The federal government’s 2026 initiative could collapse the tobacco sector in the country’s main producing state.
The Nayarit countryside faces an unprecedented threat, as the cigarette tax increase, contemplated in the 2026 economic package, could reduce tobacco production by at least 30%. This state accounts for half of the national tobacco crop.
The measure would have a devastating impact on the rural economy, as the tobacco sector is one of the state’s main economic drivers.
The Rural Association of Collective Interest of Tobacco Producers (ARIC), an organization that brings together more than three thousand producers, reiterates that the measure would affect the rural economy because it is one of the main local economic drivers. “If the increase is approved, we would have to reduce the number of hectares planted and lay off 30% of the day laborers who participate in the harvest each year,” explained Oliver González Sánchez, president of the organization.
According to the ARIC, the tobacco sector in Nayarit generates an economic income of more than 1.3 billion pesos annually and employs nearly 15,000 day laborers, mostly migrants from indigenous communities such as the Huichol, Cora, Tepehuano, and Mexicanero. Each worker earns an average of 90,000 pesos per season, an income that constitutes the main source of income for thousands of families.
The reduction in hiring could trigger a social crisis, particularly in that state, because, unlike tobacco farming, there is no other agricultural activity that offers an economically profitable option, which would force many day laborers to migrate to the United States or even be tempted to join illicit activities due to the lack of opportunities.
It was also warned that the tax increase could favor the illegal market. “If taxes are raised, counterfeit cigarettes will occupy up to half of the national market, affecting the formal industry and the treasury.” According to the organization, the loss of competitiveness would generate a drop in rural investment of approximately 378 million pesos, severely impacting the state’s economic stability.
It is worth noting that the economic impact of tobacco farming is 1.3 billion pesos annually, making it one of the five main economic drivers of the state.
Unlike other crops, tobacco offers working and social conditions uncommon in the Mexican countryside. Producers receive guaranteed prices, weather insurance, and technical assistance, in addition to access to social security through the Mexican Social Security Institute (IMSS), through annual contributions of approximately 40 million pesos, which guarantees medical care and labor rights for workers.
Together with the industry, educational and welfare programs are being promoted for the children of migrant day laborers to eradicate child labor in Nayarit’s fields. Therefore, the legislative decision to approve the federal government’s proposal to increase taxes on cigarettes by 2026 would be a lethal blow to thousands of families who depend on tobacco, warns its leader.
Source: INFOBAE
