Experts urged PTB to investigate the matter of surplus tobacco crop

Observer Report

Tobacco industry experts urged Pakistan Tobacco Board, relevant law makers and authorities to investigate the matter of surplus tobacco crop in the market so farmers do not suffer in the hands of exploiters.

PTB must ensure there is no political interference and no undue pressure is exerted to target legitimate companies, who contribute more than PKR 114 billion to national exchequer annually, while the remaining 40+ manufacturers account for only PKR 2Bn contribution.

Continuous protests are being held only outside of buying centers of two multinational companies by farmers protesting that their tobacco should be bought while as per the information available with the subscribe, multinational companies are still purchasing the surplus tobacco while local tobacco manufacturers have either stopped purchasing or are buying in very nominal quantity compared to their quota, which is worrisome.

As per the industry norm, each year tobacco companies conduct an exercise of planning and strategizing their annual demand and presenting the same before Pakistan Tobacco Board (PTB) for it to apprise the tobacco growers of the estimated annual requirement of tobacco companies through publishing in national dailies. As per PTB, the total requirement for purchase of tobacco crop for the year 2021/2022 was 55.37 million kgs.

The two multinational tobacco companies, Pakistan Tobacco Company (PTC) and Philip Morris International (PMI) had agreed on a quota of 40 million Kgs (72%) out of a total of 55 million kgs. Pakistan Tobacco Company Limited (PTC) has a quota of 26.5 million Kgs (47.86%), while their purchase till date is 35.05 million kgs.

Philip Morris (Pakistan) Limited has a quota of 13.27 million Kgs (23.97%) and they have purchased almost 14.60 till date, while all other local tobacco companies and dealers committed to a quota of 15.6 million kgs (28%).

The surplus announced by PTB this year is 5 million kgs out of which the bulk is already being purchased by these multinational companies.

Now, the pressure is unduly increasing on them again in purchasing tobacco crops beyond the surplus purchases even, for the year 2021/2022.

Under the PTB Ordinance 1968, Section 30, the companies/purchasers submit their annual demand to PTB and are then mandated to purchase that demand as well as any surplus crop produced at a pro rata basis.

This demand is also published by PTB in the newspapers with the name of companies/purchasers and their committed quantity.

According to the sources, legal and tax compliant multinational tobacco companies are being pressured into purchasing tobacco crop beyond the surplus purchases, for the year 2021/2022. However, experts believe that a balanced approach should be adopted from office bearers and they should ask local players to stop exploiting farmers for their personal gains.

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