HOUSE °F REPRESENTATIVES

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No,_2703

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

On September 26, 1972, with the declared policy to promote the
integrated growth and development of the grains industry, Presidential
Decree No. 4, otherwise known as the National Grains Industry
Development Act, was issued. The said decree created the then National
Grains Authority. This agency has since been reconstituted to become the
National Food Authority (NFA).

One of the powers and functions of the NFA agency under Section 6
(a) (xiii) of P. D. No. 4 was to establish rules and regulations governing the
export of rice, corn and other grains.

On June 11, 1978, however, this power was limited under P. D. No.
1485. The export of these agricultural products could only be made
whenever there is an excess production and/or supply. The Council, which
governs the NFA, shall first issue a certification proving excess production
and/or supply, before any authority to export is issued.

This amendment was anchored on food security. The argument was
quite simple. The very limited supply of local rice and corn should be
exclusively used for local consumption.

In the world of decades past, when the supply of rice, corn and grains
was limited and global production had just started to increase due to
investments in production and post harvest infrastructure, the policy made
sense then. But today, when regional production in different parts of the
world are consistently at surplus levels and are shipped all over the world to
take advantage of deficits and better commodity prices, this limitation has
effectively worked against the Filipino farmer. The fear in decades past of

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absent food supply sources has been mitigated today with greater trade flows
mandated by international and multi-lateral trade agreements.

While the Philippines’ accession to the World Trade Organization,
and regional free trade agreements, have allowed the entry into the
Philippines of foreign commodities to the benefit of Filipino consumers, the
flow of imports has not worked to the benefit of Filipino farmers since the
limitation to freely export their grain commodities has placed them on the
receiving end of the impact of import prices, while denying them the benefit
of better prices in the international market were they allowed to export their
produce.

The limitation, has effectively rendered nugatory the power of the
NFA to authorize export of rice and other grains, simply because it has
become rare for Philippine grain crops to register excess production or

supply.

Lately, this provision is being seen as the impediment to the growth of
a very promising sub-industry of the grains sector. This pertains to the
premium grain varieties, such as the organically grown, the aromatic, the
hybrid or the fancy, or other high end rice and corn varieties.

While these grain varieties do not enjoy high demand from local
consumers, probably due to the fact that it very expensive, it enjoys
immense popularity, not only from consumers in Western countries, but
likewise from progressive Asian countries. According to one news report, it
still briskly sells although it is at premium prices of about $350 per MT in
the overseas market, prohibitive by Philippine consumer standards.

This bill seeks the liberalization of grains export through the
elimination of the requirement for the NFA Council to certify to the fact of
excess production or supply of grains before an authority to export is issued.

With such, the export of Philippine grains, especially the premium or
high grade varieties, will be possible. In turn, our Filipino farmers shall have
the opportunity to shift their production to these grain varieties and have a
higher income potential.

In view of the foregoing, the immediate passage of the bill, filed as
House Bill No. 193 by the undersigned in the Sixtgénth Congress, is
earnestly sought.

Representdtive


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 2709

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

AN ACT

LIBERALIZING THE EXPORT OF RICE, CORN AND
OTHER GRAINS OR RELATED AGRICULTURAL
PRODUCTS, AMENDING FOR THE PURPOSE
SECTION 6 (a) xiii OF PRESIDENTIAL DECREE NO. 4,
OTHERWISE KNOWN AS THE NATIONAL GRAINS
AUTHORITY ACT, AS AMENDED, 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 “Grains
Export Liberalization Act of 2016”,

SECTION 2. Declaration of Policy. — \t hereby declared the policy
of the State to provide its farmers and agricultural workers better income
opportunity, encourage the increase in their productivity and improve their
profitability, by allowing greater latitude in the export of their grains
produce. The farmers shall no longer be limited by the deficiency in grains

production for them to be able to export their produce.


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SECTION 3. Amendment of Section 6 (a) xiii of Presidential
Decree No. 4, otherwise known as the National Grains Authority Act. —
Section 6 (a) xiii of Presidential Decree No. 4, otherwise known as the
National Grains Authority Act, as amended, is hereby further amended, to
read as follows:

“SECTION 6. — Administration _ Powers,

Organization and Management. — The powers, organization

and management of the Administration shall be as follows:

a) Powers. — In order to effectively carry out its functions
and responsibilities as provided in this Act, the
Administration shall have the following powers:

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(xiii) To establish rules and regulations governing the
export of rice, corn and other grains and/or their
substitutes and their by-products/end-products, and
to collect fees and charges for such exportation at
rates to be determined by the Council;
In the exercise of this power, the Authority shall
directly undertake the exportation of rice, corn and
other grains and/or their substitutes and/or by-
products/end products [whenever there is an excess
production and/or supply, or it may allocate
export quotas among certified and_ licensed
exporters; Provided, however, That the Council

shall first certify to such excess production


and/or supply after proper consultation with the
Office of the President].

SECTION 4, Implementing Rules. — Within sixty (60) days after the
effectivity of this Act, the National Food Authority (NFA) Council as
created under Presidential Decree No. 4, as Amended, is hereby mandated to
issue its Implementing Rules.

SECTION 5. Separability Clause. - If any provision of this Act, or
any parts thereof, is declared unconstitutional, the same shall not affect the
validity and effectivity of the other portions.

SECTION 6. Repealing Clause. - All laws, executive orders,
presidential decrees, proclamations, rules, regulations, issuances and
enactments of parts thereof inconsistent with this Act are hereby repealed or
modified accordingly.

SECTION 7. Effectivity. - This Act shall take effect fifteen (15) days
from its complete publication in the Official Gazette of in a newspaper of

general circulation in the Philippines, whichever comes earlier.

APPROVED.