Philippine Corn Industry Development Act

Sentate Office of the & urlarp REPUBLIC OF THE PHILIPPINES REFUELE OF THE PHILIPE 3 First Regular Session DEC 10 P1:49 SENATE RECEIVED BY: S. No. 1591 Introduced by Senator Camille A. Villar AN ACT TO DEVELOP THE PHILIPPINE CORN INDUSTRY, ENHANCE THE AVAILABILITY AND AFFORDABILITY OF QUALITY FEEDS AND STAPLE FOOD, AND PROVIDE FOR A CORN COMPETITIVENESS ENHANCEMENT FUND EXPLANATORY NOTE

Section 1, Article XII of the 1987 Philippine Constitution declares that:

"The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people, and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged. The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices. In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their ownership." Corn plays a critical role in the Philippine agricultural economy as both a staple

food and the primary raw material for the feed industry. It is the country's second most important crop after rice, serving as food for millions of Filipinos and as a major component of livestock and poultry feeds, which, in turn, are vital to the nation's food security. Despite this, the corn industry particularly smallhold corn farmers continues to face persistent challenges such as high production costs, low yields, inadequate access to post-harvest facilities, lack of research support, and vulnerability to climate change. This bill promotes food security, increases farmer incomes, generates rural employment, and reduces poverty in agricultural communities. By strengthening the corn industry, the country not only safeguards its food supply chain but also builds resilience against external shocks such as global feed price fluctuations. In view of the foregoing, the immediate passage of this bill is earnestly sought. AMILLE A. VILLAI

sentall Office of the serectarp TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES First Regular Session ) 25 DEC 10 P1:49 SENATE RECEIVED BY: 1591 S. No. _ Introduced by Senator Camille A. Villar AN ACT TO DEVELOP THE PHILIPPINE CORN INDUSTRY, ENHANCE THE AVAILABILITY AND AFFORDABILITY OF QUALITY FEEDS AND STAPLE FOOD, AND PROVIDE FOR A CORN COMPETITIVENESS ENHANCEMENT 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 "Philippine Corn

2 Industry Development Act".

Sec. 2. Declaration of Policy. - The State recognizes the vital role of the corn

4 industry and smallhold corn farmers in the country's agricultural economy. It is therefore the policy of the State to promote the inclusive development and 6 competitiveness of the corn industry, particularly among smallhold farmers, to 7 increase the supply of yellow corn, white corn and other indigenous corn varieties to enhance the availability and affordability of corn for the feeds industry and for human 9 consumption. The State shall endeavor to increase the income of smallhold corn farmers and farm workers to alleviate rural poverty through enhanced efficient production and post-production facilities. The State shall encourage and support Filipino scientists and inventors in contributing their knowledge and expertise to the modernization of agriculture by making their works immediately and readily available to corn farmers and the agricultural economy.

Towards this end, the State shall nurture an enabling environment and establish responsive policies and support programs for the corn industry, with primary focus on the smallhold corn farmers and shall be committed to providing necessary support and incentives to build stronger partnerships and cooperation with the private sector in recognition of their vital role in achieving the objectives of this Act.

Sec. 3. Definition of Terms. - The following terms are defined as follows:

a) Corn refers to yellow corn for animal feeds, and white corn and other indigenous corn varieties for human consumption; b) Feeds refers to a single or combination of ingredients, supplements, and additives by specific formula to be fed directly to animals which is capable of providing the nutritional requirements in order to sustain life, promote growth, production, and reproduction; and c) Smallhold Farmer refers to a farmer owning or cultivating three (3) hectares or less of farmland.

Sec. 4. Corn Industry Development Roadmap. - The corn industry development

principles and programs in this Act shall be incorporated and harmonized into the existing Corn Industry Development Roadmap and made integral to the roadmap henceforth.

Sec. 5. Designation of the Bureau of Plant Industry (BPI); Creation of a BPI

Corn Unit and BPI Field Offices. - The BPI is designated as the primary implementing agency of this Act. Accordingly, the BPI is authorized to establish and maintain a Corn Unit at its main office which shall be headed by the BPI Director. It shall also establish BPI field offices in corn production areas designated in this Act. Both shall derive budgetary support from the Corn Competitiveness Enhancement Fund, hereinafter referred to as the "Corn Fund". The Corn Unit shall also be the Corn Program Management and Coordinating Office (PMCO) which shall serve as the planning and administrative secretariat in the implementation of this Act.

Sec. 6. Powers and Functions. - In addition to the existing powers and functions

of the BPI, it shall have the following powers and functions under this Act: a) Monitor the use of the Corn Fund under Sections 9 and 11 of this Act;

b) Coordinate activities and receive regular reports from the network of corn variety development institutions in the implementation of this Act; c) Manage and implement the procurement of corn seeds from the network of corn institutions and their seed growers, fertilizer and other necessary production inputs and their distribution to farmers; d) Establish and manage a corn gene bank for all corn varieties developed under this Act, which shall be kept, protected, accessed and utilized for the implementation of this Act; and e) Establish a reliable, efficient and holistic corn industry database management system, in coordination with the Department of Agriculture-National Corn Program (DA-NCP) and the Philippine Center for Postharvest Development and Mechanization (PhilMech) which shall cater to the needs of the corn industry, particularly the corn production areas in this Act.

Sec. 7. Corn Production Areas. - Under this Act, the provinces of Isabela,

Bukidnon, Pangasinan, Quirino, South Cotabato, Cotabato and the Negros Island Region are designated as corn production areas and shall be the sole beneficiaries of the Corn Fund under this Act. Their designation is based on historical corn production data of the country and climatic factors: Provided, That there shall be no duplication in the granting of assistance with existing beneficiaries of the DA-NCP in the same areas. These provinces shall share to other provinces, through the BPI field offices, quality corn seeds and feeds they produce. The BPI shall draft guidelines for the operationalization of sharing and distribution with other provinces.

Sec. 8. Network of Corn Variety Development Institutions. - There shall be

established a network of government institutions for the development of corn varieties, herein referred to as the Network. It shall be composed of the Bureau of Plant Industry (BPI), University of the Philippines-Institute of Plant Breeding (UP-IPB), Philippine Rice Research Institute-Crop Biotechnology Center (PhilRice-Crop Biotech), and the University of Southern Mindanao (USM). Each institution is hereby tasked to develop corn varieties that are pest- and weed- resistant, climate-resilient, adjusted to the country's or its regions' agro-climatic conditions, and which shall allow corn farmers to produce at the least expense, shorter

production time, higher yield, and higher income. They shall share knowledge and 2 discoveries among themselves in their corn variety development work. In developing corn varieties, each member of the Network may pursue any of the following tracks or a combination thereof: a. Develop its own corn variety; b. Cross-breed local varieties to come up with a better variety; c. Secure the best corn varieties from abroad, within the framework of bilateral assistance, sharing and cooperation, and cross-breed with local varieties; and d. Genetically modify local varieties. The corn varieties developed by the Network shall be mass-produced for seed purposes for distribution by the BPI to smallhold farmers and their cooperatives and associations (FCAs) and the local government units. Accordingly, the Network members' institutional technical and scientific capabilities shall be enhanced. Notwithstanding existing laws, rules, regulations, orders, guidelines, circulars and other issuances to the contrary, the Network, led by the BPI and in consultation with the DA-NCP and PhilMech, shall come up with its own guidelines on the immediate and unhampered release of their developed varieties for planting in corn farms of the country, taking into consideration safety principles for animal and human health and the natural environment. The guidelines shall be finished within one hundred eighty (180) days from the effectivity of this Act. In all these activities, the institutions shall be supported through the Corn Competitiveness Enhancement Fund (Corn Fund) under Section 9 of this Act.

Sec. 9. Creation of the Corn Fund. - In addition to the regular budget from the

annual General Appropriations Act (GAA) of the agencies mentioned, there is hereby created a Corn Fund for the use of these agencies. The Corn Fund shall consist of an annual appropriation of Four billion pesos (₽4,000,000,000.00) sourced from tariff collections on imported corn, feed wheat,

feeds and other products and ingredients for feeds for the fraction of the year and for the next ten (10) years following the effectivity of this Act. Corn Imports include imported products under the following Harmonized System (HS) headings or ASEAN Harmonized Tariff Nomenclature (AHTN) 2022: 10.05 Maize (corn). 1005.90.99 - - Other 1005.90.99.100 - - - In-Quota 1005.90.99.200 - - - Out-Quota Feed Wheat Imports include imported products under the following HS headings or 2022 AHTN Codes, and Descriptions: 10.01 Wheat and meslin. - - - Other 1001.99.91 - - Meslin 1001.99.99 - - Other Feeds and Other Products and Ingredients for Feeds Imports include imported products under the following HS headings or 2022 AHTN Codes, and Descriptions: 10.03 - Barley 1003.10.00 - Seed 1003.90.00 - Other - Oats 10.04 1004.10.00 - Seed 1004.90.00 - Other 10.07 Grain Sorghum 1007.10.00 - Seed 1007.90.00 - Other 10.08 Buckwheat, millet and canary seeds; other cereals. 1008.10.00 -Buckwheat -Millet: 1008.21.00 -Seed 1008.29.00 -Other 1008.30.00 -Canary seeds 1008.40.00 -Fonio (digitaria spp.)

1008.50.00 -Quinoa (chenopodium quinoa) 1008.60.00 -Triticale 1008.90.00 -Other cereals 23.01 Flour, meals and pellets, of meat or meat offal, of fish or of crustaceans, molluscs or other aquatic invertebrates, unfit for human consumption; greaves. 2301.10.00 - Flours, meals and pellets, of meat or meat offal; greaves 2301.20 - Flours, meals and pellets, of fish or of crustaceans, molluscs or other aquatic invertebrates 2301.20.10 - Of fish, with a protein content of less than 60% by weight 2301.20.20 - Of fish, with a protein content of 60% or more by weight 2301.20.90 - Other 23.02 Bran, sharps, and other residues, whether or not in the forms of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants. 2302.10.00 - Of maize (corn) 2302.30 - Of Wheat: 2302.30.10 - - Brans and pollards 2302.30.90 - - Other 2302.40 - Of other cereals: - Of rice 2302.40.10 2302.40.90 - Other 2302.50.00 - Of leguminous plants 23.03 Residues of a starch manufacture and similar residues, beet-pulp, bagasse, and other waste of sugar manufacture, brewing or distilling dregs and waste, whether or not in the form of pellets 2303.10 - Residues of starch manufacture and similar residues: 2303.10.10 - - Of manioc (cassava) or sago 2303.10.90 - - Other 2303.20.00 - Beet-pulp, bagasse and other waste of sugar manufacture

2303.30.00 - Brewing or distilling dregs and waste 23.04 Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of soya-bean oil. - Soya-bean meal 2304.00.29 - - Other 2304.00.90 - Other 23.05 2305.00.00 Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting from the extraction of ground- nut oil. 23.06 Oil-cake and other solid residues, whether or not ground or in the forms of pellets, resulting from the extraction of vegetable or microbial fats or oils, other than those of heading 23.04 or 23.05. 2306.10.00 - Of cotton seeds; 2306.20.00 - Of linseeds; 2306.30.00 - Of sunflower seeds; - Of rape or colza seeds 2306.41 - - Of low erucic acid rape or colza seeds 2306.41.10 - - - Of low erucic acid rape seeds 2306.41.20 - - - Of low erucic acid colza seeds - - Other : 2306.49 2306.49.10 - - - Of other rape seeds 2306.49.20 - - - Of other colza seeds 2306.50.00 - Of coconut or copra; 2306.60 - Of palm nuts or kernels; 2306.60.10 - - Ground or in the form of pellets 2306.60.90 - - Other - Other : 2306.90 2306.90.10 - - Of maize (corn) germ 2306.90.90 - - Other; 2307.00.00 Wine lees; argol. 23.07 23.08 2308.00.00 Vegetable materials and vegetable waste, vegetable residues and by-products, whether or not in the form of

pellets, of a kind used in animal feeding, not elsewhere specified or included 23.09 Preparations of a kind used in animal feeding. 2309.90 - Other - - Complete feed : 2309.90.11 - - - Of a kind suitable for poultry 2309.90.12 - - - Of a kind suitable for swine 2309.10 - - - Dog or cat food, put up for retail sale 2309.10.10 - - - Containing meat 2309.10.90 - - - Other 2309.90 - - - Other - - - Complete feed 2309.90.13 - - -Of a kind suitable for prawns 2309.90.14 - - -Of a kind suitable for primates 2309.90.19 - - -Other 2309.90.20 - - -Premixes, feed supplements or feed additives 2309.90.90 - - -Other All tariff collections shall be automatically credited to a special account for Corn Industry Development in the general fund of the national treasury which shall be in place within forty five (45) days from the effectivity of this Act: Provided, That if the tariff collection exceeds Four billion pesos (₽4,000,000,000.00) in any given year within the next ten (10) years following the effectivity of this Act, the excess tariff revenue shall automatically be added to the Corn Fund of the following year and the total amount be allocated and utilized in accordance with this Act. Provided further, That allocation and utilization of the Corn Fund shall be subject to the following guidelines: a) The recipient agency shall be accountable and responsible for the management and utilization of the fund in coordination with other government agencies concerned. It shall provide the Secretary of the Department of Agriculture (DA) and the BPI Director with a regular report on its fund management and utilization;

b) The amount allocated shall be released directly to the implementing agencies based on their respective mandates under this Act: Provided, That the unutilized portion of the Corn Fund allocated to the implementing agencies shall not revert to the general fund but shall continue to be used for the purpose for which it was set aside. Fund releases charged against the said funds shall not be subject to any ceiling by the Department of Budget and Management; and c) Any program undertaken in accordance with this Act shall only be deemed complementary and supplementary to, and shall not be a replacement of any existing programs for corn farmers already implemented by the DA and other agencies concerned.

Sec. 10. Assistance for Corn Production, Post-Production, and Processing. - The

Corn Fund shall support corn production, post-production and processing activities of the corn farmer cooperatives and associations (FCAs) and the network of corn institutions. The Corn Fund shall be used exclusively for corn varieties developed by the network of corn institutions.

Sec. 11. Allocation, Disbursement and Utilizatiion of the Corn Competitiveness

Enhancement Fund. - Subject to the usual accounting and auditing rules and regulations, the Corn Fund shall be allocated, disbursed and utilized, thus: Eighty percent (80%) for yellow corn production; Twenty percent (20%) for white corn and other indigenous corn varieties, which shall be respectively divided by both as follows: a) Forty five percent (45%) to PhilMech, forty three percent (43%) of which shall be for production, post-production and processing mechanization in smallhold corn farms as grant in kind to eligible farmers' associations or organizations, registered corn cooperatives, and local government units (LGUs) in the form of provision of corn farm equipment such as corn planters, tillers, farm tractors, forage choppers, rotary seeders, power/boom sprayers, fertilizer spreader/applicator, harvesters, corn shellers, mechanical dryers, moisture meters, feed processors/mills, hauling trucks, and the establishment and improvement of corn post-harvest centers, including corn mills, waste utilization facilities and equipment, and

corn-silage facilities), and warehouses and/or silos, and two percent (2%) for Program Management Office (PMO): Provided, That PhilMech shall endeavor to develop and utilize local talents and resources in the manufacturing and provision of the foregoing equipment, tools and facilities; b) Twenty percent (20%) to BPI for provision of seeds and fertilizers: Provided, That in the procurement of seeds for distribution to farmers under this Act, the BPI shall exclusively source seeds from the ones developed by the Network and registered with the National Seed Industry Council; c) Twenty percent (20%) to BPI for the establishment and operations of the BPI Corn Unit and the field offices in corn producing provinces in this Act, as a member of the Network, which shall include the hiring and maintenance of needed personnel (15%), and for corn bank, review of the Corn Fund, and holistic database management (5%): Provided, That out of this subparagraph on allocation, One hundred million pesos (P100,000,000.00) shall be spent in the first year upon effectivity of this Act for the construction of the corn building in the BPI compound in Malate, Manila that will house the BPI corn unit and the corn gene bank; d) Six percent (6%) for extension and training activities to increase corn productivity, including training course grants, training/capacity building of beneficiaries for maintenance servicing, repair of machinery and equipment. The fund shall be utilized by the Agricultural Training Institute (ATI) (2%), PhilMech (2%), and the Technical Education and Skills Development Authority (TESDA) farm schools (2%); e) Four percent (4%) to the DA-NCP for organizing and clustering of smallhold corn farmers into formal groups, cooperatives or associations; f) Three percent (3%) for the other network members for the establishment of corn variety development facilities, procurement of equipment and supplies, hiring and maintenance of personnel, seed development, seed mass-production, and seed production training for farmer-seed growers to

be divided equally by UP-IPB, PhilRice-CROP BIOTECH CENTER, and USM at one percent (1%): Provided, That the members shall produce seed production training modules for sharing with ATI and TESDA farm schools for popularization among corn farmers in the country; and g) Two percent (2%) for credit to smallhold farmers and their FCAs to be equally divided by Land Bank of the Philippines and Development Bank of the Philippines.

Sec. 12. Beneficiaries/Grantees of Corn Fund. - Within one hundred eighty

9 (180) days from the effectivity of this Act, the DA, in consultation with farmers' cooperatives and organizations and LGUs, shall complete the validation and updating of the master list of eligible beneficiaries in each corn production province, as specified in this Act to ensure that those listed are bona fide corn farmers, cooperatives, associations, and organizations. The beneficiaries of the Corn Fund are smallhold corn farmers listed in the Registry System for Basic Sectors in Agriculture (RSBSA), and corn farmer cooperatives, associations, or organizations accredited by the DA in the designated corn production provinces: Provided, That preferential attention shall be given to smallhold corn farmers who are members of cooperatives, associations or organizations.

Sec. 13. Review of the Corn Competitiveness Enhancement Fund. - The

following mandatory review of the Corn Fund shall be performed: 1. The Philippine Institute for Development Studies (PIDS) shall conduct impact evaluation of the Corn Fund program on corn productivity on the third (3ra), sixth (6th) and ninth (gth) year of the effectivity of this Act; 2. The percentage allocation of the Corn Fund will be reviewed on the third (31d) and sixth (6th) year from the effectivity of this Act for possible revisions should intervention priorities change; and 3. On the ninth (9th) year from the effectivity of this Act, a mandatory review shall be conducted by the Congressional Oversight Committee on Agricultural and Fisheries Modernization (COCAFM) to determine whether the Corn Fund and its utilization as provided for under this Act shall be

continued, amended, or terminated. The increase or decrease in farmers' incomes and the reduction in feed prices shall be the primary benchmark in determining the effectiveness of the interventions under the program and its possible extension. In view of its oversight function, the COCAFM, at any time, may conduct an assessment of the implementation of programs and utilization of Corn Fund as directed under this Act.

Sec. 14. Lifting of Export Restrictions on Corn. - All laws, rules, regulations,

guidelines, and other issuances imposing export restrictions on corn, except those related to the prevention and spread of plant, animal pests and diseases, are hereby lifted and/or repealed.

SEC. 15. Disposition of Corn Development Fund under the National Food

Authority (NFA). - The NFA shall liquidate and report on the accomplishment of its existing corn marketing assistance program. The corn development fund, created under Memorandum Order No. 468 dated March 17, 1998, held in trust by the NFA, and the enhanced electronic trading system for corn are hereby dissolved and the remaining money balance transferred to the BPI for inclusion in the Corn Fund.

Sec. 16. Powers of the President. -The President is hereby empowered to:

a) Revise or adjust existing rates of customs duties on corn, feed wheat, feeds, and other products and ingredients for feeds imports up to their respective bound rates committed by the Philippines under the World Trade Organization agreement on agriculture and under ASEAN Trade in Goods Agreement, including any necessary change in classification applicable to their importation, subject to the provisions of the Customs Modernization and Tariff Act (CMTA): Provided, That the adjustment is time-bound and that the power herein delegated to the President shall only be exercised when Congress is not in session: Provided further, That any order issued by the President adjusting the applied tariff rates shall take effect fifteen (15) days after publication; b) Allow the importation of corn, feed wheat, feeds, and other products and ingredients for feeds products at a lower applied tariff rate to address the situation in the event of any imminent or forecasted shortage, animal

disease epidemic, or such other situation requiring government intervention for a limited period and/or a specified volume. Such order shall take effect immediately and can be issued even when Congress is in session.

Sec. 17. Separability Clause. - If any provision of this Act is declared invalid or

unconstitutional, the remainder thereof not otherwise affected shall remain in full force and effect.

Sec. 18. Repealing Clause. - All laws, presidential decrees, executive orders,

letters of instruction, proclamations or administrative regulations that are inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.

Sec. 19. Effectivity. - This Act shall take effect after fifteen (15) days following

its publication in the Official Gazette, or in a newspaper of general circulation. Approved,