Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Cray

DATE:

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO.6'78 2

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

EXPLANATORY NOTE

Dubbed as the “food of the gods,” cacao or cocoa as it is more commonly
known, is described as more than a food, and less than a drug. Originating from the
‘Americas, cacao is a small evergreen plant introduced to the Philippines by the
Spanish in 1674 to 1680. Its beans are used to make cocoa and chocolate — two
products loved the world over. The plant became a cash crop in the Philippines in
the days of the Spanish Empire along with tobacco, sugar, and coffee because the
tropical climate is ideal for the plant's growth. Since its discovery, its products are
enjoyed globally. Worldwide consumption of chocolate has gradually increased since
the 1970s.’ Global demand annually grows by 2% to 3% with particular increases in
Central Asia and Eastern Europe

According to the Department of Agriculture, the increasing global demand for
cacao is spurred by various factors: a rising awareness of its health benefits,
expanding applications in food beverage, cosmetics, and medicine, and an
increasing disposable income of the middle class. The climate and fertile soil in the
Philippines is well suited for growing cacao. Yet, the current state of cocoa business
is a disappointment to the crop’s historic roots. The homegrown cacao industry has
deteriorated into small to medium scale enterprises. As a result, local production is
declining.>

The Philippines now makes up for the dwindling supply by importing large
amounts annually. The country currently produces 10,000 to 12,000 metric tons (MT)
of dried cacao beans, enough to make the country the 18" largest cacao-producer
worldwide, but not enough to secure the local demand of 30,000 MT annually.* With
production unable to keep up with demand, international prices for cacao beans are
steadily rising. This makes importing cacao products costlier unless we can supply
our own.

* http:JAwww.cidami.org/philippine-2020-challenge!

2 http:/www.pcaarrd.dost.gov.ph/home/portal/index.php/quick-information-dispatch/2176-tastier-
future-for-the-philippine-cacao-industry

id.

 http:/Awww.cidami.org/philippine-2020-challenge/

7.


Capitalizing on the growth of the cacao industry would increase livelihood for
Filipinos especially in agriculture-rich areas. For instance, Southern Mindanao is the
country’s largest cacao-producing region with nearly 4,000 hectares dedicated to the
crop. Although the country’s contribution at present to the global market is relatively
small, we already supply cacao to the United States, Singapore, New Zealand and
Europe. Chocolate from Philippine cacao beans is used by international brands such
as Mars, M&M's, and Barry Callebaut.

The Department of Agriculture (DA) recognizes the potential market for cacao
and is already conducting banner programs. One of them, the High Value Crops
Development Program, was created to help address food security, poverty,
alleviation and sustainable growth.® It promotes the production, processing,
marketing, and distribution of high value crops. HTVCDP intends to increase income,
livelihood opportunities and contribute to the national agricultural development of the
country. For cacao, the DA aims to raise local production to 100,000 MT come 2020,
an amount that would make the country a key player on the global market.

To achieve this vision, Mindanao is considered for the planting of 1,000,000
cacao trees. The DA chose Cacao as a priority commodity for the Davao region
because of its large tracts of fertile land. Mindanao currently devotes 2 million
hectares of land to coconut trees. Coconut trees are ideal for intercropping with
cacao trees since they provide shade cacao seeds need to grow. Using a mere
100,000 hectares for intercropping would potentially create 1,000 jobs for Mindanao
residents and more options for coconut farmers.

According to DA data, cacao is also grown in some parts of Luzon (locos,
Bulacan, Laguna, Camarines Sur, Camarines Norte, etc.) and Visayas (Iloilo, Bohol,
Negros Occidental). The department plans to improve cacao farmer's access to
fertilizer and cacao seeds in Mindanao and pre-existing regions. DA also promised to
improve the flow and quality of extension service to cacao farmers to hasten the
process and produce high quality products.

This bill seeks to implement a national program for the education and training
of stakeholders in the cacao industry, collect relevant research, scientific studies and
market strategies for the proliferation of the local cacao industry. It envisions the
various government agencies together with the Department of Agriculture (DA), as
lead agency, in this endeavor of making the Philippines a competitor in the world
cacao market.

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

Luis IUND “LRAY” F. VILLAFUERTE, JR.

5 Republic Act No. 7900, High Value Crops Development Act of 1995,


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

SEVENTEENTH CONGRESS
‘Second Regular Session

HOUSE BILL NO. 6788

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

AN ACT
ESTABLISHING A NATIONAL PROGRAM FOR THE CACAO INDUSTRY
PROVIDING FUNDS THEREFOR AND FOR OTHER PURPOSES

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

Section 1. This Act shall be known as the “Cacao Industry Development Act of
2017".

Section 2. Declaration of Policy. — it is hereby declared the policy of the state to
develop a sustainable cacao industry optimizing local production capacity, the
application of sustainable agriculture practices, securing quality raw materials
and the processing, marketing of cacao beans in its raw or processed form and
to be able to participate in the international cacao trade for the economic relief of
smaliholder farmers,

Section 3. National Cacao Development Council. — The National Cacao
Development Council shall be composed of the Department of Agriculture (DA)
Undersecretary in Charges of Crops,

High Value Crops Development Program Head;

DA — Bureau of Agricultural Research;

Department of Science and Technology (DOST);

Department of Trade and Industry (DTI);

National Economic and Development Authority (NEDA);

One (1) representative from the group of cacao traders;

". One (1) representative from the group of cacao processors; and
One (1) representative from the group of cacao growers.

PNOTAYN=


Section 4. The Objectives of the Program are as follows —

a) Impose Food Security by enhancing the ability to produce or procure
cacao;

b) Encourage Private Sector Investment in agribusiness through policy
reforms and advocacy, access to financing and cost-effective
incentives.

c) Expand Income Opportunities for producers and other entrepreneurs
especially from value-adding activities.

d) Provide Improved Technologies for fresh and processed cacao beans
towards meeting world standards for competitiveness.

Section 5. Powers and Functions. - The Council shall have the following general
powers and functions:

1. Formulate the cacao development plan;

2. Educate and train all stakeholders of the cacao industry;

3. Conduct the relevant research, scientific study and feasible marketing

strategies;

Establish and develop effective production systems for cacao varieties;

Establish and maintain productive, high yielding and good quality

cacao varieties;

Establish and maintain germplasm collection and gene bank for cacao;

Update cacao processing technologies;

. Develop effective and efficient marketing system for cacao;

Establish linkages with national and international organizations and

development centers of the cacao industry; and

10.Coordinate with other government and non-government agencies
involved in the development of the cacao industry.

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BND

Section 6. Meetings. - The Council shall meet once every quarter or may call on
a special meeting, as needed, upon a week's notice in writing.

Section 7. Quorum. — The presence of at least five (5) members at the time of
the meeting shall constitute the quorum; Provided, however, that in the absence
of the Chairman, the Vice Chairman shall preside.

Section 8. Role of the Local Goverment Units (LGUs). — The full
implementation of the objectives of this Act shall be with the partnership and
cooperation of the concerned LGU, which may also be release counterpart
funding or provide other services should it deem necessary or available. This role
is pursuant to the enshrined principle in the Local Government Code that
capabilities of local government units shall be enhanced by providing them with


opportunities to participate actively in the implementation of national programs
and projects.

Section 9. Appropriation. - The amount of Fifty Million Pesos (PhP
50,000,000.00) is hereby authorized to be appropriated from the Special
Activities Fund of the President of the Republic of the Philippines, or from any
other sources that may be identified for the purpose. Thereafter, such sum
required for its operation, maintenance, research, and development shall be
included in the annual General Appropriations Act of the Agencies involved.

Section 10. Repealing Clause. — All laws, presidential decrees, executive orders,
rules and regulations, or parts thereof which are inconsistent with the provisions
of this Act are hereby repealed, superseded or modified accordingly: Provided,
however, that nothing in this Act shall amend, modify or repeal the provisions of
Republic Act No. 7900, otherwise known as “An Act to Promote the Production
Processing, Marketing, and Distribution of High-Valued Crops’.

Section 11. Separability Clause. — If any part or provision of this Act shall be
held unconstitutional or invalid, other provisions hereof which are not affected
shall continue in full force and effect.

Section 12. Effectivity Clause. — This Act shall take effect fifteen (15) days after
its publication in the Official Gazette or in at least two (2) newspapers of general
circulation.

Approved,