THE year 2020 saw another round of rate increases in January for tobacco excise tax and new taxes for heated tobacco and vapor products with the enactment of Republic Act No. 11346, also known as the Tobacco Tax Law, posing another challenge for the industry already beset with aggressive global campaign against tobacco and smoking and global competition. The COVID-19 pandemic, which started in the first quarter, however, posed the greatest challenge for the agency.
The year also marked the transition of leadership after the untimely demise of then Administrator Dr. Robert L. Seares during the early government lockdown in March. The new Administrator and CEO, Mr. Robert Victor G. Seares Jr., was appointed by President Rodrigo Roa Duterte in June 2020 under a very unusual or unprecedented condition, succeeding his father, the late Administrator Dr. Seares. The new Administrator was faced with a daunting task to lead the agency amidst uncertainties brought about by the pandemic.
NTA senior officials rose to the occasion and helped the new leadership in carrying out the implementation of ongoing programs and projects, despite strict health and safety protocols resulting in the adoption of skeleton workforce, irregular work schedules, and restrictions in travel and gathering.
Amidst these challenges, NTA has continued to be aggressive in its performance to fulfill its twin mandate, to improve the lives of the tobacco farmers and other stakeholders, and to promote the balanced and integrated growth and development of the tobacco industry.
The Agency’s accomplishments focused on priority programs, projects, and activities geared towards responding to the call of the Department of Agriculture for “Masaganang Ani at Mataas na Kita,” particularly on increased productivity and income of farmers through provision of production assistance for quality production, as well as responding to the needs of the tobacco farmers and stakeholders during the pandemic.
Immediate Aid to Farmers
NTA’s most important mission during the lockdown was to contribute to government effort to give financial aid to our farmers affected by the lockdowns.
In compliance with the Secretary of Agriculture’s directive (DA Memorandum dated April 14, 2020) to all Bureaus, Attached Agencies, Regional Field Offices and Banner Program Directors to refocus/realign the FY 2020 budget to enhance food productivity, supply availability, and price stability amid COVID-19, the NTA has implemented the following:
- Emergency Cash Assistance. NTA was one of the first government agencies that came to the aid of the farmers during the early part of the Enhanced Community Quarantine (ECQ). A total of 6,426 farmers under the Tobacco Contract Growing System (TCGS) for crop year 2019-2020 received the P13-Million Emergency Cash Assistance (ECA), at P2,000 per farmer, in tobacco-growing provinces in Region 1 and Abra (Pursuant to Referendum Resolution No. 002-2020 of the NTA Governing Board, March 24, 2020). Our NTA personnel in the Branch Offices worked on the front line to deliver, in coordination with our partner local government units, the cash assistance to the farmers.
- Gulayan at Manukan sa Barangay. In support of the “Plant, Plant, Plant” program of the Department of Agriculture, NTA allocated P10.98-million for the Gulayan at Manukan sa Barangay (GMB) project, providing a total of 26,579 Sasso chicks and 6,112 packs of assorted vegetable seeds. Our farmer-cooperators were able to harvest within the year their vegetables and poultry for family consumption, while those who harvested more were able to sell them for additional income.
- Vegetable Seeds Distribution. To supplement the Gulayan at Manukan sa Barangay project, the agency also distributed 19,922 seed packs (5 kinds of vegetable seeds per pack) to 8,321 tobacco recipients under the Vegetable Seeds Distribution project. The project covered not only contract growers under the NTA-financing scheme, but also registered contract growers under the buying firms or local government units. Our partners, Bureau of Plant Industry and seeds providers from the private sector, helped us in sourcing our seeds supply.
Livelihood for Additional Farmers’ Income
NTA also took another step towards increasing income of farmers through its Beef Cattle Production Assistance Project (BCPAP). For the initiative, the agency allocated P10 million from the Tobacco Farmers Production Assistance or Investment Outlay for 2020, under its Integrated Farming and Other Income Generating Activities Project (IFOIGAP). The project provides 250 tobacco farmers, from assigned allocations of the different Branch Offices, with one ready-to-breed upgraded Brahman heifer.
With the positive response from our beneficiaries, and as most tobacco areas are still under the General Community Quarantine, NTA has proposed additional budget to expand the coverage of the Beef Cattle Production and Gulayan at Manukan sa Barangay, including new livelihood programs such as Chicken Layer Assistance and Goat Production.
Unhampered Tobacco Trading
NTA implemented beginning crop year 2019-2020 new floor prices, higher than the prices of all tobacco types for the last two cropping seasons. Despite the total lockdown in Luzon in early March, trading operations in Ilocos proceeded, thanks to the approval by the Department of Agriculture of the request of the agency, and in coordination with the local government units, for the unhampered delivery of tobacco, and movement of NTA staff and trading personnel in their respective areas. Major tobacco buying firms, per earlier commitment, bought all the tobacco leaves of farmers in Ilocos Region, Cagayan Valley Region, and Abra.
Although the trading season was marked by the difficult situation brought about by the government lockdowns, the abovementioned factors contributed to higher tobacco production and a strong recovery of earnings among our contract growers.
The 2019-2020 harvest was better than the previous crop year. Volume of tobacco production/acceptances for all tobacco types (Virginia, Burley and Native) increased by 5.58%, from 46.6 M kilos valued at PhP3.92-B in 2019 to 49.2 M kilos, valued at PhP4.27 billion in 2020 (NTA Regulation Department data, as of December 31, 2020).
Charting the Course of the Industry in Next 5 Years
NTA has made significant strides to make the agency responsive to the needs of its stakeholders in line with its commitment for a sustainable industry. In consultation with various stakeholders, the agency formulated the Sustainable Tobacco Enhancement Program (STEP), the five-year industry roadmap, aimed at the development of the Philippine tobacco sector through the use of all available resources to accelerate the modernization and industrialization of the tobacco industry, and to increase production and farmers’ income.
With some enhancements to be done, the roadmap/plan was approved by the NTA Governing Board on December 16, 2020.
The Branch Offices have already established Block Farms in their respective coverage area, or a total of eight model block farms with an aggregate area of 438.35 hectares and an average of 54.8 hectares per Branch area, involving 636 farmer-cooperators.
The Farm Technology and Services Department (FTSD) in Batac, Ilocos Norte has already undertaken the inventory of tobacco-based cooperatives that will serve as conduits of assistance of the proposed block farms. The FTSD personnel have also updated the Tobacco Farmers Registry and, through the Farmers’ Organization Development coordinators in the branch offices, have enrolled the tobacco farmers in the Registry System for Basic Sectors in Agriculture (RSBSA), as it is being required by the Department of Agriculture for social amelioration purposes of the government.
Various components of the block farm, such as tobacco and rice production, livelihood, and farm mechanization, have been included in the plan and budget for each block farm, now ongoing finalization for approval by the NTA Board.
Increasing Production Assistance
NTA continues promoting a market-oriented approach in tobacco production through the Tobacco Contract Growing System (TCGS). This includes the adoption of a contract-growing scheme to enhance participation of the private sector in production technology transfer, production assistance and leaf marketing.
The number of registered farmers who actually planted tobacco increased by 39%, or from 29,830 in 2018-19 tobacco season to 41,516 in 2019-2020. Tobacco farm area (in hectares) however decreased by 7%, or from 29,839 to 27,764.56 in the same period.
For crop year 2020-2021, commencing in the last quarter of this year, a total of 4,830 tobacco farmers covering 3,357 hectares were provided production assistance worth Php186.34 under the NTA Financing, while 2,049 tobacco farmers covering 1,399 hectares were NTA-LGU funded, where LGUs provided the production inputs such as fertilizers and insecticides.
For the Rice Production Project, an integral component of the Integrated Farming and Other Income Generating Activities Project (IFOIGAP), NTA assisted 3,361 farmer-cooperators with an area of 2,820 hectares in Regions 1, 2 and CAR. Farmer-cooperators are granted production/credit assistance amounting to PhP48.5 million with a 40% subsidy.
For the Improved Tobacco Seedling Production project, NTA targeted 19.6 million seedlings to be distributed free to tobacco farmers. To produce the seedlings, farmer-cooperators were provided with technical assistance, inputs and implements worth P17.2 million. The seedlings will be bought back by the agency at PhP0.30 per seedling as an additional income to the seedling growers.
Farm Modernization
One of the Agency’s flagship programs to modernize the conduct of field activities on tobacco production is the Tobacco Farm Mechanization Program (TFMP). This includes the application of new technologies and using farm machineries and equipment to increase the farmer’s efficiencies of labor utilization and reduce the cost of production.
For 2020, NTA alloted P27.92 million for the distribution of four-wheel tractors to 26 farmers’ cooperatives and associations in tobacco-growing provinces. The tractors are expected to service a total of 1,517 hectares. The initial fund for the program was sourced from the Corporate Fund and it was proposed that future funding will be sourced from the Tobacco Fund (RA 4155).
NTA also addresses the tobacco farmers’ need for new flue curing barns and air-curing sheds through the Curing Barn Assistance Project (CBAP), with a PhP100 million budget, which have been provided under Tier 1 by the Department of Budget and Management. The farmers availed of the assistance to construct new barns or replace old/damaged ones that have been destroyed by calamities that hit the region in the recent years. To date, 1,002 farmers availed of flue curing barn construction/repair amounting to PhP29.9 million while 2,529 farmers benefitted from curing shed construction/repair totaling to PhP61.4 million.
The installation of the solar-powered irrigation system (SPIS) is included in the farm mechanization component of the Block Farms, which is expected to be implemented in the upcoming cropping season. NTA is set to establish eight more SPIS in eight tobacco-growing system, or one for each Tobacco Block Farm.
As of May 2020, the agency has completed the installation of the last of the nine Solar-Powered Irrigation System (SPIS), which started in 2018, in various tobacco-growing areas in Northern Luzon.
To fine-tune the implementation of the SPIS, the Operations Group conducted in October the technical capability training for all 31 registered Agricultural and Biosystems Engineers of the agency.
With the training, the Branch Office project implementers can now determine, with the help of our engineers, the baseline information needed in the site and other relevant information such as rainfall, and wind velocity, for a resilient and effective system during operation.
Online Transaction via TradeNet
The NTA Governing Board approved on October 13 the guidelines and procedure for the mandatory online transactions in its regulatory functions. Mandatory online transactions include application, processing and issuance of license to import, export and transship tobacco leaf, tobacco products, heated tobacco products, other tobacco-related supplies, materials and spare parts, and application, processing and issuance of import/export/transshipment commodity clearances. Said guidelines and procedure is a requirement for the integration of the regulatory processes into a fully online and interoperable platform with other trade regulatory government agencies (TRGAs) with TradeNet, the Philippine government’s online trading facilitation portal.
Aside from streamlining agency processes in compliance with the requirements of Ease in Doing Business and Efficient Government Services Delivery Act of 2018 (Republic Act No. 11032), NTA has adopted no-contact policy to protect the health of our clients and employees in compliance with the government directive for stringent social distancing and community quarantine measures to contain the spread of COVID 19.
By the start of the tobacco trading, the agency issued licenses to 36 trading centers, Permit and Authority to Purchase to 14 wholesale tobacco dealers, and Permit and Authority to Redry to three redyring plants, 39 Licenses/Authority to Export, 63 Licenses/Authority to Import, 13 Authority to Transship leaf tobacco and tobacco products, and 25 Accreditations to Manufacturers.
NTA also signed, along with 29 other government bodies, the Memorandum of Understanding (MOU) for inter-agency cooperation initiated by the Bureau of Customs (BOC) to strengthen border control capabilities of the government. NTA to render consultation, coordination and cooperation with the BOC in trade facilitation, prevention of smuggling and provision of support mechanism on border control.
Commitment to Highest Level of Service to Customers
The NTA got recommendation for the continuation of its ISO 9001:2015 QMS certification as a result of the 1st surveillance audit on July 27. The audit was conducted by the international certification body Société Générale de Surveillance (SGS) on virtual platform using Microsoft Teams.
With the continuation of certification, the agency is again recognized by the standard-setting body for its commitment to providing customers with the highest level of products and services within the organization’s policy and objectives.
Strengthening Manpower Capability
NTA recognizes that people are key to every success, and that the agency’s employees are its greatest asset. The agency retained all Job Orders in recognition of their vast experience working for the agency and to give them equal opportunities, along with the regular staff, to boost their morale in spite of the pandemic. Before the year ended, 11 of these hardworking JOs were given original appointments, along with 14 of our staff who were promoted in various positions.
NTA conducted in November an orientation on the selection and promotion process and policies on appointments, with a resource person from the Civil Service Commission. Since then the agency has accelerated the filling-up of vacant plantilla positions, starting with the publication of 29 vacancies, to enhance manpower capability of the agency for its upcoming projects under the STEP, and to boost employment in government.
Looking Forward to 2021
The ongoing pandemic and effects of recent calamities on tobacco farms give the Agency more resolve to assist the tobacco growers. They are essential to our economy, the backbone of the industry, and they should be given the support that they deserve.
Full Implementation of STEP
NTA has high hopes of a more sustainable tobacco industry with the initial implementation of the five-year development plan. It will fully adopt the Block Farming Approach with at least 25 hectares per block farm for a total of about 27,700 hectares of tobacco-rice farm involving about 41,500 farmers in the next five years.
NTA will request P7-billion annually from the Tobacco Fund and corporate resources to fund various projects and programs under the five-year roadmap, including specific programs, projects and activities needed to implement the various components of the Block Farms. The ultimate aim is to double the income of farmers and revert to the 80 million kilos annual production of tobacco by 2025.
More Livelihood Projects
As the Agency rolls out block farming for tobacco production next cropping season, the Operations Group are proposing priority projects worth P597-million for 2021.
These include new livelihood programs such as Chicken Layer Assistance and Goat Production, with P24.8-million combined budget, and the expanded coverage of the Beef Cattle Production, or additional 500 heads of ready-to-breed Brahman heifer, and Gulayan at Manukan sa Barangay, with P31.2-million combined budget. The last two projects were introduced last year with P20-million budget in support of the food sufficiency program of the Department of Agriculture and part of the intervention to support the farmers during the pandemic.
The agri-industrial business corridors by the DA will be actively pursued through the Block Farm Model Approach. NTA proposed additional funds to expand the coverage of the NTA Kadiwa ni Ani at Kita in Narvacan and for the sustainability of the hog-fattening project to benefit more farmer-cooperators and contribute to the food sufficiency program of the government.
Farm mechanization and modernization
NTA has allotted P51.5 million for the purchase of 28 four-wheel tractors in various HPs and 16 power tillers to various farmers’ association and cooperatives.
As infrastructure investments, it has proposed P10-million for the Solar-Powered Irrigation System.
While it continues funding post-harvest facilities for improved quality tobacco with our Curing Barn Assistance Project, NTA will conduct research on the solar-powered curing barn in two selected sites in tobacco areas.
More programs for sustainability
NTA will also work on the establishment of Digital Agriculture for our various activities in soil and water quality monitoring in selected municipalities, continuous updates on the Tobacco Farmers Registry, development of Facility Maps of the Agency, and human resource information.
NTA will continue our efforts for climate change adaptation and mitigation measures, with our Renewable Fuelwood Development program and the provision of technical expertise and facilities through our Pest Clinic and Quick Response System.
We will continue to develop and promote global trade and exports by additional funding for our Agricultural Research, particularly in Tobacco Production Management to increase yield and decrease the cost of production. This will include enhanced tobacco seed production, distribution of hybrid seeds, tobacco cultural management, crop protection, and protocol research on fertilizers and pesticides.
With our state-of-the art equipment under the Industrial Research, NTA will continue to test tobacco leaves and tobacco products to protect consumers on the hazardous substances of the cigarettes.
I HAVE full confidence in my co-workers at the NTA, together with our various stakeholders and partners, that we will move forward in our mandates to serve the farmers despite the challenges. We will continue our collective efforts to improve the economic lives of our farmers, and the rest of the stakeholders under the “new normal” and for the sustainability of the industry.
We are known to be a resilient agency, and so I have a firm belief that we will get through these tough times.
(SGD) ROBERT VICTOR G. SEARES JR.
Administrator / CEO