Tobacco producers’ don’t forget the Barren County Tobacco Production Meeting is scheduled for Feb. 16 beginning at 7 p.m.
The meeting will be at the Barren County Extension Office auditorium. Dr. Bob Pearce, UK Extension Tobacco Specialist and Dr. John Wilhoit, UK Ag Engineering Specialist will be our guests.

Managing tobacco transplant diseases

The float-bed system is a convenient and efficient way to produce tobacco transplants. One drawback to this method is the potential for significant disease development. Large numbers of plants packed into a small, water-filled area create conditions in which many diseases thrive.

Once established, problems in float-bed systems can be difficult to eradicate or bring under control. So, it is best to keep them from gaining a foothold in your transplant bed. Prevention is the best solution for keeping float-bed diseases in check. Here are some tips to help you stay ahead of tobacco-transplant diseases:

1. Produce your own plants or buy from a Kentucky source if possible. Growers who use the plug-and-transfer system should consider buying plugs grown in or north of Kentucky to avoid infections of blue mold, which is more prevalent in the South.

2. Take care not to introduce pathogens into the float system. Keep out field soil, which can harbor pathogens that cause root and stem rots. For the same reason, you shouldn’t use water from ponds or creeks to fill float beds. Always use city or well water.

3. Use clean, sanitized trays for seed. Reused trays pose a risk of contamination. Dip or spray them with a solution of one part bleach to 9 parts water. Cover and allow them to stand overnight. Follow up with a good rinse to remove the bleach residue. You should replace or heat treat with steam trays older than three or four years.

4. Once your plants are up and growing, keep them as stress-free as possible. Avoid temperature extremes and keep fertilizer levels within recommended ranges. Too much fertilizer is equally as harmful as too little and can increase susceptibility to diseases in general.

5. Use side vents and fans to maintain good air movement and keep the area surrounding the float bed weed-free. Good air flow promotes rapid drying of foliage which helps to eliminate favorable conditions for disease.

6. Consider a regular fungicide program to control root and leaf diseases. Fungicides are inexpensive insurance considering the value of your transplants.

Disease free transplants pay dividends down the road because they are vigorous and less prone to attack by pathogens in the field. Proper management of diseases in the float system insures that your tobacco crop gets off to a good start.

Winter Coveralls Dairy Meeting Feb. 19

The Kentucky Dairy Development Council, Alltech, and the UK Cooperative Extension Service are cooperating with a series of meetings for dairy producers throughout Kentucky. We are hosting one of those sessions this Friday, Feb. 19 beginning at 10 a.m. with registration and winding down at 1:30 p.m.

The Barren County session will be held at the Barren County Extension Office auditorium. All dairy farmers are encouraged to attend.

Three topics of discussion will be offered. They include: Milk Quality and Mastitis Economics, Making Silage Sense, and Hoof Health, What is Really Going on Down There.

Several key speakers will make these presentations and should really add to a dairy farmer’s arsenal for information to improve in these three areas of management.

A complimentary lunch will be provided for those in attendance and registered for meeting when presentations begin at 10:30 a.m., so don’t be late.

By GARY TILGHMAN, Glasgowdailytimes

Seeks appeal; Feds called a ’senior partner’ in tobacco industry
The federal government – which helped tobacco companies develop low-tar cigarettes in the late 1960s – has asked the Supreme Court of Canada to weigh in on a multibillion-dollar lawsuit against the tobacco industry to recoup health costs related to smoking.

The Justice Department is seeking leave to appeal a December court ruling in the British Columbia Court of Appeal, which exposed the federal government to potential liability by concluding it should be a third-party defendant in the suit, launched by the B.C. government.

The trial, expected to begin next year, is the first of several legal challenges nationwide in which provinces are seeking to recover health costs.

Tobacco manufacturers maintain the government should share responsibility for health costs because Agriculture Canada conducted its own research while regulating the industry, knew of international studies linking smoking and lung cancer, and nonetheless encouraged and aided the industry in developing light and mild brands.

“The fact of the matter is that the federal government is a senior partner in the tobacco industry,” said Eric Gagnon, a spokesman for Imperial Tobacco, one of the manufacturers named in the suit. “We believe it is important for the government to answer, as the tobacco industry will, on its involvement in the development of the industry in Canada.”

The B.C. decision could open up the government to responsibility in other suits against the tobacco industry filed in Ontario and New Brunswick, and pending actions in Quebec and Manitoba.

“The decision would substantially expand the sphere of duties owed by government in its response to public-health risks posed by a commercially supplied product,” the federal government said in its Supreme Court application.

The Canadian Cancer Society said tobacco makers should shoulder the entire blame because companies intentionally suppressed the health hazards of light and mild brands of cigarettes, hiding the information from consumers and the government.

“The tobacco industry’s historic strategy has been to try to blame someone else,” said Rob Cunningham, a cancer society senior policy analyst.

If the Supreme Court takes on the appeal, it will be its second foray into the long-standing legal battle. The court ruled in 2005 that B.C. had the legal right to sue tobacco companies.

The Canadian lawsuits were inspired by American litigation during the 1990s that ended in mass multimillion-dollar settlements.

Montrealgazette

RICHMOND, Va. — The Food and Drug Administration is saying in letters to two tobacco companies that flavored, dissolvable tobacco products — that the agency compares with candy and says contain a lot of nicotine — could be particularly appealing to kids and young adults.

The FDA’s Center for Tobacco Products wrote to R.J. Reynolds Tobacco Co., maker of Camel cigarettes, and the smaller Star Scientific Inc. on Feb. 1 voicing concern over smokeless products that are consumed like breath mints but made from finely milled tobacco.

“CTP is concerned that children and adolescents may find dissolvable tobacco products particularly appealing, given the brightly colored packaging, candy-like appearance and easily concealable size of many of these products,” Dr. Lawrence Deyton, director of the Center for Tobacco Products, told the companies.

Deyton said regulators are worried the products’ nicotine content and rapid dissolution could cause nicotine dependence and addiction and be especially dangerous to children and young adults.

He asked the two best known makers of dissolvable tobacco products to provide their research and marketing information on how people under age 26 perceive and use the products.

Exercising new power to regulate tobacco that the FDA was granted in June, Deyton also requested research on misuse of the products, including potential accidental nicotine poisoning.

Regulators also want a summary of user demographics, including at what age “tobacco-naive consumers” start using the products.

The products are available in few markets and account for a small share of the tobacco industry.

Star Scientific, based in Petersburg, Va., markets its Ariva and Stonewall tablets in wintergreen, coffee and tobacco flavors. The first versions appeared about nine years ago.

R.J. Reynolds, which is owned by Reynolds American Inc. in Winston-Salem, N.C., is test-marketing dissolvable tablets, strips and a toothpick shape under the names Camel Orbs, Camel Strips and Camel Sticks in mint and other flavors.

The Orbs last about 15 minutes, the strips dissolve in five minutes or less and the sticks, which are slightly bigger than toothpicks, last 15 to 20 minutes.

The FDA is seeking the information as its Tobacco Products Scientific Advisory Committee prepares to study the issue later this year.

Reynolds spokesman David Howard said that company is reviewing the FDA’s request and plans to help regulators evaluate the products.

“Our products are made for, and marketed to, adult tobacco consumers,” Howard said. He said dissolvable items are sold on the same shelves as other tobacco products and carry the same warnings and age restrictions.

Star Scientific, which has been involved in a patent dispute over some of the technology behind its dissolvable products, disagrees with the FDA’s characterization of them and looks forward to speaking with regulators, spokeswoman Sara Troy Machir said.

“The challenge that we have faced in attempting to meet the needs of adult smokers … is to develop a product that is palatable to the customer while at the same time not making it attractive to the non-tobacco user,” she said

Machir said flavors are added to the products to make them taste less harsh.

Tobacco companies are focusing on cigarette alternatives — such as cigars, snuff and chewing tobacco, as well as other forms of nicotine replacement — for future sales growth as demand for cigarettes continue to decline.

By MICHAEL FELBERBAUM

Kevin Duffey writes: As the market seems to be in correction mode in recent weeks, I’m starting to become more focused on some positions that I want to accumulate. One of these has been Philip Morris Int’l (PM).
For a potential play, you can now sell a January 2011 put with a $40 strike price for $3.20 premium (as of this writing). Note that you can collect $320 on essentially $4000 in cash (for every put contract) which is an 8% return. It’s actually slightly higher since the time to hold the option is less than a year.

Compare the $3.20 you can collect versus holding shares of the stock. The annual dividend payout on PM is $2.32. So by selling the put versus holding the stock, you can earn an additional $.88 per share between now and January of next year. Even more, you’re essentially obligated to PM shares at $40 per share versus today’s price of around $46 per share, so if you end up owning the shares, your cost basis is based on $40 per share versus today’s price.

I think it’s a great way to collect an 8% return with very low risk. Your only risk is if PM goes well below $40 and you’re required to purchase the shares at $40; obviously, this is still better than buying shares at $46. PM is a great long term holding, consider selling puts to pick up shares at lower prices and earn a higher return in the near term.

Remember, if you do this strategy, be sure you have the cash in your account to purchase the shares if the strike price hits.

If you want to be more aggressive, and you wait for the market to move even lower, you will potentially be able to sell the Jan 2011 $40 Puts for even more income, or target a strike price even lower than $40. Then again, you might not get that opportunity.

Disclosure: I hold shares of Philip Morris Int’l (PM) and am looking to buy more as the market move lower.

By Kevin Duffey, Marketoracle

Reporting from Denver – The Paragon Theatre’s artistic director, Warren Sherrill, has thought about staging “Agnes of God” for a while.

Problem is, one of the key characters is a psychiatrist who chain-smokes. And in Colorado — one of 25 states with indoor smoking bans — actors can’t light up on stage.

The state Supreme Court last month found the 2006 smoking restriction constitutional, rejecting theater companies’ argument that it infringed on their freedom of speech and stifled artistic expression. Actors, the justices noted, had alternatives to convey the act of smoking.

For Sherrill, the decision means he’ll keep passing on plays in which smoking is integral to the plot or to character development; he refuses to employ methods he considers unacceptable.

Miming is silly, he said. Talcum cigarettes are ridiculous. “The talcum lasts for a couple of puffs. If your actor sucks in rather than blows out, they’ve just swallowed a bunch of talcum,” he said. “And it’s going to look incredibly fake.”

Altering the stage direction so that the character doesn’t light up is equally distasteful, Sherrill said. “To me, that’s sacrificing the writer’s integrity.”

Instead the Paragon, along with Denver’s Curious Theatre, will pursue a legal case, hoping to win an audience with the U.S. Supreme Court.

Of the states that prohibit smoking in public venues such as restaurants and bars, at least six — including California — provide a theatrical exemption, according to the group Americans for Nonsmokers’ Rights.

When Colorado passed its ban, theater companies objected. They weren’t demanding to smoke tobacco, but wanted at least the option of using cigarettes made of herbs or tea leaves, said attorney A. Bruce Jones. Such alternatives weren’t harmful, the Paragon and Curious theaters argued, and would allow them to replicate the act and ambience of smoking.

But the law banned smoking of all kinds.

While secondhand tobacco smoke is measurably harmful, particularly to those with heart disease, the risks associated with herbal cigarettes are less understood, said Dr. Norman Edelman, chief medical officer with the American Lung Assn.

However, he said, smoke from non-tobacco sources can be troublesome for people with smoke sensitivities, such as those with asthma. “Just a whiff of smoke will tighten their airways,” Edelman said.

Proponents of the smoking law argue that there is no need for actors to light up. After all, they point out, theater is all about make-believe.

“They aren’t allowed to use real guns. There’s no reason they should be allowed to use cigarettes, because there’s no safe level of exposure to secondhand smoke,” said Annie Tegen, senior program manager with Americans for Nonsmokers’ Rights.

“No, you don’t shoot a gun, but you don’t shoot a toy water pistol from Kmart, either,” said Chip Walton, artistic director for Curious Theatre. While some props can appear realistic, fake cigarettes don’t do the trick, he said. And smoking often is key to the development or expression of a character, he said.

The Denver theater companies have attracted the support of 1st Amendment advocates, including the Thomas Jefferson Center for the Protection of Free Expression.

Director Robert O’Neil noted that his group does not take issue with the validity of smoking bans. “But in order to serve those purposes, [states] don’t need to prohibit an otherwise 1st Amendment-protected activity related to artistic integrity,” he said.

The issue of whether actors can puff away on stage may not seem to be a critical one, O’Neil said. “But if you view it as a question of government intervention in a way that destroys artistic integrity, that’s a different matter.”

Mike Saccone, spokesman for the Colorado attorney general’s office, which defended the smoking law, praised the state Supreme Court’s findings. “We’re glad to see they sided with us,” he said. If the U.S. Supreme Court agrees to the review, “it would be a fascinating 1st Amendment case.”
By DeeDee Correll
January 18, 2010

OKLAHOMA CITY – An Oklahoma investment company has unveiled what is believed to be the first Christian-themed line of exchange-traded funds in the United States.

FaithShares Trust in Oklahoma City announced two new products, FaithShares Baptist Values Fund and FaithShares Lutheran Values Fund, on Dec. 15. They join FaithShares’ recently launched Catholic Values Fund, Christian Values Fund and Methodist Values Fund, completing the initial family of funds.

“We created these funds to meet the needs of investors who want to participate in the potential of the stock market, yet be good stewards of their money,” said Thompson Phillips Jr., president of FaithShares.

Exchange-traded funds, or ETFs, have grown in popularity in recent years. They are similar to mutual funds, containing diversified investments in stocks and bonds that don’t require a manager, making them cheaper than traditional stocks. Unlike mutual funds, however, they trade on exchanges just like stocks, making them easier to track.

The funds start with the 400 largest U.S. stocks, which are then filtered down to 100 by avoiding companies involved in morally objectionable ventures like gambling or pornography. While large investors can give millions of dollars to a money manager and ask that their funds be managed in keeping with certain beliefs, smaller investors are more limited in their ability to invest in only socially conscious stocks and funds.

While Phillips said he knows of one other faith-based ETF — a Dow Jones Islamic Market International Index Fund that invests in keeping with Islamic law — he believes his are the first explicitly Christian products of their kind.

Phillips said he and Garrett Stevens, CEO and portfolio manager, came up with the idea after experiencing first-hand the frustration of Christian organizations as they seek to invest funds over the long term without violating their constituents’ consciences.

The individual funds are tailored around each denomination’s beliefs and investment policies, so they vary by tradition.

The Baptist fund, for example, has zero-tolerance for companies involved in ventures related to abortion, beverage alcohol, gambling, producing military weapons, pornography and tobacco.

The Methodist fund allows stocks that derive no more than 10 percent of their business from alcohol sales, such as restaurants. The Lutheran fund allows companies that produce beer and wine but not distilled alcohol.

The Catholic fund excludes businesses that manufacture contraceptive products, use embryonic stem cells or fetal tissue for research or are involved in predatory lending controversies or have a pattern of gender discrimination or poor labor practices.

A generic Christian fund tailored to non-denominational churches and other denominations not specifically represented by other ETFs excludes “companies involved in: the direct participation or support of abortion; manufacture of alcoholic beverages; ownership of, or support of, gambling facilities, products or services; production or distribution of violent media; production, sale or distribution of pornography, use of embryonic stem cell or fetal tissue for research in a product; and manufacture, sale or distribution of tobacco products or supply of key elements to the tobacco industry.”

“We did a great deal of research on the covenants of the various denominations in designing these funds,” Stevens said.

In addition to offering guilt-free investing, FaithShares pledges to give 10 percent of its net income to a ministry associated with the respective denominations.

Currently the funds carry operating expenses higher than the average ETF but lower than faith-based mutual funds. Phillips told the Wall Street Journal that expenses will decrease as the funds’ assets increase.
By Bob Allen
December 17, 2009

Bobby Labonte Racing (BLR) will be displaying some new colors during the 2010 dirt late model racing season. The team announced today the addition of Tantus Tobacco and their Red Buck Filtered Cigars brand as the primary sponsor of the No. 41 Red Buck Filtered Cigars machine driven by Brad Neat, who joined BLR last month. Red Buck will also be an associate sponsor of five-time dirt late model champion Earl Pearson Jr. and his No. 44 entry.

This is not the first time Red Buck has entered into the world of dirt late model racing. The 29-year-old Neat developed a relationship with Red Buck this past season and now looks forward to growing the successful partnership at BLR.
“The people at Tantus Tobacco and the folks who work on the Red Buck brand are truly passionate about dirt late model racing and its fans,” said Neat. “We worked together a little last season, and it’s great that they are joining us at Bobby Labonte Racing in 2010. I’m focused on winning races for them, but more importantly representing them throughout the year. They are giving us all the tools to be successful in every event we enter.”

“Tantus Tobacco is excited about the upcoming 2010 race season,” said Ross Haynes, Director of Sales for Tantus Tobacco. “We are proud to have the Red Buck name associated with two great drivers and avid outdoorsman such as Brad and Earl.” Neat was a two-time winner on the Lucas Oil Late Model Dirt Series in 2009 on his way to finishing seventh in the national championship. Pearson won four times on tour and finished third in the championship chase. Team owner Bobby Labonte knows that the addition of Red Buck will only make the team stronger.

“Tantus Tobacco is a company that believes in quality,” said team owner Bobby Labonte. “That makes them a great fit to our race team and we’re proud to welcome them on board. We hope to deliver them wins and represent them to the millions of dirt late model fans all across the country. Their partnership will make us a better team and that is something we’re all looking forward to.”

Neat and Pearson will make their debut with Red Buck February 1 when the team travels to Florida for the 34th annual DART Winternationals.

Canada’s federal government, accused of promoting so-called light cigarettes, must be a defendant in a British Columbia lawsuit seeking compensation from tobacco companies for the treatment of smoking-related illnesses.

The Court of Appeal for British Columbia yesterday overturned a trial judge’s decision that cleared the federal government and, in a 3-2 decision, ruled it must be added as a co-defendant as requested by the tobacco companies.

“The B.C. decision will demonstrate that the government of Canada has known about the risks associated with smoking for decades and that it instigated and promoted the development and sale of lower-tar tobacco products,” Donald McCarty, Imperial Tobacco Canada Ltd.’s vice president of law, said in a statement.

British Columbia was the first Canadian province to sue over the cost of treating smokers in the government-funded health-care system for cancer and other tobacco-related illnesses. The province is seeking unspecified damages, as is New Brunswick. Ontario, Canada’s most populous province, sued tobacco manufacturers for C$50 billion ($47 billion).

The tobacco companies, which include Japan Tobacco Inc.’s JTI-MacDonald, British American Tobacco Plc and Rothmans Inc., claim the federal government knew of the risks of smoking, while regulating the industry, and in the 1960s pressed the tobacco manufacturers to promote lower-tar cigarettes.

The government’s actions contributed to the losses the cigarette manufacturers may incur from the provincial suits, the companies said.

Officials from Canada’s Justice Department didn’t immediately respond to a phone call seeking comment after regular business hours yesterday.

The case is British Columbia vs. Imperial Tobacco Canada Ltd., 2009 BCCA 540, Court of Appeal for British Columbia (Vancouver).

Shareholders in PT British American Tobacco (BAT) Indonesia and PT Bentoel International Investama approved Friday the proposed merger of the two companies to challenge the domination of big players in the country’s lucrative cigarette market.

A statement issued Friday said 99.99 percent of shareholders in Bentoel, the country’s fourth-largest tobacco company, and 86.62 percent of shareholders in BAT Indonesia, the local unit of Europe’s biggest tobacco company, had approved the merger in separate extraordinary meetings.

The merger plan follows the acquisition in June of Bentoel shares by BAT Indonesia in a deal worth US$494 million. Under the deal, BAT bought 85 percent of Bentoel at a price of Rp 873 (9 US cents) a share.

The statement said that under the proposed merger, all BAT Indonesia shares would be exchanged for Bentoel shares at a ratio of 7.68 percent Bentoel shares per BAT Indonesia share.

BAT Indonesia assets and liabilities will be transferred to Bentoel on Jan. 1 next year as the surviving entity. Bentoel will remain listed on the Indonesian bourse.

The merger is expected to help BAT Indonesia diversify into kretek (clove-flavored) cigarettes and strengthen its presence in the Indonesian market, the world’s fifth-largest with 250 billion cigarettes produced annually.

Kretek cigarettes account for more than 90 percent of the Indonesian market, with regular cigarettes making up the rest.

Bentoel sells both types, and its brands include Bentoel, Star Mild, X Mild and Country.

The new company will also look to challenge the three big firms that together dominate 70 percent of the market: Philip Morris International’s H.M. Sampoerna (27 percent market share), Gudang Garam (22 percent) and Djarum (21 percent).

Djoko Moeljono will become president commissioner of the merged entity, while Jeremy Pike, previously BAT’s director for Africa, will become president director.

The merger is still subject to approval by the market regulator, and is expected to go through in January.

Following the merger, BAT will own a 98.26 percent stake in the new company, assuming all shareholders take up the merged group’s shares.

BAT Indonesia is 79 percent owned by BAT.

Stocks saw little movement to open the trading week on Monday, as a light economic calendar had traders sitting on the sidelines. The major averages finished on opposite sides of the unchanged mark by minute margins, capping off a lackluster trading session. The Dow edged up by a little more than a point, while the Nasdaq and the S&P 500 posted modest losses.

With the lack of first-tier economic data, traders looked to comments from Federal Reserve Chairman Ben Bernanke, who spoke before the Economic Club in Washington, D.C.

Bernanke said that while the economy appears to be recovering from last year’s financial crisis, it still has “some way to go” before the country can be assured that the recovery is self-sustaining.

The Fed chief noted a rebound in demand for homes and the shrinking inventory of new, unsold homes, adding that the economy should see modest growth that will lower the nation’s unemployment rate.

Bernanke warned, however, that the labor market will remain weak and the unemployment rate will decline at a slower rate than would be ideal.

In other news, the Federal Reserve reported that consumer credit fell by $3.5 billion or 1.7 percent to $2.483 trillion in October from $2.486 trillion in September. Economists had been expecting a more significant decrease in credit of about $9.3 billion.

Also today, the Wall Street Journal reported that the Treasury Department plans to cut the projected long-term cost of the TARP program by about $200 billion to $141 billion from the $341 billion previously forecast by the administration.

This afternoon, President Barack Obama said that he is considering using the leftover funds from the TARP program to create jobs and bring down the unemployment rate.

Obama, who spoke to reporters briefly in the Oval Office following a meeting with Turkish Prime Minister Recep Tayyip Erdogan, declined to divulge any details of his plans but said more information would be forthcoming Tuesday when he delivers a speech on the economy.

The major averages all saw subdued movement in late session dealing, finishing near the flat line. The Dow edged up by 1.21 points or less than a tenth of a percent to 10,390.11, while the Nasdaq fell by 4.74 points or 0.2 percent to end at 2,189.61 and the S&P 500 slid by 2.73 points or 0.3 percent to 1,103.25.

In overseas trading, stocks markets across the Asia-Pacific region closed on a mixed note on Monday. Japan’s benchmark Nikkei 225 Index advanced by 1.5 percent, while Hong Kong’s Hang Seng Index fell by 0.8 percent.

The major European markets also closed mixed. The U.K.’s FTSE 100 Index and the German DAX Index fell by 0.2 percent and 0.6 percent, respectively, while the French CAC 40 Index gained 1.1 percent.

In the bond markets, treasuries ended the day modestly higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, closed at 3.448 percent, posting a loss of 3.5 basis points.

Despite the lack of significant movement by the major averages, tobacco and telecommunication stocks saw some of the day’s strongest outings. The NYSE Arca Tobacco Index and the NYSE Arca Telecommunication Index rose by 1.7 percent and 1.6 percent, respectively. The indices finished at their best levels in over one year’s time.

Health insurance, defense and utility stocks also rose, while commercial real estate stocks weighed on the markets. The Morgan Stanley REIT Index lost 2.1 percent, pulling back off of the thirteen and a half month closing high set on Friday.

Banking stocks also fell by notable margins on the day, with the Kbw Bank Index posting a loss of 1.6 percent. The index was hurt by shares of Wells Fargo (WFC | Quote | Chart | News | PowerRating), which declined by 2.2 percent. With the retreat, the stock closed at its lowest price in two months.

Gold, brokerage, housing and trucking stocks also fell, offsetting some of the day’s gains. The decline by gold stocks came amid another drop in the price of the precious metal.

Tuesday, the economic calendar is relatively empty once again, pointing to another light trading day. Traders may begin positioning themselves for a series of economic reports due out later this week, with reports on weekly jobless claims, retail sales and consumer sentiment due for release.

PRESIDENT Arroyo has ordered the release of the P5.8-billion share of concerned local government units (LGUs) from excise-tax collections on locally manufactured Virginia-type cigarettes from 2002 to 2009.

The President issued the directive through Executive Order (EO) 846, dated November 16, authorizing the monetization of the unappropriated and unreleased share of Virginia tobacco-producing LGUs from the 15- percent excise-tax collection on locally manufactured Virginia-type cigarettes for calendar years 2002 to 2009.

In issuing EO 846, the President noted that “there are unreleased appropriations for the calendar years 2002, 2005 to 2008, and an unappropriated share of LGUs for CYs 2002-2004, accumulating to P5,810,192,796.”

She ordered the Department of Finance (DOF), Department of Budget and Management (DBM) and the National Tobacco Administration (NTA) to take “all the necessary steps to ensure that the beneficiary-LGUs get their respective shares from the unreleased and unappropriated portion of the 15 percent of the excise-tax collection on Virginia-type cigarettes for CYs 2002 to 2009 amounting to P5,810,192,796 through a monetization program [MP].”

Should beneficiary LGUs avail themselves of the fund, the MP will give the latter the option to collect in advance from the trustee banks their respective shares at a discounted value, net of interests and other charges.

The President ordered the Bureau of Internal Revenue to submit to the DBM a certification representing 15 percent of the excise-tax collection on Virginia-type cigarettes, to provide an appropriation cover.

The NTA will submit to the DBM a certification, duly approved by the NTA administrator, of Virginia tobacco production and Virginia tobacco acceptances by province, including congressional districts, cities and municipalities of each beneficiary-province.

The DBM will determine the share of each beneficiary-LGU from the unreleased portion of 15-percent excise-tax collection of volume and production and trade acceptances; issue the corresponding notice of payment schedule to inform the beneficiary LGUs of their share; and provide an annual appropriation cover.

The President also ordered the DOF to provide the letter confirmation of “the national government that the P5,810,192,796 constitutes an obligation of the Republic of the Philippines.”

The DOF will “favorably endorse to the Bangko Sentral ng Pilipinas, or other regulatory agencies as the case may be, the application to secure the necessary financial features for the investment certificates that may be issued to improve the net proceeds to the beneficiaries.”

At the option of the recipient LGU, the DOF will make an arrangement with the trustee bank on the requirements for opening a special trust account.

The DOF will also arrange with the Bureau of Treasury to make available its facilities, including the Registry of Scripless Securities, the Automated Debt Action Processing System, and others as may be required and necessary for the auctioning process and the implementation of the MP.

The government financial institution or institutions designated by the recipient-LGU shall serve as trustee bank or banks to monetize the shares of beneficiary-LGUs.

All MP-related transactions shall be undertaken according to existing accounting, auditing and budgeting rules and regulations. A list of the beneficiary- LGUs that availed themselves of the MP shall be submitted to the DBM.

The Commission on Audit shall provide guidelines in recording the obligation in the books of account of the national government.
EO 846 also provides that if any section or provision is declared unconstitutional or invalid, unaffected sections of the EO shall remain in full force and effect.

Under Republic Act 7171 and Memorandum Circular 61-A, LGUs producing Virginia tobacco shall have a 15-percent share from excise tax collected on locally manufactured Virginia-type cigarettes, to be spent on projects to “advance the self-reliance of Virginia tobacco farmers,” EO 849 stated.

BIR Revenue Resolution 12-2008 provides that Virginia-type cigarettes shall refer to cigarettes containing Virginia-type leaf tobacco, whether imported or locally produced.

MANILA, Philippines – A tobacco exporting firm has come to the succor of tobacco farmers in La Union and Pangasinan by donating cement for the rehabilitation of an irrigation system that was heavily damaged by typhoon Pepeng.

The Universal Leaf Philippines Inc. (ULPI) through its president Winston Uy recently turned over 300 bags of cement to Rosario, La Union Mayor Bellermin Flores. The cement will be used to reconstruct eroded intake canal sections of an irrigation system serving a wide expanse of tobacco farming areas in neighboring Rosario and Sison (Pangasinan) towns.

It was learned that 800 tobacco farmers belonging to several irrigation associations are relying on the water coming out of the damaged irrigation system for the sustenance of their crop.

ULPI’s donation is part of an overall effort of the various sectors of the tobacco industry including the National Tobacco Administration which had separately conducted relief operation drives in the provinces and Metro Manila for victims of devastation inflicted by typhoons Ondoy and Pepeng.

Uy said that with the irrigation system rehabilitated, the leaf farmers are guaranteed of having enough water supply for their crop in the forthcoming tobacco planting season.

ULPI is one of the country’s leading exporters of leaf tobacco and supplier of a big cigarette manufacturing company.

By Teddy Molina, November 16, 2009
Philstar