Tobacco Farmers in Distress
Why We Grow Tobacco and Not Other Crops?
Among cigarette tobacco varieties, the Flue-Cured Virginia (FCV) tobacco is the most dominant variety in India as well as the world. FCV tobacco is grown in the states of Andhra Pradesh, Telengana and Karnataka, and thrives in soil and climatic conditions that are unsuitable for cultivation of other crops. There is no equally remunerative alternative crop to tobacco.
FCV Tobacco is planted in poor, marginal soils and, being a hardy, disease resistant crop, grows well in the semi-arid and rain-fed conditions. Even in extremely adverse weather conditions, the crop suffers low fluctuation in yield.
In fact, in a 2006 a report titled “Overcoming Drought: Adaptation Strategies for Andhra Pradesh”, the World Bank favoured a shift in cropping pattern in Andhra Pradesh from rice to less water-intensive crops to decrease vulnerability of crops.
FCV tobacco is highly labour-intensive and generates more man-days of employment per unit of land than alternative crops grown in the region. Whereas FCV Tobacco requires an average of 250 man-days per acre, Cotton, Chilies, Groundnut and Red Gram require only 190, 120, 80 and 45 man-days per acre respectively. Any sudden shift from tobacco to any other crop could result in unemployment to millions of workers, creating social problems in villages and putting the livelihood of farmers and workers at stake.
The global demand for tobacco compared to other agri-commodities remains stable. This also ensures steady and remunerative earnings for FCV tobacco farmers in the country. Tobacco is also less perishable than horticulture and poultry products, making it an ideal export commodity. In addition there are well established infrastructural facilities for curing, storing and transporting of FCV tobacco besides a transparent auction system managed by the Tobacco Board set-up by the Ministry of Commerce & Industry, Government of India. This system of auction ensures prompt payment to the farmers, competitive bidding, liberal bank finance for crop raising etc.
There is No Sustainable Alternative to FCV Tobacco
A 2004 study conducted by the Government of India’s Central Tobacco Research Institute (CTRI) has outlined that there is no single crop which is an economically viable alternative to FCV tobacco.
In 2000-01 an over-supply situation had led to the declaration of a crop holiday for FCV Tobacco during which tobacco crop was not planted in Andhra Pradesh. During this crop holiday period, farmers grew alternative crops such as Red Gram, Bengal Gram, Black Gram, Green Gram etc., and in very limited areas with water resources they grew Paddy and Sugarcane.
The 2004 CTRI study on the impact of the crop holiday showed that the value realization from other crops amounted to only Rs 175 crore as against Rs 400 crore from FCV tobacco in the previous year, resulting in a loss of Rs 225 crore to the farming community, this included Rs 72 crore in reduced income due to loss of working man-days.
The Success Story of Tobacco in India
Tobacco was introduced as a commercial crop in India in the 1930s gradually bringing in a sea of transformation to the lives of the farming community. The success story of tobacco as a cash crop is unlike any other crop grown in India. In fact, it is the hardy and drought resistant nature of the crop that makes all the difference. Tobacco can even be grown in infertile soil, leaving precious fertile land areas of the country for the cultivation of staple and food crops. Tobacco is grown in 4.64 Lakh hectares of the arable land of this country and ensures prosperous living for the farming community compared with existing rural standards of subsistence living.
FCV tobacco farming in the country received a significant boost with the passage of the Tobacco Board Act in 1975, opening the doors of the Government backed institutional support to the farmers and increasing the prospect of sustainable livelihoods in rural areas of the two FCV-growing States. Nine years later, an organized system for auctioning of FCV tobacco was introduced by the Tobacco Board assuring remunerative pricing of the crop and resulting in consistent increase in FCV tobacco prices.
Being a regulated crop having institutional support and an organized system of auctioning, Banks also came forward to support tobacco farming by lending required funds to the farmers. Today, the crop enjoys a positive credit system with a 99% loan recovery rate compared with a 50% recovery rate for loans disbursed for the cultivation of other agricultural crops in the country.
The establishment of the Central Tobacco Research Institute (CTRI) by the Government also benefited tobacco farming by promoting cultivation of high-yielding seed varieties and better agricultural practices amongst the farmers, facilitating reduced cost of production and improvement in quality.
As a result, the production of FCV tobacco, used in cigarettes, witnessed consistent growth in volumes from 31.5 Million Kgs. in 1940-41 to 120 Million Kgs. in 1980 and reached its peak with 315 Million Kgs. in 2013-14. As a result, India is now the 2nd largest producer of tobacco in the world with an estimated overall tobacco production of 800 Million Kgs.
Besides sustaining a small domestic market, the FCV tobacco produced in India is also exported to around 100 countries of the world generating significant foreign exchange earnings for the country. As the quality of Indian tobaccos started meeting international standards, there was a consistent increase in exports of Indian tobaccos predominantly of the FCV variety. While India’s earnings from tobacco exports were worth Rs.102 crores in 1976-77, the same reached around Rs. 6,500 crores in 2020-21. India is now among the top five exporters of leaf tobacco in the world with FCV tobacco constituting around 85% of India’s overall leaf tobacco exports.
From Prosperity to Poverty
FCV tobacco farmers in India face the threat of having to undertake the reverse journey from prosperity to poverty as excessive taxation on cigarettes and extreme regulations impact the demand and price for domestic tobaccos.
Continued excessive taxation and extreme regulations on Cigarettes in India has not reduced tobacco consumption in the country. These tough measures have only benefitted the illegal operators and smugglers of foreign brand cigarettes.
As per Euromonitor International, Illicit cigarette volumes in India registered a whopping 44% in a decade from 19.5 billion sticks in 2011 to 28.1 billion sticks in 2020. This takes the market share of illicit cigarettes in the country from 21.3% in 2015 to 27.6% in 2020.
The negative impact of a booming illegal cigarette market in India is resulting in a sharp decline in demand and the consequent fall in prices of domestic cigarette tobaccos. Unlike the legal cigarette industry, illegal smuggled cigarettes do not use local tobaccos. A boom in the illegal cigarette sales affects the sale of legal cigarettes and reduces the demand for FCV tobacco, threatening the livelihood of the FCV tobacco farming community.
The dwindling demand for tobacco in the domestic manufacture of cigarettes is posing a challenging situation for the FCV tobacco farmers in the country. The increase in illicit cigarette volumes has resulted in shrinkage of FCV crop size by a sharp 39% from 316 million kg per annum to 194 million kg per annum between 2013-14 to 2021-22. The FCV cultivation acreage in India has also witnessed a huge drop from 2,21,385 hectares in 2013-14 to 1,22,257 hectares in 2020-21 leading to 35 million man-days of employment loss. In fact, since 2013-14, the earnings of FCV tobacco farmers have shrunk cumulatively by more than Rs.7,084 crores.
Proposed COTPA Amendment Bill,2020 will Impair Livelihood of Indian Tobacco Farmers
The proposed “Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) (Amendment) Bill, 2020” will provide huge boost to the ever-growing illicit cigarette trade in India and will adversely impact the legal cigarette trade. As a result, there will be a drastic drop of demand for tobacco grown by Indian tobacco farmers and they will lose their only source of livelihood.
The current tobacco control law namely, COTPA 2003, is already amongst some of the most stringent tobacco laws globally. In the last few years, the Government has imposed harsh tobacco regulations such as increasing the size of pictorial warnings, imposing punitive taxation on Cigarettes with the tax burden more than trebling since 2012 and has even withdrawn export benefits to tobacco. All these are leading to adverse consequences on livelihood of crores of Indians without providing any alternative livelihood opportunities or help to farmers who cannot grow any other equally remunerative crop in the dry and arid regions where they cultivate tobacco.
India has become the 4thlargest and fastest growing illicit cigarette market in the world with illicit cigarettes representing 1/4thof the India Cigarette market. In the last one-and-a-half-decade illicit cigarette market in India has doubled from a level of 13.5 billion sticks in 2006 to 28 billion sticks in 2020. Illegal cigarettes do not use locally grown tobaccos and hence, an increase in illegal trade impacts the livelihood of tobacco farmers in the country as demand for domestic tobaccos reduces further.
The harsh amendments that have been proposed in the COTPA Amendment Bill will terrorize retailers and traders and they would not want to engage in the sale of legal cigarettes. As a result, criminal syndicates who have been pushing illegal tobacco will gain ground and will flood the Indian market with illicit cigarettes. Such illicit cigarettes will certainly not follow any of the regulations in force in India. Even currently illegal tobacco product packages do not carry the mandatory large 85% size pictorial warning. Absence of the mandatory warnings gives an impression to consumers that these smuggled cigarettes are safer than the legal cigarettes with warnings.
Since these illicit cigarettes do not use domestically grown tobaccos produced by Indian farmers, the result would be loss of earnings and livelihood of millions of tobacco farmers who are dependent on the crop in the country.
Through the Amendment Bill all the provisions of the FCTC are being given effect to in full force and in some cases more than as required by FCTC. On the other hand, no action has been taken regarding the problems that the tobacco farmers are facing due to the stringent laws.
Neither the WHO nor any Government or NGO has been able to suggest a remunerative alternative crop to tobacco farmers. In view of the absence of any alternative source of livelihood, we would request the Government to not bring any amendment which will precipitate the crisis of farmers livelihood.
WHO FCTC is A Threat to Livelihood of Millions of Tobacco Farmers in India
The Framework Convention on Tobacco Control (FCTC) is the international treaty under the World Health Organization (WHO) which entered into force on February 27, 2005. The objective of the FCTC is to provide a framework for tobacco control measures for implementation at the National, Regional and Global levels. So far 182 countries, including India have ratified the FCTC. These countries are called FCTC Parties who meet once in two years in a meeting called Conference of the Parties (COP).
The Ninth Conference of Parties (COP9) of the FCTC was held virtually from 8th to 13th November 2021 due to the Covid-19 pandemic situation.
Tobacco Farmers should be Allowed to Participate in COP Meetings
The FCTC decisions are made behind closed doors, with media, the public and tobacco farmers explicitly excluded from the process. This means that the views and interests of tobacco growers are not represented in the debates.
The decisions on tobacco control at COP Meetings have effect on the livelihood of millions of tobacco farmers and farm labour connected with tobacco cultivation in the country.
Farmers should be allowed to participate in the deliberations of the Conference to help farmers understand the future course of actions being proposed by the WHO on tobacco control and the impact of these measures on the tobacco crop and the livelihood of millions that are dependent on tobacco in the country.
FCTC Article 5.3 Wrongly Exclude Farmers from Policy-Making
FCTC Article 5.3 seeks to protect the legislative process from undue influence.
However, the FCTC and individual anti-tobacco organizations have chosen to interpret this article in a different manner and instead entirely exclude certain parties, including growers, from the process and deny them the right to share their views. In addition, the entire process of developing and adopting policy has been closed off from both the public, concerned parties and even the media. During COP6 in Moscow, at its first plenary meeting, the general public and media were excluded with immediate effect.
The FCTC Secretariat has also refused to deal with the World Farmers’ Organisation and excluded it from its meetings. The International Tobacco Growers Association has been refused entry to all public meetings held by the FCTC on the basis that “their activities may not be in line with the aims and spirit of the Convention”.
NGOs and Activists are also promoting the policy of excluding tobacco Farmers from any consultative role in policy development by national Governments on tobacco control. Exclusion of key stakeholders like farmers from participating in the development of regulations on tobacco is a denial of their constitutional and democratic rights to be consulted and heard in the process of the making of laws that will have a direct bearing on their livelihood.
Excluding growers is wrong. Exclusion ignores the benefits of growers’ participation for the decision-making process. Participation from growers brings the expertise, perspective and ideas of those growers affected by the problem into the policy-making process. It also promotes balance, ensuring that the views of one group are not given disproportionate weight and the voice of the growers is properly heard. It also ensures that regulators gain a practical understanding of how a measure will operate once implemented, avoiding unintended consequences and promoting discussion of alternative solutions.
Fair treatment for tobacco growers should be ensured throughout the FCTC process. The farmers of India want to be included and have applied for ‘Observer’ status to the FCTC.
The Government of India should support this application and also support transparency throughout the FCTC process. FCTC Article 5.3 already sets comprehensive practices and should therefore not be reopened and extended in its scope.
FCTC Articles 9 & 10 put Unreasonable Restrictions on Tobacco Crop
The rules that are being recommended by the FCTC under Articles 9 & 10 for adoption by tobacco producing countries like India are very extreme and will have severe and adverse impact on tobacco farming.
Rules such as the ban on all ingredients and additives will make tobacco cultivation and processing impossible in India. Tobacco is an agricultural crop and has seasonal and regional variations. It is therefore, necessary to use to use additives to ensure that tobacco can be processed and products can be manufactured. These guidelines would effectively mean a ban on the tobacco that is grown today in India.
Moreover, tobacco grown in India is largely of the filler grade. Any restriction on the usage of ingredients/additives would make at least 30% of tobacco produced in the country unusable necessitating import of expensive tobaccos by local manufacturers. This can only be at the expense of Indian farmers and at the cost of valuable foreign exchange for the country.
Moreover, with such conditions Indian farmers will find it extremely difficult to find overseas markets for their produce also resulting in a huge loss of foreign exchange currently being earned by Indian farmers. On the other hand illegal shipment of tobacco grown in foreign countries will find its way into India at the expense of local farmers. Any radical ingredient restriction on tobacco grown in the country will only promote the already large and growing illegal cigarette trade in the country.
Policy guidelines under 9 & 10 of the FCTC that impose any unreasonable restriction on tobacco cultivation should be summarily rejected by the Indian Government as there is no viable alternative crop or alternative livelihood sources for the farmers and other dependents on tobacco crop.
FCTC Articles 17 & 18 will Destroy Farmers' Livelihood
The original objective of Articles 17 & 18 was not to reduce tobacco cultivation but for concerned governments to help farmers find alternative crops to tobacco in case demand for tobacco was to come down. However, anti-tobacco activists and such bodies are seeking to influence governments to force tobacco farmers to shift to other crops which are not viable substitutes for earnings of farmers.
Unfortunately, the anti-tobacco NGOs in India are pushing vested interest of foreign donors and have no understanding of tobacco cultivation and no appreciation of the livelihood of 4.6 crore people who are dependent on tobacco in the country.
Any harsh measures adopted by FCTC on alternative crops will therefore, have huge impact on farmers, farm workers and others that are associated with tobacco cultivation in the country and bring great deal of misery to their families.
Any move towards alternative agricultural crop in place of tobacco should involve long-term research and experimentation before viable options can be found and must be done with the involvement of tobacco farmers. No decision in this regard by the government can be taken in isolation without the active participation of farmers in order to protect their livelihood.
The Central Tobacco Research Institute (CTRI) based in Rajahmundhry, Andhra Pradesh despite many experiments and trial has not been able to find a crop that is as remunerative as tobacco. In fact, no country in the world has to date established an economically viable alternative to tobacco. FAIFA is not against alternative crops but the feasibility and sustainability of such crops must be proven conclusively through experiments and trials under similar agricultural and climatic conditions as in tobacco growing regions in the country.
Moreover, as long as there is demand for tobacco and tobacco products in the country, tobacco grown in other countries will find their way into the country mainly through illegal channels. Many large tobacco growing countries which have not ratified the FCTC will be under no obligation to reduce tobacco cultivation.
Articles 17 & 18 of the FCTC pose a huge threat to our livelihood and cannot be considered without proper trials and experimentation that can establish the feasibility of sustainable and economically viable alternative crops.