In Andhra Pradesh’s tobacco heartland, the mood has shifted from quiet confidence to deep anxiety. For decades, the State’s farmers have balanced tradition with the demands of global markets, supplying both Burley varieties and Flue-Cured Virginia (FCV) to buyers across continents. But the sudden collapse in HD Burley prices has cut farmer earnings by half in just one season, pushing entire communities to the brink.
A crash felt across villages
In the tobacco belts of Prakasam, Nellore and Guntur, farmers are reeling from a sudden collapse in prices. High-density (HD) Burley, once a dependable export leaf, has fallen to nearly half its value today. At ₹120 per kg — barely above input costs — many growers are struggling to recover even what they spent on seed, fertiliser and labour. This is more than a seasonal fluctuation, it is an existential threat that could reshape rural economies across Andhra.
Farmers do not want freebies. What they want is a remunerative price, 10 to 20 per cent more than the cost of cultivation. Crop investment assistance and freebies won’t help. What is the benefit of giving ₹15,000 or ₹20,000 to a farmer? It’s not even enough to begin cultivation on an acre. Farming is our backbone, but all are breaking our back. This year, farmers lost ₹4 lakh per tobacco barn. Cultivation costs have soared, but prices have crashed. Last year, the average price was ₹272; this year, it is only ₹230. Wages have risen, leases have doubled, yet big companies and exporters are not buying. If the big companies bought directly, we could survive.
This testimony captures the wider reality: the problem is not farmers’ ability to grow — it is their inability to make a living from what they grow.
A warning for the flagship crop
The State’s tobacco story has long been anchored by Flue-Cured Virginia (FCV), the leaf that powers a ₹12,000 crore export engine. Prices have more than doubled in the past five years. On the surface, FCV appears insulated but the Burley collapse offers a stark reminder: market dependencies can shift without warning. Over half of FCV exports are concentrated in a handful of countries, and more than 60 per cent head to the EU, where new sustainability and traceability rules are tightening. Today’s gains are built not on structural reform, but on temporary supply shortages.
Lessons from abroad
Other producing countries have already travelled this path. Zimbabwe saw its sector collapse two decades ago when buyers exited. It recovered only after expanding its buyer networks and building transparent price platforms. Brazil, in contrast, avoided a crisis altogether by modernising barns, enforcing digital farm records, and strengthening post-harvest systems — allowing its farmers to earn up to 20 per cent more per kg while maintaining global market access.
Both stories point to the same truth: resilience requires more than bumper harvests. It demands investment, partnerships and forward-looking systems that make farmers competitive in premium markets.
Future-proofing Andhra’s leaf
Andhra’s recurring pattern of oversupply followed by price crashes has exposed the limitations of short-term fixes like annual quota relaxations. To truly protect farmers, the State needs to pivot from volume-led growth to value-driven transformation. That means embedding technology, sustainability and market diversification at the heart of the system.
· Skill-building and farmer training: Exposure to global best practices — from barn modernisation to sustainable cultivation methods — can future-proof the sector and secure premium positioning for Andhra’s leaf.
· Digital traceability platforms: International buyers increasingly demand farm-level digital records for sustainability and compliance. Establishing such systems can safeguard 25 per cent of exports currently at risk under tightening EU regulations.
· Global market linkages: Long-term stability depends on diversifying beyond a handful of buyers. Andhra cannot afford to keep 60 per cent of its FCV exports tied to just the EU. Strategic partnerships — whether with new markets in Asia or with responsible global investors in the supply chain — can reduce dependence and create healthier competition for farmer produce. Well-regulated foreign investment, tied to farmer welfare and sustainability, can bring in the capital and know-how needed to modernise barns, strengthen logistics and secure premium access abroad.
The road ahead
The HD Burley crisis is an advance warning for Andhra’s wider tobacco economy. The window to act is narrow: reforms must be locked in before global regulations tighten further and supply dynamics shift. Andhra now faces a choice: continue with fragile, short-term gains or embrace a transformation that makes its farmers globally competitive and its economy resilient.
(Theauthor is President of the Tobacco Growers Association, Ongole)
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Published on September 7, 2025
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