The Markfed, in 2020, had done a first-of-its-kind intervention in the market to bail out the farmers who were struggling to find buyers for low grade varieties during auctions.
Now, the marketing agency is gearing up for a bigger role for itself by adding value to the tobacco leaf and by exporting it to different countries.
It created history by exporting to the U.S. on a pilot basis 120 tonne of tobacco through the Chennai port after processing this week. Six containers of tobacco weighing 20,000 kg each were sent to Virginia, known for a vibrant tobacco industry, on Monday, said a Markfed official.
On earlier occasions, both the Union and State governments had shared the cost of providing bonus price to the growers to avert a crisis.
But in 2020, the Markfed, on its own, had procured 13 million kg during the auctions held by the Tobacco Board when the prices for low grade varieties plummeted to a new low of about ₹50 per kg, even if it meant incurring losses by earmarking ₹108 crore for the purpose. It was the third largest firm in the purchase of the produce then in terms of quantity.
It had sold in the domestic market 9.5 million kg procured in raw form to the traders outside the auction platforms. The remaining produce was processed at a cost of ₹25 crore.
Taking advantage of the bullish market condition, an export agency had been entrusted with the task of marketing the processed tobacco to the traders abroad, the official sources said.
Based on the experience, the Markfed saw a more proactive role in the market in the future in the interest of the farmers and protect them from traders driving down the prices.
“The State government is keen on creating a healthy competition in the market. We are ready to procure one-third of the crop to create market buoyancy,” Andhra Pradesh Agriculture Mission chairman N.V.S. Nagi Reddy said in a conversation with The Hindu.
“The State government is keen to intervene in the market as and when needed to ensure a fair price to the farmers’ produce, be it tobacco or paddy, or any other crop,” he added.
