INITIATIVE FOR HIGHER PURCHASE PRICES AND STIMULATIONS FOR TOBACCO WORKERS

Increasing of the raw tobacco purchase prices mostly of the higher classes as well as higher premiums for 2008 were the issues which dominate at the meeting of the Association of Tobacco and Tobacco Products Producers that was held in Economic Chamber of Macedonia on November 29^th 2008.
Because the interest of the Republic of Macedonia is the increasing of the tobacco production, the Association concluded to propose to the Government of the Republic of Macedonia to increase the resources for financing of the raw tobacco primary production activities in 2008. Therefore in the readjustment of a budget predicted resources in the amount of MKD 273,800.000 are increased to MKD 900,000.000 and they will be used for payments to primary tobacco producers for the produced oriental aromatic tobacco from 2007 harvest. In the amendments of the Programme for financing the primary tobacco production activities in 2007 (Official Gazette of RM No. 62/07), in item 2 should be predicted  the payment  to be carried out proportional, and the percentage will be determined from the average tobacco purchase price reached for 2007 harvest on the Republic of Macedonia level, and the payment to be realized on the purchased tobacco value for each producer individually, who  delivered its tobacco to the purchase tobacco company. In order to improve the tobacco quality we propose from this financial support to be excluded the producers of 4 and 5 tobacco classes.

                                         Initiative for submitting amendments by the

 Government of the Republic of Macedonia on Draft –Law for amendments of the Law on Tobacco and Tobacco Products 

                 Pursuant to the transitional and concluding provisions of the Law on Tobacco and Tobacco Products (Article 70, item 2) is predicted the legal entities (producers, importers and exporters of cigarettes) to reconcile the obligations regarding the marking of cigarettes and tobacco products in a period of two years from the day of entering into force of this law, respectively March 8^th, 2008. 
In Article 72, item 1 of this Law is predicted that its by-laws should be brought in term of six months after the entering of this Law into force. Based on that and pursuant to Article 45, item 2 of the Law, Ministry of Health had to submit by-law which will determine the size of the letters for every warning on separate packaging. Such by-law is still not brought, due to the large number of various packages with different size and shape, present at Macedonian market. From that reason, even in the amendments of the Law which is in procedure, is predicted the erasing of this item, respectively its exemption. 
This by-law which was not adopted was an obstacle for the beginning with preparations and activities of the producers and importers of cigarettes, in order to adjust their operation pursuant to provisions of Articles 43, 44, 45 and 46, which refer to information that should be written on the tobacco products packages.

Producers and importers of tobacco products could not start these activities until entering into force of the proposed Law on amendments of the Law on Tobacco and Tobacco Products, as its enactment can not be predicted.
Considering the short period which remains for adjustment of the abovementioned, respectively until March 8^th, 2008 the cigarettes producers and importers requested from the Government of the Republic of Macedonia to intervene with the amendment to the Proposal for amendments of the Law on Tobacco and Tobacco Products, in order to accomplish reasonable term of at least six months for adjustment with the requests of the Law’s cited articles.
Furthermore, they requested a reasonable term from three to six months, in which the packages in retail business will be sold, before the producers and importers of cigarettes adjustment term, and which are not in compliance with the above mentioned Law’s articles. 
With hope that according to argument request by the members of the Economic Chamber of Macedonia you will undertake relevant activities, because the Draft –Law is already in Parliamentary procedure, I thank you in advance.

INITIATIVE FOR FINANCING OF THE PRIMARY PRODUCTION ACTIVITIES

The Association of Tobacco and Tobacco Products Producers within the Economic Chamber of Macedonia on its session held on May 19^th 2006 has discussed the proposals for determining of the stimulation to the tobacco production of 2006 harvest.   
Representatives of the producers as well as purchasers have agreed besides those 10 percent provided by compensation resources which are assigned for promotion, funds in the amount of 10 percent to be assigned for financing of the primary production activities. It mostly concerns the examination of the quality of the soil, seed etc., as the Tobacco Institute proposed its own draft programme and present it to the participants of the meeting, which was supported by the attendants. 
According to the opinions of the purchase companies and producers, the rest 80 percent should be assigned for primary producers` stimulations.
Pursuant to Article 50 of the Law on Tobacco and Tobacco Products, the Association of Tobacco and Tobacco Products Producers within the Economic Chamber of Macedonia propose:
1.Compensation from collected resources for financing of primary tobacco production to be paid proportional. The percentage is determined from the average tobacco purchase price on the Republic of Macedonia level, and the payment to be realized on the purchased tobacco value for each producer individually.
2. Second proposal by the Association of Tobacco and Tobacco Products Producers is identical as the previous one, and only 4 and 5 tobacco classes should be excluded.

CONDITIONS IN TOBACCO INDUSTRY

On common satisfaction of tobacco producers, the purchase of raw tobacco in leaf from the 2007 harvest started after December 3^rd 2007 in almost all purchasing companies which was not the case in previous years. TK Prilep made exclusion, as due to non-provided financial resources for payment of tobacco purchase started with delay.

According to the Ministry of Agriculture, Forestry and Water Management of the Republic of Macedonia data related to the planned quantity of purchasing of raw tobacco in leaf in 2007 of 24.600 tons, is estimated that of this harvest will be purchased 17-18.000 tons of tobacco. It is due mostly to a droughty period as well as to the continuation of the tobacco producers practice to conclude 2-3 or more contracts for a single production.

As a result of the improved tobacco quality and the persistent implementation of the criteria for raw tobacco in leaf quality estimation, and according to the date we have on our disposal, until January 11^th, 2008 the average purchase price by varieties and classes is by 10-15 percent higher, compared to the previous year. The tobacco payment is carried out without difficulties.

The State Agriculture Inspectorate was completely included at the beginning of tobacco purchase, due to with the Law set conditions for tobacco purchase, as there were cases when purchase points were closed and infringement forms were submitted. Remarks were mostly concerning the nonfeasance of the conditions of the purchase points pursuant to the Rule Book, delay with determining of representatives from the Association of Tobacco Producers during the tobacco estimation, too great deductions (sand, humidity, etc.) which are even not registered. During the purchase these shortcomings were eliminated.

Announcement of the tobacco stimulation in the amount of 30 denars per kg which is increase of 100 percent compared to the last year (15 denars per kg), has positive influence to the increasing of the interest for the increased tobacco production in the Republic of Macedonia.

Association of Tobacco and Tobacco Products Producers within the Economic Chamber of Macedonia further remains on requests for stimulations not to be paid per kilo purchased tobacco by which non-quality production is stimulated, but stimulation per quality respectively classes.

ENCLOSURE 1: - Purchase prices of raw tobacco in leaf and the amount stimulations      

ENCLOSURE 2: - Production, volume, import-export of tobacco and tobacco products