THE coming tobacco season will see yet another standoff between the growers and tobacco companies as the cultivators’ grievances mount.

Protest demonstrations and road blockades in the tobacco-growing areas of the North Western Frontier Province have become an annual routine and the same is expected this year.

The growers are not satisfied with the increase in tobacco support price in view of the rising cost of production, delays in fixing prices and lack of representation of the genuine farmers’ association in the Pakistan Tobacco Board.

Ikramullah Khan, President Anjuman-i-Kashtkaran Tobacco NWFP, laments that the cost of tobacco cultivation is ever-increasing, but its support price is not revised accordingly.

According to him, the per hectare current cost of production of Virginia tobacco in Peshawar valley is Rs2,36,750 for growing 2,500 kilogramme of tobacco.

Thus cost per kilogramme comes at Rs94.7, whereas the PTB has recently hinted a price between Rs65 and Rs70 per kilogramme that would cause a loss of about Rs30 per kilogramme to the growers.

In his view, the low price structure discourages cultivation of the cash crop which contributes annually Rs40 billion to the national exchequer as Central Excise Duty (CED) and Sales Tax (ST).

Khan claims that the cash crop has witnessed a major decline in last one decade because of PTB’s faulty policy.

Against a total yield of 137 million kilogramme in 1966, the average annual production is now not more than 75 million kilogramme.

”Majority of the tobacco growers have switched over to other alternative cash crops,” says Mr Khan, who believes the shortage is met by India.

“Indian tobacco export next season is likely to touch Rs16.05 billion because the growers will increase their crop by 60 per cent. The growers in India get a fair price for their crops.”

Per kilogramme cost of production in India is estimated at Rs37.55 (in Pak rupee), whereas their average price in 2007 stood at Rs56.6 per kilogramme that means the growers earn a decent profit of Rs19 per kilogramme, maintains Khan.

He complained that In Pakistan, where according to the growers, the average per kilogramme cost of production was around Rs94.7, the support price given in 2007 was Rs62, showing a loss of Rs32.7 per kilogramme.

Tobacco is the only cash crop, which enjoys constitutional protection in respect of price fixation. By law, the PTB cannot lower the per kilogramme price of tobacco compared with the previous purchase season. But why PTB is failing to satisfy the growers despite this law?

Mr Khan believes that the PTB cannot free itself from the influence of multinational companies. The companies pressurise the PTB and manipulate policies for their own benefits.

The growers’ grievances can be removed by two different ways. First, the government abolishes the existing purchase system wherein the growers are required to sign agreements with tobacco companies well before sowing of the crop and replace it with open auction as prevails in India.

The second proposal , also supported by the growers, is that the support price is announced well before the plantation season giving an opportunity to farmers to opt for any crop.

Currently, the tobacco companies submit their yearly demands to the PTB following which the growers sign agreements with them between November and October.

Whereas, the PTB announces support price between Feb and June following which purchase season begins in July each year.

This practice leaves the growers with no option but to agree to whatever price is offered by the companies even though it causes them immense financial losses every year, says a grower.

The growers say the PTB deliberately announces the prices between February and June, trapping them as they are not given a choice to grow any alternate crop if they are not happy with the purchase price of tobacco.

According to Mr Khan, on the constant demands of growers, the PTB in its 124th board meeting had decided to announce tobacco prices in October and November, enabling the farmers to make a choice between growing tobacco or any other crop.

”Unfortunately, the prices of tobacco have still not been notified, entrapping the farmers to grow tobacco as the time for sowing other crops has already elapsed,” explains Mr Khan.

Making the growers a part of decision-making process is also one of the contentious issues between the growers and the PTB.

Some times back, the provincial government had decided that four registered associations of the farming community would give their nominees to be notified as the PTB members.

This decision was implemented, but on the expiry of the existing members’ term, three persons from a single body were nominated as growers’ representatives in the PTB without taking the consent of other associations.

The presidents of three registered associations, the Kissan Board, the Anjuman-i-Kashtkaran Zamindaran and Anjuman-i-Kashtkaran Tobacco, have written to the federal government not to issue notification of the PTB members until their reservations are not resolved but to no avail.

The tobacco companies have their own clarification to the grievances of the growers. An executive of a multinational tobacco company explains that the companies operate within the parameters determined by the PTB.

“We have no concern with price fixation as it is determined by the PTB. Under the PTB rules, the companies are strictly bound to pay every year a price for tobacco, which is not less than the previous years,” he remarks.

The registered companies, he says, sign agreements with the growers before starting the purchase season that means the companies are bound to purchase tobacco from the growers.

A senior official at the PTB, when approached for knowing his version, explained that a Grades and Price Revision Committee exists in the PTB that decides each year the minimum or support prices for each type of tobacco. This committee also has growers as its members, said the official.

Referring to cost of production, the official informs that a team of the PTB along with growers’ representatives recently toured the tobacco-growing districts of Mardan, Buner, Charsadda, Swabi and Mansehra mainly to ascertain the real cost of production.

“The growers have verified that the cost of production is not as high as portrayed by their associations,” the official said and clarified that the support price for the forthcoming season would be determined keeping in view the cost of production worked out by the team.

The official, however, agrees to the growers’ demand of announcing support price well before the sowing season of the crop.

He anticipates that with the commencement of the next marketing season, the PTB will be in a position to announce the support price so that the growers could be provided with an opportunity for opting for any cash crop financially viable for them.