Japan Tobacco International (Philippines) Inc. (JTI) plans to increase its procurement of locally-produced tobacco in the coming years to support local growers reeling from the economic impact of the coronavirus disease 2019 (COVID-19) pandemic, the Department of Finance (DOF) said in a statement yesterday.
The DOF said JTI’s plan was in response to the joint request of secretaries Carlos Dominguez of the DOF and William Dar of agriculture for the cigarette manufacturer to help support local growers and raise revenues for tobacco-producing provinces.
A study has shown “only 30 percent of the total local tobacco production are bought from farmers while the rest are imported” by cigarette companies.
The government officials said strict quarantines imposed to curb the spread of COVID-19 had constrained the marketing flow of food and other agricultural goods, including tobacco, which is among the most affected crops as it is a non-food commodity.
JTI said its local team is coordinating with the company’s global leaf supply chain to “explore the possibility of further increasing local leaf tobacco purchases next year and in the coming years.”
JTI, in a letter addressed to Dominguez and Dar, said its planned purchase of 4.6 million kilograms (kg.) of locally produced tobacco leaf for 2021 already represents an increase of one million kg. from what it brought from farmers this year.
Its 2021 programmed purchases of local tobacco leaf make up a quarter of its estimated total leaf requirement for next year, John Freda, JTI general manager, said in his letter.
This volume is also well beyond what is mandated in Republic Act No. 10351, which states that manufacturers or sellers of tobacco products must procure at least 15 percent of their tobacco leaf raw material requirements from locally grown sources.
Freda said the National Tobacco Administration earlier initiated a series of meetings with JTI on more local purchases in anticipation of the next harvest and trading season which is expected to begin sometime in March 2021. (A. Celis)