Tobacco farmers demand share of tax proceeds

Gamu, Isabela-Tobacco farmers here are complaining about the long-delayed benefits from their share of the excise tax through Republic Act 8420 as amended by Republic Act 10351.

The planters of Burley and native tobacco in Barangay Furao here say that, as in the past years, they have been expecting a P12,000 annual financial aid from the local government’s share of the excise tax collected by the Bureau of Internal Revenue.

“The last time we were given only P2,500 at first. When the LGU paid the remaining balance, which is supposed to be P9,500, they deducted P1,200 from it,” said Mely Martinez, a mother of a tobacco farmer from Barangay Furao.

“When we asked what the deduction was for, they said it was an interest from the amount advanced,”  said Gil Molano, who heads the Committee on Ways and Means of the Sangguniang Bayan of Gamu.

He says he does not recall any single instance that the municipal council discussed the LGU share from the tobacco excise tax.

Asked to comment on the farmers’ complaint, Molano said, “We were never consulted or asked by the executive to approve a resolution regarding that matter.” 

Local Budget Circular 76 of the Department of Management, dated Oct. 6, 2017, says Gamu received its share from the tobacco excise tax for 2014 (PhP5,355,320) and for 2015 (PhP8,432,283).

It was not clear in which fiscal year the local government accounted for the amount received by farmers. No records were available on the 2016 and 2017 shares were found online.

The Supreme Court ordered the prompt release of the LGU’s “just share” from national taxes in July 2018. The tobacco excise tax is one of the national taxes referred to by the high court.

In Barangay Furao, 60 farmers were listed under the name of two farmer leaders―Joey Lauria, 47, and Darwin Martinez, 43.

Martinez died of a stroke on March 2, 2019. Before his death, he had been complaining of the long delays in the release of the financial assistance to tobacco farmers that comes from the local government’s share of the excise tax. 

Universal Leaf Philippines Inc., the Philippine subsidiary of the Singapore-based Universal Corporation, has emerged as the sole business engaged in tobacco farming in this part of the country. 

The company enters into a production agreement with farmers through its so-called “farmer leaders.” 

All production expenses are provided for by the company, including land rental, seedlings, fertilizers, pesticides and other inputs. 

The boxes used in the transport of dried tobacco leaves to the Universal Leaf warehouse in Cauayan City is also provided by the company.

After the harvest of dried tobacco leaves, those are brought to the Cauayan City warehouse for grading, weighing and pricing. A farmer’s net income is determined after deducting all the expenses shouldered by the company.

A tobacco farmer has no say on the price of inputs and other expenses charged in his account. 

“We were shown our statement of accounts, but they will just give us figures to know how much net income is due to us. Two copies of the SOA will be retained in the company office and the other one, they say, will be given to the Mayor’’ office, Lauria said.

A farmer from the nearby Barangay Banquero in Reina Mercedes town said a sack of fertilizer supplied to them costs way more than the price of similar fertilizers sold locally.

"My son Darwin died last month, I took charge of his responsibilities as a farmer leader. We asked help from the company but helped arrived when he was already buried―a meager P2,000," Mely Martinez said.  

Under the company’s terms and conditions for tobacco growing, a farmer leader serves as a guarantor to all the farmers under his watch. In the case of Darwin, his mother will continue to transact with Universal Leaf Philippines Inc. for the 26 accounts under her son’s name.

Martinez expressed fears that some farmers will have difficulty meeting the desired volume and grade of tobacco produced to have an income that’s  enough to settle their production cost.

Farmers also doubt the way tobacco leaves are graded because it is too complex for ordinary people to understand.

Babylyn Lauria says a farmer with a 0.5 hectare of land planted with tobacco would usually gain a net income of P24,000 in four months. 

Joshua, a first-time tobacco farmer and father of two young children, said his income is barely enough for their survival. 

In their website, Universal Corporation bannered “Capitalism with a Conscience” to describe its Corporate Social Responsibility brand. 

Their much-touted Anti-Corruption Manual of Universal Corporation seems unheeded on the ground. 

“If they are clean, why would the Office of the Mayor be interested in keeping a copy of the individual farmer痴 statement of accounts with the company? asked Percival Quibilan, a resident of Furao who believes farmers should shift to other crops.

Topics: Republic Act 8420 , Mely Martinez , Universal Leaf Philippines Inc , Bureau of Internal Revenue
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