Setting price for new
October 10, 2011
THE Pakistan Tobacco Board has initiated consultations with
farmers to determine the cost of tobacco production and its
procurement prices for the upcoming year.
Committees, comprising representatives from main tobacco
companies, PTB, Agriculture Policy Institute, Crop
Commissioner and growers, have been formed to assess and
determine the cost of production (CoP) and the minimum
tobacco price: the price for surplus tobacco above the
purchase target of companies, and weighted average price
(Wap) — the legally bound price for the annual tobacco
purchase targets of the companies — for the coming year.
Secretary PTB Numan Bashir said that detailed discussions
between growers and tobacco companies had been organised in
Mansehra and the process was underway in Swabi these days.
Surveys and interviews in the Virginia-tobacco-rich
districts of Mardan, Buner and Swat will also be organised
The PTB announces the minimum price for tobacco before the
start of the cultivation season till December each year. It
also calculates on quarterly basis the Wap on the basis of
daily purchase reports submitted by tobacco companies.
For fixation of minimum prices, increase in CoP, the minimum
and weighted average prices of tobacco the preceding year,
rate of inflation, global crop trends and increases in
prices of other agricultural commodities and raw materials
are taken into account. But farmers say they have never been
paid fair prices.
A segment of farmers say: “Apart from the fact that farmers
were not given sufficient time to prepare for the meetings,
the exclusion of genuine farmers’ representatives and
presence of the cronies of tobacco companies in the
committees,( who are not even tobacco growers as was the
case in Swabi), the CoP meetings were of no benefit to
farmers,” said Asfand Yar Khan, a farmer from Swabi.
“Then the production cost spelled out by farmers is not
accepted and is reduced. The illiterate farmers cannot fill
the complex CoP sheets themselves and are filled by the PTB
officials or representatives of tobacco companies. The
farmers just put their thumb impressions over these forms
while hardly a few could sign them, though without knowing
the contents,” he said.
“Our cost of production has increased but the companies are
not ready, and the PTB is not forcing them, to offer
proportionate increase in prices. A hectare of tobacco crop
fetched me Rs3,24,500 last season while my expenses stood at
Rs300,000. Per kg price of tobacco was in the range of
Rs100-112 last year though it should have been over Rs160,”
“The hybrid seeds supplied by tobacco firms, against the
claims, have decreased the yield from 3,200 kg per hectare
to 2,100kg per hectare. Companies ask us to shorten the stem
and enlarge leaves but as farmers are mostly untrained, they
are unable to use NPK instead of nitrate, and because of
volatile weather, the yield falls considerably. This
explains why farmers opt for non-recommended varieties
(NRVs) that have more yield and mature early and facilitates
maize cultivation in time.
As per MLO 487, farmers should be informed about official Mp
and Wap before the end of October but it is delayed till
December to their detriment,” he argued.
Khyber Pakhtunkhwa Assembly in December last year had
unanimously criticised the alleged exploitation of growers
by tobacco companies. Abdul Akbar Khan, mover of the
resolution, had said that the PTB fixed prices in
collaboration with companies without considering the
growers’ point of view.
Another farmer Abdur Raziq from Swabi, says delayed payment
by firms exposes growers to financial difficulties. “I had
purchased tobacco from farmers on deferred payment and sold
it to a company but it hasn’t paid my dues so far. But what
could I say when farmers’ arrears outstanding since Ramazan
are yet to be paid,” he informed.
Mr Bashir, PTB secretary, agreed that since prices of
various inputs like wood, fertiliser, pesticides, labour
etc. have jumped up, prices of tobacco should also be
“We are assessing the production cost. Hopefully, prices
will register significant raise as per expectations of the
growers. Last year, Wap was Rs112.64 per kg. Companies even
offered up to Rs125 for both recommended tobacco and NRVs.
As per law, no one can purchase tobacco at less than the
Wap,” he said.
“To solve the problem of NRVs, the PTB is importing new high
yielding and early maturing tobacco seeds from Brazil this
These will fulfill the basic demand of farmers. The seeds
would be tested in the tobacco research stations and if
found compatible with our environment, would be distributed
free of cost among farmers from next year,” Mr Bashir said.
Regarding favouritism in appointment of farmers as CoP
committee members, he said the PTB supervised the
appointment and working of committees and was there to
ensure that merit was not compromised in the entire process.
Courtesy: The DAWN