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Federation of All India Farmer Associations(FAIFA)

Demand Action Against Unfriendly Cash Crop Policies to Safeguard Farmer Livelihoods

  • Explosive growth of illicit and smuggled tobacco at 31% annually directly taking away farmer livelihoods in India
  • Challenges Government decision to cut tobacco cultivation without providing viable alternative livelihood solutions
  • Demand CBI enquiry against foreign health activists and their money trail whose hidden agenda is to benefit foreign growers and business syndicates
  • Made representations to Ministers of Commerce, Agriculture and Labour. Delegations planned to Ministers of Finance, Health and the Prime Minister.

Bangalore, October 30, 2015


As per Ministry of Finance data, custom seizure of smuggled foreign cigarettes has exploded in the last 2 years in India.

Seizures in the first 4 months of 2015-16 are double the quantity seized in full 2013-14. At this rate, 50% is the projected growth in smuggling of foreign cigarettes over previous year.

Year Quantity of Cigarettes of foreign brands seized

(in Thousands)

2012-13 51,769
2013-14 26,436
2014-15 1,14,330
2015-16 (Apr to July) 55,890
Source: Ministry of Finance, Government of India (through question no 779 in Lok Sabha)


Extra ordinary high taxes andrules like pictorial warnings, against reality of ill-equipped ground enforcement machinery and corruption makes India the most attractive tobacco market for smugglers in the world.

Representatives of Federation of All India Farmer Associations (FAIFA), a body of farmers associations from South, West and North India engaged in cultivation of cash crops, today congregated in Delhi to demand immediate Government intervention and action against lopsided tobacco control policies blinded by anti-farmer activists and urged an immediate correction.

This is in the wake of extreme self created stress which has been caused to farmers engaged in tobacco cultivation besides the adverse climatic debacle which crops like cotton are witnessing.

Tobacco is a specific case in point as it is immune from climatic variations, still a number of farmershave committed suicides in Andhra Pradesh and Karnataka, something which never happened before.

FAIFA members have already met Ministers Commerce, Agriculture and Labour to demand immediate correction in unfriendly policies, and are planning delegations to Ministers of Finance, Health and finally the Prime Minister.

Government instead of providing solutions, have issued orders to tobacco farmers in Andhra Pradesh to cut tobacco cultivation by 52 million kgs next year. A sudden call for cutting production is going to be difficult to absorb for farmers already under debt, as consumption for FCV tobacco has already been going down over the years.

Issues needing immediate attention

  • FCV Tobacco is a 100 year old crop in India. It provides livelihood to 45.7 million people comprising farmers, farm labour, workers, retailers etc in India
  • There is no viable and sustainable alternative to tobacco crop for farmers. While crop rotation is done, ultimately farmers are totally dependent on tobaccofor making a living, as it is the most sturdy and dependable crop which can be grown without irrigation support and in tough climatic conditions.

There is a direct correlation between the introduction of pictorial warnings and growth of illicit tobacco.

In 2007, when pictorial warnings were first introduced, illicit and contraband cigarettes were 1% of the market.  According to a FICCI Study today the Illicit & contraband cigarettes occupy 21% of the market share, and result in a revenue loss of more than Rs. 9,000 croreper annum to the exchequer.

Also, this illicit market is growing at a rate of 31% every year. It is a matter of time, that half of the cigarette market in India would be illicit, hurting prospects for local growers.

Illicit cigarettes are cheap, and mostly do not carry pictorial warnings, making them more attractive. Many large tobacco growing countries do not have India like stringent pictorial warnings regime, making their products more attractive for smugglers.

In recent years, foreign tobacco has been capturing the Indian market, coming in through the smuggled route in the form of illicit and contraband cigarettes. Last year 21 million kgs of smuggled tobacco was consumed in India through this route. Illicit cigarettes are growing at 31% in India every year, directly taking away the market from Indian tobacco farmers. The very high taxes on legal cigarettes and regulatory practices like pictorial warnings on domestic packs make these illicit cigarettes popular – as they do not have to comply with both these aspects of regulation. This is making the smuggled cigarettes grow exponentially.

  • After the Modi Government came to power, a sharp increase in the seizures of foreign cigarettes smuggled into India, suggests a 50% growth in smuggling this year, and enough proof that India has emerged the world’s most lucrative tobacco market for smugglers.
  • The state of Andhra Pradesh has produced 172 million kg of authorized FCV crop in the year 2014-15. In view of a sluggish demand this year, the Tobacco Board has reduced the FCV crop size for Andhra Pradesh for the year 2015-16, restricting the total authorized crop size for the next season to 120 Million Kgs compared with 172 Million Kgs this year.
  • This fall in the authorized crop size will affect the farmers adversely since they have already made huge investments in tobacco curing barns and other infrastructure keeping in mind the usual crop size. With the tobacco board reducing the FCV crop size by 25 -30 % for the next season the farmers will have a difficult time in sustaining their livelihoods. This will hugely impact at least 25% of the tobacco farmers and this might lead to more suicides next season.
  • Given that the Government is mulling the option of increasing pictorial warning from 40% to 85% without any consultation with farmers groups, along with increased taxes, will further led to growth of illegal and contraband tobacco in India. The day is not far when the legal tobacco industry will cease to exist in India.

ShriChangal Reddy, Chairman, Consortium of Indian Farmer Association, said, “In view of the above facts, we urge the Government to first conduct research and provide alternative solutions to tobacco farmers before promoting illicit and foreign tobacco in India, which they do by de-promoting legal tobacco, and therefore forcing a cut in production for legal and legitimate farmers.”

ShriGaddeSeshagiriRao, Adarsha Sugarcane Producers Welfare Association, Andhra Pradesh, said, “Tobacco is a very important cash crop in India. India is the 2nd largest exporter of quality tobacco earning Rs. 6000 crore in forex every year. The cut in production of legal tobacco imposed in Andhra Pradesh is only going to make farmers lose livelihoods while destroying our export opportunity. We really want to understand who gains from these measures other than foreign growers and syndicates”

Shri B V JavareGowda, Federation of Karnataka Virginia Tobacco Growers Association, Mysore, added, “We urge that the claims of anti-tobacco lobby should not be blindly followed, as most of the anti-tobacco lobby is funded by foreign sources. Even those who are not directly funded, their motives need to be investigated. Foreign powers would like to see India converting from a tobacco exporter to a net tobacco importer, as India is the 2nd largest tobacco consuming country in the world after China. We demand CBI enquiry into the funding trails of these activists”

ShriMuraliBabu, Kondapi Tobacco Growers Association, AP added, “Despite all the tobacco control measures all these years, consumption of tobacco has not gone down in Indiaeven slightly. Instead, only the business of Indian farmer has got destroyed with all gains going to foreign tobacco producers.We urge Government to save the Indian farmers from further hardship. We request that farmers should be consulted before framing policies on tobacco.” 

Farmers Appeal & Demands

  • Protect our livelihood till such time sustainable viable alternatives are provided
  • Policy framework should be equitable, rational, reasonable and balanced based on scientific data and evidence
  • Consult all stakeholders, particularly  us the farmers to frame a well-balanced tobacco control regulation
  • Investigate the hidden agenda of the activists. Their source of funds, purpose, utilisation, individual/ institutional wealth prior and post tobacco activism
  • Investigate all the beneficiaries and the linkages of such individuals and institutions
  • Independently validate all the data, statistics, studies, claims and assertions
  • A detailed study to be carried out of the socio-economic impact of the anti-tobacco measures so that a balanced well calibrated framework can be developed to address our concerns. The study may entail the following:

o   Identify alternative, equally remunerative, sustainable means of livelihood

o   New skill requirement for smooth transition to such alternatives

o   Time-frame and capital required for such transition

o   Risk analysis and amelioration in the event of failure of the alternative measures should be done

  • Conduct a CBI enquiry against anti-tobacco activists, their hidden agenda, their money trails and why their campaigns are only benefiting foreign tobacco growers and business syndicates.

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