LOCAL tobacco farmers are calling the government to investigate Mighty Corp. over possible violations of the anti-dumping law, which ultimately would adversely affect the country’s tobacco industry.
In a statement, Ilocos Sur-based Banayoyo Reforestation and Tobacco Growers Credit Cooperative (BRTGCC) said that Mighty had been importing tobacco leaf at rates way below the floor price mandated by the National Tobacco Administration—making it liable for violation of Republic Act (RA) 8752, or the Anti-Dumping Act of 1999.
“The Department of Agriculture and the Tariff Commission should initiate a probe on Mighty’s dumping practices, which are hurting local farmers and could soon drive them out of business,” BRTGCC President Francisco Gamboa said.
He recalled that the government-mandated floor price in 2011 was P58.69 per kilo for flue-cured tobacco and P38.42 for burley. For 2012, the floor price was P75 for flue-cured and P61 for Burley.
Mighty imported at a price equivalent to only a little less than P30 a kilo during these periods.
Based on the provisions of RA 8752, dumping occurs when a foreign producer sells its products to an importer at prices lower than those prevailing in the local market or at prices below the cost of production, which, in turn, threatens a domestic industry making like or comparable products.
Gamboa also called for the disclosure of the probe being conducted by the Bureau of Customs (BOC) and Bureau of Internal Revenue (BIR) on the Bulacan-based firm’s alleged under-declaration of its tobacco leaf.
To recall, Finance Secretary Cesar Purisima has ordered the BOC and BIR to investigate the alleged underdeclaration of Mighty’s imports.
Both the BOC and BIR told the House Committee on Ways and Means chaired by Rep. Miro Quimbo of Marikina City on October 22, 2013, that they have initiated an investigation on the complaints against Mighty Corp.
Documents submitted by Mighty Corp. to the BOC show that it had imported tobacco leaf at only $0.68 a kilo (equivalent to only P29.24) in 2011 and 2012, which is lower than the government-mandated floor price even for rejects.
BOC records show that the cheapest imported tobacco in 2011 was $3.39 a kilo, way above the $0.68 per kilo importation of Mighty.
The Post Entry Audit Group of the BOC, in a letter to Mighty on
October 21, asked the company to respond to the charges within 15 days.
“As far as we know, the deadline has lapsed. We hope the hope would make public the results of their investigation,” Gamboa said.
Meanwhile, tobacco farmers in Ilocos Region were highly doubtful over the recent statements by Mighty that it would start buying more leaf next year from local growers, considering that the company imports tobacco leaf at prices much lower than those prevailing in the market.
“How can Mighty make good on their promise to buy more from tobacco farmers next year if the imported price of their tobacco is cheaper than even the rejects or floor sweepings sold here?” Gamboa said.
“We never saw or heard of Mighty or the Wongchungking family buying from farmers in the North. The government should immediately investigate this company to protect the welfare of farmers,” Gamboa said.
Isabel Jimeno of the Samahan ng Magtatabako ng Kanlurang Mindoro said the local tobacco industry will die without a fight if the alleged “dumping” of tobacco leaf will continue.
“Mighty’s imported tobacco is even cheaper than the price of rejects at P43 a kilo last year. How did that happen? Mighty is openly and consistently violating the law yet they still manage to evade punishment,” Jimeno noted.
Gamboa and Jimeno also urged the House Ways and Means Committee to include Mighty’s violations of the anti-dumping law in its inquiry into the alleged questionable trade practices of the company.
The committee is set to conduct the probe upon a resolution filed by Rep. Pablo Javier, who wanted to know how Mighty managed to pay less taxes even though it imported more tobacco than one of its competitors last year.
Besides tobacco leaf, Mighty reportedly imported acetate tow, the raw material used for cigarette filter at $0.30 a kilo. The cheapest tow imported in 2011 and 2012 was at $5.26 a kilo.