The National Tobacco Administration (NTA) reached a new tripartite agreement with farmers and private sector for the tobacco floor price hike, during a two-day virtual Tripartite Consultative Conference that ended on Thursday.
The agreement calls for a PHP3 increase in floor prices per kilogram across all grades for Virigina and Burley, and a PHP4 increase across all grades for Native tobacco.
Lawyer Rohbert Ambros, manager of the NTA regulation department, said the memorandum of agreement will be sent immediately to the representatives of each sector for their signature.
The floor prices per kilogram (kg) for Virginia top grades will be increased to PHP87.10 for Grade AA and PHP86.10 for Grade A. For Burley, the top grades A and B will be increased to PHP75.10 and PHP72.10, respectively. The adjusted floor price for high grade of the Native type is PHP77.10 per kilogram.
Ambros said 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.
NTA Board Member Director Wilfredo Martinez moved for the approval of the agreement by the Board.
NTA Administrator and CEO Robert Victor 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.
During the conference, 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 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 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 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.
Meanwhile, Department of Agriculture (DA) Secretary William Dar underscored during the opening of the conference the need to assist the smallholders, the tobacco growers, so that “they can be more prosperous than their present level of existence.”
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.
Source: Philippines News Agency
