Farmer Earnings

Tobacco provides direct and indirect employment to more than 45.7 million people, around 70% of whom are in the agricultural sector. Tobacco is a highly remunerative crop providing economic/social benefits to farmers in the tobacco growing regions.

A recently-conducted ASSOCHAM-TARI study Tobacco Economics in India: The Voice of the Farmer and other Stakeholders found that the tobacco growing areas of the three major tobacco producing States in India, viz., Andhra Pradesh, Karnataka and Gujarat are better off in several socio-economic parameters as compared to the non-tobacco growing areas of these States. “…tobacco does create higher returns and other social capabilities for its farmers than those who are engaged in growing other cash crops,” the study report observed.

The performance of FCV tobacco has been impressive, particularly in terms of export and farmer earnings:

FCV Tobacco 2001-02 2013-14 Change
Production (Mln. Kg) 168 316 88%
Average Price (Rs/Kg) 35 123 251%
Gross Returns (Rs Cr)* 588 3886 560%

Source: Tobacco Board (*Derived)

Studies conducted by the Central Tobacco Research Institute (CTRI), Rajahmundry, have shown that FCV tobacco is more remunerative than other crops grown in the region, and is difficult to substitute.