A delegation of Flue-Cured Virginia (FCV) tobacco farmers from key districts in Andhra Pradesh has issued an urgent appeal to the highest levels of government. They are seeking immediate intervention to review a sharp increase in excise duty on cigarettes, which they fear will devastate their livelihoods.
Farmers Meet Tobacco Board, Sound Alarm on Livelihood Crisis
Under the banner of the Federation of All India Farmer Associations (FAIFA), farmer leaders from Prakasam, Palnadu, Guntur, and Nellore districts met with Tobacco Board Executive Director B. Vishwasree in Guntur on Tuesday. They conveyed their deep anxiety that the steep excise duty hike notified on December 31, 2025, could trigger a severe economic crisis across tobacco-growing regions of the state.
The delegation warned that this sudden and unprecedented tax increase, estimated at a massive 50 to 60 per cent, could severely depress legal cigarette demand. This, in turn, would lead to a crash in tobacco prices, pushing thousands of small and marginal farmers into acute distress.
Echoes of a Past Crisis: A Cautionary Tale
The farmers drew a direct parallel to a painful episode from the recent past to underscore their fears. They recalled that a 22 per cent hike in cigarette taxes back in 2014 led to a sharp decline in industry offtake. This resulted in FCV tobacco prices crashing by nearly 25 per cent, with average realisations dropping by around Rs 23 per kilogram.
That situation forced both the central and state governments to intervene to prevent widespread distress sales. The farmers stressed that the current proposed hike is more than double the 2014 increase, threatening consequences that could mirror and even exceed the previous crisis.
Current Economics and the Threat of Illicit Trade
Detailing the precarious economics of cultivation, the farmers pointed out that they currently realise about Rs 250 per kg for their crop, while cultivation costs have risen to nearly Rs 200 per kg. They fear the new duty could cause prices to plummet by Rs 60 to 70 per kg, making it impossible for them to even recover their costs.
FAIFA President P S Murali Babu emphasized that FCV tobacco is primarily grown in rain-fed, poor-quality soils where alternative crops are not financially viable. He also raised a critical policy concern, cautioning that excessive taxation would fuel the illicit cigarette trade. This black market already commands about 26 per cent of the total market, leading to significant revenue losses for the government and undermining public health goals.
While respecting the government's public health objectives, the farmers appealed for a balanced and predictable taxation policy. They argued that such an approach is essential to protect farmer livelihoods, sustain the legal cigarette trade, safeguard government revenue, and prevent a repeat of past agricultural crises.
The delegation included prominent farmer leaders K Venkateswarlu, Bhaskar Chowdhary, Ramanjaneyulu, Varaprasad, Sunil, Seshaiah, Hari Babu, Abburi Seshagiri, Narne Kotaiah, Krishna Reddy, and Mastan Reddy.
