The Tobacco crop is of great economic significance for Pakistan although it occupies a relatively small area of 0.27% of total irrigated land in the country and about 3 percent in Khyber Pakhtunkhwa. With suitable crop husbandry, it is capable of yielding very high income to the growers as compared to any other cash crop.
Production and quality of agricultural commodities is regulated, primarily, by their proper marketing and disposal, ensuring a fair return to the tiller. The same holds good in case of tobacco. The most sensitive aspect of tobacco crop, apart from its production, is the marketing process which is based on plant position. Seventeen grades have been prescribed for flue-cured Virginia, seven for dark air-cured, five for white patta and fourteen for Burley tobacco. Ripe, orange and softer type of tobacco is usually required for export as well as for home consumption. Tobacco marketing has been streamlined through promulgation of provincial laws in Khyber Pakhtunkhwa and administrative decisions taken by the Pakistan Tobacco Board from time to time.
Minimum prices for cigarette-type tobaccos are fixed/notified by the Federal Ministry of Commerce under Section 8(1) of the Pakistan Tobacco Board Ordinance, 1968. However, minimum indicative prices of various types of tobaccos are fixed by the Board for the last many years and circulated amongst all concerned for compliance. Besides, weighted average prices of flue-cured Virginia and white patta tobacco stand protected under the provincial laws while those of dark air-cured as per the decision of the Board. The methodology of price fixation aims to safeguard the grower's interest and grade assignment. Also, leaves of various grades of tobacco with minimum fixed prices are displayed at the buying courts of the tobacco companies.
Marketing is the hub of agricultural activity. Tobacco marketing is too complex a process. Apart from the grading and disposal practices followed in different countries, there are three significant features of tobacco trade. Firstly; bulks of the transaction amongst various countries takes place in unmanufactured form; secondly even the leading tobacco producing countries are both the exporters and importers of tobacco; and thirdly tobacco is grown in many parts of the world under different soil and climatic conditions and also consumed in more than one particular manner.
The Pakistan Tobacco Board has taken a number of steps to streamline the marketing system to eliminate malpractices and promote justice and fair-play in sale/purchase transactions amongst the concerned parties. The measures adopted are listed below:
A) Virginia Tobacco
a) The manufacturers demand for each type of cigarette tobacco is publicised annually during the month of November at the time when nurseries are being laid out.
b) Uniform dates are fixed for commencement and closure of tobacco purchases by Tobacco Companies in tobacco growing areas of Khyber Pakhtunkhwa and Punjab and compliance thereof ensured.
c) The Tobacco Companies are required to execute agreements with the tobacco growers for their targeted requirements of flue-cured Virginia, dark air-cured and Burley tobacco. Obligations dischargeable by both the companies and the growers have been prescribed in the agreement form.
d) Vigilance Committees comprising the representatives of Board/Provincial Agricultural Department, Tobacco Growers and Tobacco Companies operate at all purchase depots for supervising the marketing operations.
e) The Tobacco Companies are barred from buying flue-cured Virginia and dark air-cured tobaccos except from the agreement-holders.
f) Senior Officers of the Board visit the purchase depots to oversee the marketing operations and watch performance of 'Vigilance Committees'.
g) Payments of grower's dues has been vouchsafed through introduction of 'Deferred Payment Leaf Purchase Voucher Scheme'.
B) White Patta Tobacco
a) All Tobacco Companies are required to buy a specified percentage of their indicated requirements direct from the growers.
b) The working of Mandiwalas, Agents, Dealers etc who are engaged in white patta tobacco trading has been regulated and better working relationship established between the different cognate groups viz. tobacco growers, tobacco dealers and Tobacco Companies.
c) A uniform rate of commission has been fixed for the dealers to be charged from the growers and buyers.
d) The Tobacco Companies are required to execute agreements with the dealers for purchase of prized white patta tobacco clearly specifying payment schedule and fortnightly lifting programme.
Present system of tobacco marketing is based on a well defined approach and aims at removal of hardships encountered by tobacco growers previously, regulated business of tobacco dealers, eliminations of violent market price of fluctuations and to make available supplies of the required type tobaccos to meet the manufacturers indicated demands.
Tobacco Marketing 2011 Crop: Tobacco companies commenced purchases at their purchase depots on July 1, 2011, the date fixed by the Board. Before the commencement of tobacco planting, the Board had fixed minimum indicative prices for tobacco crop 2011. Reportedly, the tobacco companies had refused to purchase the non-recommended variety of flue-cured Virginia tobacco (locally known As Swati) grown on larger areas (almost 80 percent) of tobacco growing districts of Mardan, Swabi and Charssada. The tobacco companies' decision left the growers in the lurch as they had then harvested most of the crop of the variety which was declared non-recommended variety by the tobacco companies. The growers protested against the decision of the companies and took out rallies against the companies' decision. However, a meeting of all the cognate growers was convened at the Pakistan Tobacco Board's office in early July, 2011 wherein the companies agreed to purchase the non-recommended variety of tobacco during 2011 crop season. The tobacco growers also have shown resentment over the minimum prices fixed by the Board and those offered by the tobacco companies at their purchase depots. The growers therefore, demand for upward revision of prices being paid to them so that they are saved from financial losses on this account. Also, they put forth other demands like increase in the prices of recommended variety of tobacco and compensation for their crop damaged by hailstorm.
(The writer is a former Secretary Pakistan Tobacco Board)