Chief Minister Chandrababu Naidu directs tobacco firms to stick to procurement commitments, expedite auction process

Andhra Pradesh Chief Minister N. Chandrababu Naidu on Wednesday directed tobacco companies to immediately step up procurement and expedite the auction process to restore confidence among farmers.

He warned companies against delaying purchases despite committing to procurement quantities, saying the government would take stringent action against firms that inconvenience farmers.

Reviewing the procurement situation in the State at the Secretariat with officials and representatives of the tobacco companies, Mr. Naidu expressed dissatisfaction with the functioning of the Tobacco Board. He questioned why Andhra Pradesh was facing procurement-related issues when similar problems had not surfaced in neighbouring Karnataka.

Mr. Naidu cautioned tobacco companies against damaging their goodwill by failing to support farmers. He said if farmers were forced to shift to alternative crops due to poor market support, the companies themselves would face long-term consequences.

The Chief Minister reviewed the procurement commitments submitted by 28 tobacco companies and compared them with the quantities purchased so far. He made it clear that the government would not tolerate companies submitting procurement indent commitments without honouring them. He directed all the companies to ensure procurement at, or above, the minimum support price of ₹200 per kg fixed by the State government.

Taking serious note of the slow pace of procurement by major manufacturers, Mr. Naidu pointed out that ITC Limited, Godfrey Phillips India Ltd., and VST Industries Ltd. had together submitted indent commitments for 95.50 million kg of tobacco, but had purchased only 17.6 million kg so far.

He said it was unacceptable that the government had to conduct a review on the same issue for the fifth time during the current season, describing it as evidence of the companies’ negligence.

Representatives of the tobacco companies, however, told the Chief Minister that the current crisis was largely due to farmers cultivating tobacco beyond the demand projected through indent allocations. They said the industry had already procured quantities exceeding immediate requirements and was also facing a decline in exports, affecting its purchasing capacity. Despite these challenges, the companies assured the government that procurement would continue.

Officials informed the meeting that the absence of an open market for tobacco had further aggravated the situation. They explained that while companies had collectively placed indents for 142 million kg, farmers produced 232 million kg during the current season. The significant gap between demand and production had resulted in a sharp fall in prices and slower procurement.

Ministers K. Atchannaidu, Anam Ramanarayana Reddy, Gottipati Ravi Kumar, and Dola Bala Veeranjaneya Swamy, along with public representatives from the erstwhile Prakasam district and senior government officials, attended the review meeting.