The tobacco industry is expected to be the “bright leaf” in the government’s attempt to spur economic growth in the Northern Luzon region despite the global economic slowdown, a government official said.
The government will give priority to establishment and rehabilitation of post-harvest facilities for the tobacco industry, particularly in northern Luzon, Agriculture Undersecretary Segfredo Serrano said.
“In the past, tobacco production decreased largely because of the high saline content in the leaves. Because of these, the post-harvest facilities, like dryers and flue-curing barns, were abandoned or neglected,” Serrano said.
The price of Virginia tobacco, the neighboring Ilocos region’s cash crop, has since risen and demand for it abroad has also increased despite the global recession. The government has since come to the aid of what was once called the sunset industry of the north, local officials said.
Serrano, who was part of the team that held an economic briefing here for northern Luzon businessmen and officials on Wednesday, said local governments’ shares from the tobacco levy would continue to help farmers.
Ephraim Dayap, National Tobacco Administration supervisor in Candon City, said floor prices of Virginia tobacco have increased this trading season because of the huge demand.
We have traders buying Class AA leaves “for as much as P80 a kilogram,” said Dayap.
Last year, the buying price for Class AA “full flavor” reached P73 a kilo and P70 a kilo for AA “neutral type.”
“Cigarette manufacturers have exhausted their supplies and are now [replenishing their stocks],” Dayap said.
Economic Planning Secretary Ralph Recto said the agriculture and tourism industries would be the main focus of government investments in northern Luzon.
Recto said infrastructure spending in the region would mostly be on transportation and agriculture.
The flagship program in the North, he said, is the P12-billion extension of the Northern Luzon Expressway to Rosario, La Union.
Also, farm-to-market roads will be built to help rice, corn and tobacco farmers in northern Luzon, Recto added.