Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
st Regular Session

House Bill No.4904

TRODUCED BY REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

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On July 1, 2017, Philippine Quantitative Restrictions (QR) on Rice will be
lifted. Very simply, this means that henceforth, the Philippines will not be
able to prescribe a rice import volume on the basis of a national rice supply
shortfall. Depending on where one stands on the argument on food security,
food self-sufficiency, rural poverty and farmers’ income, the lifting of the
QR can be seen as a boon or a bane for consumers and the rural sector, alike.

Many have speculated on what the impact(s) of this event will be for a
country of 104 million people and where the national staple is rice. What
will the consequences be in a country where more than 2 million hectares of
rural lands are devoted to rice farming? Ina situation where farmers are not
fully supported in planting the national staple, can we still expect Filipino
farmers to continue doing so, especially when rice will now be freely
imported into the Philippines? As it is, the IRRI-Philrice Benchmarking
Study released for 2015-2016, quoting the International Food Policy
Research Institute (IFPRI), reports that in a climate changed world, in the
next twenty years, rice prices will increase by 32% to 37%, yield losses in
rice would be 15% and 20 million hectares of the world’s rice growing areas
will be at risk particularly India, Bangladesh and Vietnam.

But what about the interests of millions of consumers in a country where
almost a fifth of the population are considered “poor?” There are many
profound questions indeed.

However, what is clear and cannot be argued, is the fact that without a law
prescribing tariffs for rice, the unbridled option to import rice at current
international prices will mean opening the floodgates to rice importations at
effectively near “duty-free” levels leaving Filipino farmers totally
defenseless especially, at current regional costs of production where the
Phillippines lags Vietnam, Thailand and India.



Enacting a law that prescribes tariffs for rice importations cannot be seen as
otherwise than a move to support millions of rice farmers comprising a
majority of more than 40% of the Philippines’ population which remain rural
based. It is not anti-consumer but pro-livelihood for millions of our rural
poor which will be condemned to even greater depths of poverty without it.

This Bill, when passed into law, will prescribe tariff rates which will not
only support and ensure the future of Philippine Agriculture and the millions
who depend on it (both tillers and consumers); but will also ensure that the
rates will comply with our international treaties and obligations.

Furthermore, the collection of these tariffs, will be a revenue raising activity
for the Government which can be set aside to strengthen the rice sector to
meet head-on the challenges of confronting import threats and more
importantly, keeping the Philippines food secure.

Funds that will be allocated to the rice sector can follow a Rice Industry
roadmap that shall be based on the following principles: 1) rice industry
competitiveness rather than self-sufficiency; 2) farmers’ profitability; 3)
support focusing on the whole-value chain rather than on production alone;
and 4) technology-oriented, location, situation, and farmer-specific support
services.

Unless, the end-view and objective of Government policies and programs is
profitability and increasing rural income for farmers, Philippine Agriculture
will never be robust and dynamic. Passage of measures in support of the
rural sector, such as this one, will ensure that the said sector will have a fair
shot and chance to bring into fruition the modernization and lasting
development of Philippine Agriculture.

For the foregoing reasons, immediate pas
requested.

sage of this Bill is earnestly

fave
ARTHUR, YAP
Representative


Republic of the Ph
HOUSE OF REPRE!
Quezon City

[EENTH CONGRESS
st Regular Ses

House Bill NA9O4

INTRODUCED BY REPRESE!

ITATIVE ARTHUR C. YAP

AN ACT
AMENDING THE REPUBLIC ACT 8178, OTHERWISE
KNOWN AS THE “AGRICULTURAL TARIFFICATION ACT”
AND PRESIDENTIAL DECREE NO. 4, AS AMENDED,
OTHERWIS KNOWN AS, “PROCLAIMING = THE
CREATION OF THE NATIONAL GRAINS AUTHORITY AND
APPROVING FUNDS THEREFOR”

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

SECTION 1. Amendment. - The President of the Republic of the Philippines is

hereby authorized to effect the following amendments on Section 2, Paragraph 1

and Section 5, Paragraph 3 of RA 8178, and Subparagraph (xii), Paragraph 1,

Section 6 of Presidential Decree No. 4, as follows:

2. Declaration of Policy. It is the policy of the State to make
the country’s agricultural sector viable, efficient and globally
competitive. The State adopts the use of tariffs in lieu of non-tariff

import restrictions to protect local producers of agricultural products


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[except in the case of rice, which will continue to have quantitative
import restrictions. ]

"Sec. 5. Amendment —

Sec. 6 (a) Powers —
(xii) to establish rules and regulations governing the
importations of rice and to license, impose and collect fees and

charges for said importation for the purpose of equalizing the selling

of such imported rice with normal prevailing domestic prices.”

pri
“In the exercise of this power,[the Council after consultation
with the Office of the President shall first certify to a shortage of rice

ical

that may occur as a result of a short-fall in production, a cri

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 Volume obligation of the Philippines under the WTO]. The

Authority shall undertake direct importation of ri

¢ or it may allocate
import quotas among certified and licensed importers, and the
distribution thereof through cooperative and other marketing channels,
at prices to be determined by the Council regardless of existing floor
prices and the subsidy thereof, if any, shall be borne by the National

Government.”


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SECTION 2. The composition of the NFA Council provided under Section
4 (Policy Implementation) of PD No. 4, as amended, shall reinstate the DA
Secretary or his alternate as member of the Council. The NFA Council shall have
the authority to monitor and oversee all the activities of the government with

regards to rice importation,

SECTION 3. Additional Funding in Support to the NFA — Funding and
other institutional development support for the NFA to function based on its new
mandate shall be provided by the government through general appropriations.

collection on

SECTION 4. Collection from Rice Importation. — All tari

rice imports shall accrue to the Rice Industry Development Fund (RIDF) and shall

be deposited in a special account with the National Treasury, The Most Favoured
Nation (MEN) tariff on rice imports shall, for a period of three years shall not be

less than 100% as determined by the Department of Agriculture and approved by

the President of the Republic of the Philippines.

SE

MON 5. Importations borne out of commitment from various Free
Trade Agreements (FTAs) and Bilateral Negotiations, — For the purpose of this

Act, the following shall be enforced:

a) In case of in-quota imports of rice from WTO member economies
and out-quota imports of rice from ASEAN member countries,

only the NFA or the appropriate government agencies shall be


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allowed to import these quantities. The private sector may be
allowed to import rice at MFN rates.

b

The NFA may be authorized to import rice tariff-free upon
recommendation of the NFA Council and the DA Secretary and

approval of the President. In the event that the NFA imports rice at

zero tariff, half of the net income earned from the said importation
shall be used to augment the Rice Industry Development Fund. For
this purpose, NFA must have a separate accounting for its tariff

free rice imports.
SECTION 6. Rice Industry Development Fund. ~ For the purpose of this
Act, the Rice Industry Development Fund shall be established and utilized to
support the implementation of the Rice Industry Competitive Enhancement
Program of the government. All tariffs (in- and out-quota) collected from rice
imports shall be set aside and earmarked by the Department of Finance (DOF) and
the Department of Budget and Management (DBM) to form part of the Rice

Industry Development Fund which will be ac ed by the DA in support to the

Rice Industry Roadmap and the NFA as prescribed by the guidelines created by the
NFA Council.

The fund shall not replace the DA’s rice program budgetary allocation. The
regular budget of the DA shall be used primarily to fund agricultural support
measures to be undertaken as a safety net for the industry in its transition to a more

competitive sector amidst the influx of rice imports. The rice tariff collected shall


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only form part of the budget to finance the implementation of the Rice Industry
Roadmap. This Fund shall be on top of the regular appropriation of the DA as

contained in the GAA.

SECTION 7. Rice Industry Roadmap, ~ Upon the enactment of this Act,

the Department of Agriculture, together with relevant agencies shall be given a

maximum of 180 days to finalize the rice roadmap to restructure the government's

deliv

‘y of support services for the sector. As part of this Roadmap, a Five-Year
Rice Program shall be implemented to provide alternative livelihood for those who
will be affected by the shift in the import policy. The DA shall provide a list of
farmers in the Government’s transition program in which they will eventually
graduate into a more appropriate industry.

The roadmap shall be based on the following principles: 1) rice industry

competitiveness rather than self-sufficiency, 2) farmers’ profitability; 3) support

focusing on the whole-value chain rather than on production alone; and 4)

technology-oriented, location, situation, and farmer-specific support services.

The activities to be included in the roadmap shall include, but not limited to,
the following:

a) Technology development and transfer;

b) Provision of administrative and technical support to lending institutions

for clients’ easier access to financing schemes (e.g. credit, insurance);

c) Post-harvest facilities and mechanization;


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d) Hiring of additional Agriculture Extension workers/technicians to
provide direct assistance to farmers;

e) Capacity building activities for DA personnel and LGUs; and

f) Provision of social protection schemes for farmers that may cover

pension benefits, medical and hospitalization, maternity benefits, and

CTION 8. Repealing Clause. — All other laws, decrees, executive
orders, issuances, rules and regulations, or part thereof inconsistent with this Act

are hereby likewise repealed or amended accordingly.

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“TION 9. Separability Clause, — If, for any reason, any section or
provisions of this Act is declared unconstitutional or invalid, the other sections or

provisions not affected thereby shall remain in full force and effect.

SECTION 10. Effectivity. - This Act shall effect fifteen (15) days after its

publication in the Official Gazette or in at least two (2) newspapers of general

circulation.

APPROVED,