Local tobacco stakeholders are seeking full subsidy in their production as an incentive for the excise tax being provided by the crop.
This developed as policy makers expressed support to a law which will include tobacco in the Anti-Agricultural Smuggling Act of 2016.
Saturnino Distor, Philippine Tobacco Growers Association (PTGA) president, told reporters in an interview over the weekend in San Fabian, Pangasinan, average production cost of tobacco is at per P50,000 per hectare, and subsidizing the full amount will increase tobacco production and in turn, will generate more excise tax for the province.
“Our wish is for every hectare that will be tended by a tobacco farmer, (government) will provide P50,000 for farming expenses… Average production per hectare of tobacco is at 2,500 kilograms (kg). The computation of excise tax is P290 per kg for Burley variety… Just imagine the amount of excise tax the province will get against the P50,000 (per hectare) subsidy they will provide,” Distor said.
He said the price of fertilizer has increased by over 200 percent to P3,000 per bag from P900 per bag. Fuel prices have also gone up drastically.
Distor said in Pangasinan, only around 30 percent of the production cost or P15,000 per hectare is being provided by the local government.
Some provinces also grant incentives such as provisions of cows, tractors, water pumps and cash for farmers who will plant tobacco.
PTGA’s membership has gone down to 35,000 from 50,000 as the younger generation has lost interest in farming, Distor said.
According to Distor, tobacco is virtually the only crop in the country that has an assured buyer, market price and funding.
In a separate interview, Kristine Singson-Meehan, representative of the second district of Ilocos Sur said she supports House Bill (HB) 3917 providing penalties on smuggling of tobacco products.
Singson-Meehan said at the sidelines of the Tobacco Festival ceremonies in Candon City, Ilocos Sur the government loses between P30 billion and P60 billion in revenues from tobacco smuggling.
Taxes collected from tobacco products also fund Universal Health Care.
HB 3917 was approved last December in its third and final reading.
The National Tobacco Administration (NTA) also expressed support to HB 3917 and Senate Bill 1812 which both seek to include tobacco products in the coverage of large-scale agricultural smuggling as economic sabotage.
The agency said the tobacco industry provides livelihood and sustenance to at least two million people including 600,000 tobacco farmers and their families.
According to data from the Philippine Statistics Authority (PSA), the country’s production of native tobacco and Virginia tobacco went down last year compared to 2021 figures.
PSA data showed that native tobacco production last year only hit 8,221.69 metric tons (MT), down by 1.8 percent from 8,374.08 MT while Virginia tobacco production slid to 23,422.94 MT from 26,769.21 MT, a 12.5 percent decline.
Production of tobacco classified as others in the Philippines improved by 1.9 percent to 16,085.75 MT from 15,787.37 MT.
