Tobacco farmers in Mysuru district are navigating a season of anxiety and cautious hope. While the current market offers a price of up to Rs 320 per kilogram for high-quality leaves, a looming increase in taxes on tobacco products has sparked fears of a significant price crash. However, a section of the industry remains optimistic, predicting a price surge after the Sankranti festival.
Current Market Rates and Looming Tax Threat
This season, premium tobacco in Mysuru's district markets has not exceeded Rs 320 per kg. The price spectrum currently ranges between Rs 230 and Rs 320 per kilogram. On average, high-grade tobacco fetches Rs 311.67 per kg, medium quality sells for Rs 290.79 per kg, and lower-grade leaves are bought at about Rs 260.53 per kg.
The primary concern for growers stems from the central government's decision to increase the tax on popular tobacco items like cigarettes and pan masala, effective February 1. Farmers argue that this will directly impact the demand and price of their raw produce.
Farmers Voice Their Concerns and a Call for Fair Price
Rakesh, a tobacco cultivator with an MBA degree, explained the direct link. "When the tax goes up, naturally there will be a drop in demand. It will affect the prices of raw materials," he stated. He also highlighted a parallel challenge: smuggling. "In India, the biggest challenge is smuggling of tobacco products such as cigarettes. Many allege that 1 in every cigarette sold in our country is sold illegally. This tax hike may result in more smuggling," Rakesh added.
Echoing this apprehension, Hosuru Kumar, the Mysuru district president of Karnataka Rajya Raitha Sangha and a fellow farmer, pointed to the ambiguity and unfairness in the system. "The tobacco companies are making huge profits while the farmers are getting low rates," he said. Kumar strongly urged for the implementation of the Swaminathan committee formula to ensure growers receive a remunerative price for their crop.
Divergent Views: Export Demand Offers a Ray of Hope
Contrary to the widespread fear, some industry voices forecast a price increase. Former Tobacco Board member Vikram Gowda presented an optimistic outlook based on export dynamics. He noted that a substantial 80% of the tobacco grown in Karnataka is exported. According to Gowda, the domestic tax hike will have little bearing on these international orders. "The tax hike on tobacco products will not affect the prices. The prices are expected to touch Rs 400," he predicted, especially after the Sankranti festivities when export demand typically picks up.
Medical Community Supports Tax Hike, Suggests Crop Shift
The tax increase has found a strong supporter in the medical fraternity. Dr. BS Ajaikumar, Executive Chairman of HCG Cancer Centres and founder of Bharath Hospital & Institute of Oncology, welcomed the government's move. He advocated for even stricter measures, stating, "I support banning all kinds of tobacco products." Recognizing the impact on farmers, Dr. Ajaikumar suggested that they should be supported in transitioning to alternative crops. He further advised the central government to utilize the additional tax revenue to fund awareness campaigns about the severe health consequences of tobacco use.
As the February 1 tax implementation date approaches, Mysuru's tobacco farmers are left in a state of suspense, caught between the fear of reduced domestic demand and the hope of robust export-driven price recovery in the weeks following Sankranti.
