Home Topic Agriculture Cash incentives for farmers from excise tax urged

Cash incentives for farmers from excise tax urged



BAGUIO CITY — A farmers’ group in Ilocos urged local government in the region to provide cash incentive for tobacco farmers.

The Solidarity of Peasants Against Exploitation (Stop Exploitation) said that LGUs should follow the steps taken by towns, giving cash incentive for every kilo of tobacco produce from their Republic Acts 7171 and 8240 shares.

The two laws earmark 15% of the excise tax collected by the government from tobacco products as share for the provinces growing the crops. RA 8240 governs the LGU share for the Native and Burley tobaccos while RA 7171 for the Virginia-type.

Production incentives

Just this week, the Municipality of Narvacan awarded its production-based cash incentive to its tobacco farmers at P2.00 per kilo for Burley and P5.00 per kilo for Virginia. This is aside from the four bags of fertilizers they regularly receive, and farm equipment and machineries provided to farmers’ organizations.

The project, initiated by Mayor Zuriel S. Zaragoza, intends to encourage farmers to plant more tobacco in the municipality.

“This is one way of repaying our farmers for their hardships and sacrifices in planting tobacco,” the mayor said in Ilokano, during the distribution of the incentive.

Narvacan is among the top recipients of tobacco excise tax. Last year, the town received shares amounting to P360.13 million and P299.30 million from RA 7171 and RA 8240 respectively.

On the average, a hectare of land yields 2000kg of Virginia-type, and 2,200 Native Batek and Burley-type tobaccos. With the current incentive provided by the municipality, a farmer cultivating the said land area will receive P10,000 for the former and P4,400 for the latter variety.

Welcome step, but…

“We welcome Narvacan’s provision of cash incentives for tobacco farmers but it would have been better if they pegged the incentive at a much higher amount,” said Antonino Pugyao, Stop Exploitation chair.

He reasoned that while the provision of production inputs like seeds and fertilizers are appreciated, provision of cash provides greater flexibility to respond to their immediate needs.

Pugyao explained that using the 2014 figures for the municipalities Virginia tobacco production (1.081 million kilos) and RA 7171 share (P221.98 million), P10.00 per kilo subsidy would amount to about 5% of the LGU’s share.

“The provision is significant especially this period that we are trying to recover from the destruction brought by Habagat and Typhoon Ompong,” the peasant leader noted.

He also corrected the thinking of some officials why they provide inputs instead of cash that “when given cash subsidies and incentives, we [farmers] buy other things”,

“Cash-strapped farmers primarily purchase things they can use to improve their land and yield, or make their work easier. Furthermore, we use the cash to repay our debts since most of us rely on loans,” Pugyao said.

Stop Exploitation has been urging authorities to provide P10.00 per kilo cash incentives for tobacco farmers.

Pieces and crumbs

The Stop Exploitation leader lamented that farmers are only receiving “pieces and crumbs” from the huge amount intended for their development.

According to the National Tobacco Administration 13,242 hectares were planted with Virginia tobacco across the country in 2017. At the average harvest, P264.84 million pesos is needed to provide P10.00 per kilo incentive or only 1.06% of the total share released in the same year.

Last year, RA 7171 alone reached P25.06 billion based on the Department of Budget and Management Budget Memorandum 76 dated October 6.

According to Pugyao, granting their demand for P10.00 per kilo production subsidy is must to allow them to “take a breather” from the unabated increase of production cost and cost of living.

Based on their computation, if given, it can translate to P18,000-P20,000 additional income for farmers.

He also stressed that such incentive must not only come from municipalities, noting that “provinces receive 30% of the earmarked amount from the national collection” and proposed that municipal and provincial officials study sharing their funds to provide much higher incentives. # nordis.net

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