Review of tobacco prices

Published May 14, 2012 02:56am

TOBACCO growers in Khyber Pakhtunkhwa hope to get a ‘fair’ support price for their crop following a positive response from both the federal and provincial governments to their call for a review of an earlier decision of the Pakistan Tobacco Board in this regard.

First, it was the KP Chief Minister Amir Haider Khan Hoti who recently had called a special meeting of all stakeholders — tobacco growers, dealers, companies and the Pakistan Tobacco Board (PTB) — to resolve the grievances of farmers about the support price for their crop.

And now, following legal action and agitation by the growers, a high-powered committee sent by the federal government is talking to them to asses the cost of production (CoP) of the crop that earns billions for the federal government.

Farmers said Federal Minister for Food Security and Research Israrullah Khan Zehri had sent the committee headed by Director-General National Agriculture Research Council Dr Muhammad Sharif to suggest a new support price for tobacco, if needed.

The committee was given a warm welcome by tobacco growers in Swabi. “ It met and interviewed tobacco growers here and would do the same in Mardan, Charsadda and Mansehra,” a farmer said.

“We hope the committee will assess the actual cost of production and recommend a fair tobacco support price and the federal ministry of commerce will notify the new price for this season,” said Liaqat Yousafzai, general secretary of the Kashtkar Coordination Council.

When contacted, Dr Sharif said the CoP assessment process would continue for 10 days in various tobacco-growing districts and views of growers would be sought.

“The terms of reference of our committee are to assess the actual per kg cost of production and identify factors for stated low tobacco support price. Later on the basis of the data collected and empirical evidence, the committee would present its findings and recommendations to the federal government,” he said.

Mr Sharif said “farmers have told us that CoP for tobacco has increased while they are receiving very low support price. We are collecting data. It will be analysed and hopefully the committee will put forward its report to the chairman Pakistan Agriculture Research Council after six days.”

The committee doesn’t intend to take views of national and multinational tobacco companies and tobacco dealers on the CoP. But, according to a source, tobacco companies also plan to prepare a counter-report which they will present to the government.

Mr Yousafzai said farmers in Swabi had informed the committee members that while their average CoP was around Rs240/kg, the PTB had fixed the minimum price at Rs117/kg. “We want to be paid as per the CoP and the minimum price must be fixed taking into account the increase in the minimum and weighted average prices last year, rate of inflation, global tobacco prices, surge in prices of other crops and raw materials and our profit margin,” he said.

Four months ago, the PTB had fixed minimum price of tobacco at Rs117/kg but the growers had rejected it. Later they challenged it in the Peshawar High Court and also started agitation against it.

Asked why the earlier price should be revised, Mr Yousafzai said it had to be. “The Rs117/kg price is very low, unrealistic and illegal as it was announced when the PTB had neither a chairman nor sufficient members, which was a mandatory legal requirement. The last PTB Chairman had retired one and a half years ago and since then the board was run by its secretary.

We had challenged the lacuna in the court and its decision has come. This is why the committee was sent,” Mr Yousafzai added.

“The PTB is the root cause of all of farmers’ woes. It’s an open secret that some PTB officials have formed tobacco companies. They make sure that tobacco prices are fixed to benefit them. The committee report, we are hopeful, would expose the mutual connections between tobacco companies and some PTB officials,” he added.

Another farmer from Swabi alleged that “some PTB and commerce ministry officials own unregistered tobacco firms and were conniving with the powerful tobacco companies against growers.”

A farmer from Mardan complained that now 29 members have been appointed in the PTB on political basis mostly from Sindh.

Mr Yousafzai, who is also a member of the KP Chief Minister’s committee on tobacco, says “the committee has recommended disbandment of the PTB, awarding crop status to tobacco, and handing over it to the province after the 18th Constitutional Amendment.”

The Khyber Pakhtunkhwa assembly in December 2010 had, through a resolution, resented the alleged exploitation of growers by tobacco companies.

More From This Section

Stock market boom

Some market players attribute the equities’ good performance to rising foreign portfolio investment, the country’...

Ramazan economy

The collective productivity of the nation falls, but family spending peaks during Ramazan

Rupee mixed against dollar

The dollar appreciated by 19 paisas in interbank dealings but depreciated by 10 paisas in the open market last week

Comments (0) (Closed)