Philippines: Tobacco Production Secure

Source from:  Tobacco Reporter 07/20/2017

Leaf tobacco production is not expected to dwindle despite the Philippines’ government’s introduction almost five years ago of the Sin Tax reforms that were intended in part to discourage smoking, according to a Business World Online story quoting a mayor from the Ilocos region, a key growing area.

“Tobacco is considered a high-value crop,” Batac City Mayor Albert D. Chua was quoted as saying. “Farmers won’t walk away from it because it’s a cash crop.

“There are suggestions to reduce the area planted to tobacco and shift to other crops; the problem is that farmers will always plant what is competitive,” he said.

Data from the National Tobacco Administration, however, is said to show that the law might have been effective up to a point since tobacco production declined from 67.665 million kg in 2013 to 51.947 million kg in 2015.

Republic Act No. 10351 raised excise taxes on ‘sin’ products such as cigarettes and alcohol in a bid to temper public demand for these products.

It required that 15 percent of the additional revenue from the increased taxes should be earmarked to ‘programs that will provide inputs, training, and other support for tobacco farmers who shift to production of agricultural products other than tobacco including but not limited to spices, rice, corn, sugarcane, coconut, livestock and fisheries’.

The Business World story said that, according to farmers interviewed separately, there was still strong demand for tobacco from cigarette manufacturers and distributors, as companies continued to offer them production contracts.

But the picture seems to be mixed. “Tobacco won’t be abandoned by Ilocanos,” tobacco farmer Agnes Asuncion was quoted as saying. “We have long earned our living from tobacco,” added Asuncion, who nevertheless is a tobacco farmer who diversified into dragon fruit after the Sin Tax reform. Enditem