly China, as many countries had decreased tobacco production, Mr. Ramesh said.

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