A new tripartite agreement for the tobacco floor price between the farmers, private sector, and the National Tobacco Administration was reached during the two-day virtual Tripartite Consultative Conference that ended on November 11.
The memorandum of agreement will be sent immediately to the representatives of each sector for their signature, Atty. Rohbert A. Ambros, Manager of the NTA Regulation Department, said at the end of the conference.
The agreement calls for a P3 increase in floor prices per kilogram across all grades for Virginia and Burley, and a P4 increase across all grades for Native tobacco.
The floor prices per kg for Virginia top grades will be increased to P87.10 for Grade AA and P86.10 for Grade A. For Burley, the top grades A and B will be increased to P75.10 and P72.10, respectively. The adjusted floor price for high grade of the Native type is P77.10 per kilogram.
According to Atty. Ambros, the agreement will be effective immediately upon approval of the NTA Governing Board and the required publication of the NTA Memorandum Circular adopting the new floor prices, and applicable for trading years 2022 and 2023.
Director Wilfredo Martinez, member of the NTA Board, has already moved for the approval of the agreement by the Board.
NTA Administrator/CEO Robert Victor G. Seares Jr. said the cooperation among the parties, in light of the current difficulties besetting the industry due to the pandemic, made the difference in the negotiation.
“We dedicate this success and all our efforts to our tobacco growers who, despite these trying times, still contribute to the nation’s economy, especially in the health sector, through the tobacco excise tax,” Seares said.
Bernard Vicente, president of the National Federation of Tobacco Farmers Association and Cooperatives (NAFTAC), said the farmers were satisfied with the conclusion of the negotiation for a higher floor prices.
“This is better and more organized than our negotiations in the past tripartite conferences,” he said, citing the cooperation of all sectors and leadership of NTA under Administrator Seares.
Vicente, who presented on Wednesday the cost of production for Virginia tobacco as basis for the floor price increases, joined other NAFTAC officers, Saturnino Distor of Pangasinan and Reymund Pin᷈on of Cagayan, in the negotiating table. Distor and Pin᷈on presented the cost of production for Burley and Native, respectively, before the price negotiation.
Joel L. Binwag of leaf buyer Universal Leaf Philippines, Inc. represented the manufacturers and leaf buyers in the negotiation. Tobacco manufacturers also joined the biennial conference as observers.
Agriculture Secretary William Dar delivered his keynote address during the opening program on Wednesday, highlighting the need to assist the smallholders, the tobacco growers, so that “they can be more prosperous than their present level of existence.”
The agri chief also said that the “well represented consultation” will help address various issues and concerns of the industry, including, not only the pricing scheme but also production and marketing.
He also assured the industry stakeholders that the government will continue to oversee the tobacco industry in such a way that the “delicate balance between the need for a healthy environment and the need to protect the welfare of the tobacco farmers is achieved and maintained.”
Ilocos Sur Governor Ryan Luis V. Singson, Deputy Speaker and Ilocos Sur 1st District Rep. Deogracias Victor Savellano, and members of the NTA Governing Board also delivered their live video messages on Wednesday.
In his message, Gov. Singson highlighted the goal of the government to protect the welfare of the tobacco farmers, citing the huge contributions of the industry in the development of Ilocos Sur and other tobacco-producing provinces.
Rep. Savellano urged all parties in the tripartite to come up with favorable results to encourage the farmers to produce quality tobacco, which eventually result in the change in their economic status. He called on the cooperation of all sectors to address the needs for fuelwood, water, curing barns, and the right fertilizer for better yield and income of the tobacco growers.
The Deputy Speaker also commended NTA under the leadership of Administrator Robert Victor Seares and all the provincial branches for providing production and technical assistance and other services to farmers for better production.
Acting NTA Deputy Administrator for Operations Engr. Cesario G. Sambrana served as moderator during the negotiation.
The setting of the minimum floor price provides tobacco farmers a guaranteed minimum return on investment of at least 25 percent for expenses. The actual buying price, which is based on prevailing market prices, is usually higher than the minimum floor price.
NTA is authorized to set or fix tobacco floor prices, as mandated by Presidential Decree (PD) No. 627 s. 1974 (for all tobacco types except Virginia), PD No. 1481 s. 1974 (for Virginia), and PD No. 1143 s. 1977 as amended (for Burley), by adopting a tripartite consultative conference.