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National Tobacco Administration (NTA)
Annual Report for CY 2012

Amidst the issues that we have been faced with, to include among others, the passage of the sin tax bill, the NTA continues to implement programs and projects that are intended to fulfill our mandate to improve the lives of our tobacco farmers and 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)

  1. 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.

For tobacco season of CY 2011-2012, under its Tobacco Contract Growing System (TCGS), NTA assisted a total of 12,484 tobacco farmers and 7,955 hectares, a 57% increase from last year's 7,928 farmers and 5,487 hectares. Production assistance totaled PhP222 million, which were provided by NTA, Tobacco Companies and LGUs. An evidence of public-private partnerships, the Private Sector, GFIs and LGUs constitute about 69% of the total production assistance amounting to PhP158 million, while NTA provided PhP88 million.

Volume and Value of Production/Acceptances
Total tobacco production/acceptances documented to date is at 64.463 million kilograms. Compared to 2011's 79.329 million kilos, production decreased this year specifically due to the reduction of area planted on Burley and Native and instances of bacterial wilt in Region 1 (per FTSD report. The following table shows the breakdown of leaf tobacco traded type, for CYs 2011 and CY 2012:

  CY 2011 CY 2012
TobaccoType Volume (Kgs)  Value (PhP) Volume (Kgs) Value (PhP)
Virginia 44,925,106 3,163,778,272 40,493,724 2,990,637,261
Burley 18,671,233 1,291,819,918 12,543,959 964,235,334   
Native 15,579,668 808,167,435 11,425,810 645,297,234
Total 79,176,007 5,263,856,737 64,463,493   4,600,169,830

Farmer’s Yield and Income
With regard to the yield per tobacco type across sources of financing, Virginia Full Flavor obtained the highest at 2,090 kg/ha, Burley neutral flavor also got the highest at 2,152 kgs/hectare, and Native-LPI 1 at 2,064.kgs/hectare. The average yield across all types is 1,945 kgs/ha.

As to the comparative return of the tobacco crop across all types, the Burley improved flavor (Mindoro) gave the highest net income per hectare to the farmer at PhP83,287/hectare, followed by Native Batek (Pangasinan) at PhP75,444/hectare and Virginia Improved flavor (Ilocos Norte) –PhP74,163/hectare. The average net income across all tobacco types is Php41,132/hectare (FTSD Report as of Nov. 2012).

  1. 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 2012, NTA provided production assistance to 1,399 tobacco farmers, covering 1,087 hectares, Total Production Assistance totalled PhP16 million. The agency aimed 1,800 farmers with a budget allocation of PhP18 million.

  1. Tobacco Grower of the Year

As part of Market-driven Quality Tobacco Production, and a way to gauge the effect of the interventions to the farmers, the NTA conducted the Tobacco Grower of the Year Contest, giving recognition to farmers who produced the required yield, quality and complied with Good Agricultural Practices. Innovations on farming gadgets, changes to make farming easier, and efforts to protect the environment spelled the difference among the contestants. From among 94 tobacco farmers in Regions 1, 2, and CAR, 14 outstanding tobacco farmers were awarded in 7 categories in the Virginia, Burley and Native tobacco types. A success story of an outstanding farmer had a yield 3,490 from the usual 2,000 kilos per hectare with gross sales of P 235,399.17, and a net income of P 92,744.35 or 65.01% ROI.

  1. Irrigation Support Project
  2. The project was conceived in support of the self-sufficiency program for agricultural commodities, more particularly, the market-driven quality tobacco production and food security program of the Government. For CY 2012, a total of 1,937 water pump and engine sets were approved for distribution to tobacco farmers and about 237 availees for other irrigation facilities.

  3. Agripinoy Tobacco Farmers' Food Processing and Trading Center

Similar to the Agri-Pinoy Food Trading Center of the Dept. of Agriculture, as a priority investment program under the Aquino Administration, the AFTFP shall serve as a direct marketing arm/facility that will include integrated agricultural services, incl. food processing, and feedmill operations. Production assistance will be provided to tobacco farmers the production of raw materials, vegetables, fruits, hogs and poultry which it will buy, process and sell to government offices, govt. hospitals, food terminals/ bagsakan centers, with the assistance of the DA-AMAS in Region 1 and Metro Manila.

Construction of the plant in Ilocos Sur is 90% complete. Machines and equipment fabrication are on-going. Upon completion in 2013, the plant is expected to process meat products, the raw materials of which will be brought from about 7,000 tobacco farmers in Region 1.

B. 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 2012, NTA distributed 210 kilograms of tobacco seeds of different varieties benefitting 8,640 farmers.

C. 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 2012, at least 70,000 tree seedlings (ipil-ipil/mahogany/banaba) were planted by the farmers and staff of the branch offices 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

D. 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 142 tobacco-based farmers organizations are being assisted under various programs of the NTA, of which 81 are cooperatives and, 61 are farmers associations.

E. 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 2012, the following were accomplished:

    1. Licensing, Monitoring and Supervision of Leaf Trading Operations

    • Documented a total tobacco acceptances of 64,463 metric tons valued at 4.600 billion pesos.
    • Registered, licensed, monitored and supervised operations of 50 Trading Centers in Regions 1 and 2 were registered/licensed; 10 Wholesale Tobacco Dealers; 4 Redrying Plants and 400 Field Representatives.

    2. Monitoring and Supervision of Tobacco Exportation and Importation

    • Issued a total of 2,167 export/import clearances for leaf tobacco and 4,417 export/import clearances for tobacco products/cigarettes. There was also a significant increase in the issuance of regulatory documents by 24% on leaf tobacco and 141% on tobacco products.

F. 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

G. 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

H. Development and Commercialization of Other Uses of Tobacco

In response to the anti-smoking campaigns, enhancing global competitiveness, addressing public health consciousness and effective regulation, the continuing development and commercialization of the other industrial uses of tobacco to increase its utility. Among the other industrial uses/ products are tobacco pulp and paper from tobacco stalks, tobacco dusts as molluscicide cum fertilizer for aquaculture application; tobacco extracts as pesticide for fruit trees, vegetables and ornamentals, ethanol, veterinary products.

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

    For the year, the NTA continued the 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 financial assistance to the new batch of 214 scholars, enrolled in 4-year and vocational/technical courses, in state colleges and universities in Regions I, II and CAR. A total budget of PhP2.00 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 10,000 "techno-calendars" in the local dialect; published a quarterly "Tobacco News" and regularly hold press conferences with the media.