NTA sees 25% expansion in tobacco hectarage

Amid the global financial turmoil, the tobacco industry is one of a few remaining bright spots in the country’s economy. Industry stakeholders are so bullish about the prospects of tobacco that they are pouring more capital to finance 25-percent expansion in tobacco hectarage.

Administrator Carlitos Encarnacion of the National Tobacco Administration (NTA) said cigarette manufacturers, wholesale tobacco dealers and leaf trading centers will expand their exposure by a fourth both in terms of financing and farm area coverage. Encarnacion said the expansion will greatly boost the income and purchasing power of the tobacco farmers mainly in Northern Luzon who depend on the tobacco industry for livelihood.

“At a time when most countries worldwide are reeling under the weight of the US financial crisis, this is a welcome development which will go a long way in insulating rural folks in Regions I, II and CAR, from the negative effects of the crisis, “ Encarnacion said.

The NTA chief is confident that with more farms engaged in tobacco growing backed up by the required production outlay made available by the private sector, the Norhern Luzon farmers are bound to produce more and are therefore assured of larger income next season.

For the 2008-2009 season, the total financial requirement for tobacco production will reach P1.265 billion, Encarnacion said.

The tobacco companies will provide the larger part of the needed production assistance with the balance to be shouldered by the government through the NTA and the farmers themselves.

The amount will largely defray the costs of production inputs going to the farmers which are in the form of fertilizer, insecticides, seedlings and others.

Farm coverage is expected to expand to 31,647 hectares from 25,318 ha. Planted to tobacco last season. The next season figure represents an increase of 6,329 ha. or 25 percent.

NTA records show that a total of P40,000 per hectare is spent on inputs.

At an average buying price of P60 a kilo and with a production of 1,800 kilos, it is estimated that tobacco farmers will earn P60,000 in net income per hectare per season.

Encarnacion projected that total production will reach 56 million kilos worth an estimated P3.418 billion.

Looking forward to the bright prospects that the incoming tobacco season will usher in, the NTA chief said that with the purchasing power of the farmers boosted, the economy in the three northern regions will be immensely benefited.

He thanked the private sector-owned tobacco firms for their continuing faith in the industry.

Two million Filipinos depend on the tobacco industry iincluding those working in cigarette factories, it was learned.