Paving the Way Towards Higher Tobacco Taxes
February 12, 2012Taxing Health Risks
February 23, 2012
Whenever tobacco control measures are put forth by the government, such as reforming the country’s current excise tobacco tax system, claims about the farmers losing their livelihood always arise. The reality of tobacco farming in the country, however, shows otherwise.
“Tobacco control is also about helping tobacco farmers because they are also victims of the tobacco industry. In the current situation, most of them do not own the lands that they farm. As such, they pay huge amounts for land rent, on top of all the other costly but necessary farming capital inputs. Furthermore, the corporations imposing contract growing on these farmers have the capacity to thoroughly lower the buying prices of tobacco leaves, despite the extremely laborious process of tobacco farming.
” This was according to Dr. Ulysses “Yul” Dorotheo, who co-authored a survey of tobacco farmers in the Ilocos region with Prof. Rene Espino of UP Los Banos College of Agriculture. Dr. Yul is currently Project Director of the Southeast Asia Initiative on Tobacco Tax (SITT) program of the Southeast Asia Tobacco Control Alliance (SEATCA). The Filipino doctor is the first Asian to receive the Judy Wilkenfeld Award for International Tobacco Control Excellence.
The current buying prices of tobacco do not reflect the true costs of labor and capital that the farmers invest. The prices have not increased in years and the farmers’ demands to hike these are threatened by the corporations’ preference to import instead.
Avelino “Ka Abe” Dacanay, Secretary-General of Solidarity of Peasants against Exploitation (StopEx), reported that the current floor price of AA Virginia leaves is P72/kilo while the rejects can be bought at P42/kilo. These prices are certainly far from the costs of production that the farmers incur. Their hope is to have their leaves sold at P120/kilo, without price classification on grades of the tobacco types. “Pinaghahalo lang naman ang rejects at AA sa paggawa ng sigarilyo. Doon sa classification, doon kami napagsasamantalahan,” added Ka Abe.
Ka Abe also explained that there is no minimum wage for tobacco farmers. Their compensation will just depend on their output after the planting season. Farm workers, on the other hand, are paid P150/day and P250/day if they have their own carabao to work with.
Newsbreak reported in 2010 that from a supposed P60-P70 per kilo selling price of tobacco leaves, corporations were able to buy them at P50-P60 per kilo because of contract growing, or the process in which the corporations lend money to the farmers in advance and in return the farmers would only be able to sell their products to the lenders, thereby allowing them to manipulate the prices.
“With all these in mind, it is important to ask, then, who really profits: the poor farmers or the elite corporations?” said Dr. Dorotheo. “This is why we support the Aquino administration’s “no compromise” stance on the issues of sin tax reforms, which will not only benefit the government’s coffers; it will also improve the lives of many Filipino tobacco farmers. This is in contrast to the tobacco industry’s strong opposition to sin tax reforms.
” Part of the revenue from the proposed sin tax reforms will be used by the government to provide economically viable alternatives for tobacco farmers and workers. This will include capacity-building and financial support programs that will assist the farmers in shifting to other crops or livelihood projects. Implementing alternative livelihood is an obligation of the Philippines under the Framework Convention on Tobacco Control (FCTC) which the country ratified in 2005.
