Tobacco cultivators were hit hard when the annual procurement target for national and multinational companies was announced after a two-month delay. As per Dawn News, companies are reducing their procurement targets for the upcoming year in what appears to be a deliberate attempt to harm tobacco cultivators.
Companies have reduced their total tobacco purchases by 2.5 million kgs, which brings their total demand for 2025 down to a little under 75 million kgs as per sources who relayed these statistics to Dawn.
The reduction in demand is the second consecutive cut as demand stood at 77 million kgs in 2024 while in 2023, the combined company demand for tobacco stood at a high 85.5 kg in 2023.
At first glance, it seems as if a fall in demand wouldn’t necessarily have posed an issue for farmers as companies are supposed to announce their demand levels to the Pakistan Tobacco Board (PTB) in advance. This observation has its merits as farmers can simply choose to grow crops other than tobacco that have a respectable level of demand in the economy.
However, tobacco companies announced their quotas after the wheat sowing period had ended. Farmers are stuck now growing tobacco despite knowing it might never get loaded onto trucks bound for company warehouses.
Moreover, it is to be noted that the high level of tobacco demand in the previous years resulted in tobacco farmers to expand their supply significantly. A drop in demand now will undoubtedly hurt farmers as they will struggle to find buyers for their yields.
Legislation to protect farmers from precisely this situation exists, however, companies violated this law. As per The Martial Law Order (MLO) 487, which oversees the trade of tobacco, companies are supposed to disclose the volume of tobacco they aim to purchase by October 31.
As such, farmers can freely choose whether they want to grow tobacco for these companies or if they should switch to other crops such as wheat.
Farmers are growing agitated now and few can say their frustrations are not justified. Farmers have fallen victim to the exploitative practices of the tobacco buying companies.
What is especially concerning is that farmers are looking towards the PTB, which is supposed to offer them protection. However, the PTB has no plans to hold the companies accountable for exploiting farmers by violating MLO 487.
Farmers will now have to suffer financial losses due to companies not informing them on time. This could devastate the rural agricultural economy and deter investors from entering into business dealings with farmers.
It will be interesting to see now what farmers do with the excess tobacco in the upcoming year. The solution may not be as far as many think it is. The Middle Kingdom, China, up north happens to be the largest importer of tobacco being responsible for 16.5 percent of all tobacco imports worldwide.
Perhaps Pakistan’s geography will prove favourable for farmers not just to grow tobacco but also to export it.