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Business News/ News / India/  Govt grants interest-free loans to Andhra tobacco growers
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Govt grants interest-free loans to Andhra tobacco growers

The tobacco industry employs approximately 36 million people, including six million farmers and 20 million farm laborers

India is the world’s second-largest tobacco producer after China and accounts for 9% of total global production.. REUTERS/Rajendra Jadhav (INDIA)Premium
India is the world’s second-largest tobacco producer after China and accounts for 9% of total global production.. REUTERS/Rajendra Jadhav (INDIA)

NEW DELHI : The Centre on Monday approved interest-free loans to tobacco growers in Andhra Pradesh affected by cyclone Michaung in December, according to the commerce ministry.

The Tobacco Board had requested the Centre to approve interest-free loans after the cyclone, which caused heavy rains in the state, damaged crops in several regions.

In January, Mint reported that the Centre was planning to provide interest-free loans for tobacco farmers. 

The Centre has also allowed the sale of FCV or flue cured virginia tobacco on the Tobacco Boards auction platform and waived off penalties on the sale of excess production of registered growers and unauthorized production of unregistered growers in Karnataka.

Around 20% of the total planted area, which is 14,730 hectares, was affected by the cyclone. The estimated area planted in the current crop season in Andhra Pradesh was 75,355 hectares. The tobacco crop suffered due to washing out of crop, drowning of standing crop, waterlogging, and the resultant wilting of standing crop.

"In view of the hardships faced by FCV Tobacco growers in Andhra Pradesh, the government has approved 10,000 interest-free loan from the Grower Welfare Fund of Tobacco Board to the grower members of the fund, whose crops were damaged due to Michaung cyclonic rains in Andhra Pradesh," the commerce ministry said in an official statement.

FCV tobacco is mainly produced in Andhra Pradesh and Karnataka. The crop season is ongoing in Andhra Pradesh, which has 42,915 FCV tobacco growers. Auctions are also being conducted in Karnataka, which has 39,552 growers. The Karnataka government has declared drought in all except one tobacco-growing taluk.

Michaung hit Andhra Pradesh on 5 December and caused huge losses to farmers in the state, which accounts for a fifth of India’s tobacco production. Eluru, East Godavari, Kakinada, Prakasam, Nellore, Bapatla, Palnadu, and Guntur were the worst affected regions.

India is the world’s second-largest tobacco producer after China and accounts for 9% of total global production. Gujarat is the highest contributor with 45% of total production, followed by Andhra Pradesh and Uttar Pradesh.

The planting season starts around November-end and continues till mid-January. The harvesting of crops starts in March-end and continues till June. India exported tobacco worth $1.22 billion in the first ten months (April 2023-January 2024) of the current fiscal year. The major exporting destinations are Belgium, the UAE, Indonesia, Russia, Korea, the US, Yemen, Egypt, Singapore, Netherlands, Philippines, Turkey, and Nepal.

The tobacco industry employs approximately 36 million people, including six million farmers and 20 million farm laborers. Besides, 10 million people are engaged in processing, manufacturing, and exports, as per a report by India Brand Equity Foundation (IBEF), a body under the commerce ministry.

The agriculture ministry promotes the crop diversification programme under Rashtriya Krishi Vikas Yojana - Remunerative Approaches for Agriculture and Allied Sectors Rejuvenation. This programme encourages tobacco farmers in various states, including Andhra Pradesh, to transition to alternative crops.

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Published: 26 Feb 2024, 09:19 PM IST
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