Review of tobacco prices

First, it was the KP Chief Minister Amir Haider Khan Hoti who recently had called a special meeting of all stakeholders — tobacco growers, dealers, companies and the Pakistan Tobacco Board (PTB) — to resolve the grievances of farmers about the support price for their crop. And now, following legal action and agitation by the growers, a high-powered committee sent by the federal government is talking to them to asses the cost of production (CoP) of the crop that earns billions for the federal government.

Farmers said Federal Minister for Food Security and Research Israrullah Khan Zehri had sent the committee headed by Director-General National Agriculture Research Council Dr Muhammad Sharif to suggest a new support price for tobacco, if needed. The committee was given a warm welcome by tobacco growers in Swabi. “ It met and interviewed tobacco growers here and would do the same in Mardan, Charsadda and Mansehra,” a farmer said. “We hope the committee will assess the actual cost of production and recommend a fair tobacco support price and the federal ministry of commerce will notify the new price for this season,” said Liaqat Yousafzai, general secretary of the Kashtkar Coordination Council.

 When contacted, Dr Sharif said the CoP assessment process would continue for 10 days in various tobacco-growing districts and views of growers would be sought. “The terms of reference of our committee are to assess the actual per kg cost of production and identify factors for stated low tobacco support price. Later on the basis of the data collected and empirical evidence, the committee would present its findings and recommendations to the federal government,” he said. Mr Sharif said “farmers have told us that CoP for tobacco has increased while they are receiving very low support price. We are collecting data. It will be analysed and hopefully the committee will put forward its report to the chairman Pakistan Agriculture Research Council after six days.”

 The committee doesn’t intend to take views of national and multinational tobacco companies and tobacco dealers on the CoP. But, according to a source, tobacco companies also plan to prepare a counter-report which they will present to the government. Mr Yousafzai said farmers in Swabi had informed the committee members that while their average CoP was around Rs240/kg, the PTB had fixed the minimum price at Rs117/kg. “We want to be paid as per the CoP and the minimum price must be fixed taking into account the increase in the minimum and weighted average prices last year, rate of inflation, global tobacco prices, surge in prices of other crops and raw materials and our profit margin,” he said.