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Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

3162
HOUSE BILL NO.

INTRODUCED BY REPRESENTATIVE CHRISTIAN S. 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 traders. 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.

 UNABIA.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 3162

Introduced by Honorable CHRISTIAN S. UNABIA

AN ACT
STRENGTHENING THE PRICE SUPPORT SYSTEM FOR
AGRICULTURAL PRODUCE, AMENDING 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,especiallyrice,[and]com, | COCONUT, BANANA,
MANGO, CASSAVA, CAMOTE AND OTHER AGRICULTURAL
PRODUCTS THAT THE SECRETARY 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 in the increase of


the retail prices of such AGRICULTURAL products beyond the
paying capacity of the average consumer.[: Provided, further,
Thatthe Government shallalso endeavor to} THE SECRETARY
OF AGRICULTURE SHALL PERIODICALLY DETERMINE
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 PRESIDENT, MANAGER, MANAGING

PARTNER OR ANY OFFICER OR EMPLOYEE OF THE


CORPORATION OR ASSOCIATION WHO DIRECTLY
PARTICIPATED IN THE COMMISSION OF THE UNLAWFUL
ACT SHALL BE HELD LIABLE.

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

SEC. 2; A new section after Section 25 is hereby added to be
denominated as Section 25-A of the same Actto read as follows:

“SEC. 25-A. TAX CREDIT TO TRADERS THE
SECRETARY OF AGRICULTURE SHALLENCOURAGE
TRADERS TO BUY AT THE MAXIMUM FLOOR PRICE OF
THE AGRICULTURAL PRODUCTS THROUGH A TAX CREDIT
SCHEME.

ANY TRADER WHO BUYS THE AGRICULTURAL
PRODUCTS OF FARMERS AT THE MAXIMUM FLOOR PRICE
OR A PRICE ABOVE THE MINIMUM BUT BELOW THE
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


\ EVEN 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 in the Official Gazette or in a newspaper of general circulation.

Approved,