New Delhi: The Centre has approved a one-time, interest-free working capital loan of Rs 50,000 per barn for Flue-Cured Virginia (FCV) tobacco growers in Andhra Pradesh to provide immediate financial support amid changing global market conditions.
The assistance will be provided under the Interest-Free Working Capital Assistance Scheme and is expected to benefit around 44,000 growers, involving a financial intervention of approximately Rs 220 crore. The assistance is proposed to be transferred directly to farmers through Direct Benefit Transfer (DBT).
Support for growers
The government said the assistance would provide immediate liquidity to tobacco growers, helping them meet household expenses, repay institutional loans and purchase inputs for the upcoming crop season.
It is also expected to reduce growers’ dependence on private borrowing and address working capital requirements during a period of changing demand and international trade conditions.
100 million kg auctioned
Auctions for the 2025-26 FCV tobacco crop in Andhra Pradesh began on March 25, 2026. Around 100 million kg of tobacco has been auctioned so far.
FCV tobacco is primarily cultivated in Andhra Pradesh and Karnataka.
The government said changing global demand patterns, geopolitical developments and international trade dynamics have affected procurement and marketing conditions for the crop.
Measures to strengthen sector
The government is undertaking coordinated measures to facilitate procurement, increase market participation and promote exports, while maintaining engagement with exporters, buyers, growers and other stakeholders.
The one-time financial intervention is aimed at ensuring smoother marketing of the crop and supporting the working capital needs of FCV tobacco growers, the government said.