Liquor, Tobacco and Sin Goods
Tobacco Farmers and the Crop Switch Problem
How India became a leading tobacco grower and exporter, why farmers find it profitable, and the challenge of helping them switch crops.
India is one of the world’s largest tobacco producers, alongside China and Brazil.
Where it’s grown
- Andhra Pradesh and Karnataka: flue-cured Virginia tobacco for cigarettes.
- Gujarat: beedi tobacco.
Tobacco Board
The Tobacco Board regulates Virginia tobacco production and runs auctions.
Why farmers grow it
- Assured markets through auctions and exports.
- Higher returns than many alternatives in some regions.
- Established supply chains.
Exports
India exports large quantities of tobacco, earning foreign exchange.
The tension
- The government runs tobacco control programmes.
- At the same time, it supports tobacco exports and farmers.
Crop switching
- The WHO Framework Convention on Tobacco Control, which India ratified in 2004, encourages alternative livelihoods.
- Switching is hard without comparable income and markets for alternatives.
- Pilot programmes promote crops like maize, chillies and cotton.
The auction platform
A farmer in Andhra Pradesh brings his cured tobacco bales to a Tobacco Board auction, where exporters and cigarette makers bid, giving him an assured market.
Thinking tobacco farmers can easily switch crops
Alternatives need comparable income and markets.
Key takeaways
- India is among the world's largest tobacco producers.
- The Tobacco Board runs auctions for Virginia tobacco.
- Assured markets make tobacco attractive.
- Switching needs viable alternative crops and markets.
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