e-Auction of FCV Tobacco

Auction system in Tobacco

The auction system was introduced for the sale of FCV tobacco for the first time in India at Karnataka State (Mysore) in 1984 and at Andhra Pradesh in 1985. The Tobacco Board has established and operating 12 auction platforms in Karnataka and 19 auction platforms in Andhra Pradesh. To view the location of auction platforms being operated by the Tobacco Board, click on the respective states - Andhra Pradesh. Karnataka.

e-Auction system

Though the manual auction system for sale of FCV tobacco has been a time tested one, for fine tuning of the system the Tobacco Board has opted for introduction of information technology braced fool proof technology in auctioning of FCV tobacco to have absolute transparency in the auction proceedings and to eliminate the errors that were been encountered in manual auction system. In tobacco sector, the e-Auction system for marketing of FCV tobacco is the first initiative.

Process

In tobacco, the bidding process is very fast and it takes only 4 to 5 seconds for sale of each bale (bale consists of max. of 150kg tobacco). The tobacco buyers shall present on the auction floor and see the tobacco bale for its colour, texture, aroma, flavour, moisture, size, etc., and offer the price. The quality varies from bale to bale.

In electronic auction system for marketing of tobacco, all the buyers and starters are provided with electronic device called Hand Held Terminals (HHT). All the data about the bales offered for sale, their weight, lot number and its grade and any other remarks are available in all the hand held terminals. By use of HHT, the starter starts a price to a particular lot/tobacco bale and the same appears on all the buyers HHTs and those buyers who are interested on that particular lot will go on adding price in multiples of Rs.1/- and the buyer who quotes highest will be allotted with the bale. The system provides complete transparency in bidding process and facilitates growers to view the bidding process through the electronic displays.

Payment to the growers

Tobacco Board makes payment to the growers by way of consolidated cheque post dated by 15th day from the date of auction sale drawn in favour of the Banks where the growers are having saving accounts.

Service Charges:

Tobacco Board collects service charges from the growers and the buyers @ 1% each on the value of tobacco sold.

Tobacco Cess:

Tobacco Board collects Cess @ 1 paise per kg on the quantity of tobacco sold, from the growers.

Source : Tobacco Board