WLUSE WF REPRESENTATIVES:
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pare 371 AUG 2016
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BY: ann

REGISTR \TION UNIT
Seventeenth Congress BILLS AND cl ¥ SPRVICE
First Regular Session

HOUSE BILL No._ 8410
Introduced by Honorable Peter M. “Sr. Pedro” Unabia

EXPLANATORY NOTE

This bill seeks to strengthen the price support system under Republic Act
No. 7607, otherwise known as the “Magna Carta of Small Farmers” by
prohibiting traders from purchasing certain agricultural products below the
minimum floor price set by the Secretary of Agriculture.

Under the current price support system, farm gate prices set by the
Department of Agriculture are merely optional and not mandatory. Further, though
the law already provides that the price support covers certain agricultural products,
it applies mainly for rice and corn under the current practice. Except for the
National Food Authority (NFA) and the Provincial Government of Isabela, no
other government agency implements the price support system.

The price support system that NFA and Isabela are doing is to directly
procure rice and corn from farmers at a competitive price. This bill, however,
seeks to establish price control by making the farm gate prices of certain
agricultural products by which the traders shall buy the said agricultural products.

The Secretary of Agriculture shall set a minimum and maximum floor price
or a reasonable range that will ensure increase in income for farmers and an
equitable return of investments for trad The minimum floor price shall become
mandatory while the maximum floor price is optional.

Likewise, this bill provides for a tax credit scheme that will encourage
traders to buy at the maximum floor price that will further increase the income.
With the increase in income, the farmers will strive towards bigger and better
production.


It is a well-known fact that farmers are among the poorest in the Philippines.
According to the Bureau of Agricultural Statistics, a farmer’s annual average
income is about P23,000.00 or less than P2,000.00 a month. Prohibiting and
penalizing the purchase of certain agricultural products below the floor price will
not only help increase the income of farmers but it will also prevent any trader to
take advantage of the small farmers.

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

PETE ” UNABIA.


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Seventeenth Congress.
First Regular Session

: 3410
HOUSE BILL NO.

Introduced by Honorable Peter M. “Sr. Pedro” Unabia

AN ACT
STRENGTHENING THE PRICE SUPPORT SYSTEM FOR
AGRICULTURAL PRODUCE, AME: NG FOR THE PURPOSE
REPUBLIC ACT NO. 7607, OTHERWISE KNOWN AS THE “MAGNA
CARTA OF SMALL FARMERS” AND APPROPRIATING FUNDS
THEREFOR

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

SECTION 1. Section 25 of Republic Act (RA) No. 7607 is hereby
amended to read as follows:
“Sec. 25. Price Support. — The Department of Agriculture,
through its appropriate agencies, shall establish a price support system
for certain agricultural products, especially rice, [and] com,

COCONUT, BANANA, MANGO, CASSAVA, CAMOTE

AND

OTHER AGRICULTURAL PRODUCTS THAT THE

3CRETARY
OF AGRICULTURE MAY DETERMINE, taking into consideration
the need to increase the real income of small farmers.|: Provided,

however, That] The price support [established shall] MUST not result


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in the increase of the retail prices of such AGRICULTURAL products
beyond the paying capacity of the average consumer.[: Provided,
further, That the Government shall also endeavor to] THE
SECRETARY OF AGRICULTURE SHALL PERIODICALLY

DE!

3RMINE AND set THE MANDATORY farm gate prices that
respond to the changing economic conditions.

THE MANDATORY FARM GATE PRICES SHALL CONSIST
OF AN UP-TO-DATE MINIMUM AND MAXIMUM FLOOR PRICE,
A REASONABLE PRICE RANGE THAT ENSURES INCOME TO.
FARMERS AND EQUITABLE RETURN OF INVESTMENTS TO
TRADERS.

IT SHALL BE UNLAWFUL FOR ANY TRADER TO BUY
THE AGRICULTURAL PRODUCTS AT A PRICE LOWER THAN
THE CURRENT MINIMUM FLOOR PRICE. ANY TRADER WHO
COMMITS THE UNLAWFUL ACT SHALL BE PUNISHED BY
IMPRISONMENT OF NOT LESS THAN ONE (1) MONTH BUT
NOT MORE THAN SIX (6) MONTHS OR A FINE OF NOT LESS
THAN FIFTY THOUSAND PESOS (P50,000.00) BUT NOT MORE
THAN ONE HUNDRED THOUSAND PESOS (P100,000.00), OR
BOTH, AT THE DISCRETION OF THE COURT. IF THE

OFFENDER IS A CORPORATION OR ASSOCIATION, THE


ny PRESIDENT, MANAGER, MANAGING PARTNER OR ANY

z OFFICER OR EMPLOYEE OF THE CORPORATION OR

3 ASSOCIATION WHO DIRECTLY PARTICIPATED IN THE

4 COMMISSION OF THE UNLAWFUL ACT SHALL BE HELD

5 LIABLE. THE BUSINESS PERMIT OF ANY TRADER AS WELL

6 AS THE CERTIFICATE OF REGISTRATION FOR CORPORATION

7 FOUND GUILTY OF THE UNLAWFUL ACT SHALL ALSO BE

8 REVOKED.

9 In addition, the Government shall minimize importation of farm
10 inputs which are being developed locally, such as fertilizers and seeds,
a except at times of calamities or emergencies.”

12 SEC. 2. A_ new section after Section 25 is hereby added to be

13 denominated as Section 25-A of the same Act to read as follows:

4 “SEC. 25-A. TAX CREDIT TO TRADERS. — THE
15 SECRETARY OF AGRICULTURE SHALL ENCOURAGE
16 TRADERS TO BUY AT THE MAXIMUM FLOOR PRICE OF THE
7 AGRICULTURAL PRODUCTS THROUGH A TAX CREDIT
18 SCHEME.

19 ANY TRADER WHO BUYS THE AGRICULTURAL
20 PRODUCTS OF FARMERS AT THE MAXIMUM FLOOR PRICE

21 OR A PRICE ABOVE THE MINIMUM BUT BELOW THE


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MAXIMUM FLOOR PRICE IS ENTITLED TO A TAX CREDIT
EQUIVALENT TO THE DIFFERENCE BETWEEN THE
MAXIMUM AND MINIMUM FLOOR PRICE, OR BETWEEN THE
PRICE ABOVE THE MINIMUM BUT BELOW THE MAXIMUM
AND THE MINIMUM FLOOR PRICE. THE AMOUNT OF TAX
CREDIT, HOWEVER, SHALL BE COMPUTED BASED ON THE

MAXIMUM FLOOR PRICE E'

EN IF THE TRADER PAYS MORE

THAN THE MAXIMUM FLOOR PRICE.”

SEC. 3. The amount necessary to cover the initial implementation of
this Act shall be charged against the appropriation of the Department of
Agriculture for support services under the current General Appropriations Act.
Thereafter, the required budget for the continued implementation of this Act shall
be submitted to the Department of Budget and Management for inclusion in the
General Appropriations Act.

SEC.4. Within ninety (90) days from the approval of this Act, the
Department of Agriculture, in consultation with the Department of Trade and
Industry and the Bureau of Internal Revenue concerning the tax credit, shall
promulgate the rules and regulations implementing the provisions of this Act. The
implementing rules and regulations issued pursuant to this section shall take effect
thirty (30) days after its publication in two (2) newspapers of general circulation.

SEC.5. This Act shall take effect fifteen (15) days after its publication


1 in the Official Gazette or in a newspaper of general circulation.

2 Approved,