6 MIN READ

By SHERWIN DE VERA
www.nordis.net

VIGAN CITY, Ilocos Sur — To save the tobacco industry and increase the share they receive from the collected excise tax from tobacco products, the provincial and municipal governments of Ilocos Sur campaigned with the National Tobacco Administration (NTA) to convince farmers to return or try planting the crop.

With the NTA’s “Balik Tobacco Program” and subsidies provided by LGUs, the campaign to reinvigorate tobacco production in the province seems to be gaining ground, according to the Office of the Provincial Agriculturist (OPAG).

Based on the record provided by Provincial Agriculturist Oscar Tobia, before, Vigan City and the adjacent towns of Caoayan, San Vicente, Sta. Catalina, San Ildefonso, and Bantay do not have areas planted with tobacco.

For this season, 172 out of the 5,013 farmers in the First Congressional District are from Metro Vigan. The total number of tobacco farmers in the district increased from the 3,299 individuals recorded by NTA Vigan Branch during the 2018-2019 tobacco season.

Meanwhile, of the 34 local governments, Santa is the lone municipality that is not planting the crop. Below is the number of tobacco farmers per town provided by the OPAG.

Number of Tobacco Farmers in Ilocos Sur

DISTRICTMUNICIPALITYNO. OF FARMERS
1ST DISTRICT5,013
Bantay58
Cabugao1515
Caoayan18
Magsingal963
San Ildefonso20
San Juan831
San Vicente36
Sinait1441
Sta. Catalina21
Sto. Domingo91
Vigan City19
2ND DISTRICT6,207
Alilem93
Banayoyo159
Burgos535
Candon City706
Cervantes5
Galimuyod436
Gregorio del Pilar135
Lidlidda155
Nagbukel424
Narvacan789
Quirino122
Salcedo341
San Emilio449
San Esteban295
Santiago191
Sigay64
Sta. Maria463
Sta. Cruz316
Sta. Lucia288
Sugpon42
Suyo54
Tagudin145
GRAND TOTAL11,220
Source: Office of the Provincial Agriculturist, figure fo 2019-2020 season as of December 6, 2019

However, Tobia noted that the number of tobacco farmers is continuously changing depending on the price and opportunities provided by agribusiness corporations and local governments.

“Ti maysa a makitkita a gapu ket adda ngamin optionda kaspangarigan for the past years ket mayat ti presio ti mais tapos adda latta met diay support ti probinsia. Kasi ti farmers once saan mapagustoan diay mayat a presio ti commodityda tapos adda makitada a mayat nga offer alaenda nga alaen (One factor that I can see is farmers have options for example for the past years the price of corn is good, and they still receive support from the province. Once farmers are not given the proper price of their commodity and see a better offer, they would take it),” he said.

Subsidy and incentives

Meanwhile, Tobia is also hopeful that the support and incentives provided by the LGUs could bring back the enthusiasm of farmers to plant tobacco despite the low price of their harvest.

“Ti main ngamin [problema] is nababa diay presio aglalao diay naaramid a tripartite ket bassit ti increase isunga tapno makabawi ti farmers maikkanda ti subsidy tapno uray a saan a gumaraw ti presio ket bumababa diay cost of production da. No agresponse ti mayat a counterpart dagiti munisipio, dakdakkel pay koma ti ma-save ti mannalon (The main problem is the meager increase of price during the tripartite so we are giving this subsidy to the farmers to lower their cost of production so they can still earn despite the low price. If the municipalities respond with a good counterpart, then they will have bigger savings),”

This year, the province increased the number of basal fertilizers (10-18-24) provided per hectare to reduce the production expenses of farmers. Farmers cultivating Virginia (neutral) and Burley would receive four 50-kilogram bags and six bags for those plating the improved flavor variety.

“Ngem daytoy ket agkurang a iti requirementna ta kaspangarigan diay Virginia a neutral ti kasapulan na per hectare ket 8 bags (But this number is not enough to cover the required amount, for example, the Virginia neutral requires 8 bags),” he admitted.

The provincial agriculturist said they based the number of fertilizers from the recommended planting requirements by Universal Leaf Philippines, Incorporated (ULPI).

According to Tobia, the province urged town officials to provide the other requirements.

“Kayat ngamin ti probinsia nga i-counterpart ti munisipio, tapno partnership between the province ken munisipio kasi adda met diay RA 7171 shareda (The province wants the municipalities to give their counterpart, so it can be a partnership between the province and the municipality since they also have their RA 7171 share),” he told Nordis.

Tobia said that some local governments provide production incentives like Candon City, Narvacan, Magsingal, and San Emilio. According to him, farmers receive P3.00-5.00 every kilo of tobacco they harvest. The average yield for Virginia tobacco in the province is 2000 kilograms per hectare, with the incentive, farmers will have P6,000-P10,000 on top of their sales.

He added that while there are towns that provide substantial production support and incentives for tobacco farmers, some are still giving minimal support.

Overflowing funds for farmers

Excise tax collection from tobacco products and the shares received by local governments continue to increase. In 2018, the government’s excise tax collection reached P124.14 billion, higher by P33.25 billion that the previous year.

Tobacco-producing provinces receive 15 percent from the collected tobacco excise tax. RA 7171 governs the allotment and distribution of local government shares for Virginia tobacco while RA 8240 covers the Native and Burley. The law mandates that LGUs must spend their tobacco excise tax share on projects and programs that will promote the economic independence of farmers planting the crop.

Since the Supreme Court ruling on “pork barrel” of legislators and their interventions in implementing the budget, the province receives 40 percent of the share while the remaining amount goes to the municipalities and cities for RA 7171. Meanwhile, half of the municipal and city share is divided equally while the other half is allotted according to the volume of tobacco produce.

Based on the Local Budget Memorandum No. 79 released by the budget department in June 2019, Ilocos Sur will receive P7.7 billion from the P12.9 billion excise tax of locally manufactured Virginia-cigarettes. The province will also get a share from the P2.9 billion collection for Burley and Native tobacco products.

PROVINCIAL SHARE OF ILOCOS SUR FROM RA 7171 (1996-2019)

YEARRA 7171 SHARE
1996 178,245,000.00
1997 129,206,000.00
1998 432,167,000.00
1999 885,000,000.00
2000 631,000,000.00
2001 627,500,000.00
2002 618,500,000.00
2003 50,000,000.00
2004 740,000,000.00
2005 1,059,000.00
2006 338,500,000.00
2007 78,500,000.00
2008 57,232,355.00
2009 116,031,162.00
2010 1,329,002,737.10
2011 1,022,410,432.00
2012 863,489,335.00
2013 178,393,305.56
2015 2,762,030,203.00
2016 4,766,743.00
2017 1,933,850,066.00
2019 23,003,002,553.00
TOTAL 35,979,885,891.66
Sources:
1998-2007 Newsbreak Special Report on the Tobacco Excise Tax, 5 May 2009
2008-2013 COA Annual Audit Report, http://www.coa.gov.ph/
2015-2019 Local Budget Memorandum Nos. 69 (Feb. 18, 2015), 71 (Sep. 21, 2015), 72 (Mar 8, 2016), 76 (Oct 6, 2017), and 79 (Jun 14, 2019).
“Balik tabako” program

In January this year, the NTA launched the “Balik Tobacco” (return to tobacco) program in the country. This initiative intends to convince farmers to return or try planting the crop.

According to Diosdado Moduli, Supervising Tobacco Production and Regulation Officer of NTA Vigan City Branch, the “Balik Tobacco” concept came from local governments who expressed interest to return tobacco among their farmer’s crop.

“With the collaborative efforts with the LGU, we tried our best to campaign for tobacco planting. It’s a collaborative effort wherein ti provincial government ken dagiti munisipio ket mangtedda ti support wenno subsidy for inputs while NTA will provide technical assistance,” he explained.

The program also includes free distribution of water pumps and cash assistance to construct or repair flue-curing barns.

Maduli also mentioned that they are expanding the multisectoral production agreement the agency launched last year. This arrangement includes farmers, buying firms, NTA, and local governments. The contract provides for the technical, production, and marketing support and proper documentation of the product by the NTA and buying firms. Local governments will take care of farm machinery and implements, and farm inputs such as fertilizers and pesticides from their tobacco excise tax share.

Although too early to gauge the success of the program, he said their branch has a positive outlook. According to him, with the identified components of the program, farmers cultivating the crop, and the area planted with tobacco will increase.

“Adu dagiti maguyguyugoy nga agsubli gapu iti naduma-duma a tulong nga ititted ti LGUs. Dakkel a tulong dagitoy iti farmers, kas iti fertilizers ken pesticides in terms of subsidy (Many are convinced with the support given by LGUs. These are a big help to farmers, like fertilizers and pesticides in terms of subsidy),” Maduli told Nordis.

A farmer spends P16,000 for fertilizers for every hectare of Virginia (neutral) planted and P3,000 for the pesticides according to the latest consolidated cost of production from the agency.

NTA Administrator Robert Seares, Sr. has earlier made positive projections, stressing that “Balik Tobacco” will increase the production despite the government’s campaign against smoking.

Based on NTA records, the number of farmers planting the crop and area plunged to 32,652 from 53,959 individuals and to 22,795 from 37,021 hectares from 2013 to 2018.

Price remains an issue

Maduli, however, noted that tobacco price continues to be the reason why many are losing interest with the crop. He admitted that while the input costs are “logarithmically increasing,” price increase is slow.

“Mapasublida met diay gastosda ngem very minimal ti incomeda, kayatda met siempre nga within the culture period of tobacco which is 6-8 months ket adda met naananay nga incomeda koma a pangsustain ti pamiliada (They can recover their expenses but have minimal income, they also want that within the culture period of tobacco which is 6-8 months they also have earnings to sustain their families),” he explained.

He also expressed concern about the negotiation deadlock that occurred during the National Tripartite Consultative Conference (NTCC) in October. According to him, some farmers opted not to plant since price increase is still uncertain despite the start of the tobacco season.

Maduli explained that in computing the Cost of Production and proposed price increase, they include the 25 percent allowable mark-up to ensure farmer’s income.

He also admitted that since buying firms are also the once grading the tobacco, they can “manipulate the price.” However, he said that it is okay as long as companies do not go below the floor price.

“Diay 25 percent mark-up ti esensya koma ket maensure nga adda return of investment ti farmers isunga no saan a maited diay increase based on the computed production cost a ket either break even or losing dagiti farmers,” he added.

Last NTCC, the computed increase for Virginia tobacco (neutral) is P7.00; however, the buyers only offered P1.00 increase. Under the Philippine Standard Grade, the basis for the floor price increase is Virginia (neutral) even if other varieties, like Virginia (improved flavor), have a higher cost of production. # nordis.net

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