Gov’t starts working on reducing the production cost for tobacco
Right after approving the increased floor prices of tobacco, National Tobacco Administration (NTA) is now set to focus on lowering the production cost for the said commodity, which will largely benefit the farmers.
NTA Administrator Robert L. Seares said the agency will now focus on the reduction of production cost of farmers in their venture.
NTA will particularly start by offering subsidy to them in the form of production assistance.
This decision came after NTA has approved new floor prices for tobacco for the next two trading years, 2018 and 2019
Seares said setting of the minimum floor price provides tobacco farmers a guaranteed minimum return on investment of at least 25 percent for expenses.
The actual buying price, which is based on prevailing market prices, is usually higher than the minimum floor price.
NTA is authorized to set/fix tobacco floor prices, as mandated by Presidential Decree (PD) No. 627 s. 1974 (for all tobacco types except Virginia), PD No. 1481 s. 1974 (for Virginia), and PD No. 1143 s. 1977 as amended (for Burley), by adopting a tripartite consultative conference.