The local unit of cigarette giant Japan Tobacco International (JTI) said it is looking at further hiking its procurement next year of locally produced tobacco from the current 4.6 million kilograms it has programmed to buy in 2021.
Citing a letter from JTI Philippines General Manager John Freda jointly addressed to Finance Secretary Carlos G. Dominguez III and Agriculture Secretary William D. Dar, the Department of Finance said in a statement on Monday that JTI’s original plan to purchase 4.6 million kilograms of local tobacco leaf next year is 1 million kg higher than its purchases this year.
Its 2021 programmed purchases of local tobacco leaf make up a quarter of its estimated total leaf requirement for next year, Freda said. This is also well beyond what was required under Republic Act 10351, which requires manufacturers or sellers of tobacco products to procure at least 15 percent of their tobacco leaf raw material requirements from locally grown sources.
This development comes after Dominguez, who had served as agriculture secretary under former president Corazon Aquino, and Dar requested the cigarette manufacturer to help support local growers and raise revenues for tobacco-producing provinces affected by the pandemic-induced economic shock by hiking its purchases of locally produced tobacco leaf.
In their letter, Dominguez and Dar pointed out that the strict quarantines imposed to curb the spread of Covid-19 had constrained the marketing flow of food and other agricultural goods, including tobacco, which is among the most affected crops as it is a nonfood commodity.
Moreover, the two secretaries said a study has shown that “only 30 percent of the total local tobacco production are bought from the farmers while the rest are imported” by cigarette companies.
“Your kind assistance will translate into realized income to farmers, which assures food on their table and revenues for local government units [LGUs],” they said in their letter addressed to JTI.
Responding to the letter of the two Cabinet secretaries, Freda said its local team is coordinating with the company’s global leaf supply chain to “explore the possibility of further increasing our local leaf tobacco purchases next year and in the coming years.” He added that JTI has also been coordinating with the National Tobacco Administration (NTA) on the same concern even before the receipt of the letter from two Cabinet officials.
“The NTA initiated a series of meetings on the subject in anticipation of the next harvest and trading season which is expected to begin sometime in March 2021, with the goal of ensuring that all harvest next year will be procured,” Freda said.
“JTI Philippines is committed to support the Philippine government and the local tobacco farmers,” he added.
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