1. INDIAN TOBACCOS – A PERSPECTIVE By H N Ramaprasad, Vice-President – Exports & Supply Chain, ITC Limited WORLD TOBACCO, USA RICHMOND

2. INDIAN TOBACCOS – UNIQUE POSITIONING SECOND LARGEST TOBACCO PRODUCER THIRD LARGEST FLUE CURED TOBACCO PRODUCER MOST DIVERSE RANGE OF TOBACCOS

3. BRAND INDIA LARGEST FILLER SOURCE

4. THE LANDSCAPE

5. INDIA : TOBACCO CULTIVATION LANDSCAPE

6. Produced in 2 provinces Andhra Pradesh & Karnataka Karnataka Andhra Pradesh FLUE CURED TOBACCO PRODUCTION

7. MYSORE NORTHERN LIGHT SOILS (NLS) TRADITIONAL 12,000 Farmers 300 Villages 30,000 Ha Land 65 M. Kg. Production 35,000 Farmers 900 Villages 90,000 Ha Land 125 M. Kg. Production 60,000 Farmers 1000 Villages 83,000 Ha Land 100 M. Kg. Production 10,000 Farmers 300 Villages 12,000 Ha Land 15 M. Kg. Production VINUKONDA BURLEY (VB) INDIA: CIGARETTE TOBACCO GROWING REGIONS 1.0 - 2.0 % Nic2.0 - 3.0 % Nic2.0 - 4.0 % Nic 1.0 - 3.0 % Nic

8. INDIA - EXOTIC STYLES Differentiated products to meet niche requirements

9. STORAGE WAREHOUSES 80 Lakh sft Aggregating Godowns & Redried Storages THRESHING FACTORIES 20 GLTs Valued @ Rs. 4000 Cr. MANUFACTURERS 3 (ITC, GPI & VST) AUCTION CENTRES 32 Tobacco Auction Platforms EMPLOYMENT 3 Million+ (Direct & Indirect; On farm & off farm) TRADE 600+ (Traders & Exporters) LEAF TOBACCO INDUSTRY

10. INDIA – LEAF EXPORTS Annual exports of over 200 M. Kg. Second highest leaf tobacco exporter globally

11. INDIAN TOBACCO ECOSYSTEM Tobacco Exporters – 160 Registered traders – 600+ Participants – 100+ Tobacco Exporters – 160 Registered traders – 600+ Participants – 100+  Commerce Ministry  Policy making body  Crop regulator  Auctioneer  Promoter TOBACCO BOARD Small marginal farmers Large farmer base FARMERS Indian Council of Agriculture Research Fundamental research CTRI Industry body Favorable policy formulations INDIAN TOBACCO ASSOCIATION INDUSTRY

12. INDIA POLITICAL – ECONOMIC INFLUENCES

13. FUEL SUBSIDY INFRASTRUCTURE FOREIGN DIRECT INVESTMENT (FDI) FISCAL DEFICITFOREIGN POLICY CONTOURS OF THE GOVERNANCE MODEL GOVERNANCE

14. EXCHANGE RATE – INR TO THE US$ Stable 2014

15. THE FARMER

16. FLUE CURED – PRODUCTION & PRICING M. Kg. Rs./Kg.

17. Investment of US$ 2000 per Ha per annum Investment of US$ 2000 per Ha per annum Income of U$ 400 per Ha per annum Income of U$ 400 per Ha per annum HIGHEST RISK TAKER!LOW RETURNS! Small & Marginal Farmers Average Landholding: 1 – 2 Ha Small & Marginal Farmers Average Landholding: 1 – 2 Ha Low investment capability Heavy dependence on loans Low investment capability Heavy dependence on loans Weather dependent Fluctuating productivity & quality Weather dependent Fluctuating productivity & quality THE FARMER

18. HYV Deployment > 100,000 Ha under Hybrids Coverage Farm Mechanization Solutions for 80% labor reduction Sub Soiling > 200 Villages under soil compaction management Tray Seedling >50,000 Ha Coverage with Tray Seedling Production Micro Irrigation Drip Irrigation Energy Conservation Alternative fuels usage Farmer Empowerment Mobile ICT Solutions for Crop Advisory HOW DO WE MAKE THE FARMER PROFITABLE?

19. Integrated deployment of interventions in a village, round the year! Crop Management Research & Development Farm Sustainability Community Development FarmerVillage FARMER – A VILLAGE CENTRIC APPROACH

20. Mobile telephony based agricultural information services to small & marginal farmers through Voice & SMS. Crop Advisory Local News Weather Forecast Market News Schemes and Subsidy Other alerts Communication in Vernacular Language Voice & SMS based Information Personalized & Customized Messages HOW ARE WE EMPOWERING THE FARMERS?

21. FARM PRODUCTIVITY PRODUCT QUALITY PRODUCT INTEGRITY PRODUCTION COST ENVIRONMENTAL SUSTAINABILITY SOIL WATER FUEL BIODIVERSITY OUR FARMER PROFITABILITY EQUATION

22. SUSTAINABILITY

23. SOIL BIODIVERSITYFUEL WATERLABOUR Health Management Renewable Energy Alternatives Conservation & Management Farm Mechanization Micro Irrigation FOCUS AREAS

24. SOIL HEALTH MANAGEMENT WATER CONSERVATION SOCIAL FARM FORESTRY GREEN MANURING SOIL COMPACTION MANAGEMENT SOIL FERTILITY MAPPING FARM PONDS WATER TANKS TRENCHES & BUNDS GROUND WATER RECHARGE CARBON SEQUESTRATION SOIL CONSERVATION 80,000 Ha under soil fertility management programmes Water harvesting structures irrigating 20,000 Ha Dryland 30,000 Ha under various afforestation programmes NATURAL RESOURCE CONSERVATION

25. SOCIAL INVESTMENTS CHILD EDUCATION COMMUNITY INVESTMENTS LIVESTOCK DEVELOPMENT 500,000 Milch Animals! 280,000 Children! Agri Business Centres!

26. R&D

27. Focus on farm productivity and quality improvement solutions partnering with farmers PLANT BREEDINGAGRONOMYMICROBIOLOGYLEAF CHEMISTRY High yielding hybrids Support to the farmer - contemporary production techniques for weather resilience, farm productivity improvement & new product development RESEARCH & DEVELOPMENT

28. IPS WITHIN AN AUCTION SYSTEM

29. IPS – KEY ELEMENTS VERTICAL INTEGRATION 1. FARM 2.FARMER 4. PRACTICES 3. INPUTS 5.SUSTAINABILITY6.EXCLUSIVITY Visibility Farmer Profiling Monitoring & Control Support & Visibility Enforcement of PracticesComplete Ownership

30. THE ROAD AHEAD

31. Crop calibration Bringing FC production in line with demand from customers One stop shop for all tobacco types Focus on non-Flue Cured types Price competitiveness ‘Value for money’ filler and select flavour styles Product integrity & traceability Concrete actions on the ground

32. THANK YOU