INDIAN TOBACCOS – A PERSPECTIVE
By H N Ramaprasad, Vice-President – Exports & Supply Chain, ITC Limited
WORLD TOBACCO, USA
RICHMOND
INDIAN TOBACCOS – UNIQUE POSITIONING
SECOND LARGEST TOBACCO PRODUCER
THIRD LARGEST FLUE CURED TOBACCO PRODUCER
MOST DIVERSE RANGE OF TOBACCOS
BRAND INDIA
BRAND INDIA
LARGEST FILLER SOURCE
THE LANDSCAPE
INDIA : TOBACCO CULTIVATION LANDSCAPE
Provinces
Farm Families
M. Kg.
Hectares Land
Villages
Person days of Farm Labour
FLUE CURED TOBACCO PRODUCTION
Produced in 2 provinces
Andhra Pradesh & Karnataka
Andhra Pradesh
Karnataka
INDIA: CIGARETTE TOBACCO
GROWING REGIONS
MYSORE
TRADITIONAL
NORTHERN LIGHT
SOILS (NLS)
VINUKONDA
BURLEY (VB)
60,000 Farmers
35,000 Farmers
12,000 Farmers
10,000 Farmers
1000 Villages
900 Villages
300 Villages
300 Villages
83,000 Ha Land
90,000 Ha Land
30,000 Ha Land
12,000 Ha Land
100 M. Kg.
Production
125 M. Kg.
Production
65 M. Kg.
Production
15 M. Kg.
Production
2.0 - 3.0 % Nic
2.0 - 4.0 % Nic
1.0 - 3.0 % Nic
1.0 - 2.0 % Nic
INDIA - EXOTIC STYLES
Differentiated products to meet niche requirements
LEAF TOBACCO INDUSTRY
THRESHING FACTORIES
TRADE
20 GLTs
600+
Valued @ Rs. 4000 Cr.
(Traders & Exporters)
STORAGE WAREHOUSES
80 Lakh sft
Aggregating Godowns & Redried
Storages
MANUFACTURERS
3
(ITC, GPI & VST)
AUCTION CENTRES
32
Tobacco Auction Platforms
EMPLOYMENT
3 Million+
(Direct & Indirect;
On farm & off farm)
INDIA – LEAF EXPORTS
Annual exports of over 200 M. Kg.
Second highest leaf tobacco exporter globally
TOBACCO BOARD





INDIAN TOBACCO
ASSOCIATION
Commerce Ministry
Policy making body
Crop regulator
Auctioneer
Promoter
CTRI
• Industry body
• Favorable policy
formulations
INDIAN TOBACCO
ECOSYSTEM
• Indian Council of
Agriculture Research
• Fundamental
research
FARMERS
• Small marginal farmers
• Large farmer base
INDUSTRY
•
•
•
Tobacco Exporters – 160
Registered traders – 600+
Participants – 100+
INDIA
POLITICAL – ECONOMIC INFLUENCES
CONTOURS OF THE GOVERNANCE MODEL
FOREIGN POLICY
FISCAL DEFICIT
GOVERNANCE
FOREIGN DIRECT
INVESTMENT (FDI)
INFRASTRUCTURE
FUEL SUBSIDY
EXCHANGE RATE – INR TO THE US$
2013
2014
70.00
65.00
62.07
62.83
60.00
54.24
RUPEE
55.00
50.00
45.00
40.00
35.00
30.00
JAN
FEB
MAR
APR
MAY
JUN
JUL
MONTH
Stable 2014
AUG
SEPT
OCT
NOV
DEC
THE FARMER
FLUE CURED – PRODUCTION & PRICING
Rs./Kg.
M. Kg.
THE FARMER
Small & Marginal Farmers
Investment of
Average Landholding: 1 – 2 Ha
US$ 2000 per Ha per annum
Weather dependent
Fluctuating productivity & quality
Income of
Low investment capability
U$ 400 per Ha per annum
Heavy dependence on loans
HIGHEST RISK TAKER!
LOW RETURNS!
HOW DO WE MAKE THE FARMER PROFITABLE?
> 100,000 Ha under Hybrids
Coverage
Mobile ICT Solutions for Crop
Advisory
HYV Deployment
Farmer Empowerment
> 200 Villages under soil
compaction management
Solutions for 80% labor
reduction
Farm Mechanization
Drip Irrigation
Sub Soiling
Micro Irrigation
>50,000 Ha Coverage with
Tray Seedling Production
Alternative fuels usage
Tray Seedling
Energy Conservation
Village
Farmer
FARMER – A VILLAGE CENTRIC APPROACH
Integrated deployment of interventions in a village, round the year!
Crop
Management
Research &
Development
Farm
Sustainability
Community
Development
HOW ARE WE EMPOWERING THE FARMERS?
Mobile telephony based agricultural information services to small & marginal farmers through Voice &
SMS.
Communication in Vernacular
Language
Crop Advisory
Voice & SMS based Information
Local News
Personalized & Customized
Messages
Weather Forecast
Market News
Schemes and Subsidy
Other alerts
OUR FARMER PROFITABILITY EQUATION
Productivity
(kg/Ha)
Cost of
Price (Rs/kg)
(Rs/Ha)
PRODUCT QUALITY
PRODUCT INTEGRITY
FARM
PRODUCTIVITY
SOIL
Cultivation
WATER
FUEL
ENVIRONMENTAL SUSTAINABILITY
Farmer
Profitability
(Net Returns
Rs/Ha)
PRODUCTION
COST
BIODIVERSITY
SUSTAINABILITY
FOCUS AREAS
SOIL
WATER
Health Management
Micro Irrigation
LABOUR
Farm Mechanization
FUEL
Renewable Energy Alternatives
BIODIVERSITY
Conservation & Management
NATURAL RESOURCE CONSERVATION
SOIL HEALTH
MANAGEMENT
WATER
CONSERVATION
SOCIAL FARM
FORESTRY
GREEN
MANURING
FARM PONDS
GROUND WATER
RECHARGE
SOIL
COMPACTION
MANAGEMENT
WATER TANKS
CARBON
SEQUESTRATION
SOIL FERTILITY
MAPPING
TRENCHES &
BUNDS
SOIL
CONSERVATION
80,000 Ha under soil fertility
management programmes
Water harvesting structures
irrigating 20,000 Ha Dryland
30,000 Ha under various
afforestation programmes
SOCIAL INVESTMENTS
CHILD
EDUCATION
280,000 Children!
COMMUNITY
INVESTMENTS
Agri Business Centres!
LIVESTOCK
DEVELOPMENT
500,000 Milch Animals!
R&D
RESEARCH & DEVELOPMENT
Focus on farm productivity and quality improvement solutions partnering with farmers
PLANT BREEDING
AGRONOMY
MICROBIOLOGY
LEAF CHEMISTRY
High yielding hybrids
Support to the farmer - contemporary production techniques for weather resilience, farm
productivity improvement & new product development
IPS WITHIN AN AUCTION SYSTEM
IPS – KEY ELEMENTS
6.EXCLUSIVITY
5.SUSTAINABILITY
Complete Ownership
Enforcement of Practices
1. FARM
4. PRACTICES
VERTICAL INTEGRATION
Support & Visibility
Visibility
2.FARMER
3. INPUTS
Farmer Profiling
Monitoring & Control
THE ROAD AHEAD
THE ROAD AHEAD
Crop calibration
Bringing FC production in line with demand from customers
One stop shop for all tobacco types
Focus on non-Flue Cured types
Price competitiveness
‘Value for money’ filler and select flavour styles
Product integrity & traceability
Concrete actions on the ground
THANK YOU