KP tobacco farmers fear more exploitation by MNCs after budget

ISLAMABAD - Although the federal budget has promised subsidies for the agriculture sector but there is no proper mechanism to check if the farmers will actually be benefited or not, says Tobacco Farmers Welfare Association secretary general.

Zafar Malik pointed out that the tobacco farmers of KP were already being harassed by monopolistic buyers and this trend is likely to exacerbate after the new budget. Asad Khan, one of the local farmers who works in the field 12 hours a day, said that he as well as farmers like him continue to be exploited by buyers from big tobacco firms.

Malik was of the view that tobacco is a labor intensive crop mostly grown in the region of KP. As per Pakistan Tobacco Board 2013 statistics, it is the only crop grown in Pakistan whose yield is well above the world average and matches the per hectare yield of the US and other developed countries, an average yield of 3,550 kilograms per hectare. However, despite presence and dominance of the multinational companies in this sector, which are the buyers of the crop, the standard of living of KP farmers hasn’t improved and they are as poor as they were decades ago.

Asad Khan, a local farmer of Swabi district, lamented: “I inherited my agriculture land from my father in 2004 and in hope of a better tomorrow I took the decision of farming tobacco on my father’s land, who was originally cultivating sugarcane. We shifted to tobacco in 2005. However, a decade has gone by and our standard of living has not improved at all.”

“We work arduously from more than 12 hours a day to plant and harvest the best quality tobacco that can be grown in Pakistan. Buyers from big multinational companies come and buy our crops at throw away prices without giving us any room to bargain,” dejected Khan added.

Khan explained further by adding: “The buyers from these companies would come and set their own buying prices, which was always below the market buying rate. We had no other choice but to sell them at their desired rates. If we don’t sell our crops to them we had no one else to sell our crops to and this fact was exploited by buyers from these companies.”

“Fortunately, now we have other local manufacturers as well in the market to sell our crop to. They give us leverage against these big tobacco buyers and because of them I have been getting better rate for my crop,” Khan added.

As per Economic Survey of Pakistan, tobacco growing, manufacturing, distribution and retailing employs over one million persons directly and indirectly. And, it is one of the most lucrative sectors in terms of income and tax generation for Pakistan. This sector is dominated by two big tobacco firms - PTC and PMI - which together have more than 82% of the Pakistani’s tobacco market share. Both of these firms are owned by multinationals companies British American Tobacco and Phillip Morris International and annually these firms send billions of rupees abroad in terms of profits.

As per Pakistan Tobacco Board 2015 annual report, Pakistan produces one of the world’s top quality FCV tobacco, but the farmers only get $1.66/pound which is the lowest in the region of South Asia. Khan informed: “It is due to the monopoly of these big tobacco firms that we (farmers) are not getting fair rate for our crop.”

In the end, Khan requested: “Government should encourage local industrialists to establish more factories so that there is more competition in market and black mailing can be stopped by these big tobacco companies which give nothing back to the farmers. Additionaly, all-out efforts should be done by government to protect the rights of the local farmers.”

Muhammad Aslam, another farmer, alleged that big companies publicly lament the loss of revenue to the government due to illicit tobacco trade and spend millions to frame doctored reports, but do not undertake any serious effort to actually give back to the nation from where they make their billions. “There should open competition in the tobacco market so that poor farmers don’t get exploited by these companies,” he stressed.

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