RP’s Tobacco Capital Seeks Closer Look at Tobacco Industry

The local government of Ilocos Sur, the country’s tobacco capital, is seeking for a closer look at the problems hounding the industry especially with regards its competitiveness with other producers around the world, as well as its financial viability.

BY ACE ALEGRE
Contributed to Bulatlat
Vol. VII, No. 35, October 7-13, 2007

VIGAN CITY (407 kms. north of Manila) – The local government of Ilocos Sur, the country’s tobacco capital, is seeking for a closer look at the problems hounding the industry especially with regards its competitiveness with other producers around the world, as well as its financial viability.

Ilocos Sur Governor Deogracias Victor “DV” B. Savellano is seeking for a sustainable development of the tobacco industry by calling for a well–represented tripartite consultation of tobacco stakeholders including tobacco farmers, cigarette manufacturers, leaders from the Virginia tobacco producing provinces and the National Tobacco Administration (NTA).

The consultation, said Savellano, should thresh out the different aspects of the industry to include not only its pricing scheme but also production and marketing. It will be a proper venue for looking into the solutions and contingencies on the problems being brought out perennially by the farmers to the Local Government Units (LGU’s). “We need to study the reason why China can sell its prime class of flue–cured tobacco at P200 ($4.46 at an exchange rate of $1=P44.75) per kilo and its reject at P100.00 ($2.23) per kilo,” Savellano said.

“A deeper study of measures to achieve a good return on investment (ROI) should be realized. The welfare of tobacco farmers should also be studied and attended to,” he said.

During the August 2005 tobacco tripartite conference, the approved floor price of the prime class of flue-cured Virginia tobacco is P51.00 ($1.14) per kilo or an increase of P3.50 ($0.07) per kilo from the approved tobacco floor price in 2003.

The tobacco tripartite conference is held every two years and is facilitated by the NTA.

“An increase of P3.50 per kilo on floor price of tobacco is so low if we compare it to the increase of farm inputs. Thus, we need to study this aspect in order that the farmer will gain a better profit, which, in turn, will encourage them to plant tobacco,” Savellano explained.

Direction of the industry

The governor disclosed that there’s also a need to look into the direction of the country’s tobacco industry considering that Ilocos Sur is the biggest producer of Virginia tobacco.

He expressed his full support to the on–going research and development of the NTA on the alternative uses of tobacco. The Virginia tobacco, which is the main cash crop in the Ilocos provinces after the rice season, is the steady source of funds for Republic Act No. 7171, otherwise known as tobacco excise tax law then authored by former Rep. Luis Chavit Singson. It mandates the allocation of the amount of billions of pesos from the tobacco excise tax as shares for the four tobacco producing provinces such as Ilocos Norte, Ilocos Sur, Abra and La Union.

“The sustainability of our tobacco industry is our main concern considering that the bulk of our constituents in the province depend on agriculture as their major source of income and at the same time our flagship project is agriculture development,” Gov. Savellano said.

“We need to help one another to make collaborative efforts that would promote equality and justice between and among the farmers, cigarettes manufacturers and tobacco stakeholders.

Members of the Ilocos Sur’s League of Municipalities of the Province (LMP) headed by Narvacan Mayor Edgar Zaragoza earlier agreed to set aside funds to subsidize the tobacco farm inputs for the production of Virginia tobacco. Contributed to Bulatlat

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