FAIFA Protests Tobacco Tax Hike, Warns of Farmer Losses and Crop Glut

FAIFA stages protest in Ongole against proposed excise duty hike on tobacco products

New tax rates to take effect from 1 February 2026, impacting cigarette pricing nationwide

Farmer groups warn of falling demand, lower procurement, and surplus tobacco stocks

Central government urged to reconsider policy citing livelihood risks across multiple States

The Federation of All India Farmer Associations (FAIFA) has stepped up opposition to the Centre’s proposed tax hike on tobacco products, warning that the move could destabilise farm incomes and trigger a market glut. The protest comes just weeks before the new excise duty structure is scheduled to take effect.

On Saturday, January 3, 2026, FAIFA members organised a rally in Ongole, Andhra Pradesh, and submitted a formal representation to Ongole MP Magunta Srinivasulu Reddy, demanding an immediate rollback of the revised tax rates.

What the tax change involves

FAIFA is opposing a Ministry of Finance notification that increases excise duty on cigarettes to ₹2,050 to ₹8,500 per 1,000 sticks, depending on cigarette length. The revised rates are set to be enforced from 1 February 2026, a move the government has positioned as part of its broader taxation and public health framework.

Farmer representatives argue the scale of the increase is unusually steep and could have unintended economic consequences.

Farmers fear demand shock

According to FAIFA leaders, higher excise duties will likely push domestic manufacturers to raise retail prices, leading to reduced consumer demand. This, they warn, will cascade down the supply chain, directly impacting tobacco procurement from farmers.

FAIFA stated that a sudden drop in offtake could result in a near-term glut in the tobacco crop market, depressing prices and leaving farmers with unsold produce.