ORIGINAL COPY

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

193

House Bill No.

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

On September 26, 1972, with the declared policy to promote the integrated
growth and development of the ‘grains industry, Presidential Decree No. 4, otherwise
known as the National Grains Industry Development Act, was issued. The said decree
created the then National Grains Authority. This agency has since been reconstituted to
become the National Food Authority (NFA).

One of the powers and functions of the NFA agency under Section 6 (a) (xiii) of
P. D. No. 4 was to establish rules and regulations governing the export of rice, corn and
other grains.

On June 11, 1978, however, this power was limited under P. D. No. 1485. The
export of these agricultural products could only be made whenever there is an excess
production and/or supply. The Council, which governs the NFA, shall first issue a
certification proving excess production and/or supply, before any authority to export is
issued.

This amendment was anchored on food security. The argument was quite simple.
‘The very limited supply of local rice and com should be exclusively used for local
consumption.

In the world of decades past, when the supply of rice, com and grains was limited
and global production had just started to increase due to investments in production and
post harvest infrastructure, the policy made sense then. But today, when regional
production in different parts of the world are consistently at surplus levels and are
shipped all over the world to take advantage of deficits and better commodity prices, this
limitation has effectively worked against the Filipino farmer. The fear in decades past of
absent food supply sources has been mitigated today with greater trade flows mandated
by international and multi-lateral trade agreements.

While the Philippines’ accession to the World Trade Organization, and regional
free trade agreements, have allowed the entry into the Philippines of foreign commodities
to the benefit of Filipino consumers, the flow of imports has not worked to the benefit of
Filipino farmers since the limitation to freely export their grain commodities has placed
them on the receiving end of the impact of import prices, while denying them the benefit
of better prices in the international market were they allowed to export their produce.


The limitation, has effectively rendered nugatory the power of the NFA to
authorize export of rice and other grains, simply because it has become rare for
Philippine grain crops to register excess production or supply.

Lately, this provision is being seen as the impediment to the growth of a very
promising sub-industry of the grains sector. This pertains to the premium grain varieties,
such as the organically grown, the aromatic, the hybrid or the fancy, or other high end
rice and corn varieties.

While these grain varieties do not enjoy high demand from local consumers,
probably due to the fact that it very expensive, it enjoys immense popularity, not only
from consumers in Western countries, but likewise from progressive Asian countric:

According to one news report, it still briskly sells although it is at premium prices of
about $350 per MT in the overseas market, prohibitive by Philippine consumer standards.

This bill seeks the liberalization of grains export through the elimination of the
requirement for the NFA Council to certify to the fact of excess production or supply of
grains before an authority to export is issued.

With such, the export of Philippine grains, especially the premium or high grade
varieties, will be possible. In turn, our Filipino farmers shall have the opportunity to shift
their production to these grain varieties and have a higher income potential.

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



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

193

House Bill No.

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

AN ACT
LIBERALIZING THE EXPORT OF RICE, CORN AND OTHER
GRAINS OR RELATED AGRICULTURAL PRODUCTS,
AMENDING FOR THE PURPOSE SECTION 6 (a) xiii OF
PRESIDENTIAL DECREE NO. 4, OTHERWISE KNOWN AS THE
NATIONAL GRAINS AUTHORITY ACT, AS AMENDED, 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 “Grains Export
Liberalization Act of 2013”.

SECTION 2. Declaration of Policy. — \t hereby declared the policy of the State
to provide its farmers and agricultural workers better income opportunity, encourage the
increase in their productivity and improve their profitability, by allowing greater latitude
in the export of their grains produce. The farmers shall no longer be limited by the
deficiency in grains production for them to be able to export their produce.

SECTION 3. Amendment of Section 6 (a) xiii of Presidential Decree No. 4,
otherwise known as the National Grains Authority Act. — Section 6 (a) xiii of
Presidential Decree No. 4, otherwise known as the National Grains Authority Act, as
amended, is hereby further amended, to read as follows:

"SECTION 6.Administration — Powers, Organization and

Management. — The powers, organization and management of the

Administration shall be as follows:


20

21

22

23

24

25

26

27

28

29

a) Powers. — In order to effectively carry out its functions and
responsibilities as provided in this Act, the Administration shall
have the following powers:

XXX

(xiii) To establish rules and regulations governing the export of
rice, corn and other grains and/or their substitutes and their
by-products/end-products, and to collect fees and charges for
such exportation at rates to be determined by the Council;
In the exercise of this power, the Authority shall directly
undertake the exportation of rice, corn and other grains
and/or their substitutes and/or by- products/end products
[whenever there is an excess production and/or supply, or
it may allocate export quotas among certified and
licensed exporters; Provided, however, That the Council
shall first certify to such excess production and/or supply
after proper consultation with the Office of the
President].

SECTION 4. Implementing Rules. — Within sixty (60) days after the effectivity
of this Act, the National Food Authority (NFA) Council as created under Presidential
Decree No. 4, as Amended, is hereby mandated to issue its Implementing Rules.

SECTION 5. Separability Clause. - If any provision of this Act, or any parts
thereof, is declared unconstitutional, the same shall not affect the validity and effectivity
of the other portions.

SECTION 6. Repealing Clause. - All laws, executive orders, presidential
decrees, proclamations, rules, regulations, issuances and enactments of parts thereof
inconsistent with this Act are hereby repealed or modified accordingly.

SECTION 7. Effectivity. - This Act shall take effect fifteen (15) days from its
complete publication in the Official Gazette of in a newspaper of general circulation in

the Philippines, whichever comes earlier.


APPROVED.