Composition of auction platforms:

Auction Platforms are established in the vicinity of tobacco growing areas covering 50 to 100 villages having almost similar type of soil and produce same style of tobacco.  Each auction platform serves about 2500 growers.

Quota allotment to the growers:
The villages in an auction platform jurisdiction are grouped into clusters (group of villages). The number of growers and number of curing units (barns) are more or less uniform in each cluster. Each auction platform will have around 10 clusters consisting of about 250-300 growers in each-cluster.  Growers are permitted to offer tobacco for sale, cluster wise, one cluster after another cluster on specified dates which gives equal opportunity for sale of tobacco to all the growers.  Sale of entire produce completes in 6 to 7 rounds of sale. The quota system also provides an equal opportunity to all the growers to sell tobacco at fixed intervals.

All the tobacco growers are required to grade their tobacco into specified grades as per the specifications laid down, before offering the same for sale.  The growers producing tobacco in black soils are required to grade their tobacco according to ‘Farm’ grades and the grower’s producing tobacco in light soils are required to grade their tobacco according to ‘Plant position’ grades.

Standardization of bale packing material:
All the growers are required to use standardized bale packing material made of Jute cloth for packing of tobacco.  Tobacco is packed between two Jute cloth and tied with country twine in between.  The bale is open on 4 sides.

Weighment of tobacco bales and issue of receipt to the growers:
As soon as the bales are delivered at the platform, each bale is marked with TBGR No., lot number, weighed in the presence of the grower and a receipt is issued to the grower as token of receipt of the produce delivered.  The receipt contains the details of the concerned grower, lot number allotted to the bale and weight.  The weighment starts in the early hours of the day.  For absolute transparency and to ensure correct weighment, electronic weighing scales are being used and computerized receipts are generated.

Arrangement of bales on the platform:
After weighment, the bales are arranged in rows on the auction platform in the order of lot numbers so that all the bales of a grower will be in a row at one place.

Classification of tobacco:
After the bales are arranged on the auction platform, the classifier of Tobacco Board, opens the bales and take out samples from 2 to 3 places and assign the grade as per the specifications laid down by the Board for the same.  The sample drawn is also displayed on the top of the bale.  The grade once assigned will not be changed except by the Senior Grading Officer or the Auction Superintendent of Tobacco Board.

Mode of bidding:
The bales are auctioned bale by bale in the order of lot numbers. After the buyers take their positions the `Starter’ of the Tobacco Board announce the grade and the starting price of each bale.  The guiding factor for setting the starting price is the grade, quality of tobacco, ruling price for such style and grade of tobacco. The bids go up by not less than 20 paise per kilogram until the bale is knocked down to the highest bidder.

This was the mode of bidding followed since inception of auction system till the year 2012.

In the year 2012 Board has introduced e-Auction system for sale of FCV tobacco. This system provides complete transparency in bidding process and growers also facilitate to view the bidding process in the screens provided in auction platforms.

‘No Bid’:
After the starter announces the starting price, if no buyer bids for a bale, the starter may reduce the starting price to a level he feels the bale should fetch in the given market situation.  Even then, if there is no bid forth coming, the starter may withdraw the bale from sale.  Such “No-Bid” bale will be re-offered for sale on some other day.

Rejection by growers (RR):
After bidding, the grower has option in the system to refuse the price offered for the bale if he is not satisfied and can re-offer it for sale during his next round of sale.

Repudiation by buyers:
After the sale is concluded, if the buyer finds that a bale purchased by him is badly handled, mouldy, funked or damaged or nested or in some other manner unfit for sale and such remark is not marked by the classifier, the buyer can repudiate the sale if the same is satisfied by the officials of the Board.

 Making No-sale of the bales offered for sale:  

a) Elimination of NTRM- Rejection of bales offered for sale:
The international concerns about NTRM have been taken care of by the Tobacco Board and it is taking all sorts of preventive measures to eliminate the NTRMs in tobacco by educating the farmers at farm level during production, curing, grading etc. on its ill effects in product integrity and acceptability by the international merchants.

In this direction as a final check, Tobacco Board is verifying the tobacco bales offered for sale thoroughly for any traces of NTRMs and if any such objectionable traces of NTRMs are found the bale is rejected from sale with an advise to the grower concerned for separation of the NTRMs. 

b) No-sale due to other reasons:
As a part of assuring the buyer, regarding product integrity in terms of optimum moisture and tobacco to the standards of the recommended grades Tobacco Board after thorough verification of the bales and rejecting the bales from sale which are not meeting the standards.

Delivery of unsold bales to the growers:
The unsold bales (viz.) Ryot rejection (RR) bales, company rejection (CR) bales, No Bid (NB) bales, no sale (NS) bales etc. are returned to the concerned growers after obtaining proper acknowledgement.

Delivery of bales sold to the buyers:
The bales sold are slotted in the godown buyer wise, and are delivered to the concerned buyers after 100% re-weighment of the bales.  In case, the buyer delays the lifting of bales beyond the period specified, Board levies demurrage charges.