Rs 50,000 Interest-Free Loan for Andhra Tobacco Growers

26 Sep 2026, 10:49 by Vinay Kakkad · KalingaTV

New Delhi: The central government will provide Rs 220 crore in financial relief to help Flue-Cured Virginia (FCV) tobacco farmers in Andhra Pradesh manage cash shortages and prepare for the upcoming crop season.

Under the plan, farmers will receive a one-time, interest-free loan of Rs 50,000 for each tobacco barn they own as reported by ANI. The Ministry of Commerce and Industry announced the decision on Friday, September 25, 2026.

The funds fall under the government’s Interest-Free Working Capital Assistance Scheme and will reach around 44,000 growers. Money will go straight into the bank accounts of farmers through Direct Benefit Transfer (DBT) to prevent payment delays.

The relief comes during a tough period for growers. Shifting international market demand, global political tensions, and changing trade conditions have made it harder to sell and price tobacco leaves this season.

Most of India’s FCV tobacco is grown in Andhra Pradesh and Karnataka. In Andhra Pradesh, auctions for the 2025–26 crop season began on March 25, 2026. Since then, buyers have purchased around 100 million kilograms of tobacco across auction floors.

The interest-free funds are meant to solve immediate money troubles for farm families. The government explained that growers can use the cash to pay for essential household needs, clear existing bank loans, and buy farm supplies for the next crop cycle. A major goal is to keep farmers from turning to private moneylenders who charge high interest rates.

At the same time, the Commerce Ministry is working on steps to speed up crop buying, bring more buyers to local auctions, and boost tobacco exports overseas.

Officials noted that the government remains in regular talks with exporters, buyers, and growers to keep the market running smoothly and protect the livelihoods of tobacco farmers.