Government stops subsidies to cigarette industry, plans to aid tobacco growers

The government has decided to stop subsidizing the cigarette industry after a meeting Friday of the Agriculture Ministry, tobacco manufacturers and tobacco growers. The government now plans to aid tobacco farmers directly, and is considering the option of guaranteeing all tobacco farmers' income at last year's levels by purchasing unsold tobacco. Last year tobacco manufacturers sold 27,350 tons of tobacco. According to sector representatives, the government's solution is good in a long-term perspective. Moving away from last year's subsidization method, which involved subsidizing producers, would allow for the creation of a normalized, deregulated tobacco market. Several weeks ago, the government adopted a resolution under which tobacco product producers were to be subsidized, on the condition that the government's agricultural market agency (ARR) sign an agreement with the farmers by the end of March. The subsidies were to be on the same level as last year, when the government spent zl. 60 million for that purpose. (Puls Biznesu, p. 10) M.T.