October 27, 2023
The Department of Agriculture-National Tobacco Administration has negotiated a higher price for Virginia tobacco, up by an average of P9.90 per kilo for various grades, enabling farmers to enjoy higher income while raising for government excise tax that stands at P150 billion.
DA-NTA has successfully haggled for the higher tobacco price during the tripartite conference last October 3 and 4 attended by farmers and tobacco buyers.
DA Undersecretary Deogracias Victor B. Savellano expressed satisfaction over the NTA negotiation which is resulting in better income for farmers for trading years 2024 and 2025.
“This is an unprecedented increase in the price of Virginia tobacco in at least 10 years of trading history. It will surely benefit our farmers. We also need to continue finding ways to help raise farmers’ income through intercropping and other alternative livelihood,” said Savellano.
In the same forum, the increase in floor prices for a kilo of Burley tobacco and native-type tobacco are P5.90 and P3.90, respectively over the same trading years.
DA-NTA reported earlier that for trading years 2022 and 2023, floor price per kilo for Virginia top grades was at P87.10 for Grade AA and P86.10 for Grade A.
For Burley, the top grades A and B was at P75.10 and P72.10, respectively. The floor price for high grade of the native type was P77.10 per kilo.
The NTA Governing Board will release the full details of the 2024-2025 floor prices for various grades and their increases.
NTA Administrator Belinda S. Sanchez initiated the successful negotiation. The price increment is the second highest of such price difference brought about by NTA intervention.
Records show the highest agreed increase on the floor price of Virginia tobacco was P10 a kilo. It was also a result of a negotiation in a tripartite conference on December 10, 2007.
“It was a time when the honorable DV (Deogracias Victor) Savellano also intervened when he was then governor of Ilocos Sur. This is the second time Usec Savellano is intervening,” according to the NTA.
The succeeding tripartite conferences after the 2007 forum brough an increase in floor prices of Virginia tobacco by a minimal P1 to P3 a kilo.
The NTA convenes the tripartite conference every two years to review and fix reasonable tobacco floor prices. Agreements on tobacco price consider factors including world market situations, production costs, and a reasonable margin of profit for farmers, dealers, manufacturers, and exporters.
“The ultimate aim of our tripartite forum is to strengthen the tobacco industry as part of the directive of President (Ferdinand R.) Marcos for us to help raise income of farmers. We will also increase our exports and reduce imports as we expand our production,” said Savellano.
The tobacco industry generates huge tax revenue for government, reaching to P149.7 billion in excise tax in 2020. It contributes at least P74 billion per year to the Universal Health Care program.
“We aim to improve our industry while we help balance the tobacco industry’s contribution to the economy, being one of the highest contributors to the government coffer,” Savellano said.
Tobacco-producing local government units (LGUs) got a P19 billion share from the national government’s 2020 excise tax revenue. LGU share is being used for cities’ and municipalities’ implementation of priority programs.
The industry provides livelihood to at least 2.1 million people, including more than 430,000 farmers, farm workers, and their family members.
PHOTO Agriculture Undersecretary Deogracias Victor B. Savellano leads a tripartite consultative conference in Ilocos Sur attended by farmers, traders
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