Lucio Tan firm to fund P1-B package for tobacco farmers

The Department of Agriculture (DA) and Fortune Tobacco Corp. of Filipino-Chinese business tycoon Lucio Tan are firming up plans to provide economic relief to displaced tobacco farmers in north Luzon.

Nearly 50,000 tobacco farmers in the Ilocos region and Pangasinan are being encouraged to shift to alternative crops to help them recover from the previous poor harvest season which yielded low-quality tobacco leaves and subsequent weak sales.

Agriculture Secretary Luis Lorenzo said three DA agencies – the Bureau of Soils and Water Management, the National Tobacco Administration, and state-run tomato paste maker Northern Foods Corp., – are in discussions with local government officials and Tan’s representatives to thresh out an aid package for the farmers.

Initially, the group of Lucio Tan said it will shell out at least P1 billion for the construction of small water impounding projects or SWIPs.

Lorenzo said SWIPs, which are low-cost earth dams that trap rainwater from upland areas to be used for small-scale irrigation during dry season is a better alternative to the groundwater tobacco farmers tap to irrigate their crops.

For many years, tobacco farmers, particularly in Ilocos Norte, had been drawing irrigation water from underground aquifers to the extent that during the last cropping, salty water and no longer fresh underground water was coming out from the pumps.

Saline water had been used to irrigate as much as 3,000 hectares of tobacco areas in Ilocos Norte alone, resulting in poor yield in which the leaves turned brittle, of inferior quality and flavor, with high nicotine content, not saleable.

This resulted in losses to farmers to the tune of P350 million.

Even Fortune, a traditional major tobacco buyer, along with Union Tobacco Leaf and Lancaster, had been rejecting the leaves because they will lose out in the highly-competitive tobacco industry..

Lorenzo said the Department of Agriculture will provide assistance in terms of production inputs and credit to farmers that will convert about 562 hectares of the 3,000-hectare tobacco areas in Ilocos Norte to corn.

The aid, amounting to about P12,000 per hectare for seeds, fertilizers and other farm inputs, will come from the province’s 37-percent share of the tobacco excise tax spelled out by Republic Act 7171, the DA chief said.

Lorenzo also said NFC, which is run by Livelihood Corp., another DA-attached agency, is also willing to help farmers who wish to convert about 300 hectares of their tobacco land into tomato plantation.