₹200 MSP Made Mandatory for Tobacco Procurement, to Benefit 1.2 Lakh Farmers

The Andhra Pradesh government has tightened its oversight of tobacco procurement by mandating a minimum purchase price of ₹200 per kg and warning companies against delaying procurement despite earlier commitments. The decision was taken during a high-level review of the ongoing marketing season, as concerns mounted over slow purchases, surplus production, and falling prices affecting tobacco growers across the state.

Chairing the review meeting at the State Secretariat , Chief Minister N. Chandrababu Naidu expressed dissatisfaction over the sluggish pace of procurement and questioned why purchases were progressing without major disruptions in neighbouring Karnataka while growers in Andhra Pradesh continued to face uncertainty. He directed tobacco-buying companies to immediately step up procurement and ensure that no tobacco is purchased below the government-mandated minimum support price.

The Chief Minister said farmers invest months of effort into cultivating the crop and deserve a remunerative return. He instructed procurement agencies to expedite auction operations and eliminate delays that could leave growers under financial stress. Companies were also cautioned against failing to honour procurement commitments made before the marketing season.

According to officials, 28 tobacco companies had submitted procurement indents for the current season. However, several buyers have fallen well short of their commitments. The Chief Minister warned that companies failing to fulfil their declared procurement targets would face action, describing such lapses as irresponsible and detrimental to farmers' interests.

He specifically reviewed the performance of ITC Ltd , Godfrey Phillips India Ltd , and VST Industries . Together, the three companies had committed to procure 95.5 million kg of tobacco but had purchased only 17.6 million kg so far, creating anxiety among growers awaiting sales.

Company representatives attributed the slowdown to weak global demand , declining exports, and excess production. They said procurement requirements had reduced because of subdued international demand and higher inventories but assured the government that purchases would continue despite the challenging market conditions.

Officials informed the meeting that the state is facing a significant supply-demand imbalance. While companies collectively submitted procurement indents for 142 million kg , farmers produced nearly 232 million kg , leaving an estimated surplus of 90 million kg . The oversupply has slowed procurement and exerted downward pressure on prices.

Andhra Pradesh is among India's largest producers of Flue-Cured Virginia (FCV) tobacco , with cultivation concentrated in Prakasam, Bapatla, Palnadu, Guntur, SPSR Nellore, East Godavari, and West Godavari districts. Since FCV tobacco is largely export-oriented, domestic prices are heavily influenced by global demand and overseas market trends. The Tobacco Board , functioning under the Ministry of Commerce and Industry , regulates FCV tobacco production, auction platforms, and exports.

Reiterating that there would be no compromise on enforcing the ₹200 per kg MSP , the Chief Minister directed procurement agencies and tobacco companies to complete purchases at the earliest and ensure farmers receive fair prices without further delay. He said the government would continue to closely monitor the procurement process to prevent any hardship for tobacco growers.