Tobacco farmers in the province of Ilocos Norte were to persist in tobacco farming no matter the challenges of higher excise tax and the graphic health warning on cigarette packs, as demand continues to rise, according to Batac City Mayor Albert D. Chua.
Chua said tobacco is considered a high-value crop in the province, such that local farmers will continue to plant them since they generate high revenues from the crop.
“Tobacco will never be replaced [for other crops] by the farmers because it’s a cash crop,” Chua recently told financial reporters.
According to 2015 data from the Office of the Mayor, the number of farmers producing Virginia tobacco totaled 1,157 on a tract of land aggregating 551.71 hectares. In terms of yield, an average of 4,000 kilos per hectare per year can
be produced.
Virginia tobacco, also known as Bright leaf tobacco, is a flue-cured tobacco used primarily for cigarette production.
“Our yield per hectare, if the harvest of tobacco is good, is around 4,000 kilos per hectare,” he said.
Farmers in the area producing Burley tobacco in 2015 only numbered 103, tending to land totaling a mere 51.99 hectares. Burley tobacco is a light air-cured tobacco as opposed to the flue-cured Virginia tobacco.
According to the local government of Batac City, tobacco is not confined to cigarette manufacturing alone and may also be used as pesticide that helps build continued demand for the product.
Based on data from the Action for Economic Reforms (AER), the export of tobacco products from the Philippines for the years 2012 through 2015 rose 69 percent, far more than local tobacco production that grew by only 31 percent.
In the past four years, some 70 percent of domestic tobacco production were exported as raw or unmanufactured tobacco, according to the AER.
The markets for local tobacco include Japan, Russia, the United States, Singapore, Hong Kong and Germany, based on National Tobacco Administration (NTA) data.
Chua added that local tobacco farmers should only be mildly affected by the sin-tax law first implemented in 2012 since the law focuses more on excise tax on cigarettes and shouldered by the various cigarette manufacturers.
“The ones affected by it are the manufacturing companies, since high excise taxes will be imposed on cigarette packs,” he said. He added that gross income gained from tobacco harvests at a yield of at least 4,000 kg per hectare can reach to an estimated P200,000.
Chua said the gross income per hectare per farmer could reach P200,000 since class A tobacco now goes for P70 a kilo, less production cost of about P60,000 or P70,000.