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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session REGISTRATION UNIT

, [_BiLLS AND INDEX SERVICE
1965 a ~

House Bill No.

Introduced by Representative Estrellita B. Suansing

EXPLANATORY NOTE

Records show that rice accounts for almost 25% of food expenditures of the poorest
30% of the Filipino population. Two out of every three poor persons are dependent on
agriculture for employment and sustenance. Therefore, rice prices have a significant impact
on the well-being of the Filipinos, including small rice farmers who are net buyers of rice for
household consumption.

It is evident then that not only is there an urgent need to revive the rice economy to
minimize the country’s vulnerability to future external shocks and to reduce supply and price
volatility - but that in the immediate term, the rice supply gap can be minimized at much
less cost than what is usually resorted to. Thus, this proposed measure seeks to mandate an
immediate fertilizer support to Filipino farmers of irrigated land in the form of a “buy 2-take
3” subsidy scheme where farmer beneficiaries will receive in-kind 3 bags of urea fertilizer per
hectare of irrigated rice farm actually tilled to supplement 2 bags already privately
purchased. This will ensure that farmers are able to use the prescribed amount of fertilizer
per hectare, plus one more, to increase rice yields.

In conjunction with this, long overdue reforms and restructuring in the National Food
Authority (NFA) will be initiated as a preparatory step towards the long-term goal of rice
sufficiency for our country. This bill, thus, paves the way for redesigning the NFA into a
buffer stock management agency that will check and maintain the rice reserve requirements
of the country. Necessary steps to make registration processes more efficient and its
corresponding fees more affordable shall also be undertaken by the NFA in order to
encourage private sector participation in rice importation.

Fertilizer prices have more than doubled over the last two years, making optimal
usage unaffordable and optimal palay yields unattainable. Combining fertilizer support with
initiatives to reorient the NFA into a buffer stock management agency, away from its
importation function, will set the stage to correct rice market distortions that have been
created by NFA intervention in the market over the last three decades.

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

HON. ESTRELLITA B. SUANSIN}
1* District, Nueva Ecija


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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

1965

House Bill No.

Introduced by Representative Estrellita B. Suansing

AN ACT
TO INCREASE SHORT TERM GRAIN AVAILABILITY, MINIMIZE VULNERABILITY
TO EXTERNAL PRICE AND SUPPLY SHOCKS AND ACHIEVE IMMEDIATE RICE
SECURITY, MANDATING FOR THAT PURPOSE THE CREATION OF A
FERTILIZER SUPPORT MECHANISM AND THE RESTRUCTURING AND
REORIENTATION OF THE NATIONAL FOOD AUTHORITY, APPROPRIATING
FUNDS THEREFOR AND FOR OTHER PURPOSES

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

Chapter I
GENERAL PROVISIONS

SECTION 1. Short Title. - This Act shall be known as the “Immediate Rice
Security Act.”

SECTION 2. Declaration of Policy. - The State hereby reaffirms the
fundamental right of every person to adequate food and to be free from hunger.
Toward this end, the State shall provide immediate strategic measures to ensure
short-term availability of grain, particularly the staple food rice and the sustained
productivity growth of agriculture. Thus, interventions that ensure the availability
and accessibility of crucial inputs to farming, especially fertilizer, shall be carried out
by the State to maximize rice production in order to increase the yield and meet the
national requirement.

The initiation and execution of key reforms to address crucial rice market
distortions and to minimize the country’s vulnerability to external price and supply
shocks is hereby further declared a State policy. Pursuant to this, the reorientation
and transformation of the National Food Authority into a buffer stock management
agency shall be undertaken and the implementation of measures that make private
sector participation in rice importation more feasible and accessible shall be
prioritized.

Chapter I

FERTILIZER SUPPORT PROGRAM


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SECTION 3. Creation of the Fertilizer Support Program. - As the
mechanism for extending government fertilizer counterpart to the farmers, a
Fertilizer Support Program (FSP) is hereby created which shall be implemented per
cropping season over the next fiscal year immediately succeeding the enactment of
this Act or for the duration of the rice crisis as determined by the President upon
recommendation of the Department of Agriculture, whichever is longer.

Fertilizer and Pesticide Authority (FPA), in coordination with the Department
of Agriculture, shall be the primary agency tasked with the implementation of the
FSP. The FPA shall, within sixty (6) days from the enactment of this Act, formulate
the necessary rules and regulations for the implementation of the Fertilizer Support
Program created by this Act.

SECTION 4. Fertilizer Subsidy Mechanism. - The FSP shall provide
“buy-two-take-three” in-kind urea (46%) nitrogen subsidy to qualified farmers of
irrigated land duly recognized by and registered with the municipal agricultural
offices (MAO) of their local government units. Upon presentation of proof of
procurement of two bags from a FPA registered fertilizer dealer or retailer, the FPA
designated distribution centers shall give out the corresponding amount of in-kind
use subsidy to MAO-registered farmer-beneficiaries: Provided, That the amount of
urea grated to each farmer shall not be less than two (2) 50-kgs. bags or more than
three (3) 50-kgs. bags per hectare.

SECTION 5. Identification of Farmer Beneficiaries. - Each municipal
agricultural office shall submit a master list of qualified farmer-beneficiaries,
together with the corresponding area of their ricefield to the Department of
Agriculture. For the purpose of the Fertilizer Support Program created under this
Chapter, qualified farmer-beneficiaries must:

a. Be an actual tiller;
b. Have a fully irrigated riceland; and
c. Undertake that he will apply the urea in his ricefield.

SECTION 6. Fertilizer Procurement. - The FPA, pursuant to their
charter, shall promulgate the necessary rules and regulations for the importation of
the required urea under the FSP; Provided, That the procurement shall be conducted
through the government open competitive bidding in accordance with the
harmonized procedures on procurement under Republic Act No. 9184, or the
Government Procurement Reform Act; Provided, further, That the urea imported shall
be directly shipped to the respective FPA distribution centers.

SECTION 7. Monitoring and Assessment. ~ The Fertilizer and Pesticide
Authority, through their Provincial FPA Coordinators, shall monitor the distribution
and the use if urea under the FSP, as well as fertilizer availability, prices and
movements. The Department of Agriculture shall design a reporting system for the
regional field units to monitor and assess the impact of the FSP on rice farm
productivity. The MAFC shall assist the Provincial FPA Coordinators in the
monitoring and evaluation of the program.


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SECTION 8. Prohibited Acts. - For the purpose of this Chapter, any
person who engages in any fraudulent transaction or manipulative activity in order
to influence the outcome of the public bidding process, or engages in simulated or
fictitious procurement process leading to the awarding of a contract for the supply of
fertilizers, shall suffer the penalty of imprisonment of not less than twelve (12) years
and one (1) day nor more than twenty (20) years, without prejudice to separate
criminal prosecution under Republic Act No. 3019, otherwise known as the Anti-
Graft and Corruption Practices Act and other penal laws.

Chapter III
REORIENTATION OF THE NATIONAL FOOD AUTHORITY

SECTION 9. Reforms in the National Food Authority. ~ The National
Food Authority (NFA) shall, within one (1) year from the effectivity of this Act,
formulate and implement guidelines to phase out its participation in rice
importation: Provided, That the NFA shall undertake a comprehensive review of its
plans and programs and redesign the same to focus on the management and
maintenance of proper levels of buffer stock requirements of the country.

SECTION 10. Rice Importation. - The NFA shall establish rules and
regulations that will make participation in importation of rice more feasible and
accessible to the private sector. Within sixty (60) days from the effectivity of this Act,
the NFA shall have amended its guidelines to facilitate and allow for a shorter
registration process and reduced associated fees to encourage. private sector
especially farmers’ organizations, participation in the rice importation business.
Along with this, the NFA shall implement necessary restructuring in their programs
in order to make vital information that ensure timely and sufficient importation of
rice available to duly registered rice importers.

Chapter IV
FINAL PROVISIONS.

SECTION 11. Congressional Oversight Committee. - For the effective
implementation of this Act, a Congressional Oversight Committee on Rice Security
Program is hereby created, hereinafter referred to as the Rice Security Program
Oversight Committee, to be composed of five (5) members each from the Senate and
the House of Representatives. The Rice Security Program Oversight Committee shall
be jointly chaired by the Chairs of the Committees on Agriculture and Food of both
Houses, with the Chairs of the Committee on Trade and Commerce of both Houses
acting as vice-chairs. They shall meet bi-annually to monitor and review the status
of implementation of the provisions of this Act. For this purpose, the Rice Security
Program Oversight Committee shall have the power to require the submission of
status reports and other necessary data and information.

SECTION 12. Appropriations. - For purposes of the FSP created under
Chapter II of this Act, a special fertilizer support fund, which will be used by the FPA
in the importation of urea under this program, in the amount of Fifteen billion pesos
(P15,000,000,000.00) per cropping season for the fiscal year immediately following


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the enactment of this Act, shall be specially appropriated, released to and
administered by the FPA: Provided, That appropriations for the FSP shall continue
and be maintained for the duration of the rice crisis as determined by the President
pursuant to Section 3 of this Act.

SECTION 13. Rules and Regulations. - The Department of Agriculture, in
consultation with relevant government agencies and LGUs, farmers’ organizations,
and other stakeholders, shall, within one hundred and twenty (120) days from the
effectivity of this Act, promulgate the necessary rules and regulations to effectively
implement the provisions of this Act.

SECTION 14, Separability Clause. - If any part or provision of this Act is
declared unconstitutional or invalid, other parts or provisions hereof which are not
affected shall continue to be in full force and effect.

SECTION 15. Repeating Clause. - All laws, decrees, executive orders, rules
and regulations and other issuances or parts thereof inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

SECTION 16. Effectivity. - This Act shall take effect fifteen (15) days after
its publication in the Official Gazette or in a newspaper of general circulation.

Approved,