COVID-19 pandemic has already inflicted economic losses on Flue Cured Virginia (FCV) farmers. Furthermore, Government planned to introduce contract farming in tobacco. Andhra Pradesh in India produces largest amount of tobacco followed by Karnataka. But tobacco farmers and farm leaders from Karnataka and Andhra Pradesh fiercely opposed the idea.
Various associations as Virginia Tobacco Growers Association, Federation of Karnataka Virginia Tobacco Growers Association, Kaligiri FCV Tobacco Growers Association, and Kondapi Tobacco Growers Association claimed that it would only worsen the condition of famers economically.
Entry of MNC’s
Foreign tobacco multinationals currently are witnessing moderate sales in global markets and as per Indian FDI regulations, cannot invest in India. But according to FCV farmers, MNC’s are allegedly attempting to get backdoor entry into the nation by pushing contract farming. The Absence of provisions for Foreign Direct Investment in Tobaccos has stopped MNC’s from entering into contract farming so far.
Farmers claimed that open auction methods provide them with better prices for their products compared to open contract farming. However, with the union government pushing for this change, it might affect Indian tobacco farmers.
Opposing the Government’s Plan
Farmers are worried that contract farming will push them into debt traps like small farmers of Zimbabwe and Malawi who were tricked into this by promising higher returns. Farmers and leaders claimed that it will introduce a situation in which there is only one buyer and multiple sellers. Ultimately this will lead to a decrease in the price of tobacco sold.
Mr. Javare Gowda from the Federation of Karnataka Virginia Tobacco Grower Association commented, “FCV contract farming will take us into the pre-1984 era of exploitation and negatively impact Indian farming community. We must resist the efforts of foreign tobacco multinationals who are looking at India to revive their sales.
FCV tobacco farmers claimed that if the government allows contract farming, tobacco growers will get a raw deal. It is wrong to believe that contract farming will work to the advantage of farmers just because tobacco buyers would give them farm inputs and priority to sell their tobacco.
In conclusion, the FCV Tobacco Farming community humbly urges the policymakers to not encourage contract farming. Farmers indicated that it will harm both farmers and the government in the long run. Contract farming will exploit farmers and destroy the current ecosystem developed through a reliable auction system conducted by the government.