Tobacco auctions halted again as farmers protest sharp fall in prices

Tobacco auctions were suspended across most platforms in Karnataka on Wednesday after agitated farmers protested against a fresh slump in prices.

The tobacco farmers, who forced the closure of auction platforms in Periyapatna and Hunsur taluks of Mysuru district, set fire to bales of tobacco and spilled the produce on the roads in a show of anger over the crash in prices.

A group of irate farmers also staged a road blockade on the Hunsur–K.R. Nagar road.

Tobacco prices, which were fetching around ₹320 per kg at the start of the auction season in October 2025, began to decline in February after traders curtailed procurement following the imposition of excise duty and the increase in GST on tobacco products from 28% to 40%.

The price of bright-grade tobacco, which had already dropped from ₹320 to around ₹270 per kg in February, fell further to ₹240-₹250 per kg on Wednesday.

“Worse still, there were no bids for nearly 30% of the bales. When there are no bids, farmers have to bear additional transportation costs,” said Vikram Raj Urs, secretary of the Federation of Virginia Flue-Cured (VFC) Tobacco Growers’ Association of Karnataka.

Apart from the tax burden, sources in the tobacco industry said geopolitical tensions could also be affecting procurement. A significant quantity of tobacco grown in Karnataka is exported to cigarette manufacturing companies abroad, and traders have expressed concern about shipping consignments amid the ongoing conflict in West Asia involving Iran and the Israel–U.S. combine.

Mr. Urs said farmers are seeking a meeting with Union Finance Minister Nirmala Sitharaman to urge the Centre to review the tax burden on tobacco products. Alternatively, they want the government to direct traders — including cigarette manufacturers and exporters — to step up procurement and purchase the quantity they had committed to before the crop size was fixed.

For the 2025-26 season, the crop size was fixed at 100 million kg, of which about 87 million kg has been cultivated. So far, around 57 million kg has been purchased at auction platforms, leaving nearly 30 million kg yet to be procured.