Representative image for tobacco.
Credit: iStock Photo
Mysuru: Leaders of the Federation of All India Farmer Associations (FAIFA) released a report, following a study by experts, which analyses the impact of the new excessive excise duties on the tobacco farming sector.
As per Vikram Urs, joint secretary, FAIFA, the new tax on cigarettes is likely to reduce the offtake of Flue-Cured Virginia (FCV) tobacco crops by nearly 20 per cent and cause an additional loss of approximately 2.6 million man-days of employment in the farming and affiliated activities, according to the report.
Naveen Srivastav, Artha Arbitrage Consulting LLP, who carried out the research, said, “The tax will be a blow to FCV tobacco cultivators, agricultural labourers including women, and those engaged in warehousing, auctioning, transportation, and other associated activities”.
Urs said, “The new tax disproportionately hurts tobacco farmers in India, especially FCV growers in South India. The share of Indian FCV farmers in the overall tobacco market has already fallen sharply, from 21 per cent to 10 per cent, due to punitive and discriminatory taxation and the rapid growth of illegal tobacco. This share will shrink further, leaving FCV growers with an increasingly narrow and unsustainable space to operate”.