PRESIDENTIAL DECREE NO. 4, September 26, 1972
PROCLAIMING THE CREATION OF THE NATIONAL GRAINS INDUSTRY DEVELOPMENT ADMINISTRATION AND PROVIDING FUNDS THEREFOR.
Pursuant to Proclamation No. 1081, dated September 21, 1972, I, FERDINAND E.
MARCOS, President of the Philippines and Commander-in-Chief of all the Armed
Forces by virtue of the powers vested in me by the Constitution of the Republic
of the Philippines, do hereby declare as a law of the land, the creation of the
National Grains Industry Development Administration which shall be directly
under the Department of Agriculture and Natural Resources in accordance with the
pertinent provisions of the Integrated Reorganization Plan. The provisions of
this Decree are contained herein below.
SEC. 1. Title of the Act. — This Act shall be known
as the National Grains Industry Development Act.
SEC. 2. Declaration of Policy. — It shall be the
policy of the State to promote the integrated growth and development of the
grains industry (rice and corn and other grains) so that it can adequately
function as an institution conscious of its social responsibilities and capable
of providing adequate and continuous food supply to the nation and of
contributing to its proper share to the national economy.
SEC. 3. Policy Goals and Objectives. — To carry out
the foregoing policy, the government shall orient its programs towards the
immediate attainment of the following goals and objectives:
(a) Encourage increased and efficient productivity by assuring a fair return
on investment to producers and their enjoyment of a decent rising level of
income.(b) Provide comprehensive guidance for the development of the industry in all
its aspects, delineating and coordinating the respective roles of both
Government and private sectors and their respective components and earmarking
adequate financing from credit resources to support the program: Provided,
however, That the credit resources contemplated in this Act for the
development of the grains industry shall be complementary and supplementary to
those earmarked under existing laws.(c) Encourage the adoption, in the production, processing and marketing
phases, of such proven systems as will reduce costs and improve the quality of
these grains and thereby bring about ultimately reasonable prices within the
reach of the great masses of the people.(d) Institute measures to fully establish the integrity and assure the
negotiability of warehouse receipts evidencing grains in storage.(e) limit its participation only to such extent and in such phases of the
operations of the industry as the private sector has not shown capability to
adequately perform its function and discharge its responsibility, particularly
in the stabilization of producers’ and consumers’ prices.(f) Adopt measures of the grains industry.
SEC. 4. Policy Implementation. — To execute the
foregoing policy, there is hereby created a body corporate known as the National
Grains Industry Development Administration, hereinafter simply referred to as
the Administration, which shall be governed by a Board of Directors, known as
the National Grains Industry Development Council, hereinafter referred to as the
Council. The powers and functions of the Administration shall be vested in the
Council which shall have the overall responsibility for formulating and
coordinating a comprehensive program for the development of the grains industry.
The Council shall be composed of the following:
The Administrator, National Grains Industry Development
AdministrationThe Governor of the Central Bank
The Governor of the Development Bank of the Philippines
The Executive Secretary
The Secretary of the Department of Trade and Tourism
A representative from the consuming sector
A representative of rice producers
A representative of rice &c com millers and traders
Within thirty days from the approval of this Decree, the President of the
Philippines shall constitute the Council.
The representatives of the rice producers, rice and corn millers and traders,
and the representative of the corn producers shall not be less than thirty-five
years of age, with sufficient education and with at least five years experience
in the rice and corn industry, of proven honesty, integrity and recognized
competence. They shall be appointed, together with the consumer representative,
by the President of the Philippines, to hold office for a term of four years
unless sooner removed for cause or until their successors shall have been
appointed and qualified.
The Council shall meet regularly on the first Wednesday of each month:
Provided, That the Chairman may convene special meetings to discuss any
urgent matters needing immediate resolution. The Council members shall not be
entitled to per diem, for any meeting in excess of four meetings every
month.
If for any reason a member of the Council, who is a public official, is
unable to attend a meeting, he shall be represented therein by the next
ranking official or officer of the office, agency or organization he
represents.
The Council shall adopt rules and regulations to govern its proceedings, call
on any government agency or institution for secretariat assistance or support,
and determine its official location and address.
Each member of the Council who is not a fulltime national gover nment
official shall be entitled to per diems of not more than two hundred
pesos (P200.00) for each meeting actually attended and each member shall be
entitled to actual and necessary transportation expenses.
SEC. 5. Implementing Agencies. — Within the
framework of the grains industry development program adopted by the Council,
primary and direct responsibilities and functions shall be vested in specified
agencies, as follows:
a) The Department of Agriculture and Natural Resources shall assume primary
responsibility for undertaking and coordinating all government activities
directly relating to grain production. It shall—(i) Determine the comparative productivity of the lands cultivated or
proposed to be cultivated to rice and corn, and cropping patterns, for the
purpose of establishing priorities and optimizing their utilization;(ii) Maintain a system for regularly obtaining information on current and
future production;(iii) Draw up the funding requirements in support of production programs, and
recommend to the Council a schedule of priorities in the use of credit made
available under this Act;(iv) Coordinate, with the government agencies concerned, the program of
extension services and infrastructural facilities in support of the
industry;(v) Study and recommend to the Council a system of crop insurance; and
(vi) Coordinate all other activities directly related to or in support of
grain production.b) The Administration as created and organized in this Act shall undertake
and assume primary responsibility for all government activities relating to the
processing, storage, transport and marketing of grains. It shall—(i) Determine the floor price for the grain crop which shall assure the
farmer or producer a fair return on his investment: Provided, That the
floor price for the grain crop of any season shall be the total sum of the
season’s anticipated cost of production per cavan, as determined by the Council,
plus five pesos (P5.00): Provided, further, That whatever agricultural
minimum wage may be specified by law shall be included in the computation of the
anticipated production cost even for work performed by operators and/or owners
of farms: And provided, further, That in the first five years, the
floor price shall not be lower than sixty centavos (P0.60) per kilogram for corn
grain: Provided, further, That in the first five years, the retail
price for the approved variety shall not be more than one peso and twenty-five
centavos (P1.25) per kilogram for milled rice and ninety centavos (P0.90) for
com grit: Provided, further, That thereafter these ceilings shall be
adjusted in direct relation to significant changes in the Consumer Price Index
(CPI) periodically prepared by the Central Bank of the Philippines:
Provided, further, That the Administration shall give
preference to producers cooperatives in the procurement of grains so as to
promote the development of cooperatives in the country: Provided,
further, That only palay, corn or other grains deposited in a duly
accredited warehouse shall be entitled to price support as hereinafter
provided: And provided finally, That the price support shall
cover only such quantity of palay, corn or other grains as was actually produced
by the farmer in his own farm.(ii) Announce, in accordance with the above-mentioned guidelines, the floor
price of palay, corn or other grains, by region when required, for the guideline
of the producer before the start of the crop season and of the market in
anticipation of the crop harvest: Provided, That subject to changes in
the crop pattern, said floor price shall be announced not later than May and
October every year;(iii) Procure and control or cause the procurement or control of such stock
of grains in quantities and in locations, as may foreseeably be needed, to
maintain the floor price or manage as buffer stocks to stabilize consumer
prices;(iv) Promote the organized inter-relationship among the components of the
industry; particularly storage agreements between producers and warehousemen,
milling agreements between producers and processors, lease agreements between
millers and warehousemen – lessees, financing agreements among producers,
processors or warehousemen and the financial institutions, marketing agreements
between farmers’ organizations and grouped processors, arrangements embracing
elements of the marketing system to the end that the entire industry shall
attain institutionalized efficiency as to be able to meet its assigned role;(v) Device a system by which it can insure the adequacy of supply and
stability of consumer prices at levels within the reach of the low-income
families, while maintaining the announced floor price for the producers;(vi) Introduce more efficient ways, systems and facilities for harvesting,
threshing or shelling, drying, storage, milling, packaging, and post harvest
handling of rice and corn and other grains and their by-products;(vii) Introduce more efficient, regular, adequate suitable and economical
means of transporting and/or shipping the foregoing products, for purposes of
reducing marketing costs and insuring stable consumer supply;(viii) Devise and maintain a system for regularly obtaining information on
current stock positions of grains in commercial supply, their prices, and
movements in trade;(ix) Study and promote, as a supplementary scheme of wider-based grain
distribution, a system of marketing utilizing the pattern of barrio
councils;(x) Undertake the division of the country into regions or districts and
promote the grouping of existing fragmented private grain establishments therein
into organized grain corporations or cooperatives that can serve as the pattern
or base for grain milling districts to contain grain production potential and/or
for economic-sized grain warehousing, milling, packaging and distribution
complexes; and(xi) Perform such other functions as may be necessary to carry into effect
the provisions of this Act.c) The Central Bank of the Philippines shall undertake and assume primary
responsibility for making available the financial requirements of the grains
program. It shall—(i) Formulate its credit policy for the production, storage, processing and
marketing aspects of the grain program so as to extend to banking institutions
preferential assistance in terms of volume, costs, availability and character of
bank credits;(ii) Adopt the necessary measures to ensure that all production loans given
by banks to producers of rice, corn and other grains are given preference in its
rediscounting policy and that the rediscounting rate shall be the lowest
preferential rate for the period.All banks participating hereunder shall extend production loans to the extent
of at least eighty (80%) per cent of the floor price all determined under
paragraph (b) of this section: Provided, That said production loans
shall be released on a staggered basis on such amounts and at such times as may
properly be determined as adequate to cover the costs of the following phases of
the crop season: (a) start of cultivation, (b) start of planting, (c) start of
fertilization, harvesting and milling.(iii) Perform such other functions as may be necessary to achieve the maximum
participation of banks in the financing of the grains industry.d) The other agencies, public or private, called upon to participate in the
implementation of the grains program shall:(i) Submit to the Council a detailed proposal on how best they can contribute
to the successful prosecution of the program, and of the manner in which their
participation will contribute to the effective implementation of the total
grains program; and(ii) Call upon the other government agencies under their supervision and in
the case of private organizations, their affiliates and members to extend
maximum cooperation.
SEC. 6. Administration—Powers, Organization and
Management. — The powers, organization and management of the Administration
shall be as follows:
a) Powers. — In order to effectively carry out its functions and
responsibilities as provided in this Act, the Administration shall have
the following powers: (i) To institute the negotiable warehouse receipt or
quedan system in palay, com and other grains not later than two years after the
approval of this Act. Pending the institution of said quedan system, however,
the Administration shall implement the price support by procuring grains at the
announced floor price in such quantities and in such places as may be necessary:
Provided, That no such grains shall be procured unless they are stored
in a warehouse bonded by the Government Service Insurance System under a bond of
not less than thirty-three and one-third (33-1/3%) percent of the value of the
stocks of said grains: Provided, however, That in areas where there are
no bonded warehouses or adequate space in bonded warehouses, the Administration
shall start to purchase grains at the beginning of every harvest and for this
purpose shall send its men and facilities to the places of harvest where the
farmers can directly sell their harvested grains: Provided, further,
That the Government Service Insurance System may call upon private bonding
companies or pool of bonding companies to participate in the coverage:
Provided, however, That the Administration shall take measures to
expedite the establishment of bonded warehouses in areas where they are needed
but do not exist: Provided, further, That such stocks shall be
fully insured against loss due to fire: And provided, finally. That the
Administration shall not sell its stocks below procurement cost, including the
expenses incurred in the handling, hauling, storing, drying, transportation and
distribution thereof and an allowance determined by the Council for shrinkage
and sweepings,(ii) To maintain and manage a national buffer stock the quantity and
locations of which shall be determined by the Council;(iii) To own, lease, operate or otherwise hold lands, buildings, equipment
and such other immovable properties as may be necessary to carry out its
functions and to sell the same: Provided, That the Administration shall
not acquire agricultural land proper as defined in the Public Land Act for the
production of grains;(iv) To enter into, make, perform and carry out contracts of every class and
description necessary or incidental to the realization of its functions with any
person, firm or corporation, private or public, or initiate contracts and/or
agreements in behalf of the industry between the Philippine Government and any
foreign government or institution;(v) To oversee and coordinate with the grains industry development program
the activities of the Rice and Corn Board pursuant to the provisions of Republic
Act Numbered Three thousand eighteen;(vi) To inspect palay, rice, com and corn grits stored by any person,
partnership, corporation or association, for purposes of taking inventory and
record of such commodities, and to enter the premises thereof by the use of
reasonable means;(vii) To order the seizure, whenever there is cornering or hoarding, as may
be defined by the Council, of rice and corn or other grains or whenever there is
an artificial scarcity of supply of such a commodity in the consumer market and
an unwarranted increase in the price thereof, of the hoarded commodity and its
public sale in such quantity as may be needed to stabilize the supply in the
area of scarcity and restore prices to normal levels;(viii) To effect a transition of standards in measurement of grains from
volume to weight, and in metric system;(ix) To coordinate the activities of all government agencies engaged in the
study, research, and promotion of measures designed to improve the processing
and marketing standards of rice, corn and other grains, such as the methods of
drying, handling, hauling, storage, milling, packaging, distributing and
shipping these grains and their by-products;(x) To call upon and/or deputize any official of such government agencies as
may be necessary to assist the Administration in carrying out its functions;(xi) To register, license and supervise warehouses and mills; and to
prescribe, impose and collect fees, charges and/or surcharges in licensing and
regulating warehouses and mills;(xii) To license, impose and collect fees and charges in the private
importation of rice and corn for the purpose of equalizing the selling price of
the imported grains with the normal prevailing domestic prices for such grains:
Provided, That no importer shall sell the imported grains at less than
the selling price of grains of equivalent commercial grade in the domestic
market established by the Council but in no case higher than one peso and
twenty-five centavos (P1.25) per kilogram for milled rice and ninety centavos
(P0.90) for corn grit, such selling price to be determined by the Council in
such a manner as to allow reasonable profit to the importer.In the exercise of this power, the Council after consultation with the Office
of the President shall first certify to a grain shortage that may occur as a
result of a shortfall in production, a critical demand-supply gap, a state of
calamity, or other verified reasons that may warrant the need for importation.
The Administration shall allocate import quotas among certified importers:
Provided, That if the retail price of grains in any two successive
months shall rise by twenty-five (25%) per cent or over, the Administration
shall undertake the direct importation of grains and the distribution thereof
through cooperatives and other marketing channels: And provided,
finally, That in case of extreme hardships to the people brought about by
widespread disorders, natural calamities or disasters, such as storms,
earthquakes, long drought, and the like, which threaten the occurrence of famine
due to lack of rice and corn or other grains, and these are duly certified to by
the Council, the Government, to relieve the people of these hardships, may
directly import these grains to be distributed at prices to be determined by the
Council regardless of any existing floor prices determined under this
paragraph;(xiii) To establish rules and regulations governing the export of rice, corn
and other grains and to license, impose and collect fees and charges for such
exportations at rates to be determined by the Council;(xiv) To register, license and supervise private regional grain corporations
that may be established to engage in the business of providing goods and
services in support of the different activities involved in the production,
processing, marketing and trading of grains and to prescribe, impose and collect
fees, charges and/or surcharges in licensing and regulating the operations of
such corporations or cooperatives;(xv) To register, license and supervise persons natural or juridical engaged
in the retail business of rice and corn and to impose and collect nominal fees
to be determined by the Council;(xvi) To register, license and supervise persons, natural or juridical,
engaged in the processing or manufacture of goods where rice or corn or other
grains are used as ingredients in the manufacture of starch, oil, and animal
feeds in which case it shall impose the nominal fees to be determined by the
Council;(xvii) To promulgate such rules and regulations as may be necessary to carry
out the provisions of this Act. Such rules and regulations shall take effect
fifteen days following the publication twice in at least two daily newspapers of
national circulation;(xviii) To adopt, alter, and use a corporate seal which shall be judicially
noticed; to sue and be sued; and otherwise to do and perform any and all acts,
and to exercise any and all powers as may be necessary to carry into effect the
provisions of this Act or are as essential to the proper conduct of its
operations.b) Organization.— The Administration shall be governed by the
Council which shall create and administer, through an Administrator as
hereinafter provided, the necessary staff and line units of the
Administration, whose personnel shall be exempt from the rules and regulations
of the Wage and Position Classification Office.c) Management.— The management of the Administration shall be vested
in an Administrator who shall, upon recommendation of the Council, be appointed
by the President of the Philippines within sixty (60) days from the approval of
this Act, and who shall direct and manage the affairs of the Administration,
subject to the supervision of the Council. The Administrator shall hold office
for a term of four (4) years, except when earlier removed for cause, or until
his successor shall have been appointed and qualified.There shall be two deputy administrators, one for rice operations and the
other for corn and other grains, appointed by the Council, who shall assist the
Administrator in the performance of his functions. The deputy Administrator for
Rice Operations shall be a person of recognized competence and experience in the
production, processing and marketing aspects of rice, and the Deputy for Corn
& other Grains Operations shall be one of recognized competence and
experience in the production, processing, marketing and trading aspects of corn
and other grains. Either one of the Deputy Administrators, upon designation by
the Council, shall perform the duties and exercise the powers and functions of
the Administrator in the absence of the latter.The Administrator shall appoint, remove, suspend or otherwise discipline,
with the consent of the Council, other officers and employees of the
Administration, and shall perform such other functions as may be assigned and
delegated to him by the Council.The Administrator and the Deputy Administrators shall be natural-born
citizens of the Philippines, not less than thirty-five (35) years of age, of
proven honesty and integrity and of recognized managerial competence.The Administrator shall receive a compensation of sixty thousand (P60,000)
pesos per annum. The Deputy Administrators shall each receive salary to be
determined by the Council but not exceeding thirty-six thousand (P36,000) pesos
per annum.
SEC. 7. Development and Stabilization Fund. — There
is hereby established the .National Grains Industry Development and
Stabilization Fund, herein referred to as the “Fund,” for the purpose of
financing the growth and development of the industry and the stabilization of
the domestic market in grains, to be administered in trust by the Central Bank
of the Philippines, and derived in the manner herein below cited from the
following sources:
a) An additional tax on rice and corn mills as provided in Section
ten of this Act;b) Stabilization fees which shall be collected from the warehousemen by the
Administration on all grains covered by negotiable warehouse receipts or quedans
at the rate of ten centavos (P0.10) per cavan or fifty kilograms of grain per
month but not to exceed fifty centavos (P0.50) per year;c) A surtax on corporations as provided in Section eight of this
Act;d) Such borrowings as may be obtained from PL480, international institutions
and other outside foreign agencies;e) Such funds, profits, cash, and stocks of the Rice and Corn Administration
(RCA) as will be turned over to the Administration;f) Fees for licensing bonded warehouses at rates which shall be determined by
the Council and collected by the Administration per cubic meter bonded
capacity;g) Fees, charges and/or surcharges hereby imposed in the issuance of licenses
for importation of rice and corn and other grains, to be collected by the
Administration at rates which shall be determined by the Council:
Provided, That the rate of any surcharge to equalize the wholesale
price of imported grain with the prevailing selling price of the equivalent
commercial grain the domestic market shall be as determined by the Council under
subparagraph (xii) of Section six of this Act; andh) A tax on the sale, exchange or transfer of real property as
provided in Section nine of this Act.
The taxes, fees, charges, surcharges and other levies aforestated in this
section, including surcharges and penalties, if any, shall be turned over to the
Central Bank of the Philippines to form part of the Fund. For this purpose, the
agencies charged with the collection thereof shall remit their monthly
collections to the Central Bank of the Philippines for the account of the Fund
within fifteen (15) days of every succeeding month: Provided, however,
That said taxes, fees, charges, surcharges and levies as provided for
in this section shall take effect upon instruction of the President to the
Council. Failure or refusal by any person to turn over or remit the collections
within the period mentioned in this section shall be treated as a serious
offense punishable under Section Twenty-nine of this Act.
In order to enhance the usefulness of the Fund, the Central Bank of the
Philippines is hereby authorized to invest the resources thereof and the
proceeds or increments arising out of such investments shall form part of the
Fund.
Thirty (30%) per cent of the amount received every month shall be turned over
within five (5) days from receipt to the Agricultural Guarantee Fund created
under Republic Act Numbered Six thousand three hundred ninety to be disposed of
in accordance with Section eleven of this Act.
The remaining seventy (70%) percent of the Fund shall be utilized by the
Administration for funding the requirements of the development of the grains
industry starting with the production of grains and the stabilization of supply
and prices including the following:
a) Procurement of palay, rice, com and other grains in such quantities and
places as may be necessary to stabilize the supply and price thereof;b) Implementation of price support programs for palay, com and other
grains.
The disposition, allocation and utilization of this portion of the Fund for
the purposes envisioned in this Act shall be the exclusive prerogative of the
Council.
SEC. 8. Surtax on Corporations. — In addition to
the regular income tax imposed under Section twenty-four of the National
Internal Revenue Code, as amended, for five years after the approval of this
Act, there is hereby imposed for each taxable year on the net income of every
corporation surtax of five (5%) per cent upon the amount by which such total net
income minus regular income tax payable exceeds two hundred thousand (P200,000)
pesos.
The provision of existing general and special laws to the contrary
notwithstanding, there shall .be no exemption from this additional income tax.
All corporate in excess of the minimum amount provided for in this
section shall pay the surtax provided in this section.
SEC. 9. There shall be levied, assessed, collected, and paid
during the next five years from the approval of this Act on every sale,
exchange, transfer, or similar transaction intended to convey ownership of or
title to any real property or rights thereto, a tax equivalent to two and a half
(2-1/2%) per cent of the gross selling price of the real property or rights
thereto, which shall be paid by the seller or transferor, except when the value
of the property is ten thousand (PI 0,000) pesos or less. This tax shall not
apply to transfers which are subject to tax under Title III of the National
Internal Revenue Code.
SEC. 10. Imposition of Additional Taxes on Rice and Corn
Mills.— In addition to the graduated fixed tax imposed in Section one
hundred eighty-two (mm) of the National Internal Revenue Code, as amended, there
is hereby imposed an additional tax on operators or owners of rice or corn mills
in accordance with the following schedule:
RICE MILLS:
Kiskisan Type
Not exceeding 50 cavans of palay per 12-hour capacity with automotive power
not
exceeding 12 H.P.Not exceeding 100 cavans of palay per 12-hour capacity not
included in the preceding categoryExceeding 100 cavans of palay per 12-hour capacity
Cono Type
Not exceeding 100 cavans of palay per 12—hour
capacityNot exceeding 200 cavans of palay per 12—hour capacity Not exceeding 300 cavans of palay per 12—hour capacity Not exceeding 400 cavans of palay per 12—hour capacity Not exceeding 500 cavans of palay per 12—hour capacity Not exceeding 600 cavans of palay per 12—hour capacity Not exceeding 700 cavans of palay per 12—hour capacity Not exceeding 800 cavans of palay per 12—hour capacity Not exceeding 900 cavans of palay per 12—hour capacity Not exceeding 1,000 cavans of palay per 12 hour capacity Not exceeding 1,000 cavans of palay per 12—hour capacity
CORN MILLS:
Grinder Type
More than 36 but not exceeding 100 cavans corn
grit per 12-hour capacityExceeding 100 cavans corn grit per 12-hour capacity
Roller Type
More than 36 cavans but not exceeding 100 cavans corn
grit per 12-hour capacity101—250 cavans com grit per 12-hour capacity 251—500 cavans corn-grit per 12-hour capacity 501—750 cavans com grit per 12-hour capacity 751—1,000 cavans corn grit pel 12-hour capacity 1,000—2,500 cavans com grit per 12-hour capacity Above 2,500 cavans corn grit per 12-hour capacity
SEC. 11. Disposition of Funds turned over to the
Agricultural Guarantee Fund. — The Agricultural Guarantee Fund Board
created in Section thirteen of Republic Act Numbered Six thousand three hundred
ninety shall administer the Funds turned over to the Agricultural Guarantee Fund
under Section seven of this Act.
The Agricultural Guarantee Fund Board shall lay down, the policies governing
the portion of the Agricultural Guarantee Fund contributed by this Act pursuant
to the objectives stated therein. It shall promulgate such rules and regulations
as may be necessary to insure the effective and efficient implementation of such
policies.
The portion of the Agricultural Guarantee Fund funded by this Act shall be
kept in a separate account at all times and shall be applied to cover losses for
production loans extended to producers of rice and corn and other grains,
guaranteed pursuant to rules and regulations promulgated in accordance with this
section: Provided, That seventy (70%) per cent of the losses for
production loans extended by banks shall be absorbed by the Agricultural
Guarantee Fund and thirty (30%) per cent of such losses shall be absorbed by the
Banks. The Agricultural Guarantee Fund Board shall submit to the President of
the Philippines not later than the end of February, an annual report regarding
the portion of the Fund contributed by this Act.
SEC. 12. Warehousing of Grains. — For purposes of
this Act, the term “warehouseman” shall mean any person or entity engaged in the
business of accepting rice, corn and other grains, milled or unmilled, for
deposit or storage, imposing a charge or charges by reason (.hereof, and
engaging to deliver the grain deposited upon surrender of the receipt therefor:
Provided, That the warehouseman shall be entitled to allowance for
depreciation of the stocks deposited at a rate to be determined by the
Administration and approved by the Council.
SEC. 13. Registry, Licensing of Warehouses. — No
warehouseman shall engage in the business of grain storage unless duly
registered and licensed by the Administration: Provided, That no
warehouseman shall be issued a license who has not complied with the rules and
regulations to be hereinafter promulgated by the Administration, or be a person
convicted of a crime involving moral turpitude.
It shall not be prohibited for a person, natural or juridical, who owns or
operates a mill for rice or corn registered and licensed under this Act, to own
and/or operate a warehouse engaged in the business of accepting palay, corn or
other grains for storage and deposit under the quedan system and vice-versa:
Provided, That the licensees shall be required to keep separate
accounts or contracts for the milling and the warehousing operations to
forestall the possible violation of this provision, thereby keeping wholly
separable the milling operations and warehousing operations.
In order to further strengthen the quedan system, the Council shall
promulgate such policy and/or restrictions as may be desired to guarantee the
integrity of the quedan system and to encourage the banking system to finance
and support such quedan system.
With the approval of the Central Bank of the Philippines, and subject to the
registration and licensing authority of the Administration, private banks or
consortiums thereof may lease or own and operate warehouses any law to the
contrary notwithstanding.
SEC. 14. Warehouse Receipts. — For purposes of this
Act, a warehouse receipt issued by a warehouseman for rice or corn or other
grains to the depositor thereof shall be on forms provided by the
Administration, and its issuance by the warehouseman shall be in accordance with
the rules and regulations and procedures prescribed by the Administration. A
negotiable warehouse receipt for rice or corn or other grains shall be printed,
serially numbered, on security notepaper, in specific quantity in denominations
of 5, 10, 20, 50 or 100 cavans, contain the name and business address of the
warehouseman, the variety, classification, moisture content and quality of the
grain deposited, the warranties of the warehouseman prescribed by existing laws,
and the charges and authorized liens on the stocks in deposit.
SEC. 15. Uniform Warehousing Records. —
Warehousemen engaged in the business of accepting rice and corn and other grains
in deposit, shall adopt a uniform system of accounting and keeping records of
deposit and withdrawals in the manner and form to be prescribed by the
Administration.
SEC. 16. Failure to deliver Prima Facie Evidence of
Shortage. — The provisions of existing laws to the contrary,
notwithstanding, failure of any warehouseman engaged in the business of
accepting grain for storage or deposit to deliver the stock of grains on deposit
upon surrender of the warehouse receipt therefor, shall render the warehouseman
liable for the crime of estafa.
SEC. 17. Unit Measurement of Grains. — The
Administration shall implement the early transition from the present volumetric
measurement of rice and corn and other grains, to the standard weight
measurement by kilogram.
The metric standard of weight measurement shall be adopted and the “cavan” of
rice and corn, whether milled or unmilled, shall be a unit containing fifty
kilograms of such grains net weight. The use of bags or other containers
containing one cavan or a fraction or a multiple thereof, shall be encouraged in
the handling and packaging of these grains. The use of Containers, bags or
packaging materials containing the milled grains in one kilogram, two or ten
kilograms shall be encouraged in the retail trade of these grains.
SEC. 18. Guidelines for the Annual Grains Program.
— The Council shall, on or before the first day of March every year:
a) furnish the institutions cited herein the financial requirements for the
production of rice and corn and other grains for the crop seasons;b) require from the Department of Agriculture and Natural Resources the
estimate of consumption of rice and corn for the coming crop year; andc) require the Department of Agriculture and Natural Resources to submit the
annual program of agricultural production in grains, indicating therein the
areas of production, the kind of grains to be produced, with estimate of the
financial requirement of such production program. In the preparation of the corn
aspect of the said program, the Department of Agriculture and Natural Resources
shall be guided by the objective of achieving increased productivity of the
white flint varieties of corn with high milling recoveries of grit for human
consumption and the white and yellow dent varieties for industrial uses and for
livestock-and poultry feeds.
The Council shall prepare a schedule for processing the expected crop output,
its primary storage, a plan of redistribution of marketing of the milled grains
and an estimate of the financial requirements for such schedules.
Upon prior consultation with the Department of Agrarian Reform and the
National Food and Agriculture Council, the Council shall likewise prepare a
program for developing the grains industry, indicating therein the short, medium
and long-term financing needed, the roles of the governmental agencies in
support of said development program, and the pattern of industry organization
sought to be encouraged.
SEC. 19. Role of Financing Institutions. — After
approval by the Council of the annual program for the industry, the Development
Bank of the Philippines and the Philippine National Bank shall extend production
loans to all rice and corn producers: Provided, That not more than
eighty (80%) per cent of the price support shall be extended as crop loans to
the producers: Provided —
1) That it shall be mandatory to all rural banks and government-owned or
controlled lending institutions to extend production loans to small land-owners
cultivating an area of not more than twenty-four (24) hectares; and2) That it shall be mandatory for all government-owned or controlled
financing institutions to extend production loans to leaseholders who belong to
duly registered producers’ cooperatives.
For this purpose, within the next five years, all production loans extended
to rice and corn producers by banks shall be given preference in the
rediscounting policy of the Central Bank of the Philippines, and that the
rediscounting rate shall be the lowest preferential rate extended by the Central
Bank for the period.
Financial institutions named herein shall extend loans to warehousemen and
millers for the construction, improvement and repair of warehouses or for the
purchase of driers.
Private lending institutions who shall participate in this program, shall be
entitled to the rediscounting privileges and coverage under the Agricultural
Guarantee Fund.
All loans under this program shall be extended under supervised credit as
prescribed under Republic Act Numbered Sixty-three hundred and ninety;
Provided, That no farmer shall be extended loans under this program
unless he warrants in the application for loan in the loan agreement that he
shall deposit his produce with a duly accredited warehouse or where no such
warehouse is available in the meantime, in the nearest storage facility
designated by lending bank or the Administration. In this connection, the
Administration is empowered to call upon all agencies of the Government with
agricultural extension technicians to assist lending banks in the implementation
of the supervised credit program without prejudice to the employment by the
lending institutions of their own technicians.
SEC. 20. Collaterals Acceptable for Loans. — For
purposes of this Act, loans shall be granted with any or a combination of the
following collaterals, namely: (1) real estate property, if available; (2)
chattel mortgage on standing crops in bonded warehouses; and/or existing
livestock or poultry; (3) stored crops in bonded warehouses; (4) two co-makers
acceptable to the bank: Provided, That in case a farmer is a member of
a group or “selda,” the cooperative or “selda” may act as a co-maker: And
provided, further, That in the case of multi-purpose cooperatives, no
co-maker shall be required; (5) leasehold rights arising from leasehold
contracts, subject to the following conditions:
(a) That the landowner-lessor consents to the mortgage of the applicant’s
leasehold rights;(b) That the applicant belongs to a duly-registered producers’ or farmers’
cooperative;(c) That at the time of filing of the application for loan, the financial
institution concerned shall explain to the applicant in the language or dialect
understood by him that his leasehold contracts may be foreclosed in the event of
willful or neglectful non-payment of all or part of the loan extended to him and
the explanation shall be evidenced by a written notice to the applicant;(d) That the association, cooperative or “selda” to which the applicant
belongs certifies, accredits or co-makes the accommodation for loan;(e) That in case of crop failure due to furtuitous events and/or force
majeure, a refinancing scheme shall be devised or instituted for the benefit of
the farmer-borrower;(f) That if the farmer-borrower fails to pay the amount due on his loan
despite a normal crop yield and such failure of payment was due to his diversion
or misuse of the proceeds of his crop, the creditor-financial institution may
foreclose the leasehold contract not later than six months from the due date of
the loan; and(g) That notwithstanding the provisions of any law or regulation to the
contrary, the termination of the foreclosure proceeding on the lease-hold
contract shall ipso facto extinguish the farmer-borrower’s right thereunder and
shall be cause for his ejectment from the land covered therein.
Upon termination of the foreclosure proceedings, the leasehold contract
foreclosed shall be disposed of in accordance with the following order of
priorities:
(a) It shall be offered for redemption to the association, cooperative or
“selda” to which the applicant belongs;(b) If the farmer waives his right and/or fails to redeem the foreclosed
leasehold contract, it shall be offered to any qualified farmer residing in the
locality even though the farmer concerned is not yet a member of any of the
above organizations ;(c) If the association, cooperative, “selda,” or the qualified farmer waives
such right and/or fails to redeem the foreclosed leasehold contract, it shall be
offered to the Land Bank for redemption; and(d) Finally, if neither the Land Bank nor any party in the locality
manifests interest in the redemption of such right, the same shall be offered to
the original landowner who shall redeem said loan by paying the charges,
principal and interest due.
SEC. 21. Grain Exchange. — The Administration shall
study and report to the Council within one year after the passage of this Act
the advisability and feasibility of establishing a grain exchange as an
instrumentality to support the development of agribusiness in rice and corn.
SEC. 22. Organization of Farmers, Grain
Producers.—The Administration shall encourage the organization of farmers
for the purpose of improving their production. In irrigated land, the
Administration shall encourage the formation of cooperatives composed of farmers
on land serviced by irrigation. Upon formation of such cooperatives, the
maintenance of the irrigation system may, subject to the approval of the
Administration and the other government authorities concerned, be turned over to
said cooperatives,
A farmer or producer who is beneficiary of any irrigation system shall be
charged on irrigation fees, which shall include the amount needed to maintain
the system and amortize the cost of the system, and such other amount deemed to
be a reasonable contribution to the expansion of the system, which fee shall be
determined and collected by the National Irrigation Administration:
Provided, That irrigation fees shall have priority lien on the land
over all encumbrances but second only to land taxes.
In areas not accessible to irrigation systems, the Department of Agriculture
and Natural Resources, the Department of Agrarian Reform, the Department of
Public Works and Communications and the Council shall promote and take steps for
the installation of necessary irrigation pumps or other means of providing a
steady supply of water for farm purposes. Such alternative systems may be
operated and maintained by organizations of farmers in the area covered.
Millers of rice or corn and other grains shall be encouraged to enter into
regular milling and marketing contracts with farmers in their respective areas
or provinces.
SEC. 23. Citizen Volunteer Service for Grain
Production. — The Department of Agriculture and Natural Resources shall
actively promote the early and effective involvement of citizen volunteers in
agricultural production, particularly rice and corn and other grains, utilizing
organized and reputable local volunteer organizations to recruit, select, train,
organize, deploy and manage volunteers for projects and to areas designated by
the Administration. The services of the Philippine National Volunteer Service
Committee shall be availed of in the implementation of this program:
Provided, That the department shall not directly engage in the
commercial production of rice and corn or other crops nor indirectly through the
use of volunteers.
SEC. 24. Warehousing, Milling Agreements. — The
Administration shall encourage the entry of organized farmers or producers and
warehousemen or of warehousemen into a storage agreement, renewable yearly, for
the purpose of institutionalizing the primary storage of rice and corn in a
region or suitable area: Provided, That said organization of farmers or
producers, more particularly cooperatives, shall be encouraged to enter into a
milling contract, for the purpose of developing regular and orderly milling
schedules of crop production by area or region.
In the exercise of its powers to license, register and supervise grain
warehousemen, millers and traders, the Administration shall undertake measures
that will prevent collusion between or among them so as to maintain at all times
the credibility or integrity of the quedan system in grains.
SEC. 25. Funding of the Administration. — There is
hereby appropriated, out of the funds of the National Treasury not otherwise
appropriated, the sum of fifteen million pesos for the expenditure of the
National Grains Industry Development Administration: Provided, That for
the succeeding five fiscal years following the approval of this Act, the
Administration shall submit to the President of the Philippines a budget of its
expenditures for consideration and inclusion in the annual General
Appropriations Act. Thereafter, the Administration shall derive its funds from
sources provided by the industry. The proceeds of all other collections
made by the Administration from levies, fees, charges or surcharges authorized
in this Act but not specifically mentioned in Section seven hereof shall be
retained and used by the Administration as a source of funds to finance its
annual budgetary requirements.
SEC. 26. Abolition of the Rice and Corn
Administration. — The Rice and Corn Administration is hereby considered
abolished three months from the date of approval of this Act to allow the RCA to
wind up its operations: Provided, That its properties, assets, records
and . unexpended appropriations are transferred to the Administration, including
the stocks of imported rice and corn already in the country and such other
stocks thereof as may arrive as a result of current importation, which shall be
disposed of by the Administration in accordance with the supply and price
stabilization policy of the Council: Provided, further, That all
advances made by financial institutions in relation to such importations made in
1971 and 1972 shall be satisfied from the proceeds of the sale.
No official or employee of the Rice and Corn Administration shall be
appointed to any position in the Administration unless he shall have been
properly screened and cleared by a Selection Board which shall be formed by the
Administrator and shall be composed of five members, two members to be
designated by the Administrator, one member by the Office of the President, and
two members representing the Employees Associations of the Rice and Com
Administration who do not possess any of the disqualifications for absorption in
the Administration listed in this paragraph: Provided, That the
Selection Board shall screen the said officials and employees at a date not
later than one month following the appointment of the Administrator: And
provided, further, That the following persons shall not be absorbed by
the Administration:
(a) Those who have pending administrative or criminal cases filed against
them;(b) Those who have previous records of gross inefficiency and
incompetence;(c) Those who are deemed by the Screening Board to be morally unfit to be
appointed to positions requiring persons of good moral character; and(d) Those who may be considered in excess of the personnel required in the
staffing pattern of the Administration.
Permanent officials and employees of the Rice and Corn Administration who
cannot be absorbed by the Administration, or who cannot transfer or be
transferred to other agencies, or who prefer to retire, if qualified for
retirement, or to be laid off, shall be given gratuity equivalent to one month
salary for every year of service but in no case more than twenty-four months
salary, in addition to all other benefits to which they are entitled under
existing laws and regulations. For this purpose, there is hereby appropriated
the sum of fifteen million pesos or so much thereof as “may be necessary, out of
the funds of the National Treasury not otherwise appropriated.
The outstanding obligations of the Rice and Corn Administration, except as
hereinabove indicated for the importations of 1971 and 1972, bearing the
guarantee of the National Government shall be settled by the National
Government. For this purpose, the President of the Philippines, upon the
recommendation of the Secretary of Finance, is hereby authorized to issue
treasury bonds, notes or securities, in such amounts as may be necessary for the
settlement of the said obligations. The Secretary of Finance, in consultation
with the Monetary Board and the Financial Fiscal Policy Committee created under
Executive Order Numbered 97, dated October 26, 1967, as amended, shall prescribe
the rules and regulations that shall govern the issuance of such bonds, notes or
securities, including the form, the rate of interest, the denominations,
maturities, negotiability, convertibility, call and redemption features, and all
other terms and conditions and issuance, placement, sale, servicing and payment
of all bonds, notes or securities issued under the authority of this Act. The
said bonds, notes and securities to be issued under this Act shall he tax exempt
and such fact shall be stated on their face and shall be exempt from attachment,
execution or seizure. There is hereby appropriated, out of the funds of the
National Treasury not otherwise appropriated, such sum or sums as may from year
to year be necessary to amortize the payment ot the bonds, notes or securities
issued under this Act. All appropriations for this purpose shall accrue to a
special bond sinking fund, which is hereby created, to be managed by the Central
Bank of the Philippines under rules and regulations that it may promulgate for
the purpose,
SEC. 27. Transfer of the Rice and Corn Board. — The
functions, personnel, properties, assets and unexpended appropriations of the
Rice and Corn Board are hereby transferred to the Administration under which the
Board shall continue to carry out the purpose of Republic Act Numbered Three
thousand eighteen in synchronization with the grains industry development
program.
SEC. 28. Annual Reports. — Before the end of March
of each year, the Administration shall submit to the President of the
Philippines, and shall publish, a comprehensive annual report on the condition
of the grains industry and a review of the policies and measures adopted by the
Council during the past year and an analysis of the economic and financial
circumstances which give rise to said policies and measures.
The Administration shall also submit a separate Administration report to the
President of the Philippines at the end of each fiscal year.
SEC. 29. Offenses and Penalties. — Notwithstanding
the provisions of any law or regulation 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 therefor are herein prescribed:
(a) Serious Offenses. — Any of the following acts or omissions shall
constitute a serious offense:(1) Failure or refusal of the responsible officials to turn over or remit to
the Fund the collection under and within the period provided for in
Section seven of this Act;(2) Failure or refusal of a grains warehouseman, without any lawful excuse,
to deliver grains deposited with him: Provided, however, That the
warehouseman shall be entitled to the allowance authorized for depreciation of
the grains deposited;(3) Cornering or hoarding of grains resulting in artificial shortage or
scarcity of supply and increase of prices thereof in any part of the
country;(4) Printing, issuing, or knowingly using, possessing or negotiating a
cancelled unauthorized, illegal, counterfeit or falsified warehouse receipt. The
offender shall upon conviction, be -punished by imprisonment of not less than
four years and one day nor more than six years, and a fine of not less than
twelve thousand pesos nor more than fifteen thousand pesos.(b) Less Serious Offenses. — Any of the following acts or omissions shall
constitute a less serious offense:(1) Connivance in the concealment of a stock shortage in a grains
warehouse;(2) Knowingly submitting any report containing false information or data;
(3) Misrepresentation in connection with any application for license to do
business as grains warehouseman, miller, exporter or importer or trade,
manufacturer or processor;(4) Failure or refusal of a warehouseman to allow the inspection or
examination of his grain stocks to conceal shortages or to misrepresent the
quantity or quality of his grain stocks, including the impending of such
inspection and examination by abandonment, absence or otherwise;(5) Failure or refusal of any government bank or financial institution,
without any lawful excuse, to grant a loan applied for by a qualified farmer who
meets the conditions for the loan;(6) Engaging in the business of grains warehousing, milling, exporting,
importing, trading, growing and selling of certified seeds, manufacturer or
processor without a valid license.
The offender shall, upon conviction, be punished by imprisonment of not less
than two years and one day to four years, and by fine of not less than eight
thousand pesos nor more than ten thousand pesos.
(c) Light Offenses. — Any of the following acts or omissions shall
constitute a light offense:(1) Issuance by a warehouseman of warehouse receipts showing an aggregate
quantity of grains stock in excess of the quantity permissible in his bond
coverage;(2) Issuance by a warehouseman of warehouse receipts showing an aggregate
quantity of grain stocks not covered by fire insurance at full value as required
by this Act;(3) Failure or refusal to give information required by the Administration,
provided such failure or refusal does not constitute a higher offense
as herein-above provided;(4) Non-compliance with the rules, regulations, decisions, orders, circulars
or directives lawfully issued by the Administration, provided
non-compliance does not constitute a higher offense as hereinabove
provided;(5) Fraudulent misrepresentation by the applicant in, or by any other person
in connection with, an application for a production loan;(6) Selling or offering to sell to the Administration by any person of palay
or corn or other grains other than that directly produced by him as fanner or
shared by him as tenant or landlord; knowingly buying such grains by any
Administration personnel for the Administration; connivance by any person in the
selling or buying of such grains;(7) Any other violation of the provisions 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 year nor more than two years, and by a fine of not less than four
thousand pesos nor more than six thousand pesos.(d) Additional Penalties. — (1) The license of any warehouseman,
miller, exporter or importer, trader, certified seeds producer or sellor, found
guilty of a serious, less serious, or light offense, shall also be cancelled:
Provided, however, That the license of the offender shall not be
renewed during the pendency of any investigation or prosecution for the
commission of any of such offenses.
If the offender is a public officer or employee, including an officer or
employee of any government-owned or controlled corporation, he shall, upon
conviction, be disqualified from holding public office.
(2) Acts or omissions not specifically penalized under this Act but are
punishable under any other existing law shall be punished under such law.If any act or omission constitutes an offense under this Act as well as a
violation of another existing law, the law which imposes as heavier penalty
shall be made to apply.(3) If the violation or offense is committed by a corporation, partnership,
association, cooperative, or other juridical entity, whether public or private,
the penalties provided for in this Act shall be imposed upon the
directors, officers, employees or other officials or persons therein responsible
for the offense.(4) The prosecution of any offense under this Act shall be without prejudice
to the civil or administrative liabilities for the
offense.
SEC. 30. Repealing Clause. — All Acts, executive
orders and proclamations, rules and regulations, or parts thereof, inconsistent
with the provisions of this Act are hereby repealed, amended or modified
accordingly.
SEC. 31. This Act shall take effect upon its approval, and
it may be amended in part or in whole at any time by Presidential Decree.
APPROVED, in the City of Manila, this 26th day of September in the year of
Our Lord, nineteen hundred and seventy-two.
President
Republic of the Philippines