National Tobacco Administration (NTA)
Annual Report

The National Tobacco Administration, the sole government tobacco regulatory agency attached to the Department of Agriculture, has the mandate to improve the economic and living conditions and consequently raise the quality of life of the tobacco farmers including those who depend upon the industry for their livelihood; and to promote a balanced and integrated growth and development of the tobacco industry to help make agriculture a solid basis for industrialization.

For CY 2020-2021, tobacco was planted in 26,628 hectares mostly in seven major tobacco-producing provinces with 39,044 tobacco growers. The occurrence of the COVID-19 pandemic in the first quarter of 2020 and its continuing threat slowed down production of tobacco. Tobacco production for Trading Year 2021 is at 46.28 million kilos, or about 6% decrease from the 2020 output (49.17 million kilos) and slightly lower than the five-year average of 46.84 million kilos.

The NTA has accomplished the implementation of the following programs/activities/projects that are aligned to the One DA Approach/Strategies, and geared towards of the goal of “Masaganang Ani at Mataas na Kita,” or increased productivity and income of farmers through provision of production assistance and other interventions for quality production.

On top of this, NTA initiated in 2021 the Block Farming Scheme, a key strategy of its Sustainable Tobacco Enhancement Program (STEP) and aligned with the DA’s Transformative Strategies. This will allow the agency to achieve its goals set for the next five years and spur development though livelihood creation, job generation and income augmentation.

•  
• Ø    Farm Clustering/Bayanihan Agri Clusters (BACs)
• Ø    Post-harvest, Processing Logistics and Marketing Support

1. Tobacco Farmers’ Production Assistance/Tobacco Contract Growing System (TCGS)

The TCGS is a market-oriented production system that assures leaf buyers of the volume and quality of tobacco they need; and assures the farmers of production technology transfer, credit assistance and marketing assistance directly to the farmers who are members of the pilot block farm under the TCGS. NTA has provided production assistance (at an average Php50,000 per hectare) with a 40% subsidy. For CY 2021-2022, NTA assisted a total of 7,182 tobacco farmers, tilling an aggregate area of 5,003.96 hectares, with a total budget allocation of PhP204 million (PhP100 million from NTA’s subsidy and PhP104 million from corporate funds).

1. Rice-Corn Production

As a component of the Integrated Farming and Other Income Generating Activities Project (IFOIGAP), this is implemented in line with the rice self-sufficiency program of the government led by the Department of Agriculture, and to augment the income of tobacco farmers, other than tobacco production. Farmer-cooperators are granted production/credit assistance to an average amount of P20,000 per hectare with a 40% subsidy.

A total of 4,952 farmer-cooperators with an area of 4037.95 hectares in Regions 1, 2 and Abra were assisted and granted production assistance, with total amount of PhP50 million.

While there is decrease in average yield due to the effect of calamities, we note an increase in the 2021 production 4,592 kg/ha, which is higher than the average 6-year average output (4,492 kg/ha) in 2020.

1. Improved Seedling Production 

The project aims to encourage early planting among tobacco farmers for improved quality, yield and increased income. The seedling growers are paid based on the number of good plantable seedlings produced. For 2021, the project has 249 modules for implementation (6 has/module and 20,000 seedlings/ha) with an area of 3,075. A total of 3,000 farmer cooperators were tapped and provided with technical, inputs and implements to produce 30 million seedlings distributed for free. The project had a total budget allocation of PhP20M and buyback at PhP9M. The seedlings were bought back by the agency at PhP0.30 per seedling as an additional income to the seedling growers.

1. Curing Barn Assistance Project (CBAP) 

 The project aims to improve leaf grades through the production of properly cured leaf. NTA provides facility assistance for the construction and repair of curing barns and air-curing sheds, or replace old/damaged ones that have been destroyed by calamities that hit the region in recent years. It is a continuing project with a PhP100 million budget. A total of 4,029 tobacco farmers availed of the assistance for the construction/repair of their curing barns and curing sheds.

1. Beef Cattle Production Assistance Project

The project provides selected tobacco farmer-cooperators with one ready-to-breed upgraded Brahman heifer, and it is expected to jumpstart the beef cattle industry in the tobacco growing provinces. A total 500 heads Brahman heifer (2^nd batch) were distributed to the recipient farmer-cooperators of Regions 1, 2 and Abra with a total budget of PhP20 million, funded from the agency’s Corporate Funds. Additional budget of PhP300,000 is allocated for MOOE for the conduct of technical training.

1. Gulayan at Manukan sa Barangay

This is one of the refocused projects of the agency to enhance food productivity, supply availability, and price stability amid COVID-19. It enables the household beneficiaries to produce their own food and share the opportunity to raise additional income for their family. As of December 2021, 1,342 tobacco farmers, whose tobacco plants were affected by freak rains were given free chicks, including feeds. For the Vegetable Seed Distribution (“adopt a town” for vegetable production), each of the 6,685 tobacco farmers was given vegetable seed packs which consist of 5 packs of different vegetable seeds were distributed to tobacco farmers.

• Ø  Digital Agriculture

Development of NTA Projects Facility Maps for the Stakeholders of the Tobacco Industry TRAFMAP in regions 1,2 AND CAR

The Farm Technology and Services Department (FTSD) has completed the pilot implementation of the TRAFMAP at the Ilocos Norte Branch. The total number of farmers surveyed and geotagged is 2,908 which is equivalent to 74.60% of the validated tobacco farmers (3,898) registered to RSBSA from CY 2019-2020. The project also included the Improved Tobacco Seedlings Production Setups; 21 setups were geotagged in Badoc, Banna, Sarrat, Dingras and Pasuquin. The project has geotagged a total number of 2,892 curing structures (2,283 curing barn, 577 curing shed and 14 sun drying structures) and Farm Machineries (33 hand tractors, 54 tractors, 268 water pumps), 154 knapsack Sprayer and 56 animals were geotagged.Ø  Climate Change Adaptation and Mitigation Measures

1. Renewable Fuelwood Energy Farm Project

The project aims to address the fuelwood and other forest resources requirement of the farmers in the flue curing of Virginia tobacco, as well as assist in the reforestation efforts of the tobacco growing regions. For the Synchronized Tree Planting component, about 867,724 million tree seedlings were actually planted in Regions 1, 2 and CAR, participated in by government agencies, SUCs, LGUs and other volunteer groups.

1. Design, construction and evaluation of solar-aided curing barn for tobacco flue-curing

The first off-grid solar power system, curing barn and heat pump dryer has been constructed and installed at Camanga, Badoc, Ilocos Norte. The Solar-aided Curing Barn (SACB) was tested without load where it obtained 11kWh of total energy consumption in obtaining a 50^oC temperature. It was also observed that the heat pump dryer can increase the Temperature of 1^oC in just 2 minutes without load. The heat pump dryer showed its efficiency in maintaining the
required temperature. In every 10 minutes, computed mean consumption in increasing a temperature of 1^oC was 0.209kWh which is equivalent to 1.045 kWh per 5^oC or compared to 18 kg of fuelwood consumption equivalent to 93.2 kWh of power.

• Ø  Collective action/Cooperative Development
• Ø  Mobilization & Empowerment of Partners to Attain Scale

        Farmers Organizational Development (FOD)

Farm Technology and Services Department (FTSD), is tasked to assist in organizing, capability building and livelihood training of the tobacco farmers and their dependents. One of the activities undertaken to date is the inventory of tobacco-based cooperatives numbering 309 in 83 municipalities, who will be conduits of assistance of the proposed block farms. A total of 14 cooperatives with a total of 636 tobacco farmers were identified as initial beneficiaries of block farms.

Ø  Global Trade, Export Development and Promotion

Tobacco Research and Development

Under the Farm Technology Development Division based in Batac, Ilocos Norte, the following researches are being conducted with the objective of improving the quality of the leaf and reducing the cost of production.

1. TobaccoGermplasm collection, purification, maintenance and characterization, conducted an extensive germplasm collection of all types: Flue cured/Virginia, Burley, Cigar Wrapper/Filler, Batek, Oriental and other Nicotiana species, together with exhaustive morpho-agronomic characterization and pest resistance are available ready to be utilized by breeders to develop  new and improved varieties that might be desired by tobacco buyers to answer their specific requirements; 89accessions had been transplanted at the Tabug Experimental Farm.
2. Tobacco seed production and distribution. Harvesting of mature seedheads had been completed for the 4 varieties for seed increase. The harvested and threshed varieties are NC 2326, TN90, Golden Harvest and DH 48.
3. Performance evaluation of flue-cured and burley tobacco hybrids, one season evaluation of
   hybrid flue-cured and burley varieties compared to recommended pure lines (non-hybrids had been completed. Farmer-cooperators (FCs) completed the harvesting, classification of cured leaves, weighing, and collecting samples: 11 in Ilocos Sur and 16 in La Union. Collection of soil samples and collection and classifying of leaf samples was completed in Banna and Badoc in Ilocos Norte, and in Candon City in Ilocos Sur.
4.   Pest Clinic-Quick Response System is a continuing NTA project to monitor the prevalence of pests and diseases and to have ready recommendations in case of outbreaks. The pest clinic team coordinated closely with the NTA Branch offices on the occurrence of pests and diseases in their respective areas. For 2021, the FTSD had completed the preparation and sterilization of culture media (Potato Dextrose Agar and Water Agar) and glasswares for isolation and purification.
5. Monitoring of Soil & Water in the different Tobacco Growing Areas; 125 soil and 49 water samples from Vigan; 127 soil samples from Candon to be submitted to TLSID-Batac for analysis. This is done to evaluate the soil fertility, water and chloride content of specific tobacco-growing provinces.

Under the Industrial Research Department (IRD), studies are continuously being conducted on alternative uses of tobacco, among which are:

Tobacco Powder and Extract Research and Development

1.  Demonstration trials on the Use of Tobacco Leaf Extract Ointment against skin diseases of animals, 36 test animals were treated with TLE ointment infested with parasites in Ilocos Norte.
2. Tobacco Seed Oil Extraction, Purification and Characterization, 2.6 liters of tobacco seed oil was extracted using Soxhlet method and Rotavap and this will be sent to ITDI for analysis and characterization.

Scale-up Production of Tobacco Handmade Paper and Novelty Item

•  Prototyping & enhancement of THP novelty products.
•  Production of tobacco handmade papers (THP)
• Ø  Consumer Safety and Regulations

The Quality Assurance Division collected the following samples for Physical and Chemical Characterization of Tobacco Leaf, 64 for Virginia-Neutral and 54 for Virginia Topped Flavor tobacco; 25 for Burley Neutral Flavor and 44 for Topped Burley Flavor. These samples will be analyzed in the laboratory.

On the aspect of monitoring/enforcement, the NTA assures equitable trading to include, accurate weighing, proper grading, proper pricing, prompt payment and proper documentation, pursuant to existing rules and regulations. These activities are implemented through our Tobacco Production and Regulations Officers in the 8 Branch Offices in Regions I, II and CAR and our Regulation Dept. in the Central Office.

Commodity clearances/import/export permits issued to 557 Importers/Exporters/ Manufacturers and Licenses were likewise issued to Trading Centers/Wholesale Tobacco Dealers/Redrying Plants. Processing is done online.

• Ø  Ease of Doing Business and Transparent Procurement

   Tobacco Regulations

NTA has successfully completed the critical onboarding activities in the TRADENET Platform during the 3^rd National Single Window – Technical Working Group (NSW-TWG). Objective of which is to streamline and facilitate application of licenses and permits on tobacco trading, imports and exports of tobacco leaf and products.

• Ø  Strategic Communications

Communication Support, Education and Information Campaign

1. Publications

A special issue of the Philippine Tobacco News of the Agency was released for updates of the agency’s program and projects and other relevant activities. The Techno-Calendar, which contains the schedule of activities in the tobacco production, Good Agricultural Practices and a list of programs and projects of the agency were printed and distributed to the industry stakeholders.

2. Press releases – There were 20 information of activities and programs of the agency released to the press through direct mail to media outlet or via social media posting
3. Website – Regular updating of the agency website (updating of news article and relevant data) has been done, for easy navigation and provide a more comprehensive source of agency information and services, and effective online presence under the new normal, where people now turn to and rely on the Internet for relevant information with travel and mass gathering restrictions.

• Ø  Other Programs/Activities

Institution Building

1. Institutionalization of Quality Management System – The Agency passed the surveillance audit for its ISO 9001:2015 certification. This was the third year that the agency passed the annual surveillance audit for ISO.
2. IT Infrastructure Development  – The agency has procured 74 laptops and 30 desktops to enhance performance in office and work-from-home arrangements of the staff in all the branch and department offices and units.
3. Farmer’s Training Buildings – Three Farmers’ Training Centers, Vigan Branch (located in San Juan, Ilocos Sur), Cagayan Branch (locatedin Tuguegarao City) and Isabela Branch (located in Ilagan City), completed construction in 2021.
4. Human Resource Development –  To enhance the manpower capability of the agency for its upcoming projects under the Sustainable Tobacco Enhancement Program, and to boost employment in the government, the agency filled up 94 plantilla positions in 2021. The Administrative Services of the Administrative Department conducted 67 trainings, which include technical, leadership/ supervisory, and foundations.

National Tobacco Administration (NTA)
Annual Report

The year saw another increase in domestic taxation of tobacco with Republic Act No. 11346, known as the Tobacco Tax Law of 2019, signed into law by President Rodrigo Duterte in July 2019. This gave another round of rate increases for tobacco excise tax and imposed taxes on heated tobacco and vapor products. The latest legislation posed another challenge for the industry, which is already beset with aggressive global campaign against tobacco and smoking, increasing import liberalization, and global competition.

The COVID-19 pandemic, which started in the first quarter, posed the greatest challenge for the agency, with the series of lockdowns in the second quarter, and continuing restrictions on travels and mass gatherings until now. The agency was in operations in skeleton force to comply with government health protocols, but this did not hamper trading operations and implementation of projects, especially on priority programs, including interventions to help the farmers under the “new normal.” The current leadership of Administrator Robert Victor G. Seares Jr., stressed that the health of the employees and workers are of primary concern and made sure that all are provided with the protective kits, observe all health protocols as he continued the policies and directions of the past administration

Amidst these issues and challenges, NTA continued to be aggressive in its performance to fulfill its twin mandate, to improve the lives of our tobacco farmers and all those who depend on the industry for their livelihood and promote the balanced and integrated growth and development of the tobacco industry.

The Agency’s accomplishments focused on priority programs, projects, and activities geared towards responding to the call of the Department of Agriculture for “Masaganang Ani at Mataas na Kita,” particularly on increased productivity and income of farmers through provision of production assistance for quality production, as well as responding to the needs of the tobacco farmers and stakeholders during the COVID-19 Pandemic.

The PAPs  implemented were funded in the 2020 General Appropriations Act by virtue of SAGF-151 charged against R.A. 4155 (Tobacco Fund) as well as its Corporate Funds.

TOBACCO INDUSTRY’S PERFORMANCE

Number of tobacco farmers increased by 39%, or from 29,830 in 2018-19 tobacco season to 41,516 in 2019-2020, while tobacco farm area (in hectares) decreased by 7%, or from 29,839 to 27,765 in the same period.

Volume of tobacco production/acceptances for all tobacco types (Virginia, Burley and Native) increased by 1.89%, from 46.6 M kilos valued at PhP3.92-B in 2019 to 47.5 M kilos, valued at PhP3.93 billion in 2020.  This figure may increase however, as documentation of native tobacco is still continuing.

Export of unmanufactured leaf tobacco decreased by 8.8% from 37.91 million kilos in 2018 to 34.58 million kilos in 2019; with a corresponding 14.2% decrease in value, from US$158.97 million to US$136.42 million. Manufactured tobacco increased in 2018 to 2019 by 13.6% (from 41.96 M kilos to 48.57 M Kilos) and a corresponding 15% increase in value, from US$352.09 to US$414.07,

Local manufacturers imported a total of 82.38 million kilos of unmanufactured leaf tobacco in 2018 to 73.95 million kilos valued at US$289.38 million in 2019, or a reduction of 10.2%. Importation of manufactured tobacco in 2019 reached 10.03 million kilos, valued at US$96.75 million.

Data on exports and imports of tobacco for 2020 is yet unavailable as this is being provided by the BIR.

Revenue from excise taxes for 2019 is at PhP132.49-B, which is a 6.3% increase from the PhP124.14-B collection in 2018.

PROGRAMS/PROJECTS/ACTIVITIES

I. Technology Assistance, Extension and Production Support Services

1. Integrated Farming and Other Income Generating Activities Project (IFOIGAP)

1.1 Tobacco Farmers’ Production Assistance/Tobacco Contract Growing System (TCGS)

The TCGS promotes a market-oriented approach in tobacco production through the adoption of a contract-growing scheme, to enhance participation of the private sector in production technology transfer, credit assistance and leaf marketing. Production/credit assistance per hectare averages PhP50,000 with a 20% subsidy on fertilizers/pesticides. For Crop Year 2019- 2020, the NTA assisted a total of 7,131 tobacco farmers tilling an aggregate area of 4,657 hectares. The total production assistance extended was PhP164 million, PhP100 million of which is a continuing locally funded project.

Activities in the early part of 2020 included harvesting, curing, and selling of farmers produce to the trading centers although selling/buying were partially hampered due to the Enhanced Community Quarantine (ECQ) but the agency immediately coordinated with the trading centers and requested quarantine passes from the DA and the LGUs to accommodate tobacco farmers for them to be able to sell their produce.  We have facilitated the release from DA Regional Office I and II of 130 food lane accreditations to our local traders for the unhampered transport of our farmers’ produce to the trading centers.

For crop year 2020-2021, a total of 1,912 farmers covering 561 hectares were provided production assistance in CAR, Region 1 and 2 under the NTA Financing, while 1,116 tobacco farmers in 751 hectares were LGU beneficiaries.  NTA’ production assistance totaled PhP99.9 million while the LGUs thru their RA 7171 shares allocated PhP13.6 million.

1.2 Rice Production Project

As an IFOIGAP component, the Rice Project Wet Season is implemented in line with the rice self-sufficiency program of the government led by the Department of Agriculture, to augment the income of tobacco farmers. Farmer-cooperators are granted production/credit assistance to an average amount of P20,000 per hectare with a 40% subsidy.

A total of 3,531 farmer-cooperators with an area of 2,828.50 hectares in Regions 1, 2 and CAR were assisted and granted production assistance, with  total amount of PhP49.46 million.

2. Curing Barn Assistance Project (CBAP)

Curing Barn Assistance Project (CBAP) addresses the tobacco farmers’ need for new curing barns and air-curing sheds, to replace old/damaged ones that have been destroyed by calamities that hit the region in the recent years. With a PhP100 million budget which is yet to be released by the DBM, applications for the facility assistance are being processed, as the budget is still.  To date, 1,003 farmers availed of curing barn construction/repair amounting to PhP29 million while 2,084 farmers benefitted from curing shed construction/repair totaling to PhP44 million.

3. Improved Seedling Production

Funded from the agency’s Corporate funds, the project aims to encourage early planting among tobacco farmers for improved quality, yield and increased income. For crop year 2020, 126 modules (120,000 seedlings per module) will be planted and provided with technical assistance, inputs and implements to produce 15.12 million seedlings to be distributed free to tobacco farmers.  The seedlings will be brought back by the agency at PhP0.30 per seedling as an additional income to the seedling growers.  The project’s total cost is PhP4.54 million from the agency’s  Corporate Funds.

4. Renewable Fuelwood Energy Farm Project

The project aims to address the fuelwood and other forest resources requirement of the farmers in the curing of Virginia and other types of tobacco, as well as assist in the reforestation efforts of the tobacco growing regions.For the Synchronized Tree Planting component, about 984,300 number of tree seedlings to be produced in Regions 1, 2 and Abra, participated in by government agencies, SUCs, LGUs and other groups. This brought to a total of 6.3 million trees planted since the start of the project in 2013.

For the Kahuyang Pangkabuhayan at Pangkalikasan (KPP), the agency conducted inventory of trees and assistance in completing documents for the harvest and transport of these. As of the 3^rd quarter of 2020, there are 53 clusters and 679 farmer-cooperators required for CTPO application by the DENR, but only 18 clusters with 243 farmer-cooperators issued approved application for Vigan and La Union Branch Offices.

5. Tobacco Farm Mechanization Program (TFMP)

The TFMP aims to modernize the conduct of field activities on tobacco production and this is done by applying in new technologies and using farm machineries and equipment to increase the farmer’s efficiencies of labor utilization and increased productivity/income. 4-wheel tractors were given a subsidy of 40 percent (%).  For 2020, there are 28 farmer cooperative availees from Abra and Region 1 with 2,253 members and total service area of 1,607.85 hectares. Sixteen (16) power tillers were also distributed in 2 provinces who did not avail of farm tractors. The initial fund for the program was sourced from the Corporate Fund and it was proposed that future funding will be sourced from the Tobacco Fund (RA 4155).

6. Beef Cattle Production Assistance Project

The IFOIGAP was developed and implemented with the objective of making the tobacco farmers as “total farmer” doing “total farming” including livestock production.  With the end in view of increasing the income of the tobacco farmers, the project provides the selected tobacco farmer-cooperators with one ready-to-breed upgraded Brahman heifer, and jumpstart the beef cattle industry in the tobacco growing provinces to be pushed through forward payment to downline farmer-cooperators. Started in November, 250 tobacco farmers shall benefit with with a total budget of PhP10 million, funded from the agency’s Corporate Funds.Roger Pacapac, 53, tobacco grower from Salucag, Dolores, Abra, is one of the beneficiaries of the Beef Cattle Production Assistance Project (BCPAP) of the National Tobacco Administration. He received his ready-to-breed upgraded Brahman heifer from NTA Abra Branch Office during the dispersal in Dolores.

“Maraming salamat sa NTA sa pagpili sa akin bilang beneficiary ng beef cattle dispersal. Malaking tulong ito sa aking pamilia. Sana tuloy-tuloy ang programang ito ng ahensia at mas marami pa ang matutulongan na mga magsasaka ng tabako katulad ko.”

7. Farmers Organizational Development

The agency, through its Farm Technology and Services Department (FTSD), is tasked to assist in organizing, capability building and livelihood training of the tobacco farmers and their dependents. Activities undertaken to date is the inventory of tobacco-based cooperatives who will be conduits of assistance of the proposed block farms.  It has also updated the Tobacco Farmers Registry and through the FOD coordinators in the branch offices, enrolled the tobacco farmers in the RSBSA, as it is being required by the DA for social amelioration purposes of the government. This is a continuing activity.

8. Communication Support, Education and Information Campaign

The “Oras ni Mannalon ti Tabako” Radio Program in six (6) radio stations in Region 1 and Abra show up for the weekly broadcast to make sure that our tobacco growers and the rest of our stakeholders are given relevant information, especially on trading matters and those concerning government interventions for our affected farmers of the pandemic. The OMT program, agency website and official social media accounts helped in intensifsying the information advocacy of the agency and programs of the Department of Agriculture.

II. Research and Development Services

On Agricultural Research, we conducted Seed Production, Tobacco Germplasm Collection, Maintenance and Characterization to preserve the various seed varieties of tobacco. Field trials conducted by the Farm Technology Services Dept. include Evaluation of Batek Tobacco Varieties Commercially Grown in La Union and Pangasinan for NSIC Registration, and protocol researches or Fertilizer Trials on various Inorganic and Organic Fertilizers/Pesticides on the efficacy on various types of tobacco.

Our Industrial Research Department (IRD) is conducting studies on alternative uses of       tobacco, which include “Scale Up Production and Demonstration Trails on the Use of Tobacco Leaf Extract Ointment against Diseases of Animals”; Tobacco Handmade Paper production: technology enhancements and prototyping of novelty items”; and “Spent Tea Leaves and Tobacco Dust as Additive to Plywood Adhesive”, spearheaded by the FPRDI, Los Baños, Laguna.

Our Soil and Water Laboratory in Batac City provides Analytical Services specifically on the Monitoring of Soil and Water Quality of tobacco areas. The Quality Assurance Division and its Laboratory conducts Physical and Chemical Characterization of Tobacco Leaf and Tobacco Products. On Capability Enhancement for Quality Assurance, the IRD conducted training on the Harmonized Grades of Tobacco, with 100 participants, composed of TPROs, Agriculturists, Tobacco Company Graders and Farmer Leaders.

III. Regulatory Services

In the exercise of its regulatory authority, the Regulation Department (RD) has supervise tobacco trading operations, set up of floor prices for tobacco through the conduct of the biennial tripartite conference, and implement regulatory procedures on the redrying, preliminary processing of tobacco leaf, and the regulation of importation and exportation.

On the aspect of monitoring/enforcement, the NTA assures equitable trading to include, accurate weighing, proper grading, proper pricing, prompt payment and proper documentation, pursuant to existing rules and regulations. In 2020, the agency issued licenses to 36 trading centers, Permit and Authority to Purchase to 14 wholesale tobacco dealers, and Permit and Authority to Redry to three redrying plants, 39 Licenses/Authority to Export, 63 Licenses/Authority to Import, 13 Authority to Transship leaf tobacco and tobacco products, and 25 Accreditations to Manufacturers.

In observance of the policy of “social distancing”, during the pandemic, the NTA adopted the online (e-mail) filing and processing of applications for permits/licenses and clearances/(CCs).  Payment of regulatory fees were allowed through bank to bank fund transfer. As of June 2, 2020, the NTA processed/approved online a total of 947 import/ export/transshipment commodity clearances and 89 licenses/authority to buy tobacco.

In order to prevent our staff from contracting the disease, the physical inspection of commodities was suspended in the meantime, subject to random inspection to ensure compliance with the NTA rules and regulations and veracity of declared tobacco commodities.  The NTA merely require the submission of photographs showing the actual commodities, as well as the photographs prior, during and after the sealing or unsealing of cargo trucks or container vans.

The NTA is now ready with the final draft of the implementing guidelines on the online applications through the Trade.Net interconnectivity, for approval of the NTA Governing Board.  The Trade.Net is an online platform initiated by the Department of Finance (DOF) which brings 76 trade regulatory agencies to be fully connected enabling them to streamline the application of import and export permits for various products.

IV. NTA’s Refocused Proposal Projects/ Activities on Food Production

In compliance with the Honorable Secretary of Agriculture’s Memorandum dated April 14, 2020, directing all Bureaus, Attached Agencies, Regional Field Offices and Banner Program Directors to refocus/realign the FY 2020 budget to enhance food productivity, supply availability, and price stability amid COVID-19, we submitted the following additional programs/projects, including implementation updates:

Rene G. Balangue, 39, tobacco grower of Sta. Lucia, Aringay, La Union, is one of the beneficiaries of the Gulayan at Manukan sa Barangay, He received from NTA La Union 30 Broiler chicks and assorted vegetable seed packs for his one-hectare farm, and started harvesting last September.  In Ilocano dialect, this is what he has to say::

“Malaking tulong ang proyekto sa aking pamilya sa panahon ng pandemya. Yung napagbentahan ko ng mga manok at gulay, ginamit kong ipinambili ng kambing na ngayon ay may mga anak na. Nabigyan ko rin ang aking mga kapitbahay ng mga gulay. Salamat, NTA!”

V. Other Significant Accomplishment

NTA passed the recertification audit for ISO 9001:2015, by the international certification body Société Générale de Surveillance (SGS, Intl.) on July 24 to 26, 2020. The latest version of ISO 9001:2015 incorporates risk management to enable organizations to identify and provide a systematic approach to risk for more efficient quality management system.

A Customer Satisfaction Survey (CSS) was conducted in the last quarter of 2019 by the Mariano Marcos State University. The GCG provided the guidelines for the survey with the objective of assessing the performance of NTA along efficiency/effectiveness of staff and organization; quality of products and services (programs such as Tobacco Contract Growing, CBAP, Regulatory Services etc.); effectiveness of training programs; handing of complaints, facilities, etc.  Based on the results of the annual CSS, which started in 2017, the NTA has consistently garnered a very satisfactory rating from the tobacco farmers and other stakeholders.

In compliance to the 8 paradigms of the DA, the agency formulated the Sustainable Tobacco Enhancement Program (STEP), a five-year plan and roadmap for the development of the tobacco industry toward increasing agricultural and rural enterprise productivity through farm clustering/block farming and Agribusiness sizing. The roadmap is due for presentation and approval to the NTA Governing Board.

National Tobacco Administration (NTA)
Annual Report

The year saw another increase in domestic taxation of tobacco with Republic Act No. 11346, known as the Tobacco Tax Law of 2019, signed into law by President Rodrigo Duterte in July 2019. This gave another round of rate increases for tobacco excise tax and imposed taxes on heated tobacco and vapor products. The latest legislation posed another challenge for the industry, which is already beset with aggressive global campaign against tobacco and smoking, increasing import liberalization, and global competition. Amidst these issues and challenges, NTA continued to be aggressive in its performance to fulfill its twin mandate, to improve the lives of our tobacco farmers and all those who depend on the industry for their livelihood and promote the balanced and integrated growth and development of the tobacco industry.

The industry provides livelihood and sustenance to about 2.7 million of stakeholders, including 92,501 people in the tobacco labor force at the production level, consisting of farmers, laborers, helpers, agents and landlords, in Regions 1, 2 and CAR as of 2019. About 6,200 were employed in the local manufacturing and at the trading or buying level.  Government employees connected to the tobacco industry were just about 0.49 percent with 483 employees.

Based on PSA-BAS data, tobacco remained as one of the top ten agricultural exports at an average of 39 mt valued at US$194.8 B for manufactured tobacco, and 37.9 mt valued at US$113.25  unmanufactured tobacco, for the period 2014-2018.

TOBACCO INDUSTRY’S PERFORMANCE

The number of tobacco farmers decreased by 8.6%, or from 32,652 in 2018 to 29,839 in 2019, while tobacco farm area (in hectares) decreased by 17%, or from 22,794.65 to 18,911.78 in the same period.

Volume tobacco production for all tobacco types increased by 7.8% (from 43.2 M kilos in 2018 to 46.6 M kilos valued at PhP3.914-B in 2019.   

Revenue from excise taxes for 2019 is at PhP132.49-B, which is a 6.3% increase from the PhP124.14-B collection in 2018.

Export of unmanufactured leaf tobacco decreased by 8.8% from 37.91 million kilos in 2018 to 34.58 million kilos in 2019; with a corresponding 14.2% decrease in value, from US$158.97 million to US$136.42 million. Manufactured tobacco increased in 2018 to 2019 by 13.6% (from 41.96 M kilos to 48.57 M Kilos) and a corresponding 15% increase in value, from US$352.09 to US$414.07

Local manufacturers imported a total of 82.38 million kilos of unmanufactured leaf tobacco in 2018 to 73.95 million kilos valued at US$289.38 million in 2019, or a reduction of 10.2%. Importation of manufactured tobacco in 2019 reached 10.03 million kilos, valued at US$96.75 million.

Programs/Projects/Activities

The highlights of the accomplishments of the Agency for 2019 involved priority programs, projects, and activities (PPAs) pursuant to its primary mandate and thrust, “to improve the economic and living conditions and raise the quality of life of the tobacco farmers,” and in line with the Department of Agriculture’s directive for “Masaganang Ani at Mataas na Kita,” particularly on increased productivity and income of farmers through provision of production assistance for quality production and other interventions. The PPAs were funded in the 2019 General Appropriations Act by virtue of SAGF-151 charged against R.A. 4155 (Tobacco Fund) as well as its Corporate Funds.

I. Technology Assistance, Extension and Production Support Services 

1. Integrated Farming and Other Income Generating Activities Project (IFOIGAP)
   1. Tobacco Farmers’ Production Assistance/Tobacco Contract Growing System (TCGS)
      • The TCGS promotes a market-oriented approach in tobacco production through the adoption of a contract-growing scheme, to enhance participation of the private sector in production technology transfer, credit assistance and leaf marketing. Production/credit assistance per hectare averages PhP40,000 with a 20% subsidy on fertilizers/pesticides. For CY 2019, the NTA assisted a total of 6,613 tobacco farmers tilling an aggregate area of 4,322 hectares. The total production assistance extended was PhP120.53 million.

        Yield obtained under the TCGS across all tobacco types was at 2,484 kg/ha, which is higher than its 2,410 kg/ha target.

        Average net income across all types of tobacco increased by 24.64% from the 2017 baseline of P70,000 per hectare to PhP87,250 per hectare in 2019.

   2. Rice Production Project 
      • As an IFOIGAP component, the Rice Project Wet Season is implemented in line with the rice self-sufficiency program of the government led by the Department of Agriculture, to augment the income of tobacco farmers. Farmer-cooperators are granted production/credit assistance to an average amount of P20,000 per hectare with a 40% subsidy.

        A total of 3,527 farmer-cooperators with an area of 2,819.75 hectares were granted production assistance in CY 2019, in the total amount of PhP48.89 million

   3. Renewable Fuelwood Energy Farm Project
      • The project aims to address the fuelwood and other forest resources requirement of the farmers in the curing of Virginia and other types of tobacco, as well as assist in the reforestation efforts of the tobacco growing regions.

        For the Synchronized Tree Planting component, about 767,000 seedlings were planted in July 2019 in various areas in Regions 1, 2 and Abra, participated in by government agencies, SUCs, LGUs and other groups. This brought to a total of 6.3 million trees planted since the start of the project in 2013.

        For the Kahuyang Pangkabuhayan at Pangkakalikasan (KPP), the agency conducted inventory of trees and assistance in completing documents for the harvest and transport of 2013-2017 plantation covering 8,326 hectares and involving 7,726 farmer cooperators.

2. Tobacco Farm Mechanization Program
   The TFMP is a five-year program to modernize the conduct of field activities on tobacco production and this is done by applying in new technologies and using farm machineries and equipment to increase the farmers efficiencies of labor utilization and increased productivity/income. All assistance provided have subsidy of 20 percent (%). For 2019, the agency distributed 26 farm tractors and 50 hand tillers worth PhP39.66 million to 28 cooperatives and associations with 2,277 farmer members. The initial fund for the program was sourced from the Corporate Fund and it was proposed that future funding will be sourced from the Tobacco Fund (RA 4155).
3. Curing Barn Assistance Project
   Curing Barn Assistance Project (CBAP) addressed the tobacco farmers’ need for new curing barns to replace old/damaged ones that have been destroyed by calamities that hit the Ilocos region in the recent years. For 2019, a total of 4,000 tobacco farmers were given PhP100 million worth of assistance for construction/repair of their curing barns and curing sheds.
4. Seed Production Distribution
   For seed production and distribution, a total of 52 kg of seeds were distributed to about 10,400 tobacco farmers.
5. Farmers Organizational Development
   The agency, through its Farm Technology and Services Department (FTSD), assisted 377 cooperatives and associations of farmers in organizing, capability building and livelihood training. It has trained 603 farmers, higher than its 450 target in alternative livelihood. FTSD also started updating the Tobacco Farmers Registry.
6. Communication Support, Education, and Information Campaign
   The “Oras ni Mannalon ti Tabako” Radio Program in six radio stations in Region 1 and Abra show up for the weekly broadcast to make sure that our tobacco growers and the rest of our stakeholders are given relevant information, especially on trading matters and those concerning government interventions for our affected farmers of the pandemic. The OMT program, agency website and official social media accounts helped in intensifsying the information advocacy of the agency and programs of the Department of Agriculture.

II. Technology Assistance, Extension and Production Support Services

On Agricultural Research, we conducted Seed Production, Tobacco Germplasm Collection, Maintenance and Characterization to preserve the various seed varieties of tobacco. Other researches with ongoing field trials by the FTSD include Evaluation of Batek Tobacco Varieties Commercially Grown in La Union and Pangasinan for NSIC Registration, and protocol researches or Fertilizer Trials on various Inorganic and Organic Fertilizers/Pesticides on the efficacy on various types of tobacco.  

Our Industrial Research Department (IRD) is conducting studies on alternative uses of tobacco, which include “Scale Up Production and Demonstration Trails on the Use of Tobacco Leaf Extract Ointment against Diseases of Animals”; Tobacco Handmade Paper production: technology enhancements and prototyping of novelty items”; and “Spent Tea Leaves and Tobacco Dust as Additive to Plywood Adhesive”, spearheaded by the FPRDI, Los Baños, Laguna.

Our Soil and Water Laboratory in Batac City provides Analytical Services specifically on the Monitoring of Soil and Water Quality of tobacco areas. The Quality Assurance Division and its Laboratory conducts Physical and Chemical Characterization of Tobacco Leaf and Tobacco Products. On Capability Enhancement for Quality Assurance, the IRD conducted training on the Harmonized Grades of Tobacco, with 100 participants, composed of TPROs, Agriculturists, Tobacco Company Graders and Farmer Leaders.

III.  Regulatory Services 

In the exercise of its regulatory authority, the Regulation Department has supervised tobacco trading operations from February to August, set up of floor prices for tobacco through the conduct of the biennial tripartite conference in September, and implemented regulatory procedures on the redrying, preliminary processing of tobacco leaf, and the regulation of importation and exportation.

On the aspect of monitoring/enforcement, the NTA assures equitable trading to include, accurate weighing, proper grading, proper pricing, prompt payment and proper documentation, pursuant to existing rules and regulations. These activities are implemented by Regulation Department in the Central Office and the Tobacco Production and Regulations Officers in the eight Branch Offices in Regions I, II and Abra.

The RD, in compliance with the Rules and Regulations on the trading of locally grown leaf tobacco, issued licenses to 36 trading centers, Permit and Authority to Purchase to 14 wholesale tobacco dealers, and Permit and Authority to Redry to three redyring plants. Also in compliance with the existing Rules and Regulations on the Exportation and Importation of Unmanufactured/Manufactured Tobacco, RD has issued 39 Licenses/Authority to Export, 63 Licenses/Authority to Import, 13 Authority to Transship leaf tobacco and tobacco products, and 25 Accreditations to Manufacturers. 

1. Roadmap Development
   • The agency started formulating the Sustainable Tobacco Enhancement Program (STEP), a five-year plan and roadmap for the development of the tobacco industry following the 8 paradigms of the Honorable Secretary of Agriculture toward agribusinessizing and increasing agricultural and rural enterprise productivity and using farm clustering and block farming as main strategy in generating more jobs, and raising farmers income. The draft outline was initially presented to Agriculture Secretary William Dar during the meeting of the NTA Governing Board.
2. Other Significant Accomplishments
   • To cut excessive red tape and make it easier to start and operate a business in the country, the agency revised the Citizen’s Charter, following the prescribed processing time and standards of the Anti-Red Tape Authority for fast, efficient, convenient, and reliable service, and started the implementation of the complaint and feedback mechanism system.

NTA passed recertification audit for ISO 9001:2015, after an audit conducted by the international certification body Société Générale de Surveillance on July 24 to 26. The latest version of ISO 9001:2015 incorporates risk management to enable organizations to identify and provide a systematic approach to risk for more efficient quality management system.

Prepared by: 

Corporate Planning Dept. with reports from Farm Technology Services Dept., 

Central Office Depts. and Branch Offices