Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
Fifteenth Congress
First Regular Session

HOUSE BILLNO.__ 1528

Introduced by Honorable Dakila Carlo “Dax” E. Cua

AN ACT STRENGTHENING
THE NATIONAL FOOD AUTHORITY,
APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES

EXPLANATORY NOTE

To promote the growth and development of the grains industry, the National Grains
Authority (NGA) was created under Presidential Decree No. 4 on September 26, 1972. The
NGA was reconstituted into what is now the National Food Authority (NFA) through
Presidential Decree No. 1770 on January 14, 1981 with an original mandate to promote the
integrated growth and development of the grains industry, to provide food security in the
staple cereals in times and places of calamity or emergency, both natural or man-made and to
promote the stabilization of supply and prices of staple cereals both at the farm-gate and
consumer levels. It performs these fiunctions through various activities and strategies, which
include procurement of paddy from individual bonafide farmers and their organizations,
buffer stocking, processing activities, dispersal of paddy and milled rice to strategic locations
and distribution of the staple grain to various marketing outlets at appropriate times of the
year.

Tasked with the mandate to stabilize the supply and price of rice, the NFA
buys palay from farmers at prices higher than farm-gate prices and then sells rice to
‘consumers at lower than market prices. Such a practice had, over the years, resulted in
mounting losses and debts to NFA. Based on NFA's 2009 Annual Report, it has a total
outstanding obligations of P146.87 Billion, composed of short-term and long-term loans as
well as the debt papers it issued to refinance existing debts and to fund operations. In
addition, the NFA availed of P17.703 billion in tax subsidy from the government for its
importation of rice and com.

In view of these mounting losses and as part of the efforts to trim the national
budgetary deficit, the government in the last five years has been looking into the possibility
of restructuring, streamlining or privatizing certain activities of the NFA. To this end, there
have been several bills filed in the Philippines’ Congress designed to make NFA more
relevant to the needs of the times. Unfortunately, none of them was enacted into law.


This House Bill, which the undersigned is filing for the Fifteenth Congress, aims to
strengthen the National Food Authority by providing for the following, to wit:

1) The NEA shall stabilize the supply and price of foodgrains preferably through
local procurement when commissioned by the Department of Agriculture and
shall be paid for such service;

2) The NFA shall provide rice and other basic commodities for pro-poor programs
of the Department of Social Welfare and Development and shall be paid for such
service;

3) The NFA shall be attached to the Department of Agriculture and cannot be

abolished or privatized without approval of Congress.

The corporate powers and functions of the Authority shall be vested in and

exercised by a Board of Directors which shall be chaired by the Secretary of the

Department of Agriculture. Likewise, a representative from the business sector

and the farmers sector shall seat in the Board.

5) The NFA shall start on a clean slate basis and shall transfer all its loans and its

noncore program assets to an NFA Board of Liquidators (NFA-BOL) which

shall handle the disposition and liquidation of the transferred assets and
liabilities.

The NFA shall have a total authorized capitalization initially in the form of

existing assets amounting to Twenty Billion Pesos. The balance shall be

provided in the form of equity contribution thru the General Appropriations Act.

7) The Government, through the Department of Budget and Management, shall

include in the annual President's budget proposal, funds to be utilized for

personal services, interest and other maintenance and operating expenses to
maintain its food security buffer stock.

The Authority shall provide for a continuing separation package for its officers

and employees who choose to leave or retire from the government service.

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In view of the foregoing, early passage of this bill is earnestly requested.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
Fifteenth Congress
First Regular Session

HOUSE BILL NO. 1528

Introduced by Honorable Dakila Carlo “Dax” E. Cua

AN ACT STRENGTHENING
THE NATIONAL FOOD AUTHORITY,
APPROPRIATING FUNDS THEREFOR 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 Act of 2010

SEC. 2. Declaration of Policy. - It shall be the policy of the State to ensure food
security for all Filipinos, adequate supply of foodgrains at all times and in all places, and
reasonable levels of prices of foodgrains, and to carry out regulatory and developmental
functions to support farmers and grainsbusinessmen so as to increase their productivity and
profitability,

SEC. 3. Definition of Terms. ~ As used in this Act, the following terms shall mean:

a) —Calamities - refers to the fortuitous events which include acts of God such as
but not limited to typhoons, floods, droughts, earthquakes, volcanic eruptions,
lahar flows, and acts of man such as political and/or civil disturbances, and
widespread civil unrest.

b) Business Capitalization - refers to the resources invested in the diferent lines
of activities by the foodgrains businessmen. For purposes of this Act,
capitalization includes the cost of stocks, whether on consignment or bought on
cash basis, cost of facilities and equipment, loans used in the business and


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amount of working capital
Cartel - refers to any combination of an agreement between two or more
persons engaged in the production, manufacturing, processing, storage, supply,
distribution, marketing, sale or disposition of any basic necessity or prime
commodity 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 out artificial and
unreasonable increase in the price of any basic necessity or prime commodity
or when they simultaneously and unreasonably increase prices in their
competing products thereby lessening competition among themselves.
Contumacy - refers to a person's willful refusal to comply with summons of a
court or one's resistance to authority
Comering — refers to restricting the flow/delivery of goods intended for
distribution in other areas with the intent of accumulating such goods thus
depriving intended areas the use thereof.
Diversion - refers to any act of the following circumstances:
9) unreasonable depletion of stocks;
2) selling or lending government stocks to another grains businessmen;
3) selling or offering to sell the government stocks beyond the maximum
quantity or price allowed by the Authority;
4) storing and/or selling the government stocks in other places/stalls,
other than duly authorized by law; and
5) unreasonable, intentional or undue delay in the delivery or unloading
of NFA stocks to any NFA authorized warehouses, store or places for
storing food grains.
Farmgate Price - refers to prevailing buying price of a certain commodity at the
farm level in a certain locality at a given specific time.
Farmers — refers to producers of agricultural food products. They can be tillers
of the land themselves or administrators or supervisors of the process.
Foodgrains - refers to palay, rice, corn and corngrits.
Food security - refers to the policy objective, plan and strategy of substantially


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meeting the food requirements of the present and future generations of
Filipinos, ensuring that food is affordable and available to all, through a
combination of local production and importation, and consistent with the
‘overall national development objectives.

Grains Standards - refer to the standard specification for rice/palay and/or corn
grains/ corn grits and approved by the Authority for adoption by the Bureau of
Product Standards, Department of Trade and Industry.

‘Hoarding — refers to the undue accumulation by any person or a combination of
persons of any basic necessity or prime commodity beyond his or their normal
inventory levels or the unreasonable limitation or refusal to the unjustified
taking out of any basic necessity or prime commodity 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 (50%) higher
than the usual inventory and unreasonably limits, refuses, or fails to sell the
same to the general public at the time of discovery of the stocks.” 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.

Illegal Acts of Price Manipulation - refers to acts of hoarding, profiteering,
cartelizing committed by persons habitually engaged in production,
manufacture, importation, storage, transport, distribution, sale or other methods
of disposition of foodgrains.

Licensing — refers to the act of granting an authority/privilege to a qualified

applicant to engage in a particular line of activity in the rice and/or com

industry.

Minimum Market Access (MMA) — refers tothe volume of a specific
agricultural product that is allowed to be imported with a lower tariff as
‘commitment by the Philippines to the World Trade Organization (WTO).

Price Manipulation- refers to the act of causing prices of foodgrains to fall or
rise for one's own profit by changing or falsifying figures, accounts and other
related information

Registration — refers to the act of requiring businessmen engaged in certain

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activities in the rice and / or corn industry to enlist themselves with the NFA
for purposes of monitoring only.

1) _ Standard — refers to a specification adopted for wide use or repeated utilization.
Itis the result of standardization effort approved by a recognized authority.

8) Strategic Rice Reserve ~ refers to the minimum inventory of rice equivalent to
at least fifteen days (15) national rice consumption or as maybe determined by
the Department of Agriculture to be maintained all year round under
government control as a matter of national policy to ensure food security
during times of calamities / emergencies whether natural or man made

SEC. 4. National Food Authority. — Pursuant to the original mandate of Presidential
Decree No. 4, as amended, entitled: “Proclaiming the Creation of the National Grains
Authority and Providing Funds Therefor”, the National Food Authority, hereinafter referred
to as the “Authority”, shall be the body corporate tasked to maintain an adequate and
continuous food supply at reasonable prices in the country. The Authority shall be attached
to the Department of Agriculture and cannot be abolished or privatized without approval of
Congress.

‘The Authority shall have its principal place of business in Metro Manila and it may
establish such branches, offices, or agencies within Metro Manila and in other places of the
country as it may deem proper and necessary for the efficient and effective conduct of its
operations and business.

SEC. 5. Powers and Functions of the Authority. — The Authority shall have the
following purposes and functions:

a) Maintain and manage throughout the year a Strategic Rice Reserve equivalent
to at least fifteen (15) days national rice consumption or as may be determined
by the Department of Agriculture, for food security purposes;

b) Stabilize supply and price of foodgrains preferably through local procurement
when commissioned by the Department of Agriculture and to be paid for such
service;

(© Provide rice and other basic commodities for pro-poor programs of the
Department of Social Welfare and Development and to be paid for such
service;

©) Maintain and operate post harvest facilities;

4) Undertake importation of rice and com when authorized by the President in

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order to maintain the appropriate volume of Strategic Rice Reserve and be
entitled to tax expenditure subsidy;

Engage in other commodities and undertake duty and tariff free importation of
such commodities when authorized by the President of the Philippines;
Establish rules and regulations governing the allocation of tariff import quotas
for rice with Minimum Market Access (MMA) among private sector, entities
and farmer cooperatives, and impose fees and charges for said transactions,
when necessary;

Monitor supply and demand indicators of foodgrains including the imports and
exports of the private sector in coordination with concemed agencies;

Own, lease, or acquire ownership by purchase, or to invest in, hold, sell,
mortgage, pledge or otherwise dispose of properties, stocks or bonds or any
interest in either or any obligation or evidence of indebtedness of any person,
partnership, firm or corporation;

Enter into, make, perform and carry out contracts and description necessary or
incidental to the realization of its functions with other persons, firms or
corporations, private or public, including loans or borrowings by the Authority
from domestic or foreign sources which shall be guaranteed by the National
Government but within specific limits or initiate contracts and/or agreements
between the Philippine Government and any foreign government or
institution;

Sue and be sued;

Adopt, alter and use an official seal which shall be of judicial notice; and
otherwise to do and perform any and all acts as may be necessary to carry into
effect the provisions of this Act or as are essential to the proper conduct of its
operations;

Avail of foreign grants and development aid to support its development thrusts
and to ensure that technologies and expertise are up-to-date,

Create and establish a Provident Fund which shall consist of contributions
made both by the Authority and its officers and employees to a common fund
for the payment of retirement and other benefits to such officers and
employees or their heirs under such terms and conditions as the Board may

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Establish and/or restructure its own internal organization and to fix the
remuneration, emoluments, allowances, and other fringe benefits of its officers
and employees as the Board may deem fit;

Establish rules and regulations governing the importation of rice, and to
license, impose, prescribe penalties and fines for non-compliance with
established rules and procedures and collect fees and charges for said
importation for the purpose of equalizing the selling price of such imported
rice with the normal prevailing domestic prices;

Establish rules and regulations governing the export of rice, and/or its
substitutes and its by-products and to collect fees and charges for such
exportation at rates to be determined by the Board;

Register, license and supervise persons, natural or juridical, who shall engage
in the business of providing goods and services in support of the different
activities involved in the production, processing, transporting, warehousing
(whether bonded or not bonded), marketing and trading of foodgrains and/or
their substitutes and/or their by-products/end products and to prescribe,
impose and collect fees, charges and/or surcharges in licensing and regulating
the operations of such persons;

Register, license and supervise mills, warehouses, whether bonded or not
bonded; and to prescribe, impose and collect fees, charges, and/or surcharges
in licensing and regulating warehouses and mills.

Formulate and implement regulations governing the foodgrains warehouse
receipt;

Establish and enforce standards in storage, milling, distribution, shipping,
drying, handling, hauling, grading, sampling and inspection, test and analysis,
specification, nomenclature, units of measurement, code of practice and
packaging, conservation, and transport for food items;

Introduce more efficient post harvest systems and technologies, and to
coordinate with research and development entities in foodgrains processing
and marketing;

Promote interrelationships among foodgrains industry stakeholders;

Establish networks with national and international institutions for the
development of the food grains industry;


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Coordinate with other government agencies engaged in the study, research and
promotion of measures desired to enhance the integrated growth and
development of the foodgrains industry;
Inspect foodgrains stored in private warehouses for the purpose of taking
inventory and monitoring commercial stock, prices and stocks movement;
Order the seizure whenever, there is cornering, hoarding or improper
acquisition of stocks as may be defined by the Authority of rice and/or corn
and/or other food grains and substitutes and/or their by-products/end-products
thereof, including facilities and equipment used in said activities, or whenever
there is a scarcity of supply of such commodity in the consumer market and/or
an unwarranted increase in the price thereof, of the hoarded commodity and its
public sale in such quantity as may be needed to stabilize prices to normal
levels;

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 for actually
committing violation thereto, shall prescribe and impose administrative fines
and penalties, to conduct investigations and to require by subpoena and/or
subpoena “duces tecum” the attendance and testimony of witnesses, the
production of books, papers, documents, exhibits, records, evidence; to
administer oath by himself or his duly authorized representative, and to make
arrests. Any case of contumacy shall be dealt with in accordance with the

procedure prescribed in the provisions of Section Five Hundred Eighty (580)

of the Revised Administrative Code. Any fine imposed and collected under

this paragraph shall form part of the Authority's funds; and

Make arrest of persons for violation of acts prohibited enumerated under this

Act and other pertinent rules and regulations, circulars, orders and directives

which may be promulgated hereafter by the Authority under the following

circumstances:

i) when the person to be arrested had committed or is actually
committing an offense in the presence of the Administrator ot his
authorized representative;

2a» when an offense has in fact been committed and


3) has reasonable ground to believe that the person to be arrested has
committed it

SEC. 6. Board of Directors. - The corporate powers and functions of the Authority
shall be vested in and exercised by a Board of Directors, hereinafter referred to as the Board,
which shall be composed of the Secretary of the Department of Agriculture (DA) as
Chairman, the Administrator of the National Food Authority as Vice Chairman, and the
Governor of the Bangko Sentral ng Pilipinas (BSP), the President of the Land Bank of the
Philippines (LBP), the President of the Development Bank of the Philippines (DBP), the
Secretary of the Department of Finance (DOF), the Secretary of the Department of Trade and
Industry (DTD, and a representative each from the grains business sector and the farmers
sector, respectively, as members. The President shall appoint the representatives of the farmer
sector and the grains business sector from among the nominees of duly-accredited farmers
and grains business sector organizations, respectively

The term of the appointive members shall be three (3) years: Provided, That the terms
of the first two appointive members shall be one (1) and two (2) years for the first appointive
member and second appointive member, respectively: Provided, further, 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 Chairman and Vice Chairman, the Board shall elect a temporary presiding
officer

The Board shal! meet regularly at least once a month and as frequently as necessary to
discharge its duties and responsibilities properly. The Board shall be convened by the
Chairman or upon the written request of a majority of its members. Except when otherwise
provided for in this Act, the vote of a majority of the members constituting a quorum shall be
the sufficient for the adoption of any rule, resolution, decision or any act of the Board,

Each member of the Board members shall be entitled to a per diem of at least Two
Thousand Five Hundred Pesos (P2,500.00) for each meeting actually attended by them, but
not to exceed Ten Thousand Pesos (P10,000.00) a month. Members of the Board shall be
reimbursed by the Authority for actual expenses (including traveling and subsistence
expenses) incurred by them in the performance of their duties for the Authority as may be
specifically authorized by the Board

SEC. 7. Powers and Functions of the Board. - The Board shall have the following

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powers and functions:

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Formulate policies, guidelines and programs to effectively implement and

carry out the purposes, objectives and powers of the Authorit
Promulgate such rules and regulations as may be necessary and proper for the
effective exercise of the powers and functions, as well as the discharge of the
duties and responsibilities of the Authority, its officers and employees;

Adopt by-laws consistent with existing laws and amend, repeal or alter such
by-laws;

Pass upon and approve the appointment of the principal officers of the
Authority as nominated by the Administrator and by a majority vote of all
members of the Board, suspend, remove or otherwise discipline for just cause
such officers;

Determine and approve the organizational structure of the Authority, create
such positions as may be necessary for the economical, effective and efficient
discharge of its functions and responsibilities, and pay scales of the Authority,
its officers and employees subject to existing rules and regulations;

Approve the annual and supplemental budgets, including corporate plan s and
annual and medium-term investments, submitted to it by the Administrator;
Pass upon and approve all borrowings of the Authority;

Render annual reports, and such special reports, as may be requested by the
President of the Philippines and both Houses of Congress; and

Exercise such other powers and perform such other functions as may be
necessary to carry out the provisions of this Act.

SEC. 8. Administrator. — The Authority shal! have an Administrator to be appointed

by the President of the Philippines who shall be the Chief Executive Officer of the Authority
and ex-officio Vice Chairman of the Board. The Administrator shall hold office for a term of

three (3) years, except, when earlier removed for cause. In case of resignation, retirement,

separation, transfer, re-assignment, removal and other cause of cessation from office, the

replacement shall serve only for the unexpired portion of the term.

The Administrator shall be assisted by two (2) Deputy Administrators, appointed by

the Administrator with the confirmation of the Board, in the performance of his functions.

Either one of the Deputy Administrators, upon designation of the Administrator, shall

perform the duties and exercise the powers and functions of the Administrator in the absence


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of the latter. The Deputy Administrators shall be Career Executive Officers.

There shall also be Assistant Administrators who shall be Career Executive Service
eligibles, as the Administrator may deem necessary to assist him in the performance of his
functions to supervise and cover functional areas as the Administrator may determine with
the confirmation of the Board

‘The Administrator and the Deputy Administrators shall not be less than thirty-five
(35) years of age, while the Assistant Administrators shall not be less than 30 years of age, all
of whom should be natural-bom citizens of the Philippines, of proven honesty and integrity,
and of recognized managerial competence.

SEC. 9. Powers and Functions of the Administrator. — The management of the
day-to-day operations of the Authority shall be vested in the Administrator, who shall have
the following powers and duties:

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

b) 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,
subject to the approval by the Board;

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

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

) Appoint, with the approval of the Board, and discipline for cause in
accordance with civil service laws, rules and regulations, the subordinate
officers and personnel of the Authority;

Transfer officers and personnel as the exigencies of the service may require
without need of prior approval by the Board and in accordance with existing
rules and regulations; and

g) Exercise such other powers and perform such other duties as may be assigned
by the Board.

SEC. 10. Departments. — There shall be created the following departments within

the Authority: the Administrative, Legal, Operations, Financial and Management, Auditing,

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Planning and Programming, and such other department as may be necessary to effectively
carry out the functions of the Authority. The head of each Department shall be appointed by
the Board upon recommendation of the Administrator.

SEC. 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 civil service law,

rules and regulations. The recruitment, transfer, promotion, and dismissal of all its personnel

including temporary workers shall be governed by a merit system that will be established by

the Authority in compliance with existing laws, rules and regulations.
SEC. 12. Exemptions - The Authority is hereby exempted

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From the provisions of R.A. 9184 and its IRR, insofar as procurement of rice
and corn, including services for trucking, handling, stevedoring, arrastre and
warehousing,

From payment of all taxes, duties, fees, imposts charges, costs and restrictions
to the Republic of the Philippines, provinces, cities, municipalities and other
agencies and instrumentalities, including the taxes, duties, fees, imposts and
other charges provided for under the Tariff and Customs Code of the
Philippines, R.A. No. 1937, as amended by Presidential Decree No. 34, dated
October 27, 1972, and Presidential Decree No. 69, dated November 24, 1972,
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.
From 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: and

From all duties, arrastre fees in so far as the government's share is concerned,
including all charges and fees imposed under Presidential Decree No. 857,
compensating taxes and advance sales taxes, wharfage fees and tonnage dues
‘on import or export of goods required for its operations and projects.

All documents or contracts executed by or in favor of the Authority shall also
be exempt from the payment of documentary and science stamp taxes and
registration fees: Provided, however, that this exemptions shall not apply to
taxes and assessments payable by persons or entities transacting business with
the Authority.

From coverage of Presidential Decree No. 711 (Abolishing All Existing

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Special Fiduciary Funds and Transferring to the General Fund the Operations
and Funding of all Special and Fiduciary Funds).

2) From compulsorily procuring from the Government Service Insurance System

for its insurance coverage for its rice and com importation,

SEC. 13. Assets and Liabilities. - The National Food Authority shall start on a clean
slate basis and shall transfer all its loans and its noncore program assets to an NFA Board of
Liquidators (NFA-BOL) which shall handle the disposition and liquidation of the transferred
assets and liabilities. It shall be deemed abolished upon full disposition of assets and
liquidation of all liabilities but not later than ten (10) years. The Personnel Services (PS) and
‘the Maintenance and Other Operating Expenses (MOOE) of the NFA-BOL shall be provided
for by the National Government.

‘SEC. 14. Capitalization - The National Food Authority shall have a total authorized
capitalization initially in the form of existing assets amounting to Twenty Billion Pesos
(P20,000,000,000.00). The balance shall be provided in the form of equity contribution thru
the General Appropriations Act.

The National Government shall make additional equity investment into the Authority
‘out of funds appropriated in the General Appropriation Act.

SEC. 15. Appropriation - The Government through DBM shall include in the annual
President's budget proposal, funds to be utilized for personal services, interest and other
maintenance and operating expenses to maintain its food security buffer stock. In the event
that the Authority is commissioned to implement programs for price and supply stabilization
and poverty alleviation, the Department of Agriculture will provide NFA the funds difference
between the prevailing farmgate price and the desired price to influence the market, while the
Department of Social Welfare and Development will provide NFA the price difference
between the prevailing commercial market price and DSWD’s desired price for pro-poor
programs. Funds for the programs shall likewise be included by DBM for DA and DSWD in
the President’s budget

SEC. 16. Separation Incentive Package - The Authority shall provide for a
continuing separation package for its officers and employees who choose to leave or retire
from the government service subject to Council approval and shall be given a separation
incentive package equivalent to the following scale:

1-20 years 1.5.x gross monthly pay x yr of service for the first 20 years

21-30 years 2.0 x gross monthly pay x yr. of service in excess of 1* 20 years

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more than 30 years 2.5 x gross monthly pay x yr. of service in excess of 1* 30

years

In addition to other retirement benefits to which they are entitled to under existing

laws and regulations. Employees who opt to retire under RA 1616 shall receive only 1.5

gross monthly pay for every year of service under SIP

SEC. 17, Offenses and Penalties. - Notwithstanding the provisions of any laws or

regulations to the contrary, and for purposes of carrying out the provisions of this Act, the

following acts or omissions are hereby considered as serious, less serious and light offenses

and corresponding penalties therefore are herein prescribed

a) Serious Offenses- Any of the following acts or omissions shall constitute a

serious offense:

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Hoarding of foodgrains as defined in this Act;

Any act of diversion as defined in this Act;

The act of manipulating the prices of foodgrains as defined in this Act;
Printing, issuing, or knowingly using, possessing or negotiating a
canceled, unauthorized, illegal, counterfeit or falsified warehouse
receipt;

Failure or refusal of foodgrains bonded warehouseman, without any
lawful excuse, to deliver foodgrains deposited with him: Provided,
however, 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

four (4) years and one (1) day nor more than six (6) years, or a fine of not less than Fifty
Thousand Pesos (P50,000.00) nor more than One Hundred Twenty Thousand
Pesos(P 120,000.00) or both fine and imprisonment at the discretion of the court

b) Less Serious Offenses - Any of the following acts or omissions shall

constitute a less serious offense:

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Connivance in the concealment of a stock shortage in a foodgrains
warehouse;

Knowingly submitting any report to the Authority containing false
information or data;

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

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Failure or refusal of a warehouseman to allow the Authority or his duly
authorized representative to inspect or examine their foodgrain stocks
to conceal shortages or to misrepresent the quantity or quality of his
foodgrain stocks, including the impeding of such inspection and
examination by abandonment, absence or otherwise; and

Engaging in the business of foodgrains retailing, wholesaling,
threshing, shelling, warehousing, milling, exporting, importing,
trading, growing and selling of certified seed, manufacturing or
processing without a valid license.

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

(6) months and one ( 1) day nor more than four (4) years, or by fine of not less than Thirty
Thousand Pesos (P30,000.00), nor more than Fifty Thousand Pesos (P50,000.00), or both fine
and imprisonment, at the discretion of the court.

o) Light Offenses - Any of the following acts or omissions shall constitute a

light offense

1)

2

3)

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

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

Any other violation of the 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

one (1) month and one (1) day nor more than six (6) months, or a fine of not less than Five
Thousand Pesos (P5,000.00) nor more than Thirty Thousand Pesos (P30,000.00) or both such

fine and imprisonment, at the discretion of the court.

In addition to the foregoing penalties, the Administrator is hereby authorized to

prescribe and impose fines, and penalties.
SEC. 18. Repealing Clause. - Provisions of Presidential Decree No. 4 as amended

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owanune wn

and all other laws, decrees, executive orders, rules and regulations, issuances or parts thereof

inconsistent provisions of this Act are hereby expre ed or modified

repeal

accordingly

SEC. 19. Separability Clause. - The provisions of this Act are hereby declared to
be separable, and in the event one or more such provisions are held unconstitutional, the
validity of the other provisions shali not be affecied thereby

SEC. 20. Effecti

sse. - This Act shall take effect fifteen (15) days after its

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

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