Trends of tobacco cultivation in India: Boon or bane for supply reduction?

Introduction Flue-cured Virginia Tobacco is an important commercial crop grown in India. It occupies the third position in the world with an annual production of about 800 Million Kgs and 5th in exports. Tobacco contributes to over Rupees 340 Billion astax revenue to the national exchequer and approximately Rs.50 Billion by foreign exchange every year. Objective of the study To determine the trends of tobacco cultivation and tobacco revenue in India. Data sources: Data on tobacco production, crop target, crop price etc were collected for the years 2012-2016 from Annual reports of Tobacco Board, Ministry of Trade and Commerce, India. Study method: Secondary data-based Cross-Sectional Study Data analysis: Data were analyzed using percentage, proportion and Pearsonn's Correlation Coefficient on SPSS version 16. Results were considered significant at 95% level of significance. Results The mean Flue-cured virginia production between 2012 and 2016 was 270.35 million kg (± 51.52) with a percentage reduction of 27% from the baseline year. Flue-cured virginia had a mean target of 259.5 million kg (±26.55) during this period which showed 18% reduction in the target between base and end year. As FCV crop target increased, production also increased with a strong positive correlation (r= 0.96; p≤0.05) which was statistically significant. Excise duty and foreign exchange in million rupees between 2012 and 2016 showed a percentage increase of 8% and 22% respectively. Conclusions The study depicts that FCV crop target is correlated to the production positively. Hence, reducing crop target is an effective supply reduction measure