Corn Industry Development Act

Phrer cị i. TWENTIETH CONGRESS OF THE ) ) REPUBLIC OF THE PHILIPPINES 25 AUG -4 P5:06 First Regular Session SENATE RECENCO BI S. No. 842 Introduced by Senator Jinggoy Ejercito Estrada 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 Corn is one of the country's main crops. In fact, most of the country's agricultural lands are devoted for the production of corn (17.1%), alongside palay (32%) and coconut (24.3%)'. Corn ranks third among all agricultural crops in terms of average Gross Value added (GVA) from 2010 to 2019, the first two major commodities being rice and bananas. In terms of volume, corn (of yellow and white varieties) belongs to the top 5 crops with the biggest production which includes sugarcane, palay, coconut, and banana. Volume of corn production (in '000 metric tons) 2 2021 2023 2022 Sugarcane 26,277.4 21,649.1 23,455.4 Palay 19,960.2 19,756.4 20,059.6 Coconut 14,717.3 14,931.2 14,892.6 Banana 9,091.3 9,013.3 9,019.0 Yellow corn 6,057.8 6,088.9 6,367.6 White corn 2,242.5 2,116.7 2,037.4 1 Philippine Development Plan 2023-2028 2 Department of Agriculture Annual Reports for 2022 and 2023

Unfortunately, despite its crucial importance in the domestic agriculture, the corn industry is faced with serious challenges. According to a 2022 discussion paper by the Philippine Institute of Development Studies (PIDS)3, the industry is dominated by small farmers (approximately 82% wherein the average farm size is only 0.54 hectares. "This in turn negatively impacts the productivity of corn producers due to the inability of farmers to achieve economies of scale. The Philippines has one of the lowest corn yield per hectare among the selected ASEAN countries at only 4.215 metric tons (mt) per hectare. This figure is approximately 1 mt lower than the most efficient ASEAN corn producer, which is Indonesia with a productivity of 5.2 mt per hectare. Consequently, given the relatively low productivity, corn farming is considered as one of the poorest among the agricultural sectors. [The corn industry has the second highest poverty incidence among various agricultural activities at 45.12 percent in 2018." (emphasis supplied) Moreover, corn price data on selected Asian countries show that Philippines is at the upper bound of corn price (USD 0.42 to 0.44 per kg), followed by China (USD 0.28 to 0.38 per kg), Vietnam (USD 0.22 to 0.29 per kg), and Thailand (USD 0.19 to 0.24 per kg)*. Considering that corn (particularly yellow corn) is mainly used as livestock feed, its price directly drives the price of pork and chicken meat. This measure aims to further develop the corn industry, address the persistent ills encountered by this crucial sector toward supply sufficiency, and enhance its competitiveness with our regional counterparts. Ultimately, this bill which was reported out by the Senate Committee on Agriculture, Food and Agrarian Reform 3 "Is Agriculture and Fisheries Ascending the Value Added Ladder? The State of Agricultural Value Chains in the Philippines." Karlo Fermin S. Adriano and Lourdes S. Adriano. https://pidswebs.pids.gov.ph/CDN/document/pidsdps2218.pdf?fbclid=lwAR2X6TmFA92e FVKx8VTEpOvu2bA OU1D6z-ETs4AMBi1awRy[2Ws1H3ZVFw * https://www.pids.gov.ph/details/news/in-the-news/opening-remarks-on-vellow-corn-bill-hearing

during the 19th Congress, seeks to ensure food security for all Filipinos through strengthened and more comprehensive support to our local farm workers. In view of the foregoing, the approval of this bill is earnestly sought. JINGGÒY EJERCITO ESTRADA

Waiter nfi TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) First Regular Session ) AUG -4 P5:06 RECENED B SENATE S. No. _ Introduced by Senator Jinggoy Ejercito Estrada 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 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 " Philippine Corn Industry

2 Development Act.

Sec. 2. Declaration of Policy. - It is the policy of the State to promote the

inclusive development and competitiveness of the corn industry, particularly among smallhold farmers, to increase the supply of yellow corn, white corn and other indigenous corn varieties to enhance the availability and affordability of corn for the 7 feeds industry and for human consumption. It is likewise the policy of the State to increase the income of farmers and farm workers to alleviate rural poverty through 9 enhanced production efficiency and efficient post-production facilities. Towards this end, the State shall nurture an enabling environment and establish 11 responsive government policies and support programs for the corn industry, with primary focus on the smallhold corn farmers. The State shall be committed to providing necessary support and incentives to build stronger partnerships and cooperation with the private sector in recognition of 15 their vital role in achieving the objectives of this Act.

Sec. 3. Definition of Terms. - As used in this Act:

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 roadmap shall set the

strategic direction and key initiatives of the Corn Industry Development under this Act. 11 It shall be crafted in consultation with relevant stakeholders that include but not 12 limited to smallhold farmers, feed processors, livestock farmers, regulatory offices, 13 and academe. It shall be finalized within sixty (60) days from the effectivity of this Act 14 and updated every five (5) years thereafter. The Bureau of Plant Industry, together with the government agencies cited in 16 this Act, shall spearhead the crafting of the roadmap.

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

18 Corn Unit and BPI Field Offices. - The BPI is hereby designated as the implementing 19 agency of this Act. Towards this end, the BPI is hereby authorized to establish and 20 maintain a Corn Unit at its main office which shall be headed by the BPI Director. It 21 shall also establish BPI field offices in corn production areas designated in this Act. Both shall derive budgetary support from 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 its existing powers and functions

as the premier government agency in the plant industry, the BPI shall have the following powers and functions under this Act: a) Manage, supervise and monitor the Corn Fund under Sections 8 and 9 of this Act; b) In partnership with the Bureau of Agricultural Research (BAR) and the corn research stations in corn provinces designated herein, establish a

network of research institutions engaged in corn varietal improvement, propagation, and distribution; c) Establish and manage a corn gene bank of all the corn varieties developed under this Act, which shall be kept, protected, accessed and utilized for the implementation of this Act, especially those funded and developed by the BAR; and d) Establish a reliable, efficient and holistic corn industry database management system which shall cater to the needs of the corn industry, particularly the corn production areas in this Act.

Sec. 7. Corn Production Areas. - The provinces of Isabela, Bukidnon,

Pangasinan, Quirino, Camarines Sur and other provinces as may be later identified by the BPI, are designated as corn production areas and shall be the beneficiaries of the Corn Fund under this Act. Their designation is based on historical corn production data 14 of the country and climatic factors. The identified provinces shall share to other provinces, through the BPI field 16 offices, quality corn seeds and feeds they produce. The BPI shall draft guidelines for 17 the operationalization of sharing and distribution with other provinces.

Sec. 8. Creation of the Corn Competitiveness Enhancement Fund (Corn Fund).

- In addition to the regular budget from the annual General Appropriations Act (GAA) 20 of the agencies herein mentioned, there is hereby created a Corn Competitiveness Enhancement Fund for the use of these agencies. The Corn Fund shall consist of an annual appropriation of Three billion pesos (P3,000,000,000.00) 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 HS headings or 2022 AHTN Codes, and Descriptions: 10.05 Maize (corn). 1005.90.90 - - Other 1005.90.90.100 - - - In-Quota 1005.90.90.200 - - - 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 10.04 - Oats - 1004.10.00 Seed 1004.90.00 - Other 10.07 - Grain Sorghum - Seed 1007.10.00 1007.90.00 Other 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 23.02Bran, 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: 2302.40.10 - Of rice 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 2306.49 - - Other: 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 2306.90 - Other: 2306.90.10 - Of maize (corn) germ 2306.90.90 - Other; 23.07 2307.00.00 Wine lees; argol. 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 2309.09.12 - - - Of a kind suitable for swine All tariff collections shall be automatically credited to a special account for Corn 19 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 Three billion pesos (P3,000,000,000.00) 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 said 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 as provided for in this Act based on the objectives and plans of the Corn Industry Development Roadmap under Section 4 of 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. 9. Allocation, Disbursement and Utilization of the Corn Competitiveness

Enhancement Fund. - Subject to the usual accounting and auditing rules and 15 regulations, the Corn Fund shall be allocated, disbursed and utilized as follows: Eighty 16 percent (80%) for yellow corn production; Twenty percent (20%) for white corn and 17 other indigenous corn varieties, which shall be respectively divided by both as follows: a) Forty percent (40%) - 23% for post-production, 15% for mechanization of corn farms, to be implemented by PHILMECH 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, 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 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%) for provision of seeds and fertilizers, to be implemented and/or supervised by the BPI: Provided, That in the

procurement of seeds for distribution to farmers under this Act, the BPI shall source seeds from the ones developed by local Filipino seed producers and registered with the Philippine Seed Board or National Seed Industry Council, until their supply lasts; c) Twenty percent (20%) for the establishment and operations of the BPI Corn Unit and the field offices in corn producing provinces in this Act, which shall include the hiring and maintenance of needed personnel (15%), and for roadmap, corn bank, review of the Corn Fund, and holistic database management (5%); d) Ten percent (10%) for extension and training activities to increase corn productivity, including training course grants, training/capacity building of beneficiaries for maintenance servicing of machinery and equipment, and organizing and clustering of smallholder corn farmers into formal groups, cooperatives or associations. The fund shall be utilized by the Agricultural Training Institute (4%), PHILMECH (3%) and DA-National Corn Program (2%); The PHILMECH shall create its PMO for extension and training for 1%; e) Ten percent (10%) for research to be implemented by Bureau of Agricultural Research (BAR), 8% of which shall be spent for corn applied research and 2% for basic research: Provided, That the research outputs shall be owned by the government, through BPI, and any subsequent commercialization, propagation or distribution of said outputs may be the subject of contractual arrangements between and among the BPI, BAR, and local Filipino private entities that developed said outputs: Provided, further, That research initiatives shall include, but not limited to: i) Nutrient Management which shall look into increase yield and income thru the use of cost reducing technologies (Site-specific Nutrient Management for Maize (SSNM), Integrated Pest Management (IPM), Community-based Participatory Research (CPAR), and development of biofertilizers); ii) Collection, conservation, and utilization of corn varieties for the development and improvement of resistance to biotic and abiotic

stresses, and development and commercialization of high yielding and stress resistant open pollinated varieties and hybrids; ili) Pest Management thru development of rapid detection of aflatoxin and other pests; iv) Mechanization thru development of low-cost postharvest machinery that will reduce losses; v) Sustainable soil and water management in corn production areas; vi) Food and feed product development and commercialization for livelihood upliftment; and vii) Development of training and learning modules.

Sec. 10. Beneficiaries/Grantees of Corn Fund. - Within one hundred eighty

(180) days from the effectivity of this Act, the DA, in consultation with farmers' cooperatives and organizations and LGUs, shall validate and update the master list of eligible beneficiaries in corn production provinces in this Act to ensure that those listed are corn farmers, cooperatives, associations, and organizations. The beneficiaries of the Corn Fund are smallhold corn farmers listed in the 17 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. 11. Review of the Corn Competitiveness Enhancement Fund. - The

following mandatory review of the Corn Fund shall be performed: a) 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; b) The percentage allocation of the Corn Fund will be reviewed on the third (3rd) year from the effectivity of this Act for possible revisions should intervention priorities change; and c) 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 shall be a 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. 12. Lifting of Export Restriction 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 11 lifted and/or repealed.

Sec. 13. Disposition of Corn Fund under the National Food Authority (NFA). -

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

Sec. 14. 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 WTO 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. The power herein delegated to the President may be withdrawn or terminated 4 by Congress through a joint resolution.

Sec. 15. Separability Clause. - If any provision of this Act is declared

unconstitutional, the remainder thereof not otherwise affected shall remain in full force 7 and effect.

Sec. 16. Repealing Clause. - Such other 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. 17. Effectivity. - This Act shall take effect after fifteen (15) days following

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