Chief Minister Chandrababu Naidu orders tobacco firms to stick to procurement commitments and speed up auction process

The government will not tolerate companies that submit public procurement commitments without honoring them, warns Chief Minister N. Chandrababu Naidu. | Photo Credit: Photo File

Andhra Pradesh Chief Minister N. Chandrababu Naidu on Wednesday directed tobacco companies to immediately step up procurement and speed up the auction process to restore confidence among farmers.

He warned companies against delaying purchases despite having committed to take quantities and said the government would take strict action against firms harassing farmers.

After reviewing the procurement situation in the state at the Secretariat with officials and representatives of tobacco companies, Mr. Naidu expressed dissatisfaction with the functioning of the Tobacco Board. He questioned why Andhra Pradesh was facing procurement-related issues when similar issues had not surfaced in neighboring Karnataka.

Mr. Naidu warned tobacco companies against damaging their goodwill by not supporting farmers. He said if farmers were forced to switch to alternative crops due to poor market support, the companies themselves would face long-term consequences.

The Chief Minister reviewed the purchase commitments submitted by 28 tobacco companies and compared them with the quantities purchased so far. He made it clear that the government will not tolerate companies that submit public procurement commitments without honoring them. It directed all companies to ensure procurement at or above the minimum support price of ₹200 per kg set by the state government.

Mr. Naidu took serious note of the slow pace of buying by major manufacturers and pointed out that ITC Limited, Godfrey Phillips India Ltd. and VST Industries Ltd. together they have submitted commitments for 95.50 million kg of tobacco but have so far purchased only 17.6 million kg.

He said it was unacceptable for the government to have to review the same issue for the fifth time in the current season, calling it evidence of corporate negligence.

However, representatives of tobacco companies told the chief minister that the current crisis was largely caused by farmers growing tobacco beyond the demand projected through bullet points. They said the industry has already purchased quantities in excess of immediate requirements and is also facing a decline in exports, which is affecting its purchasing capacity. Despite these challenges, the companies have assured the government that procurement will continue.

Officials informed the meeting that the absence of an open tobacco market has further aggravated the situation. They explained that while the companies have collectively placed indents at 142 million kg, farmers have produced 232 million kg during the current season. The significant difference between demand and production resulted in a sharp drop in prices and slower orders.

Ministers K. Atchannaidu, Anam Ramanarayana Reddy, Gottipati Ravi Kumar and Dola Bala Veeranjaneya Swamy along with public representatives from the erstwhile Prakasam district and senior government officials attended the review meeting.

Published – 8 Jul 2026 21:20 IST