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CM Warns of Strict Action Companies must purchase leftover tobacco from farmers Pay ₹12,500 per quintal

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Prices Must Not Fall, No Procurement Delays — CM Warns of Strict Action

* Companies must purchase leftover tobacco from farmers

* Pay ₹12,500 per quintal

* We will not tolerate damage to the government's image—action will be taken without hesitation

* Companies must sign Buyback Agreements with farmers going forward

* CM Chandrababu Naidu issues strict instructions to officials and traders

* Do not reduce the price of cocoa beans below ₹500/kg

* Cocoa procurement policy on the lines of oil palm coming soon

* Prepare a list of chili farmers who incurred losses due to low prices

* Encourage paddy farmers to cultivate fine varieties

* CM outlines directions in a review meeting with the Agriculture and Marketing departments

Amaravati, May 16, 2025: Chief Minister N. Chandrababu Naidu has issued firm directives that tobacco farmers in the state must not suffer losses under any circumstances. He ordered that traders must begin immediate procurement of tobacco at remunerative prices and underlined that procurement should not stop under any pretext. 

Stressing his friendly rapport with both farmers and industry heads, the CM made it clear that any injustice to farmers would not be tolerated. He warned traders that the government would not hesitate to take action if the current crisis is not resolved promptly.

In a review meeting held at his Undavalli residence on Friday with officials and traders regarding procurement and support prices for tobacco, cocoa, chili, and paddy, the CM expressed deep dissatisfaction over the sharp fall in tobacco prices. He directed authorities to ensure farmers get remunerative prices and to avoid any actions that would bring disrepute to the government.

Target: Procure 20 million kg of tobacco

“The HD Burley variety of tobacco must be purchased by companies at ₹12,500 per quintal based on quality. GPI and ITC must immediately begin procurement of 20 million kg. Daily procurement must be monitored through a control room and WhatsApp groups. The Agriculture Department must submit procurement details every two days. Starting June 2025, awareness sessions should be held to discourage farmers from growing HD Burley tobacco based on international demand and price trends,” the CM said.

No leftover tobacco anywhere

The CM directed that no tobacco stocks should remain unsold in farmers’ homes or fields. Companies must purchase all tobacco at the minimum support price (MSP) and store it in warehouses if needed. He asked for a report by Monday on the volume of purchases and prices paid. He emphasized that farmer dissatisfaction must be avoided and they must not be allowed to suffer losses.

Surge in tobacco output

Officials informed the CM that a total of 450 million kg of FCV, White Burley, and HD Burley tobacco was produced across 1,90,456 hectares in 2024–25—a record high. A shift from other crops to tobacco caused this unexpected surge, leading to oversupply issues.

Illusion of high prices misled farmers

The CM criticised the Tobacco Board for failing to prevent the price crash and said there was poor coordination with major traders like GPI and ITC. He noted that while companies lured farmers with the promise of high prices, they slashed rates at harvest time—an unacceptable betrayal. He faulted companies for creating a crisis by denying MSP.

Buyback policy must be mandatory for tobacco

To resolve the crisis, the CM pointed out that only a Buyback Agreement Policy could protect farmers. He urged farmers to enter into buyback agreements with companies from now on. The Tobacco Board must ensure implementation and monitor purchases. Prices should reflect global demand and supply, ensuring farmer profitability. He warned that if companies continue to hurt farmers by denying remunerative prices, farmers may stop cultivating tobacco altogether, forcing companies to shut down. He also called for a crop rescheduling action plan and public awareness campaigns to shift farmers toward alternative commercial crops.

Company explanations on delayed procurement

Companies explained that the Tobacco Board regulates only FCV tobacco. Over 90% of White Burley tobacco has already been procured. However, farmers grew HD Burley without any formal contracts. Due to pest issues in chili, corn, and cotton, and the easy availability of HD Burley saplings in local nurseries, farmers preferred HD Burley. This variety is predominantly grown in Bapatla, Prakasam, Nandyal, and Guntur. Companies and local traders have already purchased 15 million kg of lower leaves. They are now awaiting export orders for the remaining stock and are facing warehouse shortages, funding issues, and labor shortages affecting grading and processing.

Cocoa must fetch remunerative prices

Reviewing cocoa procurement, the CM instructed Mondelez to not buy cocoa beans below ₹500/kg. He warned against exploitation of farmers and urged coordination with other companies to ensure uniform pricing. He asked Mondelez to prepare a value-chain plan from cultivation to product development. A dedicated cocoa policy, similar to that for oil palm, is needed, he said.

Procurement agencies must cooperate

CM Naidu stated that the government is creating a farmer- and industry-friendly environment, and companies must reciprocate by ensuring justice to farmers. He instructed that every last cocoa bean should be procured from farmers in the state. He told officials to prepare plans for forward-backward integration and asked companies to educate farmers about quality improvements to meet international standards—with government support assured.

Unjustified price cuts citing quality issues

Officials told the CM that 12,000 metric tons of cocoa were produced this year, most of which has been procured. However, farmers are anxious because companies that paid high prices last year have suddenly slashed them this year, citing poor quality and non-compliance with international standards. The CM directed that the remaining 2,000 metric tons of cocoa still with farmers must be fully procured.

List chili farmers who incurred losses

The CM instructed the Agriculture Marketing Department to prepare a list of chili farmers who sold produce through market committees and suffered losses due to low prices. He stressed that only genuine farmers, not middlemen, should be included. He called for awareness campaigns on reducing pesticide use and improving quality to boost exports.

Complete procurement of the remaining paddy

CM Chandrababu Naidu directed that all remaining paddy still with farmers be procured and that fine rice cultivation be promoted. Officials informed him that in this Rabi season, 17.62 lakh metric tons of paddy have been procured from 1,41,144 farmers, and ₹3,258 crore has been paid. By contrast, under the previous government, only 10.97 lakh MT was procured from 49,866 farmers in Rabi 2023–24, with payments totaling ₹1,103 crore.

In the Kharif season, 35.95 lakh MT was procured from 5,65,369 farmers and ₹8,278 crore was disbursed. In comparison, the previous government procured only 29.97 lakh MT from 4,97,907 farmers and paid ₹6,549 crore


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