Why tobacco farmers won't quit the crop

MANILA, Philippines - Amid moves by various groups advocating a ban against smoking,tobacco farmers from whose labors the raw material for cigarette-making originates won’t quit the crop.The no-smoking movement was reinforced recently by the Metro Manila Development Authority which launched an anti smoking drive in public areas in mega Manila backed by R.A. 9211 or the Tobacco Regulations Act.Leaf farmers, especially in the northern provinces where tobacco is mainly grown, appear fixated with tobacco that they are not distracted by all the hype affecting their crop.

This is because, as industry sources noted, tobacco has established its dependability as a” cash crop” to them despite all the rigors involved in raising it.

The tobacco season that starts September for the Virginia variety and  ends till May when trading of the harvest is generally over coincides with some major occasions when the farmers are in dire need of cash. The season for burley and native types on the other hand begins October and ends on July and August.

A week or two before their planting season starts which commences with seedbedding, the farmers receive their production loans from tobacco traders who would have the first crack on their produce after harvest. The farmers’ produce are tied to their loans and these are normally repaid during trading.

The farmers traditionally dip their hands for some amount from their production loans and set the stashed money aside to subsidize their family’s Christmas celebration and related expenses during this season of revelry and gift-giving.

By March, the farmers are confronted with another event which is the graduation of a child or children from school, an episode that almost always calls for celebration among the localfolk.

Tobacco growers usually ask for a cash advance from the traders or, for those who are ready with their first deliveries of the harvest, they can collect payment for the shjpment minus an initial deduction for their dues emanating from the production loan.

Then comes the school enrolment period with their children going to college or high school but no problem because the leaf farmers are getting their last collections for the rest of their harvests.

The confidence or devotion farmers attach on their crop is strengthened by the fact that they have an assured market for tobacco. On top of this, tobacco is the only agricultural product with imposed floor prices. The floor prices are set every two years by the National Tobacco Administration (NTA) after a tripartite conference attended by farmers, tobacco traders, and NTA officials.

Former NTA director and branch manager Rodrigo Pagtulingan told The STAR that with the floor prices, the farmers are guaranteed a profit of 25 percent and this is true for any of the various types and grades of tobacco, be it Virginia, burley or native.

“They are bound to earn even more as the traders buy beyond the floor prices which is usually the case,” he added citing leaf quality considerations and business competition.

He said that tobacco growers earn P20,000 to P25,000 per hectare in net income “even now that prices of fertilizer and other inputs are high.”

The former NTA-Candon (Ilocos Sur) branch manager where the highest volume of Virginia tobacco is produced believes that tobacco growers will stick tooth and nail to the crop.  

Declaring that there is an assured market for tobacco, Rex Antonio Teoxon, NTA corporate planning manager, noted that demand for tobacco is too huge with local production unable to cope with demand.

NTA records show that the traditional production of tobacco farmers constitute only 30 percent to 35 percent of the total annual demand. Last year’s output of 74 million kilos is only a shadow compared to the 211 million kilo (green weight)requirement of local manufacturers and leaf exporters.

Of this, local manufacturers required 163 million kilos while exporters asked for 48 million kgs. This year, NTA expects production to increase to 77 million kilos (green weight) but the figure is still short of the demand.

Leaf importations in 2010 at 133 million kilos (green weight) were almost twice those bought locally.

Philippine-grown tobacco, noted globally for its low nicotine content, is very attractive to other countries which they need in their cigarette-manufacturing activities to blend with their high-nicotine bearing crop. “Conversely, local manufacturers also import from them for blending with the local crop,” Teoxon said.

There are about 40 countries traditionally buying local tobacco with USA, Belgium, South Africa, Korea and Malaysia leading the pack. Last year, leaf exporters shipped out 33.5 million kilos valued at $105.6 million.

Locally manufactured cigars and cigarettes also command a share in the world market. Exports of these products which are mainly brought to Asian countries totaled 23.5 million kilos with a purchase value of $161 million in 2010.

Leaf exports have been steadily on the rise. From almost 19 million kgs in 2007, leaf or unmanufactured tobacco shipments went up to 23.6 million kgs in 2008, then 30 million kgs in 2009 and 33.5 million kgs last year.All these figures are in dry weight category.

Local manufacturers’ leaf requirements have also been increasing from 75 to 80 million kgs (dry weight) 10 years ago to 98 million kgs (dry weight) or 163 million kgs (green weight) in the last two years. Teoxon said he has no reason to doubt that the tobacco market is stable in the years ahead.

All these developments would indicate that tobacco growers are all the more inspired to raise the plant.

Teoxon has some words of advice to the farmers though.“ The prospects are bright but we (farmers) must do our role right.” The soft-spoken but emphatic NTA veteran meant the crop should be “technology-based, quality-oriented, and market-driven” taking into consideration what the tobacco market wants.

He is convinced that the anti-smoking campaign how ever flagrant and daring it evolves wont threaten tobacco cultivation nor encourage farmers to leave the crop. Alternative crops like garlic and onion proposed by tobacco oppositors are not attractive to the farmers according to Teoxon who cited low prices for these products especially when the market is “invaded” by imported and cheap garlic and onion as main reason for their rejection.