Khyber Pakhtunkhwa's Tobacco revenue

Tobacco is grown in Swabi, Mardan, Charsadda and Mansehra districts in Khyber Pakhtunkhwa and Okara, Sahiwal and Gujrat districts of Punjab. Its crop as per hectare yield is higher than many countries of the world and fetches huge revenue for the country. The crop is cultivated on over 6.5 million hectares in both the provinces with a production of 136 thousand tons. About one million people are associated with its growth, manufacturing, distribution and retailing; and growers are 32 per cent of them, the main chunk. The sale of the crop and its end product-cigarettes, cigar and pipe tobacco

— makes a hefty 4.4 per cent of the total GDP that is over Rs30 billion in real terms. Total revenue from this industry is in excess of Rs60 billion, including Rs18.17 billion in excise duty and Rs15.54 billion in sales tax. But Khyber Pakhtunkhwa is restricted to collect about Rs280 million in cess development fund while Rs180million was the annual share of the Pakistan Tobacco Board (PTB). This board was established in 1968 owing to the crop’s economic importance and its objective included conducting research and solving growers’ problems. It has regional offices in Peshawar and Lahore.
It was in this background that leaders of top political parties got together at Swabi, the house of tobacco production, on Friday to demand that Khyber Pakhtunkhwa should be empowered to collect all the revenue generated by tobacco. Such an authorization for the province has become all the more important following the devolution of power that saw the transfer of agriculture to provinces. Local journalists sponsored the debate on “Status of Tobacco Crop after the Eighteenth Amendment”. ANP MNA Pervez Khan from Swabi set the tone of the discussion by saying that tobacco manufacturing companies were exploiting growers by paying them much less than the crop’s actual price. He called for the dissolution of the Pakistan Tobacco Board for failing to work for the growers` welfare, and instead serving the tobacco companies’ interests. Jamaat-i-Islami leader Mohammad Usman said the centre had been receiving Rs45 billion to Rs48 billion through sale and excise taxes on cigarette and tobacco and this ratio has almost deprived the growers of their rights. Other speakers observed that all revenue generating from tobacco must go to province, particularly Khyber Pakhtunkhwa that was producing 90 per cent of the crop. The fact that the PTB fixed earlier this month the price of the commodity that growers feel is below the cost of production. PTB fixed the price at Rs124.30 per kg while the production cost is Rs170 per kg, according to farmers.
What the meeting at Swabi observed and how the farmers reacted to the PTB affairs, manifests that growers are not getting even the production expenses and the PTB has a definite tilt in favour of tobacco companies. Let the board’s affairs be investigated by the provincial governments of Punjab and KP and if the body is doing nothing to the objectives of farmers’ welfare, it may be dissolved to bring in some viable arrangement to conduct research for improvement of the tobacco quality and quantity. The devolution of tobacco growth is also a genuine demand and the federal government has to meet this constitutional obligation.