Tobacco farmers in Pakistan are up in arms against what they perceive as the government’s unfair policies, as the recent increase in federal excise duty (FED) on cigarettes has pushed them into a deep crisis.
With legal cigarettes becoming twice as expensive, the demand for illicit cigarette brands has skyrocketed, resulting in a sharp decline in sales for the regulated cigarette industry.
Mushfiq Ali Khan, President of Anjuman-i-Kahstkaran (KP), has expressed grave concerns about the dire situation faced by tobacco farmers. The significant drop in sales of the legal industry has made it increasingly difficult for farmers to secure reasonable prices for their crops.
On March 28, 2023, a press conference was held by Khan and other stakeholders to shed light on the mounting challenges faced by tobacco farmers due to the extraordinary increase in federal excise duty on cigarettes. During the conference, urgent appeals were made to the government for immediate assistance in safeguarding the interests of tobacco farmers.
Regrettably, despite the passage of two months since the press conference, no senior government officials or authorities have reached out to the farmers or taken any steps to alleviate the crisis.
Khan highlighted the burdensome taxes and the considerable decline in sales that have forced the regulated industry to limit their tobacco purchases. On the other hand, the illicit cigarette manufacturing industry offers farmers unfair prices for their tobacco, with no guarantee of timely payment. Faced with this predicament, farmers are left with no choice but to rely on the illegal cigarette industry.
Tobacco is a crucial cash crop in KPK, supporting the livelihoods of thousands of families dependent on tobacco cultivation. The regulated, tax-paying industry plays a pivotal role in enhancing the quality of tobacco farming and ensuring prompt and equitable compensation for farmers. However, the unprecedented increase in federal excise duty imposed on the regulated industry has further exacerbated the challenges faced by tobacco farmers.
In light of this, Khan called upon the government to reduce the federal excise duty on cigarettes. Such a reduction would enable the regulated and lawful industry to resume purchasing from tobacco farmers, ensuring timely payments and safeguarding the farmers’ livelihoods. Moreover, bringing the illegal cigarette industry under the purview of the law would also aid the government in achieving its cigarette tax targets.
Mushfiq Khan sent a clear message to the government and authorities, stating that if tobacco farmers are not protected through a reduction in cigarette taxes, they will not hesitate to take necessary measures to safeguard their interests. The plight of these farmers highlights the need for a comprehensive review of the government’s policies to ensure a fair and sustainable environment for tobacco cultivation in Pakistan.