Farmers in the Swabi district are grappling with the impacts of climate change, leading to a decline in tobacco crop production while simultaneously driving up export demand and prices. Muhammad Ali Dagiwal, a farmer hailing from the Dagai area of Razar Tehsil in Swabi District, expressed surprise at the significant price hike in tobacco.
Initially, Dagiwal had entered into an agreement with the multinational company Philip Morris to sell his tobacco at Rs 425 per kg. However, the current market price set by Philip Morris stands at Rs 830 per kg, catching him off guard. Unfavorable weather conditions, including two hailstorms and strong winds, have plagued his seven-acre tobacco crop, resulting in drastically reduced yields.
Dagiwal attributed this year’s tobacco price surge to the reduced crop production, thus creating a heightened demand for tobacco exports. Climate change has taken a toll on his tobacco cultivation, with 20 percent of the crop suffering damage from hailstorms and strong winds.
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Highlighting the global impact of the COVID-19 pandemic and climate change on crop production, Dagiwal noted that both factors have led to decreased yields not only in Pakistan but also in other countries. He called upon companies that had initially purchased tobacco from farmers at lower rates to make fair compensation adjustments based on end-of-season rates. Dagiwal emphasized the need to recalibrate tobacco prices to reflect current market inflation, suggesting a revised rate of 1100 rupees per kg given the rising inflationary trends.
Rizwanullah, leader of the Khyber Pakhtunkhwa Kisan Board and a tobacco grower, acknowledged that the current price of tobacco per kg has exceeded expectations, benefiting tobacco farmers. He noted that during an initial meeting, the Tobacco Board had established a minimum rate of Rs 310 per kg, a decision he disagreed with. He explained that this rate was set for October 2022 and since then, costs such as fertilizer, diesel, and other inputs have significantly risen, a trend expected to continue throughout the tobacco season. Rizwanullah warned that if prices remain stagnant, farmers might be compelled to discontinue tobacco cultivation.
In response to this concern, farmer organizations engaged in discussions with the Chairman of the Tobacco Board, Federal Secretary, Federal Minister, and officials from various tobacco-related institutions. Protests were also registered to highlight these challenges.
Rizwanullah detailed that during the tobacco maturation period in June 2023, traders inundated the market within the first week of the month. These traders initiated purchases from farmers’ storage facilities and processing units at Rs 350 per kg, even though the Tobacco Board had stipulated a purchasing window from July 1st to July 7th for companies. Concerns were raised, and appeals were made to the Chairman and companies to address the situation and extend the purchasing timeline. The goal was to prevent traders from taking advantage of farmers’ urgency and acquiring tobacco at lower prices, ultimately depriving companies of their needed supply.
Responding to these appeals, the Chairman of the Tobacco Board began purchasing operations on June 19. The pace of purchasing was expedited due to high export demand, particularly from the Pakistan Tobacco Company and Khyber Tobacco Company. The initial rate of Rs 425 per kg set by these companies on the first day continued to rise steadily.
Rizwanullah underscored that the positive trend extended beyond price increases; payments were being made promptly, further bolstering the overall economic prospects for tobacco farmers. The price of tobacco surged from 850 to 900 rupees per kg, providing a significant boost to the industry.
He expressed that tobacco farmers are experiencing a sense of contentment this year as they are finally receiving a fair price for their produce. Rizwanullah conveyed his intention to hold a meeting with the Tobacco Board after the current season concludes. The aim of this meeting would be to determine the anticipated tobacco price for the upcoming year. Additionally, discussions would focus on the potential ramifications of increased tobacco production by farmers and its impact on both companies and prices.
Rizwanullah emphasized the urgency of a timely and thorough assessment by the Tobacco Board and farmers’ organizations. He warned that without such proactive measures, a crisis could emerge, leading to adverse consequences for the farmers. He pointed out that a portion of the tobacco harvested is utilized for cigarette production within Pakistan, while the remainder is exported.
Growers were advised to refrain from adulterating tobacco, altering lower-grade tobacco to appear as higher-grade. Proper management of moisture levels within bundles was highlighted as crucial to prevent market deterioration and hindered export. Moreover, these lapses have implications for the reputation of cultivators.
Iqbal Khan Shiva, a tobacco grower from the Shiwa Adda area of Swabi, shared that tobacco crops were presently being harvested and sold in Swabi, Mardan, and Charsadda. He appreciated the favorable prices offered by companies and traders. He highlighted the discrepancy between low tobacco production and high demand. Considering current weather conditions, Iqbal Khan Shiva anticipated increasing demand for tobacco in the future. He also stressed the substantial contribution of the tobacco crop to federal excise duty revenue, amounting to over 150 billion rupees, and the significant employment opportunities it creates in the sector.
Iqbal Khan Shiva expressed concern over the trend of some companies relocating their operations from Khyber Pakhtunkhwa to Kashmir and obtaining tobacco from the former region. He asserted that this practice undermines the rights of the people in Khyber Pakhtunkhwa, as tobacco is a product inherently linked to the province. He firmly believed that individuals from the province should be afforded the opportunity to work in these companies.