Tobacco Board Slashes Andhra Pradesh Crop Size by 43% as Global Glut Bites; Farmers Seek Alternative Crops

India's Tobacco Board — which functions under the Union Commerce Ministry and is mandated to regulate the production and curing of flue-cured Virginia (FCV) tobacco — has delivered its starkest market intervention in recent memory. For the 2026-27 season, the Board has set the crop size for Andhra Pradesh at 81 million kg (mkg), down sharply from 142 mkg the previous year — a reduction of 43%. Karnataka faces an almost identical correction, with its quota cut from 100 mkg to 51 mkg, a 44% pruning.

The trigger is a combination of forces that have been building for years: a sizeable domestic market glut, a sustained surge in competition from Brazil and African tobacco-growing nations, and a persistent pattern of licensed growers exceeding their sanctioned crop limits. Together, these pressures have eroded demand and undermined the Board's price-stabilisation mandate, forcing a correction that was, by most accounts, overdue.

The practical impact for cultivators is stark. Under the revised norms, each barn — which covers roughly four acres — will be permitted to produce 2,000 kg of tobacco in 2026-27, compared with 3,600 kg per barn previously. Critically, the cost of constructing, maintaining, and operating a curing barn does not fall in proportion to the output cut, leaving farmers with unchanged overheads against significantly lower permitted revenues.

Nevertheless, growers are largely avoiding open protest. PS Murali Babu, President and former General Secretary of the Federation of All India Farmer Associations (FAIFA), acknowledged the Board's rationale: farmers are aware of the glut and broadly accept that the reduction was necessary. Their frustration, instead, is directed at the absence of a government-backed plan to help them transition to alternative crops during the reduced-quota years — a gap they are now actively pressing the state to fill.

Licensed farmers have a second, more immediate grievance: unlicensed growers who continue to sell tobacco outside the regulated auction system, undercutting official prices and diluting the Board's supply-management efforts.

Vivekananda, a tobacco farmer from Eluru district, told The Hindu BusinessLine that illegal producers bring approximately 2 million kg of tobacco to market at around ₹230 per kg, disrupting price discovery for licensed growers who face penalties for their own over-production. He called on the Board and the state government to step up enforcement, including confiscation of illegally grown produce.

Vivekananda also proposed a constructive use of confiscated stock: sell it through official channels and route a meaningful portion of the proceeds to the Tobacco Growers' Welfare Fund, thereby turning an enforcement action into a grower-support measure. The suggestion reflects a broader desire among farmers for the regulatory apparatus to work in their favour, not merely against them.

The political response has moved quickly. Andhra Pradesh Chief Minister N Chandrababu Naidu has asked state officials to prepare a layered strategy — covering short-, medium-, and long-term horizons — to address the challenges bearing down on tobacco farmers in the state.

Among the options under consideration is whether a storage facility could be developed to allow farmers to hold their produce and wait for more favourable price windows, rather than being forced to sell at depressed auction prices in a glutted market.

FAIFA's Murali Babu echoed the demand for a concrete alternative-crops plan, stressing that farmers need practical, state-backed guidance on what to grow on land that will be underutilised under the new quota regime. Without such a roadmap, the crop-size reduction risks transferring financial stress from the tobacco market onto individual farm households — a humanitarian and political problem the state cannot afford to ignore.