Republic of the Philippines
House of Representatives
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

HOUSE BILLNO. $471 _

INTRODUCED BY REPRESENTATIVE ALFREDVARGAS

EXPLANATORY NOTE
This bill seeks to introduce changes into the Charter of the National Food Authority.

When then President Ferdinand Marcos signed the laws creating the National Grains
Authority, the precursor of the National Food Authority (NFA), he probably had in mind leaving
a legacy to the nation, which has attained food sufficiency.

Decades however, after the former president had first envisioned an agency that will
bring about development in the countryside particularly for the rice-producing farmers, the
dream remains stuck in the bureaucratic quagmire. Not only has the National Food Authority
(NFA) a total failure in empowering farms sell their produce at higher prices than manipulative
traders, the agency has also failed in ensuring the ideal buffer stock that would assure rice for our
People at affordable prices. The daily long lines which characterize NFA rice selling outlets are
alarming testimonies of the need to address the institutional inadequacy of the National Food
Authority (NFA).

There must be institutional safeguards that will prevent the agency from implementing
Policy actions that deviate from its mandate. But there is also a need for the agency to be
streamlined to eliminate bureaucratic fat and empower it to be an effective agency of the
government in order to ensure food for our people in their tables. Actions such as paying off its
institutional debts over the primary task of shoring up buffer rice stocks and procuring from

farmers’ market prices that are attractive are the important factors that should be its priority
tasks,

In view of the foregoing premises, approval of this bill is earnestly sought.


Republic of the Philippines
House of Representatives
Quezon City

SEVENTEENTH CONGRESS
Third Regular Session

HOUSE BILL NO. _§471

INTRODUCED BY REPRESENTATIVE ALFRED VARGAS

AN ACT
STRENGTHENING THE NATIONAL FOOD AUTHORITY (NFA)
AND APPROPRIATING FUNDS THEREFOR

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

SECTION 1. Title. This act shall be known as the “National Food Authority (NFA)
Act of 2018”.

SECTION 2. Declaration of Policy. It shall be the policy of the State to ensure food
security for all Filipinos, provide safe and adequate supply of food grains at all times and in all
Places, maintain adequate levels of food grains, and carry out corporate proprietary and
regulatory functions to attain sustainable development, reduce poverty and promote social
justice, empower the rural sector, and improve the productivity and income of agricultural
workers and producers.

SECTION 3. Definition of Terms.

1. Adulteration refers to an act which leads to the production of food which has been
packed under unsanitary conditions which becomes injurious to health because of the
omission or abstraction of a valuable constituent; or if any substance has been added
thereto or mixed or packed therewith so as to increase its bulk or weight, or reduce its
strength or to make it appear better or greater than it is.

2. Calamities refer to fortuitous events including acts of nature such as but not limited
to typhoons, floods, droughts, earthquakes, volcanic eruptions, lahar flows, and acts
of man such as political or civil disturbances and widespread civil unrest.

3. Contumacy refers to a person’s wilful refusal to appear before the Authority, comply
with its order, or resistance to authority.

4. Corporate refers to powers of a corporation under the Corporation Code.


5. Diversion refers to an act committed by NFA accredited retailers/outlets authorized to
sell NFA stocks resulting in or for the purpose of the following:

a. Unreasonable depletion of NFA stocks in the possession of grains businessmen;

b. Selling or lending government stocks to other grains businessmen;

©. Storing or selling government stocks in other places, stores or stalls other than
those authorized by the Authority; or

4. Unreasonable, intentional, or undue delay in the delivery or unloading of NFA
stocks to any authorized warehouses, stores, or places for storing food grains.

6. Farm gate price refers to the prevailing buying price of palay and corn at the farm
level ina certain locality at a given specific time.

7. Farmers refer to the producers of palay and corn. They can be tillers of the land
themselves or administrators or supervisors of palay and corn production.

8. Food grains refer to palay, rice, corn, com grits, and other grain substitutes.

9. Food security refers to the physical and economic access to sufficient, affordable,
safe, nutritious and accessible food that meets dietary needs and food preferences for
an active and healthy life at all times.

10. Price manipulation refers to an unlawful act of any person habitually engaged in the
production, manufacture, importation, storage, transport, distribution, sale or other
methods of disposition of goods to engage in the following acts in order to influence
prices of food grains for one’s own profit without prejudice to the provisions of
existing laws on goods not covered by this Act:

a. Hoarding, which is 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
food grains to the general public or the unjustified taking out of food grains from
the channels of production, trade, commerce and industry. There shall be prima
facie evidence of hoarding when a person has stocks of food grains fifty percent
(30%) higher than his usual inventory and unreasonably limits, refuses or fails to
sell the same to the general public at the time of discovery of the excess. The
determination of a person’s usual inventory shall be reckoned from the third
month immediately preceding the discovery of the stocks in case the person has
been engaged in the business for at least three (3) months; otherwise, it shall be
reckoned from the time he started his business.

b. Profiteering, which is the sale or offering for sale of food grains at a price grossly
in excess of its true worth. There shall be prima facie evidence of profiteering
whenever a basic necessity or prime commodity being sold: (a) has no price tag:
(b) is misrepresented as to its weight or measurement; (c) is adulterated or diluted:
or (d) whenever a person raises the price of food grains he sells or offers for sale
to the general public by more than ten percent (10%) of its price in the
immediately preceding month; and


©. Cartel, which is any combination of or agreement between two (2) or more
persons engaged in the production, manufacture, processing, storage, supply,
distribution, marketing, sale or disposition of food grains designed to artificially
and unreasonably increase or manipulate its price. There shall be prima facie
evidence of engaging in a cartel whenever two (2) or more persons or business
enterprises competing for the same market and dealing in the same basic necessity
or prime commodity, perform uniform or complementary acts among themselves
which tend to bring about artificial and unreasonable increase in the price of food
grains or when they simultaneously and unreasonably increase prices on their
competing products thereby lessening competition among themselves.

11. Government Instrumentality vested with Corporate Powers (GICP) refers to
instrumentalities or agencies of the government, which are neither corporations nor
agencies integrated within the departmental framework, but vested by law with
special functions or jurisdiction, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy.

12, Minimum Access Volume (MAV) refers to the volume of rice that is allowed to be
imported with a lower tariff as commitment of the Government of the Republic of the
Philippines to the World Trade Organization (WTO).

- National Rice Reserve refers to the National Food Authority’s (NFA’s) tice
inventory, equivalent to at least Fifteen (15) days national consumption requirement.
This reserve requirement shall be maintained by the government, to be managed by
NFA with the following components:

a. Stocks for Food Security

1, Strategic stocks for intervention
2. Operational stocks for distribution

b. Stocks for Calamity

Readiness and accessibility of rice during calamities, disasters and emergency
situations

©. Stocks for the Marginalized Sector

Marginalized families under Pro-Poor Programs, DepEd’s Feeding Program,
revival of KADIWA operations

d. Stocks for Trade/Export (if sufficient)

14. Regulatory refers to the functions necessary to attain the developmental mission of
ensuring sustainability food supply, assuring local food grains producers a fair return


of investment and protecting the rights of poor consumers to safe and affordable food
grains,

SECTION 4. The National Food Authority. Pursuant to its original mandate
Prescribed in Presidential Decree No. 4, as amended by Presidential Decree Nos. 699 and 1485,
the National Food Authority, shall be classified as a Government Instrumentality vested with
Corporate Powers (GICP). It shall hereinafter be referred to as the Authority, tasked to maintain a
safe, adequate and continuous supply, at reasonable prices of food grains in the country. The
Authority shall be attached to the Office of the President and cannot be abolished without the
approval of Congress.

SECTION 5. Powers and Functions :

- To sue and be sued;

. To adopt, alter, and use an official seal;

3. To own, lease, or acquire ownership by purchase, or invest in, hold, sell, mortgage,
pledge, or otherwise dispose of real and personal properties, stocks or bonds or any
interest in either, or any obligation or evidence of indebtedness in any person,
partnership, firm or corporation;

4. To enter into, make, perform, and carry out contracts necessary or incidental to the
realization of its functions with other persons, firms, or corporations, private or public,
including loans or borrowings from domestic or foreign sources which shall be
guaranteed by the National Government, or initiate contracts or agreements between the
Philippine Government and any foreign government or institution;

5. To create and establish a provident fund shall consist of contributions made by both the
Authority and its officers and employees to a common fund for the payment of retirement
and other benefits to such officers and members or their heirs under such terms and
conditions as the Board may prescribe;

6. To maintain and manage National Rice Reserve, equivalent to at least Fifteen (15) days
national consumption requirement. This reserve requirement shall be maintained as:

1. Stocks for Food Security
A. Strategic stocks for intervention
B. Operational stocks for distribution
2. Stocks for Calamity
A. Readiness and accessibility of rice during calamities, disasters
and emergency situations
3. Stocks for the Marginalized Sector
A. Marginalized families under Pro-Poor Programs, DepEd’s
Feeding Program, revival of KADIWA operations
4. Stocks for Trade/Export (if sufficient);

xv

7. To bring in additional buffer stock on top of the fifteen (15) days National Rice Reserve,
if warranted. The President shall approve the importation of the additional buffer stock
the volume of which shall be determined on an annual basis by the Board.

8. To stabilize supply and price of food grains primarily through local procurement and rice
distribution. However, if local procurement will not be sufficient, the deficiency will be
sourced through rice importation;


9. To supply rice or com for programs of other government agencies, which shall pay for
‘such services:

* To supply rice, com or rice com blend in cases of calamity and national
emergency for the Department of Interior and Local Government (DILG) and
other government agencies tasked to distribute rice during calamities and national
emergencies;

* To supply rice, com or rice com blend for pro-poor programs of the Department
of Social Welfare and Development (DSWD) and such other pro-poor programs
of the government; and

* To supply rice, com or rice com blend for the revival of KADIWA operations of
the concerned government agencies;

10. To supply rice to all government offices, agencies, and instrumentalities who either grant
rice as form of incentive or benefit to their employees or use rice in connection with their
functions;

11. To determine the selling price of NFA rice and corn;

12. To maintain and manage food grains post-harvest facilities;

13. To undertake the direct importation of rice for the purpose of ensuring and maintaining
National Rice Reserve. For importation other than maintaining buffer stocks, the
Authority shall establish rules and regulations governing the importation of food grains,
issue import clearance among certified and licensed importers;

14. To establish rules and regulations governing the export of food grains and collects fees
and charges such as exportation at rates to be determined by the Board. The Authority
shall provide guidelines for the exportation of food grains for certified and licensed
exporters;

15. To regulate price/implement price freeze when there is an abnormal increase in the price
of rice;

16. To establish a flexible buying price of palay depending on the prevailing ex-farm price in
the area;

17. To establish rules and regulations governing the export of food grains and to collect fees
and charges for such exportation at rates to be approved by the Board;

18. To register and license persons, natural or juridical, who intend to or are engaged in the
business of food grains, whether in the trading or sale of food grains or in the provision or
services in support of the different activities involved in the production, processing,
transporting and warehousing of food grains and charges and/or surcharges in licensing
and regulating the operations of such persons;

19.To establish and enforce quality and food safety standards in grading, sampling and
inspection, test and analysis specification, nomenclatures, units of measurement, code of
Practice and packaging conservation, storage, milling, distribution, shopping. drying,
handling and transport of food grains;

20.To inspect food grains stored in private warehouses for the purpose of taking an
inventory and monitoring commercial stocks, prices and stock movement;

To order the seizure, whenever there is adulteration, profiteering, hoarding or improper

acquisition and mishandling of rice or corn and their by-products or end-products as

defined herein, including facilities and equipment used in said activities; or whenever
there is scarcity of supply of such commodity in the consumer market or an unwarranted

2

p


increase in the price of the hoarded commodity and its public sale in such quantity as may
be needed to stabilize prices to normal levels;

22. To order the transfer or conveyance of and accept the confiscated smuggled food grains
seized by the Bureau of Customs to form part of the Authority's stocks inventory based
on the quality of stocks;

23. To provide for the enforcement of the provisions of this Act or any regulations issued or
which may hereafter be issued pursuant thereto, the implementation and enforcement of

which is vested with the Authority and prescribe and impose administrative fines and
penalties; to conduct investigations and to require subpoena or subpoena duces tecum, the
attendance and testimony of witnesses, the production of books, papers, documents,
exhibits, record evidence; to administer oath; and to make arrests. Any case of ‘contumacy
shall be dealt with in accordance with the procedure prescribed pursuant to the pertinent
law. All fines imposed and collected under this paragraph shall form part of the
Authority’s funds;

. To establish rules and regulations governing the allocation of the Minimum Access
Volume (MAV) among the private sector, other private entities, and even the Authority
for its Food Security Stocks, and issue import clearances and impose fees and charges for
said transactions;

25. To promote organized interrelationships among stakeholders to attain efficiency in the

food grains marketing system;

26. To establish networks with national and international institutions for food security and
development of the food grains industry;

a.To cause the arrest persons for violation of prohibited acts committed in this act
and other pertinent rules and regulations, circulars, orders and directives which
may be promulgated hereafter by the Authority; and

b.To implement other plans, programs and policies as may be directed by the
President, with necessary funding.

2

&

In the exercise of the foregoing functions, the Authority is authorized to do and perform
and all other acts necessary to carry into the effect the provisions of this act or as essential to the
proper conduct of the operations of the Authority.

SECTION 6. Governing Body. The corporate powers and functions of the Authority
shall be vested in and exercised by the Board of Directors, hereinafter referred to as the Board,
which shall be composed of the Administrator who shall act as its Chairman, and the following
ex-officio members: representative from the Department of Agriculture (DA) as Vice-Chairman;
representative from the Department of Social Welfare and Development (DSWD); representative
from the Department of Interior and Local Government (DILG); representative from the Office
of the President (OP); one (1) representative from rice farmers; and one (1) representative from
com farmers to be appointed by the President of the Philippines from a short list prepared by the
GCG pursuant to Section 5(e) of Republic Act No. 10149. Except for the NFA Administrator
whose term as Chairman of the Board shall be for six (6) years, unless sooner removed, the term
of the appointive members of the Board shall be one (1) year, in accordance with the provisions
of Republic Act NO. 10149; Provided, that they shall continue to hold office until their
successors shall have been appointed and duly qualified. All vacancies prior to the expiration of
the term shall be filled for the unexpired term only. In the absence of the Chairman, the Vice
Chairman shall act as the chairman. In the absence of both the Chairman and the Vice Chairman,


the Board shall elect a temporary presiding officer. The Board shall meet regularly at least once a
month and as frequent as necessary to discharge its duties and responsibilities properly. The
Board shall be convened by the Chairman or a majority of the members. Except when otherwise
provided for in this Act, the vote of a majority of the members constituting a quorum shall be
sufficient for the adoption of any rule, resolution, decision or any act of the Board. Each member
of the Board shall be entitled to a per diem, of a reasonable amount under the law, incurred by

them in the performance of their duties for the Authority as may be specifically authorized by the
Board.

SECTION 7. Powers and Functions of the Board. The Board shall be the policy
making body of the Authority. In furtherance thereof, the Board shall promulgate such rules and
regulations as may be necessary and proper for the effective exercise of its powers and functions,
as well as the discharge of duties and responsibilities of the Authority, its officers and employees,
The Board shall exercise such other powers and perform such other functions as may be
necessary to carry out provisions of this Act.

SECTION 8. Administrator. The Authority shall have an Administrator to be
appointed by the President of the Philippines, for a term of six (6) years, unless sooner removed
by the President. The Administrator shall be the Chief Executive Officer of the Authority and ex-
officio Chairman of the Board. In case of resignation, retirement, separation, transfer, re-
assignment, removal and other cause of cessation from office of the Administrator, the
replacement shall serve for the unexpired portion of the term. The Administrator shall be assisted
by two (2) Deputy Administrators who shall be appointed by the Administrator upon
confirmation of the Board. In the absence of the Administrator, either one of the Deputy
Administrators, upon the designation of the Administrator, shall perform the duties and exercise
the powers and functions of the Administrator. There shall be two (2) Assistant Administrators to
supervise and cover functional areas. The Administrator, Deputy Administrators, and the
Assistant Administrators should be natural-born citizens of the Philippines.

SECTION 9. Powers and Functions of the Adi

istrator

1. Direct and supervise the management, operation and administration of the
Authority and, for the purpose, may delegate any or some operational and administrative
responsibilities and duties to the other officers of the Authority;

2. Define and promulgate the corporate objectives, target and direction of the
Authority;

3. Promulgate rules and regulations necessary to carry out the objectives, policies
and functions of the Authority;

4. Enter into and execute, on behalf of the Authority, all contracts and agreements
which the Authority may enter into, and to sign, accomplish, and deliver any and all documents
relative to such contracts and agreements;

5. To enter into, make, perform, and carry out contracts necessary or incidental to
the realization of its functions with other persons, firms, or corporations, private or public,
including loans or borrowings from domestic or foreign sources which shall be guaranteed by the
National Government or initiate contracts or agreements between the Philippine Government
and any foreign government or institution;

6. Submit to the Board an annual budget and such supplemental budgets as may be
necessary for its consideration and approval;


7. Represent the Authority in all dealings with other offices, agencies, persons or
entities, domestic or foreign, government or private;

8. Appoint and discipline or cause in accordance with civil service laws, tules, and
regulations, the subordinate officers and personnel of the Authority;

9. Transfer officers and personnel as the exigencies of the service may require, in
accordance with the existing rules and regulations; and
10. Exercise such other powers and perform such other duties as may be assigned by
the Board.

SECTION 10. Departments. There shall be created the following departments within
the Authority: administrative, legal, operations, regulatory, technical, financial and management,
internal auditing, planning, public affairs, Information and Communications Technology (ICT),
and such other department necessary to effectively carry out the functions of the Authority,

SECTION 11. Merit System. All officials and employees of the Authority shall be
selected and appointed on the bases of merit and fitness in accordance with the civil service law,
rules, and regulations. The recruitment, transfer, promotion, and dismissal of all its personnel
including temporary workers shall be governed by the merit system that will established by the
Authority in compliance with existing laws, rules, and regulations,

SECTION 12. Exemptions

1. The provisions of the Republic Act No. 9184, otherwise known as the
“Government Procurement Reform Act”, and its implementing Rules and Regulations, insofar as
procurement of Food Grains from farmers and farmer organizations, with due consideration of
the interest of the government in such negotiations;

2, Payment of taxes, duties, fees, imposts and charges, costs and restriction to the
Republic of the Philippines, provinces, cities, municipalities, and other agencies and
instrumentalities, including the taxes, duties, fees, imposts and, and other charges provided for
under Republic Act No. 1937, otherwise known as the “Tariff and Customs Code of the
Philippines:, and all filing, docket, and service fees, bonds, and other charges or costs in any
court or administrative proceedings in which the Authority may be a party;

3. All income taxes, franchise taxes and realty taxes to be paid to the National
Government, its provinces, cities, municipalities and other government agencies and
instrumentalities;

4. All duties and arrastre fees, in so far as the government's share is concerned,
including all charges and fees imposed under Presidential Decree No. 857, otherwise known as
“Revised Charter of the Philippine Ports Authority”, taxes and advance sales taxes, wharfage
taxes and tonnage dues on import and export of foods required for its operations and projects;

5. The payment of documentary and science stamp taxes and registration fees for all
documents or contracts executed by or in favour of Authority: Provided, however, that this
exemption shall not apply to taxes and assessments payable by Persons and entities transacting
business with the Authority;

6. The coverage of Presidential Decree No. 711, “Abolishing All Existing Special
and Fiduciary Funds and Transferring to the General Fund the Operations and Funding of all
Special and Fiduciary Funds”;



7. Compulsory procuring from the Government Service Insurance System (GSIS)
insurance coverage for its food grains importation; and

8. Compulsory procuring of goods from other agency of the government, such as the
Procurement Service of the Department of Budget and Management (DBM), which is tasked
with a centralized procurement of commonly used goods for the government.

SECTION 13. Assets and Liabilities. The Authority shall identify all its idle assets
and may authorize the Privatization and Management Office (PMO) to handle its disposition and
liquidation. The Authority shall maintain all its existing operational assets. All existing
obligations of the Agency and interest payments due thereon are hereby condoned and the
Agency shall be relieved from payment thereof.

SECTION 14. Capitalization. The Authority shall maintain a 15-day buffer stocking,
for National Rice Reserve. For this purpose, the National Government shall provide a fresh
capital amounting to Twenty-Five Billion Pesos (P25,000,000,000.00) in the General
Appropriations Act.

SECTION 15. Appropriations. The national government shall provide an annual
budget in the General Appropriations, that is sufficient cover the procurement of the required
volume of buffer stocks of the Agency for food security, and funds to cover the legitimate losses
from operations of the Authority. The budget for the purchase of rice stocks from the Authority
for any pro-poor programs of the DSWD, disaster relief operations of the NDRRMC and other
relief giving agencies, and rice incentives of all government offices agencies, instrumentalities
and the use thereof for their activities, shall be included in their respective allocations in the
annual General Appropriations Act. Local government units shall allocate in their respective
annual budgets the cost of rice to be purchased from the Authority for relief operations.

SECTION 16. Separation Incentive Package. Whenever necessary, a restructuring
program shall be implemented by the Authority. Permanent officials and employees of the NFA
who choose to leave government service, or who shall choose to retire if eligible, shall be given a
Separation Incentive Package (SIP) in addition to other retirement benefits to which they may be
entitled under existing laws and regulations, based on the following scales:

1, 1.5 x gross monthly pay for every year of service up to 20 years; and

2. 2.0.x gross monthly pay for every year of service in excess of 20 years.

3. 2.5 x gross monthly pay for every year of service in excess of the 1 30 years.
4. Employees who opt to retire under the provisions of Republic Act No. 1616 shall
receive the equivalent of 1.5 gross monthly pay for every year of service under SIP.

SAMPLE COMPUTATION FOR SEPARATION INCENTIVE PACKAGE.

‘Computation

1-20 yrs = 1.5 x 81,344.00 x 20 = P2,440,320.00


21-30 yrs = 2.0 x 81,344.00x 10=  1,626,880.00
Excess of 30 years:

= 2.5 x 81,344.00 x 6.28 yrs= 1,277,100.80
TOTAL = P5,344,300.80

SECTION 17. Offense and Penalties

A. Serious offenses — Any of the following acts or omissions shall constitute a serious
offense:

1, Hoarding, profiteering, or acting as a cartel involving food grains as defined in
Section 5, Illegal Acts of Price Manipulation, of Republic Act No. 7581, otherwise known as the
“Price Act”;

2. Unauthorized re-bagging / re-sacking of government stocks in commercial sacks;

3. Trading or causing the distribution or sale of imported milled rice to the public
without any permit from the Authority;

a. Mislabelling NFA and/or commercial stocks and/or
misrepresenting imported milled rice as a local rice variety;

4. Selling NFA tice at prices above the government-mandated prices;

5. Engaging in the business of selling food grains without a valid license;

6. Failure or refusal of grains warehouseman, without any lawful excuse to deliver
grains deposited with him; provided, however, that the warehouseman shall be entitled to the
allowance authorized for depreciation of the grains warehouse;

7. Connivance in the concealment of a stock stored in a grains warehouse;

8. Diversion of government stocks by NFA accredited retailers / outlets authorized to
sell NFA stocks;

a. Unreasonable depletion of stocks;

b Selling or lending government stocks to another grains businessman;

c. Selling or offering to sell the government stocks beyond the maximum
quantity allowed by NFA;

d. Storing and / or selling the government stocks in other places / stall
other than that duly authorized by the NFA;
Unreasonable / intentional delay in the delivery / unloading of
withdrawn stocks

9. Printing, issuing, or knowingly using, possessing or negotiating a cancelled,
unauthorized, illegal, counterfeit or falsified warehouse receipt;

10. Comering or hoarding of grains resulting in artificial shortage or scarcity of
supply and increase of prices thereof in any part of the country;

11. Cartel;
12. Sale of smuggled rice;
13. Violations of Minimum Access Volume (MAY) Rice Importation
a. The offender of any of the serious offenses enumerated herein shall,
upon conviction, be punished by imprisonment of not less than five (5)
years and one day nor more than fifteen (15) years, or a fine of not less



than Fifty Thousand Pesos (P50,000.00) but more than Five Hundred
Thousand Pesos (P500,000.00), or both fine and imprisonment at the
discretion of the Court without prejudice to administrative penalties of
fine, cancellation of accreditation and cancellation of NFA licenses,
confiscation and seizure of stocks.

B. Less Serious Offenses — Any of the following acts or omissions shall constitute a
less serious offense:

1.
2.

3.

10.
1.

Connivance in the concealment of a stock shortage in a food grains warehouse;
Knowingly submitting any report to the Authority containing false information or
data;

Misrepresentation in connection with any application for license to engage in food
grains business;

. Failure or refusal of a warehouseman to allow the Authority or his duly authorized

Tepresentative to inspect or examine their food grains stocks to conceal shortage
or to misrepresent the quantity or quality of his food grains stocks, including the
impeding of such inspection and examination by abandonment, absence or
otherwise;

. Engaging in the business of food grains retailing, wholesale, threshing, shelling,

warehousing, milling, exporting, importing, trading, growing, and selling of
certified seed, manufacturing or processing without a valid license;

.. Possessing a rice polishing or rice color sorting machine unless authorized by the

DA. Provided, that all rice polishing or rice color sorting machines being used or
operated by any rice miller prior to the enactment of this Act shall be submitted to
the Authority for inspection and recording and shall not be used nor operated
unless authorized by the Authority;

. Importing unmilled rice grains except upon proper showing that the same shall be

used exclusively for agricultural or scientific purpose as duly certified by the DA
and the Department of Science and Technology (DOST);

. Possessing a rice polishing or rice color sorting machine unless authorized by the

DA. Provided, that all rice polishing or rice color sorting machines being used or
operated by any rice miller prior to the enactment of this Act shall be submitted to
the Authority for inspection and recording and shall not be used nor operated
unless authorized by the Authority;

. Importing unmilled rice grains except upon proper showing that the same shall be

used exclusively for agricultural or scientific purpose as duly certified by the DA
and the Department of Science and Technology (DOST);

Non-maintenance of separate books and records keeping:

Issuance by a warehousemen of warehouse receipts showing an aggregate
quantity of grains stocks in excess of the quantity permissible in his bond
coverage;

Issuance by a warehousemen of warehouse receipts showing an aggregate

quantity of grains stocks not covered by fire insurance at full value as required by
this Act;


13, Failure or refusal to give information required by the Authority, provided such
failure or refusal does not constitute a higher offense as herein provided;

14, Fraudulent misrepresentation by the applicant, in or by other person in connection
with, an application for production loan;

15. Any violation of the provision of PD. 4 for which no specific penalty is
prescribed and which is not punished under any existing law;

16. Submission of any report or document containing false information or data.

17. Misrepresentation in connection with any application for license to do business as
grains warehouseman, miller, exporter or importer or trader, manufacturer or
processor.

c. The offender of any of the less serious offense enumerated herein shall,
upon conviction, be punished by imprisonment of not less than six (6)
months and one (1) day or more than four (4) years, or by fine of not less
than Thirty Thousand Pesos (P30,000.00) nor more than One Hundred Fifty
Thousand Pesos (P150,000.00), or both fine and imprisonment at the
discretion of the court without prejudice to administrative penalty of fine,
cancellation of accreditation and cancellation of NFA licenses.

C. Light Offenses — Any of the following acts or omissions shall constitute a light offense:

1. Non-compliance with rules, regulations, decision, orders, circulars or directives
lawfully issues by the Council, provided non-compliance does not constitute a
higher offense as herein above provided; or

2. Selling or offering to sell to the Authority by any person of palay or com or other
food grains other than that directly produced by him as farmer or shared by him as
tenant or landlord; knowingly buying such food grains by any authorized
personnel for the Authority; and connivance by any person in the selling or
buying of such food grains;

3. Buying or possessing rice polishing or rice color sorting machines unless
authorized by the Authority. For this purpose, such machines already being used
or operated by any rice miller prior to the enactment of this Act shall be submitted
to the Authority for inspection and recording and shall not be used or operated
unless duly authorized by the Authority;

4, Importing unmilled grains except upon a proper showing by the imported that the
same shall be used exclusively for agricultural or scientific purposes and duly
authorized by the DA and the Department of Science and Technology (DOST) for
such purposes;

5. Selling without price tags;

6. Improper display of NFA rice;

7. Refusal to sell NFA rice;

8. Storing or selling commercial stocks in the same establishment / stall authorized
for NFA stocks;

9. Non-display of NFA license;

10. Non-display of prescribed NFA signboard.

11. Rice boxes not painted white and with unauthorized advertisements/posters;

12, Non-renewal of NFA license/registration;


13. Non-registration of transport facilities;

14. Non-compliance with weight / unit of measurement;
15. No duly calibrated weighing scales/apparatus;

16. Non-compliance with PGSP standards.

* The offender of any of the light offenses enumerated herein shall, upon
conviction, be punished by imprisonment of not less than three (3) months
and one (1) day nor more than nine (9) months, or a fine of not less than
Fifteen Thousand Pesos (P15,000.00) nor more than Thirty Thousand
Pesos (P30,000.00), or both such fine and imprisonment without prejudice
to administrative penalty of fine, cancellation of NFA licenses.

* Rice polishing machines and rice color sorting machines found to be used
in re-polishing or re-milling imported rice or used in color-sorting of rice
afier the promulgation of this Act shall be confiscated after conviction of
the offender, in favor of the government. Confiscated rice stocks, on the
other hand, shall be immediately donated to government hospitals, jails,
outposts and detachments of the Philippine National Police or Armed
Forces of the Philippines, through the DSWD, in the areas where the same
confiscated.

SECTION 18. Violation by Juridical Persons, Whenever any violation of the
provisions of this Act is committed by a juridical person, its directors, officers, officials or
employees who are responsible for the violation shall be held liable therefor.

SECTION 19. Violation by Government Officials or Employee. Any public official
or employee who, by reason of his office, with or without consideration, conspires in the
commission or knowingly conceals violations of the offenses prescribed in this Act or the other
Provisions of this Act shall likewise be principally responsible for the violation and shall suffer
the additional penalty of removal from office and permanent disqualification to hold any public
office without prejudice to other criminal cases that could be filed.

SECTION 20. Penalties Without Prejudice to Administrative Sanctions. The
foregoing criminal penalties shall be without prejudice to the administrative sanctions which the
Authority, in the exercise of its powers and functions, may impose under this Act, its own Rules
and Regulations or under any existing laws.

SECTION 21. Compensation. The NFA’s compensation framework shall be
generated by the National Government’s Salary Standardization Law until the Authority qualifies
for the Compensation Position and Classification Scheme (CPCS) under Republic Act No.
10149,

SECTION 22. Separability Clause. If, for any reason, any provision of this Act or
the application of such provision to any person, group, and circumstance is declared invalid or
unconstitutional, the remainder of this Act shall not be affected by such declaration,


SECTION 23. Repealing Clause. The provisions of Presidential Decree No. 4, as
amended and all other laws, decrees, executive order, rules and regulations, issuances or parts
thereof inconsistent with the provision of this Act are hereby repealed or modified accordingly.

SECTION 24. Effectivity. This Act shall take effect Fifteen (15) days after its
Publication in the Official Gazette or in a newspaper of general circulation.

Approved,