The smoky future of the tobacco farmers in India

No Tobacco Day asks rhetoric questions to India’s stand

Business & Politics

June 1, 2017

/ By / Kolkata



Tobacco farmers looking for an alternative income in India

Tobacco farmers looking for an alternative income in India

‘At the crossroads of life and livelihood’ was a perfect name given to a study done on India’s tobacco industry; the second largest in the world after China. As the country endorses campaigns against the consumption of tobacco, the alternative employment for workers remains too bleak a prospect.

As the world celebrates ‘No Tobacco Day’ with an initiative to stop the usage of tobacco, the United Nations Development Programme (UNDP) reports that tobacco-related medical expenses and lost productivity cost the world’s economy a mammoth USD 1.4 trillion annually.

Sobbing tobacco farmers

An extremely important commercial crop in India, tobacco generates a substantial socio-economic benefit in terms of agricultural employment, foreign exchange earnings, revenue generation and farm incomes. The industry, according to the Tobacco Institute of India figures, provides income to 45.7 million people in the country. While these figures depict direct income, there are millions who indirectly earn their livelihood from the tobacco industry such as people engaged in packaging, warehousing, flavour & fragrance, paper, jute, mentha, areca nut, transporters. etc.

Anti-tobacco warnings all over India have supposedly brought down the consumption of tobacco. However, the illegal trade of cigarettes in contrast to the lowering wages of the tobacco farmers in the country are counter-balancing stories with a clear conflict of interest. The workers involved in the tobacco industry of India continue to live a life full of poverty, ill-health, debt and in despair as the lack of an alternative income prevails.

Tax arbitrage cripples

FICCI, the industry body of India in a report named ‘Invisible Enemy – A Threat to our Nation Interests: Extent, Causes and Remedies’, pointed out how cigarettes are one of the top five commodities smuggled in India. The report notes, “Illicit cigarette trade in India is a national threat as the country is now the 4th largest cigarette market in the world.” The report also observes the persisting increase in taxes on cigarettes providing a lucrative opportunity for tax evasion due to tax arbitrage between the country of export and the importing country.

The Tobacco Institute of India (ITI) has seen a ray of hope in the Goods and Services Tax (GST) in terms of addressing the high tax arbitrage available with the cigarette smuggling syndicates. The GST is expected to bring back relief to the distressed tobacco farmers, the legal cigarette industry and also improve the revenue collection system from this sector, according to the ITI press statement.

The curious case of casing

As a major step to discourage the consumption of tobacco in India; the government over the last decade has taken random steps that hardly ticked the boxes. Controlling tobacco in India, which is otherwise the second country in terms of consumption was a tough call. The government took an easy way out. According to a notification issued on September 24, 2015, the Cigarettes and Other Tobacco Products (Packaging and Labelling) Amendment Rules 2014, the government announced an 85 pc labelling area for the warning on tobacco goods. From April 1, 2016, it was mandatory to put the warnings; however, the results were obviously not in favour of the government.

While the world trend shows that the decrease in consumption of tobacco is a gradual process, the number of workers in the industry since pictorial warnings in 2010 was introduced in India kept on increasing.

In the process, the labelling outrage directly helped the illegal smuggling of cigarettes and bidis in the country. The farmers, workers, labourers and the low-income traders associated with the industry endured the heat.

Exploitation of women and child labour

The most vivid and the darkest side of the tobacco industry is probably the exploitation that comes along with it. In a study conducted by the Voluntary Health Association of India, it was found that tobacco as a cash crop has a very low margin of profit. The companies pay as low as INR 23-25 (USD 0.36-0.39) for 1,000 bidis rolled in certain parts of India. Thus its no surprise that this job involves more women (76 pc) and children (15 pc). The tobacco industry is also one of the major sectors that have a high level of child labour inclusion despite the strict prohibition in the country. Poverty ridden workers are subjected to death as working in tobacco factories makes these women and children more prone to asthma and tuberculosis.

The alternative source of income remains an illusion in the country that juggles between contradictory policies of promoting tobacco on one hand and sending health minister to the World Health Organisation (WHO) to receive an award for tobacco control on the other hand.

While rehabilitation looks a long-drawn process due to lack of skill and other employment opportunities, the unending poverty and an inclination to unscrupulous means to wealth remain a perennial truth.

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