<h1>Taxation on flue-cured Virginia tobacco risks depressing demand and auctions, potentially expanding illicit trade and eroding revenue.</h1> A proposed sharp increase in tax incidence on flue-cured Virginia tobacco is said to threaten farm incomes and the regulated marketing mechanism by depressing domestic demand; this may impair auction outcomes, reduce buyer participation and undermine trade confidence. Fiscal tightening is further described as likely to shrink legal cigarette trade and expand illicit trade, producing potential revenue erosion for the exchequer. Farmers warn of crop glut risks, price declines and unsold inventories when auctions commence. The note frames the issue as a taxation policy risk to agricultural market functioning, trade integrity and fiscal receipts, urging reconsideration to avoid market and revenue disruption.