Andhra Pradesh plans to cap FCV tobacco production amid surplus crop crisis

The Andhra Pradesh government plans to restrict Flue-Cured Virginia (FCV) tobacco production to 81 million kg in 2026-27 after surplus output, weak exports and sluggish procurement triggered a price crash, leaving thousands of farmers facing severe financial distress.

Amaravati: With the Flue-Cured Virginia (FCV) tobacco sector in Andhra Pradesh being gripped by a crisis due to surplus crop, the State government is planning to limit the production in the coming season.

Agriculture Minister Kinjarapu Atchannaidu said on Friday that farmers would be sensitised to limit production to 81 million kilograms for the 2026-27 season.

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The Tobacco Board had authorised production of 142 million kg for Andhra Pradesh during the 2025-26 season, but actual production is estimated at nearly 240 million kg.

The surplus production, weak exports and sluggish procurement have pushed thousands of farmers into financial distress.

The agriculture minister on Friday held a teleconference on FCV tobacco procurement. Energy Minister Gottipati Ravi Kumar, Social Welfare Minister Dola Sri Bala Veeranjaneya Swamy, Tobacco Board Chairman, the Executive Director (ED), and the Director of Agriculture participated in the meeting.

According to an official release, the discussions focussed on measures to accelerate tobacco procurement and ensure farmers receive a remunerative price.

Minister Atchannaidu noted that procurement have gained momentum over the past four days, with 8.5 lakh kilograms of tobacco being procured daily.

With the current maximum price at Rs 250, Minister Atchannaidu urged the Tobacco Board to pressure tobacco-buying companies to further increase the price.

He stated that with the procurement gathering pace, there is possibility of farmers securing even better prices.

Minister Atchannaidu advised the Tobacco Board Chairman and Executive Director to hold discussions with companies to ensure that even lower-quality tobacco fetches a remunerative price.

During the previous season, FCV tobacco fetched over ₹360 per kg but this time the price has plummeted to below ₹250. The average auction price was only Rs 219.50 per kg about 10 days ago.

The distress faced by farmers is attributed to failure in production planning, procurement and export policy.

Taxation has also added to the farmers’ woes. According to farmers, over 70 per cent increase in excise duty on cigarettes disrupted the tobacco value chain.

Chief Minister N. Chandrababu Naidu had written separate letters to Union Finance Minister Nirmala Sitharaman and Union Commerce and Industry Minister Piyush Goyal in May about the hardships being faced by FCV tobacco farmers because of the revised taxation policy on cigarettes.

The Chief Minister said the revised tax regime, effective from February 1, 2026, had adversely affected tobacco farmers in the State. He said the increase in GST on cigarettes from 28 per cent to 40 per cent, and a steep hike in excise duty ranging from Rs 2,050 to Rs 8,500 per 1,000 cigarettes depending on category and length, was affecting the interests of tobacco growers.