Tobacco price crash: Crop size reduced to 90 million kg for Karnataka during 2026-27

The Tobacco Board has reduced the crop size in Karnataka from 100 million kg in 2025-26 to 90 million kg for 2026-27. The reduction in crop size followed a decline in tobacco prices.

Tobacco Board chairman Yashwanth Kumar, who attended the board meeting held in Mysuru on Monday, said the crop size has been reduced not only due to declining demand but also to ensure the existing crop is marketed at an affordable price.

Even though the 2025-26 crop size is fixed at 100 million kg, production is estimated to be only 87.97 million kg.

Tobacco farmers in Karnataka had resorted to agitation after prices of bright quality varieties dropped from ₹320 to ₹270-280 last month.

Traders, who have reduced supplies, attributed the decline in demand for cigarettes to their rising price after the Union Budget imposed excise duty and increased the GST on tobacco products from 28% to 40%.

During the meeting, Indian Tobacco Association (ITA) secretary YA Chowdary said that production has increased in countries such as Brazil and Zimbabwe and this has affected the prices.

Moreover, transportation of tobacco to foreign destinations has also been disrupted due to conflict in West Asia and its impact on West Asian countries, Mr. Chowdary said.

Responding to demands from elected representatives on options for farmers to give up tobacco cultivation, Mr. Kumar said Niti Aayog is encouraging crop diversification to replace tobacco with alternative crops like sandalwood.

Niti Aayog has promoted alternative crops like sandalwood, bamboo and fruits to increase farmer income and sustainability.

Animal Husbandry and Sericulture Minister K. Venkatesh and A. Manju, JD(S) MLA representing tobacco growing districts of Periyapatna and Arkalgud in the Legislative Assembly, also sought compensation for farmers who had come forward to give up tobacco cultivation licences.