IN the past minimum prices were fixed and notified by the federal government for various types/grades of tobacco in the country under the relevant laws.

However, the federal government has discontinued the fixation/notification of minimum prices for tobacco for the last few years. But the Pakistan Tobacco Board has continued fixation of minimum indicative prices for various types/grades of tobacco in the country.

Besides fixation of minimum prices of tobacco, the weighted average prices of flue-cured Virginia and White Patta tobaccos stand protected under the provincial laws in Khyber Pakhtunkhwa.

It has been the persistent demand of tobacco growers that prices for tobacco be fixed before sowing of tobacco nurseries so that they could decide whether to grow tobacco or go for other competing crops.

At a meeting held at the Pakistan Tobacco Board’s office in Peshawar on Dec 14, 2011, a minimum indicative price of Rs 117 a kg was fixed for flue-cured Virginia tobacco crop 2012.

It may be mentioned here that the minimum indicative price gives a guarantee to growers that even in surplus supply situation prices will not go down below the minimum indicative prices.

However, tobacco growers were not happy with the minimum indicative price of Rs117 a kg and had shown great resentment over it.

It may be mentioned that neither the Pakistan Tobacco Board (PTB) was in existence at the time of fixation of minimum prices nor there was a chairman of it.

According to media reports, a two-member committee was set up by the federal ministry of Food Security and Research to look into tobacco prices, assess its present cost of production and recommend new prices for tobacco crop 2012, if necessary.

The committee, led by Dr Muhammad Sharif, director-general, National Agricultural Research Council, after carrying out an exercise suggested raising minimum price of tobacco to Rs183.48 a kg from Rs117 a kg recommended by the PTB for the 2012 crop.

The Federal Crop Commissioner of Pakistan later signed the above-mentioned report of the committee and notified the new price. The growers have welcomed the decision, but tobacco companies and the board have questioned it.

A meeting of all stakeholders was called in the federal ministry of commerce on June 18 last to deliberate over the issue, but remained inconclusive.

The tobacco crop 2012 has already matured and growers have cured most of the crop in the curing farms. Tobacco purchases are usually commenced in the first week of July, every year, especially in the plain areas of Charsadda, Mardan, Swabi and Nowshera districts. But with the tussle over tobacco price fixation, there is a slow pace of tobacco offerings at depots of tobacco companies. There is every likelihood that the cured stocks of tobacco lying in storages may be destroyed in the absence of immediate disposal as growers have no adequate storage facilities. This will be a notional loss. The matter needs the  immediate attention of relevant authorities to resolve the issue and enable the growers to dispose of their cured stocks on time and save them from colossal financial losses.

KHAN FARAZ Peshawar