Centre approves one-time interest-free loan of ₹50,000 per barn for Andhra tobacco farmers — How will credit come?

The Commerce Ministry on Friday announced that it has approved a one-time, interest-free loan of ₹50,000 per barn for Flue-Cured Virginia tobacco growers in Andhra Pradesh, according to a PTI report.

“As part of the proposed one-time intervention, interest-free working capital assistance of ₹50,000 per barn has been approved for FCV tobacco growers,” it stated.

How will farmers get loan credit?

The Centre’s proposal covers some 44,000 tobacco growers, with the total financial intervention reaching near ₹220 crore, the ministry statement added.

It added that the assistance is proposed to be provided directly to farmers through direct benefit transfer (DBT), the PTI report said.

Why are Andhra farmers getting financial assistance?

As per the Centre’s statement, the financial assistance is intended to “provide immediate liquidity to tobacco growers, enable them to meet household requirements and repay institutional loans, purchase inputs for the ensuing crop season and reduce dependence on private borrowing”.

“The initiative reaffirms the government’s commitment to the welfare of FCV tobacco growers by providing timely financial assistance and supporting their working capital needs,” it stated.

Meanwhile, the report added that the government is also undertaking coordinated measures to facilitate procurement, enhance market participation and promote exports.

“Continuous engagement with exporters, buyers, growers and other stakeholders is being undertaken to facilitate smooth marketing of the crop and strengthen the FCV tobacco sector,” as per the statement.

Tobacco crop in India: Key highlights

• Auctions for the 2025–26 crop season in Andhra Pradesh commenced on March 25, 2026, with about 100 million kg of FCV tobacco auctioned so far.
• This tobacco is predominantly cultivated in Andhra Pradesh and Karnataka.
• The Centre’s statement added that the global tobacco market has witnessed changing demand patterns, geopolitical developments and evolving international trade dynamics, influencing procurement and marketing conditions.

Centre permits sale of excess FCV tobacco

Meanwhile, the Centre has also permitted the sale of excess ‘Flue-Cured Virginia tobacco’ of registered and unregistered growers in Andhra Pradesh for the 2025-26 crop season at the auction platforms authorised by the Tobacco Board.

According to a Commerce Ministry notification, the Centre has relaxed the operation of a provision of the Tobacco Board Act in Andhra Pradesh “for the auctions during the crop season 2025-2026 and permits the sale of excess Flue-Cured Virginia tobacco of the registered growers and unauthorised Flue-Cured Virginia tobacco of the unregistered growers at the auction platforms authorised by the Tobacco Board”.

The financial assistance was approved under the Interest-Free Working Capital Assistance Scheme to provide timely financial support to growers amid evolving global market conditions.