MUMBAI (Reuters) – The Indian government will provide assistance to farmers diverting area under tobbaco towards medicinal plants to cut area under the leaf, a government release said on Tuesday.

The government will support tobacco growers to switch to other crops and will use a 6-billion-rupee fund for promotion of medicinal plants, Anbumani Ramadoss, federal health minister, was quoted as saying in the release.

However, higher tobacco prices are prompting Indian farmers to increase area under the leaf.

The average price of the premier grade used for cigarette-making, flue cured virginia (FCV), has risen to 84.67 rupees per kg from 47.47 rupees a year ago.

Global tobacco companies like British American Tobacco, Japan Tobacco Inc., Philip Morris International and Imperial Tobacco Plc are main buyers of Indian leaf, and they have kept prices firm in the Indian market.

India is the second biggest producer of tobacco after China and the fourth-biggest exporter of unmanufactured tobacco.

(Reporting by Rajendra Jadhav; Editing by Sunil Nair)

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