The National Tobacco Administration (NTA) has held consultations with farmers prior to the revision of tobacco floor prices next month.
The NTA, an attached government-owned and controlled corporation of the Department of Agriculture (DA), said the consultations were held in its branches in tobacco-producing provinces.
“The consultative meetings were held simultaneously at the NTA Branch Offices in Ilocos Norte, Vigan, and La Union on October 11, in Cagayan on October 13, simultaneously in Abra, Isabela, and Pangasinan on October 14, and in Candon on October 15,” it said in a recent statement.
“After group consultation and deliberation, facilitated by NTA officials, representatives of tobacco farmers came out with a unified cost of production per tobacco type and sub-type, which will be a factor in the revision of the current tobacco floor prices.”
The NTA said the biennial tripartite conference, where the adjustments for the tobacco floor prices would be deliberated and agreed upon, will be held in its central office on November 10 to 11.
The NTA added that the review and adjustment of floor prices will cover Virginia, Burley and Native types of tobacco as well as its various sub-types, such as neutral or filler and topped.
“Selected farmer leaders will present the consolidated cost of production for each tobacco type and sub-type and negotiate the floor prices in a conference in November with cigarette manufacturers, tobacco dealers, and exporters,” it said.
The new adjustment on the tobacco floor prices will be implemented during tobacco trading years 2022 and 2023, according to the NTA.
The current floor prices of tobacco, which were approved in early 2020 following the 2019 tripartite consultative conference, are: P84 for Grade AA Virginia and P83 for its Grade A; P72 for Grade A Burley and P69 for Grade B; P73 for high grade of native.
The negotiations during the previous tripartite conference in September 2019 stretched to early 2020 as leaf buyers and manufacturers were lukewarm to tobacco producers’ initial proposal of a maximum P10 increase in floor prices.
Three years ago, tobacco planters pushed for such an increase due to higher production and labor costs.
The private sector had wanted to maintain the status quo, but later on proposed a P1-price increase which was declined by farmers, the BusinessMirror learned.
The private sector made the proposal in view of the decline in cigarette sales due to higher excise taxes.
Eventually, industry players agreed on a P2 increase in floor prices across all types and grades of tobacco.
NTA data showed that the country’s tobacco output last year grew by almost 2 percent to 47.5 million kilograms from 46.6 million kg in 2019. Value wise, tobacco output last year reached P3.93 billion, slightly higher than the P3.92 billion posted in 2019.
“Number of tobacco farmers increased by 39 percent, or from 29,830 in 2018-19 tobacco season to 41,516 in 2019-2020, while tobacco farm area [in hectares] decreased by 7 percent, or from 29,839 to 27,765 in the same period,” the NTA said in its 2020 accomplishment report.