The long outstanding problem regarding the tobacco crop prices has finally been resolved. Pakistan Tobacco Board (PTB) has fixed the price of tobacco at Rs 121 per kilogram
Senate Standing Committee on Commerce recommended that the tax on tobacco export should be reduced from Rs10 to rs.5/kg. Meanwhile Commerce Federal Secretary, Munir Qureshi, said in the meeting that the price of fixation was made to protect the interests of growers. Ministry of Commerce State Minister, Abbas Khan Afridi said that the consultative meeting was held with all stakeholders regarding the price fixation in the Khyber Pukhtunkhwa (KPK) on rate of Rs.117/ per Kg as fixed by the Board.
This decision was finalized following detailed briefing in the National Assembly and Committees on Ministry of Commerce during the last few days. Experts closely aware of the issue observed that the senate was being blackmailed by elements completely unrelated to the affairs. They said that the main contention was being caused by individuals who were new to the tobacco board and were from areas where tobacco growing doesn’t even take place.
The key issues discussed during the last few days in the National Assembly and later Senate Standing Committee on Commerce were related to the damaging impact on export sector incase of drastic revision in tobacco crop prices. Tobacco crop is one of the few crops in which exports increased by more than 300% in last two years. The current price of tobacco crop in Bangladesh is Rs.106/kilogram and if Pakistan increased its price beyond international market standards, it would hurt tobacco farmers instead of protecting them.
Many members who took part in these meetings pointed out that sectors like PIA, Railways etc. had already gone under and were a drain on national resources, whereas cigarette manufacturers were contributing near Rs.75 billion (US$800 Million) annually in tax for national revenue. If proper policies were not put in place, this sector and government revenue would be undermined. Actually one of the recommendations put forward was to use these billions of Rupees in tax contribution to subsidise and support tobacco farmers instead of killing the goose that lays golden eggs.
The decision of one of the multi-national cigarette manufacturers to close one of the factories was also discussed as a tip of the iceberg if the proper policies were not put in place. If foreign investors were “blackmailed” or continue to face difficult operating environment, it would not only hurt investments in one sector of the economy but would signal red light to all potential foreign investment. It was also pointed out that the same multinational had last year declared losses due to the market conditions and if the current economic and investment environment was not improved others could also go in losses. In such scenario there would actually be no one to buy tobacco crop from farmers who would suffer more as domestic demand would also end and export potential would anyway be undermined due to drastic prices beyond international market conditions.
dear editor Pakistan Today. Fixining the price of tobacco as 121 per kg,the real stakeholders ( the growers) were not taaken in confidence. Even a single representative of the growers were not consulted at any stage of fixing the price. We went from pillor to post but no one heared us. We met ptb chairman, Abbas Afridi minister of commerce and many other concerned officer but no attention was paid to our demands. The real cost of production of tobacco is Rs 198 per kg but tobacco board and ministery of commerce announced the rate as 121 per kg. It is just a propaganda of the exploiters and swindlers that the dispute was amicablly solved. We are totally against this unfair price announced by PTB because the matter was not ammicablly solved, this low price was imposed on the poor growers. We strongly condemn this cruel and East India Company like behaviour of pakistan tobacco board. Abdul Samad Safi, Secretary General Kisan Board KPK, Pakistan
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