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National Tobacco Administration (NTA)
Highlights of Accomplishments for CY 2011

The NTA’s operation for the year accorded top priority to programs and projects in line with the President’s agenda on poverty alleviation, self-sufficiency in agricultural commodities, food security, job generation and public-private partnerships, increase in income of farmers, creation of new business activities, and global competitiveness enhancement.  Highlights of accomplishments included the following:

A. Market-Driven Quality Tobacco Production and Integrated Farming and Other Income Generating Activities Project (IFOIGAP)

  • Quality Tobacco Production

    Tobacco Contract Growing System (TCGS)
    TCGS is a market-oriented production system that assures the tobacco manufacturers and exporters of the volume and quality of tobacco they need; and, at the same time, assures the farmers of the technology, production assistance, technical assistance from seedbedding to delivery of produce, ready market, proper grading, accurate weighing and better prices for their produce, including incentives for good performance, like production quota, 100% delivery, prompt repayment and high nicotine, among others.

    NTA’s assisted tobacco farmers and total area coverage increased by 32% and 26%, respectively, from 2010’s 7,408 farmers and 5,199 hectares to 9,746 tobacco farmers and 6,531 hectares at presentProduction assistance extended increased by 35%, to Php 170 million compared with last year’s PhP 126 million, which were provided by NTA, Tobacco Companies and LGUs.  An evidence of public-private partnerships, the Private Sector, GFIs and LGUs constitute about 80% of  the total production assistance.

    Volume and Value of Production/Acceptances
    Total production/acceptances for 2011 increased by  7.33% at 79.176 million kilos, from  2010’s production of 73.767 million kilos.  Of the increase in volume, native tobacco obtained the remarkable rate of 35.43% increase followed by the Virginia type, with an increase of 5.84%.  An 8.63% increase was realized in purchase value where the same pattern followed: for native/dark tobacco, PhP808.17 million, a 33.12% increase from last year’s PhP607.11 million; and, Virginia tobacco, 8.73% increase, from PhP 2.909 billion to 3.164 billion. Burley tobacco  decreased by 2.78% from PhP1.329 billion to PhP1.292 billion, as of 29 November 2011 report.  The following table shows the breakdown  of leaf tobacco traded type, for CYs 2010 and CY 2011:

      CY 2010 CY 2011
    TobaccoType Volume (Kgs)  Value (PhP) Volume (Kgs) Value (PhP)
    Virginia 42,446,398.50 2,909,934,385.58 44,925,105.90 3,163,778,271.85
    Burley 19,817,160.80 1,329,350,558.81 18,671,232.70   1,291,819,917.90   
    Native 11,503,775.28 607,113,040.42 15,579,668.27 808,167,434.71
    Total 73,767,334.58 4,846,397,984.81 79,176,006.77   5,263,856,737.46

    Farmer’s Yield and Income
    As to the comparative return of the tobacco crop across all types, the Burley improved flavor gave the highest net income per hectare to the farmer at PhP90,589 with an ROI of 120.08, followed by Virginia Full-flavor- PhP65,558 (ROI-71.27)Virginia Neutral-PhP44,906 (ROI-41.22), and Native/Dark tobacco-PhP39,533 (ROI-50.88).

    With regard to average yield, Burley improved flavor also got the highest at 2,457 kilogram/hectare, Virginia improved flavor, 2,216 and Native cigar-filler at 2,170 kilogram/hectare as per 2011 Technology Evaluation study, conducted by the NTA Farm Technology and Services Department.

  • Rice Production component

    As an IFOIGAP component, this is implemented in line with the rice self sufficiency program of the government led by the DA, to augment the income of tobacco farmers, by increasing their yield to at least 5 tons/hectare. 

    For CY 2011, NTA assisted 1,480 tobacco farmers, covering 1,261 hectares, a 79% increase from the previous year’s 825 farmer cooperators and 704 hectares. Total Production Assistance increased by 120% at PhP17.70 million from 2010’s PhP8.04 million.

    Production Assistance for Tobacco Farmers in support of Market–Driven Quality Production and Food Security (#s1 and 2 above), from NTA alone, will be increased in CY 2011-2012 to PhP 150 million to assist 9,000 farmer-cooperators, covering at least 6,000 hectares, for tobacco alone.

B. Multi-Purpose Curing Barn cum Grain Dryer Project (MPCB)

    The MPCB is a facility assistance intended to make Virginia tobacco flue-curing more efficient to enhance quality and reduce losses in the drying of rice (in the streets), which is estimated at 5%. 

    A total of 996 units were availed, the construction of 791 units of which  were already completed.

C. Tobacco Seed Production and Distribution

    The NTA makes available market-preferred, quality seed varieties to tobacco farmers and tobacco companies, to replace the many, old, degenerated varieties the farmers are using.  This is intended to enhance global competitiveness, by ensuring consistency in the volume and quality, of leaf tobacco, as required by local cigar/cigarette manufacturers and exporters.   

    For FY 2011, NTA distributed 154 kilograms of tobacco seeds  benefitting 8,800 farmers.

D. Backyard Fuelwood Energy Farm Project and Restoration of Ecological Integrity of Tobacco Growing Regions

    Being implemented in collaboration with the DENR, farmers associations and tobacco companies, NTA provides tree seedlings to tobacco farmers, for their fuelwood requirement, and for the restoration of the ecological integrity of tobacco-growing regions, to help mitigate climate change. 

    For CY 2011, at least 6,400  tree seedlings (ipil-ipil/mahogany/banaba)  were  distributed to the farmers under the project.  This is complementary to the Agency’s continuing encouragement for the principal tobacco companies to include same in their Corporate Social Responsibility (CSR) project and for the tobacco farmers’ group to actively participate on the same undertakings.

E. Farmers Organizational Development

    From being traditional recipients of government’s assistance, this program aims towards nurturing the tobacco farmers to become truly self-reliant, self-sufficient and food secured. Through the formation of honest–to-goodness tobacco-based cooperatives, the tobacco farmers will be given the opportunity to develop technical, leadership, entrepreneurial and management capabilities alongside, financial capability development. The major implementing projects include:

    • Farmers’ Re-registration and Profiling
    • Revitalization of Farm Clusters
    • Continuing Organizational Development Assistance and Training services
    • Establishment of Agency Linkages/Resource Tapping
    • Credit Facilitation, Technical and Marketing Assistance

    As of date, a total of 156 tobacco-based farmers organizations are being assisted under various programs of the NTA, of which 103 are cooperatives and, 53 are farmers associations.

F. Regulatory Services Program

    This program involves the regulation of the production and trading of leaf, and the recently implemented monitoring/supervision/quality inspection of tobacco importation and exportation.   For 2011, the following were accomplished:

    1. Licensing, Monitoring and Supervision of Leaf Trading Operations

    • Documented a total tobacco acceptances of 79,176 metric tons valued at 5.264 billion pesos.
    • Registered, licensed, monitored and supervised operations of 50 Trading Centers in Regions 1 and 2 were registered/licensed; 14 Wholesale Tobacco Dealers; 4 Redrying Plants and 407 Field Representatives.

    2. Monitoring and Supervision of Tobacco Exportation and Importation

    • Issued a total of 1,745 export/import clearances for leaf tobacco and 1,831 export/import clearances for tobacco products/cigarettes.

    3. Setting of Tobacco Floor Prices/Tripartite Consultation Conference

    • After a series of consultative meetings with the tobacco farmers groups and principal tobacco companies/buyer firms, the NTA set the new Tobacco Floor Prices were set as agreed upon to govern Tobacco Trading Seasons 2012 and 2013, for which purpose NTA issued  MC No. 003, series of 2011, on 21 September 2011.  In percentage ranges, highest increase was obtained for native tobacco (15.46 to 51.72%), followed by burley (17.24 to 38.89%), and Virginia tobacco (9.09 to 42.86%)
    • The floor price is the minimum price that the tobacco buyers will be allowed to buy, per kilo, per grade, the leaf produce  by the farmers. It provides the farmers a guaranteed minimum of 25% return on his investment from tobacco production.  Actual buying prices, however, is very much higher than the floor prices set by the government, through the NTA (between 25 to 50% on the average, and more than 80% in 2009-2010, when there was a boom in the market for local tobacco.

G. Technology Development and Services in support of Market-Driven Quality Tobacco Production

    The program involves the continuing, systematic testing, development, introduction, transfer and adoption of yield-increasing, quality enhancing, environment friendly, income-increasing and competitiveness enhancing production and processing technologies to address specific volume and quality requirements for domestic manufacturing and for exports.

    The following projects/activities were conducted:

    • Tobacco Seed Varieties  Collection, Purification and Maintenance
    •  Production Technology Enhancement
    • Curing Structures and Management Improvement
    • Production, Evaluation and Application of Vermicompost on Tobacco
    • Integrated Pest Management Technology Enhancement
    • Tobacco Pest Clinic/ Quick Response System

H. Quality Assurance/Analytical Services

    (NTA has laboratories at NTA Research and Training Center in Batac, Ilocos Norte and at the NTA Central Office, Quezon City- Quality Assurance Laboratory) 

    Annually, in addition to requests from the various sectors that are being responded, the NTA’s quality assurance activities include the following:

    • Continuing monitoring of soil fertility, chloride determination and water quality of major tobacco growing areas
    • Fertilizer and pesticide analyses
    • Monitoring/Analysis of Physico-Chemical Quality of Tobacco Production, using various technology applications, across locations
    • Monitoring of quality of tobacco leaf and tobacco products being exported and imported
    Quality assurance/Chemical analysis of tobacco leaves, tobacco products and by- products include analysis of nicotine, tar and carbon monoxide; and, the detection of presence and levels of hazardous chemicals/carcinogenic substances

I. Scholarship Program  for Tobacco Farmers Dependents (pursuant to RA 9211)

    For the first time, the NTA launched a scholarship program for tobacco farmers’ children, pursuant to RA 9211, Tobacco Free Education Program (TFEP) and in affirmation to the Administration’s thrust of giving priority to the primary stakeholders of the industry, the tobacco farmers.  As of date it has awarded financial assistance to the first batch of 138 scholars, enrolled in 4-year and vocational/technical courses, in state colleges and universities in Regions I, II and CAR.  A total budget of PhP1.00 million was allotted for School Year 2011-2012, which is intended to be gradually increased in the ensuring school years.

J. Communication Support Program/Values Re-orientation

    To increase the government’s presence, the NTA has adopted a more proactive stance, in its interventions / introduction of necessary changes for a more sustainable development of the industry:

    •  Introduced the Values Re-orientation Program cum Good Agriculture Practices (GAP) seminars, for a technology oriented and more responsible farmers, benefitting a total of 10,000 in Regions 1, 2 and CAR;
    • Conducted continuing active consultation with the tobacco private sector and tobacco farmers groups on matters affecting the local tobacco industry, amidst the global campaign against tobacco and smoking, including the legislative agenda in both houses of congress;
    • Implemented the “Oras ni Mannalon ti Tabako” radio programs for a more active information dissemination and consultation, and reach out to far-flung areas of the regions; and,
    • Distributed 5,000 technoguides in the local dialect; published a quarterly newsletter and regularly hold press conferences with the media.