Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO.

Authored by HON. JOSEPH VICTOR G. EJERCITO

EXPLANATORY NOTE

Agrarian reform addressed the distributive inequities of the
tenancy system. However, with the exit of landlords from rural
markets, the farmer finds himself without access to credit, to market
opportunities and to many other things. Government intervention in
rural markets has to address the urgent need to institutionalize ways
of packaging factor inputs in agriculture to bring about innovative,
efficient and competitive modes of production and marketing.

This bill rationalizes and restructures the existing government
organizations in order to establish harmony and coordination between
policy-making and implementation, and market-development
programs geared towards supporting the farmer as he transforms
himself into an entrepreneur.

The National Agricultural Marketing Council will serve as the
policy-making body for agricultural trading, with the Regional
Agricultural Marketing Councils as its branch offices. The following
attached agencies are also created to serve proprietary roles in market
development and intervention: (a) The National Agricultural Trading
Corporation (NATCOR), to function as the market development and
intervention arm of the council; (b) The Public Warehousing
Corporation, to operate Commodity Exchange Centers (CECs);
establish terminal markets all over the country, and maintain the
country's buffer stocks of food grain and other food commodities; (c)
The Agricultural Credit and Guarantee Corporation of the Philippines
(AGCREDOR) to provide credit assistance and guarantee cover on
project loans and inventory financing for commodities deposited in the
warehouses of the Public Warehousing Corporation's warehouses.

Under the proposed set-up, the specialized functions are clearly
identified, delineated and distributed among the appropriate agencies
so as to avoid conflict of interest situations that have so often
hamstrung past policy making and implementation. Moreover, the
separation of policy-making and enforcement from proprietary


functions paves the way for the eventual transfer of the latter
functions to the private sector, with competitive markets geared for
efficiency.

In view of the foregoing, immediate passage of this bill is
earnestly requested.

JOSEPH VICTOR G. EJERCITO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 2993

Authored by HON. JOSEPH VICTOR G. EJERCITO

AN ACT

TO PROMOTE THE AGRICULTURE INDUSTRY, STABILIZE PRICES
OF AGRICULTURAL PRODUCTS AND ENHANCE FOOD SECURITY
THROUGH THE EFFECTIVE PRODUCTION, PROCESSING,
MARKETING AND DISTRIBUTION OF AGRICULTURAL
PRODUCTS, RATIONALIZING AND RESTRUCTURING FOR THE
PURPOSE, ALL EXISTING GOVERNMENT ORGANIZATIONS IN
AGRICULTURAL PRODUCTION, DISTRIBUTION, MARKETING
AND OTHER SUPPORT PROGRAMS, APPROPRIATING FUNDS
THEREFOR, AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives in
Congress assembled:

SECTION. 1. Title - This Act shall be known as the “National
Agricultural Marketing Act of 2010.”

SEC. 2. Declaration of Policy - It is hereby declared to be the
policy of the State to ensure the general welfare of farmers, who
constitute a majority of the national population, and are key to the
production of sufficient food supplies all over the country. It shall also
be the policy of the state to ensure the attainment of food security at
all times as an essential element of national security and a critical
element of national development. For purposes of this Act, food
security shall be defined as the avail ity and stability of food supply
in a manner accessible to every Filipino of any economic and social
standing, given any change in the country’s climatic, social, political
and economic condition. The State recognizes that the goal of food
security is best served through the operation of competitive markets
that will provide sufficient incentives to farmers and producers to
increase the productivity levels of their farms.

For the above purposes, the state hereby rationalizes and
restructures existing government structures and programs on the
production, processing, marketing and distribution of agricultural
products.


SEC. 3. Creation of the National Agricultural Marketing
Council - There is hereby created a policy-making and implementing
body corporate called the National Agricultural Marketing Council,
which shall have the general powers and attributes of a corporation as
set forth in the Corporation Law and the particular mandate to perform
the following functions, powers and responsibilities:

(a) To formulate policies, plans and programs on food
production, post harvest handling, storage, milling, distribution and
credit support, including the coordination of its implementation among
the various agencies and institutions of the government and the
private sector;

(b) To ensure the best administration of market development
programs for
agricultural commodities and food products;

(c) To ensure an adequate flow of these products to consumers
as well as
a fair return to producers and prevent inefficient and wasteful methods
of distribution;

(b) To foster the empowerment of agricultural producers into
effective associations or corporations under their own control for
Greater unity of effort in marketing;

(c) To promote the establishment and financing of a farm
marketing systems of producer- owned and_ producer-controlled
cooperative associations and other agencies;

(d) To set and review annually the government's buffer grain
stock requirements at the national and local levels and to ensure that
these requirements are achieved;

(e) To effect, with the Regional Agricultural Marketing Councils
and/or other government entities as implementing agents, the
domestic procurement of the government's buffer grain stock through
purchases of warehouse receipts or quedans of grain deposits in
government, farmer-cooperatives and private warehouses and/or by
buying grain produce directly from farmer cooperatives;

(f) To cause the direct importation of rice and allocation of
import quotas among private entities, especially certified and licensed
farmer cooperatives;

(g) To promulgate the government's “stabilization price” for
grains to assure farmers with a reasonable mark-up on their


production cost and participation in the profits that may be realized
from the sale of the government's buffer grain stock;

(h) To reorient the country’s food production policies, plans and
programs in such a way that the thrust of increasing the productivity
of farmers is not only in terms of yield per unit area but more so in the
aggregate income from farming enterprises;

(i) To promote and coordinate plans and programs of assistance
to producers through input supplies, purchases, payments and other
operations, including low or no interest loans in partnership with
available financial sources or institutions;

(j) To institutionalize and actively promote the adoption of
sustainable agricultural practices at all farm levels so that steady
production of various food commodities to cope with the demands of a
growing population is achieved in a way that maintains the
productivity of the soil and diminishes any adverse impact to the
immediate environment; and

(k) To undertake other tasks and activities as may be necessary
to ensure
the attainment of efficient agricultural marketing systems and food
security.

SEC. 4. Governing Council. - The powers, functions and affairs
of the Council shall be exercised and directed by a governing council to
be chaired by the Executive Secretary, with the Secretary of
Agriculture as Vice Chair and with the following as members:

(a) The Secretary of the Department of Agrarian Reform;

(b) The Secretary of the Department of Finance;

(c) The Secretary of the Department of Trade and Industry;

(d) The Secretary of the Department of Public Works and Highways;
(e) The Secretary of the Department of the Interior and Local
Government;

(f) The Secretary of the Department of Budget Management;
(g) The Secretary of the Department of Social Welfare and
Development;

(h) The Secretary of the Department of Transportation and
Communications; and

(i) The Secretary of the Department of Environment and Natural
Resources.

The governing council shall meet regularly at least every month
on any date to be determined by the Chair; Provided, That the Chair
may convene special meetings to discuss urgent matters needing
immediate resolution. The council members shall be entitled to per
diem for every meeting actually attended


by them and other remunerations as may be determined by them. It
shall prescribe the rules and regulations to govern its deliberations and
other official actions.

SEC. 5. Organization and Staff - The management of the
day-today operations of the Council shall be vested in an executive
director who shall be appointed with the rank of an undersecretary by
the President of the Philippines.

The Council shall set up the organizational. structure, staffing
pattern, qualification standard, compensation scale, functions and
authorities of their officers and employees pursuant to pertinent laws,
rules and regulations being implemented by the Civil Service
Commission and the Department of Budget and Management.

SEC. 6. Regional Agricultural Marketing Councils . - To
operate and serve as the branch offices of the National Agricultural
Marketing Council at the regional level, there are hereby instituted
Regional Agricultural Marketing Councils in all administrative regions of
the country.

The Regional Agricultural Marketing Councils shall be under the
administrative supervision and control of the National Agricultural
Marketing Council and shall implement in the region the policies, plans
and programs of the
latter,

SEC. 7. Composition of the Regional Agricultural
Marketing Council. - The Regional Agricultural Marketing Council
shall be composed of:

(a) All the provincial governors of the region;

(b) The regional directors of the Department of Agriculture;

(c) A representative from the farming/fisheries sector;

(d) A representative from the agricultural marketing and.trading
sector; and

(e) A representative from the consumer sector

All provincial governors with the Department of Agriculture
Regional Director shall by majority vote choose the sectoral
representatives from among nominees respectively submitted by
recognized sectoral associations in the region. Thereafter, the council
members shall elect their Chair, Vice-Chair and other officers.

SEC. 8. Support Staff - The Regional Agricultural Marketing
Council shall appoint, from among its members or qualified outsider, a
regional director who shall manage and direct the day-to-day
operations of the regional council. The concomitant organizational
structure and plantilla of personnel shall be set up by the regional
council subject to the approval of the national council.


SEC. 9. Creation of the NATCOR - There is hereby created a
body corporate to be known as the National Agricultural Trading
Corporation (NATCOR) an attached agency to the Council hereinafter
referred to as the NATCOR which shall evolve the most efficient,
dependable economical and equitable marketing systems for
agricultural products.

SEC. 10. General Powers and Functions of the NATCOR.
The NATCOR shall have the following powers and functions:

(a) To formulate a medium term agricultural market
development plan which shall be updated every year;

(b) To provide farmers and fisher folks an up-to-date market
information by the establishment of an integrated and efficient
nationwide information access system that will guide producers and
other stakeholders to make decisions on what and how much to plant
and where and when to market:

(c) To gather, analyze and disseminate market information on
various foreign countries’ food supply, domestic and export demand,
local and export prices and other relevant data;

(d) To identify markets for Philippine agricultural products and
assist in the planning of market centers, marketing channels and
distribution networks to reduce marketing costs for producers and
ultimately the cost to consumers;

(e) To foster and assist in the development of new or expansion
of existing domestic and foreign markets through institutional
arrangements like contract growing, market matching, market
intelligence and other promotional activities for agricultural products;

(f) To provide farmers, fisher folks and other persons or firms
access to existing public and private researches supporting food
market development activities;

(g) To disseminate information on inspection, classification,
standardization, and grading system for all agricultural products to
enhance global competitiveness;

(h) To formulate as part of its market development thrust more
efficient ways, systems, and facilities for harvesting, threshing or
shelling, drying, storage, milling, packaging, post-harvest handling,
transportation and/or shipping of agricultural products for purposes of
reducing costs and ensuring stable consumer supply;


(i) To require as a tool for market information the annual
registration and publication of a directory of all persons, natural or
juridical, engaged or intending to engage in wholesaling, milling,
processing, warehousing and transporting of agricultural products,
including byproducts thereof;

(j) To coordinate with the Department of Transportation and
Communications towards establishing more efficient, regular,
adequate, suitable and economical systems of transporting and/or
shipping of food products for purposes of reducing marketing costs and
ensuring availability of basic transport which is central to the whole
chain of agricultural production and distribution; and

(k) To promulgate policies, plans, programs, rules and
regulations, sanctions and penalties as may be necessary for the
effective exercise of the powers and functions of the NATCOR.

SEC. 11. Strengthening of the Agricultural Marketing
Information System. - For the effective implementation of the policy
enunciated in this Act, the Bureau of Agricultural Statistics shall be
strengthened as the principal line agency of the Republic of the
Philippines for agricultural statistics and marketing information. It shall
serve the data requirements of the NATCOR.

SEC. 12. Cooperation with other Government Agencies
and Private Business Organization - A\l units and agencies of the
government shall support and cooperate with the NATCOR in the
implementation of its functions and programs. Likewise, private
research organizations, purchasing and consuming organizations,
boards of trade, chambers of commerce, other associations of business
or trade organizations, transportation and storage agencies and
organizations, or other persons or corporations engaged in the
production, transportation, storing, processing marketing and
distribution of agricultural products shall support the NATCOR in the
implementation of its functions.

SEC. 13. Creation of the Public Warehousing Corporation -
There is hereby created a government-owned corporation to be known
as the Public Warehousing Corporation, hereinafter called the
Corporation, which shall be attached to the Council and have the
following functions, powers and responsibilities:

(a) To establish and maintain warehouses and post-harvest
facilities for foods, grain and other agricultural products in all areas of
production in the country;

(b) To provide warehousing/storage services and post-harvest
facility assistance for the farmers’ grain and food agricultural
stocks/inventories;


(c) To issue, pursuant to existing laws and regulations,
corresponding warehouse receipts or quedan for the farmers' grain and
food inventory deposits;

(d) To store and safe-keep the government's food or grain buffer
security stocks as directed by the Council;

(e) To lease out, sell, build, and transfer warehouses and/or
post-harvest facilities to farmer-cooperatives and federations, subject
to the approval of the Council;

(f) To establish and operate Commodity Exchange Centers
(CEC); and

(g) To exercise the general powers and attributes of a
corporation as set forth in the Corporation Law.

SEC. 14. Authorized Capital Stock of the Corporation - The
authorized capital stock of the Corporation shall be Five billion Pesos
(P5,000,000,000) divided into five million (5,000,000) common shares
of stock which shall be subscribed and paid for by the national
government and government institutions.

SEC. 15. Governing Board - The powers, functions and affairs
of the Corporation shall be exercised and directed by a governing
board composed of the following:

(a) Executive Director of the Council as Chair;

(b) General Manager of the Corporation as Vice-Chair;

(c) President of AGCRECOR as member;

(d) Director of NATCOR as member; and

(e) Director of the Bureau of Agricultural Statistics as member.

The Board shall meet regularly at least every month and
convene special meetings to discuss urgent matters. The Board
members shall receive per diem for each meeting actually officiated
and other remuneration as may be determined by the Board. It shall
prescribe the rules and regulations to govern its deliberations and
other official actions.

SEC. 16. Organization and Staff - The management of the
day-to-day operations of the Corporation shall be vested in a general
manager who shall be appointed by the Council.

The governing board shall set up the organizational structure,
staffing pattern, qualification standard, compensation scale, functions
and authorities of their officers and employees pursuant to pertinent
laws, rules and regulations being implemented by the Civil Service
Commission and the Department of Budget and Management.


SEC. 17. Commodity Exchange Centers (CEC) - The
Corporation shall establish at all terminal markets in the country,
especially in Metro Manila and cities in Luzon, Visayas and .Mindanao,
Commodity Exchange Centers which shall serve as central trading
facilities for grains in the regions to provide ready market for farmers’
produce and promote efficiency of grain distribution to consumers
under a transparent marketing system which enhances the interest of
farmers and consumers alike. Strategically located warehouses of the
National Food Authority (NFA) shall be the sites and business officers
of the Commodity Exchange Centers. NFA personnel, because of their
expertise in warehousing and grain classification and grading, shall
serve as the core staff for the operation of the CECs.

Initially, daily public bidding of grains shall be on the basis of "on
the spot" commodity. Bidding shall later be on the basis of quedans or
warehouse receipts for grain inventories deposited in the warehouses
of the Corporation, the CECs or private bonded warehouses. Trading
on agricultural commodity “futures” shall be the final phase that the
CECs shall work for to achieve. Similarly, the CECs shall initially cover
grains only and later include other food and agricultural commodities.

SEC. 18. - Responsibility for Credit Assistance and
Guarantee Cover - The provision of credit assistance and guarantee
cover on project loans and inventory financing for commodities owned
and deposited by farmers, consumers, and traders in the warehouses
of the Public Warehouse Corporations and franchised private bonded
warehouses shall be the primordial responsibility of the Quedan and
Rural Credit Guarantee Corporation, which is hereby attached to the
Council and renamed as the Agricultural Credit and Guarantee
Corporation of the Philippines, hereinafter referred to as AGCRECOR.

SEC. 19. Operating Guidelines - The AGCRECOR shall adhere
to the following operating guidelines:

(a) Provide production loans to farmers/fisherfolk through their
primary cooperatives or federations by direct lending, co-financing
schemes, providing lending banks with especial time deposit,
rediscounting lending banks’ production loan receivables and similar
mechanisms so as to reach out to as many rural clients as possible;

(b) Encourage lending institutions to extend project loans for
production, warehouses, post-harvest machineries and equipment,
land transportation and shipping, bulk and the like, by providing” a
guarantee cover on such loans;

(c) Provide guarantee cover on inventory loans for grain or food
commodities owned and deposited by farmers, consumers and traders


in the PWC warehouses, Commodity Exchange Centers and franchised
private bonded warehouses;

(d) Extend loans directly for the aforementioned projects and
food inventory when and where no lending banks are available or
willing to provide the loans;

(e) Endeavor to provide soft-term loans by sourcing and
coordinating grants, no-interest and low interest funds and blending
them with commercially sourced funds;

(f) Submit for the Council's approval and funding, a credit plan
and budget for the undertakings envisioned in paragraphs (a) and (d)
above, detailing therein the per region loan volume targets, expected
beneficiaries, repayments, arrearages and defaults on previous loans.
Likewise, a separate plan shall be submitted in regard to the
guarantee operation; and

(g) Remit back to the Council all repayments for current loans
and recoveries on past due loans funded by the said Council.

SEC. 20. Increase in Fund Base - To achieve the vital credit
assistance and guarantee cover envisioned in this Act, the authorized
capital stock of AGCRECOR is hereby increased to Five billion pesos
(P5,000,000,000) divided into common shares of stock of the same
par value and with the same ' government-private sector ownership
structure spelled out under Republic Act No. 7393. At the start of the
year and upon the endorsement of the Council, the Department of
Budget and Management and the Department of Finance shall program
and execute the national government's and government institutions’
(LBP, DBP, SSS, GSIS, PAGCOR, PCSO, etc.,) subscriptions and
Payment thereof for the government portion of the authorized capital
stock of AGCRECOR until such government portion is fully completed
within five (5) years.

Furthermore, to enhance credit assistance to farmers/ fisherfolk,
cooperatives/federations and other food enterprises envisioned in this
Act, the national government through the Secretary of Finance shall
guarantee the AGCRECOR’s borrowings, duly approved and endorsed
by the Council, from government or private, domestic or foreign,
financial institutions.

SEC. 21. Incentives for Banks’ Credit Support - The
guarantee obligation of AGCRECOR shall be “sovereign” in nature and
deemed as the obligation of the national government in order to entice
much greater credit support from the banking sector since such
guaranteed loan receivables shall be considered as compliance with
the Agri-Agra Law, have access to the rediscounting window of Bangko


Sentral ng Pilipinas and exempted from the “single-borrower limit” and
“risk asset ratio requirements”.

SEC. 22. Compliance with Agri-Agra Law - All banking
institutions are hereby mandated to allocate at least fifteen percent
(15%) of their loanable funds to the agricultural sector. Furthermore,
the provisions of the Agri-Agra Law, Presidential Decree No. 717, as
amended on substantial compliance through the purchase of
government securities, are hereby repealed. Bank loans extended for
grain inventories deposited in the warehouses of the Corporation,
Commodities Exchange Centers and franchised private bonded
warehouse operators shall be deemed as compliance with the Agri-
Agra Law.

SEC. 23. Devolution of the Agribusiness Group, the
National Agribusiness Corporation and the Agricultural Credit
Policy Council - The Agribusiness Group of the Department of
Agriculture, the National Agribusiness Corporation and the Agricultural
Credit Policy Council are hereby devolved as follows:

(a) The records of the Agribusiness.Group shall be transferred to
the NATCOR;

(b) The records, researches and reference materials of the
Agricultural Credit Policy Council shall likewise be turned over to the
NATCOR;

(c) All other properties, assets and unexpended appropriations or
corporate operating budget of the National Agribusiness Corporation
and the Agricultural Credit Policy Council shall be transferred to the
Council;

(d) The Comprehensive Agricultural Loan Fund created under
Executive Order No. 113, dated 24 December 1986 is hereby
transferred to the Council; and

(e) Officials and employees of the said group and agencies shall
be devolved into the NATCOR on the basis of merit and qualification.

SEC. 24. Devolution of the Personnel, Properties, Assets,
Records, and Unexpended Appropriation of the National Food
Authority (NFA) - The present warehouses, post-harvest facilities
and equipment, trucks, and utility vehicles of the National Food
Authority shall be transferred as the initial government equity to the
Public Warehousing Corporation. All personnel attendant to the said
grain. facilities shall likewise be transferred to the Corporation.

All other personnel, properties, assets, records and unexpended
appropriations of the National Food Authority are transferred to the


National Agricultural Marketing Council and National Agricultural
Trading Corporation in a manner that the said Council shall decide.
This shall include imported rice and corn already in the country and
such other stocks that may arrive pursuant to the current importation
thereof. Said stocks shall be disposed of in accordance with the new
policy of the Council.

SEC. 25. Outstanding Obligations of the NFA - A\l obligations
of the National Food Authority upon the approval of this Act shall be
transferred to and absorbed by the national government: Provided,
That those incurred in the current importation shall be paid by the
Council up to the extent of the rice/corn inventory still on hand and
transferred to the Council.

SEC. 26. Options of Devolved Personnel - All personnel
herein devolved and those otherwise not absorbed may opt to retire, if
qualified for retirement, or be laid off and gratuity shall be given as
follows:

(a) Not more than 20 years of service, 1.5 months gross pay per
year of
service; and

(b) More than 20 years of service, 2 months gross pay per year
of service.

Those with pending administrative and/or criminal cases shall be
paid only after exoneration, otherwise they shall forfeit whatever
benefits are due to them.

SEC. 27. Appropriations for the National Agricultural
Marketing Council - The sum needed for the operation and
maintenance of the Council, including the credit funds to support food
production and other undertakings, shall form part of the
appropriations, in the annual General Appropriations Act.

SEC. 28. Appropriation for the National Agricultural
Trading Corporation. - For the initial operation of the NATCOR, the
amount of Two Hundred Million Pesos (P200,000,000) is hereby
appropriated from the current appropriations of the Department of
Agriculture or the National Food Authority. Thereafter, such sum as
may be needed for its operations and maintenance, including the
amount needed for strengthening the Bureau of Agricultural Statistics,
shall be included as part of the appropriations in the annual General
Appropriations Act.

SEC. 29. Appropriations for the Public Warehousing
Corporation - For its initial operation, the amount of Five Hundred
Million Pesos (P500,000,000) is hereby appropriated for the


Corporation from the current appropriations of the Department of
Agriculture or the National Food Authority. Thereafter, such amount
needed for their continuous operation and maintenance shall be
included as part of the appropriations in the annual General
Appropriations Act.

SEC. 30. Appropriations for the Regional Agricultural
Marketing Council - The National Agricultural Marketing Council
shall, out of its financial resources, appropriate such amount as would
be necessary for the start-up and continuous operation of each
Regional Agricultural Marketing Councils.

SEC. 31. Repealing Clause - All laws, decrees, executive
issuances, rules and regulations inconsistent with this Act are hereby
repealed or modified accordingly.

SEC. 32. Separability Clause - The provisions of this Act are
hereby declared to be separable, and in the event one or more of such
provisions are held unconstitutional, the validity of the other provisions
shall not be affected thereby.

SEC. 33. Effectivity Clause. - This Act shall take effect

immediately after its complete publication in at least two (2)
newspapers of general circulation.

Approved,