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Republic of the Philippines [> RECENED

HOUSE OF REPRESENTATIVES
Quezon City
SIXTEENTH CONGRESS
First Regular Session

293

House Bill No.

Introduced by Hon, Delphine Gan Lee

EXPLANATORY NOTE

The National Food Authority (NFA) was created to address goals of ensuring low and

stable food grain prices for consumers, pursuant to our national policy of agricultural

modernization and sustainable poverty reduction. Historically, however, it has proven fiscally
impossible to address all of these objectives. A study conducted by the International Rice
Research Institute has further revealed that under the NFA monopoly over rice importation,

Filipino consumers have ended up paying more for rice than they would have had to under a

free trade regime.

There is a growing consensus among economists that with the NFA monopoly on rice
importation, the costs imposed by NFA operations on the Philippine economy far outweigh

the benefits to rice producers and consumers. The NFA has both regulatory and proprietary

functions over the grain sector. It sets import quantities and also works as the lone importer
of the authorized volume of imports. However, such interventions in the market over the

years created severe distortions in the rice market, contributing, among other:

to the poor

productivity of the rice sector over the years, the rice supply gap, and the increasing cost of

government actions to fill such gaps and artificially stabilize rice prices and supply.

This proposal aims to streamline government intervention in the rice sector by
removing the rice importation function from the NFA and allowing the participation of the
private sector in rice importation. Allowing market forces to work in the importation,

stockpiling and marketing of rice will allow for scarce government resources to be re-



allocated away from costly price stabilization functions to more productive investment in rice

research and development, extension services and irrigation

This bill proposes the transformation of NFA from a grain marketing monopoly to a
public regulatory agency focused primarily on maintaining the buffer stock requirement of
the Country at both national and local levels which will allow the country to guard against

price volatility due to natural calamities or emergencies, Along with this, the NFA shall

continue other regulatory funetions which include the licensing and registration of rice

importers, allocation of import quotas among licensed rice traders, maintenance of marketing

information dissemination systems and the inspection of stored food grains for the purpose of
‘PA,

including the stabilization of prices and the licensing of warehouses to appropriate

taking inventory. This bill further mandates the transfer of duplicative functions of the

government agencies or local government units.

The early passage of this bill is thus eamestly sought

HON. DF
Represent

AMINE GAN LEE
ARI Party-Li



SNS

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
SIXTEENTH CONGRESS
First Regular Session

House BillNo. 2906 _

Introduced by Hon, Delphine Gan Lee

AN ACT
TO STRENGTHEN AND REORIENT THE MANDATE OF THE NATIONAL
FOOD AUTHORITY IN ORDER TO ENSURE FOOD SUFFICIENCY, FOR THAT
PURPOSE RATIONALIZING ITS FUNCTIONS, AND FOR OTHER PURPOSES

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

SECTION 1, Short Title, ~ This Act shall be known as the “National Food Authority

Rationalization Act of 2013.”

TION 2. Declaration of Policy. ~ Af

ing the right of every Filipino to have

s to sufficient food, it is he State to make all government

by declared the policy of the

cies and corporations directly responsible for food production oriented toward the

attainmes the enhance

of food security and sufficienc:

nent of competitiveness and

transparency in the rice economy and to be more responsive to the increasing globalization of

the agricultural market

SECTION 3. Policy Goals and Objectives. ~ To carry out the foregoing policy, the
mandate, programs and functions of the National Food Authority (NFA), shall be reoriented
and realigned towards the achievement of the following objectives:

(A) Ensure available adequate and accessible supply of rice and other foodgrains
during lean periods and in times of calamity and emergency.

(B) Promote regulation aimed at enhancing competitiveness, transparency and

responsibility in the foodgrains marketing industry: and

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and post-harvest facilities;

ncourage private sector participation in the importation of rice and in production

ION 4. Re-orientation of the National Food Authority, ~ The functions of the
NFA shall evolve 0 focus primarily on maintaining the buffer stock requirements of the
country, All other developmental and regulatory function of the NFA shall be transferred to
appropriate government agencies or local government units unless otherwise provided by this

Act,

SI

“TION 5. Buffer Stock Management, ~ The NPA shall be the primary agency

responsible for the management of the buffer stock requirements of the country. For this

purpose, the NFA shall review on an annual basis the buffer stock requirements of the
country at the national and local levels and shall devise a system of regularly monitoring the

buffer stock levels. For the purpose of ensuring that desirable buffer stock level of the

country are met and maintained, the NFA may enter into contracts for the procurement of rice
for government; Provided that the volume of rice procurement shall not be more than the

strategic 30-day rice buffer stock requirement of the country

SECTION 6. Other Powers and Functions of the NFA, ~The NFA shall exercise the

following responsibilities, powers and functions:
(A) To establish rules and regulations governing private sector importation of rice and

collect fees and charges for s

id importation
(B) To determine and allocate import quotas among private sector entities and farmer

organizations licensed to engage in rice importation

(C)o coordinate with the Bureau of Agricultural Statistics in the generation of
marketing information and establish and maintain marketing information
dissemination systems in order to keep the public informed on the prevailing

market situation of foodgrains and their substitutes and/or their by-products/end

products in different parts of the country: and

(D)To inspect foodgrains and their substitutes and/or their by-products, stored by any

person, partnership, corporation, or association, for purposes of taking inventory

Kind record of such commodities, and to enter the premises thereof by use of

reasonable means,


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SECTION 7. Transfer of Mandate, ~ The following regulatory and developmental

functions of the NFA are hereinafter transferred to the following:

(A) The registration, licensing and supervision of warehouses, whether bonded or not,

(B)

(C) The stabil

(D) The development of more et

(F)

and the prescription, imposition and collection of fees and charges relative thereto

to the local government uni
‘The stabilization of prices of rice, corn and other foodgrains at the farm gate level
to the Department of Agriculture;

ation of supply and prices of other foodgrains and other basic food

items at the consumer level to the National Price Coordinating Council

ient ways, systems and facilities for harvest

threshing, drying, storage, milling, packaging, post-harvest handlin;

transporting of foodgrains to the Philippine Rice Research Institute;
The registration, licensing, and supervision of persons, natural or juridical, who
shall engage or are engaged in the business of, providing goods and services in

support of the different activities involved in the processing, transporting,

marketing, and trading of foodgrains and their substitutes and/or their byproducts!
end-products as well as the imposition and collection of fees, charges, and
surcharges in licensing and regulating the operations of such persons to the

ulture;

Department of Agri

The formulation of plans and programs on, foodgrains production, storag

n for

mil ibution, as well as the coordinat

ng and s implementation among
various agencies of the government and the private sector to the Bureau of

and

heries Product Standardi

Agriculture and

(G) The establishment of appropriate post-production technology and formulation of

SECTION 8. Role of the Private Sector. ~ The importat

plans and programs aimed to reduce post-harvest losses to the Bureau of Post-

Harvest Research and Extension.

n of rice shall henceforth be

open to the participation of and exclusively undertaken by private sector entities and farmers’

organizations, subject to appropriate tariffs and quotas; Provided, that the necessary

registration and licensing processes and requirements of the NFA have been complied with

For this purposes, the policy of open importation and distribution by all interested private

parties shall be fully implemented,


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SECTION 9. Transitory Provisions, ~ Within one (1) year from the effectivity of this
Act, the NPA shall gradually phase out all its rice importation activities to give way to the

entry of private sector entities, especially farmers’ organizations, in rice importation:

Provided, that the NFA shall have completely ceased all its rice importation functions and
activities four (4) years from the time of the enactment of this Act. For this purpose, the NFA
shall, within one hundred twenty (120) days from the enactment of this Act, establish the
necessary rules and regulations for the importation of rice by the private sector.

To effect a smooth transition, the NFA shall continue to exercise its developmental

and regulatory functions, until the concerned government agencies or local government units

shall have established their plans, programs and rules and regulations to implement th
mandate identified in Section 6 above, whieh in no case shall be no longer than one (1) year

from the effectivity of this Act

SE

TION 10, Penal Provisions. ~ The following acts or omissions shall be
punishable as follows:
(A) Serious Offenses:
i) Cornering or hoarding of foodgrains resulting in an artificial shortage
or scarcity of supply and inerease of prices thereof in any part of the

count

ii) Unreasonable depletion of stocks; selling or lending of government
stocks to another foodgrains seller; selling or offering 10 sell
government stocks beyond the maximum quantity or price allowed by

the Depa

nent of Agriculture: or storing or selling government stocks

in other places other than those duly authorized by law:

es of essential commodities to fall or rise for one’s own,

iii) Causing pr

profit by changing or falsifying figures, accounts, and other related
information pertaining thereto:

iv) Printing, issuing, or knowingly using, processing, or negotiating, a
cancelled, unauthorized, illegal, counterfeit, or falsified warehouse
receipt;

¥) Failure or refusal of an accountable officer to turn over or remit

collection within a reasonable period of time: or

vi) Failure or refusal of a foodgrains warehouseman to deliver foodgrains

deposited with him; Provided, that the warehouseman shall be entitled


to the allowance authorized for depreciation of the foodgrains

deposited.

The offender shall, upon conviction, be punished by imprisonment of not less than six
(6) years and one (1) day to not more than twelve (12) years, or a fine of not Jess than Two
Hundred Thousand Pesos (P200,000.00) to not more than Two Million Pesos (P2,000,000.00)

or both, at the diseretion of the court,

(B) Less Serious Offenses

i)  Conniving in the concealment of stock shortage in a foodgrains
warehouse;

ii) Knowingly submitting any report containing false information or data;

iii) Failure or refusal of a warehouseman to allow the inspection of his
foodgrain stocks to misrepresent their quantity or quality or to conceal
a shortage, including impeding such inspection and examination by

abandonment, absence, or other similar means.

The offender shall, upon conviction, be punished by imprisonment of not less than

four (4) years and one (1) day to not more than eight (8) years, or by a fine of not less than
One Hundred Thousand Pesos (P100,000.00) to not more than One Million Pesos

(P1,000,000.00), or both, at the discretion of the court.

(C) Light Offenses:

i) Willful non-compliance with any official order, circula

or directive

lawfully issued by the DA, unless such constitutes a higher offense
under this Act, in which case the offender shall be penalized under the
latter offense:

ii) Committing any other violation of a provision of this Act for which no
specific penalty is prescribed and which is not punished under any

other existing law

The offender shall, upon conviction, be punished by imprisonment of not less than

two (2) years to not more than four (4) years, or a fine of not less than Fifty Thousand Pesos


(P50,000.00) to not more than One Hundred Thousand Pesos (P100,000.00), or both, at the

discretion of the court.

SECTION 11, Implementing Rules and Regulations. ~ The NFA, in consultation
with relevant government agencies and LGUs, farmer organizations and other stakeholders,
shall within one hundred and twenty (120) days from the enactment of this Act, formulate the

necessary rules and regulations to effectively implement the provisions of this Act.
SECTION 12. Separability Clause, ~ If any provision or part hereof is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain

valid and subsisting,

SECTION 13. Repealing Clause. - Any law, presidential decree or issuance,

executive order, letter of instruction, administrative order, rule or regulation contrary to or

inconsistent with, the provisions of this Act is hereby repealed, modified, or amended

accordingly

SECTION 14. Effeetivity Clause, = This Act shall take effect fifteen (15) days after

its publication in at least two (2) newspapers of general circulation.

Approved,