SWABI, Aug 28: The unauthorised tobacco agents deputed by major entrepreneurs and companies have been buying flue-cured Virginia (FCV) tobacco from farmers, inflicting heavy financial losses on the government exchequer by avoiding different direct and indirect taxes imposed by the federal and Khyber Pakhtunkhwa government on purchase of cured tobacco crop, Dawn learnt here on Saturday.

The sources said that the cess development tax is Rs2 per kilogramme and tobacco cess Rs1.80 and the remaining taxes are on the cigarette manufacturing companies. The cess development tax goes to the provincial government, which is then transferred to parliamentarians for development work and the tobacco cess goes the Pakistan Tobacco Board (PTB).

Under the rules, both the national and multinational companies must announce their required tobacco quota through the PTB before start of tobacco cultivation each year. The companies and growers should also execute agreements following which the companies are bound to buy tobacco directly from growers, said the sources.

However, the sources said that the companies had never announced their correct required quota. They said that for current year the total projected production of Virginia tobacco was over 100 million kilogrammes, while demand by all the buyers together stood at 72 million kilogrammes.

It is due to this gap that the companies employ agents and take FCV from their designated agents who buy the crop at low prices. The growers have been demanding that all the companies should purchase tobacco from them directly and the agents should be banned.

At present, purchase of FCV is underway in tobacco growing areas, including designated purchase centres of the companies in different regions. Sources in the companies said that so far they had bought about 80 per cent quota of the FCV and the remaining would be completed soon.

“The total FCV demand of various companies in the current year is 72 million kilogrammes and major chunk of this quota would be purchased by the Pakistan Tobacco Company and Philip Morris International, Pakistan,” said one of the leaf managers.

“We have cultivated spade-70, locally known as Ali Sheray, and it is a non-recommended variety, but the companies leaf managers have been buying it,” said Khan Gul of Maneri Bala.

Kashthkar Coordination Council general secretary Liaquat Yousufzai recalled that earlier the issue of non-recommended variety was raised by the companies’ officials to kill the growers’ demand for increasing tobacco prices commensurate with the rise in expenditures and prices of commodities.

He alleged that the companies had always used tactics to keep the growers under pressure and acquire the crop from them on low prices.