Higher tobacco buying prices seen in 2024, 2025

MANILA, Philippines — The government is raising the minimum buying prices for tobacco for the next two years following an agreement among stakeholders in a recent tripartite conference conducted by the National Tobacco Administration (NTA).

The floor price of Virginia tobacco, which makes up almost 60 percent of total local production, is seen increasing by an unprecedented P9.90 per kilo in its various grades.

The minimum buying price for Burley and Native type tobacco would also be raised by P5.90 per kilo and P3.90 per kilo, respectively.

“The NTA Governing Board is set to release the full details of the floor price increases across the board of all the grades of the three types of tobacco upon approval in their session next week,” Agriculture undersecretary Deogracias Victor Savellano said.

The NTA convenes the tripartite conference every two years to review and fix reasonable tobacco floor prices on prevailing factors and conditions like world market situations, production costs, and a reasonable margin of profit for the farmers, dealers, manufacturers, and exporters.

Savellano, who sits as the NTA oversight official and alternate chairperson, said the P9.90 per kilo increase on floor prices for Virginia tobacco is the second highest in 16 years.

The highest agreed increase on the floor price of Virginia tobacco, which was P10 a kilo, was achieved during the tripartite conference on Dec. 10, 2007, with his intervention then as governor of Ilocos Sur.

In the succeeding conferences, the increase in floor prices of Virginia tobacco only ranged from P1 to P3 per kilo.

Last August, farmers were asking for at least a P5-per kilogram increase in floor prices across all types and grades of tobacco.

The proposed increase would allow farmers to recover higher input and labor costs, which surged in the past two years.

In the previous tripartite agreement struck in 2021, the tobacco floor price was raised by P3 per kilogram across all grades for Virginia and Burley. Likewise, the floor price of Native tobacco increased by P4 per kilogram.

Savellano said the tripartite forum aims to strengthen the tobacco industry to attain the goal of President Marcos, which is to increase the income of the tobacco farmers and to sustain tobacco production by lessening the importation while increasing the tobacco exports in the future.

“We aim to improve our industry by helping one another to balance the economic significance of tobacco as one of the highest contributors to the government coffer,” he said.

The floor price is the minimum price allowed by the government for the procurement of tobacco from farmers. This is based on the prevailing market conditions such as production cost, reasonable margin of profit for stakeholders and growing conditions.

The setting of the minimum floor price provides tobacco farmers a guaranteed minimum return on investment of at least 25 percent for expenses incurred in production.

The tobacco industry provides livelihood to at least 2.1 million people, including more than 430,000 farmers, farm workers and their family members.