Low tobacco prices push Ilocos Norte farmers into debt

BAGUIO, Philippines – Forty-six-year-old Cleto Masian began panaggatud, the selective harvesting of mature tobacco leaves from the bottom of the plant, in February. After four rounds of picking, he stopped.

His 6,000-square-meter farm in Batac City still had leaves ready for at least three more harvests. But he weighed the cost of continuing against the price traders offered.

“Kastoy met ti presyona – nababa. Ket luginsa kunkunak no kunkuntarek ti magastos no agpagatud pay. Baka adda pay mamin uppat wenno lima koma,” he told Rappler on Tuesday, May 5.

(This is how the price is – low. I keep thinking about how much more I’ll spend if I continue harvesting. I might still need to do four or five more rounds.)

Masian sold his best Virginia tobacco leaves at P70 per kilo, the rejected leaves at P45/kilo. His more than 20 years of experience may have helped him secure slightly better prices.

In Dingras town, 65-year-old Arsenio Valencia faced a sharper loss, planting more tobacco this season than the usual vegetables his family sells.

This is their second time planting tobacco, expanding the crop’s cultivation after local officials promised support. Higher prices in previous years also encouraged them to try again.

The National Tobacco Administration (NTA) recorded prices ranging from P107 to P125 at the March 2025 opening of the trading season, higher than the floor price of P97 for Virginia tobacco.

After last September’s Tripartite Consultative Conference, the floor price for Virginia tobacco was set at P98 for Class AA and P62 for rejects, a P1 increase across grades. Average prices for “good class” leaves – from Grades AA to F2 – stand at P88.

Despite these benchmarks, Valencia stopped harvesting after two pickings after traders bought his leaves for only P3,900 – P43 for better-quality leaves and P10/kilo for rejects.

“Saanmin nga intuloy ta dakdakkel met nga adayo ti magastos nga labor kaysa diay malako a tabako ta diay kalaka ti presyo ti paggatangda. Saanko pay ketdin kinitkita ta madi diay riknak, kunak nga sige alaenda lattan tapno adda pangnayon a pagbayad ti labor,” he said.

(We stopped because labor costs were too high compared to what we could earn from tobacco. I felt bad so didn’t even inspect it anymore. I just told them to take it so we’ll have something to pay the workers.)

Buried in debt

Valencia’s family spent P70,000 to cultivate their 8,000-square-meter farm, drawing from savings intended for other crops. They have yet to fully pay the workers.

“Pati diay para iti pamilya ket nausarkon para ti tabako, pati diay puunak koma iti panagtalonko ti pagay ket nagastosko payen. Naapektaranna pati ti usarenmi ti pamilyami ta naigastomi amin iti dayta tabako,” he said.

(Even what was meant for family needs has been spent, including the money I was supposed to use for cropping rice, gone, everything spent on that tobacco.)

Masian faces similar pressure, with half of the P40,000 he used for production borrowed at 20% interest over six months. He now plans to borrow again to settle debts and fund the next planting season.

“Dakkel ti epekto iti sumaruno a pangmula ti pagay ta awan pulos pagpuunanmi. Panay inutangen…diay inusarko tabako ket inutang ko, ket madi mabayadan no kastoy laeng ti presyo,” he said.

(This will greatly affect our next rice planting because we no longer have any capital. We keep borrowing… the money I used for tobacco, also borrowed, and it cannot be repaid if prices stay like this.)

Overproduction?

Like Masian and Valencia, 64-year-old Edgar Estavillo from Pinili, who heads Alyansa ti Mannalon iti Ilocos Norte (AMIN), also stopped harvesting. He described this season as among the worst he had in more than 40 years of cultivating the plant.

“Adu pay ti tabako a saan a nagatud ita a tobacco season ngem adu dagiti mannalon ti tabako nga agrekreklamo iti nababa a presyo, saan a nasiyaat a panaggrado, ken manmano a middleman nga aggatang,” he stated in their April 29 letter to Governor Cecilia Marcos.

(There is still a lot of tobacco left unharvested this season, and many farmers are complaining about low prices, poor grading, and the limited number of buyers.)

Estavillo said traders blamed “overproduction” for the low prices and warned of a possible “stop buying” at trading centers.

“No mapasamak ti kunada nga stop-buying, ad-addan a mailumlom ti utang dagiti nagmula ti tabako ken problemaen ti gastos iti sumaruno a panagmula ti pagay,” he said.

(If what they are saying about ‘stop-buying’ happens, the debts of tobacco farmers will only deepen, and they will struggle to cover the costs of planting rice in the next cropping season.)

Around 3,000 farmers in Ilocos Norte cultivate tobacco, including new entrants for the 2025-2026 cropping season.

Earlier, the NTA noted concerns about overproduction and declining demand as local governments push planting tobacco outside formal marketing agreements. There are about 45,000 registered tobacco farmers nationwide; only about 10,000 are under formal contracts.

Intervention urged

AMIN called on the provincial government to intervene as falling prices and uncertain trading conditions strain farmers’ income.

Estavillo urged local governments to purchase tobacco directly at fair prices and enforce agreed floor prices and proper grading. They also asked for P30,000 cash assistance for farmers, sourced from the local tobacco excise tax share.

Last October, the Department of Budget and Management ordered the release of P21 billion in LGU shares from the 2023 excise tax collection. Ilocos Norte received almost P781 million.

Pinili, Batac City, and Dingras received about P409 million, P250 million, and nearly P51 million, respectively.

AMIN said it is ready to meet with provincial officials and called for immediate action.
Rappler reached out to the NTA information office, which said it will release a statement in the coming days. This report will be updated once it becomes available. – Rappler.com