Ks GEPRESS
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E pare. 0CT_ 37 208

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
Third Regular Session

HOUSE BILL NO. Sse

INTRODUCED BY REPRESENTATIVES
ARIEL B. CASILAO
CARLOS ISAGANI T. ZARATE, EMMI A. DE JESUS, ANTONIO L. TINIO,
ARLENE D. BROSAS, FRANCE L. CASTRO AND SARAH JANE I. ELAGO

EXPLANATORY NOTE

Rice is the staple of 95 % of our people. But our policy makers are killing our rice
industry. They are killing it by relegating the industry to the bottom of government
attention. They are killing it by the choking effect of high production costs. They are
killing it by importation that suffocate our rice farmers in the flood of agricultural
imports and by other neoliberal policies that surrender the industry to rice cartels.
And they are killing it by abuse in the use of our agricultural lands.

From the Marcos regime to the present dispensation, the government’s development
policy for our rice industry swung from the massive state intervention of the Green
Revolution to the “belt-tightening measures” of the “structural adjustment program” of
the World Bank - International Monetary Fund (WB-IMF) and then to the current
liberalization of our economy that largely left our rice industry and its farmers to their
own devise in a globalized market that kills the weak!.

This swing from one end of the policy spectrum to the other has resulted in a rice
industry that suffers from stunted development. It has remained backward,
fragmented, underproductive, unsustainable, its farmers sinking deeper and deeper
into the mire of poverty and misery. And it is presently struggling to stay afloat amidst
the great flood of rice and other agricultural imports into the country. It is rapidly
deteriorating in that most crucial aspect of providing the food security of our people.
Every year, the country has a production deficit vis-a-vis consumption demands and
it has experienced severe supply problems every decade since the 1980s.

In a word, our rice industry is in crisis. This crisis is tamed here and there by stop
gap measures but explodes into a distribution catastrophe once very decade, a
pattern that the country has experienced since the 1980s. And because of this crisis,
our country is in danger of totally losing its food security.

In the distant past, our rice industry was relatively robust. It used to cover some 4.1
million hectares and hosted some 6 million farmers, farm workers and small

1 ‘The Green Revolution in our rice industry was packaged by the Marcos regime as
Masagana 99.


entrepreneurs and workers in rice-linked trade and livelihood. In the 1960s and early
part of the 1970s, this industry had an average production unit of 3 hectares and a
productivity growth of 5.9 % such that the country was self-sufficient in fulfilling the
rice consumption needs of our people and even became a minor rice exporter. But
after the withdrawal of the massive subsidy program in the late 1970s in the wake of
the “belt-tightening measures” of SAP, its productivity fell to 2.02 % in the 1980s and
became stagnant as against a population growth of 2.60 %. In the 1990s, rice
productivity picked up a little at 2.8 % and since then has stagnated in that vicinity
due to increasing costs of production, token government support, conversion-driven
contraction of planted-areas, and climate change.? In consequence, the country
became a net rice importer starting in the late 1980s.

‘The crisis afflicting our rice industry is multi-dimensional. But it can be summed up
in one sentence: our rice industry is in crisis because it runs on a structure that is
dysfunctional to meeting the needs of our country and people. It is dysfunctional
because its organization in production and distribution is not responsive to our goal
of achieving food security based on self-sufficiency, availability, and affordability.
Moreover, it is dysfunctional in terms of policy direction because our government
subordinates the goal of attaining food security to its primary thrust of liberalizing our
agriculture and the national economy. And this is a big part of the dysfunction because
@ government that believes it can achieve food security through economic
liberalization is a government of very narrow options. It sees the suffering of our
people but refuses to act on it because it sees importation as the only solution to the
crisis when it can actually do many things to stop and prevent it from recurring. It is
a government that ties its own hands with the ropes of importation. It will not do the
right thing or it will not do the things that must be done to save our rice industry
from its dysfunction that every now and then turns into a crisis as we have witnessed
in the last seven months, a crisis that is devastating our people.

At the base of this crisis is a dysfunctional property relations that continue to prevail
over the industry. The Kilusang Magbubukid ng Pilipinas estimates that, despite
several agrarian reform programs, three of every four rice farmers still do not own the
land they till. This property relations deprive our farmers of access to resources and
subject them to various exactions that allow them no control over their produce,
keeping them poor no matter how hard they work. Under this property regime, the
harvest of our farmers is captured and their income shaved off by a wide array of
economic predators. From landlords, rural usurers, farm inputs merchants to traders
~ these predators would take a huge slice of the rice produce at each stage of
production and distribution (planting, harvesting, drying, milling, transportation and
marketing) while keeping the prices of palay low. They leave our rice farmers with
only a subsistence share that is barely enough to start production anew, binding
them to a cycle of indebtedness. Their various exactions prevent our rice farmers from
accumulating the fund to improve their farms units and productivity or even to save
for family exigencies. They imprison our rice farmers in perpetual poverty. About 70%
of our rice farmers are poor.

While the Green Revolution in the 1970s failed to increase the income of our farmers,
it succeeded to usher in the corporate rice technology which is actually dysfunctional

2 Our population growth rate has lowered in recent years to an average of 1.6%, But that
still meant some 1.6 million new mouths to feed each year as compared to the industry's
production growth of 2.8% which only yields an average increment of 680,000 MT a year.


to our rice industry. It does not fit into the character of our rice industry which is
small-scale and largely run by poor farmers. It is also import-dependent and it
banished the old self-reliance of our rice industry which was based on indigenous
varieties, technology and materials. That technology now holds our industry in the
vise grip of ever increasing production costs. It now costs at least P60,000 per hectare
to produce the national average of 3.6 metric tons (MT) per hectare, increasing from
P12,000 per hectare in the 1980s. This has made rice production prohibitive to many
farming families that the ages 19 - 55 of the rural population are opting out of the
industry to look for better economic opportunities in the cities and abroad.

‘The Green Revolution had also succeeded to commercialize rice distribution® that the
industry fell to the clutches of rice cartels that control its retail marketing and dictate
the prices in Metro Manila and nearby environs that, in turn, influence the retail
prices of rice in the provinces. Our production-consumption deficit, at 5 to 6 %, is
actually not critical. But since the cartels control about 50 % of the rice supply, they
are able to exploit the consumption level in Metro Manila, which is almost twice the
national average, to create an “availability problem” that triggers periodic rice price
shocks through-out the country. Except for the price shock in 2008, this is the
template of the crisis that occurred in the country in the 1980s, 1995, and most
recently from February to the present this year.

Exacerbating this situation is the dysfunction of a government that at the very least
tolerates rice cartels and, starting with the withdrawal of the rice subsidy program in
the late 1970s, treats our rice industry and food security as a mere sideshow to its
bigger thrust of liberalizing our national economy. In its policy direction narratives,
the government makes it a regular avowal to intensify rice production per hectare.
But the real agenda of this intensification campaign, which is driven by new high-
yielding but high-cost farm technologies with little government support, is not really
the attainment of food security for the country. It is actually to free up more
agricultural lands from rice cultivation for the expansion of foreign investments-led
production for export within the framework of fully liberalizing our agriculture. This
is coupled by the institutionalization of the policy that makes importation as the first
and primary option for filling shortages in the domestic rice supply.

These policy thrusts, which became more and more the development trajectory of
governments that succeeded the Corazon Aquino regime, especially after the
country’s entry to the World Trade Organization, launched our rice industry to the
road of perdition and to the precipice of the present crisis it is in. After Aquino’s
Calabarzon came Ramos’ “regional industrial centers” which Estrada tried to outdo
with his “agriculture and fisheries development zones” which Arroyo tried to outdo
with her “growth areas” that integrated whole regions into connected and integrated
investment basins.* Through land use and crop conversions, these calibrated spatial
plans constituted a sustained assault on our rice lands and rice farmers who stood
to be dislocated by the expansion.

2 In the 1950s, rice was primarily produced for consumption such that 65 % of it was in
households and only 35 % was in the commodity circuit. This was the basis of the self-
sufficiency of that period. The Green Revolution turned that equation upside down. It
totally commodified rice, including those in the households of farmers.

* During the Benigno “Noynoy” Aquino presidency, all talk of medium-term development
based on spatial plans ceased for the simple reason that the country finally ran out of
space for investment basins.


‘As a consequence of this frenetic build-up and expansion of space for export
production, the development of our rice industry and quest for food security was
deprioritized. The infrastructure projects for the investment basins got the highest
priority in the mobilization of scarce and precious public resources and funds, giving
only a token funding for our rice industry and food security.

The rice production intensification program failed because of limited government
support, higher costs and unaddressed climate change. The yield per hectare has
been slow to climb and even stagnated, puncturing a periodic gap between
productivity and consumption demands. But where rice production intensification
failed, the expansion of foreign investment-led export production had succeeded in
massively converting rice lands, destroying some 2 million rural livelihoods and
employment, gravely affecting national productivity while weakening the potential of
our rice industry for self-sufficiency. Our rice lands, which constitute our primary
food base, shrunk from 4.1 million hectares in the 1960s to 2.4 million hectares. The
industry severely lacks the infrastructure requirement to support government targets
of increased yield per hectare. The expansion also further fragmented our rice farm
units to an average of 1.5 hectares which, in the absence of full government support,
aggravates production unsustainability.

As our rice productivity fell, the government used the perennial inability of our rice
production to meet consumption demands as the pretext for turning more and more
to rice importation. In effect, it is punishing our rice farmers for underperformance
when it actually gave the industry only so little in terms of production and
infrastructure support. Since 2000, our country has imported an average of 1.22
million MT a year, turning the country into the world’s biggest rice importer.

Our people are now paying dearly for these policies. Our rice industry has ceased to
be sustainable due to high costs and low prices that keep our farmers indebted and
poor. Its productivity is the lowest in the Asian region, making the country highly
vulnerable to periodic shortfalls which rice cartels exploit to create distribution crisis
and manipulate prices. And with government propensity to import rice, our food
security is now hitched to the foreign rice market.

‘These, in broad strokes, are the dimensions of the crisis of our rice industry. It is a
crisis of inequity in the distribution of the social product which keeps our farmers
poor. It is a crisis of economic unviability and unsustainability characterized by high
production costs and low prices of palay. It is a crisis of underproduction and flawed
distribution characterized by low productivity and the dominance of cartels and high
retail prices of rice. Most of all, it is a crisis of policy direction characterized by the
primacy of economic liberalization and importation while putting the development of
our rice industry to the backburner of government policy thrusts.

As our rice industry stands on the precipice, the crisis of policy direction is heading
for the plunge as the Duterte administration implements a medium-term
development plan that essentially imposes on the country more of the same
dysfunctional policies and programs that, in the first place, brought our rice industry
to the edge of the cliff. That plan is centered around a “Build, Build, Build” Program
that raises taxes to fund a massive infrastructure build up that, again, has little for
the rice industry and constitutes a heightened assault on our rice lands. It has
ignited an inflation surge that, at 6.4 % in August 2018 and still surging, is the
highest in nine years and hitting rice prices the hardest. In some places, such as in


Zamboanga, Sulu and Tawi-tawi, retail prices have already hit the ceiling and beyond
at P80-90/kilo. As of this writing, people are forming beelines at NFA-accredited
stores to buy rice at controlled purchase of three kilos for each individual. This
distribution crisis would have people in Marikina lining up in Quezon City to skirt
around the NFA-imposed limit.

To address this distribution crisis, the Duterte administration refused to look at its
roots and to move against its structural defects. It preferred to push our rice industry
to the gorge. To eliminate the crisis of our rice industry, it is treading on a policy
direction that will altogether kill the industry. No industry, no crisis. After more than
a decade of our people having successfully stalled the lifting of the quantitative
restrictions on rice as imposed by the WTO and the ASEAN Free Trade Agreement,
the Duterte administration is now poised to surrender our rice industry to the
tariffication regime of global trade which will open our industry to unlimited
importation. Rice tariffication will not only lift the remaining protection of our rice
industry. It will finish our rice industry off, like the many innocent victims of Oplan
Tokhang.

Hence, the urgency of this bill.

This bill seeks to lift our rice industry out from the multi-dimensional crisis that
wasted away its productive capability, stunted its development and forestalled our
attainment of food security. The result of extensive consultation with rice farmers,
consumer groups and other industry stakeholders, it is part of the broader Agrarian
Reform and Rural Development agenda which our peace-loving people are pushing to
translate into concrete measures to help advance the third substantive agenda - the
‘Comprehensive Agreement on Socio-Economic Reforms - of the peace talks between the
GRP and the NDFP. It is a tandem legislation to House Bill 555 or the Genuine
Agrarian Reform Bill as it stands on the free land distribution of GARB in addressing
the root cause of the crisis of our rice industry.

This bill, therefore, echoes the demand of our farmers, consumers, other industry
stakeholders and the masses who are now reeling from the rice crisis - the demand
for the government to realize the vox populi principle of democracy that its
commitment to regional and multi-lateral trade agreements cannot be greater than
their obligation to ease the suffering of our people.

In line with this demand of our people, this bill begins with elevating into a state
principle the idea that food security is a fundamental right of our people. Upon this
realization, it imbues the state with the political will to march toward the goal of
achieving food security by putting the national effort of addressing the roots of the
crisis of our rice industry at the topmost of government priorities and to pour into the
effort the level of resources and funding necessary for addressing the structural
defects of our rice industry and retooling it so its full potential to provide for our
people their primary staple can be realized. To this effect, it provides for the allocation
of P495 billion (including a separate budget for NFA palay procurement from local
production) for implementing within three years its nucleus and complementary core
programs.

‘The nucleus program of this bill will provide our farmers a holistic production support

program that consists of installing a collateral-free credit facility, farm inputs support
and extension services. A subtext of the program is a poverty reduction thrust that


will provide focused intervention for targeted beneficiaries made up of the poorest of
our rice farmers. The nucleus program and its subtext will address the inability of
our rice farmers to accumulate funds for improving their productivity because of the
dysfunctional property regime that slices a big chunk from the share of our rice
farmers in the produce.

Like a wheel with rays, the nucleus program will be surrounded by core programs
that complement the center by ensuring that the infrastructure requirements, from
irrigation to post-harvest, for enhancing the productivity of our rice industry are
completed and fulfilled. A crucial part of the core programs is the creation of the
policy and legal environment for protecting our rice lands from conversion and
reclassification and protecting our farmers from ejectment and various exaction
schemes so the real value of the fruits of their labor will redound to them and their
families. It will fortify the National Food Authority so it can better fulfill its main
function of procuring palay from our rice farmers for reserve and buffer stocking at
farm gate prices that will make rice farming profitable once again and of providing
affordable rice to our people.

The bill takes a strong stand against importation because of its attrition effects on
our rice industry. Its authors believe that hitching our food security to the global
market is a dangerous idea, a sure formula for the systemic hunger of our people
especially because the government's poverty alleviation programs are floundering in
failure. The bill, therefore, creates a National Rice Supply Security Council that will
have the main function of ensuring that importation is resorted to only in times when
local production has been proven after investigation to be incapable of filling rice
supply shortages in the domestic market.

On these premises and in order to stop the crisis of our rice industry from spiraling
out of control, the approval of this bill is earnestly and urgently sought.

REP. Qe CASILAO

ANAKPAWIS Party-list

REP.CARLOS ISAGANI T. ZARATE REP. EMMI A. DE JESUS
BAYAN MUNA Party-list GABRIELA Women’s Party
te .
a
REP. ANTONIO L. TINIO REP. ARLENE D. BROSAS
ACT Teachers Party-list GABRIELA Women’s Party
REP. FRANCE L. CASTRO REP. SARAH JANE I. ELAGO

ACT Teachers Party-list KABATAAN Party-list


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
Third Regular Session

8512

HOUSE BILL NO.

INTRODUCED BY REPRESENTATIVES
ARIEL B. CASILAO

CARLOS ISAGANI T. ZARATE, EMMI A. DE JESUS, ANTONIO L. TINIO,

ARLENE D. BROSAS, FRANCE L. CASTRO AND SARAH JANE I. ELAGO

‘THE RICE INDUSTRY DEVELOPMENT ACT

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

CHAPTER I
Title, State Policies and Objectives

SECTION 1. Title. - This Act shall be known as The Rice Industry Development
Act of 2018.

SECTION 2. State Policies and Principles. - The State holds that food security
forms part of the fundamental rights of the Filipino people.

Upon this principle, it is the policy of the State to give the highest priority to the
development of the national rice industry and, in line with such prioritization, to
allocate the public resources and funds necessary to enhance to the fullest the
productive capability of the rice industry, restructure its distribution and
marketing linkages in order to make the industry sustainable, achieve for the
country food security based on food self-reliance and self-sufficiency, increase the
income of rice farmers and improve their living conditions, and ensure the
accessibility and affordability of rice to the consuming population.

Rice importation is injurious to our rice farmers, weakens our rice industry,
undermines our collective efforts to attain food security, and harmful to the
national economy in the long run. To avert these negative effects, the State rejects
any policy of giving first preference to rice importation in fulfilling the needs of
the domestic market. In lieu thereof, it is the policy of the State to fulfill domestic
consumption requirements by nurturing our rice farmers towards enhancing
their productive capability.

‘The State sees land use conversion as a serious threat to the sustainability of our
agricultural food base and a clear and present danger to our food security. To


protect our rice industry and to remove the danger to our food security and in
order to align all efforts towards achieving food self-reliance, it is the policy of the
State to prohibit the conversion and reclassification of rice lands to other uses.

The State recognizes the indispensable role of our rice farmers in attaining food
security based on food self-reliance and self-sufficiency. It is therefore the policy
of the State to uphold and promote their welfare and to protect their security of
tenure and other rights as farmers.

Finally, it is the policy of the State to develop a national industry that is
responsive to the welfare and interest of rice farmers and consumers and
complements the well-rounded development of agriculture and the local rice
industry.

SECTION 3. Objectives. - This Act has the following objectives:

a) To develop within a mandated fixed schedule the domestic rice industry and
increase its productivity toward attaining food security based on food self-
reliance and self-sufficiency through:

1. the institutionalization of the provision of necessary and auxiliary
production support program and services to rice farmers;

2. the completion of the infrastructure and facilities requirements for
developing the rice industry; and

3. the creation of a policy and legal environment for the protection of rice
farmers and the rice industry;

b) To increase the income of rice farmers, alleviate their poverty and empower
them through:

1. the implementation of transitional measures for poor-focused government
support program for the poorest rice farmers;

2. the institutionalization of viable and enhanced government price support
program for the produce of rice farmers;

3. the creation of structures that will enhance the participation of rice
farmers in decision making on matters related to the rice industry; and

4. the creation of transitory mechanisms for the eventual transfer of
production and post-harvest facilities to the control of rice farmers; and

¢)

To develop the rice distribution system within the framework of establishing
closer linkages between the rice farmers and consumers to ensure rice
affordability for the general public.


CHAPTER I
Definition of Terms

SECTION 4. Definition of terms. - Unless the context provides otherwise, the
following terms are used in this Act to mean as follows:

a. Agrarian reform beneficiaries are farmers who possess the qualifications of
the beneficiaries of the land distribution and tenurial improvement programs
of Republic Act 6657 otherwise known as the “Comprehensive Agrarian
Reform Law of 1988”.

b. Cartel is any group of business entities that should be otherwise in
competition with one another but combine with one another by acting in a
way that one act complements or supports the similar acts of others in the
combination, enabling the group to dominate the market through controlling
supply and fixing the price. It is a form of collectively rigging the market as it
eliminates competition as the instrument for setting the price of goods and
commodities. In this Act, the term is used to refer to rice cartels.

c. Collateral-free refers to a loan condition which does not require the putting
up of fixed assets as collateral for the grant of the loan.

d. Credit auxiliaries refers to farmers’ organizations, rural loan associations or
rural credit cooperatives designated and authorized by the Department to act
as structural arms to help the government extend its credit facility to rice
farmers.

€. Credit cooperatives refers to cooperatives extending loans the majority of
whose members are rice farmers or whose clienteles are rural-based.

{. Department refers to the Department of Agriculture (DA).

g. Engaging in cartel operations refers to entering into combination with
others who are dealing in the same product and same market and performing
acts that are uniform or complementary to the acts of others in the
combination that result in artificial shortage and in the increase of prices. In
this Act, the term is used to refer to rice cartel operations.

h. Farmers’ organizations refer to rice farmers’ organizations consisting of
farmers who have associated or organized themselves to achieve a common
purpose or serve their common interest.

Farm inputs include seeds, fertilizers, herbicides, pesticides and farm tools
which are used for rice production.

j. Farm machines and equipment are mechanized tools such as hand tractors,
power tillers, sprayers, mini-harvesters, and threshers used in the various
processes of rice production and harvesting;


. Farmers’ marketing cooperatives are farmers’ cooperatives which specialize
in marketing their palay produce.

Farm production cooperatives are farmers’ associations or cooperatives
whose membership is based on the labor contribution of their members.

. Food security refers to a situation in which the food requirements of the
people are secured and sustained by continuous sufficient supply from local
production and are available, accessible and affordable to the consumers. Its
essential element is self-reliance through self-sufficiency in food production.

. Hoarding refers to the undue accumulation by a person or combination of
persons of any basic commodity beyond his or their normal inventory levels
or the unreasonable limitation or refusal to dispose of, sell or distribute the
stocks of any basic necessity or prime commodity from the channels of
reproduction, trade, commerce and industry. Under this Act, hoarding refers
specifically to rice hoarding.

. Land reclassification refers to the legislative act or process of changing the
classification of lands by the local government units (LGUs).

. Land-use conversion refers to the process of changing the use of the land.

. Leaseholder is a farmer who works on the land and pays the landowner a
fixed lease rate.

Minimum access volume (MAV) refers to the minimum volume of foreign
agricultural products which a country must allow access to its domestic
market, the volume constituting the minimum share of foreign agricultural
products in the domestic market based on certain proportion of the domestic
consumption requirements under the rules of the World Trade Organization

(WTO).

. Post-harvest facilities refer to farm facilities used in treating and handling
palay after the harvest; these include threshers, dryers, palay silos,
warehouses and mills.

Price support refers to a pricing mechanism in which a portion of the price
of goods and services is paid for by the government.

. Private commercial banks are commercial banks owned and operated by
the private sector.

. Profiteering refers to the sale or offering for sale of any basic necessity or
prime commodity at a price grossly in excess of its true worth.

. Production support refers to a package of government support to rice farmers
to enable them to procure farm inputs for rice production.


x. Research Program refers to the Rice Industry Development Research
Program.

y. Rice erisis refers to a situation in which there occurs a sudden increase in
the prices of commercial rice by more than ten percent (10 %) average of the
previous average price, as determined through investigation by the National
Rice Supply Security Council using Metro Manila as reference, which make rice
unaffordable to the mass of consumers even though the rice supply is
sufficient; or when the actual combined reserved and buffer stocks of the
National Food Authority is down to fifteen (15) days and there is no incoming
procurement delivery within the next ten (10) days and the rice stocks released
by the private sector into circulation in the domestic market fall for five
straight days to below ninety percent (90 %) of the daily consumption
requirements and causes a five (5) percent increase in rice retail prices, as
determined by the National Rice Supply Security Council, using Metro Manila
as reference.

2. Rice farmer refers to a farmer who plants or produces palay.

aa. Rice smuggling is the act of importing rice or bringing any quantity of rice
into the country and transporting, storing and distributing the imported rice
in violation of the policy of this Act on importation as last option.

bb. Rural loan associations refer to associations of farmers or rural residents
who contribute equity share and loan the shares to its members.

cc. Security of tenure refers to a state of possession or exercising control over a
farm land peacefully and free from actual and potential threats of ejectment.

dd, Self-suffictency refers to an attribute in which the food production in the
country meets the supply requirement, eliminating the need to import rice
from foreign sources.

ee. Small-scale rice farmers refer to rice farmers who own no lands or whose
land or produce is not enough to meet the requirements of maintaining their
families.

ff. Social guarantees refer to guarantees issued by farmers’ production
cooperatives or rural credit cooperatives accredited as credit auxiliaries under
this Act, local government officials, or priests in local parishes that vouch for
the credit-worthiness of a farmer-borrower of the Rice Production Socialized
Credit Fund.

gg. Socialized credit fund or facility refers to the credit facility provided by the
state as an assumed responsibility to help rice farmers. The credit facility is
to be exclusively applied for enhancing rice production.


CHAPTER
Implementation Schedule

SECTION 5. Time-bound accelerated implementation. - This Act shall be
implemented within a period of three (3) years the start of which shall be reckoned
after its effectivity.

SECTION 6. Implementation plan. - Within thirty (30) days upon the effectivity
of this Act, the Department of Agriculture shall call a Rice Stakeholders Summit.
The Summit shall be participated by all stakeholders of the rice industry. It shall
have the sole purpose of formulating the Three-Year Implementation Plan for this
Act based on its objectives, core programs and implementation schedule. The
Department shall ensure the effective representation of rice farmers in the
summit and its workshops.

CHAPTER IV
Beneficiary-targeting for Focused Poverty Alleviation Program

SECTION 7. Focused poverty alleviation program for special beneficiaries.
= This Act shall have alll rice farmers as beneficiaries of its component programs.
It also targets the consumers as the end-use beneficiaries of its restructuring
program of the domestic rice market. However, in implementing and dispensing
its component programs, the Department is hereby mandated to give focus to
alleviate the poverty of rice farmers who operate farm units of less than three
hectares and rice farmers with annual income below the rural poverty line as
periodically determined by the census of the Philippine Statistics Authority (PSA).
Such farmers shall be the special beneficiaries of this Act.

SECTION 8. Identifying the beneficiaries of focused poverty alleviation
program. ~ Within ninety (90) days after the effectivity of this Act, the PSA, in
coordination with the Department, shall conduct a census of all rice farmers in
the country. The Rice Farmers Census shall yield the following items of
information:

size of farm unit;
type of soil of the rice farm;
condition of the irrigation (whether irrigated or not; if irrigated, the type of
irrigation);
farm machines used;
average production cost per hectare;
source of capitalization;
seed variety used and sources;
fertilizer use and volume per hectare per cropping;
herbicide use and volume per hectare per cropping;
number of children;
participation of children as labor force for the rice farm;
gross harvest per hectare;
. cash conversion of their harvest;
monthly family expenditure; and

PoP

PROR Tree hee


o. net income.

‘The PSA shall isolate the data and information concerning the rice farmers
mentioned in the preceding section and reduced them into a report to be
submitted to the Department within thirty (30) days after the conduct of the
census. The report shall serve as basis for the Department to identify and locate
these beneficiaries for the focused poverty alleviation program of this Act.

SECTION 9. Department database for focused poverty alleviation
implementation and monitoring. - The Department shall make and maintaina
database of the information contained in the PSA report. The database shall serve
as basis for the focused pouring of resources of the component programs of this
Act to alleviate the poverty of the special beneficiaries. It shall alsoserve as basis
for monitoring after every harvest the trends of income of the special beneficiaries
during the implementation of this Act. This monitoring of the income of the
special beneficiaries shall form part of the Department's periodic report to the
Congressional Oversight Committee.

SECTION 10. Special beneficiaries as priority in the Production Support
Program. - The Department shall give priority to the special beneficiaries in
dispensing the benefits of the Rice Production Socialized Credit Program and the
Farm Inputs Support Program components of this Act.

SECTION 11. Organizing the poorest rice farmers into special
beneficiaries farmers’ association. - The Department shall organize the special
beneficiaries on barangay or cluster of barangay basis into farmers association.
Such associations shall serve as conduits for the delivery of program services and
as partners of the Department in implementing the focused- intervention program
of this Act for the special beneficiaries.

SECTION 12. Appropriate DA personnel organization for special
beneficiaries. - The Department shall form the appropriate organization of
personnel that will specialize in attending to the needs and concerns of special
beneficiaries during the course of implementing this Act.

CHAPTER V
Rice Development Zones and Rice Industry Development Councils

SECTION 13. Rice Development Zones. - To more effectively deliver the core
programs of this Act and to attain greatest impact, the Department shall identify
the rice areas in the country with the proven capability to produce above the

national average or above the requirements of the local population or highest

potential for increasing rice production and cluster them into Rice Development
Zones. The clustering shall be made up of municipalities or provinces or inter-
regions and on the basis of contiguity and connectivity. Provided, That there shall
be at least two Rice Development Zones in Luzon, Visayas and Mindanao.


SECTION 14. Rice Development Zones as centers of delivery of core
programs. - The Rice Development Zones shall serve as centers of the convergent
and synergized delivery of the core programs of this Act.

SECTION 15. Rice Industry Development Councils and functions. - There
shall be in each Rice DevelopmentZone a Rice Industry Development Council which

shall have the principal function of synergizing the delivery of the core programs
of this Act. For this purpose, it shall convene at least twice a year.

SECTION 16. Composition of RIDCs. - The Rice Industry Development Council
shall be composed of the following:

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. a representative of the Department, preferably the Regional Director or any
of its experts on the rice industry;
a representative of special beneficiaries;
a representative of farmers’ marketing cooperatives;
a representative of rural development civil society;
a representative of rural credit cooperatives or credit unions;
a representative of rural rice women farmers;
a representative of the National Rice Food Security Council;
. a representative of the National Food Authority;
a representative of the National Irrigation Administration;
a representative of the Department of Public Works and Highways;
. a representative of Department of Science and Technology;
a representative of the Department of Interior and Local Government;
. a representative of the Local Government Unit;
|. a representative of the Land Bank of the Philippines;
|. a representative of Philippine Rice Research Institute; and
a representative of State Colleges and Universities.

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The Rice Industry Development Councils shall be chaired by the representative of
the Department.

SECTION 17. Rice Development Indicators in Rice Development Zones
and reporting. - The Rice Industry Development Councils shall periodically
monitor the implementation of the core programs of this Act by maintaining for
each Rice Development Zone a Rice Development Indicators Profile. The Profile
shall be submitted bi-annually to the Secretary of the Department. The Rice
Development Indicators shall include the following items of information:

.. total number of rice farmers and the actual size of their rice farms;

total hectarage of rice farms;

number of cropping seasons;

. total hectarage of rice farms actually planted in the current cropping
season;

. current production costs per hectare as against previous production costs;
indicative production target per hectare for the cropping season;

. current total harvest as against the previous harvest;

current average harvest per hectare as against the previous average;

indicative production shortfall as against the indicative production target;

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j. segregated usage rate among rice farmers, farmers’ organizations and

accredited credit auxiliaries of the RPSCF;

k. number of private commercial banks which participated in the socialized
credit program;
actual number of farm inputs distributed, segregated as to organic and
non-organic, and actual number of rice farmer-recipients;

. actual number of irrigation facilities segregated as to old and new;
actual number of post-harvest facilities segregated as to old and new;
actual number of rice farmers with access to irrigation;
actual number of rice farmers with access to threshing, drying and rice
storage and other common service facilitie
accomplishment status of irrigation and post-harvest facilities
development projects;
number of cooperatives actually organized and their operational status;
forms of extension services and the number of participating state colleges
and universities and actual beneficiaries;
price set by the NFA in accordance with Section of this Act;
comparative prevailing price of private grain traders;
total number of rice farmers who sold their palay to NFA; and

. current per capita income of rice farmers as against the previous.

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The Secretary of the Department shall consolidate the Profiles submitted by the
Rice Industry Development Councils and reduce them into an executive report to
be submitted to the Congressional Oversight Committee and the Office of the
President within fifteen (15) days from the submission from the Rice Industry
Development Councils, with copy furnish for the National Rice Supply Security
Council as created under Section 98 hereof. The Department shall attach the
Profiles of each Rice Development Zone to the executive report.

CHAPTER VI
Core Programs and Components

SECTION 18. Core programs. - To attain the objectives of this Act, it shall
have the following core programs:

a. Production support program;

b. Focused-poverty alleviation program for the poorest rice farmers

c. Accelerated infrastructure development program for irrigation and post-
harvest facilities;

d. Research and development and auxiliary support and extension services
program;

e. Rice lands and rice industry protection program;

f. Strengthening of the NFA for the implementation ofenhanced gwernment
price support program for farmers and consumers; and

g. Rice farmers empowerment program;


CHAPTER VII
Production Support Program

SECTION 19. _Institutionalization of production support program. - This
Act hereby institutionalizes a holistic production support program for rice
farmers. The production support program shall consist of the following:

Rice Production Socialized Credit Program;
Farm Inputs Support Program;

Provision of power tillers and threshers; and
Crop insurance.

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SECTION 20. Rice Production Socialized Credit Program (RPSCP). - A
socialized credit program is hereby established for rice farmers toenable them to
have access to economic resources necessary for rice production.

For this purpose, the amount of Twenty-Five Billion Pesos (P25 B) is hereby
appropriated and constituted into a fund which shall be called Rice Production
Socialized Credit Fund (RPSCF). The RPSCF shall be made available to farmers
and farmers’ organizations or farm production cooperatives as a credit facility for
the exclusive purpose of rice production and rice production-related
undertakings.

SECTION 21. RPSCF beneficiaries. -The loan program of the RPSCF shall be
extended only to the following:

a. Rice farmers;
b. Farmers’ organizations engaged in rice production or marketing; and
c. Farmers’ cooperatives engaged in rice production or marketing.

In extending loans to individual rice farmers, the RPSCF shall give priority tothe
special beneficiaries mentioned in Section 7 of this Act, the poorest rice farmers
as determined by the Rice Farmers Survey. The amount of Ten Billion Pesos (P10
B) of the RPSCF shall be devoted for this purpose.

It shall also give priority to rice farmers who intend to use the loan for organic
rice farming.

In no case shall the loan amount for each farmers’ organization or farmers’
cooperatives exceed Ten Million Pesos (P10,000,000.00).

SECTION 22. Application of RPSCF loan. - Rice farmers, farmers’
organizations and farmers’ production cooperatives shall apply the loan they
availed of from the RPSCF to the following undertakings:

a. purchase of seeds and other farm inputs;

b. purchase of draft animals;

c. purchase of farm equipment and machines such as power tillers, hand-
held harvesters, threshers, and other similar equipment;


d. purchase or construction of irrigation equipment such as water pumps
and tube wells; and
e. construction of dryers or purchase of drying machines.

In the case of farmers’ organizations and farm production cooperatives, the loans
may also be applied to the following:

purchase of farm machinery for cooperative use;
construction of water impounding systems for irrigating rice farms;
construction of drying facilities;

construction of cooperative palay warehouse;

seed capital for establishing cooperatives for marketing of palay;
construction of communal compost pit for making organic fertilizers; and
financing the putting up of industries that produce palay-derivative
products.

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In no case shall the RPSCF be extended to borrowers for purposes not related to
rice production.

The RPSCF shail be deposited with and administered by the Land Bank of the
Philippines (LBP). All repayments from farmer-borrowers, interest earnings and
income on the deposit shall accrue to the RPSCF.

SECTION 23. Interest Rate on Loan. - The interest rate for the loans to be
made available to rice farmers under the RPSCF shall not be more than five
percent (5 %) of the principal amount.

SECTION 24. Collateral-free loan and provision against foreclosure.~The
loans to be made available to individual rice farmers under the RPSCP shall be
collateral-free. The LBP shall make use of social guarantees as defined in Section
4, (ff) hereof. In cases when the farmer-borrowers fail to pay their loans, the LBP
shall observe the provisions of Section 28 hereof.

SECTION 25. Farmers’ organizations, rural loan associations, and credit
cooperatives as credit auxiliaries of the RPSCF. - The Department shall have
the authority to accredit farmers’ organizations, rural loan associations or credit
cooperatives as credit auxiliaries of the RPSCF: Provided, that such farmers’
organizations, rural loan associations, and credit cooperatives are duly registered
with the Cooperative Development Authority (CDA).

Farmers’ organizations, rural loan associations and credit cooperatives accredited
as credit auxiliaries of the RPSCF can access the RPSCF for the maximum
amount of Ten Million Pesos (P10,000,000.00) at three percent (3%) interest rate
for extending credit to their members who are rice farmers: Provided, that they
shall not charge their members more than Eight percent (8 %); Provided further,
that the amount from the RPSCF to be made accessible to credit auniliaries shall
not exceed Twenty per cent (20 %) of the RPSCF.

‘The Department, in consultation with the LBP and representatives of farmers’
organizations, rural loan associations and credit cooperatives, shall formulate the

i


criteria, standards and procedures for the accreditation and participation of
farmers’ organizations, rural loan associations and credit cooperatives.as credit
auxiliaries of the RPSCF.

The interest collected from the credit auxiliaries shall accrue to the RPSCF and
not to the capital fund of the accredited credit auxiliaries.

Farmers’ organizations, rural loan associations and credit cooperatives accredited
as credit auxiliaries of the RPSCF may extend loans under the RPSCF to non-
members as long as the applicants are rice farmers.

SECTION 26. Simplifying the procedure for loan dispensation. - The
RPSCP shall have a simplified procedure for filing, processing and approval to
make it accessible, easy, quickly available and at minimum costs torice farmers.
The LBP, in consultation with the Department, shall formulate the guidelines for

this purpose.

SECTION 27. Incentives for participating private commercial banks. -
Private commercial banks which extend production loans to rice farmers with
interest rate provided in Sections 10 and 11 hereof shall be entitled to taxcredits
of fifteen per cent (15 %) of the amount of the capital they devoted to rice
production loans. Private commercial banks which continue toextend production
loans to rice farmers after the end of the three (3) year implementation period of
this Act shall continue enjoying tax credits at ten per cent (10 %) of the amount
of the capital they devoted to rice production loans.

SECTION 28. Non-payment of loans. - In case of failure of an individual rice
farmer to pay the loan, the LBP or the credit auxiliaries from which the farmer
incurred the loan shall automatically renegotiate or restructure the loan of the
indebted farmer until the loan is fully paid. The LBP shall formulate the guidelines
for this purpose: Provided, that in no case shall the restructuring operate toeffect
the loss or foreclosure of the land of the indebted farmer nor shall it give effect to
the blacklisting or disqualification of the indebted farmer from beinga beneficiary
of the RPSCP.

Credit auxiliaries from which the farmer incurred the loan may also extend
assistance to the indebted farmer so that the indebted farmer can pay the loan
without affecting his necessary family expenses. The assistance shall include, but
shall not be limited to, allowing at reduced cost the indebted farmer to use the
farm implements, working animals and farm inputs belonging to the credit
auxiliaries.

SECTION 29. Automatic moratorium. - In times of natural or man-made
calamities, the LBP, the credit auxiliaries and private commercial banks who
extend rice production loans to farmers shall automatically extend a moratorium
of six (6) months on the payment of loans and their interests. Excepting the
interests, they shall not impose any other penalties and charges. The moratorium
shall cover the entire area declared as under a state ofcalamity ty the President.

12


SECTION 30. Farm Inputs Support Program. - Upon the effectivity of this
Act, the Department shall institutionalize a Farm Inputs Support Program that
shall consists of distributing to rice farmers, farmers organization and farmers
producers cooperatives farm inputs at discounted prices. The farm inputs shall
include seeds, fertilizers, herbicides, farm tools and other necessaries for rice
production.

SECTION 31. Organic rice farming. - In implementing the Farm Inputs
Support Program, the Department shall give emphasis to procuring and
distributing the farm inputs with the primary consideration of promoting organic
rice farming in progression. It shall conduct massive training of rice farmerson
the technology of organic rice farming.

Each Rice Development Zone shall have at least one (1) pilot area for organic
farming.

SECTION 32. Schedule of discount for seeds and other farm inputs. - The
seeds and other farm inputs procured by the Department shall be:

a. distributed free to the special beneficiaries as a measure of full subsidy,

and
b. sold to all other farmers at less twenty-five percent (25%) af their purchase
price.

The Department shall ensure that the distribution of seeds and other farm inputs
to rice farmers shall be made thirty (30) days before the start ofcropping season.

SECTION 33. Seed selection and fertilizer distribution. - In the purchase
and distribution of seeds, the Department shall ensure that rice farmers shall
have a wide selection of seed varieties in accordance with the knowledge and farm
practices developed or existing in their communities.

The Department shall make full use of its database and mapping of soil types. as
basis in distributing fertilizers to rice farmers. As much as practicable and
according to adaptability to the knowledge and farm practices prevalent in
different areas of the country, the distribution shall be based on the best
applicability to the soil types in the area.

SECTION 34. Incentives for use of traditional varieties, organic farming
and indigenous rice farming practices. - The Department shall formulate an
incentives scheme for rice farmers who shall use traditional varieties, organic
farming, and indigenous rice farming practices.

SECTION 35. Provision of power tillers and threshers. - The Department
shall institutionalize a_ distribution program of power tillers and threshers torice
production cooperatives or organizations.

SECTION 36. Crop insurance. - A portion of ten percent (10 %) of the

principal amount of the loan extended to rice farmers under the RPSCF shall be
charged each rice farmer for the full insurance coverage of his crops with the

13


Philippine Crop Insurance Corporation; Provided, that full crop insurance
coverage shall be extended to the special beneficiaries of this Act.

CHAPTER VIII
Accelerated Infrastructure Development Program

SECTION 37. Accelerated Infrastructure Development Program. - The
Accelerated Infrastructure Development Program shall consist of the irrigation
development program and post-harvest facilities development program. The
concerned government agencies responsible for implementing these programs are
hereby mandated to complete their construction and development within three
(3) years as provided in Section 5 hereof and ensure their operational
sustainability, including the provision for maintenance.

A. Accelerated Irrigation Development Program

SECTION 38. Accelerated completion of irrigation requirement. - Within
ninety (90) days upon the effectivity of this Act, the National Irrigation Authority
(NIA) shall have drawn up a Program of Implementation for the accelerated
completion of the construction of irrigation facilities and the rehabilitation of
existing irrigation facilities based on an inventory and parallel assessment of
existing irrigation system of the country and taking into account the preservation
of natural ecosystems, appropriate technology and the requirements for attaining
rice self-sufficiency. At the end of three (3) years, the NIA Program of
Implementation shall achieve a one-hundred percent (100 %) irrigation of all rice
lands of the country and shall include a maintenance program and incorporate
the inventory and parallel assessment.

SECTION 39. Identifying priority areas. - In identifying priority areas for the
accelerated completion of the construction of irrigation facilities, NIAshall take
into account the following factors:

areas designated as Rice Development Zones;

provinces with low irrigation development;

municipalities and areas with high density of rice farmers;
municipalities and areas with low rice productivity; and

rice areas recommended by rice farmers or farmers’ organizations or
farmers’ cooperatives, agrarian reform beneficiaries whoare rice farmers,
farmers irrigators’ association and indigenous peoples.

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SECTION 40. Projects criteria. - For NIA to be able to complete the
construction of irrigation facilities requirement within the mandated schedule, its
Program of Implementation shall give focus on constructing medium andsmall-
scale irrigation facilities, small water impounding projects and communal-type
irrigation or similar facilities with low social costs but high benefits and the
technical preparation of which can be done within ninety (90) days and the
construction of which can be completed in one-hundred eighty (180) days or less.

14


SECTION 41. Management and administration. - The management and
administration of small-scale irrigation projects shall be turned over to the
farmer-beneficiaries through their farmers’ associations, irrigators’ associations
or farmers’ cooperatives upon project completion: Provided, that the NIA shall
shoulder the maintenance cost and provide continuous technical support tothe
farmer-beneficiaries to whom the projects would be turned-over; Provided further,
that the recipients of the turn over shall make the facilities available to rice
farmer-beneficiaries in accordance with Republic Act 10969 or the Free Irrigation
Services Act.

SECTION 42. Budget allocation for accelerated irrigation infrastructure
development. - Of the fund appropriated under this Act for the accelerated
irrigation development program, eighty percent (80 %) shall be used for the
construction of new irrigation projects while the twenty percent (20 %) shall be
earmarked for rehabilitation and repair works of existing irrigation facilities.

B. Post-Harvest Facilities Development Program

SECTION 43. Development of post-harvest facilities. - In coordination with
local government units (LGUs), the National Food Authority (NFA) and the
Department, through its Philippine Center for Post-Harvest Development and
Mechanization (PhilMech), shall draw up an integrated three-year Program of
Implementation for completing the construction of dryers, rice storage and other
common service facilities that are needed in the rice producing municipalities and
barangays and the construction of warehouses that are needed in the Rice
Development Zones and other rice producing provinces and regions. At the most
practicable, the Program of Implementation shall see to it that the facilities are
based on appropriate technology, strategically optimized project siting and cost-
benefit analysis and will holistically form a national post-harvest chain that will
address issues of post-harvest losses, high transportation costs and deterioration

of product quality.

The Program of Implementation to be crafted jointly by the Department and the
NFA shall integrate the post-harvest facilities projects undertaken by LGUs.

The PhilMech shall provide the research and advisory requirement for
determining the appropriate technology of the post-harvest facilities.

SECTION 44. Roles of the Department and the NFA. - The Department shall
have the primary role of implementing the construction of post-harvest facilities
in rice producing municipalities and barangays. For this purpose, it shall have
supervisory function over post-harvest facilities projects undertaken by the LGUs.

‘The Department, through its PhilMech, shall launch a nationwide training
program that will disseminate the appropriate technology down to the rice
farmers and build the institutional capability of their organizations or
cooperatives to operate and maintain these post-harvest facilities.

15


‘The NFA shall have the primary role of implementing the construction of
warehouses in Rice DevelopmentZones and other rice producing provinces and
regions.

Both agencies shall ensure the completion of all the component projects of their
integrated Program of Implementation within three (3) years.

SECTION 45. Administration of municipal and barangay post-harvest
facilities. - Upon completion of the construction of municipal and barangay
post-harvest facilities, the Department shall turn them over for administration
and maintenance to concerned LGUs where the facilities are located.

The concerned LGUs may opt, or upon application by a barangay-LGU, a farmers’
organization or a farmers’ cooperative, to turn over these post-harvest facilities to
qualified barangay-LGU, farmers’ organizations or farmers’ cooperatives:
Provided, that the barangay-LGU, farmers’ producers organization or farmers’
cooperative has been certified by the PhilMech to have undergone the knowledge
transfer training and have acquired the institutional capability to operate the
post-harvest facilities.

All municipal and barangay post-harvest facilities turned over tobarangay-LGUs,
farmers’ organizations or farmers’ producers cooperatives shall be under the
supervision of the Local Rice Supply Security Councils as created under Section
90 hereof.

SECTION 46. Mechanisms for maintenance of post-harvest facilities. - To
help defray the maintenance costs of the municipal and barangay post-harvest
facilities, the LGUs or the farmers’ organization or farmers’ producers cooperative
towhich they are turned over shall be allowed to collect reasonable fees for the
use of the facilities: Provided, that no collection or increase of service fees shall
be imposed without:

a. in the case of the municipal LGU, the approval of the Sangguniang Bayan
through a resolution that has undergone wide public hearing;

b. in the case of a barangay-LGU, the approval of the majority ofthe farmers
in the barangay; and

c. in the case of a farmers’ organization and farmers’ cooperative, the
approval of the majority of its members and the concurrence of the Local
Rice Supply Security Council.

‘The fees on the use of municipal and barangay post-harvest facilities shall be
used exclusively for the maintenance of these facilities and in no case shall any
fee be collected other than for defraying the maintenance costs for the facilities.

SECTION 47. NFA inventory of its post-harvest facilities. - Within thirty
(30) days after the effectivity of this Act, the NFA shall make an inventory of its
dryers, warehouses and other post-harvest facilities and ensure that they are
operational and viable. For deteriorating post-harvest facilities ‘under its control

16


and administration, the NFA shall integrate, where practicable, their repair and
rehabilitation into the integrated Program of Implementation.

SECTION 48. Authority of NFA to dispose nonproductive post-harvest
facilities. - The NFA shail have the authority to dispose, sell or lease to private
entities any of its post-harvest facilities that the inventory has found to be
performing below fifty percent (50 %) of their capacity or beyond repair and
rehabilitation.

If the NFA decides to sell or lease out these facilities, it shall make the offer first,
to farmers’ organizations or farmers’ producers cooperatives.

SECTION 49. Regulating dryer and warehouse fees operated by private
entities. ~ Dryers and warehouses operated by private entities, including farmers’
organizations or farmers’ producers cooperatives which rent out these facilities to
non-members, shall be regulated by the concerned LGUs. If the regulating LGU
is the barangay-LGU, the regulation must be supported by a barangay resolution
approved by a majority of the farmers in the barangay. If the regulating LGU is,
the municipal-LGU, the regulation must have the approval of the Sangguniang
Bayan through a resolution that has undergone wide public hearing;

SECTION 50. Responsibility of LGUs. - For a period of three (3) years, LGUs
in rice producing provinces and municipalities shall annually allocate a portion
of their budget as their contribution for the construction of post-harvest facilities
in their jurisdictions, three percent (3 %) in the case of provinces and two percent
(2%) in the case of municipalities.

CHAPTER IX
Research and Development and Extension Services Program

SECTION 51. Research and development of appropriate technology for
different rice production systems. - The Philippine Rice Research Institute
(PhilRice) shall add to its Research and Development Structure and devote a
considerable portion of its resources and efforts to the development of multi-
disciplinary, ecosystem-based and ecosystem-friendly appropriate technology
and technical support system for the different rice production systems in the
country.

Its research program shall promote organic rice farming and such other
production technology based on indigenous materials, resources, knowledge and
skills with the end view of reducing costs and attaining self-reliance in terms of
sourcing rice farming inputs.

SECTION 52. Extension Services Program. - The Department, in
coordination with state colleges and universities, and in consultation with
farmers and their farmers’ organizations and production cooperatives or the Local
Rice Supply Security Councils of LGUs, shall formulate an extension services
program focused on enhancing the production skills and knowledge of rice
farmers and in building their capability through their farmers’ organizations,

17


production and marketing cooperatives. The program shall strengthen the direct
complementary role of the national government in the delivery of extension
services by LGUs to rice farmers.

SECTION 53. Areas of Extension Services. - The extension services program
shall have the following major areas of services:

a. training and education services: this shall include the provision of
trainings to help rice farmers organize cooperatives and other forms of
mutual-aid and self-reliant societies, including trainings on cooperative
management, project. management and monitoring, finance
administration, accounting, capability building, project feasibility analysis
and fund sourcing:

b. production technology consultancy and advisory;

c. consultancy and advisory on cooperative development and related matters;
and

d. marketing information and communication.

The extension services shall include the periodic upgrading of the technical skills,
knowledge, and professional competence of extension service workers.

SECTION 54. Pooling and networking of extension services. - The
Department shall establish linkages with the agricultural extension programs of
state colleges and universities and private schools with rural development
extension programs, to harness their extension service capabilities and programs
for rice farmers. It shall use such linkages for recruitingagricultural students for
volunteer extension service, programmed rural immersion, and apprenticeshipin
the major areas of services mentioned in the preceding section.

The Department shall also tap non-government agricultural resource centers and
institutions in the rice areas of the country and establish linkages with them to
avail of their resource and extension services and programs.

Upon the approval of concerned state colleges and universities and private
schools with rural development extension programs, an agricultural or
community development student who has rendered a one-year volunteer
extension service, immersion or apprenticeship in any of the major areas of
extension services mentioned in Section 53 hereof shall be credited with having
completed the thesis requirement of his or her course.

SECTION 55. Capability-building for rice farmers. - The Departmentshall
ensure the participation of rice farmers and their organizations in extension
services. It shall ensure through education, trainings and seminar workshops the
formation of technicians and production advisers from among rice farmers and
members of farmers’ organizations and farmers’ producers cooperatives. It shall
complement the training and seminar workshops with a program for the periodic
and continuous upgrading of their technical skills and knowledge.

SECTION 56. Information network for rice farmers. - The Department in
coordination with the Department of Science and Technology (DOST), Department

18


of Information and Communication Technology (DICT), NFA, LGUs, and other
appropriate government agencies, shall establish a computerized national
network of information from the national to the provincial and municipal levels.
‘The information network shall serve as resource procurement and marketing
support services for rice farmers. It shall include, but not limited to, the following:

a. directory of non-government organizations and institutions that provide

resource dissemination, management, technical, organizational or legal

services to rice farmers;

supply and comparative price trends of rice production inputs;

rice demand data;

rice supply data;

timely advisory and forecasts on palay prices of the NFA and private

traders; and

f. directory of trading centers, including listing of traders and farmers
marketing cooperatives.

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The Department shall make the information network available on its websites.

SECTION 57. Promoting computer literacy among rice farmers. - The
Department shall promote the computerization of the operation of farmers’
organizations and their production cooperatives, rural loan associations and
credit cooperatives. Its training and education services shall include basic
computer literacy for rice farmers.

CHAPTER X
Rice Lands and Rice Industry Protection Program

A. Protection of Rice Lands

SECTION 58. Rice lands as zones of special protection. - As the primary
food base of the country and consistent with the state policy of protecting our rice
industry, all rice lands in the country are hereby declared as zones of special
protection.

SECTION 59. Prohibition against reclassification. - In pursuance of the
preceding Section, the reclassification by municipal-LGUs of agricultural lands
devoted to rice production shall be strictly prohibited.

SECTION 60. Prohibition against conversion of rice lands into other uses.
~ Similarly, the conversion of rice lands into other uses shall be strictly prohibited

and is hereby made a criminal offense.

SECTION 61. Prohibition against destruction of rice lands and
diminishing their sustainability, economic viability or ecological
soundness. - It is likewise strictly prohibited of any person to perform such acts
that cause the diminution of the economic viability or productivity of existing rice
lands, or such acts that destroy or undermine the sustainability of rice

19


production in rice lands, including the destruction of their ecological soundness.
Such acts include the following:

a. destroying water systems, whether natural or man-made, or diverting or
impeding their flow that causes rice lands to lose their sources of irrigation,
making it appear that the affected rice lands are no longer economically
viable;

b. large-scale cutting of trees that destroys the biodiversity of rice lands;

c. quarrying that will have the same effect of destroying the biodiversity of
rice lands;

d. contaminating rice paddies or water systems that irrigate rice fields with
mercury and other similar harmful elements or chemicals; and

e. failure to prevent the spill of mine wastes to rice fields.

SECTION 62. Prohibition against crop conversion. - The conversion ofrice
lands into other crops is also hereby prohibited.

SECTION 63. Land reclassification review mechanism. - The Local Rice
Supply Security Council is hereby mandated to review all reclassification
ordinances and resolutions passed by LGUs before the effectivity of this Act.
Where the ordinance or resolution has covered rice lands and the rice lands have
remained productive or have not been physically converted for more than three
(3) years after their reclassification, the Local Rice Supply Security Council shall
make the proper recommendation on the viability of reverting the rice lands to
their former agricultural classification.

If the Local Rice Supply Security Council recommends reversal and the
recommendation is supported by a signed petition of a majority of the farmers
who are legitimate voters or residents of the city or municipality, the Local Rice
Supply Security Council shall submit its recommendation and the signed petition
to the sanggunian or the legislative council of the concerned LGU. If, after thirty
(30) days from the receipt of the recommendation and the signed petition, the
sanggunian fails to act on the recommendation and signed petition of the majority
of farmers, the Local Rice Supply Security Council shall submit the
recommendation and the signed petition to the provincial office of the Department
of Interior and Local Government.

The DILG Provincial Director or any DILG official designated for the purpose shall
then, within thirty (30) days from the receipt of the recommendation and the
signed petition, verify the residency of the signatories, the authenticity of the
signatures and as to whether the number of signatories constituted a majority of
the farmers in the concerned LGU. If the DILG Provincial Director finds the
petition valid as to the residency of the signatories, the authenticity of the
signatures and the authenticity of claimed majority, it shall issue a certification
to that effect, register the petition in the municipal registry of ordinances and
cause its publication in three (3) newspapers of local circulation. After fifteen (15)
days from the date of publication, the petition shall be deemed to have become
an ordinance and the rice lands shall be deemed to have been reverted totheir
former agricultural classification.

20


B. Protection of the Rice Industry From Harmful Effects of Importation

SECTION 64. Policy of local production preference to meet the buffer
stock requirement of the NFA. - In cases when its actual reserved and buffer
stocks combined are below one hundred-five (105) days, the NFA is hereby
mandated to fill the shortage from local production. In no case shall it resort to
importation when the local rice production can fill the shortage.

SECTION 65. Policy against rice importation. - As a general rule, rice
importation is hereby prohibited. As an exception, it shall only be resorted to
upon recommendation of the National Rice Supply Security Council, as created
under Section 98 hereof, after it has determined through investigation the
existence ofa rice crisis. The decision to import rice shall be made in accordance
with the next Section.

SECTION 66. Steps to be taken before resorting to rice importation
during rice crisis. - At the first sign of an apparent sudden increase africe prices
or a critical inadequacy of rice supply in the domestic market, the National Rice
‘Supply Security Council shall conduct an investigation to determine if the extent
of the price increase or supply inadequacy constituted a rice crisis as definedin
Section 4 (y) hereof. If a rice crisis exists, it shall include in its report the following:

a. a declaration of the existence of rice crisis;

b. a determination if the rice crisis is caused by hoarding or by manipulation
of the local supply in which case the National Rice Supply Security Council
shall recommend to the President measures for compelling the
manipulators to release the rice supply in their hands;

c. a determination if the rice crisis is local or national. If the rice crisis is
local, the National Rice Supply Security Council shall recommend measures
on how the national supply maybe distributed to address the local crisis;
and

d. Ifthe rice crisis is national, the National Rice Supply Security Council shall
certify that local food production cannot fill the inadequacy. Onlyin such
situation may it recommend the resort to rice importation.

The National Rice Supply Security Council shall have three (3) days to finish and
submit its investigation report and recommendations to the President.

If the President finds from the report of the National Rice Supply Security Council
that possible criminal acts were committed by private individuals or government
officials in the course of the existence of the crisis, he shall direct the Department
of Justice to investigate the case and to file the appropriate criminal charges
thereon.

SECTION 67. Price Ceiling on Rice. - In the conduct of investigation for
determining the existence of rice crisis to be made at the first sign of apparent
inadequacy of rice supply in the domestic market, the National Rice Supply
Security Council shall have the authority to implement measures to arrest the
skyrocketing of rice prices. It shall have the authority to order the freezing ofrice
prices or a return to the price status quo ante. If there is prima facie evidence of

21


manipulation of prices during the period of investigation, the Nationa Rice Supply
Security Council shall set a ceiling of rice prices which shall not be more than two
percent (2%) of the price prevailing before the inadequacy situation. The order af
the National Rice Supply Security Council freezing the rice prices, reverting the
rice prices to status quo ante or setting a ceiling to rice prices shall remain in
force until reversed by the President upon recommendation by the National Rice
Food Security Council.

CHAPTER XI
Strengthening the NFA, Enhancing its Palay Procurement Program
And Price Support Program for Consumers

SECTION 68. Mandate and Role of the National Food Authority. - The
National Food Authority is an integral pillar in the national effort to attain food
security for the country based on rice self-reliance and self-sufficiency, increase
the income of rice farmers, stabilize the supply and price of rice in the domestic
market, and ensure the accessibility and affordability of rice to the public,
especially the poor among the consumers. These national goals are hereby
incorporated into its mandate. The authority and functions of the NFA are
likewise hereby reoriented towards attaining these national goals.

In consonance with the provision of this Section and with the State Policies of
this Act, the NFA shall be the sole authority to import rice upon the
recommendation of the National Rice Supply Security Council.

SECTION 69. Forty-five days Rice Reserve and Sixty days Buffer
Stocking. - Consistent with the expanded mandate of the NFAas provided in the
preceding Section, the NFA is hereby mandated to maintain a Reserved Stock
good for forty-five (45) days continuing and a Buffer Stock good for sixty (60) days
continuing to be exclusively sourced from local production except when ordered
by the President to import rice in accordance with Section 66 hereof.

‘The Reserved Stock shall be the NFA’s stocks for calamities and the marginalized
sectors while the Buffer Stock shall be its strategic stocks for market participation.

SECTION 70. Condonation of all existing loan obligations. - So it can
better fulfill its expanded mandate and functions and start afresh on sound and
stable financial footing, the NFA is hereby relieved from payment of all its loan
obligations, including interests due thereon, with the LBP and the Development
Bank of the Philippines.

SECTION 71. Procurement of palay at farm gate price. - The NFA shall
procure at least twenty-five percent (25 %) of the total palay production at farm
gate price that guarantees rice farmers a reasonable rate of returns.

To achieve this procurement target, it shall establish a system that will tringits
procurement closest to rice producing areas and communities.

22


SECTION 72. Schedule of support-pricing on farm gate and
establishment of procurement centers. - The NFA shall purchase palay from
rice farmers using the following price schedule:

a. at Twenty Pesos (P20.00) per kilogram for the calendar year 20180r upon
effectivity of this Act; and

b. after the initial year, the NFA shall review the farm gate price everyyear
taking into consideration the impact of inflation rate on fuel and rice
production. If the review finds the cost of rice production to have increased
by one point five percent (1.5 %) of the previous production cost, the NFA
shall adjust the farm gate price accordingly, usingas reference the national
average farm gate price of the preceding year as posted by the Philippine
Statistics Authority.

SECTION 73. Setting of farm gate price prior to every cropping season. ~
The NFA shall review, set and announce the farm gate price prior to every
cropping season, not later than the months of May and October.

SECTION 74. Strengthening linkage between NFA and rice farmers at the
farm gate. - In purchasing palay from rice farmers, the NFA shall promote the
cooperative marketing of palay among rice farmers, particularly small-scale rice
farmers, as a mode for tightening the procurement linkage between the NFAand
the rice farmers at the farm gate. For this purpose, the NFA shall devise a scheme
for enrolling farmers’ organizations or their marketing cooperatives as its
procurement arm. The scheme shall have an incentives package for participating
farmers’ organization or cooperatives.

SECTION 75. NFA authority to requisition the rice supply of the private
sector and dispose it to address rice crisis or state of calamity. - During
rice crisis as declared by the National Rice Supply Security Council in accordance
with Section 66 hereof or when a state of calamity has been declared over the
entire country or over a specific region or province, the NFA shall have the
authority to requisition the rice stocks in the control of private traders to
strengthen its response capability to such exigencies. The requisition cost shall
be the price at which the rice has been bought from the farm gate by the private
traders. In the National Capital Region and other metropolitan cities, the
requisition cost shall take into consideration and include the actual
transportation cost incurred in hauling the rice stocks from their origin.

For this purpose, all rice traders who operate warehouses, storage facilities for
rice or other similar structures used for volume stocking of rice, are hereby
required to monthly submit to the NFA, copy furnish the National Rice Supply
Security Council, the appropriate documents, such as warehouse receipts anda
verified inventory of their rice stocks, that will show the volume of rice stocks in
their control or in their warehouse, including incoming stocks and releases for
circulation. The NFA shall make a directory of such warehouses and their
operators as well as a monitoring system based on those documents that will give
information on where the volume of rice can be found in real time.

23


The NFA shall make use of available communication and information technology
to place its requisition: Provided, that any requisition using such technology shall
be formalized through official documentation within forty-eight hours.

SECTION 76. Effect of refusing NFA requisition. - The act of refusing NFA
requisition is hereby considered as abetting the rice crisis or the state af calamity
which shall be a ground for cancelling the rice trade or warehouse permit of the
private trader or operator.

SECTION 77. Subsidized-pricing for retail rice. - The NFA shall ensure that
its marketed rice is available, accessible and affordable to the consuming public,
especially the marginalized and poorest sectors. It shall sell it at retail prices not
higher than twenty-five percent (25 %) of the procurement price at farm gate.

SECTION 78. Separate budget for NFA procurement program. - Using
simulated forecasts of consumption requirements and such other necessary
information, the NFA shall craft a palay procurement program that is good for
three (3) years upon which its procurement budget shall be based. Such budget
shall be entirely released to the NFA so it can have financial flexibility in pursuing
its procurement program which it shall renew or revise at the end ofthe second
year and submit to Congress. The Department of Budget and Management shall
make a special account and procedure for the releases of the three-year
procurement budget of the NFA.

For the first three (3) years upon the effectivity of this Act, the NFA shall have an
annual procurement budget of One Hundred Three Billion Three Hundred Thirty
Million Pesos (P103.33 B) which shall be immediately released to the NFA after it
has submitted a three (3) year procurement plan.

CHAPTER XI
Rights of Rice Farmers

SECTION 79. Security of tenure of rice farmers. - Consistent with the state
policy affirming the indispensable role of rice farmers in developing the rice
industry towards achieving food security for the country, rice farmers shall have
the right of security of tenure over their farm land. They shall not be ejected from
their farm holding or their homes, crops and farm structures demolished unless
directed by a final decision or order of the court.

SECTION 80. Trial moratorium of ejectment cases against rice farmers
during the implementation schedule of this Act and cooling off period
thereafter. - During the three (3)-year implementation of this Act, in order not
to disrupt the delivery of services of its core programs to the rice farmer
beneficiaries, no trial of any ejectment case, or any similar case that will result in
ousting, shall proceed against any rice farmer who is a beneficiary of any of the
core programs of this Act. The judge or court with competent jurisdiction over the
case shall suspend its proceedings upon the submission by the rice farmer ofa

24


certification from the Department that he is a beneficiary of any of the core
programs of this Act.

‘Thereafter, any writ of execution issued by a court of competent jurisdiction that
will have the effect of ejecting such a rice farmer shall incorporate into the writ a
cooling off period of one (1) year.

SECTION 81. Punishing invalid writ of execution. - In all ejectment cases,
or any similar case that will result in ousting, against rice farmers who are
beneficiaries of any of the core programs of this Act, no court or tribunal shall
issue a writ of execution unless all pending issues, including motions for
reconsideration of the rice farmers, have been resolved. The failure of any judge
or court of competent jurisdiction to observe this requirement shall render the
writ invalid and any action of any government official on the basis of such writis
illegal and punishable

SECTION 82. Private acts of ejectment are criminalized. - Any private act
of ejecting the rice farmer who is a beneficiary of this Actor destroying their crops
or farm structures that will have the same effect of ejectment without any valid
court order is hereby made a criminal offense which is separate from other
criminal acts that a private person may have committed in the course of ejecting
a rice farmer without a court order.

SECTION 83. Duty of the Department to provide legal services and aid. -
The Department shall have the duty to provide legal services and aid to rice
farmers who are beneficiaries of any of the core programs of this Act but subjected
to ejectment cases or harassment suits.

SECTION 84. DAR AO No. 03-11, Series of 2011 applies when the rice
farmer is an agrarian reform beneficiary. - If the rice farmer subjected to
ejectment, or any similar case seeking to oust him from his farm land, is an
agrarian reform beneficiary under the Comprehensive Agrarian Reform Law and
other agrarian reform laws, the judge or court shall apply the provisions of
Department of Agrarian Reform Administrative Order No. 03-11, Series of 2011, as
to the rice farmer. The DAR AONo. 03-11, Series of 2011, is hereby incorporated
as part of this Act.

SECTION 85. Right against unscrupulous land rent. - Rice farmers who
are tilling farm lands under tenancy or leasehold, including farmers’
organizations and farmers’ production cooperatives which lease lands for rice
production, shall not be subjected to land rent that is more than ten percent
(10%) of the average net harvest per hectare in the last three consecutive years.
All contracts, whether written or unwritten, that exceed this threshold, including
non-cash charges or other exactions added on top of the rent, are hereby declared
as void and are considered reformed in accordance with this section.

SECTION 86. Right against arbitrary deductions on loans and exorbitant
interest rates. - Rice farmers have the right against arbitrary deductions and
exorbitant interest rates on loans. Rice farmers shall only be charged to pay the
principal amount and interest. All interest rates for loans taken byrrice farmers,

25


including farmers’ organizations and farmers’ cooperatives, from private entities
shall conform to the provisions of Sections 23 and 24 hereof and are considered
reformed in accordance therewith upon the effectivity of this Act.

SECTION 87. Right against unfair trade practices. ~ Rice farmers and their
organizations or cooperatives shall have the right against unfair trade. The
following are unfair trade practices:

a. buying the palay product of rice farmers at prices below the farm gate price
set by the NFA;

b. tacking into loan agreements the condition that binds rice farmers to sell
their palay product to the creditor at prices lower than the NFA farm gate
price and such similar acts that deprive rice farmers the opportunity to
seek better prices for their products;

c. tacking into loan agreements the condition that binds rice farmers to
procure their farm inputs and rent farm tools and equipment from the
creditor at prices or rates higher than other suppliers and such similar
acts that deprive rice farmers the opportunity to seek lower prices or rent
for their needed farm inputs and equipment; and

d. charging arbitrary deductions and exorbitant rates in milling, threshing,
drying and other similar services.

SECTION 88. Right of rice farm workers to family living wage. -
Agricultural workers in rice farms shall have the right to a family living wage.
Agricultural workers working under piece-meal, pakyawan or any other similar
arrangement who has rendered eight hours of work shall be entitled to the
payment of living minimum wage set by law.

CHAPTER XII
Strengthening Rice Farmers Towards Self-Reliance

SECTION 89. Promoting cooperatives among rice farmers. - The
Department shall make it part of its extension services the strengtheningof the
ranks of rice farmers to make them self-reliant. For this purpose, it shall promote
cooperatives and self-reliant organizations among rice farmers, giving focus on
forming cooperatives of small-scale rice farmers or rice farmers with annual
income below the rural poverty threshold. As much as practicable, it shall
promote the following types of cooperatives:

a. farm resources procurement and sharing cooperatives;
b. credit cooperatives;

c. production and labor-sharing cooperatives;

d. marketing cooperatives;

e. irrigation cooperatives;
f. consumers cooperatives.

ind

26


CHAPTER XIV
Local Rice Supply Security Councils

SECTION 90. Municipal/City Rice Supply Security Councils and their
functions. ~ LGUs of municipalities and cities shall create and constitute a rice
food security watchdog to be called the Local Rice Supply Security Council. Such
Council shall be constituted within thirty (30) days from the effectivity of this Act.
It shall have the following functions:

a. gather data for the Household Rice Food Security Index and ensure its in
publication;

b. review the land use and reclassification ordinances and resolutions in their
municipalities and cities and to make the corresponding proper
recommendation and representation to the local legislative council for its
action in accordance with the provision of Section 63 of this Act;

c. monitor local legislations that affect the rice industry in their
municipalities and cities;

d. facilitate with the end-view of ensuring the participation of rice farmers in
local venues of decision-making such as their participation in the
deliberation of ordinances and resolutions by local legislative councilson
matters related to the rice industry;

e. give the municipal or city chief executive timely and appropriate advise on
matters related to the rice industry;

f. recommend local legislations for the betterment of the rice industry and its
stakeholders;

g. monitor the rice supply in their municipality or city and, whenever it finds
acritical supply situation, to make the corresponding proper re port tothe
Provincial Rice Supply Security Council and the NFA;

h. monitor possible hoarding activities of rice traders and tomake the proper
report to the municipal or city mayor and the chief of the local Philippine
National Police; and

i. monitor the price movement of rice and make the corresponding proper
report to the National Rice Supply Security Council.

‘The municipal /city Local Rice Supply Security Councils shall meet at leastonce a
month or as often as necessary.

SECTION 91. Composition of the Local Rice Supply Security Councils. -
The municipal/city Local Rice Supply Security Council shall be composed of the
following:

a representative of the rice farmers;
a representative of the irrigators association;

a representative of the marketing cooperatives;

a representative of the rice traders doing business in the municipality or
city;

. a representative of rural development civil society;

. the Municipal Agriculture Officer; and

g. the Municipal Agrarian Reform officer.

perp

27


In municipalities and cities where there are no marketing cooperatives, their
representation slot shall be given to rice producers’ cooperative or farmers’
organizations. Likewise, in the absence of any rural development civil society in
the municipality or city, its representation slot shall be given to civic societies or
to the academic sector.

SECTION 92. Manner of constituting the Local Rice Food Security Council
and electing the Chairperson. - Within the thirty (30) days provided in Section
90 of this Act, the Municipal Agriculture Officer shall call an assembly ofall rice
stakeholders in the municipality or city. He shall ensure the attendance of all
sectors from the ranks of which the representation composition of the Local Food.
‘Security Council should come from as provided in the preceding section. He shall
also ensure the attendance of women in the assembly. The assembly shall then
elect their representatives to the Local Rice Supply Security Counallin accordance
with the representation prescribed in the preceding section.

‘The Municipal Agriculture Officer shall make a report of the results of the
elections and submit it to the chief executive of the municipality or city, copy
furnish the provincial offices of the National Food Authority and the Department.
The Local Rice Supply Security Council shall elect its Chairperson from amongits
members.

SECTION 93. LGUs responsibility to provide working facilities for the
Local Rice Supply Security Council. - The LGUs shall provide office space and
make available their facilities to the Local Rice Supply Security Councils to make
them operational.

SECTION 94. Household Rice Security Index. - LGUs shall establish and
maintain a Household Rice Security Index which is the measurement of rice
security of households in each municipality or city. The Local Rice Supply Security
Council shall be responsible for the gathering of data for the Household Rice
Security Index and for keeping and publishing the Index the expenses for which
shall be shouldered by the concerned LGU. The publication shall be made at the
turn of every calendar year.

SECTION 95. Information contents of the Household Rice Security Index.
- The Household Rice Security Index shall have the following information:

a. number of households;

b. number of members of each household segregated as to age and gender;
c. rice consumption of each household segregated as to the sources;

d. volume of rice supply from the NFA;

e. volume of rice supply from private traders;

f. point of origin of the rice supply from private traders;

g. prevailing stall price of rice;

SECTION 96. Provincial Rice Supply Security Councils. - Within forty-five
(45) days after the effectivity of this Act, the Provincial Director of the Department
shall call toa meeting all chairpersons of Local Rice Supply Security Councils of
municipalities and cities of the province and the Provincial Agrarian Reform

28


Officer, Provincial Manager of the NFA, and the Provincial Directors of the
Department of Interior and Local Government, Department of Social Welfare and
Development, Department of Trade and Industry and the National Economic
Development Authority. They shall compose the Provincial Rice Supply Security
Council. They shall elect from among themselves a chairperson and such other
officers they deem necessary. The results of such election shall be submitted to
the Provincial Governor of the concerned province.

‘The provincial LGUs shall give office space and make available its facilities to the
Provincial Rice Supply Security Councils to make them operational. It shall
establish a communication hotline for the primary use of the Provincial Rice
Supply Security Council.

The Provincial Rice Supply Security Councils shall meet as often as necessary but
not less than once every three months.

SECTION 97. Functions of the Provincial Rice Food Security Councils. -
The Provincial Rice Supply Security Council shall have the following functions:

a. consolidate at the provincial level the Household Rice Security Indexes
from the municipalities and cities;

b. help the Local Rice Supply Security Councils review the land use and
reclassification ordinances of their municipalities and cities;

c. help the Local Rice Supply Security Councils in making representations
with their local legislative councils for making good their recommendations
on land use and reclassification ordinances or resolutions as providedin
Section 63 of this Act;

d. recommend legislations and make representations in the provincial
legislative council on matters related to the rice industry;

¢. give the Provincial Governor timely and appropriate advise on matters
related to the rice industry;

f. help the Local Rice Supply Security Councils in making representation with
the NFA for redisposition of rice supply in times of critical rice supply
situation;

g. make representation with the Provincial Governor and other concerned
enforcement agencies, including the Provincial Director of the PNP, for
quick responses against hoarding activities and overpricing of rice; and

h, when there is a local critical rice supply situation, immediately submita
report to the National Rice Supply Security Council with its recommendation
as to whether or not there is a need to declare the existence of rice crisis
and conduct an investigation covering the province.

CHAPTER XV
National Rice Supply Security Council
SECTION 98. The National Rice Supply Security Council. - There is hereby

created a National Rice Supply Security Council which shall be composed of the
following:

29


Secretary of the Department;
Director-General of the National Economic Development Authority
Administrator of the National Food Authority;
Secretary of the Department of Justice;
Secretary of the Department of Interior and Local Government;
Secretary of the Department of Social Welfare and Development;
Secretary of the Department of Trade and Industry;
Director General of the Philippine Rice Research Institute;
a representative from the Provincial Rice Supply Security Councils;
a representative of the farmers sector (one each from Luzon, Visayas and
Mindanao);
a representative of women sector;
a representative of rural development civil society;

. a representative of the irrigators sector;
a representative of the consumers sector;
a representative of the rice vendors sector; and
a representative of the rice traders sector.

Sr pe meno ep

posgrr

The Executive Secretary of the Office of the President shall gather nominees from
the Provincial Rice Supply Security Councils and from the sectors mentioned in
enumeration m. to s. and appoint from among the nominees the representatives
for the Provincial Rice Supply Security Councils and for each sector.

Within three (3) months during which the appointment of representatives of the
Provincial Rice Supply Security Councils and the sectors shall have been
completed, the Executive Secretary shall convene the members of the National
Rice Supply Security Council and preside its inaugural meeting untilit has elected
a chairperson from among the sectoral representatives.

The National Rice Supply Security Council shall meet at least twice a year or as
often as it deems necessary. Its Chairperson shall have the power to call an
emergency meeting during critical situations of rice supply and price movements
in the local market.

SECTION 99. Functions of the National Rice Supply Security Council. -
‘The National Rice Supply Security Council shall have the following powers and
functions:

a. ensure that the policies and provisions of this Act on protecting the rice
industry from the harmful effects of rice importation are implemented;

b. serve as the Advisory Council for the Office of the President on all matters
that affect the rice industry;

c. declare the existence of a rice crisis after conducting an investigation in
accordance with Section 66 of this Act;

d. recommend measures for addressing critical situations of the rice supply
in the domestic market;

. recommend to the NFA the importation of rice as a last resort after
establishing and certifying that local rice production cannot fill in the
supply inadequacy;

f. set the terms and conditions for the rice importation;

30


g. impose price control measures during critical rice supply situations in
accordance with Section 66 of this Act;

h. recommend legislations for the betterment of the rice industry and its
stakeholders and make representation with both Houses of Congress for
the enactment of recommended legislations;

i. review the executive report of the Department on the Profiles of
implementation of the core programs of this Act in Rice DevelopmentZones,
and

j. reviewthe periodicreport of the Departmenton the special beneficiaries;

SECTION 100. Office, Secretariat and Budget. - The Department shall
provide the National Rice Supply Security Council office space and equipment,
facilities and vehicles for its operation. It shall also form from amongits personnel
a staff complement that will be detailed to the National Rice Supply Security
Council to serve as its Secretariat and perform core functions and services.

The National Rice Supply Security Council shall have an initial annual budget of
no less than Thirty Million Pesos (P30,000,000.00) after which it shall be levelled
to no less than Twenty Million Pesos (P20,000,000.00) in the succeeding years:
Provided, that it may be increased upon request of the National Rice Supply
Security Council but shall not be diminished by the DBM or Congress.

SECTION 101. Remuneration for sectoral representatives. - The
representatives from the Provincial Rice Supply Security Council and of the sectors
shall be entitled to a remuneration for their attendance of the meetings of the
National Rice Supply Security Council. The amount of the remuneration shall be
decided in the inaugural meeting of the National Rice Supply Security Council;
Provided, that the amount shall not exceed Ten Thousand Pesos (P10,000.00) per
attendance for each representative.

CHAPTER XVI
Appropriations

SECTION 102. Appropriation and Core Programs allocations. ~The amount
of One Hundred Eighty-Five Billion (P185 B) is hereby appropriated to fund the
‘Three-Year Implementation Plan of this Act. Such amount shall be apportioned
as follows:

a. Twenty-Five Billion (P25 B) for the RPSCF;

b. Forty-Five Billion Pesos (P45 B) for the Accelerated Irrigation Development
Program and ‘Twenty Billion (P20 B) for the rehabilitation and repair of
existing irrigations systems;

c. Thirty Billion (P30 B) for the Post-Harvest Facilities Development Program;

d. Fifty Billion (P50 B) for the Farm Inputs Support Program to be released

each year at Sixteen Billion and Six Hundred Sixty-Six Million Pesos
(P16.666 B);

31


e.

Fifteen Billion (P15 B) for Research and Development and Extension
Services Program.

Upon the completion of the Three-Year Implementation Plan, the National

Government shall appropriate at least Twenty-Seven

jon Pesos (P27 B) tobe

included in the annual Government Appropriations Act for sustaining the core
programs of this Act. Such amount shall be apportioned as follows:

a.

b

c.

d.

Ten Billion (P10 B) for the maintenance of constructed irrigation systems;

Ten Billion (P10 B) for the continuation of the Rice Production Socialized
Credit Program,

Five Billion (P5 B) for the continuation of the Production Support Program;

‘Two Billion (P2 B) for research development and extension services;

SECTION 103. Exemption from election ban. - The projects for the
implementation of the Accelerated Infrastructure Development Program of this Act
shall be exempt from election ban on public works.

(CHAPTER XVII
Prohibited Acts

SECTION 104. Criminal Offenses. - The following acts, as defined in Chapter
Il, Section 4 of this Act, shall be prohibited and be liable for punishment:

Rice hoarding - There shall be prima facie evidence of hoarding when:

1. a person has stocks of rice which are not included in his inventory
report to the NFA as mandated in the second paragraph of Section 71
of this Act;

2. a person has documented stocks of rice which is ten percent (10%)
higher than his average level of increase in his inventory in the last six
(6) months immediately prior to the discovery of the questionable
increase;

3. a person has stocks of rice which exceed the capacity ofhis warehouse
or storage facility by ten percent (10 %);

4. a person has maintained two or more dummy operators of warehouses
which enable him to control stocks of rice higher by more than five (5)
percent of his market share for the last three (3) months;

5. a person does not dispose, sell or distribute his stocks to the public for
a period of fifteen (15) days from the warehouse arrival ofthe stocks; or

6. a person takes out his stocks from distribution.

b. Profiteering - There shall be prima facie evidence of profiteering when:

32


. a person sells his rice stocks to the public at a price which is ten (10)

percent higher than the price during the immediately preceding month;
a person sells his rice stocks during the period of rice crisis the
existence of which has been declared by the National Rice Supply
Security Council at a price that does not conform with the price freeze,
status quo ante price, or price ceiling order of the National Rice Supply
Security Council;

a person buys rice from the NFA at a lower price per kilo and sellsit to
the public at a price per kilo which is ten (10) percent higher than the
NFA price;

a person sells rice which is a mixture of commercial and NFAtice ora
mixture of lower grade variety and higher grade variety; or

a person misrepresents his rice stocks as to variety, weight and
measurement.

. Engaging in rice cartel operations - There shall be prima facie evidence of
engaging in rice cartel operations when:

1.

two (2) or more persons or business enterprises dealing in rice and
competing for the same rice market perform uniform or complementary
acts among themselves which tend to bring about artificial shortage of
rice supply in order to increase the price; or

they simultaneously increase prices on their rice thereby lessening the
competition among themselves;

. Rice smuggling - Rice smuggling, regardless of volume or value, is hereby
declared as an act of sabotage against the national rice industry, our rice
farmers and the people.

Rice smuggling is committed and the commission is prima facie evidence
when:

1

2.

a person buys or procures rice from any source outside of the country
and brings the rice into the country;

a person transports or stores or sells inside the country the rice bought
or procured from outside the country;

a government official issues any document to a private person or entity
to give cover of legality to the act of bringing into the country the rice
bought or procured from outside the country; or

a person acts as broker or intermediary for the importer in disposing
the imported rice;

CHAPTER XVIII
Punishment and Penal Provisions

SECTION 105. For the issuance of an invalid writ execution that violates
the security of tenure of a rice farmer. - For any judge who issued a writ of
execution against a rice farmer in violation of the provision of Section 81 ofthis
Act, the punishment shall be suspension without pay of not less than six (6)

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months to two (2) years and a fine of One Hundred Fifty Thousand Pesos
(P150,000.00). For any judge who commits the same violation a second time, the
punishment shall be dismissal from service, perpetual disqualification from the
judicial service, and a fine of Two Hundred Thousand Pesos (P200,000.00).

For any government official, including members of the Philippine National Police
and the Armed Forces of the Philippines, who acts upon an invalid writ of
execution resulting in the illegal ejectment or ousting of a rice farmer, the
punishment shall be dismissal from service, perpetual disqualification from
government service anda fine of One Hundred Thousand Pesos (P100,000.00).

SECTION 106. For ejecting a rice farmer without a valid writ of execution
or using an invalid warrant. - For any person who orders or organizes a
demolition activity against a rice farmer in violation of Section 82 of this Act, if
the illegal ejectment is attended with excessive force and violence, the penalty
shall be an imprisonment of not less than six (6) years but not more than eight
(8) years and the payment of moral and exemplary damages for the moral injury
of the rice farmer and actual damages for his destroyed properties.

In all other cases, the penalty shall be an imprisonment of not less than four (4)
years but not more than six (6) years and the payment of moral and exemplary
damages for the moral injury of the rice farmer.

SECTION 107. For land-use conversion and destruction of rice lands. - For
any person who violates Section 60 or commits any of the acts enumerated in
Section 61 of this Act, the penalty shall be as follows:

a. If the conversion or destruction of rice lands is eighty-five (85) to one
hundred percent (100%), the penalty shall be an imprisonmentofnot less
than twelve (12) years but not more than fifteen (15) years anda reparation
fine equivalent to the total expenses necessary to restore the converted or
destroyed land to its rice production use;

b. If the conversion or destruction is sixty-five (65) to eighty-four percent
(84%), the penalty shall be an imprisonment of not less than six (6) years
but not more than eight (8) years and a reparation fine equivalent to the
expenses necessary to restore the converted or destroyed portion toits rice
production use;

c. Ifthe conversion or destruction is fifty (50) to sixty-four percent (64%), the
penalty shall be an imprisonment of not less than four (4) but not more
than six (6) years and a reparation fine equivalent to the expenses
necessary to restore the converted or destroyed portion to its rice
production use; and

d. Ifthe conversion or destruction is below fifty percent (50 %), the penalty
shall be an imprisonment of not less than two (2) years but not more than
four (4) years and a reparation fine equivalent to the expenses necessary
to restore the converted or destroyed portion to its rice production use;

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The reparation fine in each case shall be determined by an independent
assessment commission to be appointed by the court.

SECTION 108. For crop conversion of rice lands. - Any person who violates
Section 62 of this Act shall be meted the fine equivalent to twice the gross value
of the rice that was lost to crop conversion. The gross value shall be basedon the
average gross harvest for the last two cropping.

Any person who induces a rice farmer to convert his rice farm toother crops shall
be meted the fine equivalent to the gross value of the rice that was lost to crop
conversion.

SECTION 109. For hoarding, profiteering and engaging in cartel
operation. - For any person who commits any of the acts in enumeration a.,b
and c. of Section 104 of this Act, the penalty shall be not less than eight (8) years
but not more than twelve (12) years, a fine of not less than Five Hundred
Thousand Pesos (P500,000.00) but not more than Five Million Pesos
(P5,000,000.00) and the cancellation of his business permit.

SECTION 110. For rice smuggling. - For any person who commits any of the
acts in enumeration d. of Section 104 of this Act, when the minimum value is less
than Ten Million Pesos (P10,000,000.00), the penalty shall be not less than twelve
(12) years but not more than seventeen (17) years, a fine of twice the value of the
smuggled rice and the aggregate amount of the taxes, duties and other charges
avoided and the cancellation of his business permit.

If the rice smuggled has a minimum value of Ten Million Pesos (P10,000,000.00),
as determined by the Bureau of Customs (BOC), the act shall be dealt with in
accordance with the penal provisions of Republic Act 10845 or The Anti-
Agricultural Smuggling Act of 2016.

In all cases, in accordance with Section 2530 of the Tariffs and Customs Code,
the smuggled rice and the property used in smuggling shall be confiscated and,
without prejudice to Section 2531 of the same Code, shall be forfeited in favor of
the Government. The Bureau of Customs shall turn over the confiscated rice to
the NFA to form part of its buffer stock.

SECTION 111. Criminal liability of officers of juridical persons.— When the
violator of any of the prohibited acts is a juridical person, the criminal liability
shall attach to its president, chief operating officer or manager who consents,
tolerates or fails to take action to prevent the commission of the violation.

SECTION 112. Criminal liability of public officials. - Any public official or
employee who, by reason of his office, with or without consideration, conspires in
the commission of the prohibited acts or knowingly conceals the violation, shall
likewise be held principally liable for the violation and shall suffer the additional
penalty of permanent disqualification to hold public office.

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CHAPTER XIX
Congressional Oversight Committee

SECTION 113. Congressional Oversight Committee. - A Congressional
Oversight Committee is hereby created to oversee and monitor the
implementation of this Act. It shall be composed of the Chairpersons and Vice -
chairpersons of the Committees on Agriculture and Food, Agrarian Reform, and
Poverty Alleviation of the House of Representatives and Chairpersons and Vice-
chairpersons of the Committees on Agriculture and Food, Agrarian Reformand
Economic Affairs of the Senate.

The Chairperson of the Congressional Oversight Committee shall be rotated
among the chairpersons of the member-committees.

‘The Congressional Oversight Committee shall meet twice a year.

CHAPTER XX
Terminal Review of Implementation

SECTION 114. Sunset review. - On the third year of the implementation
period, the Congressional Oversight Committee shall conduct total review of the
implementation of this Act per its component programs, especially its Focused-
Poverty Alleviation Program. If it finds compelling and reasonable grounds to
extend the entire program or any of its components, the extension shall be limited
to one year; Provided, that the extension for the Focused-Poverty Alleviation
Program shall be until the special beneficiaries have successfillly transitioned to
crossing over the rural poverty threshold one hundred percent (100 %).

CHAPTER XXI
Miscellaneous Provisions

SECTION 115. Implementing Rules and Regulations. - The Department shall
issue the Implementing Rules and Regulations of this Act within forty-five (45)
days after its effectivity.

SECTION 116. Repealing clause. - All laws, decrees, executive orders, rules
and regulations and other issuances not consistent with this Act are hereby
repealed or amended as to inconsistent parts.

SECTION 117. Separability clause. - If any provision or part of this Act is
declared void, the remaining parts shall remain in force and effect.

SECTION 118. Effectivity clause. - This Act shall take effect immediately after
fifteen (15) days from its publication in the Official Gazette.

Approved.

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