Tobacco is a crop of myriad aspects. Not only does it involve scientific treatment, but requires special attention by the producers during the growth, curing and marketing stages. This crop possesses considerable economic significance and its impact on the fiscal and monetary policies of major producing, exporting/importing countries is quite pronounced.
Tobacco is an important cash crop of NWFP and Punjab, but is also grown in Balochistan and Sindh. With suitable crop husbandry, it is capable of yielding higher income to the growers as compared to any other cash crop. Linked with it is a viable and efficient tobacco industry.
Prior to 1968,though tobacco was cultivated in Pakistan, but its importance in the agriculture sector was insignificant due to inferior quality, low yield and inadequate return. The tobacco industry was then dependent on imported raw material on which a huge amount of foreign exchange was spent each year. In 1968, the Government of Pakistan decided to promote the cultivation, manufacture and export of tobacco and tobacco products on organised basis. The Pakistan Tobacco Board was established for the promotion of the cultivation, manufacture and export of tobacco and tobacco products.
Besides research and development activities of the board, the tobacco business/marketing is regulated through Federal/Provincial laws of NWFP. It is the endeavour of Pakistan Tobacco Board to have a correlationship between production and requirements of the tobacco industry. According to legal requirement, the tobacco manufacturing and exporting companies are required to indicate their tobacco requirements by the 21st of October of each year in respect of ensuing crop to the Pakistan Tobacco Board.
After lengthy discussions between the board and other stakeholders like growers, buyers and dealers, etc and taking in to account factors like crop size, prices, domestic usage and exports, these figures are finalised. The purpose of this exercise carried out diligently each year is to have a balance between the demand for tobacco by the companies and crop size.
The following requirements for 2007 crop indicated by companies/dealers have been announced/publicised by the Pakistan Tobacco Board in order to inform the growers to plan tobacco production for 2007 crop accordingly and to avoid surplus/short crop:
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Type of Tobacco Requirements
(Million Kgs)
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Flue-cured Virginia 74.070
Dark Air-cured 0.620
White Patta 3.870
Burley 0.600
Total 79.160
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The projected requirements for tobacco crop 2007 of flue-cured Virginia and white patta tobacco are higher by 0.43% and 18.16% compared to production/requirements of the tobacco companies during 2006 crop, respectively while those of dark air-cured and Burley tobacco are lower by 61.25% and 34.78% compared to production during 2006 crop, respectively.
The tobacco growers have, therefore been advised to plan production of tobacco crop 2007, keeping in view the aforementioned purchase targets of tobacco industry. They have been further advised to execute agreements with the tobacco companies of their own choice so that no problem is encountered in its proper marketing at fair prices.
Also, the tobacco companies will purchase tobacco according to their indicated requirements from contracted growers or agreement-holders and not from growers who cultivate tobacco without any contract or agreement with a company or the so-called 'Azad Growers'.
The pre-planned projection efforts are aimed at securing a balance between tobacco demand and supply. These efforts are offset, in ease, the tobacco is produced without giving appropriate consideration to the execution of agreements. This has led to cultivation by growers of a crop size in excess of the demand resulting in over-supply and consequent price depression, not to mention difficulties in disposal of crop by small growers with attendant serious financial distress.
The concluding message is that the tobacco growers should not grow Virginia tobacco without agreements while the tobacco companies should ensure compliance with the provision of law which envisages execution of agreements for targeted requirements by the end of December, each year.
(The author is former Secretary, Pakistan Tobacco Board.)
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