Rice Industry and Consumer Empowermwnt (Rice) Act

Sente VOlfter of the toa TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) ) 26 FEB 24 P3:29 First Regular Session RECEIVED BY SENATE Senate Bill No. 1902 Introduced by Senator Erwin T. Tulfo AN ACT PROMOTING RICE SECURITY BY ENSURING THE ADEQUATE SUPPLY AND STABLE PRICE OF RICE AND STRENGTHENING THE MANDATE OF THE NATIONAL FOOD AUTHORITY, AMENDING FOR THE PURPOSE REPUBLIC ACT NUMBER 8178, OTHERWISE KNOWN AS THE "AGRICULTURAL TARIFFICATION ACT," AS AMENDED EXPLANATORY NOTE Rice remains a staple food for millions of Filipino families, and a pillar in Philippine culture and economy. Effective regulation of rice is essential not only for national development but also to protect consumers from price volatility and to ensure farmers receive fair compensation for their harvests. In this light, the National Food Authority (NFA) was established in 1972 to regulate rice supply and pricing. However, with the enactment of Republic Act No. 11203 (2019), otherwise known as the "Rice Tariffication Law," the NFA's regulatory powers were substantially reduced, limiting its role to maintaining the rice buffer stock.

Despite the enactment of R.A. No. 12078 (2024) which extended and increased the Rice Fund, strengthened the regulatory power of the Department of Agriculture (DA), and allowed it to declare a state of food emergency, the persistent price instability of rice highlights the need for stronger oversight and intervention. The proposed Rice Industry and Consumer Empowerment (RICE) Act seeks to amend R.A. No. 8178, as amended by R.A. Nos. 11203 and 12078, in order to strengthen the NFA's mandate and powers to stabilize rice supply and prices. This measure aims to enhance oversight of the rice market through registration and licensing of warehouses and traders; restore NFA's enforcement powers to allow seizure of hoarded rice and in cases of anti-competitive practices; improve buffer stock management with a flexible minimum of nine (9) days and disposal following good warehouse and stock management practices; and protect farmers from distress sales by granting the DA authority to set floor prices and impose penalties for violations. This measure seeks to protect farmers, ensure stable prices for consumers, and secure the country's rice supply. In view of the foregoing, the immediate passage of this bill is earnestly sought. ERWIN T, TULFO

- Office of the enema targ TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) ) 26 FEB 24 P3:29 First Regular Session RECEIVED BY SENATE Senate Bill No. 1902 Introduced by Senator Erwin T. Tulfo AN ACT PROMOTING RICE SECURITY BY ENSURING THE ADEQUATE SUPPLY AND STABLE PRICE OF RICE AND STRENGTHENING THE MANDATE OF THE NATIONAL FOOD AUTHORITY, AMENDING FOR THE PURPOSE REPUBLIC ACT NUMBER 8178, OTHERWISE KNOWN AS THE "AGRICULTURAL TARIFFICATION ACT," AS AMENDED Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. — This Act shall be known as the "Rice

2 Industry and Consumer Empowerment (RICE) Act."

SEC. 2. Section 3 of Republic Act No. 8178, as amended, is

hereby further amended to read as follows: "Sec. 3. Definition of Terms. - The following definitions apply to the terms used in this Act: "xxx;

"(e) "Buffer Stock" refers to the optimal level of rice inventory for [fifteen (15)] AT LEAST NINE (9) days that shall be maintained to sustain the disaster relief programs of the government during natural or man-made calamities and to address food security emergency situations on rice: PROVIDED, THAT, THE DA SECRETARY MAY INCREASE THE REQUIRED LEVEL DURING EXTENDED PERIODS OF LEAN SEASON, SUPPLY HEIGHTENED DISASTER RISK, DISRUPTION, OR EXTRAORDINARY PRICE VOLATILITY." "xxx."

SEC. 3. Section 5 of Republic Act No. 8178, as amended, is

hereby further amended to read as follows: "Sec. 5. Strengthening the Regulatory Function of the Department of Agriculture (DA). - The DA, through the Bureau of Plant Industry (BPI), is hereby authorized to: "xxx; "(b) Conduct regular inspection of grain warehouses and agricultural facilities to ensure compliance with palay and rice quality and supply standards and regulations; and] "(C) ORDER THE SEIZURE OF RICE, OTHER GRAINS, THEIR SUBSTITUTES OR BY-PRODUCTS, AND THE FACILITIES USED THEREIN, IN EITHER OF THE FOLLOWING CASES: (I) WHENEVER THERE IS HOARDING, PROFITEERING, CARTEL OR OTHER ACTIVITIES DEFINED AS AGRICULTURAL ECONOMIC SABOTAGE UNDER REPUBLIC ACT NO. 12022, OTHERWISE KNOWN AS

THE "ANTI-AGRICULTURAL SABOTAGE ACT," AND OTHER APPLICABLE LAWS; OR, (Il) WHENEVER THERE IS SCARCITY OF SUPPLY IN THE RICE MARKET OR UNWARRANTED INCREASE IN THE PRICE THEREOF, IN WHICH CASE THE SEIZURE AND PUBLIC SALE OF THE HOARDED COMMODITY SHALL INCLUDE ONLY SUCH QUANTITY AS NECESSARY TO STABILIZE SUPPLY AND RESTORE REASONABLE PRICES IN THE AFFECTED AREA. "TO ENFORCE THE SEIZURE ORDER, THE ADMINISTRATOR OF THE NFA, OR HIS OR HER DULY AUTHORIZED REPRESENTATIVE, IS HEREBY AUTHORIZED TO CONDUCT INVESTIGATIONS, TO ISSUE SUBPOENA DUCES TECUM OR AD TESTIFICANDUM, TO ADMINISTER OATHS, TO IMPOSE ADMINISTRATIVE FINES AND PENALTIES, AND TO IMPLEMENT THE AUTHORIZED SEIZURES. "(D) REGISTER, LICENSE, PRESCRIBE AND COLLECT FEES, CHARGES, PENALTIES OR SURCHARGES, AND REGULATE THE OPERATIONS OF ANY PERSON, NATURAL OR TO JURIDICAL, ENGAGED OR INTENDING ENGAGE IN THE FOLLOWING: (I) GRAINS WAREHOUSES OR STORAGE OF GRAINS, THEIR RICE, OTHER SUBSTITUTES OR BY-PRODUCTS;

(Il) BUSINESS OF PROVIDING GOODS AND SERVICES THAT SUPPORT THE PRODUCTION, PROCESSING, TRANSPORT, MARKETING, AND TRADING OF RICE, OTHER GRAINS, THEIR SUBSTITUTES OR BY-PRODUCTS; (III) WHOLESALE OR RETAIL TRADE OF RICE, OTHER GRAINS, THEIR SUBSTITUTES OR BY-PRODUCTS; AND, (IV) PROCESSING OR MANUFACTURE OF GOODS INCLUDING STARCH, OIL, ANIMAL FEED, OR OTHER SIMILAR COMMODITIES OR END PRODUCTS WHERE RICE, OTHER GRAINS, THEIR SUBSTITUTES OR BY- PRODUCTS ARE USED AS INGREDIENTS. "[e)] (E) Collect and analyze data on rice trade activities, in cooperation with the Philippine Statistics Authority (PSA), the Bureau of Customs (BOC), the [National Food Authority (NFA)] NFA, and other government agencies for informed policy and operational decisions. "The DA-BPI shall exercise the aforementioned powers in addition to its existing powers related to sanitary and phytosanitary and food safety standards. Upon the request of the DA-BPI, the local government units (LGUs), the Philippine National Police, the National Bureau of Investigation, or other law enforcement agencies shall provide prompt response and assistance in the implementation of this section.

SEC. 4. Section 6 of Republic Act No. 8178, as amended, is

hereby further amended to read as follows:

"Sec. 6. Powers of the DA on Rice Price Stabilization and Supply Regulation. - The DA Secretary, upon the recommendation of the National Price Coordinating Council (NPCC), shall declare a food security emergency on rice due to supply shortage or extraordinary increase in prices. The NPCC shall devise a formula for determining the existence of a rice supply shortage or an extraordinary increase in rice prices. When such conditions occur, the DA may: "xxx; "(c) Import rice when the available supply, of locally produced rice is inadequate TO MAINTAIN STABLE SUPPLY AND PRICE OF RICE. The DA Secretary is authorized to designate the importing entity within the DAL, with the exception of the NFA]: Provided, That the designated importing entity shall import THE TYPE OF rice TO BE DETERMINED BY THE DA SECRETARY at the least cost available among government-to- government options, which shall include direct contracts between the Philippine government and a foreign government, including instrumentalities and State-owned enterprises of such foreign government. "xxx."

SEC. 5. Section 11 of Republic Act No. 8178, as amended, is

hereby further amended to read as follows: "Sec. 11. Maintenance and Disposal of Rice Buffer Stock. - The NFA shall, in accordance with rules, regulations, and procedures, maintain an optimal rice buffer stock to be sourced exclusively from local farmers, FARMER COOPERATIVES, OR FARMERS' ASSOCIATIONS IN

PALAY FORM: PROVIDED, THAT PROCUREMENT OF MILLED RICE MAY BE UNDERTAKEN WHERE NECESSARY, FOLLOWING THIS ORDER OF PREFERENCE: (A) RECIPIENTS OF DA RICE PROCESSING SYSTEMS (RPS); (B) REGISTERED FARMER COOPERATIVES OR ASSOCIATIONS; AND (C) RICE MILLS OWNED OR OPERATED BY LGUS, SUBJECT TO PRESCRIBED QUALITY STANDARDS. "The NFA shall dispose of its rice buffer stock [one (1) month before the aging period starts, following the first in, first out method] IN ACCORDANCE WITH GOOD WAREHOUSE AND STOCK MANAGEMENT PRACTICES, WITH THE EFFORT TO PREVENT THE RICE BUFFER STOCK FROM AGING. "The aging process begins three (3) months from storage for MILLED rice and six (6) months from storage for RICE IN palay FORM. "In [both] ALL cases, [disposal through sale shall be through public auction] THE NFA SHALL ISSUE THE GUIDELINES FOR THE DISPOSAL OF RICE BUFFER STOCKS THROUGH ANY OF THE FOLLOWING MODALITIES: "(A) SALE TO ACCREDITED NEA RETAILERS AND THEIR SUBSEQUENT SALE TO THE PUBLIC, WHICH SHALL BE GOVERNED BY THE NFA SELLING PRICE BULLETIN; "(B) SALE TO GOVERNMENT AGENCIES, LGUS, THE FOOD TERMINAL, INC. (FTI), THE PUBLIC THROUGH KADIWA OUTLETS, OR FARMER COOPERATIVES OR FARMERS,

ASSOCIATIONS THAT SUPPLIED PALAY TO THE NFA; OR "(C) SALE THROUGH PUBLIC AUCTION. "THE QUANTITY OF RICE DISPOSED IN ANY GIVEN MONTH SHALL NOT EXCEED TWENTY FIVE PERCENT (25%) OF THE TOTAL EXISTING BUFFER STOCK, UNLESS DIRECTED BY THE NFA COUNCIL TO DISPOSE A LARGER PORTION THEREOF. ALL DISPOSAL ACTIVITIES SHALL BE DOCUMENTED AND CONDUCTED WITH TRANSPARENCY TO ENSURE ACCOUNTABILITY, PREVENT MARKET MANIPULATION, AND PROTECT THE PUBLIC INTEREST."

SEC. 6. A new Section 11-A is hereby inserted after Section 11

of Republic Act No. 8178, as amended, to read as follows: "SEC. 11-A. SETTING FLOOR PRICE FOR PALAY. - TO ENSURE THE ADEQUACY OF SUPPLY AND STABILITY OF PALAY PRICES, THE DA SHALL HAVE THE AUTHORITY TO SET AND ENFORCE NATIONAL, REGIONAL, OR PROVINCIAL FLOOR PRICES OF PALAY, BELOW WHICH RICE TRADERS SHALL BE PROHIBITED FROM PURCHASING PALAY FROM FARMERS. "IN SETTING THE FLOOR PRICE, THE DA SHALL CONSIDER THE FOLLOWING: "(A) COST OF RICE PRODUCTION; "(B) PREVAILING MARKET PRICES; "(C) REASONABLE MARGINS FOR FARMERS; "(D) WELFARE OF BOTH FARMERS AND CONSUMERS;

"(E) OTHER RELEVANT AND VERIFIABLE FACTORS. "FLOOR PRICES SHALL BE PUBLISHED AND REGULARLY UPDATED BY THE DA."

SEC. 7. A new Section 11-B is hereby inserted after Section 11-

A of Republic Act No. 8178, as amended, to read as follows: "SEC. 11-B. PENALTIES. - ANY PERSON WHO VIOLATES SECTION 11-A OR ANY RULE OR REGULATION ISSUED THEREUNDER SHALL BE SUBJECT TO: "(A) IMPRISONMENT OF NOT MORE THAN TWO (2) YEARS, A FINE NOT EXCEEDING TWO MILLION PESOS (PHP 2,000,000.00), OR BOTH, AT THE DISCRETION OF THE COURT; AND "B) REVOCATION OR SUSPENSION OF OR LICENSE, TRADING PERMIT, ACCREDITATION, AS THE CASE MAY BE. "IF THE OFFENDER IS A CORPORATION OR ASSOCIATION, THE PENALTY SHALL BE IMPOSED UPON ITS RESPONSIBLE OFFICERS SUCH AS THE PRESIDENT, GENERAL MANAGER, OR MANAGING PARTNER. "IF THE OFFENDER IS A FOREIGN NATIONAL, HE OR SHE SHALL BE DEPORTED AFTER SERVING HIS OR HER SENTENCE, WITHOUT THE NEED FOR FURTHER PROCEEDINGS. "ANY GOVERNMENT OFFICIAL OR EMPLOYEE FOUND TO HAVE AIDED, ABETTED,

OR CONNIVED TO VIOLATE SECTION 11-A OR ANY RULE OR REGULATION ISSUED THEREUNDER1 SHALL BE PENALIZED WITH PERPETUAL FROM DISQUALIFICATION HOLDING PUBLIC OFFICE, IN ADDITION TO OTHER APPLICABLE PENALTIES."

SEC. 8. Implementing Rules and Regulations. - Within sixty

(60) days from the effectivity of this Act, the DA shall, in consultation with NFA, issue the rules and regulations to effectively implement the provisions of this Act.

SEC. 9. Separability Clause. - Should any provision or part of

this Act be declared unconstitutional or invalid, the other provisions and parts hereof, insofar as they are separable from the invalid ones, shall remain in full force and effect.

SEC. 10. Repealing Clause. - All laws, decrees, orders,

proclamations, rules and regulations, or parts thereof, which are inconsistent with this Act are hereby repealed, amended, or modified accordingly.

SEC. 11. Effectivity. - This Act shall take effect fifteen (15) days

after its publication in the Official Gazette or in at least two (2) newspapers of general circulation. Approved,