Economy


Ilocos farmers won’t abandon tobacco despite Sin Tax -- mayor




Posted on July 18, 2017


LAOAG CITY, ILOCOS NORTE -- Tobacco production is not expected to dwindle almost five years since the Sin Tax reforms became law, with the government intending to discourage smoking, a mayor from the Ilocos region, a key growing area, said.

Some 52% of the total tobacco farmers in the country are based in four Ilocano-speaking provinces of Abra, Ilocos Norte, Ilocos Sur (60%) and La Union (17%), according to the National Tobacco Administration (NTA).
“Tobacco is considered a high-value crop. Farmers won’t walk away from it because it’s a cash crop,” Batac City Mayor Albert D. Chua said in an interview with the local media on Friday.

“There are suggestions to reduce the area planted to tobacco and shift to other crops, the problem is that farmer will always plant what is competitive,” he said.

“At the end of the day, will the farmer earn from the alternative crop?” he added.

According to farmers interviewed separately, there is still strong demand for tobacco from cigarette manufacturers and distributors, as companies continue to offer them production contracts, despite incentives that will aid the farmers to expand their farming portfolio.

“Tobacco won’t be abandoned by Ilocanos. We have long earned our living from tobacco,” said Agnes Asuncion, speaking in Filipino. Ms. Asuncion is a tobacco farmer who diversified into dragonfruit after the Sin Tax reform.

Some 52% of the total tobacco farmers in the country are based in four Ilocano-speaking provinces of Abra, Ilocos Norte, Ilocos Sur (60%) and La Union (17%), according to the National Tobacco Administration (NTA).

Despite diversifying into other crops, Ms. Asuncion said that tobacco is still a better crop, as the plant can be harvested up to 12 times.

Republic Act No. 10351 raised excise taxes on “sin” products such as cigarettes and alcohol, in a bid to temper public demand from those hazardous products. It also required that 15% of the additional revenue gained from the increase in levies will be earmarked to “programs that will provide inputs, training, and other support for tobacco farmers who shift to production of agricultural products other than tobacco including but not limited to spices, rice, corn, sugarcane, coconut, livestock and fisheries.”

Still, data from the NTA show that the law may have been effective, as tobacco production declined from 67.665 million kilograms in 2013 to 51.947 million in 2015.

The farmers on the other hand said that their livelihood improved after the implementation of the Sin Tax law, as some even noted that their income grew as much as 100%.

“Our incomes rose. To be honest we have received no assistance from the government. Instead we are earning,” said Ms. Asuncion.

Yet, the farmers rejected the idea of shifting totally to high-value crops, as they still rely on incentives from the Sin Tax reform law.

“The law has a lot of incentives,” said farmer Edmond Montanez, also speaking in Filipino.

The incentives under the Sin Tax reform law are in the form of farm equipment, agri-transport, and improvement of farm-to-market roads, and kick in for farmers engaged in “multi-cropping,” under which other crops are planted while they await for the tobacco planting season to return.

For example, Ms. Asuncion said that they plant high-value crops such as rice, corn, and dragon fruit during July to December, and plant tobacco in January to June.

“Many farmers have shifted to (multi-cropping), but the season here is wet and dry. Palay cannot be a year-round crop. So we still plant tobacco,” she said.

In 2016, the province of La Union received the largest share from excise taxes at P220.38 million, followed by Ilocos Sur at P84.29 million, Abra P66.56 million, and Ilocos Norte P11.12 million. -- Elijah Joseph C. Tubayan