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

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 2544

Authored by HON. JOSEPH VICTOR G. EJERCITO

EXPLANATORY NOTE

The National Food Authority exercises both regulatory and
proprietary functions over the grain sector, setting import quantities
and at the same time serving as the sole importer of the authorized
volume of imports. Unfortunately, such interventions in the market
over the years has created severe distortions in the rice market,
contributing, among others, to the poor productivity of the rice sector
over the years, the rice supply gap, and the increasing cost of
government actions to fill such gaps and artificially stabilize rice prices
and supply.

This proposed measure seeks to streamline government
intervention in the rice sector by removing the rice importation
function from the NFA and allowing the participation of the private
sector in rice importation. Allowing market forces to work in the
importation, stockpiling and marketing of rice will allow for scarce
government resources to be re-allocated away from costly price
stabilization functions to more productive investment,in rice research
and development, extension services and irrigation.

Specifically, this bill proposes the transformation of NFA from a
grain marketing monopoly to a public regulatory agency focused
primarily on maintaining the buffer stock requirement of the country at
both national and local levels which will allow the country to guard
against price volatility due to natural calamities or emergencies. Along
with this, the NFA shall continue other regulatory functions which
include the licensing and registration of rice importers, allocation of
import quotas among licensed rice traders, maintenance of marketing
information dissemination systems and the inspection of stored food
grains for the purpose of taking inventory. This bill further mandates
the transfer of duplicative functions of the NFA, including the


stabilization of prices and the licensing of warehouses to appropriate
government agencies or local government units.

In view of the foregoing, urgent approval of this bill is earnestly
requested.

mee’

JOSEPH VICTOR G. EJERCITO


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

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 2544

Authored by HON. JOSEPH VICTOR G. EJERCITO

AN ACT
TO STRENGTHEN AND REORIENT THE MANDATE OF THE
NATIONAL FOOD AUTHORITY IN ORDER TO ENSURE FOOD
SUFFICIENCY, FOR THAT PURPOSE RATIONALIZING ITS
FUNCTIONS, AND FOR OTHER PURPOSES

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

CHAPTER 1
GENERAL PROVISIONS

SECTION 1 . Short Title. - This Act shall be known as the
“National Food Authority Rationalization Act of 2010.”

SEC. 2. Declaration of Policy. - Affirming the right of every
Filipino to have access to sufficient food, it is hereby declared the
policy of the State to make all government agencies and corporations
directly responsible for food production oriented toward the attainment
of food security and sufficiency, the enhancement of competitiveness
and transparency in the rice economy and to be more responsive to
the increasing globalization of the agricultural market.

SEC. 3. Policy Goals and Objectives, - To carry out the
foregoing policy, the mandate, programs and functions of the National
Food Authority (NFA), shall be reoriented and realigned towards the
achievement of the following objectives:

a. Ensure available adequate and accessible supply of rice and other
foodgrains during lean periods and in times of calamity and
emergency;

b. Promote regulation aimed at enhancing competitiveness,
transparency and responsibility in the foodgrains marketing industry;
and


c. Encourage private sector participation in the importation of rice and
in production and post-harvest fat iS;

SEC. 4. Reorientation of the National Food Authority - The
functions of the NFA shall evolve to focus primarily on maintaining the
buffer stock requirements of the country. All other developmental and
regulatory function of the NFA shall be transferred to appropriate
government agencies or local government units unless otherwise
provided by this Act.

SEC. 5. Buffer Stock Management. - The NFA shall be the
Primary agency responsible for the management of the buffer stock
requirements of the country. For this purpose, the NFA shall review on
an annual basis the buffer stock requirements of the country at the
national and local levels and shall devise a system of regularly
monitoring the buffer stock levels. For the purpose of ensuring that
desirable buffer stock level of the country are met and maintained, the
NFA may enter into contracts for the procurement of rice for
government; Provided that the volume of rice procurement shall not
be more than the strategic 30-day rice buffer stock requirement of the
country.

SEC. 6. Other Powers and Functions. -The NFA shall exercise
the following responsibilities, powers and functions:

a. To establish rules and regulations governing private sector
importation of rice and collect fees and charges for said importation;

b. To determine and allocate import quotas among private sector
entities and farmer organizations licensed to engage in rice
importation;

c. To coordinate with the Bureau of Agricultural Statistics in the
geheration of marketing information and establish and maintain
marketing information dissemination systems in order to keep the
public informed on the prevailing market situation of foodgrains and
their substitutes and/or their by-products/end-products in different
Parts of the country; and

d. To inspect foodgrains and their substitutes and/or their by-products,
stored by any person, partnership, corporation, or association, for
purposes of taking inventory kind record of such commodities, and to
enter the premises thereof by use of reasonable means.

SEC. 6. Transfer of Mandate. - The following regulatory and
developmental functions of the NFA are hereinafter transferred to the
following:


a. The registration, licensing and supervision of warehouses, whether
bonded or not, and the prescription, imposition and collection of fees
and charges relative thereto to the local government units;

b. The stabilization of prices of rice, corn and other foodgrains at the
farmgate level to the Department of Agriculture;

c. The stabilization of supply anO prices of other foodgrains and other
basic food items at the consumer level to the National Price
Coordinating Council;

d. The development of more efficient ways, systems and facilities for
harvesting, threshing, drying, storage, milling, packaging, post-
harvest handling, and transporting of foodgrains to the Philippine Rice
Research Institute.

e. The registration, licensing, and supervision of persons, natural or
juridical, who shall engage or are engaged in the business of providing
goods and services in support of the different activities involved in the
processing, transporting, marketing, and trading of foodgrains and
their substitutes and/or their by-products/end-products as well as the
imposition and collection of fees, charges, and surcharges in licensing
and regulating the operations of such persons to the Department of
Agriculture:

f. The formulation of plans and programs on foodgrains production,
storage, milling and distribution, as well as the coordination for its
implementation among various agencies of the government and the
private sector to the Bureau of Agriculture and Fisheries Product
Standardization; and

g. The establishment of appropriate post-production technology and
formulation of plans and programs aimed to reduce post-harvest
losses to the Bureau of Post Harvest Research and Extension.

SEC. 7. Role of the Private Sector. -The importation of rice
shall henceforth be open to the participation of and exclusively
undertaken by private sector entities and farmers’ organizations,
subject to appropriate tariffs and quotas; Provided, that the necessary
registration and licensing processes and requirements of the NFA have
been complied with. For this purposes, the policy of open importation
and distribution by all interested private parties shall be fully
implemented.

SEC. 8. Transitory Provisions. -Within one (1) year from the
effectivity of this Act, the NFA shall gradually phase out all its rice
importation activities to give way to the entry of private sector
entities, especially farmers’ organizations, in rice importation;
Provided, that the NFA shall have completely ceased all its rice


importation functions and activities four (4) years from the time of the
enactment of this Act. For this purpose, the NFA shall, within one
hundred twenty (120) days from the enactment of this Act, establish
the necessary rules and regulations for the importation of rice by the
private sector. *

To effect a smooth transition, the NFA shall continue to exercise
its developmental and regulatory functions, until the concerned
government agencies or local government units shall have established
their plans, programs and rules and regulations to implement their
mandate identified in Section 6 above, which in no case shall be no
longer than one (1) year from the effectivity of this Act.

SEC. 9. Rules and Regulations. - The NFA, in consultation with
relevant government agencies and LGUs, farmer organizations and
other stakeholders, shall within one hundred and twenty (120) days
from the enactment of this Act, formulate the necessary rules and
regulations to effectively implement the provisions of this Act.

SEC. 10. Separability Clause. - If, for any reason, any section
or provision of this Act shall be held unconstitutional or invalid, the
other section or provision not otherwise affected shall remain in full
force and effect.

SEC. 11. Repealing Clause. - All laws, presidential decrees,
executive orders, proclamations, rules and regulations which are
inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

SEC. 12. Effectivity Clause. - This Act shall take effect fifteen

(15) days after its publication in the Official Gazette or in at least two
(2) newspapers of general circulation.

Approved,