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The tobacco business and marketing are regulated through federal and provincial laws of Khyber Pakhtunkhwa.
And the Pakistan Tobacco Board tries to develop a co-relationship between crop production and requirements of the tobacco industry.
According to legal requirement, tobacco manufacturing and exporting companies are required to indicate their tobacco requirements by October 21 of each year in respect of ensuing crop to the PTB. After discussions between the Board and other stakeholders like growers, buyers and dealers, etc., and taking into account factors like crop size, prices, domestic usage and exports, these figures are finalised. The purpose of this exercise is to have a balance between the demand for tobacco by the companies and the crop size.
The following requirements for 2012 crop indicated by companies/dealers have been announced/publicised by the PTB to inform the growers to plan tobacco production for 2012 crop accordingly and to avoid crop surplus/shortage:-
The projected requirements for tobacco crop 2012 of flue-cured Virginia, dark air-cured and white patta are lower by 3, 34 and 2.3 per cent compared to the requirements by tobacco companies during 2011 while that of Burley is higher by 110 per cent.
The tobacco growers have been advised to plan production of tobacco crop 2012, keeping in view the set purchase targets of tobacco industry. They have been also advised to execute agreements with tobacco firms of their own choice so that no problem is encountered in its proper marketing at fair prices. Also, the companies will purchase tobacco according to their indicated requirements from ‘contracted growers’ or ‘agreement-holders’ and not from ‘Azad growers’.
The projection efforts are aimed at securing a balance between tobacco demand and supply. These efforts are offset, in case tobacco is produced without giving appropriate consideration to the execution of agreements. This has led to cultivation by growers of a crop size in excess of the demand resulting in over-supply and consequent price depression, not to mention difficulties in disposal of crop by small growers facing serious financial distress. The concluding message is that tobacco growers should not grow Virginia tobacco without agreements, while tobacco companies should ensure compliance with the provision of law which envisages execution of agreements for their targeted requirements by the end of December, each year.
It merits a mention that tobacco growers are advised to sow only tobacco varieties recommended by the PTB as per provision of the agreement executed with tobacco companies. However, the tobacco companies had reluctantly purchased the non-recommended varieties of flue-cured Virginia tobacco (locally known as Swati) grown on larger areas (almost 80 per cent) of tobacco growing districts of Mardan, Swabi and Charsadda during 2011 tobacco season.
