Nelson, tobacco farmers, sin tax

I’m not a fan of Willie Nelson and his country western music. But I can not forget his collaboration with Wynton Marsalis, my idol for being one of the greatest trumpeters, and acts as a jazz and classical music. Nelson and Marsalis teamed up to play good music and released an album entitled “Two and a Blues.”

I like the blues, too. And I highly recommend Nelson and Marsalis album. Their interpretation, such as “Georgia on My Mind” gentle and sweet yet retains a shade of sadness.
So, I remember Willie Nelson for two things: first, his collaboration with Marsalis, playing and singing the blues; and second, his famous quote about farmers.

That quote well applies to the specific situation of our tobacco farmers.
Members of the House of Representatives of the tobacco growing regions of the resistance of tobacco tax reforms that the Aquino administration wants the legislation. In opposing the administration bill, these legislators — collectively called the Northern Alliance — invoke the plight of the tobacco farmers.

Their argument is simple. A significant increase in tobacco taxes will lead to a reduction of tobacco products and, therefore, adversely affect the farmers. But the threat to farmers is not supported by facts.

The truth is that tobacco farmers can shift from tobacco farming to other crops, without much difficulty. Rene Rafael Espino, a professor of agriculture at the University of the Philippines at Los Baños, said that the soil and climate found in places where tobacco is grown are suitable for other crops such as vegetables, peanuts, corn and mungbean.
The choice of the farmer harvest should be developed mainly determined by the cost-effectiveness, as well as information and knowledge management, market support, as well as providing materials. The task of the government, it will provide support in terms of access to markets, inputs and technology.

The Ministry of Agriculture under the direction of the Secretary prosaic Alcala is fully aware of this and takes the necessary measures to meet the needs of farmers as they move from the cultivation of tobacco.

The fact is, too, that many farmers over the years have passed from the tobacco production of other crops. According to the Bureau of Agricultural Statistics show that tobacco products has decreased from 81723000 metric tons in 1990 to 40,529.77 metric tons in 2010. The peak of production during the 20-year period (1990-2010) amounted to 120,000 tons in 1992. But production plummeted to less than 60,000 metric tons in 1994 and subsequently declined in subsequent years. In addition, ha devoted to tobacco growing has decreased from 63,200 hectares in 1990 to 29,707 hectares in 2010.
In other words, tobacco production declined not because of high taxes (in the Philippines with one of the lowest tobacco taxes in the world). It should also be emphasized that under the current regime, where the rules have contributed to the monopoly of tobacco have to deal with monophony, which dictate prices.

All of this suggests that tobacco is no longer profitable or other crops, yield higher economic benefits for farmers. An empirical study entitled “Review of the tobacco growing areas in the Philippines”, in collaboration with Rene Rafael Espino, Danilo Evangelista, and Edgardo Ulysses Dorotheo and published in 2008, has the following conclusion:“In terms of income, vegetable, provided that high-income farmers, although this requires higher input costs and lower labor requirements compared to the Virginia brand of cigarettes. Corn, moonlight, and peanut farmers also prefer mainly due to low demand Employment and income provided along with tobacco. Thus, farmers tend to have more time to engage in other activities while at the same
The study found that “corn, beans [moonbeam, beans, and peanuts] and various kinds of vegetables, [tomatoes, eggplant, garlic, onions, etc.] are the preferred crop farmers to grow.”

This production of tobacco is a “sunset industry” Obviously; even government officials acknowledge the tobacco field. We had the opportunity to talk with Mary Jane Ortega, charming, polite, articulate and elegant ladies, three terms Mayor of San Fernando in La Union, and the wife of Rep. Victor Ortega, who happens to be president of the Northern Alliance. Ms. Ortega told us that she and Rep. Ortega understand that the tobacco industry is the sunset. Thus, her husband was trying to promote new industries as the production of honey and silk. Unfortunately, support for the market did not come, then, that the government could decide if a more interventionist.

Tax reform will benefit all sin, including tobacco. The increase in excise taxes on tobacco to fund public goods, especially universal health care, and will strengthen the macroeconomic environment, thus creating more jobs and reduce poverty. Tobacco will not only benefit from the provision of public goods, but also from the trust funds (15% of additional revenue from the excise tax on tobacco products) to be “exclusively used for programs to promote economically viable alternatives for farmers and workers.”

In conclusion, the champions and supporters of the bill to reform the tax on tobacco products are the ones who can claim that Willie Nelson said. “While there are a few farmers out there, we’ll continue to fight for them”

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