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(4}fh~r uf tile ,~rrrrtllr~ 
SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
Second Regular Session 
) 
·14 
SEP -8 P6 :32 
SENATE 
Senate Bill No. 
2400 
Prepared and submitted jointly by the Committees on Agriculture and Food, Government 
Corporations and Public Enterprises, Ways and Means, and Finance, with Senators Binay, 
Escudero, Villar, Trillanes IV, Ejercito, Honasan II, Legarda and Poe as authors thereof 
AN ACT 
PROMOTING AND SUPPORTING THE COMPETITIVENESS OF THE SUGARCANE 
INDUSTRY, ESTABLISHING THE SUGARCANE INDUSTRY DEVELOPMENT FUND, 
AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
1 
SECTION 1. Title. -
This Act shall be known as the "Sugarcane Industry 
2 
Development Act of 2014." 
3 
SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to 
4 
promote the competitiveness of the sugarcane industry and maximize the utilization of 
5 
sugarcane resources, and improve the incomes of farmers and farm workers, through 
6 
improved productivity, product diversification, job generation, and increased efficiency of 
7 
sugar mills. 
8 
For these purposes, the State shall: (a) establish productivity improvement 
9 
programs; (b) provide the needed infrastructure support; (c) enhance research and 
10 
development of other products derived from sugar, sugarcane, and their by-products; (d) 
11 
provide human resource development and extension services; (e) establish agro-industrial 
12 
economic zones for sugarcane and sugarcane-related industries; and (f) provide financial 
13 
assistance to small farmers. 
14 
SEC. 3. Productivity Improvement Programs. -
To boost the production of 
15 
sugarcane and sugar, and increase the incomes of sugarcane farmers/planters and farm 
16 
workers, the following Productivity Improvement Programs shall be implemented: 


1 
(a) Block Farm Program - The Block Farm Program for sugarcane farming being 
2 
implemented by the Sugar Regulatory Administration (SRA), Department of Agriculture 
3 
(DA), Department of Agrarian Reform (DAR), and other government agencies is hereby 
4 
institutionalized and shall be further enhanced and supported. 
5 
For purposes of this Act, the Program is the consolidation of small farms, which are 
6 
five (5) hectares or less, including farms of agrarian reform beneficiaries, as one larger 
7 
farm, with an aggregate area ranging from thirty (30) to fifty (50) hectares within a two-
8 
kilometer radius, to take advantage of the economies of scale in the production of 
9 
sugarcane, such that the activities in the small farms are aligned and implemented to 
10 
ensure the efficient use of farm machineries and equipment, deployment of workers, volume 
11 
purchase of inputs, financing, and other operational advantages, as well as recognition of 
12 
sugar mills, government financial institutions, private investors, but the ownership of each 
13 
small farm remains with the landowners. 
14 
The SRA, DA, DAR and other concerned government agencies shall provide 
15 
common service facilities, such as farm machineries and implements, grants or start-up 
16 
funding for the needed production inputs, technology adoption, livelihood and skills 
17 
development activities for the block farm and its members, and other support activities that 
18 
may be identified. 
19 
To ensure the success of, and compliance to the objectives of, the Program, the 
20 
SRA, shall: 
21 
i) 
Develop guidelines for sugarcane farms to qualify for and continue to participate 
22 
in the Program; 
23 
ii) In collaboration with DA, DAR, and other concerned government agencies, 
24 
provide farm management, technical assistance, and professional services 
25 
support to block farms; 
26 
iii) Monitor the development and productivity of block farms; 
27 
iv) Recommend, after three years, the cessation of the Program on block farms that 
28 
have failed to improve productivity or raise efficiency, or graduation of block farms 
2 


1 
that have achieved high and sustainable productivity and profitability on its 
2 
operations; and 
3 
v) Implement a certification system as a mechanism to access grants, low interest 
4 
financing, and other incentives and support from Official Development Assistance 
5 
(ODA); and market access of sugarcane: Provided, That, sugar mills, bioethanol 
6 
distilleries and other markets of sugarcane shall provide market access priority to 
7 
SRA-certified block farms, 
8 
(b) Farm Support Program - For other farms, which are nine (9) hectares or less, 
9 
that are not eligible under the Block Farm Program, the SRA shall make available a support 
10 
program which shall include, among others, the provision of (i) socialized credit, and (ii) 
11 
farm management, technical assistance, and professional services: 
12 
(i) Socialized credit shall be made available, through the Land Bank of the 
13 
Philippines, for the acquisition of production inputs, farm machineries, and 
14 
implements necessary for the continuous production of sugarcane: Provided, 
15 
That, the loans shall be available to sugarcane farmers duly registered with the 
16 
SRA: Provided, further, the lender shall have a lien on the quedan of farmers that 
17 
obtained the loan until the loan is fully paid: Provided, finally, that farmers cannot 
18 
be granted another loan until the loan is fully paid. 
19 
To ensure immediate payment of farmers and secure their income from 
20 
sugarcane, farmers may enter into any payment method with the sugar mill or 
21 
distilleries for their sugarcane. 
22 
(ii) 
Farm Management, Technical Assistance and Professional Services -
23 
The SRA, DA, DAR, Department of Labor and Employment, Technical Education 
24 
and Skills Development Authority, state universities and colleges, and other 
25 
concerned private and non-government organizations shall formulate and 
26 
implement a deployment program of agricultural engineers, agriculturists and 
27 
farm technicians for the provision of farm management, technical assistance and 
28 
professional services to these farms. 
3 


1 
(C) Farm Mechanization Program - Planters/farmers of sugarcane farms, including 
2 
block farms and farms of agrarian reform beneficiaries, shall be encouraged and trained to 
3 
utilize appropriate agricultural machineries and equipment necessary for the efficient 
4 
planting, cultivation, care and maintenance, harvesting and handling of sugarcane. 
5 
The SRA, DA and DAR, in partnership with local government units, consistent with 
6 
the provisions of Republic Act (R. A.) No. 10601, otherwise known as the "Agricultural and 
7 
Fisheries Mechanization (AFMech) Law," shall: 
8 
1. Introduce or expand the use of machineries for the different stages of sugarcane 
9 
farming; 
10 
2. Formulate and implement a Sugarcane Farm Mechanization Program at the mill 
11 
district levels and block farms; and 
12 
3. Support the establishment, operation and 
maintenance of Agri-fisheries 
13 
Machinery and Equipment Service Centers, as provided in Section 9 of R. A. No. 
14 
10601, in sugarcane areas and, for this purpose, provide socialized credit to 
15 
Service Centers: Provided that, these Service Centers shall emphasize the 
16 
provision of plowing, harrowing, weeding, fertilization, harvesting and other farm 
17 
mechanization services to sugarcane farms that do not have the capability to 
18 
purchase or maintain their own machineries and equipment. 
19 
To develop and deploy appropriate machineries and equipment, the SRA, through its 
20 
research centers, in collaboration with the Philippine Sugar Research Institute, Philippine 
21 
Center for Post-Harvest Development and Mechanization, Bureau of Agricultural Research, 
22 
state universities and colleges, other concerned government agencies, and industry 
23 
stakeholders, shall formulate and conduct a research, development and extension program 
24 
for sugarcane farm mechanization and engineering. 
25 
The Land Bank of the Philippines shall manage the socialized credit facility under the 
26 
Farm Support Program and the Farm Mechanization Program. 
27 
The SRA, DA, DAR, and Land Bank of the Philippines shall issue the guidelines on 
28 
the administration and lending of the socialized credit facility, funded out of the Sugarcane 
29 
Industry Development Fund, established under Section 12 of this Act. 
4 


1 
SEC. 4. Research and Development. - SRA, in coordination with the Department 
2 
of Science and Technology, as well as relevant state universities and government research 
3 
and development institutions and the private sector, shall intensify researches on sugarcane 
4 
high yielding or flood resistant varieties; pest control and prevention; latest farming, milling, 
5 
refining and biomass co-generation technologies; soil analysis and fertility mapping of 
6 
sugarcane areas; weather monitoring and climate change adaptation measures; sugar and 
7 
sweetener consumption; and other viable products that can be derived from sugarcane. The 
8 
DA and DOST shall likewise provide assistance to SRA to improve the lalter's crop 
9 
forecasting and crop monitoring activities or programs. 
10 
SEC. 5. Extension Services. - In addition to extension services provided by the 
11 
Department of Agriculture, Department of Agrarian Reform, state universities and colleges, 
12 
and private and non-government organizations, extension services in sugar districts shall be 
13 
provided by SRA and the mill district development councils (MDDC). Extension services 
14 
that can be provided shall include, but not limited to, provision of technical assistance and 
15 
advice, conduct of tests, propagation, and dissemination of high yielding varieties, and 
16 
operation of demonstration farms. 
17 
For its extension services, MDDCs may develop linkages with non-government 
18 
organizations, peoples' organizations, and local government units. It may likewise secure 
19 
funding for its extension services from private sector sources. 
20 
SEC. 6. Human Resources Development. - All stakeholders in the sugarcane 
21 
industry shall contribute to the development of a sustainable human resource for the 
22 
industry. Towards this end, the Department of Labor and Employment (DOLE), in 
23 
collaboration with SRA, Commission on Higher Education, Technical Education and Skills 
24 
Development Authority (TESDA), Professional Regulation Commission (PRC) and the 
25 
private sector, shall formulate and implement a Human Resource Development (HRD) 
26 
Master Plan for the sugarcane industry which shall include, but not limited to, the following: 
27 
a) 
Capacity building, skills trainings, institutional strengthening of the sugarcane 
28 
industry workers, small farmers and agrarian reform beneficiaries and their organizations to 
29 
actively contribute in productivity and competitiveness; 
5 


1 
b) 
Scholarship program for the underprivileged but deserving college and post 
2 
graduate students who are taking up courses in relevant field of disciplines in state 
3 
universities and colleges which have programs in agriculture, agricultural engineering and 
4 
mechanics, and chemical engineering/sugar technology; and for vocational courses and 
5 
skills development for farmers and farm technicians, and skilled workers in sugar mills, 
6 
sugar refineries, distilleries and biomass power plants; 
7 
c) 
Conduct of capability training or attendance to local or international trainings 
8 
and seminars by farmers, mill, refinery, distilleries and biomass power plant technicians, 
9 
including SRA technical personnel on the latest technologies related to sugarcane farming, 
10 
manufacture or production of sugar and other products derived from sugarcane; 
11 
d) 
Formulation and implementation of competency standards and training 
12 
regulations for technical vocational education and training for the sugarcane industry by 
13 
TESDA; and 
14 
e) Upgrading of facilities, faculty development and strengthening of the on-the-job 
15 
training program of agri-based higher education institutions in sugarcane areas towards the 
16 
production of highly employable and globally competitive graduates needed by the 
17 
sugarcane industry. 
18 
SEC. 7. Infrastructure Support. - To facilitate the transport of sugarcane to mills 
19 
and distilleries, enhance the marketing and export of sugar and other products derived from 
20 
sugarcane, and complement productivity improvement measures in this Act, transport 
21 
infrastructure, farm-to-mill roads, and irrigation facilities shall be provided. 
22 
(a) Transport Infrastructure. - The National Economic and Development Authority 
23 
(NEDA), Department of Transportation and Communications (DOTC), Department of Public 
24 
Works and Highways (DPWH), and Philippine Ports Authority (PPA), shall include in their 
25 
annual Development Plans and Priority Investment Programs the immediate construction 
26 
and/or improvement of eXisting trans-loading ports for export or coast-wide transport of 
27 
sugar and other products derived from sugarcane in key sugarcane producing provinces. 
28 
The SRA shall submit to these agencies, six (6) months from the start of the effectivity of 
29 
this Act, a priority list of trans-loading ports covered by this provision. 
6 


1 
(b) Farm-to-Mill Roads. - The NEDA, DA, DPWH, and concerned local governrnent 
2 
units, shall include in their annual Priority Investment Program the immediate construction 
3 
and/or rehabilitation of farm-to-mill roads in key sugarcane producing provinces. The SRA 
4 
shall prepare and submit to these agencies and LGUs, within six (6) months from the start 
5 
of effectivity of this Act, a Farm-to-Mill Road Master Plan and priority farm-to-mill roads at 
6 
the mill district as basis for the planning, programming and investment prioritization. 
7 
(c) Irrigation. - The National Irrigation Administration (NIA), Bureau of Soils and 
8 
Water Management, and concerned LGUs, in coordination with the SRA, shall construct 
9 
appropriate, efficient and cost effective irrigation facilities, pump and other pressurized 
10 
irrigation systems, rain capture and water impounding facilities in block farms and other 
11 
sugarcane farms. The SRA shall submit to these agencies the list of priority sugarcane 
12 
areas within six (6) months from the start of the effectivity of this Act. The DA and NIA shall 
13 
include in its annual budget the item or provision on construction and rehabilitation of 
14 
irrigation facilities, rain capture and water impounding facilities in sugarcane areas. 
15 
To promote the conservation of water resources and encourage and involve the 
16 
participation of sugar mills, refineries and distilleries in providing irrigation to sugarcane 
17 
areas, the utilization for irrigation of wastewater discharge of mills, refineries, or distilleries, 
18 
that meet the specifications of the DA on the safe re-use of wastewater for irrigation, 
19 
fertilization and other agricultural uses, is considered "re-use" and, therefore, exempt from 
20 
wastewater charges under the system provided under Section 13 of R. A. No. 9275, also 
21 
known as the "Philippine Clean Water Act of 2004." 
22 
SEC. 8. Creation of Agro-Industrial Economic Zones for the Sugarcane and/or 
23 
Sugarcane-Related Industries. - Pursuant to and consistent with the provisions of R. A. 
24 
No. 7916, as amended by R.A. No. 8748, otherwise known as the "Special Economic Zone 
25 
Act of 1995", the establishment of agro-industrial economic zones for the sugarcane 
26 
industry and its related industries shall be allowed: Provided, that, an agro-industrial 
27 
economic zone developer/operator from the sugarcane industry and/or its related industries, 
28 
shall apply with the Philippine Economic Zone Authority (PEZA) for the creation of an agro-
29 
industrial economic zone 
for its agro-industrial economic zone enterprises: Provided, 
7 


1 
further, that said agro-industrial economic zone shall be considered a separate customs 
2 
territory: Provided furthermore, that sugarcane milling and/or its related industries shall be 
3 
allowed to apply and locate in such economic zone and may apply with the PEZA as an 
4 
agro-industrial economic zone enterprise. 
5 
The agro-industrial economic zone and its agro-industrial economic zone locator 
6 
enterprises shall both be entitled to fiscal incentives provided under R.A 7916, as amended, 
7 
or those provided under Book VI of Executive Order No. 226, series of 1987, otherwise 
8 
known as the Omnibus Investments Code of 1987: Provided, That, except for real property 
9 
taxes on land owned by developers, no taxes, local and national, shall be imposed on agro-
10 
industrial economic zone enterprises operating within the agro-industrial economic zone. In 
11 
lieu thereof, five per cent (5%) of the gross income earned by all agro-industrial economic 
12 
zone enterprises within the agro-industrial economic zone shall be paid and remitted in 
13 
accordance with Section 24 of R. A. No. 7916. 
14 
The sugar mill, refinery, distillery and bioethanol facility in the agro-industrial 
15 
economic zone shall likewise be covered by and comply with the rules, regulations, orders 
16 
or circulars of the Sugar Regulatory Administration (SRA), Department of Energy and other 
17 
concerned agencies. 
18 
The Philippine Economic Zone Authority, in consultation with the SRA, Department 
19 
of Trade and Industry (DTI), Department of Energy, and the Bureau of Customs (BOC), 
20 
shall issue the necessary implementing rules and regulations of this Section within six (6) 
21 
months starting from the effectivity of this Act. 
22 
SEC. 9. Sugar Supply Monitoring System. - As the agency mandated to regulate 
23 
the supply of sugar in the country, in addition to its powers and functions under E. O. No. 
24 
18, series of 1986, SRA shall establish a supply chain monitoring system from sugarcane to 
25 
sugar at the retail level to ensure sufficiency and safety of sugar. 
26 
To accurately determine the supply of sugarcane and sugar in the country and to 
27 
provide sound basis for diversification, planning and policy, it is mandated that the following 
28 
shall register with SRA: 
8 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
the 
(a) Sugarcane farmers, farmers' associations/federations, mills/mill associations, 
sugarcane consolidators and muscovado producers; 
(b) Distilleries, using molasses, sugar or sugarcane as ingredient for alcohol: 
Provided, that, importers and consignees of imported molasses regularly report to 
SRA, among other information, the volume of molasses imported; 
(c) International and domestic sugar traders, including wholesale traders and 
repackers, muscovado and molasses traders and custom bonded warehouses 
(CBW) of food processors importing sugar for re-export: Provided, that 
international and domestic sugar traders and CBW food processors shall likewise 
submit a list of all their warehouses of sugar; 
(d) Warehouses of sugar, and business establishments that manufacture or sell bags 
or sacks for packing sugar; and 
(e) Cane hauling and harvesting service providers. 
SRA shall provide the forms and make sure that the manner of registration shall be 
least possible cost to the stakeholder concerned particularly agrarian reform 
16 
beneficiaries. The information gathered shall be used to develop a sugarcane industry 
17 
database which shall be administered and updated by SRA. Any of the aforementioned 
18 
entities that shall not register shall be subject to penalties imposed by SRA. 
19 
SEC. 10. Classification and Regulation of Supply of Sugar. - The SRA, in the 
20 
exercise of its regulatory authority, shall classify imported sugar according to its appropriate 
21 
classification when imported at a time that domestic production is sufficient to meet 
22 
domestic sugar requirements. The Bureau of Customs (BOC) shall require importers or 
23 
consignees to secure from SRA the classification of the imported sugar prior to its release. 
24 
SEC. 11. Value-Added Tax (VAT) Zero percent on Refined Sugar for Export. -
25 
Pursuant to Section 106 (A) (2) (a) (1) of the National Internal Revenue Code, VAT zero 
26 
percent shall be imposed on refined sugar withdrawn from warehouses for actual physical 
27 
export to the world market. 
28 
The Bureau of Internal Revenue, in consultation with SRA and industry stakeholders, 
29 
shall issue the necessary regulation to implement this Section. 
9 


1 
SEC. 12. Sugarcane Industry Development Fund. -
There is 
hereby 
2 
established 
a 
Sugarcane Industry Development Fund, or Sugar Fund, as a special 
3 
account in the General Fund, which shall exist for a period of ten (10) years. It shall be 
4 
administered by the Sugar Regulatory Administration. 
5 
The Sugar Fund shall support the implementation of programs mandated in this Act. 
6 
Specifically, the Sugar Fund shall be set aside and earmarked for the following: 
7 
8 
9 
10 
11 
12 
13 
14 
(1 ) 
(2) 
(3) 
( 4) 
Thirty percent (30%) for grants to Block Farms under the Block Farm 
Program; 
Thirty percent (30%) for Socialized Credit under the Farm Support and Farm 
Mechanization Programs; 
Thirty percent (30%) for research and development, capability building and 
technology transfer activities under Research and Development, Extension 
Services, Human Resources Development, and Farm Support Programs; and 
Ten percent (10%) for scholarship grants to be provided under paragraph (b) 
15 
of Section 6, Human Resources Development. 
16 
The Sugar Fund shall be constituted and collected from the proceeds of fifteen 
17 
percent (15%) of the: 
18 
i. 
Value Added Tax (VAT) on the sale of imported refined sugar and other products 
19 
derived from sugarcane; 
20 
ii. Value Added Tax (VAT) on the sale of domestically-produced refined sugar and 
21 
other products derived from sugarcane; and 
22 
iii. Tariff collected on the importation of raw sugar (AHTN 1701.11.00), refined sugar 
23 
(AHTN 1701.99 and its subheadings), and premix sugar (AHTN 1701.91.00 and 
24 
2106.90.52). 
25 
All proceeds from the above sources, as the case may be, shall be remitted by the 
26 
Bureau of Internal Revenue and the Bureau of Customs to the Sugar Fund. At the 
27 
expiration of the ten-year period, all remaining amounts of the Sugar Fund shall be remitted 
28 
to the National Treasury. 
10 


1 
SEC. 13. Implementing Rules and Regulations. - The Department of Agriculture, 
2 
in consultation with concerned government agencies and sugarcane industry stakeholders, 
3 
shall issue the Implementing Rules and Regulations of this Act within ninety (90) days 
4 
starting from the effectivity of this Act. 
s 
SEC. 14. Separability Clause. -
If any provision of this Act is declared 
6 
unconstitutional, the validity of the remaining provisions hereof shall remain in full force and 
7 
effect. 
8 
SEC. 15. Repealing Clause. - All laws, decrees, executive orders and rules and 
9 
regulations or part or parts thereof inconsistent with any provision of this Act are hereby 
10 
repealed, modified or amended accordingly. 
11 
SEC. 16. Effectivity. - This Act shall take effect after fifteen (15) days from its 
12 
pUblication in the Official Gazette or in at least two (2) newspapers of general circulation. 
Approved, 
11