Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS,
First Regular Session

5023

House Bill No.

Introduced by Representative GLORIA MACAPAGAL ARROYO.

AN ACT TO PLACE SAFETY NETS FOR FILIPINO RICE PRODUCERS BY
IMPOSING TARIFFS IN LIEU OF QUANTITATIVE RESTRICTIONS ON RICE
IMPORTS, DIRECTING TARIFF COLLECTIONS FROM RICE IMPORTS TO
PROJECTS AND PROGRAMS THAT ENHANCE RICE PRODUCTIVITY AND
INCREASE FARMERS’ INCOMES, AND FOR OTHER PURPOSES.

EXPLANATORY NOTE

In line with the government achieving food security in an efficient, transparent
and cost-effective mann to abolish the sole power of the National Food
Authority to import rice specially during shortages is necessary.

The proposed legislation adopts the use of tariffs in lieu of non-tariff import restrictions to
protect local paddy producers in a direct and transparent manner and, at the same time
generate revenues required to provide the infrastructure and finance the programs that
improve farmers’ productivity

To address the fears and concerns of farmers, the revenues that will be generated shall
be collected into a special fund to be called the Rice Farmers Development Fund for the
purpose of providing the necessary support services such as, but not limited to, irrigation,
farm-to-market roads, post-harvest equipment and facilities, credit, research and
development, extension services, other market infrastructure and market information.

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

GLORIA MACAPAGAL ARROYO

2™ District, Pampanga


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

5023

House BillNo.__

Introduced by Representative GLORIA MACAPAGAL ARROYO.

AN ACT TO PLACE SAFETY NETS FOR FILIPINO RICE PRODUCERS BY
IMPOSING TARIFFS IN LIEU OF QUANTITATIVE RESTRICTIONS ON RICE
IMPORTS, DIRECTING TARIFF COLLECTIONS FROM RICE IMPORTS TO.
PROJECTS AND PROGRAMS THAT ENHANCE RICE PRODUCTIVITY AND.
INCREASE FARMERS’ INCOMES, AND FOR OTHER PURPOSES

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

SECTION 1. Short Title. — This Act shall be known as the Rice Safety Net Act
of 2017

SECTION 2. Declaration of Policy. — It is the policy of the State to enhance
farmers’ incomes and ensure food security by increasing the productivity of the country’s
rice industry and making the protection accorded to rice producers transparent and
effective. Towards this goal, the State adopts the use of tariffs in lieu of non-tariff import
restrictions to protect local paddy producers in a direct and transparent manner and, at
the same time, generate revenues required to provide the infrastructure and finance the
programs that improve farmers’ productivity.

The State shall endeavor to raise rice farm productivity by providing the necessary
support services such as, but not limited to, irrigation, farm-to-market roads, post-harvest
equipment and facilities, credit, research and development, extension services, other
market infrastructure and market information. These support services shall, at least
partially, be financed from the revenue collections from agricultural tariffs

SECTION 3. Definition of Terms. — For the purposes of this Act, the following
terms are defined as follows:

(a) “Quantitative import restrictions” shall refer to non-tariff restrictions used to limit
the amount of imported commodities, including but not limited to discretionary
import licensing and import quotas, whether qualified or absolute;

(b) “Rice” shall refer to rice in the husk, husked rice, semi-milled or wholly-milled rice,
or broken rice, classified under the Harmonized System of Commodity
Classifications as used in the Tariff and Customs Code of the Philippines; and


(©) “Tariff rate equivalent” shall refer to the rate of tariff that will allow the same
protection given by existing quantitative import restrictions, reflected by the
average price gap between domestic prices and world prices

SECTION 4. Repeal. — Subparagraph (xii), paragraph (1) Section 6 of
Presidential Decree Number 4 (National Grains Authority Act of 1972) as amended by
Republic Act 8178 (Agricultural Tariffication Act of 1996), which reads

“Sec. 6 (a) Powers. (xii) To establish rules and regulations governing the
importation of rice and to license, impose and collect fees and charges for said importation
for the purpose of equalizing the selling price of such imported rice with normal prevailing
domestic prices.

In the exercise of this power, the Council after consultation with the Office of the
President shail first certify to a shortage of rice that may occur as a result of a short-fall in
production, a critical demand-supply gap, a state of calamity, or other verified reasons
that may warrant the need for importation: Provided, That this requirement shall not apply
to the importation of rice equivalent to the Minimum Access Value obligation of the
Philippines under the WTO. The Authority shall undertake direct importation of rice or it
may allocate import quotas among certified and licensed importers, and the distribution
thereof through cooperatives and other marketing channels, at process to be determined
by the Council regardless of existing floor prices and the subsidy thereof, if any, shall be
bome by the National Government.” is hereby repealed.

All other laws or provisions of law prescribing quantitative import restrictions on
rice or granting government agencies the power to impose such restrictions on rice are
hereby repealed.

SECTION 5. Institution of Tariff Protection. — In lieu of quantitative import
restrictions, the tariff rate of 100% shall be imposed on rice imports beginning 01 January
2018 to accord transparent trade protection for rice producers.

SECTION 6. Reduction of Tariff Rates. — Any subsequent reduction of the tariff
rate shall be based on the implementation of a comprehensive Rice Farmers
Development Program to improve the sector's competitiveness. The Department of
Agriculture shall develop the program in consultation with the rice sector farmers,
stakeholders and the Congressional Oversight Committee on Agriculture and Food
(COCAF), Provided further, that program implementation shall be validated and evaluated
by the COCAF.

SECTION 7. Rice Farmers Development Fund. — The tariff revenues generated
by the Government from rice imports shall be collected into a special fund at the National
Treasury called the Rice Farmers Development Trust Fund created for the exclusive
purpose of financing investments and expenditures under the Rice Farmers Development
Program. The Governor of the Bangko Sentral ng Pilipinas or his representative shall
serve as the Treasurer of the RDTF. The Bureau of Customs and the Department of
Finance shall certify to the Department of Agriculture the volumes of rice imports and the
tariff revenues generated from such imports at quarterly intervals. The Department of
Budget and Management shall certify to the Department of Agriculture the allocation of
such tariff revenues to the financing of public investments and support services in
agriculture, as directed by the Rice Farmers Development Trust Fund Board. Provided,
however, that the said special fund would be separate, distinct and in addition to the
appropriations received by the Department of Agriculture. Provided, further, that any
saving made each year shall accrue to the special funds set by this Act

SECTION 8. Anti-Rice Smuggling Fund. — One percent (1%) of the Rice
Farmers Development Fund shall be allocated to the Coast Guard and other concerned



agencies in the prevention of smuggled agricultural products that enters the domestic
market and in the implementation of the Anti-Dumping Act and Countervailing Act.

SECTION 9. Rice Farmers Development Fund Board. — The Rice Farmers.
Development Trust Fund shall be managed according to policies set by the Rice
Development Trust Fund Board, The Board shall be composed of:

Chairman Chairman of the COCAF/Chairman of the Senate Committee
on Food and Agriculture

Vice Chairmen: DA Secretary and the Vice Chairman of COCAF

Members: Peasant Sector Representative, House of Representatives
and two (2) representatives of national associations of rice
farmers appointed for a two-year term by the Secretary of
Agriculture

The RFDF Board shall meet at least once each semester. The RFDF is empowered
to organize a Technical Committee and Secretariat to undertake its operational activities
The budget for the operations of the RTDF Board and Secretariat shall be approved by
the Secretary of Agriculture and drawn from interest earnings of the RFDF

SECTION 10. Emergency Provisions. — The President is empowered to allow
the import of rice at a lower tariff rate to meet emergency requirements as well as the
requirements of the government's rice distribution program which is targeted to the
poorest of the poor. Provided, such imports may be treated as compliance to the Minimum
Access Volume (MAV) commitments under the WTO, The Secretary of Agriculture shall
recommend the applicable rate and the volume to be imported on the basis of technical
analysis and participatory consultation

The Secretary of Agriculture shall formulate and implement simple and transparent
rules and regulations governing the importation of rice under such tariff rate quota,
including the allocation of the quotas among importers, Provided, that tariff proceeds from
such imports shall accrue to the Rice Farmers Development Fund.

SECTION 11.  Separability Clause. — Any provision of this Act declared
unconstitutional shall not affect the validity of the other provisions thereof

SECTION 12. Repealing Clause. — All orders, rules, regulations and other
issuances, or parts thereof, which are inconsistent with this Act, are hereby repealed or
modified accordingly

SECTION 13. Effectivity. ~ This Act shall take effect thirty (30) days following its
publication in a newspaper of general circulation

Approved,