Food Availability Laws 01

COMPENDIUM OF RIGHT TO FOOD LAWS IN THE PHILIPPINES

Volume I Food Availability Laws

91 Madasalin Street, Sikatuna Village, Quezon City

National Food Coalition

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Food Availability Laws 03

Compendium of Right To Food Laws in the Philippines

Volume I Food Availability Laws

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Published by: National Food Coalition 91 Madasalin Street, Sikatuna Village Diliman, Quezon City Tel. No (02) 351-7553 Fax. No. (02) 436-3593 Lay-out: Ramon T. Ayco, Sr. Set in Janson Text LT Std, pt. 12 Printed in the Philippines

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Table of Contents
Acknowledgement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
A. On Agriculture, Agrarian Reform and Fisheries 1. RA 3844, The Agricultural Land Reform Code October 1963 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2. PD 27, Rice and Corn Land Reform 21 October 1972 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 3. PD 717, Providing an Agrarian Reform Credit and Financing System for Agrarian Reform Beneficiaries through Banking Institutions, also known as the Agri-Agra Law, 29 May 1975, amended by EO 83, Strengthening the Enforcement of the Agri-Agra Law and Launching the NDC Agri-Agra Erap Bonds for Rural Development, 25 December 1998 . . . . . . . . . . . . 124 4. RA 6657, Comprehensive Agrarian Reform Law, 10 June 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 5. RA 8435, Agriculture and Fisheries Modernization Act of 1997, 22 December 1997 . . . . . . . . . . . . . . . . . . . . . . 200 6. RA 7607, Magna Carta of Small Farmers, 4 June 1992. . . . . . . . . 283 7. RA 7900, High Value Crops Development Act of 1995, 23 February 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . 318 8. RA 9168, Plant Variety Protection Act, 7 June 2002 . . . . . . . . 331 9. RA 7308, Seed Industry Development Act of 1992, 27 March 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365 10. RA 7884, National Dairy Development Act of 1995, 20 February 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382 11. RA 8550, Philippine Fisheries Code, 25 February 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400

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B. On Irrigation 1. RA 6978, An Act to Promote Rural Development by Providing for an Accelerated Program within a Ten-Year Period for the Construction of Irrigation Projects, 24 January 1991. . . . . . . . . . . . . . . . . . . . . 494 C. On Trade 1. RA 8178, Agricultural Tariffication Act, 28 March 1962. PD 27, Rice and Corn Land Reform, 21 October 1972. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499 2. RA 8752, Anti Dumping Act of 1999, 12 August 1999 . . . . 507 3. RA 8800, Safeguard Measures Act, 19 July 2000 . . . . 540 4. RA 8751, Countervailing Duty Act of 1999, 7August 1999 . . . . 572 D. On Bio-Fuels 1. RA 9367, Biofuels Law, 12 January 2007. . . . . . . . . . . . . . . 600

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Acknowledgement

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ACKNOWLEDGEMENT
This publication is a result of the collaboration of individuals and institutions that support the National Food Coalition. We would like to extend our deepest gratitude to the following organizations: Philippine Human Rights Information Center (PhilRights), Alternate Forum for Research in Mindanao (AFRIM), Peoples Development Institute (PDI) and Food First Information and Action Network (FIAN) Philippines for their contribution in developing this book. For the technical staff, we would like to express our deepest appreciation to Marina Wetzlmaier and Ramon Ayco. This compendium of RTAF Laws can serve as a reference material for the development of policy papers and reform agenda. Aurea G. Miclat Teves Convenor, NFC

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Food Availability Laws 1

Compendium of Right To Food Laws in the Philippines

Volume I Food Availability Laws

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Food Availability Laws 3 REPUBLIC ACT No. 3844 AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE AND TO INSTITUTE LAND REFORMS IN THE PHILIPPINES, INCLUDING THE ABOLITION OF TENANCY AND THE CHANNELING OF CAPITAL INTO INDUSTRY, PROVIDE FOR THE NECESSARY IMPLEMENTING AGENCIES, APPROPRIATE FUNDS THEREFOR AND FOR OTHER PURPOSES PRELIMINARY CHAPTER TITLE DECLARATION OF POLICY AND COMPOSITION OF CODE Section 1. Title - This Act shall be known as the Agricultural Land Reform Code. Section 2. Declaration of Policy- It is the policy of the State: 1. To establish owner-cultivatorship and the economic family-size farm as the basis of Philippine agriculture and, as a consequence, divert landlord capital in agriculture to industrial development; 2. To achieve a dignified existence for the small farmers free from pernicious institutional restraints and practices;

4 COMPENDIUM OF RTF LAWS 3. T o create a truly viable social and economic structure in agriculture conducive to greater productivity and higher farm incomes; 4. T o apply all labor laws equally and without discrimination to both industrial and agricultural wage earners; 5. T o provide a more vigorous and systematic land resettlement program and public land distribution; and 6. To make the small farmers more independent, self-reliant and responsible citizens, and a source of genuine strength in our democratic society. Section 3. Composition of Code- In pursuance of the policy enunciated in Section two, the following are established under this Code: 1. An agricultural leasehold system to replace all existing share tenancy systems in agriculture; 2. A declaration of rights for agricultural labor; 3. An authority for the acquisition and equitable distribution of agricultural land; 4. An institution to finance the acquisition and distribution of agricultural land; 5. A machinery to extend credit and similar assistance to agriculture; 6. A machinery to provide marketing, management, and other technical services to agriculture;

Food Availability Laws 5 7. A unified administration for formulating and implementing projects of land reform; 8. An expanded program of land capability survey, classification, and registration; and 9. A judicial system to decide issues arising under this Code and other related laws and regulations. CHAPTER I AGRICULTURAL LEASEHOLD SYSTEM Section 4. Abolition of Agricultural Share Tenancy Agricultural share tenancy, as herein defined, is hereby declared to be contrary to public policy and shall be abolished: Provided, That existing share tenancy contracts may continue in force and effect in any region or locality, to be governed in the meantime by the pertinent provisions of Republic Act Numbered Eleven hundred and ninety-nine, as amended, until the end of the agricultural year when the National Land Reform Council proclaims that all the government machineries and agencies in that region or locality relating to leasehold envisioned in this Code are operating, unless such contracts provide for a shorter period or the tenant sooner exercise his option to elect the leasehold system: Provided, further, That in order not to jeopardize international commitments, lands devoted to crops covered

6 COMPENDIUM OF RTF LAWS by marketing allotments shall be made the subject of a separate proclamation that adequate provisions, such as the organization of cooperatives, marketing agreements, or other similar workable arrangements, have been made to insure efficient management on all matters requiring synchronization of the agricultural with the processing phases of such crops: Provided, furthermore, That where the agricultural share tenancy contract has ceased to be operative by virtue of this Code, or where such a tenancy contract has been entered into in violation of the provisions of this Code and is, therefore, null and void, and the tenant continues in possession of the land for cultivation, there shall be presumed to exist a leasehold relationship under the provisions of this Code, without prejudice to the right of the landowner and the former tenant to enter into any other lawful contract in relation to the land formerly under tenancy contract, as long as in the interim the security of tenure of the former tenant under Republic Act Numbered Eleven hundred and ninety-nine, as amended, and as provided in this Code, is not impaired: Provided, finally, That if a lawful leasehold tenancy contract was entered into prior to the effectivity of this Code, the rights and obligations arising therefrom shall continue to subsist until modified by the parties in accordance with the provisions of this Code.

Food Availability Laws 7 Section 5. Establishment of Agricultural Leasehold Relation The agricultural leasehold relation shall be established by operation of law in accordance with Section four of this Code and, in other cases, either orally or in writing, expressly or impliedly. Section 6. Parties to Agricultural Leasehold RelationThe agricultural leasehold relation shall be limited to the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor, and the person who personally cultivates the same. Section 7. Tenure of Agricultural Leasehold Relation- The agricultural leasehold relation once established shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and cannot be ejected therefrom unless authorized by the Court for causes herein provided. Section 8. Extinguishment of Agricultural Leasehold RelationThe agricultural leasehold relation established under this Code shall be extinguished by: 1. Abandonment of the landholding without the knowledge of the agricultural lessor; 2. Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served three months in advance; or 3. Absence of the persons under Section nine to succeed to the lessee, in the event of death or permanent incapacity of the lessee.

8 COMPENDIUM OF RTF LAWS Section 9. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of the Parties- In case of death or permanent incapacity of the agricultural lessee to work his landholding, the leasehold shall continue between the agricultural lessor and the person who can cultivate the landholding personally, chosen by the agricultural lessor within one month from such death or permanent incapacity, from among the following: (a) the surviving spouse; (b) the eldest direct descendant by consanguinity; or (c) the next eldest descendant or descendants in the order of their age: Provided, That in case the death or permanent incapacity of the agricultural lessee occurs during the agricultural year, such choice shall be exercised at the end of that agricultural year: Provided, further, That in the event the agricultural lessor fails to exercise his choice within the periods herein provided, the priority shall be in accordance with the order herein established. In case of death or permanent incapacity of the agricultural lessor, the leasehold shall bind his legal heirs. Section 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc.- The agricultural leasehold relation under this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor

Food Availability Laws 9 by the sale, alienation or transfer of the legal possession of the landholding. In case the agricultural lessor sells, alienates or transfers the legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor. Section 11. Lessees Right of Pre-emption- In case the agricultural lessor decides to sell the landholding, the agricultural lessee shall have the preferential right to buy the same under reasonable terms and conditions: Provided, That the entire landholding offered for sale must be pre-empted by the Land Authority if the landowner so desires, unless the majority of the lessees object to such acquisition: Provided, further, That where there are two or more agricultural lessees, each shall be entitled to said preferential right only to the extent of the area actually cultivated by him. The right of pre-emption under this Section may be exercised within ninety days from notice in writing which shall be served by the owner on all lessees affected. Section 12. Lessees Right of Redemption- In case the landholding is sold to a third person without the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable price and consideration: Provided, That the entire landholding sold must be redeemed: Provided, further, That

10 COMPENDIUM OF RTF LAWS where there are two or more agricultural lessees, each shall be entitled to said right of redemption only to the extent of the area actually cultivated by him. The right of redemption under this Section may be exercised within two years from the registration of the sale, and shall have priority over any other right of legal redemption. Section 13. Affidavit Required in Sale of Land Subject to Right of Pre-emption- No deed of sale of agricultural land under cultivation by an agricultural lessee or lessees shall be recorded in the Registry of Property unless accompanied by an affidavit of the vendor that he has given the written notice required in Section eleven of this Chapter or that the land is not worked by an agricultural lessee. Section 14. Right of Pre-emption and Redemption Not Applicable to Land to be Converted into Residential, Industrial and Similar Purposes The right of pre-emption and redemption granted under Sections eleven and twelve of this Chapter cannot be exercised over landholdings suitably located which the owner bought or holds for conversion into residential, commercial, industrial or other similar non-agricultural purposes: Provided, however, That the conversion be in good faith and is substantially carried out within one year from the date of sale. Should the owner

Food Availability Laws 11 fail to comply with the above condition, the agricultural lessee shall have the right to repurchase under reasonable terms and conditions said landholding from said owner within one year after the aforementioned period for conversion has expired: Provided, however, That the tenure of one year shall cease to run from the time the agricultural lessee petitions the Land Authority to acquire the land under the provisions of paragraph 11 of Section fifty-one. Section 15. Agricultural Leasehold Contract in GeneralThe agricultural lessor and the agricultural lessee shall be free to enter into any kind of terms, conditions or stipulations in a leasehold contract, as long as they are not contrary to law, morals or public policy. A term, condition or stipulation in an agricultural leasehold contract is considered contrary to law, morals or public policy: 1. If the agricultural lessee is required to pay a rental in excess of that which is hereinafter provided for in this Chapter; 2. If the agricultural lessee is required to pay a consideration in excess of the fair rental value as defined herein, for the use of work animals and/or farm implements belonging to the agricultural lessor or to any other person; or 3. If it is imposed as a condition in the agricultural leasehold contract: (a) that the

12 COMPENDIUM OF RTF LAWS agricultural lessee is required to rent work animals or to hire farm implements from the agricultural lessor or a third person, or to make use of any store or services operated by the agricultural lessor or a third person; or (b) that the agricultural lessee is required to perform any work or render any service other than his duties and obligations provided in this Chapter with or without compensation; or (c) that the agricultural lessee is required to answer for any fine, deductions and/or assessments. Any contract by which the agricultural lessee is required to accept a loan or to make payment therefor in kind shall also be contrary to law, morals or public policy. Section 16. Nature and Continuity of Conditions of Leasehold Contract - In the absence of any agreement as to the period, the terms and conditions of a leasehold contract shall continue until modified by the parties: Provided, That in no case shall any modification of its terms and conditions prejudice the right of the agricultural lessee to the security of his tenure on the landholding: Provided, further, That in case of a contract with a period an agricultural lessor may not, upon the expiration of the period increase the rental except in accordance with the provisions of Section thirty-four.

Food Availability Laws 13 Section 17. Form and Registration of Contract- Should the parties decide to reduce their agreement into writing, the agricultural leasehold contract shall be drawn in quadruplicate in a language or dialect known to the agricultural lessee and signed or thumb-marked both by the agricultural lessee personally and by the agricultural lessor or his authorized representative, before two witnesses, to be chosen by each party. If the agricultural lessee does not know how to read, the contents of the document shall be read and explained to him by his witness. The contracting parties shall acknowledge the execution of the contract before the justice of the peace of the municipality where the land is situated. No fees or stamps of any kind shall be required in the preparation and acknowledgment of the instrument. Each of the contracting parties shall retain a copy of the contract. The justice of the peace shall cause the third copy to be delivered to the municipal treasurer of the municipality where the land is located and the fourth copy to the Office of the Agrarian Counsel. Except in case of mistake, violence, intimidation, undue influence, or fraud, an agricultural contract reduced in writing and registered as hereinafter provided, shall be conclusive between the contracting parties, if not denounced or impugned within thirty days after its registration.

14 COMPENDIUM OF RTF LAWS Section 18. Registration of Leasehold Contract- The municipal treasurer shall, upon receipt of his copy of the contract, require the agricultural lessee and agricultural lessor to present their respective copies of the contract, and shall cause to be annotated thereon the date, time and place of registration as well as its entry or registration number. Section 19. Registry of Agricultural Leasehold ContractsThe Municipal Treasurer of the municipality wherein the land is situated shall keep a record of all such contracts drawn and executed within his jurisdiction, to be known as Registry of Agricultural Leasehold Contracts. He shall keep this registry together with a copy of each contract entered therein, and make annotations on said registry of all subsequent acts relative to each contract, such as its renewal, novation, cancellation, etc. No registration fees or documentary stamps shall be required in the registration of said contracts or of any subsequent acts relative thereto. Section 20. Memorandum of Loans- No obligation to pay money on account of loans including interest thereon obtained by the agricultural lessee from the agricultural lessor or his representative shall be enforceable unless the same or a memorandum thereof be in writing in a language or dialect known to the agricultural lessee, and signed or thumbmarked by him, or by his agent.

Food Availability Laws 15 Section 21. Exemption from Lien and/or Execution The following shall be exempt from lien and/or execution against the agricultural lessee: 1. Twenty-five per centum of the entire produce of the land under cultivation; and 2. Work animals and farm implements belonging to the agricultural lessee: Provided, That their value does not exceed one thousand pesos. But no article or species of property mentioned in this Section shall be exempt from execution issued upon a judgment recovered for its price or upon a judgment of foreclosure of a mortgage thereon. Section 22. Use of Accepted Standards of Weights and Measures - In all transactions entered into between the agricultural lessee and the agricultural lessor concerning agricultural products the official or, upon agreement of the parties, the accepted standards of weights and measures shall be used. Section 23. Rights of Agricultural Lessee in General- It shall be the right of the agricultural lessee: 1. To have possession and peaceful enjoyment of the land; 2. T o manage and work on the land in a manner and method of cultivation and harvest which conform to proven farm practices; 3. T o mechanize all or any phase of his farm work; and

16 COMPENDIUM OF RTF LAWS 4. T o deal with millers and processors and attend to the issuance of quedans and warehouse receipts for the produce due him. Section 24. Right to a Home Lot- The agricultural lessee shall have the right to continue in the exclusive possession and enjoyment of any home lot he may have occupied upon the effectivity of this Code, which shall be considered as included in the leasehold. Section 25. Right to be Indemnified for Labor - The agricultural lessee shall have the right to be indemnified for the cost and expenses incurred in the cultivation, planting or harvesting and other expenses incidental to the improvement of his crop in case he surrenders or abandons his landholding for just cause or is ejected therefrom. In addition, he has the right to be indemnified for one-half of the necessary and useful improvements made by him on the landholding: Provided, That these improvements are tangible and have not yet lost their utility at the time of surrender and/or abandonment of the landholding, at which time their value shall be determined for the purpose of the indemnity for improvements. Section 26. Obligations of the Lessee - It shall be the obligation of the agricultural lessee: 1. To cultivate and take care of the farm, growing crops, and other improvements on the landholding as a good father of

Food Availability Laws 17 a family and perform all the work therein in accordance with proven farm practices; 2. T o inform the agricultural lessor within a reasonable time of any trespass committed by third persons upon the farm, without prejudice to his direct action against the trespasser; 3. To take reasonable care of the work animals and farm implements delivered to him by the agricultural lessor and see that they are not used for purposes other than those intended or used by another without the knowledge and consent of the agricultural lessor: Provided, however, That if said work animals get lost or die, or said farm implements get lost or are destroyed, through the negligence of the agricultural lessee, he shall be held responsible and made answerable therefor to the extent of the value of the work animals and/or farm implements at the time of the loss, death or destruction; 4. To keep his farm and growing crops attended to during the work season. In case of unjustified abandonment or neglect of his farm, any or all of his expected produce may, upon order of the Court, be forfeited in favor of the agricultural lessor to the extent of the damage caused thereby;

18 COMPENDIUM OF RTF LAWS 5. To notify the agricultural lessor at least three days before the date of harvesting or, whenever applicable, of threshing; and 6. To pay the lease rental to the agricultural lessor when it falls due. Section 27. Prohibitions to Agricultural Lessee- It shall be unlawful for the agricultural lessee: 1. T o contract to work additional landholdings belonging to a different agricultural lessor or to acquire and personally cultivate an economic family-size farm, without the knowledge and consent of the agricultural lessor with whom he had entered first into household, if the first landholding is of sufficient size to make him and the members of his immediate farm household fully occupied in its cultivation; or 2. To employ a sub-lessee on his landholding: Provided, however, That in case of illness or temporary incapacity he may employ laborers whose services on his landholding shall be on his account. Section 28. Termination of Leasehold by Agricultural Lessee During Agricultural Year- The agricultural lessee may terminate the leasehold during the agricultural year for any of the following causes: 1. Cruel, inhuman or offensive, treatment of the agricultural lessee or any member of his immediate farm household by the

Food Availability Laws 19 agricultural lessor or his representative with the knowledge and consent of the lessor; 2. Non-compliance on the part of the agricultural lessor with any of the obligations imposed upon him by the provisions of this Code or by his contact with the agricultural lessee; 3. Compulsion of the agricultural lessee or any member of his immediate farm household by the agricultural lessor to do any work or render any service not in any way connected with farm work or even without compulsion if no compensation is paid; 4. Commission of a crime by the agricultural lessor or his representative against the agricultural lessee or any member of his immediate farm household; or 5. Voluntary surrender due to circumstances more advantageous to him and his family. Section 29. Rights of the Agricultural Lessor- It shall be the right of the agricultural lessor: 1. To inspect and observe the extent of compliance with the terms and conditions of their contract and the provisions of this Chapter; 2. To propose a change in the use of the landholding to other agricultural purposes, or in the kind of crops to be planted: Provided, That in case of disagreement as to the proposed change, the same shall be settled by the Court according to the best

20 COMPENDIUM OF RTF LAWS interest of the parties concerned: Provided, further, That in no case shall an agricultural lessee be ejected as a consequence of the conversion of the land to some other agricultural purpose or because of a change in the crop to be planted; 3. T o require the agricultural lessee, taking into consideration his financial capacity and the credit facilities available to him, to adopt in his farm proven farm practices necessary to the conservation of the land, improvement of its fertility and increase of its productivity: Provided, That in case of disagreement as to what proven farm practice the lessee shall adopt, the same shall be settled by the Court according to the best interest of the parties concerned; and 4. To mortgage expected rentals. Section 30. Obligations of the Agricultural Lessor- It shall be the obligation of the agricultural lessor: 1. T o keep the agricultural lessee in peaceful possession and cultivation of his landholding; and 2. To keep intact such permanent useful improvements existing on the landholding at the start of the leasehold relation as irrigation and drainage system and marketing allotments, which in the case of sugar quotas shall refer both to domestic and export quotas, provisions of existing laws to the contrary notwithstanding.

Food Availability Laws 21 Section 31. Prohibitions to the Agricultural Lessor- It shall be unlawful for the agricultural lessor: 1. To dispossess the agricultural lessee of his landholding except upon authorization by the Court under Section thirty-six. Should the agricultural lessee be dispossessed of his landholding without authorization from the Court, the agricultural lessor shall be liable for damages suffered by the agricultural lessee in addition to the fine or imprisonment prescribed in this Code for unauthorized dispossession; 2. T o require the agricultural lessee to assume, directly or indirectly, the payment of the taxes or part thereof levied by the government on the landholding; 3. To require the agricultural lessee to assume, directly or indirectly, any part of the rent, canon or other consideration which the agricultural lessor is under obligation to pay to third persons for the use of the land; 4. To deal with millers or processors without written authorization of the lessee in cases where the crop has to be sold in processed form before payment of the rental; or 5. To discourage, directly or indirectly, the formation, maintenance or growth of unions or organizations of agricultural

22 COMPENDIUM OF RTF LAWS lessees in his landholding, or to initiate, dominate, assist or interfere in the formation or administration of any such union or organization. Section 32. Cost of Irrigation System- The cost of construction of a permanent irrigation system, including distributory canals, may be borne exclusively by the agricultural lessor who shall be entitled to an increase in rental proportionate to the resultant increase in production: Provided, That if the agricultural lessor refuses to bear the expenses of construction the agricultural lessee or lessees may shoulder the same, in which case the former shall not be entitled to an increase in rental and shall, upon the termination of the relationship, pay the lessee or his heir the reasonable value of the improvement at the time of the termination: Provided, further, That if the irrigation system constructed does not work, it shall not be considered as an improvement within the meaning of this Section. Section 33. Manner, Time and Place of Rental PaymentThe consideration for the lease of the land shall be paid in an amount certain in money or in produce, or both, payable at the place agreed upon by the parties immediately after threshing or processing if the consideration is in kind, or within a reasonable time thereafter, if not in kind.

Food Availability Laws 23 In no case shall the agricultural lessor require the agricultural lessee to file a bond, make a deposit or pay the rental in advance, in money or in kind or in both, but a special and preferential lien is hereby created in favor of the agricultural lessor over such portion of the gross harvest necessary for the payment of the rental due in his favor. Section 34. Consideration for the Lease of Riceland and Lands Devoted to Other Crops- The consideration for the lease of riceland and lands devoted to other crops shall not be more than the equivalent of twenty-five per centum of the average normal harvest during the three agricultural years immediately preceding the date the leasehold was established after deducting the amount used for seeds and the cost of harvesting, threshing, loading, hauling and processing, whichever are applicable: Provided, That if the land has been cultivated for a period of less than three years, the initial consideration shall be based on the average normal harvest during the preceding years when the land was actually cultivated, or on the harvest of the first year in the case of newly-cultivated lands, if that harvest is normal: Provided, further, That after the lapse of the first three normal harvests, the final consideration shall be based on the average normal harvest during these three preceding agricultural years:

24 COMPENDIUM OF RTF LAWS Provided, furthermore, That in the absence of any agreement between the parties as to the rental, the maximum allowed herein shall apply: Provided, finally, That if capital improvements are introduced on the farm not by the lessee to increase its productivity, the rental shall be increased proportionately to the consequent increase in production due to said improvements. In case of disagreement, the Court shall determine the reasonable increase in rental. Section 35. Exemption from Leasehold of Other Kinds of Lands - Notwithstanding the provisions of the preceding Sections, in the case of fishponds, saltbeds, and lands principally planted to citrus, coconuts, cacao, coffee, durian, and other similar permanent trees at the time of the approval of this Code, the consideration, as well as the tenancy system prevailing, shall be governed by the provisions of Republic Act Numbered Eleven hundred and ninety-nine, as amended. Section 36. Possession of Landholding; Exceptions Notwithstanding any agreement as to the period or future surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that: 1. The agricultural lessor-owner or a member of his immediate family will personally

Food Availability Laws 25 cultivate the landholding or will convert the landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes: Provided; That the agricultural lessee shall be entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his rights under Sections twenty-five and thirty-four, except when the land owned and leased by the agricultural lessor, is not more than five hectares, in which case instead of disturbance compensation the lessee may be entitled to an advanced notice of at least one agricultural year before ejectment proceedings are filed against him: Provided, further, That should the landholder not cultivate the land himself for three years or fail to substantially carry out such conversion within one year after the dispossession of the tenant, it shall be presumed that he acted in bad faith and the tenant shall have the right to demand possession of the land and recover damages for any loss incurred by him because of said dispossessions. 2. The agricultural lessee failed to substantially comply with any of the terms and conditions of the contract or any of the provisions of this Code unless his failure is caused by fortuitous event or force majeure;

26 COMPENDIUM OF RTF LAWS 3. The agricultural lessee planted crops or used the landholding for a purpose other than what had been previously agreed upon; 4. The agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of Section twenty-nine; 5. The land or other substantial permanent improvement thereon is substantially damaged or destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural lessee; 6. The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; or 7. The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section twenty-seven. Section 37. Burden of Proof- The burden of proof to show the existence of a lawful cause for the ejectment of an agricultural lessee shall rest upon the agricultural lessor. Section 38. Statute of Limitations- An action to enforce any cause of action under this Code shall be barred if not commenced within three years after such cause of action accrued.

Food Availability Laws 27 CHAPTER II BILL OF RIGHTS FOR AGRICULTURAL LABOR Section 39. Rights for Agricultural Labor- To enable the farm workers to enjoy the same rights and opportunities in life as industrial workers, they shall enjoy the following: 1. Right to self-organization; 2. Right to engage in concerted activities; 3. Right to minimum wage; 4. Right to work for not more than eight hours; 5. Right to claim for damages for death or injuries sustained while at work; 6. Right to compensation for personal injuries, death or illness; and 7. Right against suspension or lay-off. Section 40. Right to Self-Organization - The farm workers shall have the right to selforganization and to form, join or assist farm workers organizations of their own choosing for the purpose of collective bargaining through representatives of their own choosing: Provided, That this right shall be exercised in a manner as will not unduly interfere with the normal farm operations. Individuals employed as supervisors shall not be eligible for membership in farm workers organizations under their supervision but may form separate organizations of their own.

28 COMPENDIUM OF RTF LAWS Section 41. Right to Engage in Concerted Activities- The farm workers shall also have the right to engage in concerted activities for the purpose of collective bargaining and other mutual aid or protection. For the purpose of this and the preceding Section, it shall be the duty of the farm employer or manager to allow the farm workers, labor leaders, organizers, advisers and helpers complete freedom to enter and leave the farm, plantation or compound at the portion of the same where said farm workers live or stay permanently or temporarily. Section 42. Right to Minimum Wage- Notwithstanding any provision of law or contract to the contrary, farm workers in farm enterprises shall be entitled to at least P3.50 a day for eight hours work: Provided, That this wage may, however, be increased by the Minimum Wage Board as provided for in Republic Act Numbered Six hundred and two. Section 43. Right to Eight Hours Work- Notwithstanding the provision of existing laws to the contrary, farm workers shall not be required to work for more than eight hours daily. When the work is not continuous, the time during which the farm worker is not working and can leave his working place and can rest completely shall not be counted.

Food Availability Laws 29 Work may be performed beyond eight hours a day in case of actual or impending emergencies caused by serious accidents, fire, flood, typhoon, epidemic, or other disaster or calamity, or in case of urgent work to be performed on farm machines, equipment or installations in order to avoid a serious loss which the farm employer or manager would otherwise suffer, or some other just cause of a similar nature, but in all such cases the farm workers shall be entitled to receive compensation for the overtime work performed at the same rate as their regular wages, plus at least twenty-five per centum additional, based on their daily wages. No farm employer or manager shall compel a farm worker to work during Sundays and legal holidays: Provided, however, That should the farm worker agree to work on said days, he shall be paid an additional sum of at least twenty-five per centum of his regular compensation; Provided, further, That the farm employer or manager shall not be held liable for any claim for overtime work which he had not previously authorized, except if the work rendered was to avoid damages to crops, produce, work animals or implements, buildings or the like. Any agreement or contract between the farm employer or

30 COMPENDIUM OF RTF LAWS manager and the farm worker contrary to the provisions of this Section shall be null and void. Section 44. Right of Action for Damages- Notwithstanding the provisions of existing laws to the contrary, Act Numbered Eighteen hundred and seventy-four, as amended, entitled An Act to extend and regulate the responsibility of employers for personal injuries and death suffered by their employees while at work, shall apply to farm workers insofar as it may be applicable. Section 45. Right to Compensation for Personal Injuries, Death, or Illness - Notwithstanding the provisions of existing laws to the contrary, Act Numbered Thirty-four hundred and twenty-eight, as amended, entitled An Act prescribing the compensation to be received by employees for personal injuries, death or illness contracted in the performance of their duties, shall apply to farm workers insofar as it may be applicable. Section 46. Right Against Suspension of Lay-off The landowner, farm employer or farm manager shall not suspend, lay-off or dismiss any farm worker without just cause from the time a farm workers organization or group of farm workers has presented to the landowner a petition or complaint regarding any matter likely to cause a strike or lockout and a copy thereof

Food Availability Laws 31 furnished with the Department of Labor, or while an agricultural dispute is pending before the Court of Agrarian Relations. If it is proved during the said period that a worker has been suspended or dismissed without just cause, the Court may direct the reinstatement and the payment of his wage during the time of his suspension or dismissal or of any sum he should have received had he not been suspended or dismissed, without prejudice to any criminal liability of the landowner, farm employer or farm manager as prescribed by Section twenty-four of Commonwealth Act Numbered One hundred and three, as amended. Section 47. Other Applicable Provisions - All other existing laws applicable to non-agricultural workers in private enterprises which are not inconsistent with this Code shall likewise apply to farm workers, farm labor organizations and agrarian disputes as defined in this Code, as well as to relations between farm management and farm labor and the functions of the Department of Labor and other agencies. Section 48. Exceptions to Preceding Section- The preceding Sections of this Chapter, except Sections forty, forty-one, forty-two and forty-three shall not apply to farm enterprises comprising not more than twelve hectares.

32 COMPENDIUM OF RTF LAWS CHAPTER III LAND AUTHORITY ARTICLE I Organization and Functions of the Land Authority Section 49. Creation of the Land Authority- For the purpose of carrying out the policy of establishing owner-cultivatorship and the economic family-size farm as the basis of Philippine agriculture and other policies enunciated in this Code, there is hereby created a Land Authority, hereinafter called the Authority, which shall be directly under the control and supervision of the President of the Philippines. The Authority shall be headed by a Governor who shall be appointed by the President with the consent of the Commission on Appointments. He shall be assisted by two Deputy Governors who shall be appointed by the President with the consent of the Commission on Appointments, each of whom shall head such operating departments as may be set up by the Governor. The Governor and the Deputy Governors shall hold office for five years. Section 50. Qualifications and Compensation of Governors - No person shall be appointed Governor or Deputy Governor of the Authority unless he is a natural-born citizen

Food Availability Laws 33 of the Philippines, with adequate background and experience in land reform here and/or elsewhere, and at least thirtyfive years of age. The Governor shall receive an annual compensation of twenty-four thousand pesos; the Deputy Governors shall each receive an annual compensation of eighteen thousand pesos. Section 51. Powers and Functions - It shall be the responsibility of the Authority: 1. To initiate and prosecute expropriation proceedings for the acquisition of private agricultural lands as defined in Section one hundred sixty-six of Chapter XI of this Code for the purpose of subdivision into economic family-size farm units and resale of said farm units to bona fide tenants, occupants and qualified farmers: Provided, That the powers herein granted shall apply only to private agricultural lands subject to the terms and conditions and order of priority hereinbelow specified: a.. all idle or abandoned private agricultural lands, except those held or purchased within one year from the approval of this Code by private individuals or corporations for the purpose of resale and subdivision into economic family-size farm

34 COMPENDIUM OF RTF LAWS units in accordance with the policies enunciated in this Code: Provided, That the subdivision and resale shall be substantially carried out within one year from the approval of this Code; b.. all private agricultural lands suitable for subdivision into economic familysize farm units, owned by private individuals or corporations worked by lessees, no substantial portion of whose landholding in relation to the area sought to be expropriated, is planted to permanent crops under labor administration, in excess of seventy-five hectares except all private agricultural lands under labor administration and lands acquired under Section seventy-one of this Code; and c. in expropriating private agricultural lands declared by the National Land Reform Council or by the Land Authority within a land reform district to be necessary for the implementation of the provisions of this Code, the following order of priority shall be observed: i. idle or abandoned lands; ii. those whose area exceeds 1,024 hectares;

Food Availability Laws 35 iii. those whose area exceeds 500 hectares but is not more than 1,024 hectares; iv. those whose area exceeds 144 hectares but is not more than 500 hectares; and v. those whose area exceeds 75 hectares but is not more than 144 hectares. 2. To help bona fide farmers without lands or agricultural owner-cultivators of uneconomic-size farms to acquire and own economic family-size farm units; 3. To administer and dispose of agricultural lands of the public domain under the custody and administration of the National Resettlement and Rehabilitation Administration prior to the approval of this Code and such other public agricultural lands as may hereafter be reserved by the President of the Philippines for resettlement and sale, in accordance with such terms and conditions as are set forth under this Chapter: Provided, That the exercise of the authority granted herein, as well as in the preceding sub-paragraph, shall not contravene public policy on the permanency of forest reserves or other laws intended

36 COMPENDIUM OF RTF LAWS for the preservation and conservation of public forests; 4. To develop plans and initiate actions for the systematic opening of alienable and disposable lands of the public domain for speedy, distribution to and development by deserving and qualified persons or corporations; 5. To recommend to the President, from time to time after previous consultation with the Secretary of Agriculture and Natural Resources, what portion of the alienable or disposable public lands shall be reserved for settlement or disposition under this chapter; 6. To give economic family-size farms to landless citizens of the Philippines who need, deserve, and are capable of cultivating the land personally, through organized resettlement, under the terms and conditions the Authority may prescribe, giving priority to qualified and deserving farmers in the province where such lands are located; 7. To reclaim swamps and marshes, obtain titles thereto whenever feasible and subdivide them into economic familysize farms for distribution to deserving and qualified farmers; 8. To undertake measures which will insure the early issuance of titles to persons or

Food Availability Laws 37 corporations who have actually settled and cultivated disposable alienable lands of the public domain; 9. To survey, subdivide and set aside lands or areas of landholdings under its administration for economic familysize farms, large-scale farm operations, town sites, roads, parks, government centers and other civic improvements as circumstances may warrant and to submit subdivision survey plans conducted either by the government or private surveyors on parcels of lands under its administration for verification and approval either by the Director of Lands or by the Land Registration Commission; 10. To inform the Agricultural Productivity Commission and the Office of the Agrarian Counsel of the problems of settlers and farmers on lands under its administration; 11. To acquire for agricultural lessees exercising their right of pre-emption under Chapter I of this Code, any landholdings mentioned thereunder; 12. To conduct land capability survey and classification of the entire country and print maps; 13. To make such arrangements with the Land Bank with respect to titles of

38 COMPENDIUM OF RTF LAWS agricultural lands of the public domain under its administration as will be necessary to carry out the objectives of this Code; 14. To expropriate home lots occupied by agricultural lessees outside their landholdings for resale at cost to said agricultural lessees; and 15. To submit to the President of the Philippines and to both Houses of Congress through their presiding officers, to the Secretary of Finance and to the Auditor General within sixty days of the close of the fiscal year, an annual report showing its accomplishments during the year; the expropriation proceedings it has undertaken; the expenditures it has incurred and other financial transactions undertaken with respect thereto. Section 52. Appointment of Subordinate Officials and Employees - The Governor shall organize the personnel in such departments, divisions and sections of the Authority as will insure their maximum efficiency. He shall appoint, subject to civil service rules and regulations, fix the compensation, subject to WAPCO rules and regulations, and determine the duties of subordinate officials and employees as the exigencies of the service may require.

Food Availability Laws 39 ARTICLE II Expropriation of Private Agricultural Lands Section 53. Compulsory Purchase of Agricultural Lands The Authority shall, upon petition in writing of at least one-third of the lessees and subject to the provisions of Chapter VII of this Code, institute and prosecute expropriation proceedings for the acquisition of private agricultural lands and home lots enumerated under Section fifty-one. In the event a landowner agrees to sell his property under the terms specified in this Chapter and the National Land Reform Council finds it suitable and necessary to acquire such property, a joint motion embodying the agreement, including the valuation of the property, shall be submitted by the Land Authority and the land-owner to the Court for approval: Provided, That in such case, any person qualified to be a beneficiary of such expropriation or purchase may object to the valuation as excessive, in which case the Court shall determine the just compensation in accordance with Section fifty-six of this Code. Section 54. Possession of the Land; Procedure - The Authority, after commencing the expropriation suit, may take immediate possession of the land upon deposit with the Court that has acquired jurisdiction over the expropriation

40 COMPENDIUM OF RTF LAWS proceedings in accordance with the Rules of Court, of money, and bonds of the Land Bank, in accordance with the proportions provided for under Section eighty of this Code, equal to the value as determined by the Court in accordance with the provisions of Section fifty-six hereof. Section 55. Expeditious Survey and Subdivision- Immediately after the Authority takes possession of lands to be acquired by it under this Code, it shall undertake a subdivision survey of the land into economic family-size farms which shall be immediately assigned to beneficiaries selected in accordance with Section one hundred and twenty-eight subject to such rules and regulations as it may prescribe. Section 56. Just Compensation- In determining the just compensation of the land to be expropriated pursuant to this Chapter, the Court, in land under leasehold, shall consider as a basis, without prejudice to considering other factors also, the annual lease rental income authorized by law capitalized at the rate of six per centum per annum. The owner of the land expropriated shall be paid in accordance with Section eighty of this Act by the Land Bank and pursuant to an arrangement herein authorized. Section 57. Duty of Court in Expropriation ProceedingsIn expropriation proceedings, it shall be the duty of the Court to include in its resolution

Food Availability Laws 41 or order of expropriation a provision that the Land Authority shall, after taking possession of the land and after the subdivision thereof,allow the Land Bank to have the title thereto for the purpose of paying the owner the just compensation therefor. Section 58. Issuance of Certificates of Title for Parcel or LotAfter the payment of just compensation on the land expropriated the Land Bank shall cause the issuance of separate certificates of titles for each parcel or lot in accordance with the subdivision survey made under Section fifty-five. Section 59. Prohibition Against Alienation and EjectmentUpon the filing of the petition referred to in Section fifty-three the landowner may not alienate any portion of the land covered by such petition except in pursuance of the provisions of this Code, or enter into any form of contract to defeat the purposes of this Code, and no ejectment proceedings against any lessee or occupant of the land covered by the petition shall be instituted or prosecuted until it becomes certain that the land shall not be acquired by the Authority. Section 60. Disposition of Expropriated Land - After separate certificates of titles have been issued in accordance with Section fifty-eight, the Land Authority, on behalf of the Republic of the Philippines and in representation of the Land Bank as the financing agency, shall

42 COMPENDIUM OF RTF LAWS allot and sell each parcel or lot to a qualified beneficiary selected under Section fiftyfive of this Code, subject to uniform terms and conditions imposed by the Land Bank: Provided, That the resale shall be at cost which shall mean the purchase price not more than six per centum per annum, which shall cover administrative expenses, and actual expenses for subdivision, surveying, and registration: Provided, further, That such cost shall be paid on the basis of an amortization plan not exceeding twenty-five years at the option of the beneficiary. In case some agricultural lessees working portions of agricultural lands acquired by the government under this Code prefer to remain as lessees thereof, which preference shall be expressed in writing and attested by a representative of the Office of Agrarian Counsel, the resale and redistribution to them shall be deferred until such time that such lessees are ready and willing to assume the obligations and responsibilities of independent owners, which shall be manifested by a written notice to this effect by the lessees and which shall oblige the Land Authority forthwith to allot and sell such portions to such lessees under the same uniform terms and conditions. Pending the sale, such lessees shall continue to work on their landholdings and receive the produce

Food Availability Laws 43 thereof, subject, however, to the requirement that they pay the Land Bank the allowable rental established in Section thirty-four. The Land Bank shall apply the rental to the six percent added to the acquisition price and credit the balance to the acquisition cost in the name of the lessee as partial payment for the land. The Land Authority shall administer said parcels of land during the period they are under lease. Competent management and adequate production credit shall be provided in accordance with the program developed by the Land Reform Project T eam for such area. Section 61. Organization of Cooperative Associations- For the purpose of more efficient management, adoption of modern farm methods and techniques, and spreading risk, either through diversification of farm projects or mutual assumption of risks the farmer beneficiaries may organize themselves into cooperative associations with the advice or assistance of the Agricultural Productivity Commission and in accordance with the guidelines established by said Commission for such associations. Section 62. Limitation on Land Rights- Except in case of hereditary succession by one heir, landholdings acquired under this Code may not be resold, mortgaged, encumbered or transferred until after the lapse of ten years from the date of full payment and acquisition and after such ten-

44 COMPENDIUM OF RTF LAWS year period, any transfer, sale or disposition may be made only in favor of persons qualified to acquire economic family-size farm units in accordance with the provisions of this Code: Provided, That a purchaser who acquired his landholding under a contract to sell may secure a loan on the same from any private lending institution or individual for an amount not exceeding his equity on said landholding upon a guaranty by the Land Bank. Section 63. Inscription of Specific Prohibition Against Resale and Subdivision of Landholding Certificates of titles of landholdings acquired by the Land Authority and resold to purchasers shall contain therein a specific inscription prohibiting further subdivision and the resale, transfer or encumbrance of said landholdings except as provided in the preceding Section. Section 64. Exemption from Attachment- Lands acquired under the provisions of this Chapter shall be exempt from execution and attachment, except when the land itself is the property mortgaged, in accordance with Section sixtytwo of this Code. Section 65. Precedence of Expropriation Cases- Expropriation cases filed by the Authority under provisions of this Chapter shall take precedence over all other civil cases pending before the Court and shall be terminated within a period not exceeding six months from the date of filing.

Food Availability Laws 45 ARTICLE III Distribution of Agricultural Lands of the Public Domain Section 66. Title to Public Agricultural Land - Upon reservation by the President of the Philippines of public agricultural land available for disposition by the Land Authority, such land shall be surveyed, titled and transferred to the Land Bank, which shall reduce said title into individual titles for specific parcels or lots in accordance with the subdivision survey conducted by the Land Authority under paragraph 9 of Section fifty-one: Provided, however, That existing laws governing the acquisition of public lands shall have been complied with. The Land Authority shall thereupon distribute in accordance with the provisions of this Code, each parcel or lot, subject to the terms and conditions of the Land Bank, to a beneficiary selected pursuant to Section seventy-one or in accordance with paragraph 3 of Section fifty-one, to a beneficiary selected pursuant to paragraph 3 of Section one hundred twenty-eight. Section 67. Census of Settlements- The Authority shall take a census of all settlements already made or started by farmers on their own initiative on public agricultural lands, forest lands, and on private titled lands which had been

46 COMPENDIUM OF RTF LAWS cleared, occupied and cultivated wholly or partially by them, with or without legal sanction. The census shall include, among other things, the bona fide character of the settlements, the character of the settlers or farmers, the exact status of the lands settled, the feasibility of enlarging the settlements, particularly in connection with the resources of the land occupied and the neighboring areas, actual and potential accessibility to markets, as well as strategic location of the settlement with respect to national security. Section 68. Assistance to Settlers in Transporting Themselves and Their Belongings - The Authority may, in certain projects, assist settlers in transporting themselves, their belongings, work animals and farm equipment, if any, from the communities from which they are migrating to the settlement areas reserved for the purpose and for subsistence necessary until credit can be provided by government financing agencies, or by any other credit institution by loaning to them the full amount required for such purposes. These loans from the Land Authority shall be non-interest bearing, shall constitute a lien upon the land, and shall be amortized over a period of ten years, payable annually beginning with the end of the third year, after the date of arrival in the settlement

Food Availability Laws 47 areas, subject to the right of the borrower to pay in the full at any time prior to the maturity of the loan. Section 69. Assistance to Settlers in Securing Equipment - The Authority may assist the settlers in securing equipment, supplies and materials needed; or assist the cooperative associations of the new settlers in securing the most advantageous prices or terms on farm implements and supplies needed. Section 70. Providing Housing and Accommodations to Settlers - The Authority may help provide housing and other accommodations for the new settlers upon their arrival in the settlement areas by stationing them in properly surveyed and subdivided lots reserved for the purpose: help them organize community activities; and cooperate with the Bureau of Health, the Bureau of Public Schools and other pertinent agencies of the Government, in providing services necessary for the proper establishment of community facilities. Section 71. Power of the Land Authority to Sell to Holders of Bonds Issued to Former Landowners Whose Lands Have Been Purchased for RedistributionThe Land Authority shall sell, for a price not less than the appraised value, any portion not exceeding one hundred forty-four hectares in the case of individuals or one thousand twenty-four hectares in the case of corporations of the public agricultural

48 COMPENDIUM OF RTF LAWS lands transferred to the Land Bank which is suitable for large-scale farm operations to any holder, who is qualified to acquire agricultural lands through purchase, of bonds issued to former landowners whose lands have been purchased for redistribution under this Code, subject to the condition that the purchaser shall, within two years after acquisition, place under cultivation at least thirty per centum of the entire area under plantation administration and the remaining seventy per centum within five years from the date of acquisition. The Governor of the Land Authority shall issue the title of said land upon showing that the purchaser has begun the development and cultivation of his land under plantation administration: Provided, That public agricultural land sold as hereinabove specified shall not be the object of any expropriation as long as the same shall be developed and cultivated for large-scale production under farm labor management, except as allowed by the Constitution. The selling price of the portion of the public agricultural land sold under this Section shall be credited to the Governments subscription to the Land Bank. As payment for the land sold under this Section, the Land Bank shall accept as sole instruments of payment the bonds issued pursuant to Section seventy-six.

Food Availability Laws 49 Issued bonds accepted as payment for the land sold shall be cancelled to the extent of the amount paid. All sales under this Code shall be subject to the provision of Chapter V of the Public Land Act covering sales of public agricultural lands insofar as they are not inconsistent with the provisions of this Code. Section 72. Duplicate Records to be Furnished the Bureau of Lands- The Land Authority shall furnish the Bureau of Lands with the duplicate records of proceedings on applications for the sale or other disposition of public agricultural lands under its administration. Section 73. Transfer of Appropriations, Powers, Functions, etc - The National Resettlement and Rehabilitation Administration and the Land Tenure administration are hereby abolished and their powers and functions not inconsistent with this Code, balances of all appropriations, funds, equipment, records and supplies, as well as agricultural lands, public and private, under their administration, are hereby transferred to the Authority: Provided, That the function of the Land Tenure Administration with respect to the expropriation of urban lands as provided by existing laws is hereby transferred to and all hereafter be undertaken by the Peoples Homesite and housing Corporation.

50 COMPENDIUM OF RTF LAWS In addition to the appropriations herein transferred there is hereby appropriated from the general funds in the National Treasury not otherwise appropriated the sum of five million pesos, or so much thereof as may be necessary, to carry out the purposes of this Code. To carry out the land capability survey and classification mentioned in paragraph 12 of Section fifty-one and Section one hundred thirty-two of this Code, there is hereby appropriated out of the unappropriated funds of the National Treasury the amount of ten million pesos. CHAPTER IV LAND BANK Section 74. Creation - To finance the acquisition by the Government of landed estates for division and resale to small landholders, as well as the purchase of the landholding by the agricultural lessee from the landowner, there is hereby established a body corporate to be known as the Land Bank of the Philippines, hereinafter called the Bank, which shall have its principal place of business in Manila. The legal existence of the Bank shall be for a period of fifty years counting from the date of the approval hereof. The Bank shall be subject to such rules and regulations as the Central Bank may from time to time promulgate.

Food Availability Laws 51 Section 75. Powers in General- To carry out this main purpose, the Bank shall have the power: 1. To prescribe, repeal, and alter its own by laws, to determine its operating policies, and to issue such rules and regulations as may be necessary to achieve the main purpose for the creation of the Bank; 2. To adopt, alter and use a corporate seal; 3. To acquire and own real and personal property and to sell, mortgage or otherwise dispose of the same; 4. To sue and be sued, make contracts, and borrow money from both local and foreign sources. Such loans shall be subject to approval by the President of the Philippines and shall be fully guaranteed by the Government of the Philippines; 5. Upon recommendation of the Committee on Investments, to hold, own, purchase, acquire, sell or otherwise invest, or reinvest in stocks, bonds or other securities capable of giving the Bank a reasonably assured income sufficient to support its financing activities and give its private stockholders a fair return on their holdings: Provided, however, That pending the organization of the Committee on Investments, the Bank may exercise the powers herein provided without the recommendation of said Committee on Investments: Provided,

52 COMPENDIUM OF RTF LAWS further, That in case of the dissolution of the Land Bank all unsold public lands transferred to it which may be allocated to the Government of the Philippines in the course of liquidation of the business of the Bank shall revert to the Department of Agriculture and Natural Resources; and 6. To provide, free of charge, investment counselling and technical services to landowners whose lands have been acquired by the Land Bank. For this purpose, the Land Bank may contract the services of private consultants. Section 76. Issuance of Bonds- The Land Bank shall, upon recommendation by the Board of Trustees and approval of the Monetary Board of the Central Bank, issue bonds, debentures and other evidences of indebtedness at such terms, rates and conditions as the Bank may determine up to an aggregate amount not exceeding, at any one time, five times its unimpaired capital and surplus. Such bonds and other obligations shall be secured by the assets of the Bank and shall be fully tax exempt both as to principal and income. Said income shall be paid to the bondholder every six (6) months from the date of issue. These bonds and other obligations shall be fully negotiable and unconditionally guaranteed by the Government of the Republic of

Food Availability Laws 53 the Philippines and shall be redeemable at the option of the Bank at or prior to maturity, which in no case shall exceed twenty-five years. These negotiable instruments of indebtedness shall be mortgageable in accordance with established banking procedures and practices to government institutions not to exceed sixty per centum of their face value to enable the holders of such bonds to make use of them in investments in productive enterprises. They shall also be accepted as payments for reparation equipment and materials. The Board of Trustees shall have the power to prescribe rules and regulations for the registration of the bonds issued by the Bank at the request of the holders thereof. Section 77. Issuance of Preferred Shares of Stock to Finance Acquisition of Landed Estates- The Land Bank shall issue, from time to time, preferred shares of stock in such quantities not exceeding six hundred million pesos worth of preferred shares as may be necessary to pay the owners of landed estates in accordance with Sections eighty and eighty-one of this Code. The amount of shares that the Bank may issue shall not exceed the aggregate amount needed to pay for acquired estates in the proportions prescribed in said Section eighty of this Code. The Board of Trustees shall include as a necessary part of the by-laws that it shall issue under Section seventy-

54 COMPENDIUM OF RTF LAWS five of this Code, such formula as it deems adequate for determining the net asset value of its holdings as a guide and basis for the issuance of preferred shares. The shares of stock issued under the authority of this provision shall be guaranteed a rate of return of six per centum per annum. In the event that the earnings of the Bank for any single fiscal year are not sufficient to enable the Bank, after making reasonable allowance for administration, contingencies and growth, to declare dividends at the guaranteed rate, the amount equivalent to the difference between the Banks earnings available for dividends and that necessary to pay the guaranteed rate shall be paid by the Bank out of its own assets but the Government shall, on the same day that the Bank makes such payment, reimburse the latter in full, for which purpose such amounts as may be necessary to enable the Government to make such reimbursements are hereby appropriated out of any moneys in the National Treasury not otherwise appropriated. The Bank shall give sufficient notice to the Budget Commissioner and the President of the Philippines in the event that it is not able to pay the guaranteed rate of return on any fiscal period. The guaranteed rate of return on these shares shall not preclude the holders thereof from participating at a percentage higher than

Food Availability Laws 55 six per centum should the earnings of the Bank for the corresponding fiscal period exceed the guaranteed rate of return. The Board of Trustees shall declare and distribute dividends within three months after the close of each fiscal year at the guaranteed rate unless a higher rate of return is justified by the Banks earnings after making reasonable allowance for administration, contingencies and growth, in which case dividends shall be declared and distributed at a higher rate. The capital gains derived from the sale or transfer of such shares and all income derived therefrom in the form of dividends shall be fully exempt from taxes. Section 78. Special Guaranty Fund- In the event that the Bank shall be unable to pay the bonds, debentures, and other obligations issued by it, a fixed amount thereof shall be paid from a special guaranty fund to be set up by the Government, to guarantee the obligation of the Land Bank, and established in accordance with this Section, and thereupon, to the extent of the amounts so paid, the Government of the Republic of the Philippines shall succeed to all the rights of the holders of such bonds, debentures or other obligations: Provided, however, That for the next four years after the establishment of the Bank, the payment to the special guaranty fund should not exceed one million pesos per year, after which period,

56 COMPENDIUM OF RTF LAWS the Government shall pay into the guaranty fund the sum of five hundred thousand pesos each year until the cumulative total of such guaranty fund is no less than twenty percent of the outstanding net obligation of the Land Bank at the end of any single calendar year. The guaranty fund shall be administered by the Central Bank of the Philippines in the manner most consistent with its charter. For the purpose of such fund, there shall be appropriated annually the sum of one million pesos out of any moneys in the National Treasury not otherwise appropriated, until the total amount of twenty million pesos shall have been attained. Section 79. Receiving Payments and Time Deposits- The Bank, under the supervision of the Monetary Board and subject to the provisions of the General Banking Act, shall receive savings and time deposits from the small landholders in whose favor public lands or landed estates acquired by the Land Authority have been sold and, for this purpose, establish, and maintain branches and offices in such areas as may be necessary to service such deposits. The Monetary Board shall supervise and authorize the Bank to receive savings and time deposits from the public in areas where facilities for such a service do not exist or cannot be adequately provided by other deposit institutions.

Food Availability Laws 57 Section 80. Making Payment to Owners of Landed EstatesThe Land bank shall make payments in the form herein prescribed to the owners of land acquired by the Land Authority for division and resale under this Code. Such payment shall be made in the following manner: ten per centum in cash and the remaining balance in six percent, tax-free, redeemable bonds issued by the Bank in accordance with Section seventy-six, unless the landowner desires to be paid in shares of stock issued by the Land Bank in accordance with Section seventyseven in an amount not exceeding thirty per centum of the purchase price. In the event there is an existing lien or encumbrance on the land in favor of any Government institution at the time of acquisition by the Land Bank, the bonds and/or shares, in that order, shall be accepted as substitute collaterals to secure the indebtedness. The profits accruing from payment shall be exempt from the tax on capital gains. Section 81. Capital - The authorized capital stock of the Bank shall be one billion five hundred million pesos divided into ninety million shares with a par value of ten pesos each, which shall be fully subscribed by the Government and sixty million preferred shares with a par value of ten pesos each which shall be issued in accordance with the provisions of Sections seventy-

58 COMPENDIUM OF RTF LAWS seven and eighty-three of this Code. Of the total capital subscribed by the Government, two hundred million pesos shall be paid by the Government within one year from the approval of this Code, and one hundred million pesos every year thereafter for two years for which purpose the amount of two hundred million pesos is hereby appropriated upon the effectivity of this Code, and one hundred million pesos every year for the next two years thereafter, out of the funds in the National Treasury not otherwise appropriated for the purpose: Provided, That if there are not enough funds in the National Treasury for the appropriation herein made, the Secretary of Finance, with the approval of the President of the Philippines, shall issue bonds or other evidence of indebtedness to be negotiated either locally or abroad in such amount as may be necessary to cover any deficiency in the amount above-appropriated but not exceeding four hundred million pesos, the proceeds of which are hereby appropriated: Provided, further, That the bonds to be issued locally shall not be supported by the Central Bank: Provided, finally, That there is automatically appropriated out of the unappropriated funds in the National Treasury such amounts as is necessary to cover the losses which shall include among other things loss of earnings occasioned by the limitation of the resale

Food Availability Laws 59 cost herein provided such that said amount together with the administrative expenses mentioned in Section ninety hereof shall not exceed in the aggregate the equivalent of two and one-half per centum of its assets limited therein. Section 82. Government Shares - All shares of stock in the Bank subscribed or owned by the Government shall not be entitled to participate in the income earned by the Bank from its investments and other operations, whether in the form of cash or stock dividends or otherwise. Amounts expended for the administration of the Bank shall not be deemed as a participation of the Government in income. Section 83. Preferred Shares - All preferred shares of stock issued under Section seventy-seven of this Code shall be entitled to the income earned by the Bank on its investments and other operations and shall have a limited right to elect annually one member of the Board of Trustees and one member of the Committee on Investments: Provided, That the holders of such preferred shares of stock shall not bring derivative suits against the Bank. Such preferred shares shall be fully transferable: Provided, further, That upon the liquidation of the Bank, the redemption of such preferred shares shall be given priority and shall be guaranteed at par value.

60 COMPENDIUM OF RTF LAWS Section 84. Voting of Shares - The voting power of all the shares of stock of the Land Bank owned or controlled by the Government shall be vested in the President of the Philippines or in such person or persons as he may from time to time designate. Section 85. Use of Bonds- The bonds issued by the Land Bank may be used by the holder thereof and shall be accepted in the amount of their face value as any of the following: 1. Payment for agricultural lands or other real properties purchased from the Government; 2. Payment for the purchase of shares of stock of all or substantially all of the assets of the following Government owned or controlled corporations: The National Development Company; Cebu Portland Cement Company; National Shipyards and Steel Corporation; Manila Gas Corporation; and the Manila Hotel Company. Upon offer by the bondholder, the corporation owned or controlled by the Government shall, through its Board of Directors, negotiate with such bondholder with respect to the price and other terms and conditions of the sale. In case there are various bondholders making the offer, the one willing to purchase under terms and conditions most favorable to the

Food Availability Laws 61 corporation shall be preferred. If no price is acceptable to the corporation, the same shall be determined by a Committee of Appraisers composed of three members, one to be appointed by the corporation, another by the bondholder making the highest or only offer, and the third by the two members so chosen. The expenses of appraisal shall be borne equally by the corporation and the successful purchaser. Should the Government offer for sale to the public any or all of the shares of stock or the assets of any of the Government owned or controlled corporations enumerated herein, the bidder who offers to pay in bonds of the Land Bank shall be preferred provided that the various bids be equal in every respect except in the medium of payment. 3. Surety or performance bonds in all cases where the Government may require or accept real property as bonds; and 4. Payment for reparations goods. Section 86. Board of Trustees- The affairs and business of the Bank shall be directed, its powers exercised and its property managed and preserved by a Board of Trustees. Such Board shall be composed of one Chairman and four members, one of whom shall be the head of the Land Authority who shall be an ex-officio member of such Board

62 COMPENDIUM OF RTF LAWS and another to be elected by the holders of preferred shares. The Chairman and two members of the Board of Trustees shall serve on full-time basis with the Bank. With the exception of the head of the Land Authority and the member elected by the holders of preferred shares, the Chairman and all members of the Board shall be appointed by the President with the consent of the Commission on Appointments for a term of seven years, except that the first Chairman and members to be appointed under this Code shall serve for a period of three, five and seven years, such terms to be specified in their respective appointments. Thereafter the Chairman and members, with the exception of the ex-officio member, appointed after such initial appointment shall serve for a term of seven years including any Chairman or member who is appointed in place of one who resigns or is removed or otherwise vacates his position before the expiration of his seven-year term. The Chairman and the two full-time members of the Board shall act as the heads of such operating departments as may be set up by the Board under the authority granted by Section eighty-seven of this Code. The Chairman shall have authority, exerciseable at his discretion, to determine from time to time the organizational divisions to

Food Availability Laws 63 be headed by each member serving full time and to make the corresponding shifts in designations pursuant thereto. The compensation of the Chairman and the members of the Board of Trustees serving full time shall be twenty-four thousand and eighteen thousand pesos, respectively. The other members of the Board shall receive a per diem of one hundred pesos for each session of the Board that they attend. Section 87. The Chairman and Vice-Chairman- The Chairman of the Board shall be the chief executive officer of the Bank. He shall have direct control and supervision of the business of the Bank in all matters which are not by this Code or by the by-laws of the Bank specifically reserved to be done by the Board of Trustees. He shall be assisted by an Executive Vice-Chairman and one or more vice-chairman who shall be chosen and may beremoved by the Board of Trustees. The salaries of the Vice-Chairmen shall be fixed by the Board of Trustees with the approval of the President of the Philippines. Section 88. Qualifications of Members - No person shall be appointed Chairman or member of the Board unless he is a man of accepted integrity, probity, training and experience in the field of banking and finance, at least thirty-five years of age and possessed of demonstrated administrative skill and ability.

64 COMPENDIUM OF RTF LAWS Section 89. Committee on Investments- There shall be a Committee on Investments composed of three members; the member of the Board of Trustees elected by the holders of preferred shares as Chairman, one member to be appointed by the President of the Philippines from among the government members of the Board of Trustees, and another member to be selected by the holders of preferred shares under Section eighty-three of this Code. The Committee on Investments shall recommend to the Board of Trustees the corporations or entities from which the Land Bank shall purchase shares of stock. The Land Bank shall not invest in any corporation, partnership or company wherein any member of the Board of Trustees or of the Committee on Investments or his spouse, direct descendant or ascendant has substantial pecuniary interest or has participation in the management or control of the enterprise except with the unanimous vote of the members of the Board of Trustees and of the Committee on Investments, excluding the member interested, in a joint meeting held for that purpose where full and fair information of the extent of such interest or participation has been adequately disclosed in writing and recorded in the minutes of the meeting: Provided, That such interested member shall not in any manner participate in the deliberations and shall refrain from

Food Availability Laws 65 exerting any pressure or influence whatever on any official or member of the Bank whose functions bear on or relate to the investment of the funds of the Bank in the enterprise: Provided, further, That the total investment in any single corporation, partnership, company, or association shall not exceed five per centum of the total investible funds. Section 90. Personnel; Cost of Administration - The Administrative expenses of the Bank during any single fiscal year shall not in any case exceed two and one-half per centum of its total assets. The Board of Trustees shall provide for an organization and staff of officers and employees necessary to carry out the functions of the Bank, fix their compensation, and appoint and remove such officers and employees for cause. The Bank officers and employees shall be subject to the rules and regulations issued by the Civil Service Commission but shall not fall under the Wage and Position Classification Office. The Board of Trustees shall recommend to the Civil Service Commission rules and regulations for the recruitment, appointment, compensation, administration, conduct, promotion and removal of all Bank officers and employees under a strict merit system and prepare and conduct examinations under the supervision of said Commission. Section 91. Legal counsel - The Secretary of Justice shall be ex-officio legal adviser of the

66 COMPENDIUM OF RTF LAWS Bank. Any provision of law to the contrary notwithstanding, the Land Bank shall have its own Legal Department, the chief and members of which shall be appointed by the Board of Trustees. The composition, budget and operating expenses of the Office of the Legal Counsel and the salaries and traveling expenses of its officers and employees shall be fixed by the Board of Trustees and paid by the Bank. Section 92. Auditor- The Auditor General shall be the exofficio auditor of the Bank and shall appoint a representative, who shall be the auditor in charge of the auditing office of the Bank. The Auditor General shall, upon the recommendation of the auditor of the Bank, appoint or remove the personnel of the auditing office. The compensation, budget and operating expenses of the auditing office and the salaries and traveling expenses of the officers and employees thereof shall be fixed by the Board of Trustees and paid by the Bank notwithstanding any provision of law to the contrary. Section 93. Report on Condition of Bank- The representative of the Auditor General shall make a quarterly report on the condition of the Bank to the President of the Philippines, to the Senate through its President, to the House of Representatives through its Speaker, to the Secretary of Finance, to the Auditor General and to the Board of Trustees of the Bank. The report shall contain, among other things,

Food Availability Laws 67 a statement of the resources and liabilities including earnings and expenses, the amount of capital stock, surplus, reserve and profits, as well as losses, bad debts, and suspended and overdue paper carried in the books as assets of the Bank, and a plantilla of the Bank. Section 94. Auditing Rules and Regulations- The Auditor General shall, with respect to the Bank, formulate improved and progressive auditing rules and regulations designed to expedite the operations of the Bank and prevent the occurrence of delays and bottlenecks in its work Section 95. Removal of Members- The President of the Philippines may, at any time, remove the Chairman or any member of the Boardappointed by him if the interest of the Bank so requires, for any of the following causes: 1. Mismanagemen t, gra ve a buse of discretion, infidelity in the conduct of fiduciary relations, or gross neglect in the performance of duties; 2. Dishonesty, corruption, or any act involving moral turpitude; and 3. Any act or performance tending to prejudice or impair the substantial rights of the stockholders. Conviction of the Chairman or a member for a crime carrying with it a penalty greater than arresto mayor shall cause the removal of such Chairman or member without the necessity of Presidential action.

68 COMPENDIUM OF RTF LAWS The Chairman or member may, in any of the above cases, be civilly liable for any damage that may have been suffered by the stockholders. Section 96. Transfer of Claims and Liabilities- The assets of the former Land T enure Administration and the National Resettlement and Rehabilitation Administration in the form of claims and receivables arising from the sale or transfer of private and public lands, agricultural equipment, machinery, tools and work animals, but excluding advances made for subsistence, to small landholders shall, after an exhaustive evaluation to determine their true asset value, be irrevocably transferred to the Bank under such arrangements as the Land Authority and the Bank shall agree upon. Thereafter, the Bank shall have authority and jurisdiction to administer the claims, to collect and make adjustments on the same and, generally, to do all other acts properly pertaining to the administration of claims held by a financial institution. The Land Authority, upon request of the Bank, shall assist the latter in the collection of such claims. The Land Authority shall be entitled to collect from the Bank no more than the actual cost of such collection services as it may extend. The claims transferred under this Section shall not be considered as part of the Governments subscription to the capital of the Bank.

Food Availability Laws 69 Section 97. Regulation - The Bank shall not be subject to the laws, rules and regulations governing banks and other financial institutions of whatever type except with respect to the receipt of savings and time deposits in accordance with Section seventy-nine of this Code, in which case the legal reserve and other requirements prescribed by the Central Bank for such deposits shall apply. The Bank shall be operated as an autonomous body and shall be under the supervision of the Central Bank. Section 98. Tax Exemption - The operations, as well as holdings, equipment, property, income and earnings of the Bank from whatever sources shall be fully exempt from taxation. Section 99. Organization of Bank- The Bank shall be organized within one year from the date that this Code takes effect. Section 100. Penalty for Violation of the Provisions of this Chapter - Any trustee, officer, employee or agent of the Bank who violates or permits the violation of any of the provisions of this Chapter, or any person aiding or abetting the violations of any of the provisions of this Chapter, shall be punished by a fine not to exceed ten thousand pesos or by imprisonment of not more than five years, or both such fine and imprisonment at the discretion of the Court.

70 COMPENDIUM OF RTF LAWS CHAPTER V AGRICULTURAL CREDIT ADMINISTRATION Section 101. Reorganization of ACCFA to Align Its Activities - The administrative machinery of the Agricultural Credit and Cooperative Financing Administration created under Republic Act Numbered Eight hundred twenty-one, as amended by Republic Act Numbered Twelve hundred and eightyfive, shall be reorganized to enable it to align its activities with the requirements and objectives of this Code and shall be known as the Agricultural Credit Administration Section 102. Financing - To finance the additional credit functions of the Agricultural Credit Administration as a result of the land reform program laid down in this Code, there is hereby appropriated the sum of one hundred fifty million pesos out of funds in the National Treasury not otherwise appropriated in addition to existing appropriations for the Agricultural Credit and Cooperative Financing Administration. Section 103. Privilege of Rediscounting - The Agricultural Credit Administration is hereby granted the privilege of rediscounting with the Central Bank of the Philippines, the Development Bank of the Philippines and the Philippine National Bank eligible evidence of

Food Availability Laws 71 indebtedness acquired by it in carrying on its authorized activities, at an interest rate equal to the lowest charged by the above financing institution on any private person or entity. Section 104. Power to Obtain Additional Funds- Nothing in this Section shall limit the power of the Agricultural Credit Administration to obtain from the Central Bank of the Philippines, the Development Bank of the Philippines, the Philippine National Bank and other financing institutions, such additional funds as may be necessary for the effective implementation of this Act: Provided, That such additional funds are to be utilized as loans to farmers and/or farmers cooperatives. Section 105. Loaning Activities- Loaning activities of the Agricultural Credit Administration shall be directed to stimulate the development and operation of farmers cooperatives. The term Farmers Cooperatives shall be taken to include all cooperatives relating to the production and marketing of agricultural products and those formed to manage and/or own, on a cooperative basis, services and facilities, such as irrigation and transport system, established to support production and/or marketing of agricultural products. Under such rules and regulations in accordance with generally accepted

72 COMPENDIUM OF RTF LAWS banking practices and procedures as may be promulgated by the Agricultural Credit Administration, Rural Banks and DevelopmentBanks may, in their respective localities, be designated to act as agents of the Agricultural Credit Administration in regard to its loaning activities. Section 106. Credit to Small Farmers - Production loans and loans for the purchase of work animals, tillage equipment, seeds, fertilizers, poultry, livestock, feed and other similar items, may be extended to small farmers as defined in Republic Act Numbered Eight hundred twenty-one, based upon their paying capacity and such securities as they can provide, and under such terms and conditions as the Agricultural Credit Administration may impose, provided the amount thereof does not exceed two thousand pesos, or such amount as may be fixed by the President, but in no case shall the amount of loan exceed eighty per centum of the value of the collateral pledged. In instances where credit is extended for items which are not consumed in their use, such items may be pledged as security therefor. The Agricultural Credit Administration shall promulgate such rules and regulations as may be necessary in the extension of the

Food Availability Laws 73 loans herein authorized so as to assure their repayment: Provided, That such rules and regulations shall follow and be in accordance with generally accepted financing practices and procedures. Section 107. Security for Loans- The production of the borrower, after deducting the lease rental and/ or liens thereon, shall be accepted as security for loans: Provided, That said production is pledged to the Agricultural Credit Administration with appropriate safeguards to insure against its unauthorized disposition: Provided, further, That the amount of loan shall not exceed sixty per centum of the value of the estimated production. Section 108. Loans to Cooperatives- The Agricultural Credit Administration is hereby authorized to extend such types of loans as it may deem necessary for the effective implementation of this Code, to eligible farmers cooperatives as herein defined, under such terms and conditions as it may impose and with such securities as it may require. A farmers cooperative that has been registered with the Securities and Exchange Commission and affiliated with the Agricultural Credit Administration shall be eligible for loans if, in the judgment of the latter, its organization, management and business policies are of such character as will insure the safety and effective use of such loans.

74 COMPENDIUM OF RTF LAWS Section 109. Loans for Construction or Acquisition by Purchase of Facilities - Loans for the construction or acquisition by purchase of facilities of farmers cooperatives may be granted by the Agricultural Credit Administration. Section 110. Interest on Loans - The total charges including interest and insurance fees on all kinds of loans shall not be more than eight per centum per annum: Provided, That if an impairment of the capitalization of the Agricultural Credit Administration is imminent by reason of the limitation of the interest rate herein provided, there is automatically appropriated out of the unappropriated funds in the National Treasury such amounts as is necessary to cover the losses of the Agricultural Credit Administration, but not exceeding six million pesos for any one year. Section 111. Institution of Supervised Credit- To provide for the effective use of credit by farmers, the Agricultural Credit Administration may institute a program of supervised credit in cooperation with the Agricultural Productivity Commission. Section 112. Guidance to Cooperatives - The Agricultural Credit Administration shall have the power to register and provide credit guidance or assistance to all agricultural cooperatives including

Food Availability Laws 75 irrigation cooperatives and other cooperative associations or fund corporations. Section 113. Auditing of Operations - For the effective supervision of farmers cooperatives, the head of the Agricultural Credit Administration shall have the power to audit their operations, records and books of account and to issue subpoena and subpoena duces tecum to compel the attendance of witnesses and the production of books, documents and records in the conduct of such audit or of any inquiry into their affairs. Any person who, without lawful cause, fails to obey such subpoena or subpoena duces tecum shall, upon application of the head of Agricultural Credit Administration with the proper court, be liable to punishment for contempt in the manner provided by law and if he is an officer of the association, to suspension or removal from office. Section 114. Prosecution of Officials - The Agricultural Credit Administration, through the appropriate provincial or city fiscal, shall have the power to file and prosecute any and all actions which it may have against any and all officials or employees of farmers cooperatives arising from misfeasance or malfeasance in office. Section 115. Free Notarial Services - Any justice of the peace, in his capacity as notary ex-officio, shall render service free of charge to any

76 COMPENDIUM OF RTF LAWS person applying for a loan under this Code either in administering the oath or in the acknowledgment of instruments relating to such loan. Section 116. Free Registration of Deeds - Any register of deeds shall accept for registration, free of charge any instrument relative to a loan made under this Code. Section 117. Writing-off Unsecured and Outstanding Loans - Subject to the approval of the President upon recommendation of the Auditor General, the Agricultural Credit Administration may write-off from its books, unsecured and outstanding loans and accounts receivable which may become uncollectible by reason of the death or disappearance of the debtor, should there be no visible means of collecting the same in the foreseeable future, or where the debtor has been verified to have no income or property whatsoever with which to effect payment. In all cases, the writing-off shall be after five years from the date the debtor defaults. Section 118. Exemption from Duties, Taxes and Levies The Agricultural Credit Administration is hereby exempted from the payment of all duties, taxes, levies, and fees, including docket and sheriffs fees, of whatever nature or kind, in the performance of its functions and in the exercise of its powers hereunder.

Food Availability Laws 77 CHAPTER VI AGRICULTURAL PRODUCTIVITY COMMISSION Section 119. Creation of the Agricultural Productivity Commission - For the purpose of accelerating progressive improvement in the productivity of farms, the advancement of farmers and the strengthening of existing agricultural extension services through the consolidation of all/promotional, educational and informational activities pertaining to agriculture, the present Bureau of Agricultural Extension of the Department of Agriculture and Natural Resources is hereby placed directly under the executive supervision and control of the President and hereinafter renamed Agricultural Productivity Commission. Upon the effectivity of this Code, the Agricultural Tenancy Commission of the Department of Justice, together with its powers, duties, responsibilities, files, records supplies, equipment, personnel and unexpended balance of appropriations, is hereby placed under the Agricultural Productivity Commission as a separate office thereof. Section 120. Commissioner of the Agricultural Productivity Commission - The Agricultural Productivity Commission shall be administered by an

78 COMPENDIUM OF RTF LAWS Agricultural Productivity Commissioner who shall be appointed by the President with the consent of the Commission on Appointments and who shall have a compensation of sixteen thousand pesos per annum. No person shall be appointed as an A gricu ltu r a l Produc t iv it y Commissioner unless he be a holder of at least a Bachelor of Science degree in Agriculture from a reputable school or college of agriculture and shall have practiced agriculture for at least five years, and who is of recognized competence in agricultural economics or any of its equivalents. Section 121. Powers and Duties - The Agricultural Productivity Commissioner shall exercise the same powers and duties vested in the Director of the Bureau of Agricultural Extension. Section 122. Division on Cooperatives - In addition to the existing divisions of the Bureau of Agriculture Extension, herein renamed as Agricultural Productivity Commission, there shall be a Division of Cooperatives and such other divisions and sections as the Agricultural Productivity Commissioner may deem necessary to organize in order to carry out the promotional and educational activities of the Commission.

Food Availability Laws 79 Section 123. Recruitment, Selection and Training of Extension Workers - The extension workers shall be recruited and selected from graduates of agricultural colleges with adequate practical experience and training in actual crop, tree, poultry and livestock farming: Provided, however, That in the event there are no graduates of agricultural colleges available, graduates of agricultural high schools may be temporarily employed. Training of extension workers shall be done in conjunction with research institutions to insure their maximum efficiency. Section 124. Functions of Extension Workers - In addition to their functions under Republic Act Numbered Six hundred eighty, it shall be the duty of extension workers: 1. T o reside in the locality where they are assigned, to disseminate technical information to farmers, and to demonstrate improved farm management practices and techniques; 2. To work with individual farmers in farm planning and budgeting, guide them in the proper conduct of farm business and work out schedules of re-payment of loans obtained by farmers; 3. To assist farmers in securing the services or assistance of other agencies, or their personnel, having

80 COMPENDIUM OF RTF LAWS to do with relevant activities and problems of farmers; 4. To visit newly-established independent farm operators either singly or collectively at least once a month; 5. To conduct educational activities that will acquaint leaseholders and other independent farm operators with their rights and responsibilities under this Code; 6. To encourage the formation and growth of private associations, study clubs, committees and other organized groups of farmers, familiarize them with modern methods of farming and interest them to actively participate, collaborate or take the initiative in agricultural research, experimentation and implementation of projects in cooperation with the Agricultural Productivity Commissioner and other agencies; and 7. T o promote, stimulate and assist in the organization of farmers cooperatives. Section 125. Appropriation - In addition to the funds herein transferred, there is hereby appropriated from the general funds in the National Treasury not otherwise appropriated the sum of five million pesos, or so much thereof as may be necessary to carry out the purposes of this Chapter.

Food Availability Laws 81 CHAPTER VII LAND REFORM PROJECT ADMINISTRATION Section 126. Creation of National Land Reform Council - There is hereby created a National Land Reform Council, hereinafter called the Council, which shall be composed of the Governor of the Land Authority, who shall act as Chairman, the Administrator of the Agricultural Credit Administration, the Chairman of the Board of Trustees of the Land Bank, the Commissioner of the Agricultural Productivity Commission and another member appointed by the President upon recommendation of the minority party receiving the second largest number of votes in the last Presidential election who shall hold office at the pleasure of such minority party, unless sooner removed for cause by the President as members and the Agrarian Counsel as legal counsel: Provided, That the Council shall not be considered fully constituted and ready to function until after the member representing the minority party has been appointed by the President of the Philippines: Provided, further, That the minority party shall submit its recommendation to the President within sixty days from the approval of this

82 COMPENDIUM OF RTF LAWS Code, in the absence of which the Council shall be deemed to be so constituted even without such member from the minority party: Provided, finally, That the minority representative shall receive a per diem of fifty pesos for each day he attends a council meeting, chargeable to the appropriations of the Land Authority. Section 127. Meetings; Resolutions- The Chairman of the Council shall convoke the Council as its responsibilities enumerated in Section one hundred twenty-eight may warrant, and shall preside over its meetings. It shall be the duty of the members to attend any meeting of the Council upon the call of the Chairman. In case of inability, a member may require the officer next in rank in his agency to attend the meeting in his behalf. A majority vote of the members present if there is a quorum shall be necessary for the approval of a resolution. Upon such approval the resolution shall be final and binding upon all members of the Council and their respective agencies insofar as their functions, powers and duties required under this Code are concerned. The refusal of any member to implement any resolution or part thereof falling within the scope of the powers granted to his agency shall be sufficient ground for the President of the Philippines to remove

Food Availability Laws 83 said member from office or to impose upon him disciplinary or administrative sanctions. Section 128. Functions of National Land Reform Council- It shall be the responsibility of the Council: 1. To construct the general program of land reform contemplated by this Code; 2. To establish guidelines, plans and policies for its member-agencies relative to any particular land reform project; 3. To formulate such rules and regulations as may be necessary to carry out the provisions of this Code for (a) the selection of agricultural land to be acquired and distributed under this Code; (b) the determination of sizes of family farms as defined in Section one hundred sixty-six; and (c) the selection of beneficiaries to family farms available for distribution: Provided, That priority shall be given in the following order: First, to members of the immediate family of the former owner of the land within the first degree of consanguinity who will cultivate the land personally with the aid of labor available within his farm household; Second, to the actual occupants personally cultivating the land either as agricultural lessees or

84 COMPENDIUM OF RTF LAWS otherwise with respect to the area under their cultivation; Third, to farmers falling under the preceding category who are cultivating uneconomicsize farms with respect to idle or abandoned lands; Fourth, to owneroperators of uneconomic-size farms; and Fifth, to such other categories as may be fixed by virtue of this Code, taking into consideration the needs and qualifications of the applicants: 4. To revise, approve, or reject any land reform proposal or project; and 5. To proclaim in accordance with the provisions of this Code, which proclamation shall be considered as having been promulgated immediately after three successive weekly publications in at least two newspapers of general circulation in the region or locality affected by the proclamation, preference being given to local newspapers, if any, that all the government machineries and agencies in any region or locality relating to leasehold envisioned in this Code are operating: Provided, That the conversion to leasehold in the proclaimed area shall become effective at the beginning of the next succeeding agricultural year after such

Food Availability Laws 85 promulgation: Provided, further, That the proclamation shall be made after having considered factors affecting feasibility and fund requirements and the other factors embodied in Sections one hundred twenty-nine, one hundred thirty and one hundred thirty-one. Section 129. Creation of Land Reform Districts - The Council shall exercise the functions enumerated in the preceding Section for particular areas which the Council shall select and designate as land reform districts. A district shall constitute one or more reform projects, each project to comprise either a large landed estate or several areas within small estates. In the selection of a district, the Council shall consider factors affecting the feasibility of acquiring for redistribution the areas within the district, including: 1. The productivity of the area; 2. Its suitability for economic family-size farms; 3. The tenancy rate in the area; 4. The minimum fixed capital outlay required to develop the area; 5. The proximity of the area to resettlement projects; and 6. The number of farmers that cultivate uneconomic-size farms, the ability and readiness of such farmers to be

86 COMPENDIUM OF RTF LAWS resettled, and the availability of idle or abandoned lands that may be acquired or expropriated as well as of other resettlement facilities. Section 130. Regional Land Reform Committee - For the purpose of implementing the program and policies of the Council on the local level, the Council shall establish in each region of the Philippines a Regional Land Reform Committee which shall be composed of the representatives of the agencies composing the National Land Reform Council and shall be under the chairmanship of the representative of the Land Authority. The committee shall recommend to the Council such plans for projects of land reform in its jurisdiction as it may deem appropriate. The Committee shall conduct public hearings, gather and analyze data, estimate the essentials of such plans for projects or programs and consolidate its findings in a report to be submitted to the Council for its consideration. The decision of the Council upon such projects or programs shall be returned to the Committee, within thirty days from the submission thereof, for early implementation or execution by said Committee and the agencies represented therein.

Food Availability Laws 87 Section 131. Land Reform Project Team- The Regional Land Reform Committee shall direct and assign a Land Reform Project Team for any project or projects within the region, to be composed of an appropriate number of personnel from the member-agencies. The team shall be headed by a representative of the Land Authority designated by the Committee, but each agency shall, in every case, be duly represented by at least one member in the Team. On the basis of national, regional, and local policies and programs formulated and approved by the Council through the Committee, the Team shall determine (a) the suitability of any area for redistribution into economic family-size farms; (b) the economic size of farm units; (c) the feasibility of acquiring and distributing the area; (d) the willingness of the lessees to assume the responsibilities of ownership; and (e) the financial and other requirements of the project. For this purpose, it shall gather data, obtain opinions, conduct surveys, pursue investigations, and incorporate any information thus established in a development program for the area concerned to be submitted in the form of a consolidated report to the Committee.

88 COMPENDIUM OF RTF LAWS CHAPTER VIII LAND CAPABILITY SURVEY AND CLASSIFICATION Section 132. Land Survey to Conform to Legal RequirementsTo provide the necessary basis for the implementation of the land reform program formulated under this Code, the Land Authority is hereby authorized to undertake a land capability survey and classification in cooperation with the relevant agencies that will be directly benefited by such survey and classification. The survey shall be made to conform to the requirements of the Department of Agriculture and Natural Resources for implementation of agricultural programs and forestry inventory, of the Board of Technical Surveys and Maps, and of the National Economic Council and other agencies for agricultural planning and other purposes. Section 133. Cadastral Survey - To resolve the rights of landholders holding unregistered property, the Bureau of Lands is directed to undertake an expanded cadastral survey and land registration program commencing within three months from the passage of this Code. Section 134. Costs of Fees and Charges - Notwithstanding any provisions of law to the contrary, the following rules shall apply with respect to the costs, fees and charges in the survey,

Food Availability Laws 89 monumenting, and registration of lands of whatever description and nature had in relation to cadastral proceedings undertaken by the National Government, either alone through its offices, agencies and instrumentalities, or in conjunction with provincial and municipal governments. Section 135. Apportionment of Cost of Survey- One-half of the cost of survey and monumenting and registration proceedings shall be fully assessed and collected against each and all of the lots included in cadastral proceedings and shall be apportioned in accordance with the area thereof, but in no case shall less than ten pesos be charged against each lot, the other half being chargeable to the National Government. The amounts taxed against each of the lots or parcels of land shall be considered as a special assessment of taxes against the respective parcels, shall constitute a first lien upon the land and shall be collected by the Director of Lands or his duly authorized representatives in equal installments within a period of three years, bearing interest at the rate of six per centum per annum. The first installment shall become due and payable at the same time as the general land taxes for the year next succeeding the year in which the assessment of the cost shall be received by the Provincial Treasurer, and shall

90 COMPENDIUM OF RTF LAWS be collected in the same manner as such general taxes. Each succeeding installment shall become due and payable at the same time as the general land taxes for the corresponding current year and shall be collected in the same manner. The Director of Lands shall for this purpose send to the officer in charge of such collection a copy of said assessment of costs: Provided, however, That the amounts representing the proportional shares of the costs taxed against lots surveyed at the request and expense of their owner and for which a plan other than the cadastral plan has been made by a duly authorized surveyor prior to the decision in the cadastral proceeding, or which have been registered in accordance with the provisions of Act Numbered Four hundred ninety-six, entitled The Land Registration Act, or surveyed, patented, or leased under the Public Land and Mining Laws, prior to the decision in the cadastral proceeding, or have been declared to the public lands by the Court, shall not constitute a lien against said lot nor shall be collected from the owner thereof: Provided, further, That the owner of any lot may, if he so desires, pay any installment of the costs taxed against his lot at any time before the same becomes due.

Food Availability Laws 91 Section 136. Payment of Costs of Land in Its Entirety in Case of Transfer of Land- In case of the sale, transfer, or conveyance, for a pecuniary consideration, of any property, or part thereof, registered by virtue of a decree issued in a cadastral proceeding, prior to the payment of the total amount of the costs taxed against such property in accordance with the preceding Section endorsed as an encumbrance or lien upon each cadastral certificate of title, the vendor or his legal representative shall pay such costs in their entirety in case the order apportioning the costs has already been issued in the cadastral proceeding in which the property being sold, transferred, or conveyed is included, and the register of deeds concerned shall demand of the vendor, before registering the deed for such sale, transfer, or conveyance of said property, that he exhibit a receipt signed by the Director of Lands or his duly authorized representative showing that such encumbrance or lien has been paid. Section 137. Costs of Registration Proceedings- The costs of the registration proceedings under the provisions of this Code shall consist of a sum equivalent to ten per centum of the costs of the survey and monumenting of the land. The amount of the costs of the proceeding so taxed shall be for all services rendered by the Land

92 COMPENDIUM OF RTF LAWS Registration Commission and the clerk or his deputies in each cadastral proceeding, and the expense of publication, mailing, and posting notice, as well as the notices of the decision and the order apportioning the cost shall be borne by the Land Registration Commission. Section 138. Laws Covering Survey and Registration of Land in Forces- Unless otherwise provided in this Chapter, all provisions of law covering the survey and registration of land shall remain in full force and effect. Section 139. Revolving Fund- All amounts collected by the Bureau of Lands or its duly authorized representatives from the owners of the various lots as costs of proceedings, survey, and monumenting in relation to the cadastral survey program herein described shall be paid into a Special Cadastral Program Revolving Fund to finance the cadastral land survey and registration of other unregistered lands. Section 140. Appropriation - To finance and support the expanded cadastral land survey and registration program set forth herein, the amount of one hundred million pesos is hereby appropriated out of funds in the National Treasury not otherwise appropriated, which amount shall be paid into a Special Cadastral Program Revolving Fund, to finance the cadastral land survey and registration of other unregistered areas.

Food Availability Laws 93 CHAPTER IX COURTS OF AGRARIAN RELATIONS Section 141. Creation - Courts of Agrarian Relations are hereby organized and established throughout the Philippines in conformity with the provisions of this Chapter. Section 142. Regional Districts- Regional districts for the Courts of Agrarian Relations in the Philippines are constituted as follows: 1. The first Regional District shall consist of the provinces of Cagayan, Batanes, Isabela and Nueva Vizcaya, with seat in Tuguegarao, Cagayan for Branch I and in Ilagan, Isabela for Branch II; 2. The second Regional District, of the provinces of Ilocos Norte, Ilocos Sur, Abra, Mountain Province, La Union and the City of Baguio, with seat in Laoag, Ilocos Norte for Branch I and in San Fernando, La Union for Branch II; 3. The third Regional District of the provinces of Pangasinan and Zambales, and the City of Dagupan, with seat in Lingayen, Pangasinan for Branch I, in Tayug, Pangasinan for Branch II and in Iba, Zambales for Branch III; 4. The fourth Regional District, of the provinces of Nueva Ecija and Tarlac, and Cabanatuan City, with seat in Cabanatuan City for Branch I, in Guimba, Nueva Ecija

94 COMPENDIUM OF RTF LAWS for Branch II, in Tarlac, Tarlac for Branch III and in Moncada, Tarlac for Branch IV; 5. The fifth Regional District, of the provinces of Pampanga, Bataan and Bulacan, with seat in Malolos, Bulacan for Branch I, in San Fernando, Pampanga for Branch II, in Angeles, Pampanga for Branch III and in Balanga, Bataan for Branch IV; 6. The sixth Regional District, of the City of Manila, Quezon City, Pasay City, the province of Rizal, the City of Cavite, the province of Cavite, the City of Tagaytay, Trece Martires City, and the province of Palawan, with seat in Manila for Branch I (Executive Judge), in Cavite City for Branch II and in Pasig, Rizal for Branch III; 7. The seventh Regional District, of the province of Laguna, the City of San Pablo, the province of Batangas, the City of Lipa, and the provinces of Oriental Mindoro and Occidental Mindoro, with seat in Los Baos, Laguna for Branch I, in Batangas, Batangas for Branch II and in Mamburao, Mindoro Occidental for Branch III; 8. The eight Regional District, of the province of Quezon, the subprovince of Aurora, the City of Lucena, and the province of Camarines Norte, with seat in the City of Lucena for Branch I and in Daet, Camarines Norte for Branch II;

Food Availability Laws 95 9. The ninth Regional District, of the province of Camarines Sur, Naga City, Legaspi City and the provinces of Albay, Catanduanes, Sorsogon and Masbate, with seat in Naga City for Branch I, in Legaspi City for Branch II and in Sorsogon, Sorsogon for Branch III; 10. The tenth Regional District, of the province of Capiz, Roxas City, the provinces of Aklan, Romblon, Marinduque and Iloilo, the City of Iloilo, and the province of Antique, with seat in the City of Iloilo for Branch I and in Roxas City for Branch II; 11 The eleventh Regional District, of the province of Occidental Negros, the Cities of Bacolod and Silay, the province of Oriental Negros, Dumaguete City, and the subprovince of Siquijor, with seat in Bacolod City for Branch I, in Dumaguete City for Branch II and in San Carlos City for Branch III; 12. The twelfth Regional District, of the province of Samar, the City of Calbayog, the province of Leyte, and the Cities of Ormoc and Tacloban, with seat in Catbalogan, Samar for Branch I and in Ormoc City for Branch II; 13. The thirteenth Regional District, of the province of Cebu, the City of Cebu, and the province of Bohol, with seat in

96 COMPENDIUM OF RTF LAWS the City of Cebu for Branch I and in Tagbilaran, Bohol for Branch II; 14. The fourteenth Regional District, of the provinces of Surigao and Agusan, Butuan City, the province of Oriental Misamis, Cagayan de Oro City, the provinces of Bukidnon, Lanao del Sur and Lanao del Norte, and the Cities of Iligan and Marawi, with seat in Cagayan de Oro City for Branch I and in Iligan City for Branch II; 15. The fifteenth Regional District, of the province of Davao the City of Davao, the provinces of Cotabato and Occidental Misamis, Ozamiz City, the provinces of Zamboanga del Norte and Zamboanga del Sur, Zamboanga City, Basilan City and the province of Sulu, with seat in the City of Davao for Branch I, Cotabato City for Branch II and Ozamiz City for Branch III. Section 143. Judges of Agrarian Relations -The judicial function of the Courts of Agrarian Relations shall be vested in an Executive Judge and the Regional District Judges, who shall be appointed from time to time, depending on the need for their services, by the President of the Philippines with the consent of the Commission on Appointments: Provided, however, That the Executive Judge and the eight Associate Judges, at the time of

Food Availability Laws 97 the approval of this Code, of the Court of Agrarian Relations established and organized under Republic Act Numbered Twelve hundred and sixty-seven, shall continue as Agrarian Judges without need of new appointments by the President of the Philippines and new confirmation of the Commission on Appointments: Provided, further, That upon the approval of this Code, the said Executive Judge shall continue as such with authority to exercise the usual administrative functions over the Court of Agrarian Relations not incompatible with the provisions of this Chapter and shall have his office in Manila without prejudice to his holding court in any district where the requirements of the service so warrant, and the eight Associate Judges shall be assigned as Regional District Judges by the Executive Judge to any of the regional districts as constituted in the preceding Section. Section 144. Qualifications of Judges; Tenure of Office; Compensation - No person shall be appointed as Executive Judge or Regional District Judge unless he has been a citizen of the Philippines for ten years and has practiced law in the Philippines for a period of not less than ten years or has held during a like period, within the Philippines, an office requiring admission

98 COMPENDIUM OF RTF LAWS to the practice of law in the Philippines as an indispensable requisite. Regional District Judges shall be appointed to serve during good behavior, until they reach the age of seventy years or become incapacitated to discharge the duties of their office, unless sooner removed in accordance with law. The judges may be suspended or removed in the same manner and upon the same grounds as judges of the Court of First Instance: The Executive Judge shall receive an annual compensation which shall be equal to that allowed or may hereafter be allowed for judges of the Court of First Instance and the Regional District Judges shall receive an annual compensation of one thousand pesos less than that of the Executive Judge. Section 145. Leave Privileges; Traveling Expenses- Judges of the Courts of Agrarian Relations shall be entitled to same retirement and leave privileges now granted or may hereafter be granted to judges of the court of First Instance. They shall be entitled to traveling expenses when performing their duties outside official stations. Section 146. Vacation of Courts of Agrarian RelationsThe yearly vacation of Courts of Agrarian Relations shall begin with the first of April and close with the first of June each year.

Food Availability Laws 99 Section 147. Assignment of Judges to Vacation Duty During the month of January of each year the Executive Judge shall issue an order naming the judges who are to remain on duty during the court vacation of that year; and, consistently with the requirements of the judicial service, the assignment shall be so made that no judge shall be assigned to vacation duty, unless upon his own request, with greater frequency than once in two years. Such order shall specify, in the case of each judge assigned to vacation duty, the territory over which in addition to his own district his authority as vacation judge shall extend. The Executive Judge may from time to time modify his order assigning the judges to vacation duty as newly arising conditions or emergencies may require. A judge assigned to vacation duty shall not ordinarily be required to hold court during such vacation; but the Executive Judge may, when in his judgment the emergency shall require, direct any judge assigned to vacation duty to hold during the vacation a special term of court in any district. Section 148. Judges of Regional Districts - Four judges shall be commissioned for each of the fourth and fifth Regional Districts; three judges shall be commissioned for each of the third,

100 COMPENDIUM OF RTF LAWS sixth, seventh, ninth, eleventh and fifteenth Regional Districts; and two judges for each of the other Regional Districts. Section 149. Oath of Office - Before entering upon the discharge of the duties of their office, the judges shall take and subscribe to an oath of office in accordance with the provisions of Section twenty-three of the Revised Administrative Code. Section 150. Division of Business Between Branches- All business appertaining to the Courts of Agrarian Relations of each Regional District shall be equitably distributed among the judges of thebranches in such manner as shall be agreed upon by the judges themselves. Should the judges fail to agree on the distribution of business, then the Executive Judge shall make the distribution. Section 151. Judges Certification as to Work Completed- The judges of the Courts of Agrarian Relations shall certify at the end of each month that all petitions and motions in all cases pending decision or resolution for a period of thirty days from submission by the parties have been determined and decided before the date of the making of the certificate. No leave shall be granted and no salary shall be paid without such certificate. Section 152. Official Station of Regional District Judges Within thirty days after the approval of this Code, the Executive Judge shall issue

Food Availability Laws 101 an order designating the official station of the judges of the branches of each of the Regional Districts. Section 153. Time and Place of Holding Court- Sessions of the Court shall be convened on all working days when there are cases ready for trial or other court business to be dispatched. The hours for the daily session of the Court shall be from nine to twelve in the morning, and from three to five in the afternoon, except on Saturdays, when a morning session only shall be required: but the judge may extend the hours of session whenever in his judgment it is proper to do so. The judge, in his discretion, may order that but one session per day shall be held instead of two, at such hours as he may deem expedient for the convenience both of the Court and of the public; but the number of hours that the Court shall be in session per day shall be not less than five. Sessions of the Court shall be held at the places of the official station of the respective judges: Provided, however, That whenever necessary in the interest of speedy and inexpensive justice and litigation, a judge shall hold court in the municipality where the subject matter of the dispute is located, utilizing the sala of the local justice of the peace court for this purpose. A brief monthly report which shall be submitted within the first five days of the

102 COMPENDIUM OF RTF LAWS succeeding month showing the number and nature of the cases tried in his sala, the place of hearing in each case, the progress of the litigation with corresponding dates and the disposition made thereon shall be rendered by every judge under his signature and copies thereof shall be furnished the Executive Judge, who shall compile and report in an appropriate form the decisions promulgated in important cases. A judge be liable to warning by the Executive Judge, and upon repeated failure or neglect may be suspended or removed from office. Section 154. Jurisdiction of the Court- The Court shall have original and exclusive jurisdiction over: 1. All cases or actions involving matters, controversies, disputes, or money claims arising from agrarian relations: Provided, however, That all cases still pending in the Court of Agrarian Relations, established under Republic Act Numbered Twelve hundred and sixty-seven, at the time of the effectivity of this Code, shall be transferred to and continued in the respective Courts of Agrarian Relations within whose district the sites of the cases are located; 2. All cases or actions involving violations of Chapters I and II of this Code and Republic Act Number Eight hundred and nine; and

Food Availability Laws 103 3. Expropriations to be instituted by the Land Authority: Provided, however, That expropriation proceedings instituted by the Land Tenure Administration pending in the Court of First Instance at the time of the effectivity of this Code shall be transferred to and continued in the respective Courts of Agrarian Relations within whose district the subject matter or property is located. Section 155. Powers of the Court; Rules and Procedures- The Courts of Agrarian Relations shall have all the powers and prerogatives inherent in or belonging to the Court of First Instance. The Courts of Agrarian Relations shall be governed by the Rules of Court: Provided, That in the hearing, investigation and determination of any question or controversy pending before them, the Courts without impairing substantial rights, shall not be bound strictly by the technical rules of evidence and procedure, except in expropriation cases. Section 156. Appeals - Appeals from an order or decision of the Courts of Agrarian Relations may be taken to the Court of Appeals on questions of fact and of fact and law or to the Supreme Court on pure questions of law, as the case may be, in accordance with rules governing appeals from the Court of First Instance as provided in the Rules of Court.

104 COMPENDIUM OF RTF LAWS Section 157. Detail of Judges to Another District- Whenever any judge in any of the Court shall certify to the Executive Judge that the condition of the docket in his Court is such as to require the assistance of an additional judge, or when there is any vacancy in any Court, the Executive Judge may, in the interest of justice, with the approval of the Supreme Court, assign any judge of the Court of Agrarian Relations whose docket permits his temporary absence from said Court, to hold session in the Court needing such assistance or where such vacancy exists. Whenever a judge appointed or assigned in any branch of the Court shall leave his district by transfer or assignment to another Court of equal jurisdiction without having decided a case totally heard by him and which was duly argued or opportunity given for argument to the parties of their counsel, it shall be lawful for him to prepare and sign his decision in said case anywhere within the Philippines and send the same by registered mail to the clerk of court to be filed in the Court as of the date when the same was received by the clerk, in the same manner as if the judge had been present in the Court to direct the filing of the judgment: Provided, however, That if a case has been heard only in part, the Supreme Court, upon petition of any of the interested parties to the case and the recommendation of the respective

Food Availability Laws 105 district judge, may also authorize the judge who has partly heard the case to continue hearing and to decide said case notwithstanding his transfer or appointment to another court of equal jurisdiction. Section 158. Personnel of the Courts of Agrarian Relations1. Court Commissioners; Qualifications and Compensation - There shall be twentyfour Court Commissioners who shall receive an annual compensation of nine thousand pesos each and shall be appointed by the President with the consent of the Commission on Appointments. A Court Commissioner shall be a member of the Philippine Bar and must have been engaged in the practice of law for five years or must have held a position in the government requiring the qualifications of a lawyer for the same period. A Court Commissioner may be assigned by the Executive Judge to assist in the hearing and investigation of cases. Subject to the latters direction and supervision, he may hear evidence for the Court on any disputed point or issue in any given case or cases and shall after said hearing submit a report of all the cases heard by him together with the records thereof within the period prescribed by the Court. During the hearing he may rule upon questions of pleading and procedure but not on the merits of the case.

106 COMPENDIUM OF RTF LAWS 2. Clerks of Court; Qualifications, Duties, Compensation and Bond - There shall be as many Clerks of Court as there are judges, who shall be appointed by the President of the Philippines with the consent of the Commission on Appointments. Deputy Clerks of Court and such other employees as may be required shall be appointed by the Executive Judge, subject to Civil Service law, rules and regulations. No person shall be eligible for appointment as Clerk of Court unless he is duly authorized to practice law in the Philippines. Before entering upon the discharge of the duties of his office, he shall file a bond in the amount of ten thousand pesos in the same manner and form as required of the Clerk of the Supreme Court, such bond to be approved by, and filed with, the Treasurer of the Philippines and shall be subject to inspection by interested parties. The Clerk of Court shall require his deputy to give an adequate bond as security against loss by reason of his wrong-doing or gross negligence. The Clerks of Court shall each receive an annual compensation of seven thousand two hundred pesos. They shall exercise the same powers and perform the same duties on all matters within the jurisdiction of

Food Availability Laws 107 the Courts as those exercised by the Clerks of Court of the Courts of First Instance. Clerks of Courts and other subordinate employees of the Courts of Agrarian Relations shall, for administrative purposes, belong to the Department of Justice; but in the performance of their duties, they shall be subject to the supervision of the judges of the Court to which they respectively pertain. The Commissioners, otherwise known as Hearing Officers of the Court of Agrarian Relations, as well as the Clerks of Court at the time of the approval of this Code, shall continue as such without the need of new appointment by the President of the Philippines and new confirmation by the Commission on Appointments. Section 159. Appropriation- There is hereby appropriated the sum of three million five hundred thousand pesos, or so much thereof as may be necessary, out of the unappropriated funds in the Philippine Treasury for expenses for courtrooms and court offices, including equipment for the Courts and their personnel, for salaries, and for other necessary expenses that may be incurred in carrying out the provisions of this Chapter. The amount appropriated shall be carried in succeeding appropriations for the Courts of Agrarian Relations.

108 COMPENDIUM OF RTF LAWS CHAPTER X OFFICE OF AGRARIAN COUNSEL Section 160. Creation of Office of Agrarian Counsel - T o strengthen the legal assistance to agricultural lessees and agricultural owner-cultivators referred to in this Code, the T enancy Mediation Commission is hereby expanded and shall hereafter be known as the Office of the Agrarian Counsel. The head of the Office shall hereafter be known as Agrarian Counsel and shall have the rank, qualifications and salary of First Assistant Solicitor General. He shall be assisted by a Deputy Agrarian Counsel, who shall have the rank, qualifications and salary of Assistant Solicitor General. The Agrarian Counsel and Deputy Agrarian Counsel shall be appointed by the President with the consent of the Commission on Appointments of Congress and shall be under the direct supervision of the Secretary of Justice. Section 161. Special Attorneys- There is hereby created in the Office of the Agrarian Counsel eighty additional positions of Special Attorneys, who shall be appointed by the President upon recommendation of the Secretary of Justice and with the consent of the Commission on Appointments. They shall have the rank, qualifications and salary provided by law for a solicitor in the Office of the Solicitor General with the lowest rank.

Food Availability Laws 109 Section 162. Appointment of Subordinate Officials The Agrarian Counsel shall appoint the subordinate officials and employees of the Office of Agrarian Counsel, subject to civil service rules and regulations, fix their compensation and prescribe their duties. The compensation of special attorneys transferred to the Office of Agrarian Counsel shall be fixed on salary scales corresponding to solicitors of the Office of the Solicitor General: Provided, That in the fixing of their salary seniority in rank shall be taken into account. The Agrarian Counsel shall have the power to organize such divisions and sections as will insure maximum efficiency of the Office. Section 163. Functions of the Office of Agrarian Counsel- It shall be the responsibility of the Office of the Agrarian counsel, upon proper notification by the party concerned or by the association or organization to which it belongs, to represent agricultural lessees, agricultural farm workers and agricultural owner-cultivators referred to in this Code who cannot engage the services of competent private counsel in cases before the Court of Agrarian Relations. Section 164. Authority to Administer Oath- The Agrarian Counsel, the Deputy Agrarian Counsel and the Special Attorneys of the Office of Agrarian Counsel are hereby authorized to administer oaths free of charge.

110 COMPENDIUM OF RTF LAWS Section 165. Appropriations - There is hereby appropriated, in addition to the appropriation of the Tenancy Mediation Commission for Fiscal Year 1964, the sum of three million pesos, or so much thereof as may be necessary, out of the unappropriated funds in the National Treasury, for salaries, wages, purchase of motor vehicles, supplies, equipment, and other sundry expenses. The amount appropriated herein shall be carried in the appropriations for the Office of the Agrarian Counsel in the General Appropriations Acts for succeeding fiscal years. CHAPTER XI GENERAL PROVISIONS Section 166. Definition of Terms - As used in Chapter I of this Code: 1. Agricultural Land means land devoted to any growth, including but not limited to crop lands, salt beds, fish ponds, idle land and abandoned land as defined in paragraphs 18 and 19 of this Section, respectively. 2. Agricultural lessee means a person who, by himself and with the aid available from within his immediate farm household, cultivates the land belonging to, or

Food Availability Laws 111 possessed by, another with the latters consent for purposes of production, for a price certain in money or in produce or both. It is distinguished from civil lessee as understood in the Civil Code of the Philippines. 3. Agricultural lessor means a person, natural or juridical, who, either as owner, civil law lessee, usufructuary, or legal possessor, lets or grants to another the cultivation and use of his land for a price certain. 4. Agricultural year means the period of time required for raising a particular agricultural product, including the preparation of the land, sowing, planting and harvesting of crops and, whenever applicable, threshing of said crops: Provided, however, That in case of crops yielding more than one harvest from planting, agricultural year shall be the period from the preparation of the land to the first harvest and thereafter from harvest to harvest. In both cases, the period may be shorter or longer than a calendar year. 5. Court means the Court of Agrarian Relations. 6. Fair rental value means the value not in excess of allowable depreciation plus six per cent interest per annum on the

112 COMPENDIUM OF RTF LAWS investment computed at its market value: Provided, That the fair rental value for work animal or animals and farm implements used to produce the crop shall not exceed five per cent of the gross harvest for the work animal or animals and five per cent for implements. 7. Farm implements means hand tools or machines ordinarily employed in a farm enterprise. 8 . Immediate farm household means the members of the family of the lessee or lessor and other persons who are dependent upon him for support and who usually help him in his activities. 9. Incapacity means any cause or circumstance which prevents the lessee from fulfilling his contractual and other obligations under this Code. 10. Inspect means to enter, examine and observe. Under no circumstance, however, shall such entrance, examination and observation be utilized to commit any act of intimidation or coercion nor shall it be utilized to impair the civil rights of the individuals affected. 11 Proven farm practices means sound farming practices generally accepted through usage or officially

Food Availability Laws 113 recommended by the Agricultural Productivity Commission for a particular type of farm. 12. Work animals means animals ordinarily employed in a farm enterprise, such as carabaos, horses, bullocks, etc. 13. Personal cultivation means cultivation by the lessee or lessor in person and/ or with the aid of labor from within his immediate household. As used in Chapter II: 14. Farm employer includes any person acting directly or indirectly in the interest of a farm employer whether for profit or not, as well as a labor contractor, but shall not include any labor organization (otherwise than when acting as a farm employer) or anyone acting in the capacity of an officer or agent of such labor organization. 15. Farm worker includes any agricultural wage, salary or piece but is not limited to a farm worker of a particular farm employer unless this Code explicitly states otherwise and any individual whose work has ceased as a consequence of, or in connection with, a current agrarian dispute or an unfair labor practice and who has not

114 COMPENDIUM OF RTF LAWS obtained a substantially equivalent and regular employment. Whenever the term farm worker is used in this Code, it shall be understood to include farm laborer and/or farm employee. 16. Farm workers organization includes any union or association of farm workers which exists, in whole or in part, for the purpose of collective bargaining or dealing with farm employers concerning terms and conditions of employment. 17. Agrarian dispute means any controversy relating to terms, tenure or conditions of employment, or concerning an association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether the disputants stand in the proximate relation of farm employers and employees. As used in Chapter III of this Code: 18. Idle lands means land not devoted directly to any crop or to any definite economic purpose for at least one year prior to the notice of expropriation except for reasons other than force majeure or any

Food Availability Laws 115 other fortuitous event but used to be devoted or is suitable to such crop or is contiguous to land devoted directly to any crop and does not include land devoted permanently or regularly to other essential and more productive purpose. 19. Abandoned lands means lands devoted to any crop at least one year prior to the notice of expropriation, but which was not utilized by the owner for his benefit for the past five years prior to such notice of expropriation. 20. Economic family-sized farm units means an area of farm land that permits efficient use of labor and capital resources of the farm family and will produce an income sufficient to provide a modest standard of living to meet a farm familys needs for food, clothing, shelter, and education with possible allowance for payment of yearly installments on the land, and reasonable reserves to absorb yearly fluctuations in income. 21. Suitably for economic family-size farm refers to situations where a parcel of land whose characteristics, such as climate, soil, topography, availability of water and location, will support a farm family if operated in economic family-size farm

116 COMPENDIUM OF RTF LAWS units and does not include those where large-scale operations will result in greater production and more efficient use of land. 22. Agricultural owner-cultivator means any person who, providing capital and management, personally cultivates his own land with the aid of his immediate family and household. 23. Owner-manager means the owner of a parcel of land devoted to agricultural production who provides the capital and management in the farm enterprise. 24. Labor administration means cases where farm workers are employed wholly in the agricultural production. 25. Share tenancy as used in this Code means the relationship which exists whenever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land personally with the aid of labor available from members of his immediate farm household, and the produce thereof to be divided between the landholder and the tenant.

Food Availability Laws 117 26. Tax free in reference to bonds and shares of stock issued by the Land Bank as payment for acquired private agricultural land shall mean all government taxes, except gift tax and inheritance tax. Section 167. Penal Provisions1. Violation of the provisions of Section thirteen and twenty-seven and paragraph 1 of Section thirty-one of this Code shall be punished by a fine not exceeding one thousand pesos or imprisonment not exceeding one year or both in the discretion of the court. In case of juridical persons, the manager or the person who has charge of the management or administration of the property or, in his default, the person acting in his stead, shall be liable under this Section. 2. Any person, natural or juridical, who induces another, as tenant, to execute or enter into a share tenancy contract with himself or with another in violation of this Code shall be punished by a fine not exceeding five thousand pesos with subsidiary imprisonment in accordance with the Revised Penal Code: Provided, That the execution of a share tenancy contract shall be considered prima facie evidence of such inducement

118 COMPENDIUM OF RTF LAWS as to the owner, civil law lessee, usufructuary or legal possessor. In case of juridical persons, the manager or the person who has charge of the management or administration of the property or, in his default, the person acting in his stead, shall be liable under this Section. 3. Any person who executes an affidavit as required by Section thirteen of Chapter I, knowing the contents thereof to be false, shall be punished by a fine not exceeding one thousand pesos or imprisonment of not more than one year, or both, in the discretion of the court. 4. Any person who wilfully violates the provisions of Sections forty and fortyone of this Code shall be punished by a fine of not less than one hundred pesos nor more than one thousand pesos or by imprisonment of not less than one month nor more than one year, or both such fine and imprisonment, in the discretion of the court. If any violation of Sections forty and forty-one of this Code is committed by a corporation, partnership or association, the manager or, in his default, the person acting as such when the violation took place shall be criminally responsible.

Food Availability Laws 119 5. Any person who wilfully violates the provisions of Section forty-two of this Code shall, upon conviction thereof, be subject to a fine of not more than two thousand pesos, or upon second conviction, to imprisonment of not more than one year or both such fine and imprisonment, in the discretion of the court. If any violation of the provisions of Section forty-two of this Code is committed by a corporation, partnership or association, the manager or, in his default, the person acting as such when the violation took place shall be criminally responsible. Section 168. Pending Application for Mechanization - Any provision of this Code to the contrary notwithstanding, any application for mechanization where corresponding certifications for suitability for mechanization and for availability for resettlement by the Agricultural Tenancy Commission and the National Resettlement and Rehabilitation Administration, respectively, have been issued and proper notices served on the tenants at least two months prior to the approval of this Code shall be given due course and decided in accordance with the pertinent provisions and requirements of Republic Act Numbered Eleven hundred and ninety-nine, as amended.

120 COMPENDIUM OF RTF LAWS Section 169. Personnel of Reorganized or Abolished Agencies - Permanent officials and employees of all existing government agencies which are abolished or reorganized under this Code, subject to Civil Service Rules and regulations, shall be absorbed and shall not be divested of their positions except presidential appointees: Provided, That those presidential appointees who cannot be absorbed and such officials and employees who prefer 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 benefits to which they are entitled under existing laws and regulations. T o carry out the provisions of this Section, there is hereby appropriated the sum of five hundred thousand pesos out of the unappropriated funds in the National Treasury. Section 170. Budgeting and Disbursing of Appropriated Funds- Any provision of this Code or of any existing law to the contrary notwithstanding, not more than sixty per centum of the specific appropriations provided in this Code for operating expenditures shall be used for personnel services: Provided, That in the case of the appropriations for the Agricultural Productivity Commission not more than twenty per centum shall be spent for office personnel and other administrative expenses thereof: Provided, further, That the total

Food Availability Laws 121 operating expenditures of the Agricultural Credit Administration shall not exceed three per centum of its total capitalization in addition to the allowance for losses under Section one hundred ten: Provided, furthermore, That all unexpended balances of all appropriations provided in this Code for operating expenditures shall revert to the National Treasury at the end of the fiscal year in conformity with the provisions of Section twenty-three of Republic Act Numbered Nine hundred ninety-two: And provided, finally, That all the financial requirements of the various agencies established in this Code for their operation except the Land Bank and the Agricultural Credit Administration shall be proposed in the Presidents budget in order that such appropriation as may be necessary therefor may be provided in the General Appropriation Acts for the succeeding fiscal years. Section 171. Separability of Provisions- If, for any reason, any section or provision of this Code shall be questioned in any court, and shall be held to the unconstitutional or invalid, no other section or provision of this Code shall be affected thereby. Section 172. Prior Inconsistent Laws- All laws or parts of any law inconsistent with the provisions of this Code are hereby repealed. Section 173. Effective Date- This Code shall take effect upon its approval. Approved: August 8, 1963

122 COMPENDIUM OF RTF LAWS PRESIDENTIAL DECREE No. 27 October 21, 1972 DECREEING THE EMANCIPATION OF TENANTS FROM THE BONDAGE OF THE SOIL, TRANSFERRING TO THEM THE OWNERSHIP OF THE LAND THEY TILL AND PROVIDING THE INSTRUMENTS AND MECHANISM THEREFOR In as much as the old concept of land ownership by a few has spawned valid and legitimate grievances that gave rise to violent conflict and social tension, The redress of such legitimate grievances being one of the fundamental objectives of the New Society, Since Reformation must start with the emancipation of the tiller of the soil from his bondage, NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, and General Order No. 1 dated September 22, 1972, as amended do hereby decree and order the emancipation of all tenant farmers as of this day, October 21, 1972: This shall apply to tenant farmers of private agricultural lands primarily devoted to rice and corn under a system of sharecrop or lease-tenancy, whether classified as landed estate or not; The tenant farmer, whether in land classified as landed estate or not, shall be deemed owner of a portion

Food Availability Laws 123 constituting a family-size farm of five (5) hectares if not irrigated and three (3) hectares if irrigated; In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now cultivate it; For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to this Decree, the value of the land shall be equivalent to two and one-half (2 1/2) times the average harvest of three normal crop years immediately preceding the promulgation of this Decree; The total cost of the land, including interest at the rate of six (6) per centum per annum, shall be paid by the tenant in fifteen (15) years of fifteen (15) equal annual amortizations; In case of default, the amortization due shall be paid by the farmers cooperative in which the defaulting tenantfarmer is a member, with the cooperative having a right of recourse against him; The government shall guaranty such amortizations with shares of stock in government-owned and governmentcontrolled corporations; No title to the land owned by the tenant-farmers under this Decree shall be actually issued to a tenant-farmer unless and until the tenant-farmer has become a fullfledged member of a duly recognized farmers cooperative; Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be transferable except by hereditary succession or to the Government in accordance with the provisions of this Decree, the Code of Agrarian Reforms and other existing laws and regulations;

124 COMPENDIUM OF RTF LAWS The Department of Agrarian Reform through its Secretary is hereby empowered to promulgate rules and regulations for the implementation of this Decree. All laws, executive orders, decrees and rules and regulations, or parts thereof, inconsistent with this Decree are hereby repealed and or modified accordingly. Done in the City of Manila, this 21st day of October, in the year of Our Lord, nineteen hundred and seventy-two. MALACAANG Manila PRESIDENTIAL DECREE No. 717 May 29, 1975 PROVIDING AN AGRARIAN REFORM CREDIT AND FINANCING SYSTEM FOR AGRARIAN REFORM BENEFICIARIES THROUGH BANKING INSTITUTIONS WHEREAS, it is a declared national policy to give first priority to measures for the adequate and timely financing of the Agrarian Program; WHEREAS, government and private banking institutions are in best position to extend adequate agrarian reform credit to agrarian reform beneficiaries; WHEREAS, there is a need of flexibility of government policy on agrarian reform credit and for a realistic approach to the credit needs of agrarian reform beneficiaries;

Food Availability Laws 125 NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby decree and order to be part of the laws of the land the following: Section 1. There shall be evolved an agrarian reform credit and financing system for the beneficiaries of agrarian reform, namely: tillers, tenant-farmers, settlers, agricultural lessees, amortizing owners, owner-cultivators, farmers cooperatives and compact farms, through government and private banking institutions. Agrarian reform credit, as used herein, shall include production or other types of loans for acquisition of work animals, farm equipment and machinery, seeds, fertilizers, poultry, livestock, feeds and other similar items; acquisition of lands authorized under the Agrarian Reform Code of the Philippines and its amendments; construction and/or acquisition of facilities for production, processing, storage and marketing; and efficient and effective merchandising of agricultural commodities stored and/or processed by the facilities aforecited in domestic and foreign commerce. Section 2. The credit mentioned in the next preceding Section may be extended to

126 COMPENDIUM OF RTF LAWS the beneficiaries named therein based on the feasibility of the project and their paying capacity, their estimated production, and/or securites they can provide as well as such assets as may be required by them from the proceeds of the loan. Section 3. All banking institutions, whether government or private, shall set aside at least twenty-five per cent (25%) of their loanable funds for agricultural credit in general, of which at least ten per cent (10%) of the loanable funds shall be made available for agrarian reform credit to beneficiaries mentioned in Section 1 hereof: PROVIDED, however, that loanable funds as used in this Section shall refer to funds generated from the date of effectivity of this Decree; PROVIDED, FURTHER, that the National Economic and Development Authority may increase or decrease such percentages whenever so recommended by the Department of Agrarian Reform and Central Bank of the Philippines taking into consideration the magnitude of the credit needs of the beneficiaries of agrarian reform. Section 4. The Central Bank of the Philippines, in consultation with and/or upon the recommendation of the Department

Food Availability Laws 127 of Agrarian Reform, shall promulgate such rules and regulations as may be necessary. to implement the provisions of this Decree Subject to such rules and regulations, banking institutions may be allowed to: 1. Invest, in such government securities, as may be declared eligible by the Central Bank of the Philippines, any portion of the amount set aside for agrarian reform credit not actually loaned out; PROVIDED, however, that the issuing government entity shall stand ready to monetize, encash or repurchase such securities whenever funds are needed by the banks holding the said securities, for lending to the beneficiaries of agrarian reform; and 2. Rediscount with the Central Bank of the Philippines eligible paper covering agrarian reform credits. Section 5. All laws, decrees, rules and regulations, or parts thereof, as may be inconsistent herewith are hereby repealed or modified accordingly. Section 6. This Decree shall take effect immediately. Done in the City of Manila, this 29th day of May, in the year of Our Lord, nineteen hundred and seventyfive.

128 COMPENDIUM OF RTF LAWS EXECUTIVE ORDER NO. 83 STRENGTHENING THE ENFORCEMENT OF THE AGRI-AGRA LAW (PD 717) AND LAUNCHING THE NDC AGRI-AGRA ERAP BONDS FOR RURAL DEVELOPMENT WHEREAS, the Government has, as a matter of policy, given the highest priority to the development of the agricultural and agrarian sectors and in connection therewith, has called upon the private sector to share in the responsibility of promoting and improving the productivity of these sectors; WHEREAS, a basic social policy has been laid by Presidential Decree No. 717 entitled Providing and Agrarian Reform Credit and Financing System from Agrarian Reform Beneficiaries Through Banking Institutions or the Agri-Agra Law, requiring the banking sector to allocate at least 25% of its loanable funds for agricultural credit in general, of which 10% of said loanable funds shall be made available to agrarian reform beneficiaries as defined therein; WHEREAS, various related Republic Acts have expanded the modes of compliance by the banking sector with PD 717, to wit: Section 9, RA 7721 Extension of development loans for educational institutions, cooperatives, hospitals and other medical services; socialized or low-cost housing and local government units without national government guarantee

Food Availability Laws 129 Section 11 (b), RA 7835 Mandatory investment of all unused Agri-Agra allocation funds in socialized and low cost housing Section 8, RA 7900 Exemption of banks from compliance requirements of PD 717 when at least 5% of loanable funds are directly lent to farmers association or cooperatives WHEREAS, there is a need to increase and further improve compliance by the banking sector with the provisions of PD 717 through an alternative compliance mechanism to be able to increase the productivity of the agriculture and agrarian sectors. WHEREAS, Section 4 of PD 717 allows the banking sector to invest in government securities declared eligible by the Bangko Sentral ng Pilipinas (BSP) and invest any portion of the amount set aside for agrarian reform credit not actually loaned out as a mechanism for alternative compliance with the requirements of PD 717; WHEREAS, Section 9 of PD 1648, the Revised Charter of the National Development Company (NDC) authorizes NDC to issue, upon recommendation of the Secretary of Finance (DOF) and approval of the President, tax exempt bonds and securities guaranteed by the government to finance its operations; WHEREAS, there is a need to authorize the issuance of long term bonds by NDC which shall be called NDC AgriAgra Economic Recovery through Agricultural Productivity (ERAP) Bonds to support projects for economic growth

130 COMPENDIUM OF RTF LAWS under a revitalized rural development program undertaken by NDC in cooperation with the Department of Agrarian Reform (DAR) and the private sector; NOW THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the Republic of the Philippines, for the effective and efficient implementation of PD 717 and in order to address the governments priority program, by virtue of the powers vested in me by law, do hereby order: Section 1. Title - This Executive Order shall otherwise be known as the Launching of the NDC Agri-Agra Economic Recovery Through Agricultural Productivity (ERAP) Bonds for Rural Development. Section 2. Enforcement of PD 717 and Institution of Penalties - The BSP shall intensify the enforcement of PD 717 for the banking sector to support the credit requirements of the agricultural and agrarian reform sectors and shall institute the necessary penalties for non-compliance. Section 3. Authorizing the Issuance of NDC Agri-Agra ERAP Bonds in support of Alternative Compliance Mechanisms and Rural Credit Mobilization. NDC is hereby authorized toundertake the issuance of the NDC Agri- Agra ERAP Bonds in the total amount of up to Fifty Billion Pesos (P 50,000,000,000.00) which shall be guaranteed by the Republic of the Philippines. The features of the NDC Agri-Agra ERAP Bonds shall be determined and fixed by NDC

Food Availability Laws 131 in consultation with the DOF, which features shall be competitive with existing bonds and securities in circulation in the Philippine market. The purchase or underwriting of these bonds by the banking sector shall serve as compliance by it with the provisions of PD 717. Section 4. Mobilization and Utilization of the Proceeds of the NDC Agri-Agra ERAP Bonds. The proceeds from the issuance of the NDC AgriAgra ERAP Bonds, hereinafter referred to as the Fund, shall be jointly managed by NDC and DAR. The Fund shall be used exclusively for the development of the agriculture and agrarian sectors and in the implementation of identified development priority projects of NDC and of the Departments of Agriculture and Agrarian Reform for these sectors, such as but not limited to, rice production joint ventures, establishments of food chains, livestock and agri-processing support services and facilities and similar undertakings. Consistent with NDCs mandate as the corporate vehicle of the government, the NDC shall act as the DARs corporate arm in the mobilization and utilization of the Fund, Section 5. Implementing Rules and Regulations - The BSP, in close coordination with DOF, DAR and NDC, shall promulgate the implementing rules and regulations necessary to effectively

132 COMPENDIUM OF RTF LAWS implement, and improve compliance by the banking sector with, the provisions of PD 717 and this Executive Order. The implementing rules and regulations shall also utilize alternative modes of fund utilization to improve the efficiency and effectiveness of projects in these sectors, to include guarantees, concessional financing loans, equity or quasiequity and quasi-debt instruments in projects trust bonds or securities of qualified project enterprises and such other modes as may be determined by the NDC and DAR. Section 6. Taxation. Pursuant to Section 9, PD 4971, interest income on the Agri-Agra ERAP Bonds shall be exempt from the payment of taxes. Section 7. Repealing Clause. All issuances, executive or administrative orders, and/or rules andegulations or parts thereof, which are inconsistent herewith are hereby repealed or modified accordingly Done in the City of Manila, this 25th day of December, in the year of our Lord, nineteen hundred and ninety eight. (SGD.) JOSEPH EJERCITO ESTRADA By: (SGD.) RONALDO P. ZAMORA Executive Secretary

Food Availability Laws 133 Republic of the Philippines Congress of the Philippines Metro Manila Eighth Congress Republic Act No. 6657 June 10, 1988 AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE SOCIAL JUSTICE AND INDUSTRIALIZATION, PROVIDING THE MECHANISM FOR ITS IMPLEMENTATION, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: CHAPTER I Preliminary Chapter Section 1. Title. This Act shall be known as theComprehensive Agrarian Reform Law of 1988. Section 2. Declaration of Principles and Policies. It is the policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farmworkers will receive the highest consideration to promote social justice and

134 COMPENDIUM OF RTF LAWS to move the nation toward sound rural development and industrialization, and the establishment of owner cultivatorship of economic-size farms as the basis of Philippine agriculture. To this end, a more equitable distribution and ownership of land, with due regard to the rights of landowners to just compensation and to the ecological needs of the nation, shall be undertaken to provide farmers and farmworkers with the opportunity to enhance their dignity and improve the quality of their lives through greater productivity of agricultural lands. The agrarian reform program is founded on the right of farmers and regular farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farm workers, to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural lands, subject to the priorities and retention limits set forth in this Act, having taken into account ecological, developmental, and equity considerations, and subject to the payment of just compensation. The State shall respect the right of small landowners, and shall provide incentives for voluntary landsharing.

Food Availability Laws 135 The State shall recognize the right of farmers, farmworkers and landowners, as well as cooperatives and other independent farmers organizations, to participate in the planning, organization, and management of the program, and shall provide support to agriculture through appropriate technology and research, and adequate financial production, marketing and other support services. The State shall apply the principles of agrarian reform, or stewardship, whenever applicable, in accordance with law, in the disposition or utilization of other natural resources, including lands of the public domain, under lease or concession, suitable to agriculture, subject to prior rights, homestead rights of small settlers and the rights of indigenous communities to their ancestral lands. The State may resettle landless farmers and farmworkers in its own agricultural estates, which shall be distributed to them in the manner provided by law. By means of appropriate incentives, the State shall encourage the formation and maintenance of economic-size family farms to be constituted by individual beneficiaries and small landowners. The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential use of

136 COMPENDIUM OF RTF LAWS communal marine and fishing resources, both inland and offshore. It shall provide support to such fishermen through appropriate technology and research, adequate financial, production and marketing assistance and other services. The State shall also protect, develop and conserve such resources. The protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion. Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources. The State shall be guided by the principles that land has a social function and land ownership has a social responsibility. Owners of agricultural lands have the obligation to cultivate directly or through labor administration the lands they own and thereby make the land productive. The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to promote industrialization, employment and privatization of public sector enterprises. Financial instruments used as payment for lands shall contain features that shall enhance negotiability and acceptability in the marketplace. The State may lease undeveloped lands of the public domain to qualified entities for the development of capital-intensive farms, and

Food Availability Laws 137 traditional and pioneering crops especially those for exports subject to the prior rights of the beneficiaries under this Act. Section 3. Definitions. For the purpose of this Act, unless the context indicates otherwise: 1. Agrarian Reform means redistribution of lands, regardless of crops or fruits produced, to farmers and regular farmworkers who are landless, irrespective of tenurial arrangement, to include the totality of factors and support services designed to lift the economic status of the beneficiaries and all other arrangements alternative to the physical redistribution of lands, such as production or profitsharing, labor administration, and the distribution of shares of stocks, which will allow beneficiaries to receive a just share of the fruits of the lands they work. 2. Agriculture, Agricultural Enterprise or Agricultural Activity means the cultivation of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities and practices performed by a farmer in conjunction with such farming operations done by person whether natural or juridical.

138 COMPENDIUM OF RTF LAWS 3. Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land. 4. Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning farmworkers associations or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of such tenurial arrangements. It includes any controversy relating to compensation of lands acquired under this Act and other terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and lessee. 5. Idle or Abandoned Land refers to any agricultural land not cultivated, tilled or developed to produce any crop nor devoted to any specific economic

Food Availability Laws 139 purpose continuously for a period of three (3) years immediately prior to the receipt of notice of acquisition by the government as provided under this Act, but does not include land that has become permanently or regularly devoted to non-agricultural purposes. It does not include land which has become unproductive by reason of force majeure or any other fortuitous event, provided that prior to such event, such land was previously used for agricultural or other economic purpose. 6. Farmer refers to a natural person whose primary livelihood is cultivation of land or the production of agricultural crops, either by himself, or primarily with the assistance of his immediate farm household, whether the land is owned by him, or by another person under a leasehold or share tenancy agreement or arrangement with the owner thereof. 7. Farmworker is a natural person who renders service for value as an employee or laborer in an agricultural enterprise or farm regardless of whether his compensation is paid on a daily, weekly, monthly or pakyaw basis. The term includes an individual whose work

140 COMPENDIUM OF RTF LAWS has ceased as a consequence of, or in connection with, a pending agrarian dispute and who has not obtained a substantially equivalent and regular farm employment. 8. Regular Farmworker is a natural person who is employed on a permanent basis by an agricultural enterprise or farm. 9. Seasonal Farmworker is a natural person who is employed on a recurrent, periodic or intermittent basis by an agricultural enterprise or farm, whether as a permanent or a non-permanent laborer, such as dumaan, sacada, and the like. 10. Other Farmworker is a farmworker who does not fall under paragraphs (g), (h) and (i). 11. Co o p eratives sha ll re f er to organizations composed primarily of small agricultural producers, farmers, farmworkers, or other agrarian reform beneficiaries who voluntarily organize themselves for the purpose of pooling land, human, technological, financial or other economic resources, and operated on the principle of one member, one vote. A juridical person may be a member of a cooperative, with the same rights and duties as a natural person.

Food Availability Laws 141 CHAPTER II Coverage Section 4. Scope. The Comprehensive Agrarian Reform Law of 1989 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands, as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture. More specifically the following lands are covered by the Comprehensive Agrarian Reform Program: 1. All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain. 2. All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph; 3. All other lands owned by the Government devoted to or suitable for agriculture; and 4. All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon.

142 COMPENDIUM OF RTF LAWS Section 5. Schedule of Implementation. The distribution of all lands covered by this Act shall be implemented immediately and completed within ten (10) years from the effectivity thereof. Section 6. Retention Limits. Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-size farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm: provided, that landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the areas originally retained by them thereunder: provided, further, that original homestead grantees or their direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead.

Food Availability Laws 143 The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner: provided, however, that in case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or comparable features. In case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act. In case the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise this option within a period of one (1) year from the time the landowner manifests his choice of the area for retention. In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be respected. Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of private lands executed by the original landowner in violation of the Act shall be null and void: provided, however, that those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of

144 COMPENDIUM OF RTF LAWS this Act. Thereafter, all Registers of Deeds shall inform the Department of Agrarian Reform (DAR) within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares. Section 7. Priorities. The Department of Agrarian Reform (DAR) in coordination with the Presidential Agrarian Reform Council (PARC) shall plan and program the acquisition and distribution of all agricultural lands through a period of ten (10) years from the effectivity of this Act. Lands shall be acquired and distributed as follows: PhaseOne:RiceandcornlandsunderPresidential Decree No. 27; all idle or abandoned lands; all private lands voluntarily offered by the owners for agrarian reform; all lands foreclosed by the government financial institutions; all lands acquired by the Presidential Commission on Good Government (PCGG); and all other lands owned by the government devoted to or suitable for agriculture, which shall be acquired and distributed immediately upon the effectivity of this Act, with the implementation to be completed within a period of not more than four (4) years; Phase Two: All alienable and disposable public agricultural lands; all arable public agricultural lands under agro-forest, pasture and agricultural leases already cultivated and planted to crops in accordance with Section

Food Availability Laws 145 6, Article XIII of the Constitution; all public agricultural lands which are to be opened for new development and resettlement; and all private agricultural lands in excess of fifty (50) hectares, insofar as the excess hectarage is concerned, to implement principally the rights of farmers and regular farmworkers, who are the landless, to own directly or collectively the lands they till, which shall be distributed immediately upon the effectivity of this Act, with the implementation to be completed within a period of not more than four (4) years. Phase Three: All other private agricultural lands commencing with large landholdings and proceeding to medium and small landholdings under the following schedule: 1. Landholdings above twenty-four (24) hectares up to fifty (50) hectares, to begin on the fourth (4th) year from the effectivity of this Act and to be completed within three (3) years; and 2. Landholdings from the retention limit up to twenty-four (24) hectares, to begin on the sixth (6th) year from the effectivity of this Act and to be completed within four (4) years; to implement principally the right of farmers and regular farmworkers who are landless, to own directly or collectively the lands they till.

146 COMPENDIUM OF RTF LAWS The schedule of acquisition and redistribution of all agricultural lands covered by this program shall be made in accordance with the above order of priority, which shall be provided in the implementing rules to be prepared by the Presidential Agrarian Reform Council (PARC), taking into consideration the following; the need to distribute land to the tillers at the earliest practicable time; the need to enhance agricultural productivity; and the availability of funds and resources to implement and support the program. In an y case, th e PAR C, upon recommendation by the Provincial Agrarian Reform Coordinating Committee (PARCCOM), may declare certain provinces or region as priority land reform areas, in which the acquisition and distribution of private agricultural lands therein may be implemented ahead of the above schedules. In effecting the transfer within these guidelines, priority must be given to lands that are tenanted. The PARC shall establish guidelines to implement the above priorities and distribution scheme, including the determination of who are qualified beneficiaries: provided, that an owner-tiller may be a beneficiary of the land he does not own but is actually cultivating to the extent of the difference between the area of the land

Food Availability Laws 147 he owns and the award ceiling of three (3) hectares. Section 8. Multinational Corporations. All lands of the public domain leased, held or possessed by multinational corporations or associations, and other lands owned by the government or by government-owned or controlled corporations, associations, institutions, or entities, devoted to existing and operational agri-business or agro-industrial enterprises, operated by multinational corporations and associations, shall be programmed for acquisition and distribution immediately upon the effectivity of this Act, with the implementation to be completed within three (3) years. Lands covered by the paragraph immediately preceding, under lease, management, grower or service contracts, and the like, shall be disposed of as follows: 1. Lease, management, grower or service contracts covering such lands covering an aggregate area in excess of 1,000 hectares, leased or held by foreign individuals in excess of 500 hectares are deemed amended to conform with the limits set forth in Section 3 of Article XII of the Constitution. 2. Contracts covering areas not in excess of 1,000 hectares in the case of such corporations and associations, and 500 hectares, in the case of such individuals,

148 COMPENDIUM OF RTF LAWS shall be allowed to continue under their original terms and conditions but not beyond August 29, 1992, or their valid termination, whichever comes sooner, after which, such agreements shall continue only when confirmed by the appropriate government agency. Such contracts shall likewise continue even after the land has been transferred to beneficiaries or awardees thereof, which transfer shall be immediately commenced and implemented and completed within the period of three (3) years mentioned in the first paragraph hereof. 3. In no case will such leases and other agreements now being implemented extend beyond August 29, 1992, when all lands subject hereof shall have been distributed completely to qualified beneficiaries or awardees. Such agreements can continue thereafter only under a new contract between the government or qualified beneficiaries or awardees, on the one hand, and said enterprises, on the other. Lands leased, held or possessed by multinational corporations, owned by private individuals and private non-governmental corporations, associations, institutions and entities, citizens of the Philippines, shall be subject to immediate compulsory acquisition

Food Availability Laws 149 and distribution upon the expiration of the applicable lease, management, grower or service contract in effect as of August 29, 1987, or otherwise, upon its valid termination, whichever comes sooner, but not later than after ten (10) years following the effectivity of the Act. However during the said period of effectivity, the government shall take steps to acquire these lands for immediate distribution thereafter. In general, lands shall be distributed directly to the individual worker-beneficiaries. In case it is not economically feasible and sound to divide the land, then they shall form a workers cooperative or association which will deal with the corporation or business association or any other proper party for the purpose of entering into a lease or growers agreement and for all other legitimate purposes. Until a new agreement is entered into by and between the workers cooperative or association and the corporation or business association or any other proper party, any agreement existing at the time this Act takes effect between the former and the previous landowner shall be respected by both the workers cooperative or association and the corporation, business, association or such other proper party. In no case shall the implementation or application of this Act justify or result in the reduction of

150 COMPENDIUM OF RTF LAWS status or diminution of any benefits received or enjoyed by the worker-beneficiaries, or in which they may have a vested right, at the time this Act becomes effective. The provisions of Section 32 of this Act, with regard to production and incomesharing shall apply to farms operated by multinational corporations. During the transition period, the new owners shall be assisted in their efforts to learn modern technology in production. Enterprises which show a willingness and commitment and goodfaith efforts to impart voluntarily such advanced technology will be given preferential treatment where feasible. In no case shall a foreign corporation, association, entity or individual enjoy any rights or privileges better than those enjoyed by a domestic corporation, association, entity or individual. Section 9. Ancestral Lands. For purposes of this Act, ancestral lands of each indigenous cultural community shall include, but not be limited to, lands in the actual, continuous and open possession and occupation of the community and its members: provided, that the Torrens Systems shall be respected. The right of these communities to their ancestral lands shall be protected to ensuretheir economic, social and cultural well-being. In line with the principles of self-

Food Availability Laws 151 determination and autonomy, the systems of land ownership, land use, and the modes of settling land disputes of all these communities must be recognized and respected. Any provision of law to the contrary notwithstanding, the PARC may suspend the implementation of this Act with respect to ancestral lands for the purpose of identifying and delineating such lands: provided, that in the autonomous regions, the respective legislatures may enact their own laws on ancestral domain subject to the provisions of the Constitution and the principles enunciated in this Act and other national laws. Section 10. Exemptions and Exclusions. Lands actually, directly and exclusively used and found to be necessary for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds, and mangroves, national defense, school sites and campuses including experimental farm stations operated by public or private schools for educational purposes, seeds and seedlings research and pilot production centers, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent

152 COMPENDIUM OF RTF LAWS (18%) slope and over, except those already developed shall be exempt from the coverage of the Act. Section 11. Commercial Farming. Commercial farms, which are private agricultural lands devoted to commercial livestock, poultry and swine raising, and aquaculture including saltbeds, fishponds and prawn ponds, fruit farms, orchards, vegetable and cut-flower farms, and cacao, coffee and rubber plantations, shall be subject to immediate compulsory acquisition and distribution after (10) years from the effectivity of the Act. In the case of new farms, the ten-year period shall begin from the first year of commercial production and operation, as determined by the DAR. During the ten-year period, the government shall initiate the steps necessary to acquire these lands, upon payment of just compensation for the land and the improvements thereon, preferably in favor of organized cooperatives or associations, which shall hereafter manage the said lands for the worker-beneficiaries. If the DAR determines that the purposes for which this deferment is granted no longer exist, such areas shall automatically be subject to redistribution. The provisions of Section 32 of the Act, with regard to production-and income-sharing, shall apply to commercial farms.

Food Availability Laws 153 CHAPTER III Improvement of Tenurial and Labor Relations Section 12. Determination of Lease Rentals. In order to protect and improve the tenurial and economic status of the farmers in tenanted lands under the retention limit and lands not yet acquired under this Act, the DAR is mandated to determine and fix immediately the lease rentals thereof in accordance with Section 34 of Republic Act No. 3844, as amended: provided, that the DAR shall immediately and periodically review and adjust the rental structure for different crops, including rice and corn, or different regions in order to improve progressively the conditions of the farmer, tenant or lessee. Section 13. Production-Sharing Plan. Any enterprise adopting the scheme provided for in Section 32 or operating under a production venture, lease, management contract or other similar arrangement and any farm covered by Sections 8 and 11 hereof is hereby mandated to execute within ninety (90) days from the effectivity of this Act, a production-sharing plan, under guidelines prescribed by the appropriate government agency. Nothing herein shall be construed to sanction the diminution of any benefits such as salaries, bonuses, leaves and

154 COMPENDIUM OF RTF LAWS working conditions granted to the conditions granted to the employeebeneficiaries under existing laws, agreements, and voluntary practice by the enterprise, nor shall the enterprise and its employee-beneficiaries be prevented from entering into any agreement with terms more favorable to the latter. CHAPTER IV Registration Section 14. Registration of Landowners. Within one hundred eighty (180) days from the effectivity of this Act, all persons, natural or juridical, including government entities, that own or claim to own agricultural lands, whether in their names or in the name of others, except those who have already registered pursuant to Executive Order No. 229, who shall be entitled to such incentives as may be provided for the PARC, shall file a sworn statement in the proper assessors office in the form to be prescribed by the DAR, stating the following information: 1. the description and area of the property; 2. the average gross income from the property for at least three (3) years; 3. the names of all tenants and farmworkers therein;

Food Availability Laws 155 4. the crops planted in the property and the area covered by each crop as of June 1, 1987; 5. the terms of mortgages, lease, and management contracts subsisting as of June 1, 1987, and 6. the latest declared market value of the land as d etermin e d by t he c it y or provincial assessor. Section 15. Registration of Beneficiaries. The DAR in coordination with the Barangay Agrarian Reform Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants and farmworkers who are qualified to be beneficiaries of the CARP. These potential beneficiaries with the assistance of the BARC and the DAR shall provide the following data: 1. names and members of their immediate farm household; 2. owners or administrators of the lands they work on and the length of tenurial relationship; 3. location and area of the land they work; 4. crops planted; and 5. their share in the harvest or amount of rental paid or wages received. A copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the barangay hall, school or other public buildings in the barangay where it shall be open to inspection by the public at all reasonable hours.

156 COMPENDIUM OF RTF LAWS CHAPTER V Land Acquisition Section 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of private lands, the following procedures shall be followed: 1. After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to acquire the land to the owners thereof, by personal delivery or registered mail, and post the same in a conspicuous place in the municipal building and barangay hall of the place where the property is located. Said notice shall contain the offer of the DAR to pay a corresponding value in accordance with the valuation set forth in Sections 17, 18, and other pertinent provisions hereof. 2. Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail, the landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of the offer. 3. If the landowner accepts the offer of the DAR, the Land Bank of the Philippines (LBP) shall pay the landowner the purchase price of the land within thirty (30) days after he executes and delivers a deed of transfer in favor of the government and surrenders the Certificate of Title and other muniments of title.

Food Availability Laws 157 4. In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to determine the compensation for the land requiring the landowner, the LBP and other interested parties to submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of the notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for decision. 5. Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries. 6. Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation.

158 COMPENDIUM OF RTF LAWS CHAPTER VI Compensation Section 17. Determination of Just Compensation. In determining just compensation, the cost of acquisition of the land, the current value of the like properties, its nature, actual use and income, the sworn valuation by the owner, the tax declarations, and the assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and the farmworkers and by the Government to the property as well as the non-payment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation. Section 18. Valuation and Mode of Compensation. The LBP shall compensate the landowner in such amounts as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just compensation for the land. The compensation shall be paid on one of the following modes, at the option of the landowner:

Food Availability Laws 159 1. Cash payment, under the following terms and conditions;
(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned. (b) For lands above twenty-four (24) hectares and up to fifty (50) hectares. (c) For lands twentyfour (24) hectares and below. Twenty-five percent (25%) cash, the balance to be paid in government financial instruments negotiable at any time. Thirty percent (30%) cash, the balance to be paid in government financial instruments negotiable at any time. Thirty-five percent (35%) cash, the balance to be paid in government financial instruments negotiable at any time.

2. Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other qualified investments in accordance with guidelines set by the PARC; 3. Tax credits which can be used against any tax liability; 4. LBP bonds, which shall have the following features: a. Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of the bonds shall mature every year from the date of issuance until the tenth (10th) year: provided, that

160 COMPENDIUM OF RTF LAWS should the landowner choose to forego the cash portion, whether in full or in part, he shall be paid correspondingly in LBP bonds; b. Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors in interest or his assigns, up to the amount of their face value, for any of the following: i. Acquisition of land or other real properties of the government, including assets under the Asset Privatization Program and other assets foreclosed by government financial institutions in the same province or region where the lands for which the bonds were paid are situated; ii. Acquisition of shares of stock of government-owned or -controlled corporations or shares of stocks owned by the government in private corporations; iii. Substitution for surety or bail bonds for the provisional release of accused persons, or performance bonds; iv. Security for loans with any government financial institution,

Food Availability Laws 161 provided the proceeds of the loans shall be invested in an economic enterprise, preferably in a small-and medium-scale industry, in the same province or region as the land for which the bonds are paid; v. Payment for various taxes and fees to government; provided, that the use of these bonds for these purposes will be limited to a certain percentage of the outstanding balance of the financial instruments: provided, further, that the PARC shall determine the percentage mentioned above; vi. Payment for tuition fees of the immediate family of the original bondholder in government universities, colleges, trade schools, and other institutions; vii. Payment for fees of the immediate family of the original bondholder in government hospitals; and viii. Such other uses as the PARC may from time to time allow. In case of ex t ra ordina ry inflation, the PARC shall take appropriate measures to protect the economy.

162 COMPENDIUM OF RTF LAWS Section 19. Incentives for Voluntary Offers for Sales. Landowners, other than banks and other financial institutions, ho voluntarily offer their lands for sale shall be entitled to an additional five percent (5%) cash payment. Section 20. Voluntary Land Transfer. Landowners of agricultural lands subject to acquisition under this Act may enter into a voluntary arrangement for direct transfer of their lands to qualified beneficiaries subject to the following guidelines: 1. All notices for voluntary land transfer must be submitted to the DAR within the first year of the implementation of the CARP. Negotiations between the landowners and qualified beneficiaries covering any voluntary land transfer which remain unresolved after one (1) year shall not be recognized and such land shall instead be acquired by the government and transferred pursuant to this Act. 2. The terms and conditions of such transfer shall not be less favorable to the transferee than those of the governments standing offer to purchase from the landowner and to resell to the beneficiaries, if such offers have been made and are fully known to both parties. 3. The voluntary agreement shall include sanctions for non-compliance by either

Food Availability Laws 163 party and shall be duly recorded and its implementation monitored by the DAR. Section 21. Payment of Compensation by Beneficiaries Under Voluntary Land Transfer. Direct payments in cash or in kind may be by the farmer-beneficiary to the landowner under terms to be mutually agreed upon by both parties, which shall be binding upon them, upon registration with the approval by the DAR. Said approval shall be considered given, unless notice of disapproval is received by the farmer-beneficiary within thirty (30) days from the date of registration. In the event they cannot agree on the price of land, the procedure for compulsory acquisition as provided in Section 16 shall apply. The LBP shall extend financing to the beneficiaries for purposes of acquiring the land. CHAPTER VII Land Redistribution Section 22. Qualified Beneficiaries. The lands covered by the CARP shall be distributed as much as possible to landless residents of the same barangay, or in the absence thereof, landless residents of the same municipality in the following order of priority: 1. agricultural lessees and share tenants; 2. regular farmworkers; 3. seasonal farmworkers;

164 COMPENDIUM OF RTF LAWS 4. other farmworkers; 5. actual tillers or occupants of public lands; 6. collectives or cooperatives of the above beneficiaries; and 7. others directly working on the land. Provided, however, that the children of landowners who are qualified under Section 6 of this Act shall be given preference in the distribution of the land of their parents: and provided, further, that actual tenant-tillers in the landholdings shall not be ejected or removed therefrom. Beneficiaries under Presidential Decree No. 27 who have culpably sold, disposed of, or abandoned their land are disqualified to become beneficiaries under this Program. A basic qualification of a beneficiary shall be his willingness, aptitude, and ability to cultivate and make the land as productive as possible. The DAR shall adopt a system of monitoring the record or performance of each beneficiary, so that any beneficiary guilty of negligence or misuse of the land or any support extended to him shall forfeit his right to continue as such beneficiary. The DAR shall submit periodic reports on the performance of the beneficiaries to the PARC. If, due to the landowners retention rights or to the number of tenants, lessees, or workers on the land, there is not enough land

Food Availability Laws 165 to accommodate any or some of them, they may be granted ownership of other lands available for distribution under this Act, at the option of the beneficiaries. Farmers already in place and those not accommodated in the distribution of privately-owned lands will be given preferential rights in the distribution of lands from the public domain. Section 23. Distribution Limit. No qualified beneficiary may own more than three (3) hectares of agricultural land. Section 24. Award to Beneficiaries. The rights and responsibilities of the beneficiary shall commence from the time the DAR makes an award of the land to him, which award shall be completed within one hundred eighty (180) days from the time the DAR takes actual possession of the land. Ownership of the beneficiary shall be evidenced by a Certificate of Land Ownership Award, which shall contain the restrictions and conditions provided for in this Act, and shall be recorded in the Register of Deeds concerned and annotated on the Certificate of Title. Section 25. Award Ceilings for Beneficiaries. Beneficiaries shall be awarded an area not exceeding three (3) hectares which may cover a contiguous tract of land or several parcels of land cumulated up to the prescribed award limits.

166 COMPENDIUM OF RTF LAWS For purposes of this Act, a landless beneficiary is one who owns less than three (3) hectares of agricultural land. The beneficiaries may opt for collective ownership, such as co-ownership or farmers cooperative or some other form of collective organization: provided, that the total area that may be awarded shall not exceed the total number of coowners or member of the cooperative or collective organization multiplied by the award limit above prescribed, except in meritorious cases as determined by the PARC. Title to the property shall be issued in the name of the co-owners or the cooperative or collective organization as the case may be. Section 26. Payment by Beneficiaries. Lands awarded pursuant to this Act shall be paid for by the beneficiaries to the LBP in thirty (30) annual amortizations at six percent (6%) interest per annum. The payments for the first three (3) years after the award may be at reduced amounts as established by the PARC: provided, that the first five (5) annual payments may not be more than five percent (5%) of the value of the annual gross production as established by the DAR. Should the scheduled annual payments after the fifth year exceed ten percent (10%) of the annual gross production and the

Food Availability Laws 167 failure to produce accordingly is not due to the beneficiarys fault, the LBP may reduce the interest rate or reduce the principal obligations to make the repayment affordable. The LBP shall have a lien by way of mortgage on the land awarded to the beneficiary; and this mortgage may be foreclosed by the LBP for non-payment of an aggregate of three (3) annual amortizations. The LBP shall advise the DAR of such proceedings and the latter shall subsequently award the forfeited landholdings to other qualified beneficiaries. A beneficiary whose land, as provided herein, has been foreclosed shall thereafter be permanently disqualified from becoming a beneficiary under this Act. Section 27. Transferability of Awarded Lands. Lands acquired by beneficiaries under this Act may not be sold, transferred or conveyed except through hereditary succession, or to the government, or the LBP, or to other qualified beneficiaries for a period of ten (10) years: provided, however, that the children or the spouse of the transferor shall have a right to repurchase the land from the government or LBP within a period of two (2) years. Due notice of the availability of the land shall be given by the LBP to the Barangay

168 COMPENDIUM OF RTF LAWS Agrarian Reform Committee (BARC) of the barangay where the land is situated. The Provincial Agrarian Reform Coordinating Committee (PARCCOM) as herein provided, shall, in turn, be given due notice thereof by the BARC. If the land has not yet been fully paid by the beneficiary, the rights to the land may be transferred or conveyed, with prior approval of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or conveyance, shall cultivate the land himself. Failing compliance herewith, the land shall be transferred to the LBP which shall give due notice of the availability of the land in the manner specified in the immediately preceding paragraph. In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for the amounts the latter has already paid, together with the value of improvements he has made on the land. Section 28. Standing Crops at the Time of Acquisition. The landowner shall retain his share of any standing crops unharvested at the time the DAR shall take possession of the land under Section 16 of the Act, and shall be given a reasonable time to harvest the same.

Food Availability Laws 169 CHAPTER VIII Corporate Farms Section 29. Farms Owned or Operated by Corporations or Other Business Associations. In the case of farms owned or operated by corporations or other business associations, the following rules shall be observed by the PARC: In general, lands shall be distributed directly to the individual worker-beneficiaries. In case it is not economically feasible and sound to divide the land, then it shall be owned collectively by the workers cooperative or association which will deal with the corporation or business association. Until a new agreement is entered into by and between the workers cooperative or association and the corporation or business association, any agreement existing at the time this Act takes effect between the former and the previous landowner shall be respected by both the workers cooperative or association and the corporation or business association. Section 30. Homelots and Farmlots for Members of Cooperatives. The individual members of the cooperatives or corporations mentioned in the preceding section shall be provided with homelots and small farmlots for their family use, to be taken from the land owned by the cooperative or corporation.

170 COMPENDIUM OF RTF LAWS Section 31. Corporate Landowners. Corporate landowners may voluntarily transfer ownership over their agricultural landholdings to the Republic of the Philippines pursuant to Section 20 hereof or to qualified beneficiaries, under such terms and conditions, consistent with this Act, as they may agree upon, subject to confirmation by the DAR. Upon certification by the DAR, corporations owning agricultural lands may give their qualified beneficiaries the right to purchase such proportion of the capital stock of the corporation that the agricultural land, actually devoted to agricultural activities, bears in relation to the companys total assets, under such terms and conditions as may be agreed upon by them. In no case shall the compensation received by the workers at the time the shares of stocks are distributed be reduced. The same principle shall be applied to associations, with respect to their equity or participation. Corporations or associations which voluntarily divest a proportion of their capital stock, equity or participation in favor of their workers or other qualified beneficiaries under this section shall be deemed to have complied with the provisions of the Act: provided, that the following conditions are complied with: 1. In order to safeguard the right of beneficiaries who own shares of stocks to dividends and other financial benefits, the

Food Availability Laws 171 books of the corporation or association shall be subject to periodic audit by certified public accountants chosen by the beneficiaries; 2. Irrespective of the value of their equity in the corporation or association, the beneficiaries shall be assured of at least one (1) representative in the board of directors, or in a management or executive committee, if one exists, of the corporation or association; and 3. Any shares acquired by such workers and beneficiaries shall have the same rights and features as all other shares. 4. Any transfer of shares of stocks by the original beneficiaries shall be void ab initio unless said transaction is in favor of a qualified and registered beneficiary within the same corporation. If within two (2) years from the approval of this Act, the land or stock transfer envisioned above is not made or realized or the plan for such stock distribution approved by the PARC within the same period, the agricultural land of the corporate owners or corporation shall be subject to the compulsory coverage of this Act. Section 32. Production-Sharing. Pending final land transfer, individuals or entities owning, or operating under lease or management contract, agricultural lands are hereby mandated to execute a production-sharing plan with their

172 COMPENDIUM OF RTF LAWS farm workers or farmworkers reorganization, if any, whereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days of the end of the fiscal year as compensation to regular and other farmworkers in such lands over and above the compensation they currently receive: provided, that these individuals or entities realize gross sales in excess of five million pesos per annum unless the DAR, upon proper application, determines a lower ceiling. In the event that the individual or entity realizes a profit, an additional ten percent (10%) of the net profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days of the end of the fiscal year. T o forestall any disruption in the normal operation of lands to be turned over to the farmworkerbeneficiaries mentioned above, a transitory period, the length of which shall be determined by the DAR, shall be established. During this transitory period, at least one percent (1%) of the gross sales of the entity shall be distributed to the managerial, supervisory and technical group in placeat the time of the effectivity of this Act, as compensation for such transitory managerial and technical functions as it will perform, pursuant to an agreement that the farmworker-

Food Availability Laws 173 beneficiaries and the managerial, supervisory and technical group may conclude, subject to the approval of the DAR. Section 33. Payment of Shares of Cooperative or Association. Shares of a cooperative or association acquired by farmers-beneficiaries or workers-beneficiaries shall be fully paid for in an amount corresponding to the valuation as determined in the immediately succeeding section. The landowner and the LBP shall assist the farmers-beneficiaries and workers-beneficiaries in the payment for said shares by providing credit financing. Section 34. Valuation of Lands. A valuation scheme for the land shall be formulated by the PARC, taking into account the factors enumerated in Section 17, in addition to the need to stimulate the growth of cooperatives and the objective of fostering responsible participation of the workers-beneficiaries in the creation of wealth. In the determination of price that is just not only to the individuals but to society as well, the PARC shall consult closely with the landowner and the workers-beneficiaries. In case of disagreement, the price as determined by the PARC, if accepted by the workers-beneficiaries, shall be followed, without prejudice to the landowners right to petition the Special Agrarian Court to resolve the issue of valuation.

174 COMPENDIUM OF RTF LAWS CHAPTER IX Support Services Section 35. Creation of Support Services Office. There is hereby created the Office of Support Services under the DAR to be headed by an Undersecretary. The Office shall provide general support and coordinative services in the implementation of the program particularly in carrying out the provisions of the following services to farmer-beneficiaries and affected landowners: 1. Irrigation facilities, especially second crop or dry season irrigation facilities; 2. Infrastructure development and public works projects in areas and settlements that come under agrarian reform, and for this purpose, the preparation of the physical development plan of such settlements providing suitable barangay sites, potable water and power resources, irrigation systems and other facilities for a sound agricultural development plan; 3. Government subsidies for the use of irrigation facilities; 4. Price support and guarantee for all agricultural produce; 5. Extending to small landowners, farmers organizations the necessary credit, like

Food Availability Laws 175 concessional and collateral-free loans, for agro-industrialization based on social collaterals like the guarantees of farmers organization: 6. Promoting, developing and extending financial assistance to small-and medium-scale industries in agrarian reform areas; 7. Assigning sufficient numbers of agricultural extension workers to farmers organizations; 8. Undertake research, development and dissemination of information on agrarian reform and low-cost and ecologically sound farm inputs and technologies to minimize reliance on expensive and imported agricultural inputs; 9. Development of cooperative management skills through intensive training; 10. Assistance in the identification of ready markets for agricultural produce and training in other various prospects of marketing; and 11. Administration operation management and funding of support services, programs and projects including pilot projects and models related to agrarian reform as developed by the DAR. Section 36. Funding for Support Services. In order to cover the expenses and cost of support services, at least twenty-five percent (25%)

176 COMPENDIUM OF RTF LAWS of all appropriations for agrarian reform shall be immediately set aside and made available for this purpose. In addition, the DAR shall be authorized to package proposals and receive grants, aid and other forms of financial assistance from any source. Section 37. Support Services to the Beneficiaries. The PARC shall ensure that support services to farmers-beneficiaries are provided, such as: 1. Land surveys and titling; 2. Liberalized terms on credit facilities and production loans; 3. Extension services by way of planting, cropping, production and postharvest technology transfer, as well as marketing and management assistance and support to cooperatives and farmers organizations; 4. Infrastructure such as access trails, mini-dams, public utilities, marketing and storage facilities; and 5. Research, p ro d uc t ion a nd use o f organic fertilizers and other local substances necessary in farming and cultivation. The PARC shall formulate policies to ensure that support services to farmerbeneficiaries shall be provided at all stages of land reform.

Food Availability Laws 177 The Bagong Kilusang Kabuhayan sa Kaunlaran (BKKK) Secretariat shall be transferred and attached to the LBP, for its supervision including all its applicable and existing funds, personnel, properties, equipment and records. Misuse or diversion of the financial and support services herein provided shall result in sanctions against the beneficiary guilty thereof, including the forfeiture of the land transferred to him or lesser sanctions as may be provided by the PARC, without prejudice to criminal prosecution. Section 38. Support Services to Landowners. The PARC with the assistance of such other government agencies and instrumentalities as it may direct, shall provide landowners affected by the CARP and prior agrarian reform programs with the following services: 1. Investment information financial and counseling assistance; 2. Facilities, programs and schemes for the conversion or exchange of bonds issued for payment of the lands acquired with stocks and bonds issued by the National Government, the Central Bank and other government institutions and instrumentalities; 3. Marketing of LBP bonds, as well as promoting the marketability of said

178 COMPENDIUM OF RTF LAWS bonds in traditional and non-traditional financial markets and stock exchanges; and 4. Other services designed to utilize productively the proceeds of the sale of such lands for rural industrialization. A landowner who invests in ruralbased industries shall be entitled to the incentives granted to a registered enterprise engaged in a pioneer or preferred area of investment as provided for in the Omnibus Investment Code of 1987, or to such other incentives as the PARC, the LBP, or other government financial institutions may provide. The LBP shall redeem a landowners LBP bonds at face value, provided that the proceeds thereof shall be invested in a BOIregistered company or in any agri-business or agro-industrial enterprise in the region where the landowner has previously made investments, to the extent of thirty percent (30%) of the face value of said LBP bonds, subject to guidelines that shall be issued by the LBP. Section 39. Land Consolidation. The DAR shall carry out land consolidation projects to promote equal distribution of landholdings, to provide the needed infrastructures in agriculture, and to conserve soil fertility and prevent erosion.

Food Availability Laws 179 CHAPTER X Special Areas of Concern Section 40. Special Areas of Concern. As an integral part of the Comprehensive Agrarian Reform Program, the following principles in these special areas of concern shall be observed: 1. Subsistence Fishing. Small fisherfolk, including seaweed farmers, shall be assured of greater access to the utilization of water resources. 2. Logging and Mining Concessions. Subject to the requirement of a balanced ecology and conservation of water resources, suitable areas, as determined by the Department of Environment and Natural Resources (DENR), in logging, mining and pasture areas, shall be opened up for agrarian settlements whose beneficiaries shall be required to undertake reforestation and conservation production methods. Subject to existing laws, rules and regulations, settlers and members of tribal communities shall be allowed to enjoy and exploit the products of the forest other than timber within the logging concessions. 3. Sparsely Occupied Public Agricultural Lands. Sparsely occupied agricultural lands of the public domain shall be surveyed, proclaimed and developed as farm settlements for qualified landless people

180 COMPENDIUM OF RTF LAWS based on an organized program to ensure their orderly and early development. Agricultural land allocations shall be made for ideal family-size farms as determined by the PARC. Pioneers and other settlers shall be treated equally in every respect. Subject to the prior rights of qualified beneficiaries, uncultivated lands of the public domain shall be made available on a lease basis to interested and qualified parties. Parties who will engage in the development of capital-intensive, traditional or pioneering crops shall be given priority. The lease period, which shall not be more than a total of fifty (50) years, shall be proportionate to the amount of investment and production goals of the lessee. A system of evaluation and audit shall be instituted. 4. Id le, A b an d o n ed, Forec lose d and Sequestered Lands. Idle, abandoned, foreclosed and sequestered lands shall be planned for distribution as home lots and family-size farmlots to actual occupants. If land area permits, other landless families shall be accommodated in these lands. 5. Rural Women. All qualified women members of the agricultural labor force must be guaranteed and assured equal

Food Availability Laws 181 right to ownership of the land, equal shares of the farms produce, and representation in advisory or appropriate decisionmaking bodies. 6. Veterans and Retirees. In accordance with Section 7 of Article XVI of the Constitution, landless war veterans and veterans of military campaigns, their surviving spouse and orphans, retirees of the Armed Forces of the Philippines (AFP) and the Integrated National Police (INP), returnees, surrenderees, and similar beneficiaries shall be given due consideration in the disposition of agricultural lands of the public domain. 7. Agriculture Graduates. Graduates of agricultural schools who are landless shall be assisted by the government, through the DAR, in their desire to own and till agricultural lands. CHAPTER XI Program Implementation Section 41. The Presidential Agrarian Reform Council. The Presidential Agrarian Reform Council (PARC) shall be composed of the President of the Philippines as Chairman, the Secretary of Agrarian Reform as Vice-Chairman and the following as members; Secretaries of the Departments

182 COMPENDIUM OF RTF LAWS of Agriculture; Environment and Natural Resources; Budget and Management; Local Government: Public Works and Highways; Trade and Industry; Finance; Labor and Employment; Director-General of the National Economic and Development Authority; President, Land Bank of the Philippines; Administrator, National Irrigation Administration; and three (3) representatives of affected landowners to represent Luzon, Visayas and Mindanao; six (6) representatives of agrarian reform beneficiaries, two (2) each from Luzon, Visayas and Mindanao, provided that one of them shall be from the cultural communities. Section 42. Executive Committee. There shall be an Executive Committee (EXCOM) of the PARC composed of the Secretary of the DAR as Chairman, and such other members as the President may designate, taking into account Article XIII, Section 5 of the Constitution. Unless otherwise directed by PARC, the EXCOM may meet and decide on any and all matters in between meetings of the PARC: provided, however, that its decisions must be reported to the PARC immediately and not later than the next meeting. Section 43. Secretariat. A PARC Secretariat is hereby established to provide general support and coordinative services such as interagency linkages; program and project

Food Availability Laws 183 appraisal and evaluation and general operations monitoring for the PARC.The Secretariat shall be headed by the Secretary of Agrarian Reform who shall be assisted by an Undersecretary and supported by a staff whose composition shall be determined by the PARC Executive Committee and whose compensation shall be chargeable against the Agrarian Reform Fund. All officers and employees of the Secretariat shall be appointed by the Secretary of Agrarian Reform. Section 44. Provincial Agrarian Reform Coordinating Committee (PARCCOM). A Provincial Agrarian Reform Coordinating Co mmittee (PA RCC O M ) is here by created in each province, composed of a Chairman, who shall be appointed by the President upon the recommendation of the EXCOM, the Provincial Agrarian Reform Officer as Executive Officer, and one representative each from the Departments of Agriculture, and of Environment and Natural Resources and from the LBP, one representative each from existing farmers organizations, agricultural cooperatives and non-governmental organizations in the province; two representatives from landowners, at least one of whom shall be a producer representing the principal crop of the province, and two representatives

184 COMPENDIUM OF RTF LAWS from farmer and farmworker-beneficiaries, at least one of whom shall be a farmer or farmworker representing the principal crop of the province, as members: provided, that in areas where there are cultural communities, the latter shall likewise have one representative. The PARCCOM shall coordinate and monitor the implementation of the CARP in the province. It shall provide information on the provisions of the CARP, guidelines issued by the PARC and on the progress of the CARP in the province. Section 45. Province-by-Province Implementation. The PARC shall provide the guidelines for a province-by-province implementation of the CARP. The ten-year program of distribution of public and private lands in each province shall be adjusted from year by the provinces PARCCOM in accordance with the level of operations previously established by the PARC, in every case ensuring that support services are available or have been programmed before actual distribution is effected. Section 46. Barangay Agrarian Reform Committee (BARC). Unless otherwise provided in this Act, the provisions of Executive Order No. 229 regarding the organization of the Barangay Agrarian Reform Committee (BARC) shall be in effect.

Food Availability Laws 185 Section 47. Functions of the BARC. In addition to those provided in Executive Order No. 229, the BARC shall have the following functions: (1) Mediate and conciliate between parties involved in an agrarian dispute including matters related to tenurial and financial arrangements; (2) Assist in the identification of qualified beneficiaries and landowners within the barangay; (3) Attest to the accuracy of the initial parcellary mapping of the beneficiarys tillage; (4) A ssist q u alified bene f ic ia ries in obtaining credit from lending institutions; (5) Assist in the initial determination of the value of the land; (6) Assist the DAR representatives in the preparation of periodic reports on the CARP implementation for submission to the DAR; (7) Coordinate the delivery of support services to beneficiaries; and (8) Perform such other functions as may be assigned by the DAR. The BARC shall endeavor to mediate, conciliate and settle agrarian disputes lodged before it within thirty (30) days from its taking cognizance thereof. If after the lapse

186 COMPENDIUM OF RTF LAWS of the thirty day period, it is unable to settle the dispute, it shall issue a certificate of its proceedings and shall furnish a copy thereof upon the parties within seven (7) days after the expiration of the thirty-day period. Section 48. Legal Assistance. The BARC or any member thereof may, whenever necessary in the exercise of any of its functions hereunder, seek the legal assistance of the DAR and the provincial, city, or municipal government. Section 49. Rules and Regulations. The PARC and the DAR shall have the power to issue rules and regulations, whether substantive or procedural, to carry out the objects and purposes of this Act. Said rules shall take effect ten (10) days after publication in two (2) national newspapers of general circulation CHAPTER XII Administrative Adjudication Section 50. Quasi-Judicial Powers of the DAR. The DAR is hereby vested with the primary jurisdiction to determine and adjudicate agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform except those falling under the exclusive jurisdiction of the Department of Agriculture (DA)

Food Availability Laws 187 and the Department of Environment and Natural Resources (DENR). It shall not be bound by technical rules of procedure and evidence but shall proceed to hear and decide all cases, disputes or controversies in a most expeditious manner,employing all reasonable means to ascertain the facts of every case in accordance with justice and equity and the merits of the case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just, expeditious and inexpensive determination for every action or proceeding before it. It shall have the power to summon witnesses, administer oaths, take testimony, require submission of reports, compel the production of books and documents and answers to interrogatories and issue subpoena, and subpoena duces tecum, and enforce its writs through sheriffs or other duly deputized officers. It shall likewise have the power to punish direct and indirect contempts in the same manner and subject to the same penalties as provided in the Rules of Court. Responsible farmer leaders shall be allowed to represent themselves, their fellow farmers, or their organizations in any proceedings before the DAR: provided, however, that when there are two or more representatives for any individual or group, the

188 COMPENDIUM OF RTF LAWS representatives should choose only one among themselves to represent such party or group before any DAR proceedings. Notwithstanding an appeal to the Court of Appeals, the decision of the DAR shall be immediately executory. Section 51. Finality of Determination. Any case or controversy before it shall be decided within thirty (30) days after it is submitted for resolution. Only one (1) motion for reconsideration shall be allowed. Any order, ruling or decision shall be final after the lapse of fifteen (15) days from receipt of a copy thereof. Section 52. Frivolous Appeals. To discourage frivolous or dilatory appeals from the decisions or orders on the local or provincial levels, the DAR may impose reasonable penalties, including but not limited to fines or censures upon erring parties. Section 53. Certification of the BARC. The DAR shall not take cognizance of any agrarian dispute or controversy unless a certification from the BARC that the dispute has been submitted to it for mediation and conciliation without any success of settlement is presented: provided, however, that if no certification is issued by the BARC within thirty (30) days after a matter or issue is submitted to it for mediation or conciliation the case or dispute may be brought before the PARC.

Food Availability Laws 189 CHAPTER XIII Judicial Review Section 54. Certiorari. Any decision, order, award or ruling of the DAR on any agrarian dispute or on any matter pertaining to the application, implementation, enforcement, or interpretation of this Act and other pertinent laws on agrarian reform may be brought to the Court of Appeals by certiorari except as otherwise provided in this Act within fifteen (15) days from the receipt of a copy thereof. The findings of fact of the DAR shall be final and conclusive if based on substantial evidence. Section 55. No Restraining Order or Preliminary Injunction. No court in the Philippines shall have jurisdiction to issue any restraining order or writ of preliminary injunction against the PARC or any of its duly authorized or designated agencies in any case, dispute or controversy arising from, necessary to, or in connection with the application, implementation, enforcement, or interpretation of this Act and other pertinent laws on agrarian reform. Section 56. Special Agrarian Court. The Supreme Court shall designate at least one (1) branch of the Regional Trial Court (RTC) within each province to act as a Special Agrarian Court.

190 COMPENDIUM OF RTF LAWS The Supreme Court may designate more branches to constitute such additional Special Agrarian Courts as may be necessary to cope with the number of agrarian cases in each province. In the designation, the Supreme Court shall give preference to the Regional Trial Courts which have been assigned to handle agrarian cases or whose presiding judges were former judges of the defunct Court of Agrarian Relations. The Regional Trial Court (RTC) judges assigned to said courts shall exercise said special jurisdiction in addition to the regular jurisdiction of their respective courts. The Special Agrarian Courts shall have the powers and prerogatives inherent in or belonging to the Regional Trial Courts. Section 57. Special Jurisdiction. The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision.

Food Availability Laws 191 Section 58. Appointment of Commissioners. The Special Agrarian Courts, upon their own initiative or at the instance of any of the parties, may appoint one or more commissioners to examine, investigate and ascertain facts relevant to the dispute including the valuation of properties, and to file a written report thereof with the court. Section 59. Orders of the Special Agrarian Courts. No order of the Special Agrarian Courts on any issue, question, matter or incident raised before them shall be elevated to the appellate courts until the hearing shall have been terminated and the case decided on the merits. Section 60. Appeals. An appeal may be taken from the decision of the Special Agrarian Courts by filing a petition for review with the Court of Appeals within fifteen (15) days receipt of notice of the decision; otherwise, the decision shall become final. An appeal from the decision of the Court of Appeals, or from any order, ruling or decision of the DAR, as the case may be, shall be by a petition for review with the Supreme Court within a non-extendible period of fifteen (15) days from receipt of a copy of said decision. Section 61. Procedure on Review. Review by the Court of Appeals or the Supreme Court, as the case may be, shall be governed by

192 COMPENDIUM OF RTF LAWS the Rules of Court. The Court of Appeals, however, may require the parties to file simultaneous memoranda within a period of fifteen (15) days from notice, after which the case is deemed submitted for decision. Section 62. Preferential Attention in Courts. All courts in the Philippines, both trial and appellate, shall give preferential attention to all cases arising from or in connection with the implementation of the provisions of this Act. All cases pending in court arising from or in connection with the implementation of this Act shall continue to be heard, tried and decided into their finality, notwithstanding the expiration of the ten-year period mentioned in Section 5 hereof. CHAPTER XIV Financing Section 63. Funding Source. The initial amount needed to implement this Act for the period of ten (10) years upon approval hereof shall be funded from the Agrarian Reform Fund created under Sections 20 and 21 of Executive Order No. 229. Additional amounts are hereby authorized to be appropriated as and when needed to augment the Agrarian Reform Fund in order to fully

Food Availability Laws 193 implement the provisions of this Act. Sources of funding or appropriations shall include the following: (1) Proceeds of the sales of the Assets Privatization Trust; (2) All receipts from assets recovered and from sales of ill-gotten wealth recovered through the Presidential Commission on Good Government; (3) Proceeds of the disposition of the properties of the Government in foreign countries; (4) Portion of amounts accruing to the Philippines from all sources of official foreign grants and concessional financing from all countries, to be used for the specific purposes of financing production credits, infrastructures, and other support services required by this Act; (5) Other government funds not otherwise appropriated. All funds appropriated to implement the provisions of this Act shall be considered continuing appropriations during the period of its implementation. Section 64. Financial Intermediary for the CARP. The Land Bank of the Philippines shall be the financial intermediary for the CARP, and shall insure that the social justice objectives of the CARP shall enjoy a preference among its priorities.

194 COMPENDIUM OF RTF LAWS CHAPTER XV General Provisions Section 65. Conversion of Lands. After the lapse of five (5) years from its award, when the land ceases to be economically feasible and sound for agricultural purposes, or the locality has become urbanized and the land will have a greater economic value for residential, commercial or industrial purposes, the DAR, upon application of the beneficiary or the landowner, with due notice to the affected parties, and subject to existing laws, may authorize the reclassification or conversion of the land and its disposition: provided, that the beneficiary shall have fully paid his obligation. Section 66. Exemptions from Taxes and Fees of Land Transfers. Transactions under this Act involving a transfer of ownership, whether from natural or juridical persons, shall be exempted from taxes arising from capital gains. These transactions shall also be exempted from the payment of registration fees, and all other taxes and fees for the conveyance or transfer thereof; provided, that all arrearages in real property taxes, without penalty or interest, shall be deductible from the compensation to which the owner may be entitled.

Food Availability Laws 195 Section 67. Free Registration of Patents and Titles. All Registers of Deeds are hereby directed to register, free from payment of all fees and other charges, patents, titles and documents required for the implementation of the CARP. Section 68. Immunity of Government Agencies from Undue Interference. No injunction, restraining order, prohibition or mandamus shall be issued by the lower courts against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the Department of Environment and Natural Resources (DENR), and the Department of Justice (DOJ) in their implementation of the program. Section 69. Assistance of Other Government Entities. The PARC, in the exercise of its functions, is hereby authorized to call upon the assistance and support of other government agencies, bureaus and offices, including governmentowned or -controlled corporations. Section 70. Disposition of Private Agricultural Lands. The sale or disposition of agricultural lands retained by a landowner as a consequence of Section 6 hereof shall be valid as long as the total landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall not exceed the landholding ceilings provided for in this Act.

196 COMPENDIUM OF RTF LAWS Any sale or disposition of agricultural lands after the effectivity of this Act found to be contrary to the provisions hereof shall be null and void. Transferees of agricultural lands shall furnish the appropriate Register of Deeds and the BARC an affidavit attesting that his total landholdings as a result of the said acquisition do not exceed the landholding ceiling. The Register of Deeds shall not register the transfer of any agricultural land without the submission of this sworn statement together with proof of service of a copy thereof to the BARC. Section 71. Bank Mortgages. Banks and other financial institutions allowed by law to hold mortgage rights or security interests in agricultural lands to secure loans and other obligations of borrowers, may acquire title to these mortgaged properties, regardless of area, subject to existing laws on compulsory transfer of foreclosed assets and acquisition as prescribed under Section 13 of this Act. Section 72. Lease, Management, Grower or Service Contracts, Mortgages and Other Claims. Lands covered by this Act under lease, management, grower or service contracts, and the like shall be disposed of as follows: (1) Lease, management, grower or service contracts covering private lands may con-

Food Availability Laws 197 tinue under their original terms and conditions until the expiration of the same even if such land has, in the meantime, been transferred to qualified beneficiaries. (2) Mortgages and other claims registered with the Register of Deeds shall be assumed by the government up to an amount equivalent to the landowners compensation value as provided in this Act. Section 73. Prohibited Acts and Omissions. The following are prohibited: (1) The ownership or possession, for the purpose of circumventing the provisions of this Act, of agricultural lands in excess of the total retention limits or award ceilings by any person, natural or juridical, except those under collective ownership by farmerbeneficiaries. (2) The forcible entry or illegal detainer by persons who are not qualified beneficiaries under this Act to avail themselves of the rights and benefits of the Agrarian Reform Program. (3) The conversion by any landowner of his agricultural land into any nonagricultural use with intent to avoid the application of this Act to his landholdings and to dispossess his

198 COMPENDIUM OF RTF LAWS tenant farmers of the land tilled by them. (4) The willful prevention or obstruction by any person, association or entity of the implementation of the CARP. (5) The sale, transfer, conveyance or change of the nature of lands outside of urban centers and city limits either in whole or in part after the effectivity of this Act. The date of the registration of the deed of conveyance in the Register of Deeds with respect to titled lands and the date of the issuance of the tax declaration to the transferee of the property with respect to unregistered lands, as the case may be, shall be conclusive for the purpose of this Act. (6) The sale, transfer or conveyance by a beneficiary of the right to use or any other usufructuary right over the land he acquired by virtue of being a beneficiary, in order to circumvent the provisions of this Act. Section 74. Penalties. Any person who knowingly or willfully violates the provisions of this Act shall be punished by imprisonment of not less than one (1) month to not more than three (3) years or a fine of not less than one thousand pesos (P1,000.00) and not more than fifteen thousand pesos (P15,000.00),

Food Availability Laws 199 or both, at the discretion of the court. If the offender is a corporation or association, the officer responsible therefore shall be criminally liable. 75. Suppletory Application of Existing Legislation. The provisions of Republic Act No. 3844 as amended, Presidential Decree Nos. 27 and 266 as amended, Executive Order Nos. 228 and 229, both Series of 1987; and other laws not inconsistent with this Act shall have suppletory effect. 76. Repealing Clause. Section 35 of Republic Act No. 3834, Presidential Decree No. 316, the last two paragraphs of Section 12 of Presidential Decree No. 946, Presidential Decree No. 1038, and all other laws, decrees executive orders, rules and regulations, issuances or parts thereof inconsistent with this Act are hereby repealed or amended accordingly. 77. Separability Clause. If, for any reason, any section or provision of this Act is declared null and void, no other section, provision, or part thereof shall be affected and the same shall remain in full force and effect. 78. Effectivity Clause. This Act shall take effect immediately after publication in at least two (2) national newspapers of general circulation.

Section

Section

Section

Section

200 COMPENDIUM OF RTF LAWS Republic of the Philippines Congress of the Philippines Metro Manila Tenth Congress Third Regular Session Begun and held in Metro Manila, on Monday the twenty-eighth day of July, nineteen hundred and ninety-seven. [REPUBLIC ACT NO. 8435] AN ACT PRESCRIBING URGENT RELATED MEASURES TO MODERNIZE THE AGRICULTURE AND FISHERIES SECTORS OF THE COUNTRY IN ORDER TO ENHANCE THEIR PROFITABILITY, AND PREPARE SAID SECTORS FOR THE CHALLENGES OF GLOBALIZATION THROUGH AN ADEQUATE, FOCUSED AND RATIONAL DELIVERY OF NECESSARY SUPPORT SERVICES, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled. Section 1. Short Title. This Act shall be known as the Agriculture and Fisheries Modernization Act of 1997.

Food Availability Laws 201 Section 2. Declaration of Policy. The goals of the national economy are a more equitable distribution of opportunities, income and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged. The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. In pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their ownership. Thus, it is hereby declared the policy of the State to enable those who belong to the agriculture and fisheries sectors to participate and share in the fruits of development and growth in a manner that utilizes the nations resources in the most efficient and sustainable way possible by establishing a more equitable access to assets, income, basic and support services and infrastructure.

202 COMPENDIUM OF RTF LAWS The State shall promote food security, including sufficiency in our staple food, namely rice and white corn. The production of rice and white corn shall be optimized to meet our local consumption and shall be given adequate support by the State. The State shall adopt the market approach in assisting the agriculture and fisheries sectors while recognizing the contribution of said sectors to food security, environmental protection, and balanced urban and rural development, without neglecting the welfare of the consumers, especially the lower income groups. The State shall promote market-oriented policies in agricultural production to encourage farmers to shift to more profitable crops. The State shall empower the agriculture and fisheries sectors to develop and sustain themselves. Toward this end, the State shall ensure the development of the agriculture and fisheries sectors in accordance with the following principles: 1) Poverty Alleviation and Social Equity The State shall ensure that the poorer sectors of society have equitable access to resources, income opportunities, basic and support services and infrastructure especially in areas where productivity is low as a means of improving their quality of life compared with other sectors of society;

Food Availability Laws 203 2) Food Security The State shall assure the availability, adequacy, accessibility and affordability of food supplies to all at all times; 3) Rational Use of Resources The State shall adopt a rational approach in the allocation of public investments in agriculture and fisheries in order to assure efficiency and effectiveness in the use of scarce resources and thus obtain optimal returns on its investments; 4) Global Competitiveness The State shall enhance the competitiveness of the agriculture and fisheries sectors in both domestic and foreign markets; 5) Sustainable Development The State shall promote development that is compatible with the preservation of the ecosystem in areas where agriculture and fisheries activities are carried out. The State should exert care and judicious use of the countrys natural resources in order to attain long-term sustainability. 6) People Empowerment The State shall promote people empowerment by enabling all citizens through direct participation or through their duly elected, chosen or designated representatives the opportunity to participate in policy formulation and decision-making by establishing the appropriate mechanisms

204 COMPENDIUM OF RTF LAWS and by giving them access to information; and 7) Protection from Unfair Competition The State shall protect small farmers and fisherfolk from unfair competition such as monopolistic and oligopolistic practices by promoting a policy environment that provides them priority access to credit and strengthened cooperative-based marketing system. Section 3. Statement of Objectives. This Act shall have the following objectives: 1) T o modernize the agriculture and fisheries sectors by transforming these sectors from a resource-based to a technologybased industry; 2) To enhance profits and incomes in the agriculture and fisheries sectors, particularly the small farmers and fisherfolk, by ensuring equitable access to assets, resources and services, and promoting higher-value crops, valueadded processing, agribusiness activities, and agro-industrialization; 3) T o ensure the accessibility, availability and stable supply of food to all at all times; 4) To encourage horizontal and vertical integration, consolidation and expansion of agriculture and fisheries activities, groups, functions, and other services through the organization of cooperatives,

Food Availability Laws 205 farmers and fisherfolks associations, corporations, nucleus estates, and consolidated farms and to enable these entities to benefit from economies of scale, afford them a stronger negotiating position, pursue more focused, efficient and appropriate research and development efforts and enable them to hire professional managers; 5) T o promote people empowerment by strengthening peoples organizations, cooperatives and NGOs and by establishing and improving mechanisms and processes for their participation in government decision-making and implementation; 6) To pursue a market-driven approach to enhance the comparative advantage to our agriculture and fisheries sectors in the world market; 7) To induce the agriculture and fisheries sectors to ascend continuously the value-added ladder by subjecting their traditional or new products to further processing in order to minimize the marketing of raw, unfinished or unprocessed products; 8) T o adopt policies that will promote industry dispersal and rural industrialization by providing incentives to local and foreign investors to establish industries that have backward linkages to the

206 COMPENDIUM OF RTF LAWS countrys agriculture and fisheries resource base; 9) To provide social and economic adjustment measures that increase productivity and improve market efficiency while ensuring the protection and preservation of the environment and equity for small farmers and fisherfolk; and 10) T o improve the quality of life of all sectors. Section 4. Definition of Terms. Agrarian Reform Community is a barangay at the minimum or a cluster of contiguous barangays where there is a critical mass of farmers or farm workers and which features the main thrust of agrarian development: land tenure improvement and effective delivery of support services. Agricultural Lands refers to lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of trees, raising of livestock, poultry, fish or aquaculture production, including the harvesting of such farm products, and other farm activities and practices performed in conjunction with such farming operations by persons whether natural or juridical and not classified by law as mineral land, forest land, residential land, commercial land, or industrial land. Agricultural Land Use Conversion refers to the process of changing the use of agricultural land to non-agricultural uses.

Food Availability Laws 207 Agricultural Sector is the sector engaged in the cultivation of the soil, planting of crops, growing of fruit trees, raising of livestock, poultry, or fish, including the harvesting and marketing of such farm products, and other farm activities and practices. Agricultural Mechanization is the development, adoption, manufacture and application of appropriate location-specific, and cost-effective agricultural technology using human, animal, mechanical, electrical and other non-conventional sources of energy for agricultural production and postharvest operations consistent with agronomic conditions and for efficient and economic farm management. Agriculture and Fisheries Modernization is the process of transforming the agriculture and fisheries sectors into one that is dynamic, technologically advanced and competitive yet centered on human development, guided by the sound practices of sustainability and the principles of social justice. Agro-Processing Activities refers to the processing of raw agricultural and fishery products into semi-processed or finished products which include materials for the manufacture of food and/or non-food products, pharmaceuticals and other industrial products.

208 COMPENDIUM OF RTF LAWS Banks, collectively used, means government banks and private banks, rural banks and cooperative banks. Basic Needs Approach to Development involves the identification, production and marketing of wage goods and services for consumption of rural communities. Communal Irrigation System (CIS) is an irrigation system that is managed by a bona fide Irrigators Association. Competitive Advantage refers to competitive edge in terms of product quality and/or price. It likewise refers to the ability to produce a product with the greatest relative efficiency in the use of resources. Cooperatives refers to duly registered associations of persons with a common bond of interest who have voluntarily joined together to achieve a lawful common social and economic end, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles. Department refers to the Department of Agriculture. Economic Scale refers to the minimum quantity or volume of goods required to be efficient. Economies of Scale refers to the decrease in unit cost as more units are produced due to the spreading out of

Food Availability Laws 209 fixed costs over a greater number of units produced. Empowerment involves providing authority, responsibility and information to people directly engaged in agriculture and fishery production, primarily at the level of the farmers, fisherfolk and those engaged in food and nonfood production and processing, in order to give them wider choices and enable them to take advantage of the benefits of the agriculture and fishery industries. Extension Services refers to the provision of training, information, and support services by the government and non-government organizations to the agriculture and fisheries sectors to improve the technical, business and social capabilities of farmers and fisherfolk. Farmers and Fisherfolks Organizations or Associations refers to farmers and fisherfolks cooperatives, associations, or corporations duly registered with appropriate government agencies and which are composed primarily of small agricultural producers, farmers, farm workers, agrarian reform beneficiaries, fisherfolk who voluntarily join together to form business enterprises or non-business organizations which they themselves own, control and patronize. Farm-to-Market Roads refers to roads linking the agriculture and fisheries

210 COMPENDIUM OF RTF LAWS production sites, coastal landing points and post-harvest facilities to the market and arterial roads and highways. Fisheries refers to all systems or networks of interrelated activities which include the production, growing, harvesting, processing, marketing, developing, conserving, and managing of all aquatic resources and fisheries areas. Fisheries Sector is the sector engaged in the production, growing, harvesting, processing, marketing, developing, conserving, and managing of aquatic resources and fisheries areas. Fishing refers to the application of techniques using various gear in catching fish and other fisheries products. Fishing Grounds refers to areas in any body of water where fish and other aquatic resources congregate and become target of capture. Food Security refers to the policy objective, plan and strategy of meeting the food requirements of the present and future generations of Filipinos in substantial quantity, ensuring the availability and affordability of food to all, either through local production or importation, or both, based on the countrys existing and potential resource endowment and related production advantages, and consistent with the overall national development objectives and policies. However, sufficiency in rice and white corn should be pursued.

Food Availability Laws 211 Fresh Agricultural and Fishery Products refers to agricultural and fisheries products newly taken or captured directly from its natural state or habitat, or those newly harvested or gathered from agricultural areas or bodies of water used for aquaculture. Global Competitiveness refers to the ability to compete in terms of price, quality and volume of agriculture and fishery products relative to those of other countries. Gross Value-Added refers to the total value, excluding the value of non-agricultural or fishery intermediate inputs, of goods and services contributed by the agricultural and fisheries sectors. Headworks refers to the composite parts of the irrigation system that divert water from natural bodies of water such as rivers, streams, and lakes. Industrial Dispersal refers to the encouragement given to manufacturing enterprises to establish their plants in rural areas. Such firms normally use agricultural raw materials either in their primary or intermediate state. Irrigable Lands refers to lands which display marked characteristics justifying the operation of an irrigation system. Irrigated Lands refers to lands serviced by natural irrigation or irrigation facilities. These include lands where water is not readily

212 COMPENDIUM OF RTF LAWS available as existing irrigation facilities need rehabilitation or upgrading or where irrigation water is not available year-round. Irrigation System refers to a system of irrigation facilities covering contiguous areas. Irrigators Association (IA) refers to an association of farmers within a contiguous area served by a National Irrigation System or Communal Irrigation System. Land Use refers to the manner of utilizing the land, including its allocation, development and management. Land Use Plan refers to a document embodying a set of policies accompanied by maps and similar illustrations which represent the community-desired pattern of population distribution and a proposal for the future allocation of land to the various land-using activities, in accordance with the social and economic objectives of the people. It identifies the location, character and extent of the areas land resources to be used for different purposes and includes the process and the criteria employed in the determination of the land use. Land Use Planning refers to the act of defining the allocation, utilization, development and management of all lands within a given territory or jurisdiction according to the inherent qualities of the land itself and supportive of sustainable, economic, demographic, socio-cultural

Food Availability Laws 213 and environmental objectives as an aid to decision-making and legislation. Main Canal refers to the channel where diverted water from a source flows to the intended area to be irrigated. Market Infrastructure refers to facilities including, but not limited to market buildings, slaughterhouses, holding pens, warehouses, market information centers, connecting roads, transport and communication and cold storage used by the farmers and fisherfolk in marketing their produce. National Information Network (NIN) refers to an information network which links all offices and levels of the Department with various research institutions and local endusers, providing easy access to information and marketing services related to agriculture and fisheries. National Irrigation System (NIS) refers to a major irrigation system managed by the National Irrigation Administration. Network of Protected Areas for Agricultural and Agro-Industrial Development (NPAAAD) refers to agricultural areas identified by the Department through the Bureau of Soils and Water Management in coordination with the National Mapping and Resource Information Authority in order to ensure the efficient utilization of land for agriculture and agro-industrial

214 COMPENDIUM OF RTF LAWS development and promote sustainable growth. The NPAAAD covers all irrigated areas, all irrigable lands already covered by irrigation projects with firm funding commitments; all alluvial plain land highly suitable for agriculture whether irrigated or not; agro-industrial croplands or lands presently planted to industrial crops that support the viability of existing agricultural infrastructure and agro-based enterprises, highlands, or areas located at an elevation of five hundred (500) meters or above and have the potential for growing semi-temperate and high-value crops; all agricultural lands that are ecologically fragile, the conversion of which result in serious environmental degradation, and mangrove areas and fish sanctuaries. On-Farm Irrigation Facilities refers to composite facilities that permit entry of water to paddy areas and consist of farm ditches and turnouts. Primary Processing refers to the physical alteration of raw agricultural or fishery products with or without the use of mechanical facilities. Post-Harvest Activities includes, but is not limited to, threshing, drying, milling, grading, storing, and handling of produce and such other activities as stripping, winnowing, chipping and washing.

Food Availability Laws 215 Post-Harvest Facilities includes, but is not limited to, threshers, moisture meters, dryers, weighing scales, milling equipment, fish ports, fish landings, ice plants and cold storage facilities, processing plants, warehouses, buying stations, market infrastructure and transportation facilities. Premature Conversion of Agricultural Land refers to the undertaking of any development activity the results of which modify or alter the physical characteristics of the agricultural lands to render them suitable for non-agricultural purposes, without an approved order of conversion from the DAR. Resource Accounting refers to the process of tracking changes in the environment and natural resources biophysically and economically in monetary terms. Resource-based refers to the utilization of natural resources. Rural Industrialization refers to the process by which the economy is transformed from one that is predominantly agricultural to one that is dominantly industrial and serviceoriented. Agriculture provides the impetus and push for industry and services through the market that it creates, the labor that it absorbs, and the income that it generates which is channeled to industry and services. As development continues, with agriculture

216 COMPENDIUM OF RTF LAWS still an important sector, industry and services begin to generate income and markets and concomitantly increase their share of total income. Strategic Agriculture and Fisheries Development Zones (SAFDZ) refers to the areas within the NPAAAD identified for production, agro-processing and marketing activities to help develop and modernize, with the support of government, the agriculture and fisheries sectors in an environmentally and socioculturally sound manner. Secondary Canal refers to the channel connected to the main canal which distributes irrigation to specific areas. Secondary Processing refers to the physical transformation of semi-processed agricultural or fishery products. Shallow Tube Well (STW) refers to a tube or shaft vertically set into the ground for the purpose of bringing ground water to the soil surface from a depth of less than 20 meters by suction lifting. Small Farmers and Fisherfolk refers to natural persons dependent on small-scale subsistence farming and fishing activities as their primary source of income. Small and Medium Enterprise (SME) refers to any business activity or enterprise engaged in industry, agribusiness and/or

Food Availability Laws 217 services, whether single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entitys office, plant and equipment are situated, must have value falling under the following categories: 1. Micro : not more than P1,500,000 2. Small : P1,500,001 to P15,000,000 3. Medium : P15,000,001 to P60,000,000 The Department, in consultation with the Congressional Oversight Committee on Agricultural and Fisheries Modernization, may adjust the above values as deemed necessary. Socio-Culturally Sound means the consideration of the social structure of the community such as leadership pattern, distribution of roles across gender and age groups, the diversity of religion and other spiritual beliefs, ethnicity and cultural diversity of the population. Technology-based refers to utilization of technology. Zoning Ordinance refers to a local legislation approving the development/land use plan and providing for the regulations and other conditions on the uses of land including the limitation on the infrastructure that may be placed within the territorial jurisdiction of a city or municipality.

218 COMPENDIUM OF RTF LAWS TITLE I PRODUCTION AND MARKETING SUPPORT SERVICES Chapter 1 Strategic Agricultural and Fisheries Development Zones Section 5. Declaration of Policy. It is the policy of the State to ensure that all sectors of the economy and all regions of the country shall be given optimum opportunity to develop through the rational and sustainable use of resources peculiar to each area in order to maximize agricultural productivity, promote efficiency and equity and accelerate the modernization of the agriculture and fisheries sectors of the country. Section 6 . Network of Areas for Agricultural and AgroIndustrial Development. The Department shall, within six (6) months after the approval of this Act, and in consultation with the local government units, appropriate government agencies, concerned non-government organizations (NGOs) and organized farmers and fisherfolks groups, identify the Strategic Agriculture and Fisheries Development Zones (SAFDZ) within the network of protected areas for agricultural and agro-industrial development to ensure that lands are efficiently and sustainably

Food Availability Laws 219 utilized for food and non-food production and agro- industrialization. The SAFDZ, which shall serve as centers where development in the agriculture and fisheries sectors are catalyzed in an environmentally and socio-culturally sound manner, shall be identified on the basis of the following criteria: 1) Agro-climatic and environmental conditions giving the area a competitive advantage in the cultivation, culture, production and processing of particular crops, animals and aquatic products; 2) Strategic location of the area for the establishment of agriculture or fisheries infrastructure, industrial complexes, production and processing zones; 3) Strategic location of the area for market development and market networking both at the local and international levels; and 4) Dominant presence of agrarian reform communities (ARCs) and/or small owner-cultivators and amortizing owners/agrarian reform beneficiaries and other small farmers and fisherfolk in the area. The SAFDZ shall have an integrated development plan consisting of production, processing, investment, marketing, human resources and environmental protection components.

220 COMPENDIUM OF RTF LAWS Section 7. Model Farms. The Department, in coordination with the local government units (LGUs) and appropriate government agencies, may designate agrarian reform communities (ARCs) and other areas within the SAFDZ suitable for economic scale production which will serve as model farms. Farmer-landowners whose lands are located within these designated areas shall be given the option to enter into a management agreement with corporate entities with proven competence in farm operations and management, high-end quality production and productivity through the use of up-todate technology and collateral resources such as skilled manpower, adequate capital and credit, and access to markets, consistent with existing laws. Section 8. Mapping. The Department, through the Bureau of Soils and Water Management (BSWM), in coordination with the National Mapping and Resource Information Authority (NAMRIA) and the Housing and Land Use Regulatory Board (HLURB) shall undertake the mapping of the network of areas for agricultural and agro-industrial development for all municipalities, cities at an appropriate scale. The BSWM may call on other agencies to provide technical and other logistical support in this undertaking.

Food Availability Laws 221 Section 9. Delineation of Strategic Agriculture and Fisheries Development Zones. The Department, in consultation with the Department of Agrarian Reform, the Department of Trade and Industry, the Department of Environment and Natural Resources, Department of Science and Technology, the concerned LGUs, the organized farmers and fisherfolk groups, the private sector and communities shall, without prejudice to the development of identified economic zones and free ports, establish and delineate, based on sound resource accounting, the SAFDZ within one (1) year from the effectivity of this Act. All irrigated lands, irrigable lands already covered by irrigation projects with firm funding commitments, and lands with existing or having the potential for growing high-value crops so delineated and included within the SAFDZ shall not be converted for a period of five (5) years from the effectivity of this Act: Provided, however, that not more than five percent (5%) of the said lands located within the SAFDZ may be converted upon compliance with existing laws, rules, regulations, executive orders and issuances, and administrative orders relating to land use conversion: Provided, further, That thereafter: 1) a review of the SAFDZ, specifically on the productivity of the areas, improvement of the quality of life

222 COMPENDIUM OF RTF LAWS of farmers and fisherfolk, and efficiency and effectiveness of the support services shall be conducted by the Department and the Department of Agrarian Reform, in coordination with the Congressional Oversight Committee on Agricultural and F isheries Moderniz a t ion; 2) conversion may be allowed, if at all, on a case- to-case basis subject to existing laws, rules, regulations, executive orders and issuances, and administrative orders governing land use conversion; and, 3) in case of conversion, the land owner will pay the Department the amount equivalent to the governments investment cost including inflation. Section 10. Preparation of Land Use and Zoning Ordinance. Within one (1) year from the finalization of the SAFDZ, in every city and municipality, all cities and municipalities shall have prepared their respective land use and zoning ordinance incorporating the SAFDZ, where applicable. Thereafter, all land use plans and zoning ordinances shall be updated every four (4) years or as often as may be deemed necessary upon the recommendation of the Housing and Land use Regulatory Board and must be completed within the first year of the term of office of the mayor. If the cities/ municipalities fail to comply with the

Food Availability Laws 223 preparation of zoning and land use plans, the DILG shall impose the penalty as provided for under Republic Act No. 7160. Section 11. Penalty for Agricultural Inactivity and Premature Conversion. Any person or juridical entity who knowingly or deliberately causes any irrigated agricultural lands seven (7) hectares or larger, whether contiguous or not, within the protected areas for agricultural development, as specified under Section 6 in relation to Section 9 of this Act, to lie idle and unproductive for a period exceeding one (1) year, unless due to force majeure, shall be subject to an idle land tax of Three Thousand Pesos (P3,000.00) per hectare per year. In addition, the violator shall be required to put back such lands to productive agricultural use. Should the continued agricultural inactivity, unless due to force majeure, exceed a period of two (2) years, the land shall be subject to escheat proceedings. Any person found guilty of premature or illegal conversion shall be penalized with imprisonment of two (2) to six (6) years, or a fine equivalent to one hundred percent (100%) of the governments investment cost, or both, at the discretion of the court, and an accessory penalty of forfeiture of the land and any improvement thereon.

224 COMPENDIUM OF RTF LAWS In addition, the DAR may impose the following penalties, after determining, in an administrative proceedings, that violation of this law has been committed: 1) Cancellation or withdrawal of the authorization for land use conversion; and 2) Blacklisting, or automatic disapproval of pending and subsequent conversion applications that they may file with the DAR. Section 12. Protection of Watershed Areas. All watersheds that are sources of water for existing and potential irrigable areas and recharge areas of major aquifers identified by the Department of Agriculture and the Department of Environment and Natural Resources shall be preserved as such at all times. Chapter 2 Agriculture and Fisheries Modernization Plan Section 13. Agriculture and Fisheries Modernization Plan (AFMP). The Department in consultation with the farmers and fisherfolk, the private sector, NGOs, peoples organizations and the appropriate government agencies and offices, shall formulate and implement a medium- and long-term comprehensive Agriculture and Fisheries Modernization Plan.

Food Availability Laws 225 The Agriculture and Fisheries Modernization Plan shall focus on five (5) major concerns; 1) Food security; 2) Poverty alleviation and social equity; 3) Income enhancement and profitability, especially for farmers and fisherfolk; 4) Global competitiveness; and 5) Sustainability. Section 14. Food Security, Poverty Alleviation, Social Equity and Income Enhancement. The Department, in coordination with other concerned departments or agencies, shall formulate medium- and long-term plans addressing food security, poverty alleviation, social equity and income enhancement concerns based on, but not limited to, the following goals and indicators of development. 1) Increased income and profit of small farmers and fisherfolk; 2) Availability of rice and other staple food at affordable prices; 3) Reduction of rural poverty and income inequality; 4) Reduction of the incidence of malnutrition; 5) Reduction of rural unemployment and underemployment; and 6) Improvement in land tenure of small farmers.

226 COMPENDIUM OF RTF LAWS Section 15. Global Competitiveness and Sustainability. The Department shall formulate medium- and long-term plans aimed at enhancing the global competitiveness and sustainability of the country in agriculture and fisheries based on, but not limited to, the following goals and indicators of development: 1) Increase in the volume, quality and value of agriculture and fisheries production for domestic consumption and for exports; 2) Reduction in post-harvest losses; 3) Increase in the number/types and quality of processed agricultural and fishery products; 4) Increase in the number of international trading partners in agriculture and fishery products; 5) Increase in the number of sustainable agriculture and fisheries firms engaged in domestic production, processing, marketing and export activities; 6) Increase in and wider level of entrepreneurship among farmers and fisherfolk in the area; 7) Increase in the number of farms engaged in diversified farming; and, 8) Reduced use of agro-chemicals that are harmful to health and the environment.

Food Availability Laws 227 Section 16. Global Climate Change. The Department in coordination with the Philippine Atmospheric, Geophysical and Astronomical Service Administration (P.A.G.A.S.A.) and such other appropriate government agencies, shall devise a method of regularly monitoring and considering the effect of global climate changes, weather disturbances, and annual productivity cycles for the purpose of forecasting and formulating agriculture and fisheries production programs. Section 17. Special Concerns. The Department shall consider the following areas of concerns, among others, in formulating the AFMP: 1) Strategies and programs aimed to achieve growth and profitability targets in the context of the constraints and challenges of the World Trade Organization (WTO); 2) Programs arising from the implementation of the Agrarian Reform Program; 3) Identification of SAFDZ; 4) Infrastructure and market support for the SAFDZs; 5) Infrastructure support to make agriculture and fisheries production inputs, information and technology readily available to farmers, fisherfolk, cooperatives and entrepreneurs;

228 COMPENDIUM OF RTF LAWS 6) Credit programs for small farmers and fisherfolk, and agricultural graduates; 7) Comprehensive and integrated agriculture and fisheries research, development and extension services; 8) Preservation of biodiversity, genetic materials and the environment; 9) Adequate and timely response against environmental threats to agriculture and fisheries; 10) Rural non-farm employment; 11) Access to aquatic resources by fisherfolk; 12) Basic needs program for the impoverished sectors of society who will be affected by liberalization; 13) Indigenous peoples; 14) Rural youth; 15) Women; 16) Handicapped persons; and 17) Senior citizens. Section 18. Monitoring and Evaluation. The Department shall develop the capability of monitoring the AFMP through a Program Benefit Monitoring and Evaluation System (PBMES). In addition, it can secure the services of independent consultants and external evaluators in order to assess its over-all impact. The Department shall make periodic reports to the Congressional Oversight Committee on Agriculture and Fisheries Modernization.

Food Availability Laws 229 Section 19. Role of Other Agencies. All agencies of the government shall support the Department in the implementation of the AFMP. In particular, the Department of Public Works and Highways shall coordinate with the Department with respect to the infrastructure support aspect of the plan in order to accomplish networking of related infrastructure facilities. The Department of Interior and Local Government shall provide assistance to the Department in mobilizing resources under the control of local government units. The Departments of Trade and Industry, Agrarian Reform, Science and Technology, and Environment and Natural Resources shall coordinate their investment programs and activities to complement the Departments implementation of the AFMP. The Department of Education, Culture and Sports, the Technical Education and Skills Development Authority, the Department of Health and the Department of Social Services and Development shall coordinate with the Department to determine the financial requirements of small farmers and fisherfolk to adjust to the effects of modernization as envisioned in the Agriculture and Fisheries Modernization Plan. The Department of Environment and Natural Resources shall provide technical

230 COMPENDIUM OF RTF LAWS assistance and advice on the delineation of the SAFDZ and on the development of the Departments environmental protection plans. The departments referred to above shall be required to identify in their budget proposals the allocation intended for the improvement of the environmental and other conditions affecting agriculture and fisheries. Congressional initiatives shall also be coordinated by the Committees on Agriculture of both Houses to complement and enhance the programs and activities of the Department in the implementation of the AFMP. Chapter 3 Credit Section 20. Declaration of Policy. It is hereby declared the policy of the State to alleviate poverty and promote vigorous growth in the countryside through access to credit by small farmers, fisherfolk, particularly the women involved in the production, processing and trading of agriculture and fisheries products and the small and medium scale enterprises (SMEs) and industries engaged in agriculture and fisheries. Interest rates shall be determined by market forces, provided that existing credit arrangements with agrarian reform beneficiaries

Food Availability Laws 231 are not affected. Emphasis of the credit program shall be on proper management and utilization. In this regard, the State enjoins the active participation of the banking sector and government financial institutions in the rural financial system. Section 21. Phase-out of the Directed Credit Programs (DCPs) and Provision for the Agro-Industry Modernization Credit and Financing Program (AMCFP). The Department shall implement existing DCPs; however, the Department shall, within a period of four (4) years from the effectivity of this Act, phase-out all DCPs and deposit all its loanable funds including those under the Comprehensive Agricultural Loan Fund (CALF) including new funds provided by this Act for the AMCFP and transfer the management thereof to cooperative banks, rural banks, government financial institutions and viable NGOs for the AgroIndustry Modernization Credit Financing Program (AMCFP). Interest earnings of the said deposited loan funds shall be reverted to the AMCFP. Section 22. Coverage. An agriculture, fisheries and agrarian reform credit and financing system shall be designed for the use and benefit of farmers, fisherfolk, those engaged in food and non-food production, processing and

232 COMPENDIUM OF RTF LAWS trading, cooperatives, farmers/fisherfolks organization, and SMEs engaged in agriculture and fisheries, hereinafter referred to in this chapter as the beneficiaries. Section 23. Scope of the Agro-Industry Modernization Credit and Financing Program (AMCFP). The Agro-Industry Modernization Credit and Financing Program shall include the packaging and delivery of various credit assistance programs for the following: 1. Agriculture and fisheries production including processing of fisheries and agri-based products and farm inputs. 2. Acquisition of work animals, farm and fishery equipment and machinery; 3. Acquisition of seeds, fertilizer, poultry, livestock, feeds and other similar items; 4. Procurement of agriculture and fisheries products for storage, trading, processing and distribution. 5. Acquisition of water pumps and installation of tube wells for irrigation; 6. Construction, acquisition and repair of facilities, for production, processing, storage, transportation, communication, marketing and such other facilities in support of agriculture and fisheries. 7. Working capital for agriculture and fisheries graduates to enable them to engage in agriculture and fisheriesrelated economic activities;

Food Availability Laws 233 8. Agribusiness activities which support soil and water conservation and ecologyenhancing activities; 9. Privately-funded and LGU-funded irrigation systems that are designed to protect the watershed; 10. Working capital for long-gestating projects; and 11. Credit guarantees on uncollateralized loans to farmers and fisherfolk. Section 24. Review of the mandates of Land Bank of the Philippines, Philippine Crop Insurance Corporation, Guarantee Fund For Small and Medium Enterprises, Quedan and Rural Credit Guarantee Corporation, Agricultural Credit Policy Council. The Department of Finance shall commission an independent review of the charters and the respective programs of the Land Bank of the Philippines (LBP), Philippine Crop Insurance Corporation (PCIC), Guarantee Fund for Small and Medium Enterprises (GSFME), Quedan and Rural Credit Guarantee Corporation (Quedancor), and Agricultural Credit Policy Council (ACPC), and recommend policy changes and other measures to induce the private sectors participation in lending to agriculture and to improve credit access by farmers and fisherfolk: Provided, That agriculture and fisheries projects with long gestation period shall

234 COMPENDIUM OF RTF LAWS be entitled to a longer grace period in repaying the loan based on the economic life of the project. The Land Bank of the Philippines, shall, in accordance with its original mandate, focus primarily on plans and programs in relation to the financing of agrarian reform and the delivery of credit services to the agriculture and fisheries sectors, especially to small farmers and fisherfolk. The review shall start six (6) months after the enactment of this Act. Thereafter, the review shall make recommendations to the appropriate Congressional Committees for possible legislative actions and to the Executive Branch for policy and program changes within six (6) months after submission. Section 25. Rationalization of Credit Guarantee Schemes and Funds. - All existing credit guarantee schemes and funds applicable to the agriculture and fishery sectors shall be rationalized and consolidated into an Agriculture and Fisheries Credit Guarantee Fund. The rationalization and consolidation shall cover the credit guarantee schemes and funds operated by the Quedancor, the GFSME and the Comprehensive Agricultural Loan Fund. The Agriculture and Fisheries Credit Guarantee Fund shall be managed and implemented by the Quedancor: Provided, That representation

Food Availability Laws 235 to the Quedancor Board shall be granted to cooperatives, local government units and rural financial institution: Provided, further, That credit guarantee shall be given only to small-scale agriculture and fisheries activities and to countryside micro- small, and medium enterprises. It may also cover loan guarantees for purchase orders and sales contracts. The Agriculture and Fisheries Credit Guarantee Fund shall be funded by at least ten percent (10%) of the funding allocation for the AMCFP. Chapter 4 Irrigation Section 26. Declaration of Policy. It is the policy of the State to use its natural resources rationally and equitably. The State shall prevent the further destruction of watersheds, rehabilitate existing irrigation systems and promote the development of irrigation systems that are effective, affordable, appropriate, and efficient. In the choice of location-specific irrigation projects, the economic principle of comparative advantage shall always be adhered to. Section 27. Research and Development. Irrigation Research and Development (R & D) shall be pursued and priority shall be given to the

236 COMPENDIUM OF RTF LAWS development of effective, appropriate and efficient irrigation and water management technologies. The Department shall coordinate with the Department of Environment and Natural Resources concerning the preservation and rehabilitation of watersheds to support the irrigation systems. Section 28. Criteria for Selection of Irrigation, Development Scheme. The selection of appropriate scheme of irrigation development shall be location-specific and based on the following criteria: 1. Technical feasibility; 2. Cost-effectiveness; 3. Affordability, low investment cost per unit area; 4. Sustainability and simplicity of operation; 5. Recovery of operation and maintenance cost; 6. Efficiency in water use; 7. Length of gestation period; and 8. Potential for increasing unit area productivity. All irrigation projects shall, in addition to the criteria enumerated above, be subjected to a social cost-benefit analysis. Section 29. Simplified Public Bidding. The construction, repair, rehabilitation, improvement, or maintenance of irrigation projects and facilities shall follow the Commission on Audit (COA) rules on simplified public bidding.

Food Availability Laws 237 Irrigation projects undertaken by farmers, farmers organizations and other private entities whose funding is partly or wholly acquired by way of loan from government financial institutions shall not be subject to the bidding requirements of the government. Section 30. National Irrigation Systems (NIS). - The National Irrigation Administration (NIA) shall continue to plan, design, develop, rehabilitate and improve the NISs. It shall continue to maintain and operate the major irrigation structures including the headworks and main canals. In addition, the NIA is mandated to gradually turn over operation and maintenance of the National Irrigation Systems secondary canal and on-farm facilities to Irrigators Associations. Section 31. Communal Irrigation Systems (CIS). The Department shall, within five (5) years from the effectivity of this Act, devolve the planning, design, and management of CISs, including the transfer of NIAs assets and resources in relation to the CIS, to the LGUs. The budget for the development, construction, operation and maintenance of the CIS and other types of irrigation systems shall be prepared by and coursed through the LGUs. The NIA shall continue to provide technical assistance to the LGUs even

238 COMPENDIUM OF RTF LAWS after complete devolution of the Irrigation Systems to the LGUs, as may be deemed necessary. 32. Minor Irrigation Schemes. The Department shall formulate and develop a plan for the promotion of a private sectorled development of minor irrigation systems, such as Shallow Tube Wells (STWs), LowLift pumps (LLPs) and other inundation systems. The plan shall be included in the Short- term Agriculture and Fisheries Modernization Plan. 33. Other Irrigation Construction Schemes. The Government shall also encourage the construction of irrigation facilities through other viable schemes for the construction of irrigation such as build-operate-transfer, build-transfer and other schemes that will fast tract the development of irrigation systems. 34. Guarantee of the National Government. To make build-operate-transfer (BOT) projects for irrigation attractive to proponents, the national government shall issue the needed payment guarantee for BOT projects which shall answer for default of the National Irrigation Administration. Such amounts needed to answer for the payment guarantee is hereby to be appropriated. 35. Irrigation Service Fees (ISF) Upon effectivity of this Act, the NIA shall immediately review the

Section

Section

Section

Section

Food Availability Laws 239 ISF rates and recommend to the Department reasonable rates within six (6) months from the effectivity of this Act. Section 36. Monitoring and Evaluation. The Department shall monitor the implementation of R & D programs and irrigation projects. The Department shall review all existing irrigation systems every four (4) years, to determine their viability or ineffectiveness. The Department shall employ the services of independent evaluators to assess the over-all impact of the countrys irrigation development. Section 37. Exemption from Election Ban. The repair, maintenance and rehabilitation of irrigation facilities as well as BOT irrigation projects shall be exempted from the scope of the election ban on public works. Chapter 5 Information and Marketing Support Service Section 38. Declaration of Policy. - It is hereby declared the policy of the State to empower Filipino farmers and fisherfolk, particularly the women, involved in agriculture and fisheries through the provision of timely accurate and responsive business information and efficient trading services which will link them to profitable markets for their products

240 COMPENDIUM OF RTF LAWS They shall likewise be given innovative support toward the generation of maximum income through assistance in marketing. Section 39. Coverage. A market information system shall be installed for the use and benefit of, but not limited to, the farmers and fisherfolk, cooperatives, traders, processors, the LGUs and the Department Section 40. The Marketing Assistance System. - The Department shall establish a National Marketing Assistance Program that will immediately lead to the creation of a national marketing umbrella in order to ensure the generation of the highest possible income for the farmers and fisherfolk or groups of farmers and fisherfolk, matching supply and demand in both domestic and foreign markets. Section 41. National Information Network. A National Information Network (NIN) shall be set up from the Department level down to the regional, provincial and municipal offices within one (1) year from the approval of this Act taking into account existing information networks and systems. The NIN shall likewise link the various research institutions for easy access to data on agriculture and fisheries research and technology. All departments, agencies, bureaus, research institutions, and local

Food Availability Laws 241 government units shall consolidate and continuously update all relevant information and data on a periodic basis and make such data available on the Internet. Section 42. Information and Marketing Service. The NIN shall provide information and marketing services related to agriculture and fisheries which shall include the following: 1) Supply data; 2) Demand data; 3) Price and price trends; 4) Product standards for both fresh and processed agricultural and fisheries products; 5) Directory of, but not limited to, cooperatives, traders, key market centers, processors and business institutions concerned with agriculture and fisheries at the provincial and municipal levels; 6) Research information and technology generated from research institutions involved in agriculture and fisheries; 7) International, regional and local market forecasts; and 8) Resource accounting data. Section 43. Initial Set-up. The Department shall provide technical assistance in settingup the NIN at the local level through the cooperatives and the LGUs: Provided, That, at the local level, a system that will make marketing information and services,

242 COMPENDIUM OF RTF LAWS related to agriculture and fisheries will be readily available in the city/municipal public market for the benefit of the producers, traders and consumers. Section 44. Role of Government Agencies. - The Bureau of Agricultural Statistics will serve as the central information server and will provide technical assistance to end-users in accessing and analyzing product and market information and technology. The Department of Transportation and Communications shall provide technical and infrastructure assistance to the Department in setting up the NIN. LGUs shall coordinate with the Department for technical assistance in order to accelerate the establishment and training of information end-users in their respective jurisdictions. The Cooperative Development Authority shall coordinate with the Department for technical assistance in order to provide training assistance to cooperatives in the use and analysis of market information and technology. Section 45. Role of Private Sector. The NIN shall likewise be accessible to the private sector engaged in agriculture and fisheries enterprises. The Department shall formulate guidelines and determine fees for private sector entities that use the NIN.

Food Availability Laws 243 Chapter 6 Other Infrastructure Section 46. Agriculture and Fisheries Infrastructure Support Services. The Department of Public Works and Highways, the Department of Transportation and Communications, the Department of Trade and Industry and the LGUs shall coordinate with the Department to address the infrastructure requirements in accordance with this Act: Provided, That, the Department and the LGUs shall also strengthen its agricultural engineering groups to provide the necessary technical and engineering support in carrying out the smooth and expeditious implementation of agricultural infrastructure projects. Section 47. Criteria for Prioritization. The prioritization of government resources for rural infrastructure shall be based on the following criteria: 1) Agro-industrial potential of the area; 2) Socio-economic contributions of the investments in the area; 3) Absence of public investment in the area; and 4) Presence of agrarian reform beneficiaries and other small farmers and fisherfolk in the area. Section 48. Public Infrastructure Facilities. - Public infrastructure investments shall give preference to the kind, type, and model of infrastructure

244 COMPENDIUM OF RTF LAWS facilities that are cost-effective and will be useful for the production, conservation, and distribution of most commodities and should benefit the most number of agriculture and fisheries producers and processors. Section 49. Private Infrastructure Facilities. For instrastructure facilities primarily benefiting private investors, the State shall facilitate the purchase and use of such facilities and shall keep to the minimum the bureaucratic requirements for these type of investments. Private investors include cooperatives or corporations of agriculture and fisheries producers and processors. Section 50. Public Works Act. The Department of Public Works and Highways shall coordinate with the Department for the purpose of determining the order of priorities for public works funded under the Public Works Act which directly or indirectly affect agriculture and fisheries. Section 51. Fishports, Seaports and Airports. The Department of Transportation and Communications, Philippine Ports Authority and Philippine Fisheries Development Authority shall coordinate with the Department for the purpose of determining priority fishports, seaports and airports and facilitating the installation of bulk-handling and storage facilities, and other post-harvest facilities needed in order to enhance the marketing of agriculture and fisheries products: Provided,

Food Availability Laws 245 That fishports, seaports and airports are also equipped with quarantine, sanitary and phytosanitary centers. The department of Transportation and Communications (DOTC) shall have the mandate to cancel arrastre and cargo handling franchises among operators whom it deems inefficient and/or ineffective owing, but not limited to, a past history of under-capitalization, lack of equipment and lack of professional expertise. The DOTC shall recommend to the Philippine Ports Authority and consult with ship-owners and ship-operators in assessing the cargohandling capabilities of cargo operators prior to extending new franchises or awards. Section 52. Farm-to-Market Roads. The Department shall coordinate with the LGUs and the resident-farmers and fisherfolk in order to identify priority locations of farm-to-market roads that take into account the number of farmers and fisherfolk, and their families who shall benefit therefrom and the amount, kind and importance of agriculture and fisheries products produced in the area. Construction of farm-to-market roads shall be a priority investment of the LGUs which shall provide a counterpart of not less than ten percent (10%) of the project cost subject to their IRA level. Section 53. Rural Energy - The Department shall coordinate with the Department of

246 COMPENDIUM OF RTF LAWS Energy (DOE), the Department of Public Works and Highways (DPWH), the National Electrification Administration (NEA) and the National Power Corporation (NAPOCOR) for the identification and installation of appropriate types of energy sources particularly in the use of non-conventional energy sources for the locality in order to enhance agriculture and fisheries development in the area. 54. Communications Infrastructure. The Department shall coordinate with the DOTC to facilitate the installation of telecommunication facilities in priority areas, in order to enhance agriculture and fisheries development. 55. Water Supply System. - The Department shall coordinate with the DPWH and the LGUs for the identification and installation of water supply system in the locality for agro-industrial uses to enhance agriculture and fisheries development in the area. 56. Research and Technology Infrastructure The Department in coordination with other government agencies shall give priority and facilitate the funding of infrastructure necessary for research ventures such as farm laboratories and demonstration farms with state colleges and universities that derived their core funds from the Department. 57. Post-Harvest Facilities. - The Department shall coordinate with the Bureau of PostHarvest for Research and Extension and the

Section

Section

Section

Section

Food Availability Laws 247 Post-harvest Horticulture, Training and Research Center of the University of the Philippines Los Banos, to identify appropriate post-harvest facilities and technology needed to enhance agriculture and fisheries development in the area. Section 58. Public Market and Abattoirs. - The Department shall encourage the LGUs to turn over the management and supervision of public markets and abattoirs to market vendors cooperatives and for that purpose, the appropriation for post-harvest facilities shall include the support for market vendors cooperatives. The Department shall coordinate with the LGUs in the establishment of standardized market systems and use of sanitary market facilities, and abattoirs, intended to ensure food safety and quality. All markets shall have a sanitation unit, proper and adequate drainage and sewerage system, ample water supply, public toilets with lavatories, garbage receptacles, ice plants and cold storage, adequate lighting and ventilation and supply of electricity to ensure cleanliness; and sanitation. Price monitoring bulletin boards for selected commodities and weighting scales accessible to the public shall also be established. Proper protection and preservation of agriculture and fisheries products being sold in the market shall also be observed. All foods which required no further cooking

248 COMPENDIUM OF RTF LAWS shall be wrapped, covered, or enclosed in containers to preserve the freshness and prevent contamination. Selling of products on market floors shall be prohibited. Section 59. Agricultural Machinery. - The Department shall give priority to the development and promotion of appropriate agricultural machinery and other agricultural mechanization technologies to enhance agricultural mechanization in the countryside. Chapter 7 Product Standardization And Consumer Safety Section 60. Declaration of Policy. - It is the policy of the State that all sectors involved in the production, processing, distribution and marketing of food and non-food agricultural and fisheries products shall adhere to, and implement the use of product standards in order to ensure consumer safety and promote the competitiveness of agriculture and fisheries products. Section 61. Bureau of Agriculture and Fisheries Product Standards. The Department, within six (6) months after the approval of this Act and inconsultation with the Department of Trade and Industry and the Bureau of Food and Drug, shall establish the Bureau of Agriculture and Fisheries Products Standards (BAFPS).

Food Availability Laws 249 Section 62. Coverage . - The BAFPS shall set and implement standards for fresh, primary- and secondary-processed agricultural and fishery products. Section 63. Powers and Functions. - The BAFPS shall have the following powers and functions. 1) Formulate and enforce standards of quality in the processing preservation, labeling, importation, packaging, exportation, distribution and advertising of agricultural and fisheries products; 2) Co n d u ct resear c h on produc t standardization, alignment of the local standards with the international standards; and 3) Conduct regular inspection of processing plants, storage facilities, abattoirs, as well as public and private markets in order to ensure freshness, safety and quality of products. Section 64. Pool of Experts and Advisers. The BAFPS may coordinate, seek the services of, and consult with both private and governmental agencies, research institutes, educational establishments and such other individuals and entities with expertise in the field of product standards and consumer safety. The Department of Trade and Industry, the Food and Nutrition Research Institute, and the Bureau of Food and Drug Administration shall provide technical advice and form part of the pool of experts/advisers of the BAFPS.

250 COMPENDIUM OF RTF LAWS TITLE 2 HUMAN RESOURCE DEVELOPMENT Section 65. Declaration of Policy. It is hereby declared the policy of the State to give priority to education and training on science and technology in order to accelerate social progress and promote total human liberation and development. The State shall promote industrialization and full employment, based on sound agriculture and fisheries development and agrarian reform, through industries that make full and efficient use of human and natural resources. Section 66. National Agriculture and Fisheries Education System (NAFES). The Commission on Higher Education (CHED), in coordination with the Department and appropriate government agencies, shall establish a National Agriculture and Fisheries Education System (NAFES) which shall have the following objectives: 1) To establish, maintain and support a complete and integrated system of agriculture and fisheries education relevant to the needs of the economy, and community and society; 2) To modernize and rationalize agriculture and fisheries education from the elementary to the tertiary levels;

Food Availability Laws 251 3) To unify, coordinate and improve the system of implementation of academic programs that are geared toward achieving agriculture and fisheries development in the country; and 4) T o upgrade the quality, ensure sustainability and promote global competitiveness, at all levels, of agriculture and fisheries education. Section 67. Education Program for Elementary and Secondary Levels. - There is hereby established an Agriculture and Fisheries Education Program, under the NAFES, specially designed for elementary and secondary levels. The Program shall be formulated, organized and implemented by the DECS with the following objectives: 1) to develop appropriate values that form the foundation for sustained growth in agriculture and fisheries modernization; 2) to increase the attractiveness of agriculture and fisheries education, so that more young and talented persons will look at agriculture and fisheries as an acceptable option for career and livelihood; 3) to promote appreciation of science in agriculture and fisheries development; 4) to develop among students, positive attitudes towards entrepreneurship and global competition in the agriculture and fisheries business;

252 COMPENDIUM OF RTF LAWS 5) to improve the present curriculum in the elementary and secondary levels by emphasizing the core values necessary for agriculture and fisheries modernization; and 6) to develop an outreach program where students, parents and the schools become instruments in effecting positive changes in the pupils home and community. Section 68. Post-Secondary Education Program. - There is hereby established a Post-Secondary Education Program for Agriculture and Fisheries under the NAFES, which shall be formulated and developed by TESDA in coordination with the appropriate government agencies and the private sector. The program shall include, among others, the following: 1) a mechanism for a flexible process of curriculum development; 2) integration of the dual training system in the various agricultural curricula and training programs; 3) integration of entrepreneurship and global competitiveness in the agrofisheries curricula; 4) institutionalizing agriculture and fisheries skills standards and technician testing and certification. 5) regular upgrading of learning/training facilities, school buildings, laboratory equipment; and

Food Availability Laws 253 6) development of a system for the strict enforcement of school regulations regarding standards and requirements. Section 69. Network of National Centers of Excellence for Tertiary Education. There is hereby established a Network of National Centers of Excellence in Agriculture and Fisheries Education, composed of qualified public and private colleges and universities, duly accredited as National Centers of Excellence (NCE) in the field of agriculture and fisheries. For this purpose, the CHED shall formulate and implement a system of accreditation: Provided, That not more than one provincial institute in every province and no more than one national university in each field in every region shall be accredited as such: and Provided, further, That the system shall be based on the following criteria: 1) institutional accessibility, population, economic contribution of agriculture and fisheries in the community, and the needs or unique requirements of the area; 2) quantity and quality of research studies conducted; 3) degree of utilization of research results; 4) quantity and quality of faculty members; 5) type of facilities; 6) linkage with international organizations; and

254 COMPENDIUM OF RTF LAWS 7) potential contribution to agriculture and fisheries development in the target area. Section 70. Rationalization Plan. For the purpose of upgrading and maintaining a high degree of academic excellence in the fields of agriculture and fisheries, all existing public and private colleges and universities that are not hereinafter designated and accredited as centers of excellence shall be given adequate time to redirect its program to non-agriculture and/or non-fisheries areas needed by the province or region and/or merge their program with accredited NCEs in accordance with the Rationalization Plan to be jointly formulated by CHED and the Philippine Association of State Universities and Colleges (PASUC) upon consultation with the institution concerned. The Rationalization Plan shall include a policy for the effective utilization of affected personnel and facilities, and shall not be construed as to result in the decrease of the budget allocation for the state universities and colleges concerned. Section 71. Counterpart Funding from LGUs. - The LGUs shall, within two (2) years from the effectivity of This Act, provide at least ten percent (10%) of the Maintenance and Other Operating Expenses (MOOE) budget for the operation of the provincial institutes within their area of responsibility.

Food Availability Laws 255 In consultation with the LGUs, the CHED shall develop a provincial-national partnership scheme for a reasonable sharing of financial support taking into account social equity factors for poor provinces. Section 72. National Integrated Human Resource Development Plan in Agriculture and Fisheries. - The CHED, in coordination with the Department and appropriate government agencies, shall formulate, develop and implement an integrated human resource development plan in agriculture and fisheries which shall serve as an instrument that will provide over-all direction in setting priorities in curricular programs, enrollment, performance targets, and investment programs. Section 73. Output-Oriented Performance Standards. - In o rd er to en sure inst it ut iona l accountability, efficiency, and quality, there shall be formulated and developed an Output-Oriented Performance Standards which shall serve as the primary instrument for institutional evaluation. For this purpose, all public and private universities and colleges, that are designated as centers of excellence, shall cause to be installed a computerized monitoring and evaluation system that periodically collects and regularly measures variables indicating institutional performance based on the Output-Oriented Performance Standards.

256 COMPENDIUM OF RTF LAWS Section 74. Evaluation System. Not later than one (1) year from the effectivity of this Act, the CHED shall establish a baseline information using the Output-Oriented Performance Standards referred to in Section 73 of this Title. Once every five (5) years thereafter, all designated NCEs in agriculture and fisheries shall be subject to a third party evaluation. The evaluation shall include, among others, management and educational experts of national stature and representatives of key sectors of the agriculture and fisheries industries, as well as representatives of the Department, the Department of Environment and Natural Resources, the Department of Science and Technology, and the National Economic and Development Authority. Section 75. Agriculture and Fisheries Board. There shall be created an Agriculture and Fisheries Board in the Professional Regulation Commission to upgrade the Agriculture and Fisheries profession. Those who have not passed the Civil Service Examination for Fisheries and Agriculture but have served the industry in either private or public capacity for not less than five (5) years shall be automatically granted eligibility by the Board of Examiners.

Food Availability Laws 257 The first board of examination for B.S. Fisheries and/or Agriculture Graduates shall be conducted within one (1) year from the approval of this Act. Section 76. Continuing Agriculture and Fisheries Education Program. - The Commission on Higher Education, the Department of Education, Culture and Sports and Technical Education and Skills Development Authority, in coordination with the Department and the public and private universities and colleges, shall formulate and develop a National and Integrated Continuing Agriculture and Fisheries Education Program, which shall address the current education and training requirements of teachers, professors and educators in agriculture and fisheries. For this purpose, pre-service and in-service training of teachers in Home Economics Livelihood Education (HELE) for the primary level and Technology and Home Economics (THE) for the secondary level, shall be upgraded. Section 77. Scholarship Program. - The CHED, in coordination with public and private universities and colleges, TESDA and the DBM shall develop a national scholarship program that provides opportunities for deserving academic staff to pursue advanced degrees in agriculture

258 COMPENDIUM OF RTF LAWS and fisheries. Where appropriate, such scholarship program shall also provide opportunities for graduate work in foreign universities. Section 78. Merit System. To promote the development of scientific excellence and academic scholarship, the public and private universities and colleges, in cooperation with the CHED and the DBM, shall institute an output-oriented unified system of promotion for academic personnel. Section 79. Budgetary Allocation Scheme. - The Budgetary Allocation Scheme for NAFES shall be as follows: 1) The current appropriation or budgets of state universities and colleges, that are herein designated as NCEs, shall continue and shall be modified and adjusted in succeeding years in order to meet the standards of the rationalized programs of the institutions as approved by Congress and shall be included in the annual General Appropriations Act; 2) NCEs that are created under this Act shall likewise be provided with budgetary support based on their programs and new staffing pattern as approved by DBM and shall be included in the annual General Appropriations Act.

Food Availability Laws 259 TITLE 3 RESEARCH DEVELOPMENT AND EXTENSION Chapter 1 Research and Development Section 80. Declaration of Policy - It is hereby declared the policy of the State to promote science and technology as essential for national development and progress. The State shall likewise give priority to research and development, invention, innovation, and their utilization and to science and technology education, training, and services. In addition to appropriate and relevant technology ,the State shall support indigenous and self-reliant scientific and technological capabilities, and their application to the countrys productive system and national life. Section 81. The National Research and Development System in Agriculture and Fisheries. - The Department, in coordination with the Department of Science and Technology and other appropriate agencies and research institutions shall enhance, support and consolidate the existing National Research and Development System in Agriculture and Fisheries within six (6) months from the approval

260 COMPENDIUM OF RTF LAWS of this Act: Provided, That fisheries research and development shall be pursued separately from, but in close coordination with that of agriculture. Section 82. Special Concerns in Agriculture and Fisheries Research Services. - Agriculture and Fisheries Research and Development activities shall be multidisciplinary and shall involve farmers, fisherfolk and their organizations, and those engaged in food and non-food production and processing, including the private and public sectors. Research institutions and centers shall enjoy autonomy and academic freedom. The Department, in collaboration with the Department of Science and Technology and other appropriate agencies, shall harmonize its merit and output-oriented promotion system governing the scientific community in order to promote increased research excellence and productivity and provide the government research system a competitive edge in retaining its scientific personnel. Appropriate technology shall be used to protect the environment, reduce cost of production, improve product quality and increase value-added for global competitiveness. Section 83. Funds for Research and Development. Considering the nature of research,

Food Availability Laws 261 development and extension activities, funding shall be based on the following guidelines: 1) Allocation of multi-year budgets which shall be treated as research and development grants; 2) The budget for agriculture and fisheries research and development shall be at least one percent (1%) of the gross value added (GVA) by year 2001 allocating at least one percent (1%) of the total amount of 1999. The Department of Finance (DOF) in consultation with the Department shall formulate revenue enhancement measures to fund this facility. 3) At least twenty percent (20%) shall be spent in support of basic research and not more than eighty percent (80%) shall be used for applied research and technology development, of which at least ten percent (10%) shall be used for technology packaging and transfer activities. 4) A science fund shall be established from which the scientific community in agriculture and fisheries shall draw its financial resource for sustained career development: Provided, That only the interest earnings of the funds shall be used.

262 COMPENDIUM OF RTF LAWS The Department and other research agencies, in the national interest, are encouraged to go into co- financing agreements with the private sector in the conduct of research and development provided that the terms and conditions of the agreement are beneficial to the country. Section 84. Excellence and Accountability in Research and Development. - The Department, in collaboration with the Department of Science and Technology and other appropriate government agencies shall formulate the national guidelines in evaluating research and development activities and institutions, which shall involve an independent and interdisciplinary team of collegial reviewers and evaluators. Section 85. Communication of Research Results and Research Extension Linkage. - Research information and technology shall be communicated through the National Information Network (NIN). All government agencies including the state colleges and universities and private educational institutions selected as NCEs shall be computerized, networked, provided with regular updated information, and shall likewise provide, through the NIN, results of research and development activities and current available technology relating agriculture and fisheries.

Food Availability Laws 263 Chapter 2 Extension Services Section 86. Declaration of Policy. - It is hereby declared the policy of the State to promote science and technology as essential for national development and progress. The State shall give priority to the utilization of research results through formal and non-formal education, extension, and training services. It shall support the development of a national extension system that will help accelerate the transformation of Philippine agriculture and fisheries from a resource-based to a technology-based industry. Section 87. Extension Services. - Agriculture and Fisheries extension services shall cover the following major services to the farming and fishing community. 1) Training services; 2) Farm or business advisory services; 3) Demonstration services; and 4) Information and communication support services through tri-media. Section 88. Special Concerns in the Delivery of Extension Services. - The delivery of Agriculture and Fisheries Extension Services shall be multidisciplinary and shall involve the farmers, fisherfolk, and their organizations, and those engaged in food and non-food production and processing, including the private and public sectors.

264 COMPENDIUM OF RTF LAWS There shall be a national merit and promotion system governing all extension personnel, regardless of source of funding, to promote professionalism and achieve excellence and productivity in the provision of the government extension services. Section 89. The National Extension System for Agriculture and Fisheries (NESAF). The Department, in coordination with the appropriate government agencies, shall formulate a National Extension System for Agriculture and Fisheries. The National Extension System for Agriculture and Fisheries shall be composed of three (3) subsystems: 1) The national government subsystem which directly complements; 2) The local government subsystems; and 3) The private sector subsystem. Section 90. The Role of Local Government Units. - The LGUs shall be responsible for delivering direct agriculture and fisheries extension services. The provincial government shall integrate the operations for the agriculture extension services and shall undertake an annual evaluation of all municipal extension programs. The extension program of state colleges and universities shall primarily focus on the improvement of the capability of the LGU extension service by providing:

Food Availability Laws 265 1) Degree and non-degree training programs; 2) Technical assistance; 3) Extension cum research activities; 4) Monitoring and evaluation of LGU extension projects; and 5) Information support services through the tri-media and electronics. Section 91. Role of the Private Sector in Extension. - The Department shall encourage the participation of farmers and fisherfolk cooperatives and associations and others in the private sector in training and other complementary extension services especially in community organizing, use of participatory approaches, popularization of training materials, regenerative agricultural technologies, agribusiness and management skills. The Department is hereby authorized to commission and provide funding for such training and extension services undertaken by the private sector. Section 92. The Role of Government Agencies. - The Department together with the state colleges, and universities shall assist in the LGUs extension system by improving their effectiveness and efficiency through capability-building and complementary extension activities such as: 1) technical assistance; 2) training of LGU extension personnel;

266 COMPENDIUM OF RTF LAWS 3) improvement of physical facilities; 4) extension cum research; and 5) information support services Section 93. Funding for Extension Activities. Extension activities shall be support by the following measures; 1) allocation of multi-year budget that shall be treated as grants; 2) allow transfer of funds from the Department to the local government units as extension grants, and 3) the budget for agriculture and fisheries extension services shall be at least one percent (1%) of the gross value added (GVA) by year 2001. Section 94. Excellence and Accountability in Extension. - The Department shall formulate the guidelines in evaluating extension activities and institutions, which shall involve an independent and interdisciplinary team of collegial reviewers and evaluators. Section 95. Extension Communication Support for LGUs. - The Department, in coordination with the public and private universities and colleges, shall develop an integrated multimedia support for national and LGU extension programs. The Department shall assist the LGUs in the computerization of communication support services to clients and linkages to the NIN.

Food Availability Laws 267 TITLE 4 RURAL NON-FARM EMPLOYMENT Chapter 1 Section 96. Declaration of Policy. It is hereby declared the policy of the State to promote full employment. Economic history, however, shows that as an economy modernizes the number of workers employed in its agricultural sector declines. It is therefore necessary to formulate policies and implement programs that will employ workers efficiently in rural areas in order to improve their standard of living, and reduce their propensity to migrate to urban areas. Section 97. Objectives. - Rural non-farm employment aims to 1) promote a basic needs approach to rural development; 2) make rural workers more adaptable and flexible through education and training; 3) promote rural industrialization and the establishment of agro-processing enterprises in rural communities; and 4) increase the income of rural workers Chapter 2 The Basic Needs Program Section 98. Principles. - The Department, in coordination with the appropriate government agencies,

268 COMPENDIUM OF RTF LAWS shall formulate the Basic Needs Programs to create employment and cushion the effects of liberalization based on the following principles: 1) No credit subsidies shall be granted. The normal rules of banking shall apply to all enterprises involved, provided that existing credit arrangements with ARBs shall not be affected. 2) Enterprises can use training, information, advisory and related services of the Government free of charge. 3) The participation of the private sector shall be voluntary. Teams composed of specialists from government agencies and the private sectors shall develop pilot programs in selected locales to establish the planning, implementation and evaluation procedures. Section 99. Participation of Government Agencies. - The replication of the program shall be the responsibility of the local government units concerned in collaboration with the appropriate government agencies, and the private sector. The local government units shall bear the costs of promoting and monitoring the basic needs program for which their IRA shall be increased accordingly as recommended by the Secretary of the Department: Provided, That the appropriate national government agencies shall continue to provide the necessary technical as well

Food Availability Laws 269 as financial assistance to the LGUs in the replication of the program. The Cooperatives Development Authority shall encourage the establishment and growth of associations and cooperatives as vehicles for the stable expansion of basic needs enterprises. The Department of Education, Culture and Sports, Department of Health, and the Technical Education and Skills Development Authority shall coordinate with the Department and Congress in the review, rationalization and reallocation of their regular budgets as well as their budgets under the GATT- related measures fund to finance education, training, health and other welfare services for farmers and fisherfolk. Chapter 3 Rural Industrialization Industry Dispersal Program Section 100. Principles. Rural industrialization and industry dispersal programs shall be based on the interplay of market forces. The Board of Investments (BOI) is hereby required to give the highest priority to the grant of incentives to business and industries with linkages to agriculture. Section 101. Role of Government Agencies. - The appropriate government agencies, under

270 COMPENDIUM OF RTF LAWS the leadership of the LGUs concerned, shall provide integrated services and information to prospective enterprises under the onestop-shop concept. Local government units are authorized to undertake investment and marketing missions provided that the costs of such missions are borne by the LGUs concerned. In making their land use plans, the LGUs, in consultation with the appropriate government agencies concerned, shall identify areas for industrial parks. The Department shall coordinate with the Department of Trade and Industry, in particular, the Board of Investment, in the formulation of investment priorities for rural areas. The Regional Wage Boards shall consult participating enterprises in this program before they issue wage orders. Section 102. Participating Enterprises. Participating enterprises may request any government agency for training, technical and advisory services free of cost. A set of incentives shall be given to enterprises that subcontract part of their production to farmers, fisherfolk and landless workers during periods when they are not engaged in agricultural activities. Section 103. Financing. Except for basic infrastructure and other goods that benefit all citizens, the facilities of this program should be undertaken and financed by the private sector.

Food Availability Laws 271 Chapter 4 Training of Workers Section 104. Role of TESDA. - TESDA shall organize local committees that will advise on the scope, nature and duration of training for the above-mentioned programs. TESDA is authorized to request the additional budgetary resources for these programs: Provided, That after a reasonable period, the task of coordinating the training is transferred to the LGUs concerned. Section 105. Role of the DENR. The Department and the DENR shall organize the training of workers in coastal resources management and sustainable fishing techniques. Section 106. Role of the Technology and Livelihood Resource Center (TLRC). - The TLRC shall undertake field training in entrepreneurship and management of workers involved in the basic needs program. Section 107. Special Training Projects for Women. The Department, in collaboration with the appropriate government agencies concerned, shall plan and implement special training projects for women for absorption in the basic needs and rural industrialization programs.

272 COMPENDIUM OF RTF LAWS TITLE 5 TRADE AND FISCAL INCENTIVES Section 108. Taxation policies must not deter the growth of value-adding activities in the rural areas. Section 109. All enterprises engaged in agriculture and fisheries as duly certified by the Department in consultation with the Department of Finance and the Board of Investment, shall, for five (5) years after the effectivity of this Act, be exempted from the payment of tariff and duties for the importation of all types of agriculture and fisheries inputs, equipment and machinery such as, but not limited to, fertilizer, insecticide, pesticide, tractor, trailers, trucks, farm implements and machinery, harvesters, threshers, hybrid seeds, genetic materials, sprayers, packaging machinery and materials, bulk-handling facilities such as conveyors and mini loaders, weighing scales, harvesting equipment, spare parts of all agricultural equipment, fishing equipment and parts thereof, refrigeration equipment, and renewable energy systems such as solar panels: Provided, however, That the imported agricultural and fishery inputs, equipment and machinery shall be for the exclusive use of the importing enterprise. The Department, in consultation with the Department of Finance and the Board of Investment, shall, within ninety (90)

Food Availability Laws 273 days from the effectivity of this Act, formulate the implementing rules and regulations governing the importation of agriculture and fishery inputs, equipment and machinery. Section 110. Any person, partnership, corporation, association and other juridical entity found circumventing the provisions of Section 109 of this Act shall suffer the penalty of imprisonment for a period of not less than six (6) months but not more than one (1) year, or a fine equivalent to two hundred percent (200%) of the value of the imported materials, or both, at the discretion of the court, and the accessory penalties of confiscation of the imported goods in favor of the government and revocation of the privileges given under this title. In cases where the violator is a juridical entity, the officers, responsible in the violation of Section 109 shall suffer the penalty of imprisonment prescribed in this section. The importation of goods equivalent to or exceeding the declared assets of the enterprise, partnership, or the authorized capital stock in case of corporations, and/ or resale of the imported goods shall be a prima facie evidence of the violation of the provision of Section 109 of this Act.

274 COMPENDIUM OF RTF LAWS GENERAL PROVISIONS Section 111. Initial Appropriation.- For the first year of implementation of this Act, the amount of T wenty billion pesos (P20,000,000,000.00) is hereby appropriated. The Department is hereby authorized to re align its appropriations in the current year of the date of effectivity of this Act to conform with the requirements of this Act: Provided, That the amount shall be allocated and disbursed as follows: 1) Thirty percent (30%) for irrigation 2) Ten percent (10%) for post-harvest facilities: Provided, That the Secretary of Agriculture may invest up to fifty percent (50%) of the said amount to fund post-harvest facilities of cooperatives, especially market vendors cooperatives, where said cooperatives exist and are operational: Provided, further, That if no cooperatives are operational, said amount shall fund the post-harvest facilities of the market-assistance system: 3) T en percent (10%) for other infrastructure including fishports, seaports, and airports, farm- and-coast-to-market roads, rural energy, communications, infrastructure, watershed rehabilitation, water supply system, research and technology infrastructure, public markets and abattoirs;

Food Availability Laws 275 4) T en percent (10%) for the Agro-industry Modernization Credit and Financing Program (AMCFP) to be deposited by the Department in participating rural-based public and private financial institutions provided that no less than fifty percent (50%) of said funds shall be deposited in rural banks and cooperative banks; 5) Eight percent (8%) for the implementation of the Farmer-Fisherfolk Marketing Assistance System and support to market vendors cooperatives. 6) Ten percent (10%) for research and development, four percent (4%) of which shall be used to support the Biotechnology Program; 7) Five percent (5%) for capability-building of farmers and fisherfolk organizations and LGUs for the effective implementation of the agriculture and fisheries programs at the local level; 8) Six percent (6%) for salary supplement of Extension Workers under the LGUs; 9) Five percent (5%) for NAFES, for the upgrading of the facilities of State Universities and Colleges that will be chosen as national center of excellence in agriculture and fisheries education; 10) Four percent (4%) for the National Information Network (NIN) consisting of both the national and local levels;

276 COMPENDIUM OF RTF LAWS 11) One-and-three-fourth percent (1.75%) for SUC- and TESDA- administered Ru ral No n -F arm E m ploym e nt Training; and 12) One-fourth percent (0.25%) for the identification of the SAFDZs. Section 112. Continuing Appropriation. The Department of Budget and Management (DBM) is hereby mandated to include annually in the next six (6) years, in the Presidents program of expenditures for submission to Congress, and release, an amount not less that Seventeen billion pesos (P17,000,000,000.00), for the implementation of this Act. Additional funds over and above the regular yearly budget of the Department shall be sourced from twenty percent (20%) of the proceeds of the securitization of government assets, including the Subic, Clark and other special economic zones. Other sources of funds shall be from the following: 1) Fifty Percent (50%) of the net earnings of the Public Estates Authority; 2) Loans, grants, bequest, or donations, whether from local or foreign sources; 3) Forty Percent (40%) of the TESDA Skills Development Fund; 4) Net proceeds from the privatization of the Food Terminal, Inc. (FTI), the Bureau of

Food Availability Laws 277 Animal Industry (BAI), the Bureau of Plant Industry (BPI), and other assets of the Department that will be identified by the DA Secretary and recommended to the President for privatization; 5) Proceeds from the Minimum Access Volume (MAV) in accordance with the provision of Republic Act No. 8178; 6) Poverty Alleviation Fund; and 7) Fifty Percent (50%) of the Support Facilities and Services Fund under Republic Act No. 6657. Section 113. Implementing Rules and Regulations. The Secretary, within ninety (90) working days after the effectivity of this Act, together with the Department of Agrarian Reform (DAR), Department of Environment and Natural Resources (DENR), Department of Finance (DOF), Department of Science and Technology (DOST), Department of Trade and Industry (DTI), Commission on Higher Education (CHED), Technical Education and Skills Development Authority (TESDA), Department of Education Culture and Sports (DECS), Department of Social Services and Development (DSSD), National Economic and Development Authority (NEDA), Department of Budget and Management (DBM), Department of Labor and Employment (DOLE), Commission on Audit (COA), Civil Service

278 COMPENDIUM OF RTF LAWS Commission (CSC), in consultation with other agencies concerned, farmers, fisherfolk and agri-business organization, and in coordination with the Congressional Oversight Committee on Agriculture and Fisheries Modernization, shall promulgate the rules and regulations for the effective implementation of this Act. The Secretary shall submit to the Committee on Agriculture of both Houses of Congress copies of the implementing rules and regulations within thirty (30) days after their promulgation. Any violation of this section shall render the official/s concerned liable under Republic Act No. 6713 otherwise known as the Code of Conduct and Ethical Standards for Public Officials and Employees and other existing administrative and/or criminal laws. Section 114. Congressional Oversight Committee on Agricultural and Fisheries Modernization. A Congressional Oversight Committee on Agricultural and Fisheries Modernization is hereby created to be composed of the Chairs of the Committee on Agriculture of both Houses, six (6) members of the House of Representatives and six (6) members of the Senate, to be designated respectively by the Speaker of the House and the President of the Senate, who shall endeavor to have the various sectors and regions of the country represented.

Food Availability Laws 279 The chairs of the Committees on Agriculture in the Senate and House of Representatives, shall be, respectively, the Chair and Co-Chair of the Oversight Committee. The other members shall receive no compensation; however, traveling and other necessary expenses shall be allowed. The Committee shall oversee and monitor the implementation of the Congressional Commission on Agriculture Modernization (AGRICOM) recommendations as well as all programs, projects and activities related to agriculture and fisheries, and its allied concerns in both public and private sectors, with a view to providing all legislative support and assistance within the powers of Congress to ensure their inclusion, wherever feasible, in the national, regional, provincial, municipal, and sectoral development plans, to recommend the disposal of assets no longer needed by the Department to fund the modernization program, and to see them through their successful implementation. Section 115. Powers and Functions of the Committee. The Congressional Oversight Committee on Agriculture and Fisheries Modernization shall have the following powers and functions; 1) Prescribe and adopt guidelines that will govern its work; 2) Hold hearings, receive testimonies and reports pertinent to is specified concerns;

280 COMPENDIUM OF RTF LAWS 3) Secure from any department, bureau, office or instrumentality of the Government such assistance as may be needed, including technical information, preparation and production of reports and submission of recommendations or plans as it may require; 4) Summon by sub-poena any public or private citizen to testify before it, or require a subpoena duces tecum to produce before it such records, reports or other documents as may be necessary in the performance of its functions; 5) Use resource persons from the public and private sectors as may be needed; 6) Carry on the winding-up work of AGRICOM, such as editing and printing all technical reports and studies as well as bibliographic cataloguing of its collection of source materials, continue its information and advocacy work; 7) Cause to be transferred to the Committee all works, outputs, source materials and assets, funds, supplies and equipment of AGRICOM; 8) Approve the budget for the work of the Committee and all disbursements therefrom, including compensation of all personnel; 9) Organize it staff and hire and appoint such employees and personnel whether

Food Availability Laws 281 temporary, contractual or on consultancy, subject to applicable rules, and 10) Generally, to exercise all the powers necessary to attain the purposes for which it is created. Section 116. Periodic Report. - The Committee shall submit periodic report on its findings and make recommendations on actions to be taken by Congress and the appropriate departments, and that in order to carry out the objectives of this Act, an initial amount of Twenty million pesos (P20,000,000.00) is hereby appropriated for the Oversight Committee for the first year of its operation. Section 117. Automatic Review. - Every five (5) years after the effectivity of this Act an independent review panel composed of experts to be appointed by the President shall review the policies and programs in the Agriculture and Fisheries Modernization Act and shall make recommendations, based on its findings, to the President and to both Houses of Congress. Section 118. Repealing Clause. All laws, decrees, executive issuance, rules and regulations inconsistent with this Act are hereby repealed or modified accordingly. Section 119. Separability Clause. - The provisions of this Act are hereby declared to be separable, and in the event one or more of such provisions are held unconstitutional, the validity of the other provisions shall not be affected thereby.

282 COMPENDIUM OF RTF LAWS Section 120. Effectivity. This Act shall take effect thirty (30) days from the date of its publication in the Official Gazette or an at least two (2) newspapers of general circulation. Approved: SGD. JOSE DE VENECIA, JR. Speaker of the Hose of Representatives SGD. ERNESTO MACEDA President of the Senate This Act, which is a consolidation of Senate Bill No. 2245 and House Bill No. 2 was finally passed by the Senate and the House of Representatives on December 15, 1997 and December 16, 1997, respectively.

SGD. ROBERTO P. NAZARENO Secretary General House of Representatives SGD. LORENZO E. LEYNES, JR. Secretary of the Senate

Approved: December 22, 1997 SGD. FIDEL V. RAMOS President of the Philippines

Food Availability Laws 283 Republic of the Philippines Congress of the Philippines Metro Manila Fifth Regular Session Begun and held in Metro Manila, on Monday, the twenty-second day of July, nineteen hundred and ninety-one. [REPUBLIC ACT NO. 7607] AN ACT PROVIDING A MAGNA CARTA OF SMALL FARMERS Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: S e c t i o n 1. Title. - This Act shall be known as the Magna Carta of Small Farmers. CHAPTER I GENERAL PROVISIONS S e c t i o n 2. Declaration of Policy. - It is the declared policy of the State to give the highest priority to the development of agriculture such that equitable distribution of benefits and opportunities is realized through the empowerment of small farmers. While the State recognizes the fact that the welfare and development of the small farmers is their primordial responsibility, the

284 COMPENDIUM OF RTF LAWS State shall provide the necessary support mechanism towards the attainment of their socioeconomic endeavors. Recognizing that rural development based on growth and equity requires full integration of women and youth in the mainstream of development, the State shall ensure that these sectors are provided ample opportunity to develop their skills, acquire productive employment and contribute to their communities to the fullest of their capabilities. To ensure the efficient use and sustainability of land, water and other productive resources, the State shall ensure that ecological balance and environmental protection are maintained and observed in its pursuit of rural development goals. In pursuance of this policy, the State shall recognize the right of small farmers and farmworkers, as well as cooperatives and independent farmers organizations, to participate in the planning, organization, management and implementation of agricultural programs and projects especially through the bayanihan spirit. It shall support agriculture through appropriate policies, research, technology and training, and adequate financial, production, marketing and other support services to enhance agricultural productivity. In addition, it shall

Food Availability Laws 285 provide incentives and reward systems to small farmers so as to accelerate agricultural productivity and to promote self-sufficiency and full development of agricultural potentials. Section 3. Scope of Application. - This Act shall cover all small farmers and, to the extent herein provided, the departments, offices, agencies, subdivisions or instrumentalities of the National Government. S e c t i o n 4. Definition of Terms. - For purposes of this Act, the term: (1) Small farmer refers to natural persons dependent on small-scale subsistence farming as their primary source of income and whose sale, barter or exchange of agricultural products do not excecd a gross value of One hundred eighty thousand pesos (P180,000) per annum based on 1992 constant prizes. An inter-agency committee composed of the Department of Agrarian Reform, the Department of Trade and Industry, the Department of Finance and the National Economic and Development Authority and headed by the Department of Agriculture may conduct periodic review and adjustments of the income level to take into account the effects of changes in inflation, devaluation and consumer price index;

286 COMPENDIUM OF RTF LAWS (2) Farmers organization refers to farmers cooperatives, associations, or corporations duly registered with appropriate government agencies and which are composed primarily of small agricultural producers, farmers, farmworkers, and other agrarian reform beneficiaries who voluntarily join together to form business enterprises which they themselves own, control and patronize; (3) Small agricultural producer refers to any self-employed individual who, by himself or with his family, provides the primary labor requirement of his business enterprises or one who earns at least fifty percent (50%) of his gross income from the payment, proceeds or income of the labor he provides; (4) Production infrastructure refers to farm-to-market roads, irrigation, rural electrification, ports, drying areas, public sites, warehouses and other physical facilities used for productivity enhancing services, extension management assistance, training, research and development; (5) Pre-harvest activities include, but are not limited to, seedbed and land preparation, planting, weeding, pest and disease control, fertilizer application, water management and harvesting;

Food Availability Laws 287 (6) Postharvest activities include, but are not limited to, threshing, drying, milling, storing and handling of produce and such other activities as shelling, stripping, winnowing, chipping and washing; (7) Extension services refers to the technology transfer provided by the Government and nongovernment organizations to the agricultural sector such as training of farmers, credit assistance and the like; (8) Transportation infrastructure includes roads, bridges, ports, airports, and the different modes of transportation using these infrastructure; (9) Preharvest facilities include, but are not limited to, plows, harrows, tractors, rotavators and sprayers; (10) Postharvest facilities include, but are not limited to, threshers, moisture meters, dryers, weighing scales, milling equipment, storage facilities, buying stations, market infrastructure and transportation facilities; (11) Market infrastructure refers to facilities such as market buildings, slaughterhouses, holding pens and cold storage used by the farmers in marketing their produce;

288 COMPENDIUM OF RTF LAWS (12) Input subsidy refers to assistance extended by the Government to the farmers in terms of discounted prices of farm inputs such as fertilizer, pesticide and seed; (13) Agrarian reform credit includes production or other types of loans used for the acquisition of work animals, farm equipment and machinery, seeds, fertilizers, poultry and livestock feeds and other similar items; acquisition of lands authorized under the Comprehensive Agrarian Reform Law (CARL); construction or acquisition of facilities for the production and effective merchandising of agricultural commodities; (14) Price subsidy refers to the payment of Government of an additional amount for every unit of output sold by the farmers in the open market; (15) Farmworker is a natural person who renders service value as an employee or laborer in an agricultural enterprise or farm regardless of whether his compensation is paid on a daily, weekly, monthly or pakyaw basis; (16) Upland farming refers to planting of upland crops which usually require less water than other crops, as in nonirrigated and elevated farm areas;

Food Availability Laws 289 (17) Rural bank refers to banks duly organized under Republic Act Numbered Seven hundred twenty with authority to operate under existing laws; (18) Cooperative bank refers to banks whose owners are farmers associations or cooperatives; (19) Private development bank refers to banks duly organized under Republic Act Numbered Four thousand ninety-three with authority to operate under existing laws; (20) Banks collectively used, means the rural banks, cooperative banks, and private development banks as defined in paragraphs 17, 18 and 19, Section 3 of this Act; (21) Irrigated lands are agricultural lands which are supported by irrigation systems; (22) Non-irrigated lands are agricultural lands which lack irrigation systems and are usually rainfed; (23) Certified seed refers to seeds that passed the seed certification standards of the Bureau of Plant Industry and which are the progeny of foundation, registered or certified seeds that are so handled as to maintain satisfactory genetic identity and varietal purity;

290 COMPENDIUM OF RTF LAWS (24) Good seed refers to seeds that are the progeny of certified seeds so handled as to maintain a minimum acceptable level of generic purity and identity and which is selected at the farm level; (25) Cooperative refers to a duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve a lawful common social economic end, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles; (26) Integrated Pest Management (IPM) refers to a pest management system which utilizes all suitable methods and tecniques in as compatible a manner as possible to maintain the pest population at a level below that causing economically unacceptable damage or loss without endangering the environment; and (27) Locally available materials refers to form lumber, gravel and sand, nipa, sawali, old G.I. sheets and other low-cost, indigenous or used materials that could be used as inputs in small infrastructure projects.

Food Availability Laws 291 CHAPTER II FARMERS ORGANIZATION S e c t i o n 5. Right to Organize. - The State recognizes the right of farmers to organize themselves to promote their welfare and advance or safeguard their interests. Towards these end, the Government shall assist small farmers in establishing such self-help organizations such as farmers cooperatives and associations. In particular, the Government shall encourage the formation of marketing cooperatives among farmers in order to enable members to purchase inputs at lower cost and obtain fair prices for their produce. S e c t i o n 6. Farmers Representation in Government. After voluntarily organizing themselves on the barangay, municipal, provincial and regional levels, the farmers who have been elected through all levels shall elect from among themselves their national officials who, notwithstanding existing laws to the contrary, shall occupy a seat in the boards of concerned government agencies such as, but not limited to, the Philippine Coconut Authority, the National Food Authority, the Philippine Crop Insurance Corporation, the National Irrigation Administration and others.

292 COMPENDIUM OF RTF LAWS On all other levels, the farmer representatives shall serve as members of planning and implementing units of the local governments and shall act as the official representatives of the farmers with whom the Government shall coordinate with: Provided, That all farmer representatives are members of primary farmers organizations preferably cooperatives and have been elected in all preceding levels. CHAPTER III EMPOWERMENT OF THE SMALL FARMERS S e c t i o n 7. G eneral Provisions. - Empowerment of small farmers refers to provision of opportunities whereby farmers can have access to ownership or management of production resources. To achieve this, small farmers rights and obligations that specifically promote such empowerment are hereby given a legislative mantle. Through these provisions, the farmers rights to participate in the charting of their political, economic and social development are made inviolable. Likewise, the corresponding obligations of the farmers to initiate, or undertake patriotic and nationalistic endeavors must be fulfilled.

Food Availability Laws 293 S e c t i o n 8. Farmers Rights. - The farmers have the right to: (1) Conduct their activities in an atmosphere guaranteed by a support price program for certain agricultural commodities such as rice and corn; (2) Participate in a market free from monopoly, cartel or any other situation which may suppress prices to their disadvantage; (3) Be covered by social security to serve as protection from event such as calamities, death, sickness and disability; (4) Avail of credit at minimal interest rates and with a minimum of collateral requirements for their farm and basic household needs; (5) Avail of and distribute farm inputs and services; (6) Be heard and repre sent e d in t he Government; (7) Be regularly informed of such vital information as market prices, government agricultural policies, market demands and farming practices; (8) Benefit from our countrys natural resources under existing laws; (9) Pursue any appropriate education and skills development towards the improvement of the quality of life;

294 COMPENDIUM OF RTF LAWS (10) Eventually assume certain processing and marketing functions of government agencies; and (11) Avail of technical assistance from the appropriate government agency in the preparation of project feasibility studies in availing loans and other forms of government economic assistance. S e c t i o n 9. Farmers Obligations. - The farmers shall: (1) Make use of their farmersorganizations preferably cooperatives in order to enhance their capabilities in production, processing, marketing and financing towards self-reliance; (2) Aim for inctreased productivity through the use of recommended farm practices and quality inputs; (3) Comply with the terms and conditions stipulated in the availment of any form of assistance from the Government, financial institutions and nongovernment organizations to enable others to equally benefit from such assistance; (4) Adopt production and marketing strategies to avail of economies of scale, soil and climatic conditions, idle farm, labor and innovative agricultural technology through crop zonification, diversification, home and backyard industries, farming systems and similar activities;

Food Availability Laws 295 (5) Through their cooperative, share with the consuming public the benefits derived from economies of scale, integration of processing and marketing activities and the application of better technology in the form of reasonable prices and superior quality of products; (6) Share in the delivery of public services by contributiing available labor and material resources to activities such as the maintenance of irrigation canals, the construction of small water impounding projects, the establishment of buying stations and public markets, and the establishment of plant nurseries and seedbanks; (7) Exert efforts to meet local demand requirements to avert any shortage that may necessitate importation; (8) Participate in the conservation, protection and development of the national patrimony; (9) Promptly pay all applicable fees, license fees and taxes to the appropriate government agencies; (10) Participate in and contribute to government insurance and social security programs; and (11) Und ertake self-help c om m unit y development projects such as cottage industries, backyard farming and other economic-enhancement projects.

296 COMPENDIUM OF RTF LAWS CHAPTER IV INFRASTRUCTURE AND FARM INPUTS Section 10. Provision of Infrastructure Support, Inputs and Services. - Consistent with the countrys thrust for social equity and increased agricultural productivity, the Government shall provide infrastructure support, access to farm inputs and services to the agriculture sector, particularly to small farmers based on their absorptive capacity. In the construction and maintenance of infrastructure projects, the Government shall undertake this with the farmers organizations for the purpose of utilizing locally available manpower and materials. Every farmer shall be assisted in gaining access to, obtaining, owning or operating facilities necessary for pre- and postharvest activities, for support services, and for procurement and distribution of inputs through their farmers organizations. Each city or municipality which is predominantly agriculture-based shall ensure that appropriate linkages with component barangays, nongovernment organizations and concerned government agencies are established to ensure that such assistance is made available to local farmers.

Food Availability Laws 297 Section 11. Transportation Infrastructure. - The Government shall provide farm-to-market roads, feeder roads and bridges which will link the farms to the market. Priority shall be given to areas predominantly populated by small farmers and where agricultural productivity is relatively low. To ensure accessibility of markets to farmers and thereby minimize product wastage, the Government shall also provide for the construction of additional piers or wharves and airports and the improvement of such existing facilities especially in areas having surplus agricultural production and in other strategic areas in the country. It shall devise schemes to allow farmers to operate and eventually obtain their own transport equipment. The Department of Public Works and Highways shall, in coordination with other agencies or subdivisions of the National Government, implement the provisions of this section. Farmers organizations shall participate in site identification, preparation, actual execution and maintenance of infrastructure projects especially in tapping available local manpower and materials. Section 12. Communications Infrastructure. - To facilitate farmers access to vital information, the Government shall make available at

298 COMPENDIUM OF RTF LAWS least one (1) communication facility in each municipality for this purpose. This facility is to be operated by the Department of Agriculture or by a designated farmers organization. Section 13. Postharvest Facilities/Services. - Every barangay which is predominantly agriculture-based shall be entitled to at least one (1) storage facility and a multipurpose pavement/plaza which can be used for various purposes including drying of agricultural produce. These shall be located in the chosen barangay site or in any area to be approved by the sangguniang barangay in consultation with the small farmers and farmers organizations who shall provide the labor and other locally available materials for the construction and maintenance of the facilities. Priority shall be given to areas where no such facilities are available and predominantly populated by small farmers. The selected site shall, as much as practicable, be accessible by transportation and communication facilities and must be near the center of the barangay. The farmers organizations may collect reasonable fees for services rendered in connection with the use of such facilities: Provided, That the collections therefrom shall be used only for the maintenance, improvement and expansion of these facilities: Provided, further, That an

Food Availability Laws 299 amount representing rental fees for the land shall be remitted to the barangay, where applicable. Section 14. Postharvest Facilities. - The National Food Authority (NFA) shall establish the necessary postharvest facilities such as rice mills, dryers, threshers, warehouses, cold storage and other facilities which are needed in the area. Such postharvest facilities shall be leased to farmers organizations. Viable cooperatives shall have the option to buy such facilities from the NFA. Underutilized or nonoperational postharvest facilities of tlic Government shall be made available to farmers organizations through lease or sale. Section 15. Market Infrastructure. - To assure farmers of markets for their produce, the Government shall assist farmers organizations in establishing and operating market infrastructure, facilities and equipment. Section 16. Use of Good Seeds and Planting Materials. The State shall ensure that every farmer has the equal opportunity to avail of, to produce and to market good seeds and planting materials recommended by the Department of Agriculture as capable of producing highyielding, pest-and-disease resistant, and widely-adapted crops for irrigated, rainfed and upland areas. Farmers organizations

300 COMPENDIUM OF RTF LAWS shall coordinate with the field offices of the Department of Agriculture and other concerned government agencies in ensuring that seeds and the means necessary to engage in the production and marketing of seeds suited to prevailing conditions in their respective communities are made available to small farmers. To ensure the constant availability of appropriate and affordable seeds of recommended varieties, the Department of Agriculture, through the Bureau of Plant Industry, and in cooperation with the private seed producers associations, the farmers organizations, the Institute of Plant Breeding of the University of the Philippines at Los Banos, and other state universities, colleges, and other institutions, shall extend all the necessary support needed to give the farmers the capability to undertake seed production and distribution services. The Department of Agriculture shall conduct information campaigns and accelerate dissemination of technology on the use, production and storage of quality seeds. It shall also provide seed quality control services to discourage the use of inferior seeds and other varieties. Section 17. Use of Fertilizers and Pesticides. - The Government together with the small farmers shall encourage the use of fertilizers

Food Availability Laws 301 and pesticides which have an acceptable level of deleterious effects on the health and the environment. They shall also promote the use of organic fertilizer and Integrated Pest Management (IPM). In addition, they shall promote efficient and proper usage of fertilizer and pesticide taking into consideration the characteristics of the soil and crop and thereby eliminate losses due to wasteful and improper application. The Government shall support farmers organizations in the trading of fertilizers and pesticides. The Department of Agriculture shall formulate policies and implement programs regulating the use of fertilizers and pesticides. It shall conduct an extensive information campaign on the nature and consequences of using highly toxic pesticides. It shall monitor and regulate the sale of pesticides to ensure that banned pesticides are not sold in the market. It shall conduct thorough evaluation to check the data submitted by pesticide companies. The Department of Agriculture shall likewise ensure adequate supply of fertilizers at reasonable prices. To eliminate added cost passed on by traders to the farmers, farmers organizations shall be encouraged to undertake the distribution of fertilizers to their members.

302 COMPENDIUM OF RTF LAWS CHAPTER V FARM MACHINERY AND EQUIPMENT Section 18. Availability of Farm Machinery and Equipment. -The Department of Agriculture, through the barangay or municipal governments and farmers organizations, shall support activities to ensure the availability of farm machinery and equipment for the use of small farmers in both pre- and postharvest operations. For purposes of monitoring, all farm machinery and equipment must be registered with the municipal government. The Department shall devise a program to increase the population of draft animals in the area. Local agricultural officers shall, in coordination with farmers organizations, devise schemes in the sharing, pooling, leasing or acquiring draft animals, equipment or machinery needed by the farmers. The Government shall support the farmers in acquiring their inventory of farm equipment. With the use of grants-in-aid, as well as other domestic and foreign funds, the Government shall acquire and distribute to farmers organizations farm equipment and machinery so as to increase their productive capabilities. The funding requirement for this undertaking shall be included in the annual budget of the Department of Agriculture.

Food Availability Laws 303 CHAPTER VI WATER MANAGEMENT AND IRRIGATION FACILITIES Section 19. Water Management. - The Government shall provide adequate support services that will address the development, management and conservation of water resources. The Department of Public Works and Highways, through the National Irrigation Administration and the Department of Agriculture, and with the participation of farmers organizations, shall undertake the implementation of small water impounding projects which can provide supplemental irrigation and additional income from fish and duck raising, and at the same time minimize soil erosion, siltation and flooding. Training programs for small farmers on these subjects shall be provided. Focus shall also be made on small irrigation systems which are more efficient, cost-effective and cheaper to establish. The design and construction of irrigation systems shall be based not only on economic rate of return but also on the sustainable use of these systems. Inefficient and underutilized irrigation systems shall be rehabilitated, improved and maintained. To enhance the compatibility of environmental protection with sustained agricultural productivity, the Department of Environment and Natural Resources

304 COMPENDIUM OF RTF LAWS shall adopt measures to promote conservation practices such as reforestation, watershed management, antipollution programs and other similar measures. In addition, the Department of Agriculture shall implement specific measures to ensure that farming practices are not detrimental to the environment. T o ensure the protection of watersheds and availability of irrigation services in rainfed and upland farms, the Department of Environment and Natural Resources shall, in collaboration with local government units, strictly enforce conservation measures and provide for the restoration of the protective forest cover and stability of the countrys critical watersheds. Farmer-beneficiaries shall be organized into irrigators associations which shall be tapped by the Department of Environment and Natural Resources to implement its communitybased reforestation projects, particularly the development and management of watershed of the irrigation projects. T o ensure the integration of irrigation delivery systems with other agriculture support services, there shall be close coordination among the National Irrigation Administration, the Department of Agriculture, and the Department of Environment and Natural Resources through the local development councils. The Bureau of Soils and Water Management shall prepare for each barangay, municipality

Food Availability Laws 305 or city which is predominantly agriculturebased, parcellary maps identifying agricultural lands which can be reached by irrigation systems. In order to ensure the availability of irrigation services in areas with production potential, the Government shall implement irrigation pump distribution programs particularly in areas predominantly populated by small farmers. Section 20. Access to Irrigation Services. - While the Government, through the National Irrigation Administration (NIA) and other concerned offices, continues to provide irrigation services, farmers organizations shall be encouraged to spearhead the construction of irrigation systems. T owards this end, the Government shall encourage small farmers to join or form irrigators association. In addition, it shall promote participation of farmers to develop their capabilities to eventually assume the operation and maintenance of irrigation systems and the responsibility of collecting fees from the individual members and remitting an amount to the NIA. The NIA shall undertake the development and institutionalization of second-crop irrigation facilities in support of multi-crop farming. It shall also devise schemes for small farmers to avail of electric pumps or diesel-powered deep well irrigation systems in barangays or communities where water is scarce.

306 COMPENDIUM OF RTF LAWS CHAPTER VII AGRICULTURAL CREDIT Section 21. Rural Credit Delivery System. - An efficient credit delivery system guided by a sound rural credit policy geared towards the needs of small farmers shall be established. The features of the credit delivery system for small farmers shall include, among others, a maximum rate of interest not to exceed seventy-five percent (75%) of commercial rate per annum inclusive of all service, penalty and other charges. It shall also include minimum collateral requirements, accessibility, reasonable repayment terms, expeditious loan documentation and processing procedures. Services shall be expanded to include not only loans for procurement of production inputs but also for other needs and purposes of small farmers such as education and health needs. The Department of Agriculture, through the Agricultural Credit Policy Council (ACPC) and other concerned agencies, shall give subsidies for the education and training of small farmers on credit awareness, loan acquisition and loan repayment. It shall conduct an intensive information drive that will promote the establishment of strong and viable farmers

Food Availability Laws 307 organizations such as cooperatives, credit unions, rotating savings, and credit associations and nongovernment In order to reduce the risks and administrative costs organizations (NGOs) which play a major role in increasing small farmers access to credit. Likewise, the Government shall also set up a system which will provide information on the credit worthiness of potential borrowers. of lending institutions, the Government shall expand its loan guarantee coverage under the Comprehensive Agricultural Loan Fund to be administered by the ACPC and crop insurance programs to cover not only rice and corn but other crops, livestock, poultry, fishery, and agro-forestry as well. The ACPC shall conduct special projects to promote innovative financing schemes for small farmers. Payments under such insurance program shall be prompt and any delay without just cause shall entitle the beneficiary to reasonable interest rate on the amount due. In addition, the Government shall promote the development of farmers organizations. Toward this end, the Government, through the ACPC and other concerned agencies, shall subsidize costs of information dissemination, monitoring, training and registration. The farmers organizations may serve as conduits of rural banks, private development banks

308 COMPENDIUM OF RTF LAWS and other banks for effective agricultural credit delivery. An amount shall be earmarked for lending exclusively to farmers cooperatives at subsidized interest rates. All agricultural lending programs of the Government are hereby consolidated and placed under the administration of the Land Bank of the Philippines. The funds shall be augmented by annual budgetary allocations which shall be managed as a self-sustaining fund base by the Land Bank of the Philippines in coordination with the ACPC. A portion of all loanable agricultural funds shall be utilized for direct lending to small farmers for their production, processing, postharvest and marketing requirements. To be able to generate funds that will be used to cover for the administrative costs of the agricultural funds being handled by the Land Bank of the Philippines, all government agencies that are involved in the development of the small farmers shall be allowed the option to deposit their funds in the Land Bank of the Philippines. Section 22. Cooperative Banks. - Small farmers shall have access to reasonable credit/loan package. The Government shall promote the establishment of cooperative banks and promote the growth of networks of cooperative banks.

Food Availability Laws 309 CHAPTER VIII WAGE, INCENTIVES AND PRICE SUPPORT Section 23. Incentives. - Small farmers, including agricultural share tenants and lessees, regular and seasonal farmworkers and beneficiaries under the Comprehensive Agrarian Reform Law (CARL), shall be entitled to the following privileges or incentives: (1) Financial and technical assistance shall be awarded to deserving farmers organizations implementing livelihood projects. Concerned national offices or agencies shall assist them in locating markets for their produce and by providing other support services necessary for the success of their projects; (2) Barangay, municipal or provincial officials shall assist their respective communities to make the necessary representations before the appropriate government agencies in seeking assistance for agro-based projects. They shall be encouraged to support farmers to set up site specific agro-based projects that shall be operated in a businesslike manner; (3) The Department of Agriculture and other concerned agencies shall promote investment and financing programs designed to channel financial resources to livelihood projects in the countryside;

310 COMPENDIUM OF RTF LAWS (4) Preferential tariff terms shall be extended on farm inputs and spare parts, farm machinery and equipment imported by farmers organizations provided that these are used specifically for their projects; (5) The Government shall give incentives and recognition to farmers and farmers organizations adopting more efficient farm technologies or equipment resulting in increased productivity and income; (6) The Government shall widen the scope of the existing crop and livestock insurance programs by providing an insurance scheme that can accommodate major crops, livestock and other produce of small farmers; (7) Study tours of short duration, local or overseas, shall be provided to deserving small farmers to improve their technological competence and knowledge; (8) A system of certification of farm skills shall be instituted by the Department of Agriculture through duly authorized institutions to upgrade the skills of farmers and farmworkers; (9) Farmers insurance coverage by the Social Security System subject to its charter shall be extended to small farmers and farmworkers; and (10) Importations shall not be allowed on agricultural products that are produced locally in sufficient quantity. Importation

Food Availability Laws 311 policies should include the protection of new and developing crops such as soybean, ramie, sorghum and wheat. Importation policies shall be reviewed periodically by the Government in consultation with farmers organizations. Section 24. Income-generating Activities. - Small farmers shall be encouraged to engage in other income-generating activities to supplement their farm income. National agencies, in collaboration with local government units, shall provide technical and skills training assistance through farmers organizations, and shall also be tasked to provide marketing assistance to small farmers. Farmers organizations shall be the main conduits for funding livelihood projects. Assistance to livelihood projects shall include identification of specific markets and facilitating access to market facilities. The Government shall also provide other support services necessary for the success of livelihood projects. Priority shall be given to demand-pulled production activities. Section 25. Price Support. - The Department of Agriculture through its appropriate agencies, shall establish a price support system for certain agricultural products, especially rice and corn, taking into consideration the need to increase the real income of small farmers: Provided, However, That the price support established shall not result in the increase of the retail prices of such products beyond the paying capacity of the

312 COMPENDIUM OF RTF LAWS average consumer: Provided, further, That the Government shall also endeavor to set farmgate prices that respond to the changing economic conditions. In addition, the Government shall minimize importation of farm inputs which are being developed locally, such as fertilizers and seeds, except at times of calamities or emergencies. Section 26. Minimum Wage. - Rural workers including regular farmworkers shall be entitled to wage levels prescribed by the Regional Tripartite Wages and Productivity Board pursuant to Republic Act Numbered Sixty-seven hundred twenty-seven. Contract workers or seasonal farmworkers shall also be entitled to minimum wages unless they receive higher wages under the terms of their contracts. Section 27. Procurement of Agricultural Produce. The National Food Authority or any other appropriate agency of the Department of Agriculture which implements the government price support for agricultural produce, especially rice and corn, shall only procure and purchase palay, corn or other agricultural produce directly from small farmers or farmers organizations. Such agency shall devise an effective procurement scheme to ensure that small farmers can avail of this benefit. Any official or employee of such agency who allows, consorts or connives with any trader or nonfarmer in the purchase of rice, corn or

Food Availability Laws 313 other agricultural produce or inputs subject to price support or any other government subsidy which is intended exclusively to benefit small farmers, shall be punished by a fine of not less than Ten thousand pesos (P10,000) or by imprisonment for a term of not less than two (2) years but not more than four (4) years, or both at the discretion of the court, without prejudice to administrative sanctions imposed by the subject agency with perpetual disqualification to hold public office. The Probation Law shall not apply to penalties imposed under this Act. Authentic copies of any evidence of procurement or purchase of palay, corn and other agricultural produce enjoying price support as provided in this section shall, within thirty (30) days from the issuance thereof, be furnished the Bureau of Internal Revenue by the National Food Authority or any other agency of the Government implementing price support therefor, subject to the penalties provided in the preceding paragraph for violation thereof. The penalties provided under this section shall likewise apply to any official or employee of the National Food Authority or to any such similar agency of the Government who consorts or connives with any trader or nonfarmer in the sale of rice, corn or other agricultural produce sold under any government program.

314 COMPENDIUM OF RTF LAWS CHAPTER IX RESEARCH AND EXTENSION SERVICES Section 28. Research and Development System. The R and D System shall conduct mission-oriented or strategic research and adaptation trials taking into consideration specific needs of the intended beneficiaries. The results of these adaptation trials shall be verified under actual farm conditions to determine their performance in comparison with existing farming systems. The R and D System shall complement national research centers by contributing studies or actual data to such studies. It shall concentrate on addressing the problems faced by farmers at the local level. The R and D System shall also tap the knowledge or experience of the farmers in the area and, through proper assessment and development, synthesize such with the present stock data. The Philippine Council for Agriculture and Resources Research and Development shall be the lead agency to strengthen the existing R and D System in coordination with the Bureau of Agricultural Research, the Philippine Rice Research Institute and other government research institutions; state research institutions;

Food Availability Laws 315 private research institutions; state colleges and universities; and the farmers organizations in the area. Section 29. Demonstration Farms. - Technology verification and piloting shall be conducted by the farmers organizations on the farmers fields under the supervision of the R and D personnel. These demonstration farms shall showcase technologies that have passed regional adaptability tests. Emphasis shall be given on the ease of application of the concept/technique, the use of indigenous technology and materials, resource conservation, the increase in productivity and income of the farmers and other similar considerations. Section 30. Focus on Research, Training and Extension. -Research, training and extension shall focus on the development and transfer of adaptive tecnologies that provide solutions to problems encountered by the small farmers in the areas of production, postharvest and processing, marketing, enterpreneurship and management, and community organizing and institutional development. Section 31. Studies on Soil Types and Climatic Conditions. - The Bureau of Soils and Water Management (BSWM) and other concerned agencies shall conduct studies in the municipalities and provinces in

316 COMPENDIUM OF RTF LAWS order to determine the best use of the land, the most profitable cropping mix, and the fertilizers needed for such areas and crops. The BSWM shall likewise determine the soil management practices suitable for the areas to ensure sustainability of farming in these areas. Section 32. Extentsion Services. - The extension workers of the Department of Agriculture shall serve as linkages between the small farmers and farmers organizations. Together, they shall identify on-farm problems to be referred to the research and development institutions. They shall likewise disseminate tested locationspecific technologies to their farmer clientele. The farmers organization shall complement the extension program of the Department of Agriculture for more effective technology transfer and information dissemination. Section 33. Agro-industrial Linkages. The Department of Trade and Industry and the Department of Agriculture shall jointly devise a program that will increase the linkage between agriculture and industries, especially those in industrial estates , through the promotion of processing industries in order to develop a sound agri-based industrial development of rural communities.

Food Availability Laws 317 CHAPTER X FINAL PROVISIONS Section 34. Appropriations. - The amounts necessary to carry out the provisions of this Act are hereby authorized to be appropriated in the General Appropriations Act of the year following its enactment into law. Other funding sources like the Philippine Aid Plan may also be tapped for the purpose. Section 35. Implementing Guidelines. - Within sixty (60) days from the effectivity of this Act, the Department of Agriculture shall issue the necessary rules and regulations to implement this Act. Section 36. Repealing Clause. - All laws, decrees, executive orders, administrative orders, rules and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or modified accordingly: Provided, however, That nothing in this Act shall amend, modify or repeal the provisions of Republic Act Numbered Seventy-one hundred sixty, otherwise known as the Local Government Code of 1991. Section 37. Separability Clause. - In case any provisions of this Act or any portion thereof is declared unconstitutional by a competent court, other provisions shall not be affected thereby. Section 38. Effectivity Clause. - This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in two (2) newspapers of general circulation.

318 COMPENDIUM OF RTF LAWS REPUBLIC ACT NO. 7900 AN ACT TO PROMOTE THE PRODUCTION, PROCESSING, MARKETING AND DISTRIBUTION OF HIGH-VALUED CROPS, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES. Section 1. Title. This Act shall be known as the High-Value Crops Development Act of 1995. Section 2. Declaration of Policy. It is hereby declared the policy of the State to accelerate the growth and development of agriculture in general, enhance productivity and incomes of farmers and the rural population, improve investment climate, competencies and efficiency of agribusiness and develop high-value crops as export crops that will significantly augment the foreign exchange earnings of the country, through an allout promotion of the production, processing, marketing, and distribution of high-value crops in suitable areas of the country. The State shall be guided by the principles that land has a social function and land ownership has a social responsibility. As such, owners and lessees of agricultural land, being stewards, have the obligation to cultivate the lands they own or lease and make the land economically productive

Food Availability Laws 319 on a sustainable and environmentally friendly manner. The State has the right to expropriate lands not utilized for the benefit of the community and the country as a whole. The State shall effect an efficient use of land and other productive resources with due regard to ecological balance and environmental protection, rural development, equity consideration, mobilization of human resources, and increased agro-industrial production for the alleviation of poverty and sustainable growth objectives. Section 3. Scope of Application. This Act shall cover upland dwellers as well as lowland tenants, indigenous and cultural communities, Comprehensive Agrarian Reform Program (CARP) beneficiaries, upland farm owners, farmers, farmers organizations/associations/ cooperatives, community associations and farmworkers, and to the extent herein provided, the departments, offices, agencies, subdivisions, branches or instrumentalities in the areas identified by the Department of Agriculture as key commercial crop production areas. Section 4. Definition of Terms. For purposes of this Act, the term: a. Non-traditional crops refer to crops other than rice, corn, coconut and sugar.

320 COMPENDIUM OF RTF LAWS b. High-value crops (HVC) these are crops other than traditional crops which include, but are not limited to: coffee and cacao, fruit crops (citrus, cashew, guyabano, papaya, mango, pineapple, strawberry, jackfruit, rambutan, durian, mangosteen, guava, lanzones, and watermelon), root crops (potato and ubi), vegetable crops (asparagus, broccoli, cabbage, celery, carrots, cauliflower, radish, tomato, bell pepper, and patola), legumes, pole sitao (snap beans and garden pea), spices and condiments (black pepper, garlic, ginger, and onion), and cutflower and ornamental foliage plants (chrysanthemum, gladiolus, anthuriums, orchids, and statice). c. Idle and abandoned land refers to any agricultural land not cultivated, titled or developed to produce any crop nor devoted to any specific economic purpose continuously for a period of three (3) years immediately prior to the receipt of notice of acquisition by the government as provided under the CARP. d. Alienable and disposable lands refer to those lands of the public domain which have been the subject of the present system of classification and declared as not needed for forest purposes.

Food Availability Laws 321 e. Forest land refers to the lands of the public domain which have not been declared as alienable or disposable, public forests, permanent forests or forest reserves, forest reservations, timberlands, grazing lands, game refuge, and bird sanctuaries. Section 5. Site Identification. The Department of Agrarian Reform and the Department of Agriculture, in coordination with the Department of Environment and Natural Resources, and the municipal government concerned, shall identify the broad areas suitable for high-valued crops production, within six (6) months after the effectivity of this Act: Provided, That such site identification shall be reviewed at appropriate intervals to ensure consistency with the agrarian reform program and the national land use policy. Section 6. Tenurial Arrangement. Farmer cooperatives may lease the land for a period of twenty-five (25) years, and not to exceed one thousand hectares (1,000 has.) in area. Section 7. Farm Model. For the program, farmers may adopt the cooperative system in putting up economically-sized farms for highvalue crop farming. Farmer members shall collectively manage individual farms which includes contracting process and means of production; planning and coordinating crops varieties; and raising breed, hectarage, distribution and some production measures

322 COMPENDIUM OF RTF LAWS with reference to the market it shall serve. Said farm models may be replicated by farmers organizations all over the country. Section 8. High-Value Crops Development Fund (HVCDF). For the purpose of providing the funding requirements of the production, marketing, and processing of high-value crops, and the establishment of low-cost credit to qualified project proponents, there is hereby created a High-Value Crops Development Fund (HVCDF), with an initial amount of One billion pesos (P1,000,000,000). The HVCDF shall be sourced from the Comprehensive Agricultural Loan Fund (CALF) and shall be managed by the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP). Other sources of funds, including but not limited to borrowings from local and international financial institutions, shall also be considered to further support the program: Provided, That sixty percent (60%) of the HVCDF shall be utilized for direct lending to high-value crop producers while the remaining forty percent (40%) shall be allocated by the Department of Agriculture to guarantee loans granted by private financial institutions toward highvalue crop production through existing guarantee institutions. The Department of Agriculture, which is directly responsible for

Food Availability Laws 323 the management of the HVCDF, is hereby authorized to designate the Land Bank of the Philippines and the Development Bank of the Philippines to manage the direct lending operations of the sixty percent (60%) portion of the HVCDF through LBP and DBP facilities or their conduits. All financial institutions, whether public or private, shall be tapped to support the program. Participating banks are hereby exempted from the compliance requirement of Presidential Decree No. 717: Provided, That they shall lend a minimum of five percent (5%) of their loanable funds without alternative compliance directly to farmers associations or cooperatives. Other sources of funds, including but not limited to borrowings from local and international financial institutions, shall also be considered to further support the program. Section 9. Incentives. The proponents of the program shall be entitled to the following incentives: a. Crop insurance the insurance program of the Philippine Crop Insurance Corporation (PCIC) shall be expanded to cover high-value crops. The premium rates shall be set not on the basis of, the performance of previous programs specifically on rice and corn;

324 COMPENDIUM OF RTF LAWS b. Credit assistance the HVCDF shall be loaned out to farmers organizations/ associations/cooperatives composed of, but not limited to, CARP beneficiaries subject to the prevailing Land Bank interest rates; c. Credit Guarantee to enhance the bankability of projects, a credit guarantee cover shall be extended by the Quedan and Rural Credit Guarantee Corporation (QUEDANCOR) which shall thereby be provided with a commensurate guarantee fund, in the form of equity, out of the HVCDF; d. Grace period on lease of government lands payments project proponents shall effect payment on the lease not earlier than two (2) years after the lease agreement is signed and approved. The grace period shall be determined by the gestation periods of the crops; e. Tax exemption project proponents as defined in Section 7 of this Act shall be entitled to the following tax exemptions: 1. Exemptions from taxes and duties subject to the provisions of Article 62 of Republic Act No. 6938 or the Cooperative Code of the Philippines; 2. Exemption from the value-added tax in accordance with Section 103 of the National Internal Revenue Code, as amended; and

Food Availability Laws 325 3. Exemption from taxes, fees and charges under Title One of Book Two of the Local Government Code of 1991 in accordance with Section 133(n) of the said Code. f. Market linkage the Department of Agriculture, in coordination with the Department of Trade and Industry, shall link-up agribusiness cooperatives directly with consumers cooperatives, agroprocessing companies, or exporters to provide marketing outlets and assure relatively higher and stable prices. Agroprocessing firms buying directly from project proponents shall be granted tax rebates. T o ensure health and proper trading, the agribusiness development group of the Department of Agriculture shall establish and enforce standards in grading, sampling and inspection, tests and analysis, specifications, nomenclature, units of measurement, code of practice and packaging, preservation, conservation and transportation of high-value crops. g. Technical and infrastructure support technical support on research and extension, infrastructure development, financial and market information shall be provided by the Department of Agriculture, Department of Trade and

326 COMPENDIUM OF RTF LAWS Industry, Department of Science and Technology, Cooperative Development Authority, state universities and colleges and other relevant government agencies; h. Post harvest facilities access to post harvest facilities, storage and distribution/ transport facilities of existing government agencies shall be facilitated. Assistance shall be given to qualified and viable farmers/ growers cooperatives in the availment of soft loans or grants for the construction of post-harvest, processing and storage facilities. Guidelines for the eventual transfer of ownership of these facilities to the proponent shall be formulated by the Department of Agriculture; i. Good seeds and planting materials the Department of Agriculture, in coordination with the state universities and colleges, the Department of Trade and Industry, and farmers organizations shall make good seeds and materials readily available to farmers/ farmers cooperatives to ensure high yield and good quality produce. However, the project proponents may be allowed to import, free of duties, high quality seeds/ planting materials subject to quarantine laws and Section 15 of Republic Act No. 7083 or the Seed Industry Development Act of 1992; and

Food Availability Laws 327 j. Fiscal incentives the same fiscal incentives granted by the Board of Investments shall be automatically granted to project proponents. Section 10. Inter-Agency Committee. A committee, composed of representatives from the Department of Agriculture, the Department of Agrarian Reform, the Bangko Sentral ng Pilipinas, the Land Bank of the Philippines, the Development Bank of the Philippines, the Cooperative Development Authority, the Department of Science and Technology, the Department of Trade and Industry, the Department of Environment and Natural Resources, and the Department of the Interior and Local Government and one (1) each from the small farmers and commercial producers sectors to be designated by the Secretary of Agriculture, shall formulate and prescribe, after public hearing and publication as required by law, the implementing rules and regulations in order to carry out the provisions of this Act. The representatives from the Department of Agriculture and the Department of Trade and Industry shall be the chairman and the vicechairman, respectively, of the committee. The Secretary of the Department of Agriculture shall report to both Houses of Congress on the status of the High-Value Crops Development Program biannually.

328 COMPENDIUM OF RTF LAWS Section 11. Agribusiness Development Group. The agribusiness development group of the Department of Agriculture shall be strengthened to implement, coordinate and monitor the program based on the rules and regulations setforth by the inter-agency committee. Aside from its usual functions, it shall be tasked to perform the following functions: a. Assist in the formulation of general and specific policies for the development of high-value crops; b. Set up the appropriate system to monitor the utilization of the HVCDF and shall furnish the Bangko Sentral ng Pilipinas regular reports on the financial institutions compliance to the program; c. Extend assistance in marketing and distribution of highvalue crops through monitoring and dissemination of market information, including identification of the local supplydemand situation, domestic market matching and overseas market intelligence and promotion activities on high-value crops; d. Enjoin the Department of Transportation and Communications to effect a more efficient, regular, adequate, suitable, and economical means of transporting and/or shipping of high-value crops, for purposes of reducing marketing costs and ensuring stable consumer supply;

Food Availability Laws 329 e. Encourage the establishment of wholesale markets in identified major centers of the country: Provided, That agricultural produce collection centers may also be established in areas where feasible, which may also serve as buying stations of farm products, packaging houses, pick-up points and meeting places of farmers/ growers cooperatives; f. Establish linkages with various government and private research institutions for the conduct of studies and researches designed to promote the production, marketing and processing of high-value crops; g. Conduct farmers training programs primarily aimed at increasing their knowledge on production technologies and on market potentials and prospects for various types of highvalue crops, through the DAAgricultural Training Institute (ATI), the DTI or the LGUs technicians or by contracting agriculturists and marketing specialists from private or academic institutions; h. Establish experimental stations and seed farms for the development of varieties suitable to the agro-climatic conditions of the area and markets that will provide greatest value added to high-value crops; and

330 COMPENDIUM OF RTF LAWS i. Devise and maintain a system for regularly obtaining information on current and future production, their prices and movement in trade, to determine and effect a balanced distribution of highvalue crops by means of inter-trading or intra-trading among the established wholesale markets. Such amount as may be needed for the initial operating expenses of the group shall be charged to any available funds in the appropriation for current operating expenditures of the Department of Agriculture. Thereafter, the amount necessary for its operations shall be included in the annual General Appropriations Act. Section 12. Repealing Clause. All laws or parts thereof, decrees, orders, rules and regulations inconsistent with the provisions of this Act are hereby repealed or modified accordingly: Provided, however, That nothing in this Act shall be construed or applied as amending the CARL and other laws on agrarian reform. Section 13. Separability Clause. If any of the provisions of this Act is declared invalid, the other provisions not affected thereby shall remain in full force and effect. Section 14. Effectivity Clause. This Act shall take effect immediately following its publication in a newspaper of general circulation or in the Official Gazette, whichever comes first.

Food Availability Laws 331 Congress of the Philippines Twelfth Congress First Regular Session REPUBLIC ACT NO. 9168 June 7, 2002 AN ACT TO PROVIDE PROTECTION TO NEW PLANT VARIETIES, ESTABLISHING A NATIONAL PLANT VARIETY PROTECTION BOARD AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Short Title. This Act shall be known and cited as the Philippine Plant Variety Protection Act of 2002 Section 2 . Statement of Policies. a) The State recognizes that an effective intellectual property system in general and the development of new plant variety in particular is vital in attaining food security for the country. T o this end, it shall protect and secure the exclusive rights of breeders with respect to their new plant variety particularly when beneficial to the people for such periods as provided for in this Act. b) The use of intellectual property bears a socioeconomic function. To this end, the State shall promote the diffusion of technology and information for the promotion of national development and progress for the common good.

332 COMPENDIUM OF RTF LAWS c) The State recognizes the indispensable role of the private sector, encourages the participation of private enterprises and provides incentives to needed investments in the development of new plant varieties. d) The State recognizes that science and technology are essential for national development and promotes the adaptation of technology and knowledge from all sources for the national benefit. The State also recognizes the need to protect and secure the exclusive rights of scientists and other gifted citizens to their intellectual property and creations. e) The State, while recognizing intellectual property rights in the field of agriculture, does so in a manner supportive of and not inconsistent with its obligation to maintain a healthful ecology in accord with the rhythm and harmony of nature. TITLE II Definitions Section 3. Definitions. a) Applicant means the breeder who applies for the grant of a Certificate of Plant Variety Protection. b) Board means the National Plant Variety Protection Board created by this Act.

Food Availability Laws 333 It shall also refer to the National Seed Industry Council during the transition period from the effectivity of this Act up to the time the said Board has been organized and operating. c) Breeder means: 1) The person who bred, or discovered and developed a new plant variety; or 2) The person who is the employer of the aforementioned person or who has commissioned the work; or 3) The successors-in-interest of the foregoing persons as the case may be; or 4) The holder of the Certificate of Plant Variety Protection. d) Certificate of Plant Variety Protection means the document issued by the Board pursuant to this Act for the protection of a new plant variety. e) Commission means to engage the services of a person to develop new plant varieties in exchange for monetary or any material consideration. f) Harvested material means any part of a plant with potential economic value or any product made directly therefrom in proper case. g) Holder means a person who has been granted a Certificate of Plant Variety Protection or his successors-in-interest.

334 COMPENDIUM OF RTF LAWS h) Persons include natural persons and juridical persons. i) Plant include terrestrial and aquatic flora. j) Plan t Variety Prot e c t ion ( PVP) means the rights of breeders over their new plant variety as defined in this Act. k) Propagating material means any part of the plant that can be used to reproduce the protected variety. l) Regulations means the rules and regulations promulgated by the Board for the purpose of implementing the provisions of this Act. m) Variety means a plant grouping within a single botanical taxon of the lowest known rank, that without regard to whether the conditions for plant variety protection are fully met, can be defined by the expression of the characteristics resulting from a given genotype or combination of genotypes, distinguished from any other plant groupings by the expression of at least one (1) characteristic, and considered as a unit with regard to the suitability for being propagated unchanged. A variety may be represented by seed, transplants, plants, tubers, tissue culture plantlets, and other forms.

Food Availability Laws 335 TITLE III Conditions for the Grant of the Plant Variety Protection Section 4. The Certificate of Plant Variety Protection shall be granted for varieties that are: a) New; b) Distinct; c) Uniform; and d) Stable. Section 5. Newness.- A variety shall be deemed new if the propagating or harvested material of the variety has not been sold, offered for sale or otherwise disposed of to others, by or with the consent of the breeder, for purposes of exploitation of the variety; a) In the Philippines for more than one (1) year before the date of filing of an application for plant variety protection; or b) In other countries or territories in which the application has been filed, for more than four (4) years or, in the case of vines or trees, more than six (6) years before the date of filing of an application for Plant Variety Protection. However, the requirement of novelty provided for in this Act shall not apply to varieties sold, offered for sale or

336 COMPENDIUM OF RTF LAWS disposed of to others for a period of five (5) years before the approval of this Act. Provided, That application for PVP shall be filed within one (1) year from the approval of this act. Section 6. Distinctness.- A variety shall be deemed distinct if it is clearly distinguishable from any commonly known variety. The filing of an application for the granting of a plant variety protection or for the entering of a new variety in an official register of variety in the Philippines or in any country, shall render the said variety a matter of public knowledge from the date of the said application: Provided, That the application leads to the granting of a Certificate of Plant Variety Protection or the entering of the said other variety in the official register of variety as the case may be. Section 7. Uniformity.- The variety shall be deemed uniform if, subject to the variation that may be expected from the particular features of its propagation, it is sufficiently uniform in its relevant characteristics. Section 8. Stability.- The variety shall be deemed stable if its relevant characteristics remain unchanged after repeated propagation or, in the case of a particular cycle of propagation, at the end of each such cycle.

Food Availability Laws 337 TITLE IV Variety Denomination Section 9. Variety Denomination.- The variety shall be designated by a denomination which shall be its generic description. In particular, it must be different from any denomination that designates an existing variety of the same plant species or closely related species. Section 10. Right of Priority over Denomination.- The use of a denomination shall not be granted to a breeder if such denomination has already been registered to another breeder or is being used by a third party in relation to the sale or offering for sale of a particular variety prior to the filing date or priority date of an application for a Certificate of Plant Variety Protection. In case two (2) or more breeders/applicants apply for the registration of the same denomination, the breeder/applicant who has the earliest filing date or priority date shall have the right to register the same to the exclusion of the other applicant/breeder(s). Section 11. Figures as Denomination.- The denomination must enable the variety to be identified. It may not consist solely of figures except when it is an established practice for designating such a variety. Section 12. Misleading Denomination.- No denomination shall be accepted if it is liable to mislead or to cause confusion concerning the characteristic value or identity of the variety or identity of the breeder.

338 COMPENDIUM OF RTF LAWS Section 13. Refusal of Denomination.- If the denomination does not satisfy these requirements, its registration shall be refused and the breeder shall be required to propose another denomination within a prescribed period. The denomination shall be registered together with the grant of the breeders right. Section 14. Denomination Used in an Application Previously Filed abroad.- An application filed in this country, the subject matter of which is the same as that of an application previously filed abroad, shall use the same denomination as the latter. However, if such denomination does not conform to the provisions of this Title, the applicant/ breeder shall be required to submit a new denomination. Section 15. Obligation to Use Denomination.- Any person, who offers for sale or markets in the Philippines, propagating material of a variety protected, shall be obliged to use the denomination of that variety, even after the expiration of the breeders right therefor except when the rule of prior rights apply. Section 16. Use of Marks.- When a protected variety is offered for sale or marketed, it may be associated with a trademark, trade name or other similar indication with a registered denomination. If such an indication is so associated, the denomination must nevertheless be easily recognizable.

Food Availability Laws 339 TITLE V Applicants to a Plant Variety Protection Section 17. Entitlement.- Any breeder, with respect to the variety developed, may apply for a plant variety developed, may apply for a plant variety protection and obtain a Certificate of Plant Variety Protection upon compliance with the requirements of this Act. Section 18. Co-ownership of the Right.- If two (2) or more persons contribute to the development of a new plant variety, all of them shall be named in the Certificate of Plant Variety Protection and shall be entitled to such rights as agreed upon in writing or in the absence thereof, the rights in proportion to their contribution in the development of plant variety. Section 19. Employee-Employer relationship.- in case an employee develops a plant variety in the course of his employment as a result of the performance of his regular duty, the plant variety protection shall belong to the employer, unless there is a written stipulation to the contrary. Section 20. First to File Rule.- If two (2) or more persons develop a new plant variety separately and independently of each other, the Certificate of Plant Variety Protection shall belong to the person who files the application first. In case two (2) or more persons file an application for the same plant variety, the right shall be granted to the person who has the earliest filing date or priority date.

340 COMPENDIUM OF RTF LAWS Section 21. Priority Date.- Any application for a Certificate of Plant Variety Protection previously filed by a breeder in another country, which by treaty, convention or law affords similar privileges to Filipino citizens, shall be considered as filed locally as of the date of filing of the foreign application:Provided,That: a) The local application expressly claims priority; b) It is filed within twelve (12) months from the filing date of the earliest foreign application; and c) The applicant submits, within six (6) months from the filing of the local application, authenticated copies of documents which constitute the foreign application, samples or other evidence showing that the variety which is being applied for protection is the same variety which has been applied for protection in a foreign country. Section 22. Foreign Nationals.- For purposes of this Act, a person shall be considered a national of a foreign country if he is a citizen of such country according to its laws, a natural person residing therein, or is a legal entity whose office is registered in such foreign country. Section 23. National Treatment.- Any application filed locally for a Certificate of Plant Variety Protection previously granted to a breeder in

Food Availability Laws 341 another country, which by treaty, convention or law affords similar privileges to Filipino citizens, shall be issued a Certificate of Plant Variety Protection upon payment of dues and compliance to all the provisions of this Act. This Act shall also apply to the nationals of foreign countries that are members of intergovernmental organizations or party to any multilateral agreement or convention concerning the granting of intellectual property protection to plant varieties. TITLE VI Examination of the Application and Issuance of PVP Certificate Section 24. Contents of the Application. - An application for a Certificate of Plant Variety Protection shall be filed in the manner and on the conditions prescribed in the regulations, and shall include: a) Name of the applicant/breeder; b) Address of the applicant/breeder in the Philippines; c) Name of resident agent and address in the Philippines; d) The description of the variety bred, including particulars of its characteristics; e) The variety denomination; f) Sample of propagating materials, which are the subject of the application; and

342 COMPENDIUM OF RTF LAWS g) Any other particular required by the regulations. 25. Rights of the Applicant to File the Application.If the applicant is not the actual breeder, he shall indicate in his application the basis for his right to file the application. 26. Contents of the Description and Order of Presentation.- The Board shall issue rules and regulations stipulating the contents of the description and the order of presentation. 27. Other Information Required.- The applicant shall be required by the Board to furnish information regarding any application filed by him in other countries including all pertinent documents relating thereto. If the applicant has successfully claimed priority according to this Act, he shall be given a period of two (2) years from the priority date to comply with the requirements of this Section. 28. Manner of Conducting Tests.- The Board may carry out the necessary tests, cause the conduct of tests, or consider the results of other tests or trials that have already been done. For this purpose, the Board shall require the applicant to furnish all the necessary information, documents or materials within a period of time prescribed in the regulations. 29. Filing Date.- For purposes of according a filing date, the Board shall consider, as

Section

Section

Section

Section

Section

Food Availability Laws 343 a minimum requirement, all of the above enumerated items in Section 24 hereof. Section 30. Publication of the Application.- After the Board has accorded a filing date, the application shall be published within sixty (60) days at the expense of the applicant in the Plant Variety Gazette hereunder described in Section 73. Prior to such publication, the application and all related documents shall not be made available to the public without the written consent of the applicant. After publication of the application, any person may inspect the application documents in a manner to be prescribed by the Board. Section 31. Opposition to the Grant of Plant Variety Protection.- Any person who believes that the applicant is not entitled to the grant of the Certificate of Plant Variety Protection may file an opposition thereto within the period prescribed by the Board from the date of its publication and before the issuance of the Certificate of Plant Variety Protection. Opposition to the application may be made on the following grounds: a) that the person opposing the application is entitled to the breeders right as against the applicant; b) that the variety is not registrable under this Act.

344 COMPENDIUM OF RTF LAWS If the opposition is based on the conditions of Plant Variety Protection, such opposition shall be considered together with the examination of the application. Section 32. Issuance of the Certificate.-When the Board has tested and examined the variety, and/ or considered the supporting materials and literature pertinent thereto, it shall issue a Certificate of Plant Variety Protection. A notice of such issuance shall be published in the manner to be prescribed in the regulations at the expense of the holder. Section 33. Term of Protection.- For trees and vines, the period of protection shall be twenty-five (25) years from the date of the grant of the Certificate of Plant Variety Protection and twenty (20) years from the said date for all other types of plants, unless declared voidab initio or cancelled otherwise, as provided under Section 61 and 62, respectively of this Act. Section 34. Annual Fees.- To maintain the validity of the Certificate of Plant Variety Protection, the holder shall pay an annual fee to be prescribed by the Board. Annual fees shall be paid starting from the fourth anniversary of the issuance of the certificate and every year thereafter with the first three (3) months of said years. The holder has the option to pay in advance this annual fee for a maximum of twenty (20) years.

Food Availability Laws 345 The Certificate of Plant Variety Protection shall expire and cease to have force and effect upon the holders failure to pay the annual fees within the prescribed period. A notice of such cancellation shall be published in the Plant Variety Gazetteone (1) year after the term of protection has expired. Before such publication, any holder who fails to pay the annual fees may request for a reinstatement of his certificate: Provided, That he settles his unpaid accounts including surcharges to be determined by the Board. Section 35. Notice of Rejection.-Whenever an application is rejected, the Board shall immediately inform the applicant on the grounds therefor, and when applicable, identify and provide the documents used as the basis for rejection. a) Reconsideration - Within two (2) months from the receipt of the rejection notice, the applicant may amend his application or traverse the finding of the Board. The Board, in turn, may reverse its initial finding or issue a final rejection within the same period. b) Appeal from the Notice of Rejection The decision of the Board is final except for anomalous circumstances involving the Board in which case the applicant may appeal it to the proper court.

346 COMPENDIUM OF RTF LAWS TITLE VII Rights of Holders Section 36. Rights of Holders of Plant Variety Protection.- In respect of the propagating materials, holders of a Certificate of Plant Variety Protection shall have the right to authorize any of the following acts: a) Production or reproduction; b) Conditioning for the purpose of propagation; c) Offering for sale; d) Selling or other marketing; e) Exporting; f) Importing; and g) Stocking for any purpose mentioned above. Section 37. The holder may make his authorization subject to conditions and limitations. Section 38. Acts in Respect of Harvested Materials.Except for Sections 43 and 44 of this Title, the rights in the two (2) preceding sections shall also extend to the harvested materials which may be the entire plant or its other parts, if the production thereof resulted directly from the unauthorized use of the plants propagating materials that are covered by this Act, unless the holder has had the reasonable opportunity to exercise his right in relation to the said propagating materials.

Food Availability Laws 347 Section 39. Coverage of Protection.- The rights of holder under Sections 36 and 38 of this Act shall also apply in relation to: a) Varieties which are essentially derived from the protected variety, where the protected variety is not itself an essentially derived variety; b) Varieties which are not clearly distinct from the protected variety; and c) Varieties whose production requires the repeated use of the protected variety. Section 40. Essentially Derived Varieties.- For the purpose of paragraph 39(a), a variety shall be deemed to be essentially derived from the initial variety when: a) It is predominantly derived from the initial variety, or from a variety that is itself predominantly derived from the initial variety, while retaining the expression of the essential characteristics that result from the genotype or combination of genotypes of the initial variety; b) It is clearly distinguishable from the initial variety; and c) Except for the differences which result from the act of derivation, it conforms to the initial variety in the expression of the essential characteristics that result from the genotype or combination of genotypes of the initial variety.

348 COMPENDIUM OF RTF LAWS Section 41. Manner of Developing Essentially Derived Varieties.- It shall also be understood that essentially derived varieties may be obtained through processes which may include, but not limited to, the selection of a natural or induced mutant, or of a somoclonal variant, the selection of a variant individual from plants of initial variety, backcrossing or transformation by genetic engineering. Genetic engineering shall be understood as the introduction of genes by laboratory techniques. Section 42. Provisional Protection.- An applicant for a Certificate of Plant Variety Protection shall be entitled to equitable remuneration from any person who, during the period between the publication of the application for the certificate and the grant of that certificate, has carried out acts which, once the certificate is granted, required the holders authorization as conferred in this Act: Provided, That the applicant shall initiate the legal action against the alleged infringer within two (2) years from the date of the granting of his Certificate of Plant Variety Protection. Section 43. Exceptions to Plant Variety Protection. -The Certificate of Plant Variety Protection shall not extent to: a) Acts done for noncommercial purposes; b) Acts done for experimental purposes;

Food Availability Laws 349 c) Acts done for the purpose of breeding other varieties, except when Sections 39 and 40 apply; and d) The traditional right of small farmers to save, use, exchange, share or sell their farm produce of a variety protected under this Act, except when a sale is for the purpose of reproduction under a commercial marketing agreement. The Board shall determine the condition under which this exception shall apply, taking into consideration the nature of the plant cultivated, grown or sown. This provision shall also extend to the exchange and sell of seeds among and between said small farmers: Provided, That the small farmers may exchange or sell seeds for reproduction and replanting in their own land. Section 44. Exhaustion of Plant Variety Protection.- The Certificate of Plant Variety Protection shall not extend to acts concerning any material of the protected variety, or a variety covered by the provisions of Sections 39 and 40 hereof, which has been sold or otherwise marketed by the breeder or with his consent in the Philippines, or any material derived from the said material, unless it: a) Involves further propagation of the variety in question; or b) Involves the export of the variety, which enables the propagation of the variety,

350 COMPENDIUM OF RTF LAWS into a country that does not protect the variety of the plant genus or species to which the variety belongs, except where the exported material is for final consumption purposes. Section 45. Rights of Attribution - No Certificate of Plant Variety Protection shall be issued without naming the breeder(s) unless this right is protested in writing within one (1) year. Section 46. Succession/Transmission- The Certificate of Plant Variety Protection shall be considered as a property right and the transmission thereof shall be governed by the law on Property. TITLE VIII Infringement Section 47. What Constitutes Infringement - Except as otherwise provided in this Act, any person who without being entitled to do so, performs the following acts: a) Sell the novel variety, or offer it or expose it for sale, deliver it, ship it, consign it, exchange it, or solicit an offer to buy it, or any other transfer of title or possession of it; or b) Import the novel variety into, or export it from, the Philippines; or c) Sexually multiply the novel variety as a step in marketing (for growing purposes) the variety; or

Food Availability Laws 351 d) Use the novel variety in producing (as distinguished from developing) a hybrid or different variety therefrom; or e) Use seed which had been marked unauthorized propagation prohibited or unauthorized seed multiplication prohibited or progeny thereof to propagate the novel variety; or f) Dispense the novel variety to another, in a form which can be propagated, without notice as to being a protected variety under which it was received; or g) Fails to use a variety denomination the use of which is obligatory under Section 15; or h) Perform any of the foregoing acts even in instances in which the novel variety is multiplied other than sexually, except in pursuance of a valid Philippine plant patent; or i) Instigate or actively induce performance of any foregoing acts, may be sued by the holder, who may also avail of all such relief as are available in any proceeding involving infringements of other proprietary rights. Section 48. Where to Commence Action- Any holder may petition the proper regional trial court for infringement of his plant variety protection as defined in this Act. Section 49. Presumption of Validity - Certificate of Plant Variety Protection shall be presumed valid

352 COMPENDIUM OF RTF LAWS and the burden of proof of their invalidity shall rest on the party assailing them. 50. Defenses Against Infringement Charges- The following shall be valid defenses against infringement charges: a) Non-infringement; b) The plant variety does not possess at the time of its application criterion of novelty or distinctness; c) The alleged infringement was performed under a right adverse to it, prior to the notice of infringement; and/or d) Other defenses that are made available under this Act. 51. Notice - No damages shall be awarded unless there is actual or constructive notice made upon the alleged infringer. 52. Damages - The court may award actual, moral, exemplary damages and attorneys fees according to a proven amount including a reasonable royalty for the use of the protected variety. 53. Injunction - The court may also enjoin the infringer(s) from further performing any act of infringement on the rights of the holder(s) as defined in this Act. 54. Court to Order Confiscation of Infringing Materials - Upon petition by the complainant, the court may order the confiscation of infringing materials, and: a) Cause their distribution to charitable organization;

Section

Section

Section

Section

Section

Food Availability Laws 353 b) Cause the sale and provide the proceeds thereof to research organizations; or c) Cause the return to the petitioner for further scientific use. Section 55. Prescription - No recovery of damages for any infringement case shall prosper when the cause of action has reached more than six (6) years from the time the alleged infringement case was committed. Section 56. Criminal Penalty - Any person who violates any of the rights of the holder provided for in this Act may also suffer the penalty of imprisonment of not less than three (3) years but not more than six (6) years and/or a fine of up to three (3) times the profit derived by virtue of the infringement but in no case should be less than One Hundred Thousand pesos (P100,000.00). TITLE IX Compulsory License Section 57. Grounds for the Grant of Compulsory Licensing - Any interested person may file a petition for compulsory license with the Board at any time after two (2) years from the grant of the Certificate of Plant Variety Protection under this Act when it is for the public interest to grant such compulsory license, and: a) The reasonable requirements of the public for any part of the variety are not met; or

354 COMPENDIUM OF RTF LAWS b) There is an overseas market for the sale of any part of the variety and the same are not met by the holder; or c) The plant variety developed relates to or required in the production of medicine and/or any food preparation. Section 58. Scope of Compulsory License - The Board, upon petition by any interested party and upon proof of any of the foregoing grounds, may issue a decision: a) Allowing the petitioner to produce in commercial quantity and distribute the variety protected or any part thereof; or b) Requiring the holder to ensure the availability of the propagating materials of the variety protected; or c) Requiring the petitioner to pay the holder with license fees in the form of reasonable royalties; and d) Other such additional remedies that the Board may determine to be consistent with appropriate circumstances. Section 59. Duration of the License- A compulsory license shall be effective until the ground(s) for its issuance has been terminated as determined by the Boardmotu proprioor upon petition by party or parties and resolution by the Board. Section 60. Procedure for Grant - The Board shall provide in the rules and regulations the manner and procedure for granting compulsory licenses.

Food Availability Laws 355 TITLE X Cancellation and Nullity of Plant Variety Protection Section 61. Grounds for Nullity.- The Certificate of Plant Variety Protection shall be declared voidab initioon any of the following grounds: a) The grant of the Certificate of Plant Variety Protection was essentially based upon information and documents furnished by the applicant, wherein the conditions of distinctness, uniformity, stability, and newness were not complied with the time of the grant of the certificate; or b) The Certificate of Plant Variety Protection was granted to a person who is not entitled to it, unless it is transferred to the person who is so entitled. The effect of the declaration of nullity is that as if the Certificate of Plant Variety Protection was not issued. Section 62. Grounds for Cancellation.- The Plant Variety Protection shall be cancelled on any of the following grounds: a) The breeder does not provide the required information, documents, or materials necessary for verifying the maintenance of the variety; or b) The breeder fails to pay the required fees to keep his or her rights in force or provides false information in his or her application; or

356 COMPENDIUM OF RTF LAWS c) The breeder does not propose, within the time/period provided under the regulations, another suitable denomination if the denomination of the variety is cancelled after the grant of the Certificate of Plant Variety Protection; or d) The conditions of uniformity and stability could not be maintained although these were present at the time of the issuance of the Certificate of Plant Variety Protection; or e) The breeder entitled to the Certificate of Plant Variety Protection or the holder has relinquished his/her rights through a declaration in a public instrument filed with the registrar. Section 63. Venue.- Any petition to cancel a Certificate of Plant Variety Protection shall originally be under the jurisdiction of the Board. Decisions of the Board may be appealable with the Court of Appeals within fifteen (15) days from the date of notice of the Boards final decision. Section 64. Prescription.- The right to cancel a Certificate of Plant Variety Protection shall be instituted at any time within the term of protection of such right. Section 65. Publication.- A notice of the filing of a petition to cancel a Certificate of Plant Variety Protection and the final order/decision on the same shall be published in thePlant Variety Gazetteat the expense of the petitioner.

Food Availability Laws 357 TITLE XI Institution Section 66. National Plant Variety Protection Board.There is hereby created a National Plant Variety Protection Board which shall be composed of the following or their duly designated representatives: a) The Secretary of the Department of Agriculture, as chairman; b) The Secretary of the Department of Science and Technology, as co-chairman; c) The Director-General of the Intellectual Property Office, as vice chairman; d) The Director of the Bureau of Plant Industry; e) The Director of the Institute of Plant Breeding of the University of the Philippines Los Baos; f) The President of the Philippine Seed Industry Association; g) A representative from a federation of small farmers organizations to be nominated by the Secretary of Agriculture; h) A representative from the scientific community to be nominated by the National Academy of Science and Technology; and i) The Registrar (ex officio). The members of the Board or their representatives must be Filipino citizens,

358 COMPENDIUM OF RTF LAWS have good moral character and should not have been convicted of a crime involving moral turpitude. The Board shall perform the following functions: a) Promulgate policy guidelines for the effective implementation of the provisions of this Act; b) Have original and exclusive appellate jurisdiction over all acts of the Registrar; c) Have original jurisdiction over petitions for compulsory licensing, nullity and cancellation of the Certificate of Plant Variety Protection; d) Institutionalize database of existing plant varieties, collected from foreign and local databases, within one (1) year from the effectivity of this act; e) Call on resource persons to provide inputs that will be relevant in the performance of the tasks of the Board; f) Organize the Registrar as it sees fit; g) Approve capital expenditure and contracts of experts; and h) Perform all other functions as may be required in the implementation of this Act. Section 67. Rules and Regulations.- For the purpose of the preceding section, the Board with representatives from the Senate and House Committees on Agriculture, shall within six (6) months from the effectivity of this

Food Availability Laws 359 act, prescribe rules and regulations necessary for the implementation of its functions, or reorganize and create units therefore under its control and supervision. Section 68. Fees.- The Board shall prescribe a schedule of fees to be charged against any applicant/ breeder in the course of the application for a Certificate of Plant Variety Protection or in the maintenance therefor. Section 69. Coordination and Cooperation with Other Institutions.- For the purpose of verifying certain facts such as but not limited to the requirements of stability, distinctness and uniformity, the Board may enter into agreements with other governmental or nongovernmental institutions both domestic and foreign under a set of conditions germane to its functions. Further, the Board shall also designate appropriate state colleges and universities, bona fideresearch institutions, or appropriate nongovernmental research centers as testing centers for the distinctness, uniformity and stability of varieties. Section 70. The PVP Fund.- There is hereby created a PVP Fund, hereinafter referred to as the Fund, to be administered by the Board. All fees, fines and charges collected by the Board under this Act, shall be deposited in the Fund. The Board is hereby authorized to use and disburse the Fund. The Board

360 COMPENDIUM OF RTF LAWS is hereby authorized to use and disburse the Fund without need of approval by any government agency, and subject only to existing accounting and auditing rules and regulations for purposes of defraying the cost of operations in the delivery of its services to the public. Section 71. Gene Trust Fund.- There shall be an independent and separate trust fund established under this Act, to be administered by the Board, for the benefit of bona fide organizations or institutions managing and operating an accredited gene bank. An amount to be determined by the Board but not to exceed twenty percent (20%) of the fees and charges, shall be used for the purposes of the gene trust fund. The trust fund may also accept donations from national and international institutions and other organizations and individuals interested in strengthening genetic conservation. Section 72. Farming Communities and Bona fide Farmers Organizations.- Farming communities and bona fide farmers organizations are encouraged to build an inventory of locallybred varieties as an option to protect these resources from misappropriation and unfair monopolization. Section 73. Publication.- The Board shall maintain its own publication which shall be known as the Plant Variety Gazette for all the

Food Availability Laws 361 publication requirements of this Act and for other purposes which the Board may require. Copies shall be distributed to all concerned especially to the Members of the Senate and House Committees on Agriculture: Provided, That the Board shall distribute for free, and in the major dialect understood by the locality, copies of thePlant Variety Gazetteto small farmer groups and indigenous communities. Section 74. The Registrar.- There is hereby established a National Plant Variety Protection Registrar and an Associate Registrar under the control and supervision of the Board. The Registrar and the Associate Registrar shall be appointed by the President of the Philippines upon the recommendation of the Board and shall have a term of six (6) years. However, the Registrar who shall be first appointed shall serve for a term of seven (7) years. The Registrar shall be a citizen of the Philippines with good moral character, proven track record in the field of plant science, and/or extensive executive experience and capability. Functions of the Registrar. The Registrar shall have the following functions: a) Original and exclusive jurisdiction to receive, process, examine all applications for Certificate of Plant Variety Protection

362 COMPENDIUM OF RTF LAWS in accordance with this Act, and in meritorious cases, issue the said certificates and sign them in the name of the Board; b) Issue and maintain a systematic record of all Certificate of Plant Variety Protection and transactions related thereto; c) Implement the rules and regulations issued by the Board; d) Institutionalize, maintain and continuously update a database of existing plant varieties collected from foreign and local databases; e) Maintain a library of scientific and other works and periodicals, both foreign and local, to aid his examiners in the discharge of their duties; f) Maintain samples of the propagating materials of the protected variety; and g) Perform such other functions as may be prescribed by the Board. TITLE XII Miscellaneous and Final Provisions Section 75. Relation with Other Laws.- The interpretation of the provisions of this Act shall not negate the effectivity and application of Republic Act No. 8371, otherwise known as the Indigenous Peoples Rights Act; Republic Act No. 9147, otherwise known as the Wildlife Resources Conservation and

Food Availability Laws 363 Protection Act; Presidential Decree No. 1151, otherwise known as the Philippine Environmental Policy; and Executive Order No. 430 and Administration Order No. 8, Series of 2002 of the Department of Agriculture or the rules and regulations for the importation and release to the environment of plant products derived from the use of biotechnology. Section 76. Transitory Provisions.- The National Seed Industry Council, which was created by Republic Act No. 7308 or the National Seed Industry Development Act, shall perform the functions of the Board until the latter has been fully organized, but not later than three (3) years from the effectivity of this act. Within the same period, the Director of the Bureau of Plant Industry shall be the Acting Registrar and the Assistant Director of the same Bureau shall act as the Associate Registrar. Section 77. Appropriations.- The Secretary of the Department of Agriculture shall immediately include in its program and issue such rules and regulations to implement the provisions of this Act, the funding of which shall be included in the annual General Appropriations Act. Section 78. Separability Clause.- If, for any reason, any provision of this Act is declared invalid or unconstitutional, the other parts not affected thereby shall continue to be in full force and effect.

364 COMPENDIUM OF RTF LAWS Section 79. Repealing Clause.- All laws, decrees, executive orders, and rules and regulations, or parts thereof that are inconsistent with the provisions of this Act, are hereby repealed or modified accordingly. Section 80. Effectivity.- This Act shall take effect thirty (30) days after its complete publication in a newspaper of general circulation. Approved, (Sgd) JOSE DE VENECIA, JR. Speaker of the House of Representatives (Sgd) FRANKLIN M. DRILON President of the Senate This Act which is a consolidation of Senate Bill No. 1865 and House Bill No. 4518 was finally passed by the Senate and the House of Representatives on May 30, 2002. (Sgd) ROBERTO P. NAZARENO Secretary General House of Representatives (Sgd) OSCAR G. YABES Secretary of the Senate Approved: June 7, 2002 (Sgd) GLORIA MACAPAGAL-ARROYO President of the Philippines

Food Availability Laws 365 REPUBLIC ACT NO. 7308 DATE: March 27, 1992 AN ACT TO PROMOTE AND DEVELOP THE SEED INDUSTRY IN THE PHILIPPINES AND CREATE A NATIONAL SEED INDUSTRY COUNCIL AND FOR OTHER PURPOSES S e c t i o n 1. Short Title. - This Act shall be known as the Seed Industry Development Act of 1992. S e c t i o n 2. Declaration of Policy. - It is hereby declared the policy of the State to promote and accelerate the development of the seed industry and, for this purpose, the Government shall: a) conserve, preserve and develop the plant genetic resources of the nation; b) encourage and hasten the organization of all sectors engaged in the industry, integrate all their activities, and provide assistance to them; c) consider the seed industry as a preferred area of investment; d) encourage the private sector to engage in seed research and development and in mass production and distribution of good quality seeds; and e) provide the local seed industry protection against unfair competition from imported seeds. Se c t i o n 3 . Definition of Terms. - When used in this Act, the following terms shall mean as follows:

366 COMPENDIUM OF RTF LAWS a) Seed shall mean plant material used of the production of food, forage, fibers, industrial crops, oil, flowers, grasses, herbs and aquatic plants, including but not limited to meristem, and clonal propagules such as tubers, corms, cuttings, and micro-propagated plantlets; b) Seed lot shall mean a definite quantity of seeds indemnified by a lot number or other identification marks, or every portion of the bag or any container, the contents of which uniformly represent the factors which appear in the label within allowable tolerance; c) Breeder Seed shall mean a seed directly controlled by the originating, or in certain cases, the sponsoring plant, breeder or institution and which provide the source for the initial and recurring increase of foundation seeds; d) Foundation Seed shall mean seed that is a progeny of breeder seeds so handled as to maintain a minimum acceptable level of genetic purity and identity; e) Registered Seed shall mean the progeny of foundation seeds so handled as to maintain satisfactory genetic identity and purity; f) Seed Industry shall mean the different components of the chain of activities

Food Availability Laws 367 undertaken by an individual, association, cooperative, corporation or firm, academic institutions, public agricultural research institutes in the production, processing, testing, handling, grading, storage, distribution, and marketing of seeds for agricultural production with economic benefits; Seed testing shall mean the accurate and prompt analysis of a seed sample based on methodologies prescribed by the Council to determine its quality; Seed Certification shall mean a system of seed production geared toward maintaining genetic identity, varietal purity and standards of quality seeds of superior crop varieties; Quality Control shall mean a systematic approach to determine, achieve and maintain desired standards of seed quality; Seed Sample shall mean a quantity of seeds drawn from seed lots in accordance with the rules for seed sampling to be promulgated under this Act, properly identified, labeled, and submitted for seed testing; Label shall mean any written, printed or graphic presentation in any manner on the seed container giving information as required in the rules and regulations promulgated under this Act;

g)

h)

i)

j)

k)

368 COMPENDIUM OF RTF LAWS l) Seed Dealer/Trader/Merchant shall mean any person, firm, agency, cooperative or corporation engaged in the processing and/or marketing of seeds; m) Seed Grower/Producer shall mean any person, natural or juridical, engaged in the production, processing and/or marketing of seeds; n) Seed control shall mean the regulation of seed marketing through registration of seed merchants/dealers, compulsory labeling, and establishment of minimum standards of seed quality. S e c t i o n 4. National Seed Industry Council. - There is hereby created a National Seed Industry, hereinafter referred to as the Council, to replace the existing Philippine Seed Board. The Council shall be composed of the following who, except for the representatives of the private sector shall serve in ex officio capacity. a) Secretary, Department of Agriculture Chairman b) Director , Bureau of Plant Industry Vice Chairman and Executive Director. c) Dean, College of Agriculture University of the Philippines at Los Banos, Laguna Member d) Director, Institute of Plant Breeding Member

Food Availability Laws 369 e) Crop Research Director, Philippine Council for Agriculture Forestry and Natural Resources Research and Development - Member f) Director, Philippine Rice Research Institute Member g) Two (2) representatives from accredited farmers organizations h) One (1) Representative from the seed industry Member The representatives of the sectors enumerated herein, who shall be nominated by their respective sectors or associations, shall be appointed by the Secretary of Agriculture and shall serve for a term of three (3) years. Only citizens of the Philippines shall be members of the Council. In case of vacancy the appointed successor shall serve only the unexpired portion of the term of his predecessor. Section 5. Duties and Functions - The Council shall have the following duties, powers and functions: a) to formulate policies that will stimulate plant breeding activities for the development of the genetic resources of the country in accordance with the provisions of this Act; b) to encourage persons, associations, cooperatives and corporations engaged in genetic resources conservation, varietal development, production

370 COMPENDIUM OF RTF LAWS and processing, quality control, storage, marketing, and distribution of seeds to adopt system and practices which improve the quality of seeds for distribution to farmers; c) to promote the establishment of infrastructures and other support services in priority areas geared toward the development of the seed industry; d) to formulate a comprehensive medium and long-term national seed industry development program in order to achieve self-sufficiency in the supply of high quality seeds; e) to grant awards, subsidiaries and other forms of assistance to seed or plant breeders who develop or are developing outstanding varieties or cultivars; f) to formulate policies that will stimulate plant breeding activities; and g) to promote rules and regulations to implement the provisions of this Act. Section 6. Council Meetings. - The Council shall hold regular quarterly meetings: Provided, That it may hold special meetings when necessary upon the call of the Chairman or upon written request of at least three (3) members. The presence of five (5) members shall constitute a quorum. The members of the Council shall not receive any compensation: Provided, That

Food Availability Laws 371 they shall be entitled to per diems and travel allowances, to be determined by the Council for every attendance in the meetings. S e c t i o n 7. Chairman, Duties and Responsibilities. - The Chairman of the Board shall have the following duties and responsibilities: a) to preside over the meetings of the Council; b) to supervise the operations and administration of the Council; and c) to exercise such other functions and perform such other duties as may be vested in him by the Council. Section 8. Executive Director, Duties and Responsibilities. - The Executive Director shall have the following duties and responsibilities: a) to execute, direct and implement the policies, regulations and resolutions issued by the Council; b) to assist in the administration, management and supervision of the functional activities of the Council; c) to coordinate, monitor and evaluate the seed program of the different government agencies; d) to administer and manage the budgetary appropriations and financial disbursements of the Council; and e) to supervise the Council Secretariat and maintain official records, files and proceedings of the Council.

372 COMPENDIUM OF RTF LAWS Section 9. Council Secretariat. - The Council shall have a Secretariat which shall furnish the necessary administration, secretarial and other support services to the Council. The Secretariat shall be under the direction and supervision of the Executive Director. The personnel of the Secretariat shall be appointed, and their compensation fixed by the Chairman upon the recommendation of the Executive Director in accordance with Civil Service rules and regulations. Section 10. Technical Secretariat. - There is hereby created under the Council a technical Secretariat which shall assume the functions of the existing Philippine Seed Board Technical Working Groups. The heads and the members of the Technical Secretariat shall be appointed and their compensation and tenure fixed by the Chairman upon the recommendation of the Executive Director. The Technical Secretariat shall establish seed standards and formulate systems and procedures for varietal identification, evaluation, nomination, review and approval for registration, commercial release and discontinuation of crop cultivars or varieties in the National Agricultural Crop Production and Development Program. Section 11. National Seed Quality Control Services. - There shall be a National Seed Quality Control Services, hereinafter referred to as Services,

Food Availability Laws 373 which shall be constituted in the Bureau of Plant Industry. It shall have control and supervision over filed inspection and control services, and seed testing laboratories which shall be established by the Bureau of Plant Industry in various parts of the country as are necessary to ensure the attainment of the purposes of this Act. All personnel, funds and equipment of the existing control services and the field inspection services of the Department of Agriculture are hereby transferred to the herein created body. Section 12. Functions of the National Seed Quality Control Services. - The National Seed Quality Control Services shall perform the following functions: a) formulate plans and programs on seed quality control services and activities on seed testing, plant/seed material confirmation and other quality control schemes to be developed: b) sample and conduct seed analysis and issue the corresponding report of analysis of samples drawn from locally produced and imported seed within the purview of this Act; c) conduct field inspection of the seed crops, seed storage and processing facilities and other activities required for seed/ plant material certification and issue

374 COMPENDIUM OF RTF LAWS the corresponding report of inspection within the purview of this Act; d) conduct other related functions like seed research and seed technology training for its clientele; e) collect reasonable fees for testing of seeds, inspection of crop fields and facilities and for issuance of permits and licenses in relation to the activities of the Services; f) supervise and coordinate all official seed testing laboratories in the regions and provincial satellite laboratories and seed certification in all provinces and subprovinces; g) accredit private seed testing laboratories; and h) perform such other functions as the Council may direct. Section 13. Seed Industry Development Program. - The Council shall adopt within ninety (90) days after it has been constituted, a Seed Industry Development Program hereinafter referred to as the Program, which shall be implemented by its constituent agencies. a) A network of seed centers to be known as the National Seed Network shall be established at the Bureau of Plant Industry and major agricultural colleges and universities to produce sufficient quantity of breeder, foundation and registered seeds of all varieties developed by the government sector;

Food Availability Laws 375 b) The Department of Agriculture shall have the overall task of directing and coordinating the activities of its component agencies in accelerating the development of the seed industry; c) The Bureau of Plant industry shall have the direct responsibility for the production, distribution, regulation of breeder, foundation and registered seeds, and the implementation of the Program, including but not limited to the management of the existing research stations and seed farms, seed testing laboratories, and certification services under a self-reliant management scheme; d) The University of the Philippines at Los Banos shall provide leadership in plant technology activities related to plant improvement, genetic resources conservation, and in vitro mass production of planting e) The Philippine Rice Research (PHILRICE) shall develop appropriate rice varieties under Philippine Conditions and propagate them into breeder, foundation, and registered seed and extend all necessary technical assistance to ensure the proper utilization of such seeds on the farm level;

376 COMPENDIUM OF RTF LAWS The Board of Investment (BOI) shall promulgate necessary rules or the development of the seed industry as a preferred area of investment; and g) The private sector of the seed industry shall direct their collective efforts towards an increased and more active cooperation and coordination with the government agencies. Farmers organizations shall take active part in the conservation of the plant genetic resources of the nation. Section 14. Incentives. - The private sector may avail of the following incentives to develop the local seed industry: a) Individuals, farmers organizations, cooperatives, and corporations, wholly owned by Filipinos shall be entitled to technical assistance from the Government, including training in seed technology, and availment of seeds and results of basic research studies; b) Technical equipment used in seed processing, sowing, meristem culture, storage and quality testing by individuals, farmers organizations, cooperatives and corporations whollyowned by Filipinos shall be exempted from duties and taxes during their first five (5) years of operation subject to the following conditions: f)

Food Availability Laws 377 1) The equipment are not manufactured domestically in sufficient quantity of comparable quality and at reasonable prices; 2) They are reasonably needed and will be used exclusively by the importer in the operation of its business; 3) Approval of the Council was obtained prior to the importation; 4) In case the importer transfers, sells, or disposes of the equipment within five (5) years from acquisition without prior approval of the Council the former shall be solidarily liable with the transferee to pay double the amount of tax exemption given it. The Council may permit transfer, sale or disposition of said equipment within the said five (5) years if made to another person or entity enjoying similar incentives, or for reason of proven technical obsolescence, or for purposes of replacement to improve and expand the operations of the importer; 5) The importer shall not enjoy a similar incentive under the Omnibus Investments Code of 1987. However, cooperatives organized and registered under Republic Act No. 6938 shall be covered by Articles 61,

378 COMPENDIUM OF RTF LAWS 62, and 63 of the said law pertaining to the tax exemption privileges of cooperatives; and 6) Expenses for research, development and extension of private Filipino seed producers shall enjoy a two hundred percent (200%) deduction from their gross income for the first five (5) years of operation in accordance with the rules and regulations to be promulgated by the Department of Finance within ninety (90) days from the effectivity of this Act. Section 15. Restrictions. - The following acts are prohibited: a) Importation in commercial quantities of species of seeds that are being produced locally, except seeds difficult to grow under ordinary conditions or when allowed by the Council; b) Exportation of rare species, varieties, lines and strains of plants from the country except for scientific or international exchange purposes which shall be determined by the Council; and c) Such other activities as the Council may deem fit to prohibit. Section 16. Funds of the Council. - There is hereby created a special account in the general fund to be known as the Seed Fund which shall be obtained from the following sources:

Food Availability Laws 379 a) Five million pesos (P5,000,000.00) to be appropriated out of any funds in the National Treasury not otherwise appropriated; b) the existing Seed Fund; c) revenues from the sale of certified seeds and plant materials, including but not limited to the income derived from the products of research stations and seed farms, seed processing and testing fees, field inspection fees, seed export and import fees, license fees, fees for the issuance of permits to seed growers/producers, fines collected for violations of this Act; and d) donations from private or government agencies, either domestic or foreign: Provided, That said funds shall be held in trust by the Bureau of Plant Industry: Provided, further, That the allocation, utilization and disposition of such funds shall be by and under the authority of the Council. Section 17. Appropriations. - The amount necessary to carry out the provisions of this Act is hereby authorized to be appropriated in the General Appropriations Act of the Year following its enactment into law and thereafter. Section 18. Authority to Search and Condemn Unlawful Seed Lots. - In order to carry out effectively the provisions of this Act, the Executive Director of the Council is hereby authorized

380 COMPENDIUM OF RTF LAWS to search and seize seed lots labeled, identified or imported in violation of this Act; Provided, That a search warrant shall first be secured from the proper court and the same shall be served/enforced with the assistance of the Philippine National Police (PNP) of the National Bureau of Investigation. Should the seed lots so searched and seized be found after due hearing, to be suitable for condemnation, in his judgment, the Executive Director is hereby empowered to issue to any of his designated representatives an order for condemnation of unlawful seed lots, in which case the same shall be processed, relabeled or otherwise disposed of in such manner as he may deem appropriate: Provided, That in no case shall the Executive Director order such condemnation without giving the claimant an opportunity to apply for the release of said seed lot or permission to process it in compliance with this Act, subject to the payment of just compensation in the proper case. Section 19. Penal Provisions. - Any person, firm, or association who shall violate any provision of this Act or the implementing rules and regulations promulgated pursuant to this Act, shall, upon conviction, be punished with a fine of not more than Ten thousand pesos (P10,000.00) or imprisonment of

Food Availability Laws 381 not more than five (5) years, or both, in the discretion of the Court: Provided, That in the case of a firm or association, the penalty of imprisonment shall be imposed upon the officer(s) who knowingly participated, abetted, or consented to the commission of such punishable acts. 20. Rules and Regulations. - The Council Shall within ninety (90) days from the effectivity of this Act, promulgate the necessary rules and regulations for the enforcement of the provisions of this Act. 21. Repealing Clause. - All existing laws, rules and regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed, superseded or modified accordingly: Provided, however, That nothing in this Act shall amend, modify or repeal the provisions of Republic act No. 7160, otherwise known as the Local Government Code. 22. Separability Clause. - If any part, section, or provision of this Act shall be held invalid or unconstitutional, the rest of the provisions shall not be affected thereby. 23. Effectivity. - This Act shall take effect fifteen (15) days after its complete publication in the Official Gazette or in at least two (2) newspapers of general circulation.

Section

Section

Section

Section

Approved: March 27, 1992

382 COMPENDIUM OF RTF LAWS REPUBLIC ACT NO. 7884 AN ACT CREATING THE NATIONAL DAIRY AUTHORITY TO ACCELERATE THE DEVELOPMENT OF THE DAIRY INDUSTRY IN THE PHILIPPINES, PROVIDING FOR A DAIRY DEVELOPMENT FUND, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Title. - This Act shall be known as the National Dairy Development Act of 1995. Section 2. Declaration of Policy. - It is hereby declared the policy of the State to strive for national self-sufficiency in milk and dairy products as a vital feature in the attainment of a self- reliant and independent Philippine economy in the provision of proper nutrition and the generation of more employment opportunities for the people. It is also the Policy of the State to recognize the primary role of the private sector in research, training, production, processing, and marketing, and to provide incentives to those undertaking these activities, with government limiting itself to policy- making, facilitation and regulation. Towards this end, the State shall create an agency tasked to help the private sector accelerate the development and growth of

Food Availability Laws 383 the Philippine dairy industry under the spirit of cooperativism in all stages of dairy production, processing, distribution, marketing, and other dairy- related activities, in such a way that market viability of livestock and dairy products shall be ensured, focusing on developing breeds adapted to Philippine conditions. Likewise, the State shall help establish marketing networks and outlets, especially among and between processors and end-users, which may include the integration of local milk production with existing industrial milk plants geared towards the sufficient production of local milk for the needs of the people. Section. 3. Objectives. - The objectives of this Act are as follows: (a) To promote and provide direction for the accelerated development of the Philippine dairy industry, consistent with the provisions of this Act; (b) To give support and assistance in the production, processing and marketing activities of all those engaged in the business of producing milk, and other dairy products particularly rural-based small dairy farmers through the provision of necessary support systems; (c) T o encourage and promote the active participation of farm families, rural cooperatives and the private sector recognizing them as principal agents in

384 COMPENDIUM OF RTF LAWS the development of the Philippine dairy industry; (d) To ensure an adequate supply of milk and dairy products at affordable prices; (e) To improve livelihood opportunities and thereby increase income level through dairying; (f) To enhance childrens and pregnant and nursing mothers nutritional intake through the promotion of locally produced milk and milk products. (g) To develop and disseminate appropriate smallholder-based dairy technology; (h) To improve milk production from existing stock and to systematically program the build-up of productive milking herd; and (i) To conserve foreign exchange by supporting local milk production. Section 4. The National Dairy Authority. - To achieve the objectives of this Act, there is hereby created a National Dairy Authority (NDA), hereafter referred to as the Authority,. which shall, for the purpose of policy and program coordination, be attached to the Department of Agriculture. The Authority shall be the central policy determining and directing body tasked to ensure the accelerated development of the Philippine dairy industry, in accordance with the policies and objectives set forth in this Act.

Food Availability Laws 385 Section 5. The Dairy Industry Board. - The National Dairy Authority shall be governed by a Dairy Industry Board, hereafter referred to as the Board, to be composed of the following: (a) The Secretary of Agriculture, as chairperson; (b) The NDA Administrator, as an ex officio member; (c) The Secretary of Trade and Industry, as member; (d) The Secretary of Health, as member; (e) The Secretary of Education, Culture and Sports, as member; (f) The Secretary of Science and Technology, as member; (g) The Secretary of Agrarian Reform, as member; (h) The Director of the Dairy Training and Research Institute, as member; and (i) Four (4) other members who shall be appointed by the President of the Philippines upon the recommendation of the chairperson: Provided, That one (1) shall come from the commercial milk processors group and the other three (3) from the dairy cooperatives and/ or national dairy federation, with one representative each from Luzon, Visayas and Mindanao: Provided, further, That they will hold office for a period of three

386 COMPENDIUM OF RTF LAWS (3) years from the date of their respective appointments without reappointment; Provided, finally, That any member appointed to a vacancy shall serve only for the unexpired term of the member whom he succeeds. Section 6. Powers and Functions of the National Dairy Authority. - The National Dairy Authority shall have the following powers and functions: a) To formulate and execute dairy programs that will generate a national impact on rural as well as urban nutrition levels and incomes; b) To assist in the purchase, importation, propagation, storage, distribution and sale of dairy animals, semen, forage seeds, fertilizers, veterinary supplies, dairy equipment and engineering supplies and such other inputs as may be needed by the dairy industry; c) To encourage the integration of dairy production and local milk and the distribution of dairy products into various rural livelihood and nutrition programs; d) To assume control and supervision over all dairy-related government agency personnel and programs, including the Bureau of Animal Industrys Dairy Division, the Livestock Development Councils Dairy Division, the Philippine

Food Availability Laws 387 Dairy Corporation, Livelihood Corporations Laguna Processing Center and other dairy related government agencies, division, councils subject to the guidelines prescribed by the Civil Service Commission; e) T o borrow, raise or obtain funds; to issue bonds and other instruments of indebtedness; or to enter into any financial or credit arrangement in order to support or carry out its objectives and purposes, subject to pertinent laws governing public debts and expenditures; f) T o receive grants, subsidies, donations or contributions from corporations, trusts, foundations, associations and other sources from any private or government office, agency or corporation in the Philippines or abroad; g) T o establish, maintain or operate field units or offices in various parts of the country in order to utilize the objectives of this Act; h) To help design and implement a credit system that will finance dairy farmers and dairy cooperatives or associations; i) To charge reasonable fees for services rendered for the attainment of the objectives of this Act; j) To promulgate rules and regulations to carry out the provisions and policy objectives of this Act; and

388 COMPENDIUM OF RTF LAWS k) T o adopt, alter and use a corporate seal; to sue and be sued; and otherwise to do and perform all acts or exercise all powers as may be necessary or incidental to carry out the objectives of this Act. Section 7. Meeting of the Board. - The Board shall convene in a regular monthly meeting and shall hold special meetings when necessary. The presence of at least seven (7) members of the Board shall constitute a quorum and the vote of a majority of those present shall be sufficient to transact business during any meeting: Provided, That the department secretaries can be represented on a permanent basis by their respective undersecretaries or assistant secretaries who will have full voting power and shall be considered in the determination of quorum: Provided, finally, That the chairperson shall not vote except in case of a tie. Section 8. Allowance of the Board Members. - The chairperson and members of the Board shall be entitled to per diems and other allowable emoluments as may be fixed by the Board for every meeting actually attended, subject to existing laws, rules and regulations which, in no case, shall exceed Four thousand pesos (P4,000.00) per month: Provided, however, That the transportation expenses for

Food Availability Laws 389 representatives from far places will be reimbursed: Provided, finally, That the Administrator of the Authority, as an ex officio member of the Board, shall receive only the remuneration and allowances which shall be provided by the Board for the said position. Whenever the exigencies of the service demand, and the Board, for any valid reason, cannot be convened to a meeting, the Administrator, in coordination with the Board Secretary, is hereby authorized to submit any matter for resolution by memorandum and the concurrence of a majority of the Board members and/or alternates constituting a quorum shall be considered sufficient for the approval thereof. Section 9. Management of the Authority. - There shall be a full time Administrator who shall manage the operations of the Authority, to be assisted by a Deputy Administrator. Both the Administrator and the Deputy Administrator shall be appointed by the President of the Philippines. The Administrator shall be a citizen of the Philippines; at least thirty-five (35) years of age on the date of his appointment; of good moral character; with recognized executive ability and competence; and preferably well-versed in the various aspects of the dairy industry.

390 COMPENDIUM OF RTF LAWS The salary and allowances of the Administrator and Deputy Administrator shall be in accordance with the provisions of R.A. 6758 or The Salary Standardization Act of 1989. Section 10. Powers and Functions of the Administrator. - Subject to the control and supervision of the Board, the Administrator shall have the following powers and functions: a) Submit policy recommendations and proposed measures necessary to carry out the objectives and functions of the Authority, for the consideration of the Board; b) Recommend to the Board, for approval, an organizational structure, and Plantilla of personnel of the Authority, in accordance with existing laws, rules and regulations; c) Execute, administer and implement policies and measures approved by the Board; d) Submit to the Board, in line with the national budget cycle, an annual budget and such supplemental budget as may be necessary for its consideration and approval; e) Represent the Authority in all its dealings with other persons, entities, agencies, and institutions whether public or private, domestic or foreign, subject to the limitations and conditions herein provided;

Food Availability Laws 391 f) Appoint, subject to the confirmation of the Board, and discipline or remove for cause in accordance with the civil service law, rules and regulations, the officers and personnel of the Authority; and Perform such other duties which may be assigned to him by the Board or by the Secretary of the Department of Agriculture. Section 11. Dairy Cooperative and Farmers Organizations. - The Authority shall help organize small producers and processors of milk into cooperatives or other forms of organizations to achieve the purposes of this Act including the following. a) T o facilitate collective arrangements that will enable cooperatives to acquire dairy animals, feeds, veterinary and other supplies, materials, equipment, services of all kinds and other dairy inputs under favorable terms; b) To provide a forum for the members of cooperatives to discuss common problems affecting production, marketing and the cooperatives relationships with the Authority; c) To help design credit systems that will provide loans, grants and such services as may be required, to dairy cooperatives and duly accredited peoples organizations; d) To assist cooperatives in developing market channels and in negotiations for bulk outlets of milk output;

392 COMPENDIUM OF RTF LAWS The Authority shall support the formation of a Dairy Cooperatives Federation among dairy cooperatives as a channel of its coordinative function in the industry. Section 12. National Dairy Campaign. - The Authority shall promote a nationwide campaign to boost support for the realization of the objectives of this Act. It shall encourage the participation of womens groups in dairy and dairy-related projects including dairy animal health care, village nutrition schemes, community-based processing, and marketing of milk and dairy products. Section 13. Priority Projects. - Immediately after the approval of this Act, the Authority, in coordination with other related agencies, shall undertake vigorously the following: a) Educational programs for dairy farmers and dairy cooperatives including, but not limited to, the conduct of seminars, workshops, assemblies and others; b) Training programs including, but not limited to, courses in animal husbandry, feed technology, dairy cooperatives management and other related aspects of dairying; c) Dairy research and development including but not limited to, breeds and breeding, herd improvement, indigenous and agri-waste feed sourcing, product development, herbal veterinary drugs

Food Availability Laws 393 and biologics, dairy facilities fabrication, and others; d) Establishment of support services to dairy farmers and cooperatives in the acquisition of basic supplies and inputs for animal health and nutrition; and e) Boost the number and quality of local animal stocks through applied technology. Section 14. Dairy Development Fund - T o implement Section 13 of this Act, there is hereby created a Dairy Development Fund which shall be used exclusively for the above-mentioned programs in the amount of T wo hundred million pesos (P200,000,000) from the funds in the National Treasury not otherwise appropriated. Annually thereafter, the amount of not less than One hundred forty million pesos (P140,000,000) shall be provided to augment the fund in the General Appropriations Act. Section 15. Government Agency Support. - The Authority shall coordinate closely with other government agencies in the establishment of support services for the dairy industry, including, among others, needed infrastructure, and the, setting of tariff rates to countervail subsidized imports. Section 16. Nutrition Programs. - The governments nutrition programs requiring milk and dairy products shall be sourced from small farmers and dairy cooperatives in coordination with the Authority.

394 COMPENDIUM OF RTF LAWS Section 17. Supply and Distribution. - The Authority shall monitor the importation, manufacture, supply and distribution of dairy products and raw materials for the manufacture or processing of milk and dairy products, as well as the importation and exportation of dairy animals, if the needs of the industry require, it shall, after public hearing and after consultations with the National Economic and Development Authority, the Department of Trade and Industry, the Department of Finance, and the representatives of the dairy cooperatives and the commercial sector, set guidelines for the importation, exportation and pricing of dairy animals, raw materials and other products necessary for the manufacture or processing of milk and dairy products: Provided, That within a period of three (3) years from the effectivity of this Act, the dairy cooperatives and the commercial sector shall, subject to quality and price considerations, mutually agree upon a volume of local milk production to be absorbed by the commercial sector. If at the end of the three-year period, the parties mentioned above have not come to a mutual agreement, the commercial sector shall absorb a fixed portion of the local milk supply to be determined by the Authority. Processors who purchase locally produced milk from dairy cooperatives in excess of the volume prescribed by the Authority shall be

Food Availability Laws 395 accorded tax credits equivalent to ten (10%) percent of the value of the excess volume purchased. Section 18. Exemption from Taxes and Duties. - The Authority shall be exempt from the payment of customs duties and taxes on the importation of dairy animals, veterinary and other supplies, other farm inputs, dairy equipment and machineries, including its spare parts, for distribution to dairy cooperatives subject to the following conditions: (1) That said equipment and machineries, including its spare parts are not manufactured domestically in sufficient quantity, of comparable quality and reasonable prices; (2) That it shall be actually, directly and exclusively used by the dairy cooperatives in the manufacture of its products; (3) That it shall not be disposed within three (3) years from acquisition, without prior approval of the Authority; and (4) If it will be subsequently sold, transferred or exchanged in the Philippines to non-exempt persons or entities, the purchasers or recipients shall be considered the importers thereof, and shall be liable for the customs duties and internal revenue taxes due on such importations. The customs duties and internal revenue taxes due on such articles shall constitute a lien on the articles itself,

396 COMPENDIUM OF RTF LAWS superior to all other charges or liens, irrespective of the possessors thereof. Any donation, contribution, bequest, subsidy or financial aid which may be made to the Authority shall constitute as allowable deduction from the income of the donor for income tax purposes and shall be exempt from donors tax, subject to such conditions as provided under the National Internal Revenue Code, as amended. Small farmers and small farmers dairy cooperatives shall be exempt from all taxes on proceeds from sale of raw milk and milk products. Milk processors shall enjoy a presumptive input tax credit of four percent (4%) of the value of their gross purchases from small farmers and small farmers dairy cooperatives. Section 19. Credit Facilities. - The Bangko Sentral ng Pilipinas shall adopt such monetary and re-discounting policies as may be designed to encourage rural banks, savings and loan associations, commercial banks and other credit institutions to meet the financing and credit needs essential to achieve the objectives of this Act. In addition, the Philippine National Bank, the Land Bank of the Philippines and the Development Bank of the Philippines shall design and establish special lending programs at affordable terms for small dairy farmers and dairy cooperatives.

Food Availability Laws 397 Section 20. Auditor. - The Authority shall have an auditor and complementary personnel who shall be appointed by the Commission on Audit in accordance with the civil service law, rules and regulations. The salaries of the auditor and the audit staff shall be determined and paid by the Commission on Audit. Section 21. Transitory Provision. - The Philippine Dairy Corporation is hereby abolished. The dairy functions of the livestock Development Council, the Dairy Division of the Bureau of Animal Industry and the Livelihood Corporations Laguna Processing Center are hereby transferred to the Authority. The personnel, assets, funds held, grants, subsidies and records of the abolished agencies as well as those of the Livestock Development Council, the Dairy Division of the Bureau of Animal Industry and the Laguna Processing Center are bereby transferred to the Authority. The Secretary of Agriculture shall designate an officer-in-charge pending the appointment of the administrator by the President of the Philippines. Incumbent officials and employees of the affected offices shall continue to exercise their respective functions, duties and responsibilities, with the corresponding benefits and privileges unless and until otherwise ordered by the Board.

398 COMPENDIUM OF RTF LAWS The new position structure and staffing pattern of the Authority shall be approved and prescribed by the Board within ninety (90) days from the effectivity of this Act within guidelines set by existing civil service and other laws, rules and regulations on the matter. Those separated from the service shall receive the retirement benefits to which they may be entitled under existing laws, rules and regulations. Otherwise, they shall be paid the equivalent of one (1) months salary for every year of service or a fraction thereof, computed on the basis of the highest salary received, but in no case shall such exceed the equivalent of twelve (12) months salary. Section 22. Penalty Clause. - Any person or entity found guilty of violating any provision of this Act, shall be sentenced to an imprisonment of not more than six (6) months or a fine of not more than T wenty thousand pesos (P20,000.00) or both upon the discretion of the Court. Section 23. Promulgation of Rules and Regulations. - The Department of Agriculture, in coordination with the member agencies and the private sector representatives of the Dairy Industry Board shall prepare and issue the rules and regulations implementing this Act within six (6) months from the date of its effectivity.

Food Availability Laws 399 In addition, the Secretary of the Department of Agriculture (DA) shall report to both Houses of Congress on the status of the promulgation of the rules and regulations within ninety (90) days from the date of the effectivity of this Act. 24. Appropriations. - The appropriations of agencies, division, council and corporation, merged, abolished or transferred pursuant to this Act shall be turned over to the Authority. Thereafter, such sums as may be necessary for its continued operation and maintenance shall be included in the annual General Appropriations Act. 25. Repealing Clause. - All laws, decrees, executive orders, rules and regulations or parts thereof which are inconsistent with this Act are hereby repealed or modified accordingly. 26. Separability Clause - If any provision of this Act is declared unconstitutional or invalid, other provisions thereof which are not affected thereby shall continue in full force and effect. 27. Effectivity - This Act shall take effect after fifteen (15) days following its publication in the Official Gazette or in any newspaper of general circulation.

Section

Section

Section

Section

Approved: February 20, 1995

400 COMPENDIUM OF RTF LAWS Republic of the Philippines Congress of the Philippines Metro Manila Tenth Congress Republic Act No. 8550 February 25, 1998 AN ACT PROVIDING FOR THE DEVELOPMENT, MANAGEMENT AND CONSERVATION OF THE FISHERIES AND AQUATIC RESOURCES, INTEGRATING ALL LAWS PERTINENT THERETO, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:: Section 1. Title.- This Act shall be known as The Philippine Fisheries Code of 1998. CHAPTER I Declaration of Policy and Definitions Section 2. Declaration of Policy.- It is hereby declared the policy of the State: (a) to achieve food security as the overriding consideration in the utilization, management, development, conservation and protection of fishery resources in order to provide the food needs of the population.

Food Availability Laws 401 A flexible policy towards the attainment of food security shall be adopted in response to changes in demographic trends for fish, emerging trends in the trade of fish and other aquatic products in domestic and international markets, and the law of supply and demand; lawphi1 (b) to limit access to the fishery and aquatic resources of the Philippines for the exclusive use and enjoyment of Filipino citizens; (c) to ensure the rational and sustainable development, management and conservation of the fishery and aquatic resources in Philippine waters including the Exclusive Economic Zone (EEZ) and in the adjacent high seas, consistent with the primordial objective of maintaining a sound ecological balance, protecting and enhancing the quality of the environment; (d) to protect the rights of fisherfolk, especially of the local communities with priority to municipal fisherfolk, in the preferential use of the municipal waters. Such preferential use, shall be based on, but not limited to, Maximum Sustainable Yield (MSY) or Total Allowable Catch (TAC) on the basis of resources and ecological conditions, and shall be consistent with our commitments under international treaties and agreements;

402 COMPENDIUM OF RTF LAWS (e) to provide support to the fishery sector, primarily to the municipal fisherfolk, including women and youth sectors, through appropriate technology and research, adequate financial, production, construction of post-harvest facilities, marketing assistance, and other services. The protection of municipal fisherfolk against foreign intrusion shall extend to offshore fishing grounds. Fishworkers shall receive a just share for their labor in the utilization of marine and fishery resources; (f) to manage fishery and aquatic resources, in a manner consistent with the concept of an integrated coastal area management in specific natural fishery management areas, appropriately supported by research, technical services and guidance provided by the State; and (g) to grant the private sector the privilege to utilize fishery resources under the basic concept that the grantee, licensee or permittee thereof shall not only be a privileged beneficiary of the State but also active participant and partner of the Government in the sustainable development, management, conservation and protection of the fishery and aquatic resources of the country. The state shall ensure the attainment of the following objectives of the fishery sector:

Food Availability Laws 403 1. Conservation, protection and sustained management of the countrys fishery and aquatic resources; 2. Poverty alleviation and the provision of supplementary livelihood among municipal fisherfolk; 3. Improvement of productivity of aquaculture within ecological limits; 4. Optimal utilization of offshore and deepsea resources; and 5. Upgrading of post-harvest technology. Section 3. Application of its Provisions.- The provisions of this Code shall be enforced in: (a) all Philippine waters including other waters over which the Philippines has sovereignty and jurisdiction, and the countrys 200-nautical mile Exclusive Economic Zone (EEZ) and continental shelf; (b) all aquatic and fishery resources whether inland, coastal or offshore fishing areas, including but not limited to fishponds, fishpens/cages; and (c) all lands devoted to aquaculture, or businesses and activities relating to fishery, whether private or public lands. lawphi1 Section 4. Definition of Terms. - As used in this Code, the following terms and phrases shall mean as follows: 1. Ancillary Industries - firms or companies related to the supply, construction and maintenance of fishing vessels, gears, nets

404 COMPENDIUM OF RTF LAWS and other fishing paraphernalia; fishery machine shops; and other facilities such as hatcheries, nurseries, feed plants, cold storage and refrigeration, processing plants and other pre-harvest and postharvest facilities. 2. Appropriate Fishing Technology adaptable technology, both in fishing and ancillary industries, that is ecologically sound, locally source-based and labor intensive. 3. Aquaculture - fishery operations involving all forms of raising and culturing fish and other fishery species in fresh, brackish and marine water areas. 4. Aquatic Pollution - the introduction by human or machine, directly or indirectly, of substances or energy to the aquatic environment which result or is likely to result in such deleterious effects as to harm living and non-living aquatic resources, pose potential and/or real hazard to human health, hindrance to aquatic activities such as fishing and navigation, including dumping/ disposal of waste and other marine litters, discharge of petroleum or residual products of petroleum or carbonaceous materials/ substances, and other, radioactive, noxious or harmful liquid, gaseous or solid substances, from any water, land or air transport or other human-made structure.

Food Availability Laws 405 Deforestation, unsound agricultural practices such as the use of banned chemicals and excessive use of chemicals, intensive use of artificial fish feed, and wetland conversion, which cause similar hazards and deleterious effects shall also constitute aquatic pollution. 5. Aquatic Resources - includes fish, all other aquatic flora and fauna and other living resources of the aquatic environment, including, but not limited to, salt and corals. 6. Artificial Reefs - any structure of natural or man-made materials placed on a body of water to serve as shelter and habitat, source of food, breeding areas for fishery species and shoreline protection. 7. Catch Ceilings - refer to the annual catch limits allowed to be taken, gathered or harvested from any fishing area in consideration of the need to prevent overfishing and harmful depletion of breeding stocks of aquatic organisms. 8. Closed Season - the period during which the taking of specified fishery species by a specified fishing gear is prohibited in a specified area or areas in Philippine waters. 9. Coastal Area/Zone - is a band of dry land and adjacent ocean space (water and submerged land) in which

406 COMPENDIUM OF RTF LAWS terrestrial processes and uses directly affect oceanic processes and uses, and vice versa; its geographic extent may include areas within a landmark limit of one (1) kilometer from the shoreline at high tide to include mangrove swamps, brackish water ponds, nipa swamps, estuarine rivers, sandy beaches and other areas within a seaward limit of 200 meters isobath to include coral reefs, algal flats, seagrass beds and other soft-bottom areas. 10. Commercial Fishing - the taking of fishery species by passive or active gear for trade, business & profit beyond subsistence or sports fishing, to be further classified as: (1) Small scale commercial fishing fishing with passive or active gear utilizing fishing vessels of 3.1 gross tons (GT) up to twenty (20) GT; (2) Medium scale commercial fishing - fishing utilizing active gears and vessels of 20.1 GT up to one hundred fifty (150) GT; and (3) Large commercial fishing - fishing utilizing active gears and vessels of more than one hundred fifty (150) GT. 11. Commercial Scale - a scheme of producing a minimum harvest per hectare per year of milkfish or other species including those raised in pens, cages, and tanks to

Food Availability Laws 407 be determined by the Department in consultation with the concerned sectors; 12. Coral - the hard calcareous substance made up of the skeleton of marine coelenterate polyps which include reefs, shelves and atolls or any of the marine coelenterate animals living in colonies where their skeletons form a stony mass. They include: (a. skeletons of anthozoan coelenterates characterized as having a rigid axis of compact calcareous or horny spicules, belonging to the genus corallium as represented by the red, pink, and white corals which are considered precious corals; (b. skeletons of anthozoan coelenterates characterized by thorny, horny axis such as the antipatharians represented by the black corals which are considered semiprecious corals; and (c. ordinary corals which are any kind of corals that are not precious nor semi-precious. 13. Coral Reef - a natural aggregation of coral skeleton, with or without living coral polyps, occurring in intertidal and subtidal marine waters. 14. Demarcated Areas - boundaries defined by markers and assigned exclusively to specific individuals or organizations for certain specified and limited uses such as: (a) Aquaculture, sea ranching and sea farming;

408 COMPENDIUM OF RTF LAWS (b) Fish aggregating devices; (c) Fixed and passive fishing gears; and (d) Fry and fingerlings gathering. 15. Department - shall mean the Department of Agriculture. 16. Electrofishing - the use of electricity generated by batteries, electric generators and other source of electric power to kill, stupefy, disable or render unconscious fishery species, whether or not the same are subsequently recovered. 17. Endangered Rare and/or Threatened Species - aquatic plants, animals, including some varieties of corals and sea shells in danger of extinction as provided for in existing fishery laws, rules and regulations or in the Protected Areas and Wildlife Bureau of the Department of Environment and Natural Resources (DENR. and in the Convention on the International Trade of Endangered Species of Flora and Fauna (CITES). 18. Exclusive Economic Zone (EEZ. - an area beyond and adjacent to the territorial sea which shall not extend beyond 200 nautical miles from the baselines as defined under existing laws. 19. FARMCs - the Fisheries and Aquatic Resources Management Councils. 20. Farm-to-Market Roads - shall include roads linking the fisheries production

Food Availability Laws 409 sites, coastal landing points and other post-harvest facilities to major market and arterial roads and highways. 21. Fine Mesh Net - net with mesh size of less than three centimeters (3 cm.. measured between two (2) opposite knots of a full mesh when stretched or as otherwise determined by the appropriate government agency. 22. Fish and Fishery/Aquatic Products include not only finfish but also mollusks, crustaceans, echinoderms, marine mammals, and all other species of aquatic flora and fauna and all other products of aquatic living resources in any form. 23. Fish Cage - refers to an enclosure which is either stationary or floating made up of nets or screens sewn or fastened together and installed in the water with opening at the surface or covered and held in a place by wooden/bamboo posts or various types of anchors and floats. 24. Fish Corral or Baklad - a stationary weir or trap devised to intercept and capture fish consisting of rows of bamboo stakes, plastic nets and other materials fenced with split blood mattings or wire mattings with one or more enclosures, usually with easy entrance but difficult exit, and with or without leaders to direct the fish to the catching chambers, purse or bags.

410 COMPENDIUM OF RTF LAWS 25. Fish fingerlings - a stage in the life cycle of the fish measuring to about 6-13 cm. depending on the species. 26. Fish fry - a stage at which a fish has just been hatched usually with sizes from 1-2.5 cm. 27. Fish pen - an artificial enclosure constructed within a body of water for culturing fish and fishery/aquatic resources made up of poles closely arranged in an enclosure with wooden materials, screen or nylon netting to prevent escape of fish. 28. Fisherfolk - people directly or personally and physically engaged in taking and/or culturing and processing fishery and/or aquatic resources.lawphi1 29. Fisherfolk Cooperative - a duly registered association of fisherfolk with a common bond of interest, who have voluntarily joined together to achieve a lawful common social or economic end, making equitable contribution to the capital requirement and accepting a fair share of the risks and benefits of the undertakings in accordance with universally accepted cooperative principles. 30. Fisherfolk Organization - an organized group, association, federation, alliance or an institution of fisherfolk which has at least fifteen (15) members, a set of officers, a constitution and by-laws, an organizational structure and a program of action.

Food Availability Laws 411 31. Fisheries - refers to all activities relating to the act or business of fishing, culturing, preserving, processing, marketing, developing, conserving and managing aquatic resources and the fishery areas, including the privilege to fish or take aquatic resource thereof. 32. Fish Pond - a land-based facility enclosed with earthen or stone material to impound water for growing fish. 33. Fishing Boat/Gear License - a permit to operate specific types of fishing boat/ gear for specific duration in areas beyond municipal waters for demersal or pelagic fishery resources. 34. Fishery Management Areas - a bay, gulf, lake or any other fishery area which may be delineated for fishery resource management purposes. 35. Fishery Operator - one who owns and provides the means including land, labor, capital, fishing gears and vessels, but does not personally engage in fishery. 36. Fishery Refuge and Sanctuaries a designated area where fishing or other forms of activities which may damage the ecosystem of the area is prohibited and human access may be restricted. 37. Fishery Reserve - a designated area where activities are regulated and set aside for educational and research purposes.

412 COMPENDIUM OF RTF LAWS 38. Fishery Species - all aquatic flora and fauna including, but not restricted to, fish, algae, coelenterates, mollusks, crustaceans, echinoderms and cetaceans. 39. Fishing - the taking of fishery species from their wild state of habitat, with or without the use of fishing vessels. 40. Fishing gear - any instrument or device and its accessories utilized in taking fish and other fishery species. (a) Active fishing gear - is a fishing device characterized by gear movements, and/ or the pursuit of the target species by towing, lifting, and pushing the gears, surrounding, covering, dredging, pumping and scaring the target species to impoundments; such as, but not limited to, trawl, purse seines, Danish seines, bag nets, paaling, drift gill net and tuna longline. (b) Passive fishing gear - is characterized by the absence of gear movements and/or the pursuit of the target species; such as, but not limited to, hook and line, fishpots, traps and gill nets across the path of the fish. 41. Fishing vessel - any boat, ship or other watercraft equipped to be used for taking of fishery species or aiding or assisting one (1) or more vessels in the performance of any activity relating to fishing, including,

Food Availability Laws 413 but not limited to, preservation, supply, storage, refrigeration, transportation and/or processing. 42. Fishing with Explosives - the use of the dynamite, other explosives or other chemical compounds that contain combustible elements or ingredients which upon ignition by friction, concussion, percussion or detonation of all or parts of the compound, will kill, stupefy, disable or render unconscious any fishery species. It also refers to the use of any other substance and/or device which causes an explosion that is capable of producing the said harmful effects on any fishery species and aquatic resources and capable of damaging and altering the natural habitat. 43. Fishing with Noxious or Poisonous Substances - the use of any substance, plant extracts or juice thereof, sodium cyanide and/or cyanide compounds or other chemicals either in a raw or processed form, harmful or harmless to human beings, which will kill, stupefy, disable or render unconscious any fishery species and aquatic resources and capable of damaging and altering the natural habitat. 44. Fishworker - a person regularly or not regularly employed in commercial fishing and related industries, whose

414 COMPENDIUM OF RTF LAWS income is either in wage, profit-sharing or stratified sharing basis, including those working in fish pens, fish cages, fish corrals/traps, fishponds, prawn farms, sea farms, salt beds, fish ports, fishing boat or trawlers, or fish processing and/ or packing plants. Excluded from this category are administrators, security guards and overseers. 45. Food Security - refers to any plan, policy or strategy aimed at ensuring adequate supplies of appropriate food at affordable prices. Food security may be achieved through self-sufficiency (i.e. ensuring adequate food supplies from domestic production), through self-reliance (i.e. ensuring adequate food supplies through a combination of domestic production and importation), or through pure importation. 46. Foreshore Land - a string of land margining a body of water; the part of a seashore between the low-water line usually at the seaward margin of a low tide terrace and the upper limit of wave wash at high tide usually marked by a beach scarp or berm. 47. Fully-developed Fishpond Area - a clean leveled area enclosed by dikes, at least one foot higher than the highest floodwater level in the locality and strong enough to resist pressure at the highest

Food Availability Laws 415 flood tide; consists of at least a nursery pond, a transition pond, a rearing pond or a combination of any or all said classes of ponds, and a functional water control system and producing in a commercial scale. 48. Gross Tonnage - includes the underdeck tonnage, permanently enclosed spaces above the tonnage deck, except for certain exemptions. In broad terms, all the vessels closed-in spaces expressed in volume terms on the bases of one hundred cubic feet (that equals one gross ton). 49. Inland Fishery - the freshwater fishery and brackishwater fishponds. 50. Lake - an inland body of water, an expanded part of a river, a reservoir formed by a dam, or a lake basin intermittently or formerly covered by water. 51. Limited Access - a fishery policy by which a system of equitable resource and allocation is established by law through fishery rights granting and licensing procedure as provided by this Code. 52. Mangroves - a community of intertidal plants including all species of trees, shrubs, vines and herbs found on coasts, swamps, or border of swamps. 53. Maximum Sustainable Yield (MSY) - is the largest average quantity of fish that

416 COMPENDIUM OF RTF LAWS can be harvested from a fish stocks/ resource within a period of time (e.g. one year) on a sustainable basis under existing environmental conditions. 54. Migratory species - refers to any fishery species which in the course of their life could travel from freshwater to marine water or vice versa, or any marine species which travel over great distances in waters of the ocean as part of their behavioral adaptation for survival and speciation: (a) Anadromous species - marine fishes which migrate to freshwater areas to spawn; (b) Catadromous species - freshwater fishes which migrate to marine areas to spawn. 55. Monitoring, control and surveillance (a) Monitoring - the requirement of continuously observing: (1) fishing effort which can be expressed by the number of days or hours of fishing, number of fishing gears and number of fisherfolk; (2) characteristics of fishery resources; and (3) resource yields (catch); (b) Control - the regulatory conditions (legal framework) under which the exploitation, utilization and disposition of the resources may be conducted; and

Food Availability Laws 417 (c) Surveillance - the degree and types of observations required to maintain compliance with regulations. lawphi1 ALF 56. Municipal fisherfolk - persons who are directly or indirectly engaged in municipal fishing and other related fishing activities. 57. Municipal fishing - refers to fishing within municipal waters using fishing vessels of three (3) gross tons or less, or fishing not requiring the use of fishing vessels. 58. Municipal waters - include not only streams, lakes, inland bodies of water and tidal waters within the municipality which are not included within the protected areas as defined under Republic Act No. 7586 (The NIPAS Law), public forest, timber lands, forest reserves or fishery reserves, but also marine waters included between two (2) lines drawn perpendicular to the general coastline from points where the boundary lines of the municipality touch the sea at low tide and a third line parallel with the general coastline including offshore islands and fifteen (15) kilometers from such coastline. Where two (2) municipalities are so situated on opposite shores that there is less than thirty (30) kilometers of marine waters between them, the third line shall

418 COMPENDIUM OF RTF LAWS be equally distant from opposite shore of the respective municipalities. 59. Non-governmental organization (NGO. - an agency, institution, a foundation or a group of persons whose purpose is to assist peoples organizations/associations in various ways including, but not limited to, organizing, education, training, research and/or resource accessing. 60. Payao - a fish aggregating device consisting of a floating raft anchored by a weighted line with suspended materials such as palm fronds to attract pelagic and schooling species common in deep waters. 61. Pearl Farm Lease - public waters leased for the purpose of producing cultured pearls. 62. Peoples Organization - a bona fide association of citizens with demonstrated capacity to promote the public interest and with identifiable leadership, membership and structure. Its members belong to a sector/s who voluntarily band themselves together to work for and by themselves for their own upliftment, development and greater good. 63. Person - natural or juridical entities such as individuals, associations, partnership, cooperatives or corporations.

Food Availability Laws 419 64. Philippine waters - include all bodies of water within the Philippine territory such as lakes, rivers, streams, creeks, brooks, ponds, swamps, lagoons, gulfs, bays and seas and other bodies of water now existing or which may hereafter exist in the provinces, cities, municipalities, and barangays and the waters around, between and connecting the islands of the archipelago regardless of their breadth and dimensions, the territorial sea, the sea beds, the insular shelves, and all other waters over which the Philippines has sovereignty and jurisdiction including the 200-nautical miles Exclusive Economic Zone and the continental shelf. 65. Post-harvest facilities - these facilities include, but are not limited to, fishport, fishlanding, ice plants and cold storages, fish processing plants. 66. Purse Seine - a form of encircling net having a line at the bottom passing through rings attached to the net, which can be drawn or pursed. In general, the net is set from a boat or pair of boats around the school of fish. The bottom of the net is pulled closed with the purse line. The net is then pulled aboard the fishing boat or boats until the fish are concentrated in the bunt or fish bag.

420 COMPENDIUM OF RTF LAWS 67. Resource Rent - the difference between the value of the products produced from harvesting a publicly owned resource less the cost of producing it, where cost includes the normal return to capital and normal return to labor. 68. Sea farming - the stocking of natural or hatchery-produced marine plants or animals, under controlled conditions, for purposes of rearing and harvesting, but not limited to commercially-important fishes, mollusks (such as pearl and giant clam culture), including seaweeds and seagrasses. 69. Sea ranching - the release of the young of fishery species reared in hatcheries and nurseries into natural bodies of water for subsequent harvest at maturity or the manipulation of fishery habitat, to encourage the growth of the wild stocks. 70. Secretary - the Secretary of the Department of Agriculture. 71. Superlight - also called magic light, is a type of light using halogen or metal halide bulb which may be located above the sea surface or submerged in the water. It consists of a ballast, regulator, electric cable and socket. The source of energy comes from a generator, battery or dynamo coupled with the main engine.

Food Availability Laws 421 72. Total Allowable Catch (TAC) - the maximum harvest allowed to be taken during a given period of time from any fishery area, or from any fishery species or group of fishery species, or a combination of area and species and normally would not exceed the MSY. 73. Trawl - an active fishing gear consisting of a bag shaped net with or without otter boards to open its opening which is dragged or towed along the bottom or through the water column to take fishery species by straining them from the water, including all variations and modifications of trawls (bottom, mid-water, and baby trawls) and tow nets. CHAPTER II Utilization, Management, Development, Conservation and Allocation System of Fisheries and Aquatic Resources Section 5. Use of Philippine Waters.- The use and exploitation of the fishery and aquatic resources in Philippine waters shall be reserved exclusively to Filipinos: Provided, however, That research and survey activities may be allowed under strict regulations, for purely research, scientific, technological and educational purposes that would also benefit Filipino citizens.

422 COMPENDIUM OF RTF LAWS Section 6. Fees and Other Fishery Charges.- The rentals for fishpond areas covered by the Fishpond Lease Agreement (FLA) and license fees for Commercial Fishing Boat Licenses (CFBL) shall be set at levels that reflect resource rent accruing from the utilization of resources and shall be determined by the Department: Provided, That the Department shall also prescribe fees and other fishery charges and issue the corresponding license or permit for fishing gear, fishing accessories and other fishery activities beyond the municipal waters: Provided, further, That the license fees of fishery activity in municipal waters shall be determined by the Local Government Units (LGUs) in consultation with the FARMCs. The FARMCs may also recommend the appropriate license fees that will be imposed. Section 7. Access to Fishery Resources.- The Department shall issue such number of licenses and permits for the conduct of fishery activities subject to the limits of the MSY of the resource as determined by scientific studies or best available evidence. Preference shall be given to resource users in the local communities adjacent or nearest to the municipal waters. Section 8. Catch Ceiling Limitations.- The Secretary may prescribe limitations or quota on the total quantity of fish captured, for a specified period of time and specified area based on the best available evidence. Such

Food Availability Laws 423 a catch ceiling may be imposed per species of fish whenever necessary and practicable: Provided, however, That in municipal waters and fishery management areas, and waters under the jurisdiction of special agencies, catch ceilings may be established upon the concurrence and approval or recommendation of such special agency and the concerned LGU in consultation with the FARMC for conservation or ecological purposes. Section 9. Establishment of Closed Season.- The Secretary may declare, through public notice in at least two (2) newspapers of general circulation or in public service announcements, whichever is applicable, at least five (5) days before the declaration, a closed season in any or all Philippine waters outside the boundary of municipal waters and in bays, for conservation and ecological purposes. The Secretary may include waters under the jurisdiction of special agencies, municipal waters and bays, and/or other areas reserved for the use of the municipal fisherfolk in the area to be covered by the closed season: Provided, however, That this shall be done only upon the concurrence and approval or recommendation of such special agency and the concerned LGU and FARMC: Provided, further, That in municipal waters, fishery management areas and other areas reserved

424 COMPENDIUM OF RTF LAWS for the use of the municipal fisherfolk, closed season may be established by the concerned LGU in consultation with the FARMC for conservation or ecological purposes. The FARMCs may also recommend the establishment of closed seasons in municipal waters, fisheries management and other areas reserved for the use of the municipal fisherfolk. Section 10. Introduction of Foreign Aquatic Species.- No foreign finfish, mollusk, crustacean or aquatic plants shall be introduced in Philippine waters without a sound ecological, biological and environmental justification based on scientific studies subject to the bio-safety standard as provided for by existing laws: Provided, however, That the Department may approve the introduction of foreign aquatic species for scientific/research purposes. Section 11. Protection of Rare, Threatened and Endangered Species.- The Department shall declare closed seasons and take conservation and rehabilitation measures for rare, threatened and endangered species, as it may determine, and shall ban the fishing and/or taking of rare, threatened and/or endangered species, including their eggs/offspring as identified by existing laws in concurrence with concerned government agencies. Section 12. Environmental Impact Statement (EIS).All government agencies as well as private

Food Availability Laws 425 corporations, firms and entities who intend to undertake activities or projects which will affect the quality of the environment shall be required to prepare a detailed Environmental Impact Statement (EIS) prior to undertaking such development activity. The preparation of the EIS shall form an integral part of the entire planning process pursuant to the provisions of Presidential Decree No. 1586 as well as its implementing rules and regulations. Section 13. Environmental Compliance Certificate (ECC).- All Environmental Impact Statements (EIS) shall be submitted to the Department of Environment and Natural Resources (DENR) for review and evaluation. No person, natural or juridical, shall undertake any development project without first securing an Environmental Compliance Certificate (ECC) from the Secretary of the DENR. Section 14. Monitoring, Control and Surveillance of Philippine Waters.- A monitoring, control and surveillance system shall be established by the Department in coordination with LGUs, FARMCs, the private sector and other agencies concerned to ensure that the fisheries and aquatic resources in Philippine waters are judiciously and wisely utilized and managed on a sustainable basis and conserved for the benefit and enjoyment exclusively of Filipino citizens. Section 15. Auxiliary Invoices.- All fish and fishery products must have an auxiliary invoice

426 COMPENDIUM OF RTF LAWS to be issued by the LGUs or their duly authorized representatives prior to their transport from their point of origin to their point of destination in the Philippines and/ or export purposes upon payment of a fee to be determined by the LGUs to defray administrative costs therefor. ARTICLE I MUNICIPAL FISHERIES Section 16. Jurisdiction of Municipal/City Government.The municipal/city government shall have jurisdiction over municipal waters as defined in this Code. The municipal/ city government, in consultation with the FARMC shall be responsible for the management, conservation, development, protection, utilization, and disposition of all fish and fishery/ aquatic resources within their respective municipal waters. The municipal/city government may, in consultation with the FARMC, enact appropriate ordinances for this purpose and in accordance with the National Fisheries Policy. The ordinances enacted by the municipality and component city shall be reviewed pursuant to Republic Act No. 7160 by the sanggunian of the province which has jurisdiction over the same.

Food Availability Laws 427 The LGUs shall also enforce all fishery laws, rules and regulations as well as valid fishery ordinances enacted by the municipal/city council. The management of contiguous fishery resources such as bays which straddle several municipalities, cities or provinces, shall be done in an integrated manner, and shall not be based on political subdivisions of municipal waters in order to facilitate their management as single resource systems. The LGUs which share or border such resources may group themselves and coordinate with each other to achieve the objectives of integrated fishery resource management. The Integrated Fisheries and Aquatic Resources Management Councils (FARMCs) established under Section 76 of this Code shall serve as the venues for close collaboration among LGUs in the management of contiguous resources. Section 17. Grant of Fishing Privileges in Municipal Waters.- The duly registered fisherfolk organizations/cooperatives shall have preference in the grant of fishery rights by the Municipal/City Council pursuant to Section 149 of the Local Government Code: Provided, That in areas where there are special agencies or offices vested

428 COMPENDIUM OF RTF LAWS with jurisdiction over municipal waters by virtue of special laws creating these agencies such as, but not limited to, the Laguna Lake Development Authority and the Palawan Council for Sustainable Development, said offices and agencies shall continue to grant permits for proper management and implementation of the aforementioned structures. Section 18. Users of Municipal Waters.- All fishery related activities in municipal waters, as defined in this Code, shall be utilized by municipal fisherfolk and their cooperatives/ organizations who are listed as such in the registry of municipal fisherfolk. The municipal or city government, however, may, through its local chief executive and acting pursuant to an appropriate ordinance, authorize or permit small and medium commercial fishing vessels to operate within the ten point one (10.1) to fifteen (15) kilometer area from the shoreline in municipal waters as defined herein, provided, that all the following are met: (a) no commercial fishing in municipal waters with depth less than seven (7) fathoms as certified by the appropriate agency; (b) fishing activities utilizing methods and gears that are determined to be

Food Availability Laws 429 consistent with national policies set by the Department; (c) prior consultation, through public hearing, with the M/CFARMC has been conducted; and (d) the applicant vessel as well as the shipowner, employer, captain and crew have been certified by the appropriate agency as not having violated this Code, environmental laws and related laws. In no case shall the authorization or permit mentioned above be granted for fishing in bays as determined by the Department to be in an environmentally critical condition and during closed season as provided for in Section 9 of this Code. Section 19. Registry of Municipal Fisherfolk.- The LGU shall maintain a registry of municipal fisherfolk, who are fishing or may desire to fish in municipal waters for the purpose of determining priorities among them, of limiting entry into the municipal waters, and of monitoring fishing activities and/or other related purposes: Provided, That the FARMC shall submit to the LGU the list of priorities for its consideration. Such list or registry shall be updated annually or as may be necessary, and shall be posted in barangay halls or other strategic locations where it shall be open to public

430 COMPENDIUM OF RTF LAWS inspection, for the purpose of validating the correctness and completeness of the list. The LGU, in consultation with the FARMCs, shall formulate the necessary mechanisms for inclusion or exclusion procedures that shall be most beneficial to the resident municipal fisherfolk. The FARMCs may likewise recommend such mechanisms. The LGUs shall also maintain a registry of municipal fishing vessels by type of gear and other boat particulars with the assistance of the FARMC. Section 20. Fisherfolk Organizations and/or Cooperatives.Fisherfolk organizations/cooperatives whose members are listed in the registry of municipal fisherfolk, may be granted use of demarcated fishery areas to engage in fish capture, mariculture and/or fish farming: Provided, however, That an organization/ cooperative member whose household is already in possession of a fishery right other than for fish capture cannot enjoy the fishing rights granted to the organization or cooperative. Section 21. Priority of Resident Municipal Fisherfolk.Resident municipal fisherfolk of the municipality concerned and their organizations/cooperatives shall have priority to exploit municipal and demarcated fishery areas of the said municipality.

Food Availability Laws 431 Section 22. Demarcated Fishery Right.- The LGU concerned shall grant demarcated fishery rights to fishery organizations/cooperatives for mariculture operation in specific areas identified by the Department. Section 23. Limited Entry Into Overfished Areas.Whenever it is determined by the LGUs and the Department that a municipal water is overfished based on available data or information or in danger of being overfished, and that there is a need to regenerate the fishery resources in that water, the LGU shall prohibit or limit fishery activities in the said waters. Section 24. Support to Municipal Fisherfolk.- The Department and the LGUs shall provide support to municipal fisherfolk through appropriate technology and research, credit, production and marketing assistance and other services such as, but not limited to training for additional/supplementary livelihood. Section 25. Rights and Privileges of Fishworkers.- The fishworkers shall be entitled to the privileges accorded to other workers under the Labor Code, Social Security System and other benefits under other laws or social legislation for workers: Provided, That fishworkers on board any fishing vessels engaged in fishing operations are hereby covered by the Philippine Labor Code, as amended.

432 COMPENDIUM OF RTF LAWS ARTICLE II COMMERCIAL FISHERIES Section 26. Commercial Fishing Vessel License and Other Licenses.- No person shall operate a commercial fishing vessel, pearl fishing vessel or fishing vessel for scientific, research or educational purposes, or engage in any fishery activity, or seek employment as a fishworker or pearl diver without first securing a license from the Department, the period of which shall be prescribed by the Department: Provided, That no such license shall be required of a fishing vessel engaged in scientific, research or educational purposes within Philippine waters pursuant to an international agreement of which the Philippines is a signatory and which agreement defines the status, privileges and obligations of said vessel and its crew and the non-Filipino officials of the international agency under which said vessel operates: Provided, further, That members of the crew of a fishing vessel used for commercial fishing except the duly licensed and/or authorized patrons, marine engineers, radio operators and cooks shall be considered as fisherfolk: Provided, furthermore, That all skippers/ master fishers shall be required to undertake an orientation training on detection of fish caught by illegal means before they can be

Food Availability Laws 433 issued their fishworker licenses: Provided, finally, That the large commercial fishing vessels license herein authorized to be granted shall allow the licensee to operate only in Philippine waters seven (7) or more fathoms deep, the depth to be certified by the NAMRIA, and subject to the conditions that may be stated therein and the rules and regulations that may be promulgated by the Department. Section 27. Persons Eligible for Commercial Fishing Vessel License.- No commercial fishing vessel license shall be issued except to citizens of the Philippines, partnerships or to associations, cooperatives or corporations duly registered in the Philippines at least sixty percent (60%) of the capital stock of which is owned by Filipino citizens. No person to whom a license has been issued shall sell, transfer or assign, directly or indirectly, his stock or interest therein to any person not qualified to hold a license. Any such transfer, sale or assignment shall be null and void and shall not be registered in the books of the association, cooperative or corporation. For purposes of commercial fishing, fishing vessels owned by citizens of the Philippines, partnerships, corporations, cooperatives or associations qualified under this section shall secure Certificates of Philippine Registry and such other documents as are necessary

434 COMPENDIUM OF RTF LAWS for fishing operations from the concerned agencies: Provided, That the commercial fishing vessel license shall be valid for a period to be determined by the Department. 28. Commercial Fishing Vessel Registration.- The registration, documentation, inspection and manning of the operation of all types of fishing vessels plying Philippine waters shall be in accordance with laws, rules and regulations. 29. Registration and Licensing of Fishing Gears Used in Commercial Fishing.- Before a commercial fishing vessel holding a commercial fishing vessel license may begin fishing operations in Philippine waters, the fishing gear it will utilize in fishing shall be registered and a license granted therefor. The Department shall promulgate guidelines to implement this provision within sixty (60) days from approval of this Code. 30. Renewal of Commercial Boat License.- The commercial fishing boat license shall be renewed every three (3) years. The owner/operator of a fishing vessel has a period of sixty (60) days prior to the expiration of the license within which to renew the same. 31. Report of Transfer of Ownership.- The owner/ operator of a registered fishing vessel shall notify the Department in writing of the transfer of the ownership of the vessel with a copy of such document within ten (10) days after its transfer to another person.

Section

Section

Section

Section

Food Availability Laws 435 Section 32. Fishing by Philippine Commercial Fishing Fleet in International Waters.- Fishing vessels of Philippine registry may operate in international waters or waters of other countries which allow such fishing operations: Provided, That they comply with the safety, manning and other requirements of the Philippine Coast Guard, Maritime Industry Authority and other agencies concerned: Provided, however, That they secure an international fishing permit and certificate of clearance from the Department: Provided, further, That the fish caught by such vessels shall be considered as caught in Philippine waters and therefore not subject to all import duties and taxes only when the same is landed in duly designated fish landings and fish ports in the Philippines: Provided, furthermore, That landing ports established by canneries, seafood processors and all fish landing sites established prior to the effectivity of this Code shall be considered authorized landing sites: Provided, finally, That fishworkers on board Philippine registered fishing vessels conducting fishing activities beyond the Philippine Exclusive Economic Zone are not considered as overseas Filipino workers. Section 33. Importation of Fishing Vessels or Construction of New Fishing Boats.- Prior to the importation of fishing vessels and the construction of new fishing vessels, the approval/clearance of the Department must first be obtained.

436 COMPENDIUM OF RTF LAWS Section 34. Incentives for Municipal and Small-Scale Commercial Fisherfolk.- Municipal and smallscale commercial fisherfolk shall be granted incentives which shall include, but are not limited to, the following: (a) at least ten percent (10%) of the credit and the guarantee funds of government financing institutions shall be made available for post-harvest and marketing projects for the purpose of enhancing our fisherfolk competitiveness by reducing post-harvest losses. Qualified projects shall include, but shall not be limited to, ice plants, cold storage, canning, warehouse, transport and other related infrastructure projects and facilities; and (b) the Department shall undertake the following programs: 1. a capability-building program for targeted parties shall be developed by the Department to promote greater bankability and credit worthiness of municipal and small-scale commercial fishers. Such program shall include organizing activities, technology transfer, and skills training related to commercial fishing as well as credit management. Groups and cooperatives organized under the program shall have priority access over credit and guarantee funds established under this Code; and

Food Availability Laws 437 2. an information campaign shall be conducted to promote the capability building and credit programs. The campaign shall ensure greater information dissemination and accessibility to targeted fisherfolk. Section 35. Incentives for Commercial Fishers to Fish Farther into the Exclusive Economic Zone.In order to encourage fishing vessel operators to fish farther in the EEZ and beyond, new incentives for improvement of fishing vessels and acquisition of fishing equipment shall be granted in addition to incentives already available from the Board of Investments (BOI). Such incentives shall be granted subject to exhaustive evaluation of resource and exploitation conditions in the specified areas of fishing operations. The incentive shall include, but not be limited to: (a) long term loans supported by guarantee facilities to finance the building and acquisition and/or improvement of fishing vessels and equipment; (b) commercial fishing vessel operators of Philippine registry shall enjoy a limited period of tax and duty exemptions on the importation of fishing vessels not more than five (5) years old, equipment and paraphernalia, the period of exemption and guidelines shall be

438 COMPENDIUM OF RTF LAWS fixed by the Department within ninety (90) days from the effectivity of this Code; (c) commercial fishing operator of Philippine registry engaged in fisheries in the high seas shall be entitled to duty and tax rebates on fuel consumption for commercial fisheries operations. Guidelines shall be promulgated within ninety (90) days from the effectivity of this Code by the Department; and (d) all applicable incentives available under the Omnibus Investment Code of 1987: Provided, That the fishing operation project is qualified for registration and is duly registered with the BOI. Section 36. Complement of Fishing Vessels.- Every commercial fishing vessel of Philippine registry when actually operated, shall be manned in accordance with the requirements of the Philippine Merchant Marine rules and regulations. Section 37. Medical Supplies and Life-Saving Devices.- All fishing vessels shall be provided with adequate medical supplies and life-saving devices to be determined by the Occupational Safety and Health Center: Provided, That a fishing vessel of twenty (20) GT or more shall have as a member of its crew a person qualified as a first aider duly certified by the Philippine National Red Cross.

Food Availability Laws 439 Section 38. Reportorial Requirements.- Each commercial fishing vessel shall keep a daily record of fish catch and spoilage, landing points, and quantity and value of fish caught, and off-loaded for transshipment, sale and/or other disposal. Detailed information shall be duly certified by the vessels captain and transmitted monthly to the officer or representative of the Department, at the nearest designated landing point. Section 39. Report of Meteorological and Other Data.All vessels and crafts passing navigational lanes or engaged in fisheries activity shall be required to contribute to meteorological and other data, and shall assist the Department in documentation or reporting of information vital to navigation and the fishing industry. Section 40. Color Code and Radio Frequency.- For administrative efficiency and enforcement of regulations, registered fishing vessels shall bear a color code as may be determined by the Department and may be assigned a radio frequency specific and distinct to its area of operation. Section 41. Passage.- Commercial and other passage not in the regular conduct of fisheries activity shall be made at designated navigational lanes. Section 42. Transshipment.- Foreign fishing vessels wishing to avail of land, air and sea facilities available in the Philippines to transport fishery

440 COMPENDIUM OF RTF LAWS products which are caught outside Philippine territorial waters to its final destination shall call only at duly designated government-owned or -controlled regional fishport complexes after securing clearance from the Department. Section 43. Operation of Radio Communication Facilities on Board Fishing Vessels.- The Department shall promulgate guidelines in the operation of radio communication facilities on board fishing vessels and the assignment of radio frequencies specific and distinct to area of operation in coordination with the National Telecommunications Commission. Section 44. Use of Superlight.- The number and wattage of superlights used in commercial fishing vessels shall be regulated by the Department: Provided, That the use of superlights is banned within municipal waters and bays. ARTICLE III AQUACULTURE Section 45. Disposition of Public Lands for Fishery Purposes.- Public lands such as tidal swamps, mangroves, marshes, foreshore lands and ponds suitable for fishery operations shall not be disposed or alienated. Upon effectivity of this Code, FLA may be issued for public lands that may be declared available for fishpond development primarily to qualified fisherfolk cooperatives/associations: Provided,

Food Availability Laws 441 however, That upon the expiration of existing FLAs the current lessees shall be given priority and be entitled to an extension of twenty-five (25) years in the utilization of their respective leased areas. Thereafter, such FLAs shall be granted to any Filipino citizen with preference, primarily to qualified fisherfolk cooperatives/ associations as well as small and medium enterprises as defined under Republic Act No. 8289: Provided, further, That the Department shall declare as reservation, portions of available public lands certified as suitable for fishpond purposes for fish sanctuary, conservation, and ecological purposes: Provided, finally, That two (2) years after the approval of this Act, no fish pens or fish cages or fish traps shall be allowed in lakes. Section 46. Lease of Fishponds.- Fishpond leased to qualified persons and fisherfolk organizations/cooperatives shall be subject to the following conditions: (a) Areas leased for fishpond purposes shall be no more than 50 hectares for individuals and 250 hectares for corporations or fisherfolk organizations; (b) The lease shall be for a period of twentyfive (25) years and renewable for another twenty-five (25) years: Provided, That in case of the death of the lessee, his spouse and/or children, as his heirs, shall have preemptive rights to the unexpired

442 COMPENDIUM OF RTF LAWS term of his Fishpond Lease Agreement subject to the same terms and conditions provided herein provided that the said heirs are qualified; (c) Lease rates for fishpond areas shall be determined by the Department: Provided, That all fees collected shall be remitted to the National Fisheries Research and Development Institute and other qualified research institutions to be used for aquaculture research development; (d) The area leased shall be developed and producing on a commercial scale within three (3) years from the approval of the lease contract: Provided, however, That all areas not fully producing within five (5) years from the date of approval of the lease contract shall automatically revert to the public domain for reforestation; (e) The fishpond shall not be subleased, in whole or in part, and failure to comply with this provision shall mean cancellation of FLA; (f) The transfer or assignment of rights to FLA shall be allowed only upon prior written approval of the Department; (g) The lessee shall undertake reforestation for river banks, bays, streams, and seashore fronting the dike of his fishpond subject to the rules and regulations to be promulgated thereon; and

Food Availability Laws 443 (h) The lessee shall provide facilities that will minimize environmental pollution, i.e., settling ponds, reservoirs, etc: Provided, That failure to comply with this provision shall mean cancellation of FLA. Section 47. Code of Practice for Aquaculture.- The Department shall establish a code of practice for aquaculture that will outline general principles and guidelines for environmentally-sound design and operation to promote the sustainable development of the industry. Such Code shall be developed through a consultative process with the DENR, the fishworkers, FLA holders, fishpond owners, fisherfolk cooperatives, small-scale operators, research institutions and the academe, and other potential stakeholders. The Department may consult with specialized international organizations in the formulation of the code of practice. Section 48. Incentives and Disincentives for Sustainable Aquaculture Practices.- The Department shall formulate incentives and disincentives, such as, but not limited to, effluent charges, user fees and negotiable permits, to encourage compliance with the environmental standards and to promote sustainable management practices. Section 49. Reversion of All Abandoned, Undeveloped or Underutilized Fishponds.- The DENR, in coordination with the Department, LGUs,

444 COMPENDIUM OF RTF LAWS other concerned agencies and FARMCs shall determine which abandoned, underdeveloped or underutilized fishponds covered by FLAs can be reverted to their original mangrove state and after having made such determination shall take all steps necessary to restore such areas in their original mangrove state. Section 50. Absentee Fishpond Lease Agreement Holders.Holders of fishpond lease agreements who have acquired citizenship in another country during the existence of the FLA shall have their lease automatically cancelled and the improvements thereon to be forfeited in favor of the government and disposed of in accordance with rules and regulations promulgated thereon. Section 51. License to Operate Fish Pens, Fish Cages, Fish Traps and Other Structures for the Culture of Fish and Other Fishery Products.- Fish pens, fish cages, fish traps and other structures for the culture of fish and other fishery products shall be constructed and shall operate only within established zones duly designated by LGUs in consultation with the FARMCs concerned consistent with national fisheries policies after the corresponding licenses thereof have been secured. The area to be utilized for this purpose for individual person shall be determined by the LGUs in consultation with the concerned FARMC: Provided, however, That not over ten percent (10%) of the suitable water surface

Food Availability Laws 445 area of all lakes and rivers shall be allotted for aquaculture purposes like fish pens, fish cages and fish traps; and the stocking density and feeding requirement which shall be controlled and determined by its carrying capacity: Provided, further, That fish pens and fish cages located outside municipal waters shall be constructed and operated only within fish pen and fish cage belts designated by the Department and after corresponding licenses therefor have been secured and the fees thereof paid. Section 52. Pearl Farm Leases.- The foregoing provisions notwithstanding, existing pearl farm leases shall be respected and allowed to operate under the terms thereof. New leases may be granted to qualified persons who possess the necessary capital and technology, by the LGUs having jurisdiction over the area. Section 53. Grant of Privileges for Operations of Fish Pens, Cages, Corrals/Traps and Similar Structures.- No new concessions, licenses, permits, leases and similar privileges for the establishment or operation of fish pens, fish cages, fish corrals/traps and other similar structures in municipal areas shall be granted except to municipal fisherfolk and their organizations. Section 54. Insurance for Fishponds, Fish Cages and Fish Pens.- Inland fishponds, fish cages and fish pens shall be covered under the insurance

446 COMPENDIUM OF RTF LAWS program of the Philippine Crop Insurance Corporation for losses caused by force majeure and fortuitous events. Section 55. Non-Obstruction to Navigation.- Nothing in the foregoing sections shall be construed as permitting the lessee, licensee, or permittee to undertake any construction which will obstruct the free navigation in any stream, river, lakes, or bays flowing through or adjoining the fish pens, fish cages, fish traps and fishponds, or impede the flow of the tide to and from the area. Any construction made in violation hereof shall be removed upon the order of the Department in coordination with the other government agencies concerned at the expense of the lessee, licensee, or occupants thereof, whenever applicable. The Department shall within thirty (30) days after the effectivity of this Code formulate and implement rules and regulations for the immediate dismantling of existing obstruction to navigation. Section 56. Non-Obstruction to Defined Migration Paths. Nothing in the foregoing sections shall be construed as permitting the lessee, permittee, or licensee to undertake any construction which will obstruct any defined migration path of migratory fish species such as river mouths and estuaries with a distance determined by the concerned LGUs in consultation with and upon the recommendation of the FARMCs.

Food Availability Laws 447 Section 57. Registration of Fish Hatcheries and Private Fishponds, etc.- All fish hatcheries, fish breeding facilities and private fishponds must be registered with the LGUs which shall prescribe minimum standards for such facilities in consultation with the Department: Provided, That the Department shall conduct a yearly inventory of all fishponds, fish pens and fish cages whether in public or private lands: Provided, further, That all fishpond, fish pens and fish cage operators shall annually report to the Department the type of species and volume of production in areas devoted to aquaculture. ARTICLE IV POST-HARVEST FACILITIES, ACTIVITIES AND TRADES Section 58. Comprehensive Post-harvest and Ancillary Industries Plan.- The Department shall conduct a regular study of fisheries postharvest operations and ancillary industries, in the formulation of a comprehensive plan for post-harvest and ancillary industries. It shall take into account among others, the following: (a) detailed and clear guidelines on the distribution, construction, maintenance and use of post-harvest infrastructure facilities;

448 COMPENDIUM OF RTF LAWS (b) extension of credit and incentives for post-harvest operations; (c) promotion and strengthening of semiprocessing, processing and handling; (d) development of domestic fishmeal industry; (e) development of fisheries ship-building and repair as a viable industry; (f) development and strengthening of marketing facilities and activities, including the pricing system, with emphasis on collective marketing and the elimination of middlemen; (g) increased participation of cooperatives and non-governmental organizations in post-harvest operations and ancillary industries; and (h) integration of fisheries post-harvest operations into the national fisheries plan. Section 59. Establishment of Post-Harvest Facilities for Fishing Communities- The LGUs shall coordinate with the private sector and other concerned agencies and FARMCs in the establishment of post-harvest facilities for fishing communities such as, but not limited to, municipal fish landing sites, fish ports, ice plants and cold storage and other fish processing establishments to serve primarily the needs of municipal fisherfolk: Provided, That such post-harvest facilities shall be consistent with the Comprehensive Postharvest and Ancillary Industries Plan.

Food Availability Laws 449 Section 60. Registration and Licensing of all Post-Harvest Facilities - All post-harvest facilities such as fish processing plants, ice plants, and cold storages, fish ports/landings and other fishery business establishments must register with and be licensed by the LGUs which shall prescribe minimum standards for such facilities in consultation with the Department. Section 61. Importation and Exportation of Fishery Products(a) Export of fishery products shall be regulated whenever such exportation affects domestic food security and production: Provided, That exportation of live fish shall be prohibited except those which are hatched or propagated in accredited hatcheries and ponds; (b) To protect and maintain the local biodiversity or ensure the sufficiency of domestic supply, spawners, breeders, eggs and fry of bangus, prawn and other endemic species, as may be determined by the Department, shall not be exported or caused to be exported by any person; (c) Fishery products may be imported only when the importation has been certified as necessary by the Department in consultation with the FARMC, and all the requirements of

450 COMPENDIUM OF RTF LAWS this Code, as well as all existing rules and regulations have been complied with: Provided, That fish imports for canning/processing purposes only may be allowed without the necessary certification, but within the provisions of Section 61(d) of this Code; and (d) No person, shall import and/or export fishery products of whatever size, stage or form for any purpose without securing a permit from the Department. The Department in consultation with the FARMC shall promulgate rules and regulations on importation and exportation of fish and fishery/aquatic resources with the Governments export/import simplification procedures. Section 62. Instruments of Weights and Measures, and Quality Grades/Standards- Standards for weights, volume and other measurements for all fishery transactions shall be set by the Department. All fish and fishery products for export, import and domestic consumption shall meet the quality grades/standards as determined by the Department. The LGU concerned shall, by appropriate ordinance, penalize fraudulent practices and unlawful possession or use of instruments of weights and measures.

Food Availability Laws 451 CHAPTER III Reconstitution of The Bureau of Fisheries and Aquatic Resources and Creation of Fisheries and Aquatic Resources Management Councils ARTICLE I RECONSTITUTION OF THE BUREAU OF FISHERIES AND AQUATIC RESOURCES Section 63. Creation of the Position of Undersecretary for Fisheries and Aquatic Resources.- There is hereby created in the Department of Agriculture the position of Undersecretary for Fisheries and Aquatic Resources, solely for the purpose of attending to the needs of the fishing industry, to be appointed by the President. Such Undersecretary shall have the following functions: (a) set policies and formulate standards for the effective, efficient and economical operations of the fishing industry in accordance with the programs of the government; (b) exercise overall supervision over all functions and activities of all offices and instrumentalities and other offices related to fisheries including its officers; (c) establish, with the assistance of the director, such regional, provincial and other fishery officers as may be necessary

452 COMPENDIUM OF RTF LAWS and appropriate and organize the internal structure of BFAR in such manner as is necessary for the efficient and effective attainment of its objectives and purposes; and (d) perform such other functions as may be necessary or proper to attain the objectives of this Code. Section 64. Reconstitution of the BFAR.- The Bureau of Fisheries and Aquatic Resources (BFAR) is hereby reconstituted as a line bureau under the Department of Agriculture. Section 65. Functions of the Bureau of Fisheries and Aquatic Resources.- As a line bureau, the BFAR shall have the following functions: (a) prepare and implement a Comprehensive Natio n al F ish eries Indust ry Development Plan; (b) issue licenses for the operation of commercial fishing vessels; (c) issue identification cards free of charge to fishworkers engaged in commercial fishing; (d) monitor and review joint fishing agreements between Filipino citizens and foreigners who conduct fishing activities in international waters, and ensure that such agreements are not contrary to Philippine commitment under international treaties and convention on fishing in the high seas;

Food Availability Laws 453 (e) formulate and implement a Comprehensive Fishery Research and Development Program, such as, but not limited to, sea farming, sea ranching, tropical/ornamental fish and seaweed culture, aimed at increasing resource productivity, improving resource use efficiency, and ensuring the long-term sustainability of the countrys fishery and aquatic resources; (f) establish and maintain a Comprehensive Fishery Information System; (g) provide extensive development support services in all aspects of fisheries production, processing and marketing; (h) provide advisory services and technical assistance on the improvement of quality of fish from the time it is caught (i.e. on board fishing vessel, at landing areas, fish markets, to the processing plants and to the distribution and marketing chain); (i) coordinate efforts relating to fishery production undertaken by the primary fishery producers, LGUs, FARMCs, fishery and organizations/cooperatives; (j) advise and coordinate with LGUs on the maintenance of proper sanitation and hygienic practices in fish markets and fish landing areas; (k) estab lish a co rps of spe c ia list s in collaboration with the Department

454 COMPENDIUM OF RTF LAWS of National Defense, Department of the Interior and Local Government, Department of Foreign Affairs for the efficient monitoring, control and surveillance of fishing activities within Philippine territorial waters and provide the necessary facilities, equipment and training therefor; (l) implement an inspection system for import and export of fishery/aquatic products and fish processing establishments, consistent with international standards to ensure product quality and safety; (m) coordinate with LGUs and other concerned agencies for the establishment of productivity enhancing and market development programs in fishing communities to enable women to engage in other fisheries/economic activities and contribute significantly to development efforts; (n) enforce all laws, formulate and enforce all rules and regulations governing the conservation and management of fishery resources, except in municipal waters, and to settle conflicts of resource use and allocation in consultation with the NFARMC, LGUs and local FARMCs; (o) develop value-added fishery-products for domestic consumption and export; lawphi1

Food Availability Laws 455 (p) recommend measures for the protection/ enhancement of the fishery industries; (q) assist the LGUs in developing their technical capability in the development, management, regulation, conservation, and protection of the fishery resources; (r) formulate rules and regulations for the conservation and management of straddling fish stocks and highly migratory fish stocks; and (s) perform such other related functions which shall promote the development, conservation, management, protection and utilization of fisheries and aquatic resources. Section 66. Composition of BFAR.- As a line bureau, the BFAR shall be headed by a Director and assisted by two (2) Assistant Directors who shall supervise the administrative and technical services of the bureau respectively. It shall establish regional, provincial and municipal offices as may be appropriate and necessary to carry out effectively and efficiently the provisions of this Code. Section 67. Fisheries Inspection and Quarantine Service.For purposes of monitoring and regulating the importation and exportation of fish and fishery/aquatic resources, the Fisheries Inspection and Quarantine Service in the BFAR is hereby strengthened and shall have the following functions:

456 COMPENDIUM OF RTF LAWS (a) conduct fisheries quarantine and quality inspection of all fish and fishery/aquatic products coming into and going out of the country by air or water transport, to detect the presence of fish pest and diseases and if found to harbor fish pests or diseases shall be confiscated and disposed of in accordance with environmental standards and practices; (b) implement international agreements/ commitments on bio-safety and biodiversity as well as prevent the movement or trade of endemic fishery and aquatic resources to ensure that the same are not taken out of the country; (c) quarantine such aquatic animals and other fishery products determined or suspected to be with fishery pests and diseases and prevent the movement or trade from and/or into the country of these products so prohibited or regulated under existing laws, rules and regulations as well as international agreements of which the Philippines is a State Party; (d) examine all fish and fishery products coming into or going out of the country which may be a source or medium of fish pests or diseases and/or regulated by existing fishery regulations and ensure that the quality of fish import and export meet international standards; and

Food Availability Laws 457 (e) document and authorize the movement or trade of fish and fishery products when found free of fish pests or diseases and collect necessary fees prescribed by law and regulations. ARTICLE II THE FISHERIES AND AQUATIC RESOURCES MANAGEMENT COUNCILS (FARMCs) Section 68. Development of Fisheries and Aquatic Resources in Municipal Waters and Bays.Fisherfolk and their organizations residing within the geographical jurisdiction of the barangays, municipalities or cities with the concerned LGUs shall develop the fishery/ aquatic resources in municipal waters and bays. Section 69. Creation of Fisheries and Aquatic Resources Management Councils (FARMCs).- FARMCs shall be established in the national level and in all municipalities/cities abutting municipal waters as defined by this Code. The FARMCs shall be formed by fisherfolk organizations/cooperatives and NGOs in the locality and be assisted by the LGUs and other government entities. Before organizing FARMCs, the LGUs, NGOs, fisherfolk, and other concerned POs shall undergo consultation and orientation on the formation of FARMCs.

458 COMPENDIUM OF RTF LAWS Section 70. Creation and Composition of the National Fisheries and Aquatic Resources Management Council (NFARMC)- There is hereby created a National Fisheries and Aquatic Resources Management Council hereinafter referred to as NFARMC as an advisory/recommendatory body to the Department. The NFARMC shall be composed of fifteen (15) members consisting of: (a) the Undersecretary of Agriculture, as Chairman; (b) the Undersecretary of the Interior and Local Government; (c) five (5) members representing the fisherfolk and fishworkers; (d) five (5) members representing commercial fishing and aquaculture operators and the processing sectors; (e) two (2) members from the academe; and (f) one (1) representative of NGOs involved in fisheries. The members of the NFARMC, except for the Undersecretary of Agriculture and the Undersecretary of the Interior and Local Government, shall be appointed by the President upon the nomination of their respective organizations. Section 71. Terms of Office- The members of NFARMC, except the Undersecretary of Agriculture and the Undersecretary

Food Availability Laws 459 of the Interior and Local Government, shall serve for a term of three (3) years without reappointment. Section 72. Functions of the NFARMC- The NFARMC shall have the following functions: (a) assist in the formulation of national policies for the protection, sustainable development and management of fishery and aquatic resources for the approval of the Secretary; (b) assist the Department in the preparation of the National Fisheries and Industry Development Plan; and (c) perform such other functions as may be provided by law. Section 73. The Municipal/City Fisheries and Aquatic Resources Management Councils (M/ CFARMCs)- The M/CFARMCs shall be created in each of the municipalities and cities abutting municipal waters. However, the LGU may create the Barangay Fisheries and Aquatic Resources Management Councils (BFARMCs) and the Lakewide Fisheries and Aquatic Resources Management Councils (LFARMCs) whenever necessary. Such BFARMCs and LFARMCs shall serve in an advisory capacity to the LGUs. Section 74. Functions of the M/CFARMCs- The M/ CFARMCs shall exercise the following functions:

460 COMPENDIUM OF RTF LAWS (a) assist in the preparation of the Municipal Fishery Development Plan and submit such plan to the Municipal Development Council; (b) recommend the enactment of municipal fishery ordinances to the sangguniang bayan/sangguniang panlungsod through its Committee on Fisheries; (c) assist in the enforcement of fishery laws, rules and regulations in municipal waters; (d) advise the sangguniang bayan/panlungsod on fishery matters through its Committee on Fisheries, if such has been organized; and (e) perform such other functions which may be assigned by the sangguniang bayan/ panlungsod. Section 75. Composition of the M/CFARMC- The regular member of the M/CFARMCs shall be composed of: (a) Municipal/City Planning Development Officer; (b) Chairperson, Agriculture/Fishery Committee of the Sangguniang Bayan/ Panlungsod; (c) representative of the Municipal/City Development Council; (d) representative from the accredited nongovernment organization; (e) representative from the private sector;

Food Availability Laws 461 (f) representative from the Department of Agriculture; and (g) at least eleven (11) fisherfolk representatives (seven (7) municipal fisherfolk, one (1) fishworker and three (3) commercial fishers) in each municipality/city which include representative from youth and women sector. The Council shall adopt rules and regulations necessary to govern its proceedings and election. Section 76. The Integrated Fisheries and Aquatic Resources Management Councils (IFARMCs)- The IFARMCs shall be created in bays, gulfs, lakes and rivers and dams bounded by two (2) or more municipalities/cities. Section 77. Functions of the IFARMCs- The IFARMC shall have the following functions: (a) assist in the preparation of the Integrated Fishery Development Plan and submit such plan to the concerned Municipal Development Councils; (b) recommend the enactment of integrated fishery ordinances to the concerned sangguniang bayan/panlungsod through its Committee on Fisheries, if such has been organized; (c) assist in the enforcement of fishery laws, rules and regulations in concerned municipal waters;

462 COMPENDIUM OF RTF LAWS (d) advice the concerned sangguniang bayan/panlungsod on fishery matters through its Committee on Fisheries, if such has been organized; and (e) perform such other functions which may be assigned by the concerned sangguniang bayan/panlungsod. Section 78. Composition of the IFARMCs.- The regular members of the IFARMCs shall be composed of the following: (a) the chairperson of the Committee on Agriculture/Fisheries of the concerned sangguniang bayan/panlungsod; (b) the Municipal/City Fisheries Officers of the concerned municipalities/cities; (c) the Municipal/City Development Officers of the concerned municipalities/cities; (d) one (1) representative from NGO; (e) one (1) representative from private sector; and (f) at least nine (9) representatives from the fisherfolk sector which include representatives from the youth and women sector. The Council shall adopt rules and regulations necessary to govern its proceedings and election. Section 79. Source of Funds of the FARMCs.- A separate fund for the NFARMC, IFARMCs and M/CFARMCs shall be established and administered by the Department from the regular annual budgetary appropriations.

Food Availability Laws 463 CHAPTER IV Fishery Reserves, Refuge and Sanctuaries Section 80. Fishing Areas Reserves for Exclusive Use of Government.- The Department may designate area or areas in Philippine waters beyond fifteen (15) kilometers from shoreline as fishery reservation for the exclusive use of the government or any of its political subdivisions, agencies or instrumentalities, for propagation, educational, research and scientific purposes: Provided, That in municipalities or cities, the concerned LGUs in consultation with the FARMCs may recommend to the Department that portion of the municipal waters be declared as fishery reserves for special or limited use, for educational, research, and/or special management purposes. The FARMCs may recommend to the Department portions of the municipal waters which can be declared as fisheries reserves for special or limited use for educational, research and special management purposes. Section 81. Fish Refuge and Sanctuaries.- The Department may establish fish refuge and sanctuaries to be administered in the manner to be prescribed by the BFAR at least twenty-five percent (25%) but not more than forty percent (40%) of bays, foreshore lands, continental shelf or any fishing ground shall be set aside for the cultivation of mangroves to strengthen

464 COMPENDIUM OF RTF LAWS the habitat and the spawning grounds of fish. Within these areas no commercial fishing shall be allowed. All marine fishery reserves, fish sanctuaries and mangrove swamp reservations already declared or proclaimed by the President or legislated by the Congress of the Philippines shall be continuously administered and supervised by the concerned agency: Provided, however, That in municipal waters, the concerned LGU in consultation with the FARMCs may establish fishery refuge and sanctuaries. The FARMCs may also recommend fishery refuge and sanctuaries: Provided, further, That at least fifteen percent (15%) where applicable of the total coastal areas in each municipality shall be identified, based on the best available scientific data and in consultation with the Department, and automatically designated as fish sanctuaries by the LGUs in consultation with the concerned FARMCs. CHAPTER V Fisheries Research and Development Section 82. Creation of a National Fisheries Research and Development Institute (NFRDI).- In recognition of the important role of fisheries research in the development, management, conservation and protection of the countrys fisheries and aquatic resources, there is herebycreated a National Fisheries Research and Development Institute (NFRDI).

Food Availability Laws 465 The Institute shall form part of the National Research and Development Network of the Department of Science and Technology (DOST). The Institute, which shall be attached to the Department shall serve as the primary research arm of the BFAR. The overall governance of the Institute shall be vested in the Governing Board which shall formulate policy guidelines for its operation. The plans, programs and operational budget shall be passed by the Board. The Board may create such committees as it may deem necessary for the proper and effective performance of its functions. The composition of the Governing Board shall be as follows: (a) Undersecretary for Fisheries - Chairman (b) BFAR Director - Vice Chairman (c) NFRDI Executive Director - Member (d) PCAMRD Executive Director - Member (e) Representative from the academe Member (f) four (4) representatives from the private sector who shall come from the following subsectors: - Members Municipal Fisherfolk Commercial Fishing Operator Aquaculture Operator Post-Harvest/Processor The NFRDI shall have a separate budget specific to its manpower requirements and

466 COMPENDIUM OF RTF LAWS operations to ensure the independent and objective implementation of its research activities. Section 83. Qualification Standard. - The Institute shall be headed by an Executive Director to be appointed by the President of the Philippines upon the recommendation of the governing board. The Executive Director shall hold a Doctorate degree in fisheries and/or other related disciplines. The organizational structure and staffing pattern shall be approved by the Department: Provided, however, That the staffing pattern and remunerations for scientific and technical staff shall be based on the qualification standards for science and technology personnel. Section 84. Research and Development Objectives.Researches to be done by the NFRDI are expected to result in the following: (a) To raise the income of the fisherfolk and to elevate the Philippines among the top five (5) in the world ranking in the fish productions; (b) to make the countrys fishing industry in the high seas competitive; (c) to conduct social research on fisherfolk families for a better understanding of their conditions and needs; and (d) to coordinate with the fisheries schools, LGUs and private sectors regarding the maximum utilization of available

Food Availability Laws 467 technology, including the transfer of such technology to the industry particularly the fisherfolk. Section 85. Functions of the NFRDI .- As a national institute, the NFRDI shall have the following functions: (a) establish a national infrastructure unit complete with technologically-advanced features and modern scientific equipment, which shall facilitate, monitor, and implement various research needs and activities of the fisheries sector; (b) provide a venue for intensive training and development of human resources in the field of fisheries, a repository of all fisheries researches and scientific information; (c) provide intensive training and development of human resources in the field of fisheries for the maximum utilization of available technology; (d) hasten the realization of the economic potential of the fisheries sector by maximizing developmental research efforts in accordance with the requirements of the national fisheries conservations and development programs, also possibly through collaborative effort with international institutions; and (e) formally establish, strengthen and expand the network of fisheries-researching communities through effective communication linkages nationwide.

468 COMPENDIUM OF RTF LAWS CHAPTER VI Prohibitions and Penalties Section 86. Unauthorized Fishing or Engaging in Other Unauthorized Fisheries Activities.- No person shall exploit, occupy, produce, breed, culture, capture or gather fish, fry or fingerlings of any fishery species or fishery products, or engage in any fishery activity in Philippine waters without a license, lease or permit. Discovery of any person in an area where he has no permit or registration papers for a fishing vessel shall constitute a prima facie presumption that the person and/or vessel is engaged in unauthorized fishing: Provided, That fishing for daily food sustenance or for leisure which is not for commercial, occupation or livelihood purposes may be allowed. It shall be unlawful for any commercial fishing vessel to fish in bays and in such other fishery management areas which may hereinafter be declared as over-exploited. Any commercial fishing boat captain or the three (3) highest officers of the boat who commit any of the above prohibited acts upon conviction shall be punished by a fine equivalent to the value of catch or Ten thousand pesos (P10,000.00) whichever is higher, and imprisonment of six (6) months, confiscation of catch and fishing gears, and automatic revocation of license.

Food Availability Laws 469 It shall be unlawful for any person not listed in the registry of municipal fisherfolk to engage in any commercial fishing activity in municipal waters. Any municipal fisherfolk who commits such violation shall be punished by confiscation of catch and a fine of Five hundred pesos (500.00). Section 87. Poaching in Philippine Waters.- It shall be unlawful for any foreign person, corporation or entity to fish or operate any fishing vessel in Philippine waters. The entry of any foreign fishing vessel in Philippine waters shall constitute a prima facie evidence that the vessel is engaged in fishing in Philippine waters. Violation of the above shall be punished by a fine of One hundred thousand U.S. Dollars (US$100,000.00), in addition to the confiscation of its catch, fishing equipment and fishing vessel: Provided, That the Department is empowered to impose an administrative fine of not less than Fifty thousand U.S. Dollars (US$50,000.00) but not more than Two hundred thousand U.S. Dollars (US$200,000.00) or its equivalent in the Philippine Currency. Section 88. Fishing Through Explosives, Noxious or Poisonous Substance, and/or Electricity.(1) It shall be unlawful for any person to catch, take or gather or cause to be caught, taken or gathered, fish or any fishery species in Philippine waters with

470 COMPENDIUM OF RTF LAWS the use of electricity, explosives, noxious or poisonous substance such as sodium cyanide in the Philippine fishery areas, which will kill, stupefy, disable or render unconscious fish or fishery species: Provided, That the Department, subject to such safeguards and conditions deemed necessary and endorsement from the concerned LGUs, may allow, for research, educational or scientific purposes only, the use of electricity, poisonous or noxious substances to catch, take or gather fish or fishery species: Provided, further, That the use of poisonous or noxious substances to eradicate predators in fishponds in accordance with accepted scientific practices and without causing adverse environmental impact in neighboring waters and grounds shall not be construed as illegal fishing. It will likewise be unlawful for any person, corporation or entity to possess, deal in, sell or in any manner dispose of, any fish or fishery species which have been illegally caught, taken or gathered. The discovery of dynamite, other explosives and chemical compounds which contain combustible elements, or noxious or poisonous substances, or equipment or device for electro-fishing in any fishing

Food Availability Laws 471 vessel or in the possession of any fisherfolk, operator, fishing boat official or fishworker shall constitute prima facie evidence, that the same was used for fishing in violation of this Code. The discovery in any fishing vessel of fish caught or killed with the use of explosive, noxious or poisonous substances or by electricity shall constitute prima facie evidence that the fisherfolk, operator, boat official or fishworker is fishing with the use thereof. (2) Mere possession of explosive, noxious or poisonous substances or electrofishing devices for illegal fishing shall be punishable by imprisonment ranging from six (6) months to two (2) years. (3) Actual use of explosives, noxious or poisonous substances or electrofishing devices for illegal fishing shall be punishable by imprisonment ranging from five (5) years to ten (10) years without prejudice to the filing of separate criminal cases when the use of the same result to physical injury or loss of human life. (4) Dealing in, selling, or in any manner disposing of, for profit, illegally caught/ gathered fisheries species shall be punished by imprisonment ranging from six (6) months to two (2) years. (5) In all cases enumerated above, the explosives, noxious or poisonous

472 COMPENDIUM OF RTF LAWS substances and/or electrical devices, as well as the fishing vessels, fishing equipment and catch shall be forfeited. Section 89. Use of Fine Mesh Net.- It shall be unlawful to engage in fishing using nets with mesh smaller than that which may be fixed by the Department: Provided, That the prohibition on the use of fine mesh net shall not apply to the gathering of fry, glass eels, elvers, tabios, and alamang and such species which by their nature are small but already mature to be identified in the implementing rules and regulations by the Department. Violation of the above shall subject the offender to a fine from Two thousand pesos (P2,000.00) to Twenty thousand pesos (P20,000.00) or imprisonment from six (6) months to two (2) years or both such fine and imprisonment at the discretion of the court: Provided, That if the offense is committed by a commercial fishing vessel, the boat captain and the master fisherman shall also be subject to the penalties provided herein: Provided, further, That the owner/operator of the commercial fishing vessel who violates this provision shall be subjected to the same penalties provided herein: Provided, finally, That the Department is hereby empowered to impose upon the offender an administrative fine and/or cancel his permit or license or both.

Food Availability Laws 473 Section 90. Use of Active Gear in the Municipal Waters and Bays and Other Fishery Management Areas.It shall be unlawful to engage in fishing in municipal waters and in all bays as well as other fishery management areas using active fishing gears as defined in this Code. Violators of the above prohibitions shall suffer the following penalties: (1) The boat captain and master fisherman of the vessels who participated in the violation shall suffer the penalty of imprisonment from two (2) years to six (6) years; (2) The owner/operator of the vessel shall be fined from T wo thousand pesos (P2,000.00) to T wenty thousand pesos (20,000.00) upon the discretion of the court. If the owner/operator is a corporation, the penalty shall be imposed on the chief executive officer of the Corporation. If the owner/operator is a partnership the penalty shall be imposed on the managing partner. (3) The catch shall be confiscated and forfeited. Section 91. Ban on Coral Exploitation and Exportation.It shall be unlawful for any person or corporation to gather, possess, sell or export ordinary precious and semi-precious corals, whether raw or in processed form, except for scientific or research purposes.

474 COMPENDIUM OF RTF LAWS Violations of this provision shall be punished by imprisonment from six (6) months to two (2) years and a fine from Two thousand pesos (P2,000.00) to Twenty thousand pesos (20,000.00), or both such fine and imprisonment, at the discretion of the court, and forfeiture of the subject corals, including the vessel and its proper disposition. The confiscated corals shall either be returned to the sea or donated to schools and museums for educational or scientific purposes or disposed through other means. Section 92. Ban on Muro-Ami Other Methods and Gear Destructive to Coral Reefs and Other Marine Habitat.- It shall be unlawful for any person, natural or juridical, to fish with gear method that destroys coral reefs, seagrass beds, and other fishery marine life habitat as may be determined by the Department. MuroAmi and any of its variation, and such similar gear and methods that require diving, other physical or mechanical acts to pound the coral reefs and other habitat to entrap, gather or catch fish and other fishery species are also prohibited. The operator, boat captain, master fisherman, and recruiter or organizer of fishworkers who violate this provision shall suffer a penalty of two (2) years to ten (10) years imprisonment and a fine of not less than One

Food Availability Laws 475 hundred thousand pesos (P100,000.00) to Five hundred thousand pesos (P500,000.00) or both such fine and imprisonment, at the discretion of the court. The catch and gear used shall be confiscated. It shall likewise be unlawful for any person or corporation to gather, sell or export white sand, silica, pebbles and any other substances which make up any marine habitat. The person or corporation who violates this provision shall suffer a penalty of two (2) years to ten (10) years imprisonment and a fine of not less than One hundred thousand pesos (P100,000.00) to Five hundred thousand pesos (P500,000.00) or both such fine and imprisonment, at the discretion of the court. The substance taken from its marine habitat shall be confiscated. Section 93. Illegal Use of Superlights.- It shall be unlawful to engage in fishing with the use of superlights in municipal waters or in violation of the rules and regulations which may be promulgated by the Department on the use of superlights outside municipal waters. Violations of this provision shall be punished by imprisonment from six (6) months to two (2) years or a fine of Five thousand pesos (P5,000.00) per superlight, or both such fine and imprisonment at the discretion of the courts. The superlight, fishing gears and vessel shall be confiscated.

476 COMPENDIUM OF RTF LAWS Section 94. Conversion of Mangroves.- It shall be unlawful for any person to convert mangroves into fishponds or for any other purposes. Violation of the provision of this section shall be punished by imprisonment of six (6) years and one (1) day to twelve (12) years and/or a fine of Eighty thousand pesos (P80,000.00): Provided, That if the area requires rehabilitation or restoration as determined by the court, the offender should also be required to restore or compensate for the restoration of the damage. Section 95. Fishing in Overfished Area and During Closed Season.- It shall be unlawful to fish in overfished area and during closed season. Violation of the provision of this section shall be punished by imprisonment of six (6) months and one (1) day to six (6) years and/ or fine of Six thousand pesos (P6,000.00) and by forfeiture of the catch and cancellation of fishing permit or license. Section 96. Fishing in Fishery Reserves, Refuge and Sanctuaries.- It shall be unlawful to fish in fishery areas declared by the Department as fishery reserves, refuge and sanctuaries. Violation of the provision of this section shall be punished by imprisonment of two (2) years to six (6) years and/or fine of T wo thousand pesos (P2,000.00) to T wenty thousand pesos (P20,000.00) and by forfeiture of the catch and the cancellation of fishing permit or license.

Food Availability Laws 477 Section 97. Fishing Or Taking of Rare, Threatened or Endangered Species.- It shall be unlawful to fish or take rare, threatened or endangered species as listed in the CITES and as determined by the Department. Violation of the provision of this section shall be punished by imprisonment of twelve (12) years to twenty (20) years and/or a fine of One hundred and twenty thousand pesos (P120,000.00) and forfeiture of the catch, and the cancellation of fishing permit. Section 98. Capture of Sabalo and Other Breeders/Spawners.It shall be unlawful for any person to catch, gather, capture or possess mature milkfish or sabalo and such other breeders or spawners of other fishery species as may be determined by the Department: Provided, That catching of sabalo and other breeders/spawners for local breeding purposes or scientific or research purposes may be allowed subject to guidelines to be promulgated by the Department. Violation of the provision of this section shall be punished by imprisonment of six (6) months and one (1) day to eight (8) years and/or a fine of Eighty thousand pesos (P80,000.00) and forfeiture of the catch, and fishing equipment used and revocation of license. Section 99. Exportation of Breeders, Spawners, Eggs or Fry.Exportation of breeders, spawners, eggs or fry as prohibited in this Code shall be punished by

478 COMPENDIUM OF RTF LAWS imprisonment of eight (8) years, confiscation of the same or a fine equivalent to double the value of the same, and revocation of the fishing and/or export license/permit. Section 100. Importation or Exportation of Fish or Fishery Species.- Any importation or exportation of fish or fisheries species in violation of this Code shall be punished by eight (8) years of imprisonment, a fine of Eighty thousand pesos (P80,000.00) and destruction of live fishery species or forfeiture of non-live fishery species in favor of the department for its proper disposition: Provided, That violator of this provision shall be banned from being members or stock holders of companies currently engaged in fisheries or companies to be created in the future, the guidelines for which shall be promulgated by the Department. Section 101. Violation of Catch Ceilings.- It shall be unlawful for any person to fish in violation of catch ceilings as determined by the Department. Violation of the provision of this section shall be punished by imprisonment of six (6) months and one (1) day to six (6) years and/ or a fine of Fifty thousand pesos (P50,000.00) and forfeiture of the catch, and fishing equipment used and revocation of license. Section 102. Aquatic Pollution.- Aquatic pollution, as defined in this Code shall be unlawful. Violation of the provision of this section shall be punished by imprisonment of six (6) years

Food Availability Laws 479 and one (1) day to twelve (12) years and/or a fine of Eighty thousand pesos (P80,000.00) plus an additional fine of Eight thousand pesos (P8,000.00) per day until such violation ceases and the fines paid. Section 103. Other Violations.- The following fisheries activities shall also be considered as a violation of this Code: (a) Failure to Comply with Minimum Safety Standards. - The owner and captain of a commercial fishing vessel engaged in fishing who, upon demand by proper authorities, fails to exhibit or show proof of compliance with the safety standards provided in this Code, shall be immediately prevented from continuing with his fishing activity and escorted to the nearest port or landing point. The license to operate the commercial fishing vessel shall be suspended until the safety standard has been complied with. (b) Failure to Conduct a Yearly Report on all Fishponds, Fish Pens and Fish Cages. The FLA of the holder who fails to render a yearly report shall be immediately cancelled: Provided, That if the offender be the owner of the fishpond, fish pen or fish cage, he shall be subjected to the following penalties: (1) first offense, a fine of Five hundred pesos (P500.00) per unreported hectare; (2) subsequent offenses, a fine of One thousand pesos (1,000.00) per unreported hectare.

480 COMPENDIUM OF RTF LAWS (c) Gathering and Marketing of Shell Fishes. - It shall be unlawful for any person to take, sell, transfer, or have in possession for any purpose any shell fish which is sexually mature or below the minimum size or above the maximum quantities prescribed for the particular species. (d) Obstruction to Navigation or Flow and Ebb of Tide in any Stream, River, Lake or Bay. - It shall be unlawful for any person who causes obstruction to navigation or flow or ebb of tide. (e) Construction and Operation of Fish Corrals/Traps, Fish Pens and Fish Cages. - It shall be unlawful to construct and operate fish corrals/traps, fish pens and fish cages without a license/permit. Subject to the provision of subparagraph (b) of this section, violation of the aboveenumerated prohibited acts shall subject the offender to a fine ranging from T wo thousand pesos (P2,000.00) to T en thousand pesos (P10,000.00) or imprisonment from one (1) month and one (1) day to six (6) months, or both such fine and imprisonment, upon the discretion of the court: Provided, That the Secretary is hereby empowered to impose upon the offender an administrative fine of not more than T en thousand pesos (P10,000.00) or to cancel his permit or license, or to impose such fine and to cancel his permit or license, in the

Food Availability Laws 481 discretion of the Secretary: Provided, further, That the Secretary, or his duly authorized representative, and law enforcement agents are hereby empowered to impound with the assistance of the Philippine Coast Guard, PNP-Maritime Command: Provided, finally, That any person who unlawfully obstructs or delays the inspection and/or movement of fish and fishery/aquatic products when such inspection and/or movement is authorized under this Code, shall be subject to a fine of not more than T en thousand pesos (P10,000.00) or imprisonment of not more than two (2) years, or both such fine and imprisonment, upon the discretion of the court. Every penalty imposed for the commission of an offense shall carry with it the forfeiture of the proceeds of such offense and the instruments or tools with which it was committed. Such proceeds and instruments or tools shall be confiscated and forfeited in favor of the Government, unless they be the property of a third person not liable for the offense, but those articles which are not subject of lawful commerce shall be destroyed. Section 104. Commercial Fishing Vessel Operators Employing Unlicensed Fisherfolk or Fishworker or Crew.The owner/operator of a commercial fishing vessel employing unlicensed fisherfolk or fishworker shall be fined Five hundred pesos (P500.00) each for every month that the same

482 COMPENDIUM OF RTF LAWS has been employed and/or One thousand pesos (P1,000.00) for every month for each unlicensed crew member who has been employed. Section 105. Obstruction of Defined Migration Paths. Obstruction of any defined migration paths of anadromous, catadromous and other migratory species, in areas including, but not limited to river mouths and estuaries within a distance determined by the concerned FARMCs shall be punished by imprisonment of seven (7) years to twelve (12) years or a fine from Fifty thousand pesos (P50,000.00) to One hundred thousand pesos (P100,000.00)or both imprisonment and fine at the discretion of the court, and cancellation of permit/license, if any, and dismantling of obstruction shall be at his own expense and confiscation of same. Section 106. Obstruction to Fishery Law Enforcement Officer. The boat owner, master or operator or any person acting on his behalf of any fishing vessel who evades, obstructs or hinders any fishery law enforcement officer of the Department to perform his duty, shall be fined T en thousand pesos (P10,000.00). In addition, the registration, permit and/or license of the vessel including the license of the master fisherman shall be canceled. Section 107. Promulgation of Administrative Orders.- For purposes of fishery regulation or other fishery adjustments, the Department in consultation with the LGUs and local FARMCs, shall issue Fishery Administrative Orders or regulations

Food Availability Laws 483 for the conservation, preservation, management and sustainable development of fishery and aquatic resources. CHAPTER VII General Provisions Section 108. Fisherfolk Settlement Areas.- The Department shall establish and create fisherfolk settlement areas in coordination with concerned agencies of the government, where certain areas of the public domain, specifically near the fishing grounds, shall be reserved for the settlement of the municipal fisherfolk. Nothing in this section shall be construed to vest ownership of any resettlement area to a municipal fisherfolk for whom said areas may have been reserved for or had been actually granted to. Section 109. Municipal Fisheries Grant Fund.- For the development, management and conservation of the municipal resources, there is hereby created a Fishery Grant Fund to finance fishery projects of the LGUs primarily for the upliftment of the municipal fisherfolk. The amount of One hundred million pesos (P100,000,000.00) is hereby appropriated out of the Departments allocation in the General Appropriations Act (GAA) to support the Grant Fund. For this purpose, the Department may seek financial assistance from any source and may receive any donation therefore.

484 COMPENDIUM OF RTF LAWS Section 110. Fishery Loan and Guarantee Fund.- Pursuant to Section 7, Article XIII of the Constitution, there is hereby created a Fishery Loan and Guarantee Fund with an initial of One hundred million pesos (P100,000,000.00), which shall be administered by the Land Bank of the Philippines. The fund shall be made available for lending to qualified borrowers to finance the development of the fishery industry under a program to be prescribed by the Department. For the same purpose, the Department may seek financial assistance from any source and may receive any donation therefrom. Section 111. Fishing Vessels Development Fund.- There is hereby created a Fishing Vessels Development Fund to enhance the building and/or acquisition of fishing vessels. This shall be a long-term loan facility that shall be administered by the Development Bank of the Philippines. The amount of T wo hundred and fifty million pesos (P250,000,000.00) per year for five (5) years is hereby appropriated out of the Departments allocation in the GAA to support this Development Fund. Section 112. Special Fisheries Science and Approfishtech Fund.The Department shall provide subsidy for full technical and financial support to the development of appropriate technology, both in fishery and ancillary industries, that are ecologically sound, locally source-based and labor intensive, based on the requirement and

Food Availability Laws 485 needs of the FARMCs. An initial amount of One hundred million pesos (100,000,000.00) shall be authorized for the purpose of a Special Fisheries Science and Approfishtech Fund, and thereafter shall be included in the GAA. Section 113. Aquaculture Investment Fund.- An Aquaculture Investment Fund in the minimum amount of Fifty million pesos (P50,000,000.00) shall be established for soft loans which shall be extended to municipal fisherfolk and their organization who will engage in aquaculture, and for the development of underdeveloped or underutilized inland fishponds. Section 114. Other Fisheries Financing Facilities.- In addition to fisheries credit guarantee, grant and other similar facilities granted under this Code, qualified Filipino fisherfolk and fisheries enterprises shall enjoy such other facilities granted them under existing and/or new laws, specially as to rural credit, with preference being given to fisheries cooperatives. Section 115. Professionalization of Fisheries Graduates.- There is hereby created a Fisheries Board of Examiners in the Professional Regulation Commission to upgrade the Fisheries Profession: Provided, however, That those who have passed the Civil Service Examination for Fisheries shall automatically be granted eligibility by the Fisheries Board of Examiners: Provided, further,That they have served the industry in

486 COMPENDIUM OF RTF LAWS either public or private capacity for not less than five (5) years: Provided, finally, That the first Board Examination for B.S. Fisheries Graduates shall be conducted within one (1) year from the approval of this Code. Section 116. Upgrading of State Fisheries Schools/Colleges.The Department, in coordination with the Commission on Higher Education (CHED), Department of Education, Culture and Sports (DECS), and T echnical Education and Skills Development Authority (TESDA), shall upgrade State Fisheries Schools/Colleges which provide both formal and non-formal education: Provided, however, That the CHED shall incorporate Approfishtech in the curricula of fisheries schools/colleges. The Department and the CHED shall jointly formulate standards to upgrade all fisheries schools/colleges. Fisheries schools/colleges that do not meet minimum standards shall be closed. Section 117. Inclusion of Fisheries Conservation Subjects in School Curriculum.- Fisheries conservation subjects shall be incorporated in the curricula of elementary and secondary schools both private and public. Section 118. Educational campaign at all levels.- The Department, the CHED, the DECS and the Philippine Information Agency shall launch and pursue a nationwide educational campaign to:

Food Availability Laws 487 (a) help realize the policies and implement the provisions of this Code; (b) promote the development, management, conservation and proper use of the environment; (c) promote the principle of sustainable development; and (d) promote the development of truly Filipinooriented fishing and ancillary industries. Section 119. Infrastructure Support.- The Department in cooperation with concerned agencies shall: (a) prepare and implement a nationwide plan for the development of municipal fishing ports and markets; (b) prioritize the construction of farmto-market roads linking the fisheries production sites, coastal landing points and other post-harvest facilities to major market and arterial roads/highways; (c) identify community infrastructure facilities such as fish landing ports, ice plant and cold storage facilities in consultation with fishery cooperatives/associations and prepare plans and designs for their construction that would be consistent with international environmental impact; (d) establish and maintain quality laboratories in major fish ports and prescribe the highest standards for the operation and maintenance of such post-harvest facilities;

488 COMPENDIUM OF RTF LAWS (e) arrange and make representations with appropriate funding institutions to finance such facilities for the use of the fishery cooperatives/associations; (f) develop and strengthen marketing facilities and promote cooperative marketing systems; and (g) promote and strengthen local fisheries ship-building and repair industry. Section 120. Extension Services.- The Department shall develop cost-effective, practical and efficient extension services on a sustained basis, in addition to those provided by state educational institutions, especially to municipal fisherfolk in undeveloped areas, utilizing practicable and indigenous resources and government agencies available, and based upon a system of selfreliance and self-help. Section 121. Protection of Sensitive Technical Information.The Department shall take such measures as may benecessary in order to protect trade, industrial and policy information of Filipino fisherfolk, fisheries owners/ operators, entrepreneurs, manufacturers and researchers, when disclosure of such information will injure the competitiveness or viability of domestic fisheries. Section 122. Assistance in Collecting Information.- The Department, in coordination with other government entities concerned, may require

Food Availability Laws 489 Filipino representatives abroad and foreignbased personnel to assist in the collection of fisheries data and information. Section 123. Charting of Navigational Lanes and Delineation of Municipal Waters.- The Department shall authorize the National Mapping and Resource Information Authority (NAMRIA) for the designation and charting of navigational lanes in fishery areas and delineation of municipal waters. The Philippine Coast Guard shall exercise control and supervision over such designated navigational lanes. Section 124. Persons and Deputies Authorized to Enforce this Code and Other Fishery Laws, Rules and Regulations.The law enforcement officers of the Department, the Philippine Navy, Philippine Coast Guard, Philippine National Police (PNP),PNP-Maritime Command, law enforcement officers of the LGUs and other government enforcement agencies, are hereby authorized to enforce this Code and other fishery laws, rules and regulations. Other competent government officials and employees, punong barangays and officers and members of fisherfolk associations who have undergone training on law enforcement may be designated in writing by the Department as deputy fish wardens in the enforcement of this Code and other fishery laws, rules and regulations. Section 125. Strengthening Prosecution and Conviction of Violators of Fishery Laws.- The Department of Justice (DOJ) shall embark on a program

490 COMPENDIUM OF RTF LAWS to strengthen the prosecution and conviction aspects of fishery law enforcement through augmentation of the current complement of state prosecutors and through their continuous training and reorientation on fishery laws, rules and regulations. Section 126. Foreign Grants and Aids.- All foreign grants, aids, exchange programs, loans, researches and the like shall be evaluated and regulated by the Department to ensure that such are consistent with the Filipinization, democratization and industrialization of fishing industry and the development of the entire country. Section 127. Mandatory Review.- The Congress of the Philippines shall undertake a mandatory review of this Code at least once every five (5) years and as often as it may deem necessary, to ensure that fisheries policies and guidelines remain responsive to changing circumstances. CHAPTER VIII Transitory Provisions Section 128. Moratoria.- The Department shall, upon the recommendation of the Bureau, have the power to declare a moratorium on the issuance of licenses for commercial fishing vessels to operate in specified area or areas in Philippine waters for a limited period of time if there are indications of overfishing brought about by a decrease in the volume and sizes

Food Availability Laws 491 of fish caught therein or for conservation or ecological purposes. No new licenses and similar privileges on exploitation of specific fishery areas in Philippine waters and aquaculture production areas shall be issued in accordance with this Code. Such moratoria shall not exceed five (5) years from the effectivity of this Code. Section 129. Formulation of Implementing Rules and Regulations.- An Inter-agency Committee is hereby created to formulate rules and regulations for the full implementation of this Code within ninety (90) days of its effectivity: Provided, however, That the formulated rules and regulations shall be submitted to both Houses of Congress for information and guidance. Such rules and regulations shall take effect upon publication in a newspaper of general circulation. The Inter-agency Committee shall be composed of the following: (a) Secretary of Agriculture as Chairman; (b) Secretary of the Interior and Local Government; (c) Secretary of Environment and Natural Resources; (d) Secretary of Justice; (e) Secretary of Finance; (f) Secretary of Budget and Management; (g) Secretary of Labor and Employment; (h) Secretary of National Defense;

492 COMPENDIUM OF RTF LAWS (i) Commissioner of Civil Service Commission; (j) Director of BFAR; (k) Executive Director of PCAMRD; (l) General Manager of PFDA; (m) One (1) representative from each of the following: (a.1) The League of Provinces; (a.2) The League of Cities; (a.3) The League of Municipalities; (a.4) The Liga ng mga Barangay; (n) Representative of the municipal fisherfolk; lawphi1 (o) Representative of the commercial fishers; (p) Representative of the non-government organizations involved in fishing concerns; and (q) A representative from the academe coming from the specialized fisheries institution. CHAPTER IX Final Provisions Section 130. Appropriation.- The sum necessary to effectively carry out the provisions of this Act during the first year of implementation shall be sourced from the budget of the DA/BFAR and other agencies performing fisheriesrelated functions: Provided, however, That such amount as may be necessary to carry out the provisions of Sections 79, 109, 110,

Food Availability Laws 493 111, 112, 113 are hereby appropriated out of the unappropriated funds of the National Treasury. The Congress of the Philippines shall provide for the appropriations of the Department, the NFRDI and the Fisheries Scholarship Program for the succeeding years to be included in the annual GAA. Section 131. Repealing Clause.- Presidential Decree No. 704, as amended by Presidential Decree Nos. 1015 and 1058, Presidential Decree No. 977, as amended, Executive Order No. 967, Series of 1984, Executive Order No. 116, Series of 1987, Executive Order No. 292, Series of 1987, Executive Order No. 473, Series of 1991 and other existing laws except Republic Act No. 7611, decrees, executive orders, and rules and regulations or parts thereof, which are inconsistent with this Code, are hereby repealed or modified accordingly. Section 132. Separability Clause.- If any portion or provision of this Code is declared unconstitutional or invalid, the other portions or provisions hereof, which are not affected thereby, shall continue in full force and effect. Section 133. Effectivity.- This Code shall take effect fifteen (15) days after its publication in the Official Gazette or in two (2) newspapers of general publication. Approved:February 25, 1998

494 COMPENDIUM OF RTF LAWS Republic of the Philippines Congress of the Philippines Metro Manila Eighth Congress Republic Act No. 6978 January 24, 1991 AN ACT TO PROMOTE RURAL DEVELOPMENT BY PROVIDING FOR AN ACCELERATED PROGRAM WITHIN A TENYEAR PERIOD FOR THE CONSTRUCTION OF IRRIGATION PROJECTS Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. It is hereby declared to be a national policy to promote the quality of living of every Filipino through the provision of adequate social services including, but not limited to, the provision of adequate irrigation projects facilities to increase agricultural production. Section 2. The National Irrigation Administration shall undertake a ten-year program for the construction of irrigation projects in the remaining one million five hundred thousand (1,500,000) hectares of unirrigated but irrigable lands, whether in the lowlands or in the uplands, including

Food Availability Laws 495 other related project components nationwide. The program shall give priority to areas with social and economic problems, taking into consideration population, area served, project cost and other economic and environmental factors as may be deemed necessary in undertaking the program within the context of the national development plans. The National Irrigation Administration, in consultation with the provincial and municipal development councils, shall determine the areas which shall be given priority. Section 3. The National Irrigation Administration shall observe the following priorities and guidelines in the planning, construction and management of irrigation projects: (a) Funds provided for in this Act shall be used only for the construction of new irrigation projects; (b) Priority shall be given to the construction of communal irrigation projects. At least fifty percent (50%) of the funds shall be used for communal irrigation projects; (c) Priority shall be given to the following: (1) Beneficiaries of the Comprehensive Agrarian Reform Program; (2) Members of the indigenous cultural communities;

496 COMPENDIUM OF RTF LAWS (3) Beneficiaries in areas where there are farmer-irrigators associations; and (4) Beneficiaries in fifth and sixth class municipalities; (d) The irrigation projects must be equitably distributed among the provinces and municipalities, giving priority to those provinces and municipalities without any irrigation system; (e) The farmer-beneficiaries of communal irrigation projects shall participate in all stages of the project. The beneficiaries shall participate in the project planning, identification, design, management of the project funds, construction and monitoring; (f) The beneficiaries of communal irrigation projects shall pay fifty percent (50%) of the project cost without interest for a period of fifty (50) years: provided, that, in case the beneficiary dies, his legal heirs or whoever may own the land benefited by the project at any given time during the term of payment shall shoulder the remaining obligation of the land; (g) The communal irrigation system shall be managed and maintained by the irrigators association or cooperative. The National Irrigation Administration shall help organize the

Food Availability Laws 497 irrigators association or cooperative and shall assist in the conduct of orientation seminars and training to the members of the said association or cooperative; and (h) The provincial offices of the National Irrigation Administration shall be responsible in the preparation of the feasibility studies and design of communal irrigation projects. Section 4. Such sums as may be necessary for the implementation of this Act shall be taken from any available appropriations of the National Irrigation Administration under the current General Appropriations Act. Thereafter, the succeeding appropriations for its continued implementation shall be included in the annual General Appropriations Act until the program shall have been completed by year 2000. In addition, the portion of financial grants and concessional loans extended to the Philippines by foreign governments and multilateral agencies including, but not limited to the Philippine Aid Plan, the amount to be determined by the President, shall be allocated by the Department of Budget and Management and augment the appropriations of the National Irrigation Administration until the program is completed as envisioned in this Act.

498 COMPENDIUM OF RTF LAWS Section 5. Whenever practicable, the construction of irrigation projects under this Act shall consider any or a combination of the following related or complementary purposes: (a) Prevention of flooding; (b) Ensuring water supply for drinking purposes; (c) Erosion control; (d) Watershed management; (e) Fish culture; (f) Power generation; and (g) Tourism development Section 6. If any part or provision of this Act is held unconstitutional, other parts or provisions hereof which are not affected thereby shall be in full force and effect. Section 7. All laws, presidential decrees execution orders, rules and regulations inconsistent with this Act are hereby repealed. Section 8. This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation. Approved:January 24, 1991

Food Availability Laws 499 REPUBLIC ACT NO. 8178 AN ACT REPLACING QUANTITATIVE IMPORT RESTRICTIONS ON AGRICULTURAL PRODUCTS, EXCEPT RICE, WITH TARIFFS, CREATING THE AGRICULTURAL COMPETITIVENESS ENHANCEMENT FUND, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Title. This Act shall be known as the Agricultural Tariffication Act. Section 2. Declaration of Policy. It is the policy of the State to make the countrys agricultural sector viable, efficient and globally competitive. The State adopts the use of tariffs in lieu of non-tariff import restrictions to protect local producers of agricultural products, except in the case of rice, which will continue to have quantitative import restrictions. Consistent with the constitutional mandate of protecting Filipino firms against unfair trade, it is furthermore the policy of the State to employ anti-dumping and countervailing measures to protect local producers from unfair trade practices, rather than use quantitative import restrictions.

500 COMPENDIUM OF RTF LAWS To help the agricultural sector compete globally, the State shall seek to raise farm productivity levels by providing the necessary support services such as, but not limited to, irrigation, farm-tomarket roads, post-harvest equipment and facilities, credit, research and development, extension services, other market infrastructure and market information. Section 3. Definition of Terms. The following definitions apply to the terms used in this Act: (a) Agricultural products shall have the same meaning as agricultural products under Chapters 1-24 of Presidential Decree No. 1464, otherwise known as the Tariff and Customs Code of the Philippines, as amended. (b) Applied rate is the rate of import duty that is actually used by Customs authorities in the collection of Customs revenues. (c) Bound rate refers to maximum limits on tariffs on products committed by the Philippines to the World Trade Organization (WTO) under the Uruguay Round Final Act. (d) In-Quota Tariff Rate refers to the tariff rates for minimum access volumes committed by the Philippines to the World Trade Organization (WTO) under the Uruguay Round Final Act. (e) Minimum Access Volume refers to

Food Availability Laws 501 the volume of a specific agricultural product that is allowed to be imported with a lower tariff as committed by the Philippines to the World Trade Organization (WTO) under the Uruguay Round Final Act. (f) Quantitative Import Restrictions refers to non-tariff restrictions used to limit the amount of imported commodities, including but not limited to discretionary import licensing and import quotas, whether qualified or absolute. (g) Tariff refers to a tax levied on a commodity imported from another country. It earns revenues for the government and regarded as instruments to promote local industries by taxing their competitors. The benefit is accorded to the local producers by the maintenance of a domestic price at a level equal to the world price plus the tariff. (h) Tariffication refers to the lifting of all existing quantitative restrictions such as import quotas or prohibitions, imposed on agricultural products, and replacing these restrictions with tariffs. Section 4. Repeal. The following laws and all other laws or provisions of law prescribing quantitative import restrictions or granting government

502 COMPENDIUM OF RTF LAWS agencies the power to impose such restrictions on agricultural products, except rice, are hereby repealed: (1) Republic Act No. 1296, entitled: An Act to Prohibit the Importation of Onions, Potatoes, Garlic, and Cabbages, Except for Seedling Purposes, and to Provide Penalties for the Violation Thereof; (2) Republic Act No. 2712, entitled: An Act to Prohibit the Importation of Coffee; (3) Presidential Decree No. 1297, as amended, entitled: Centralizing the Importation of Ruminants for Breeding, Slaughter and Beef; (4) Paragraph 10 of Section 23 of Republic Act No. 7607, entitled: An Act Providing a Magna Carta for Small Farmers; (5) Paragraph (a) of Section 15 of Republic Act No. 7308, entitled: Seed Industry Development Act; (6) Section 4 of Republic Act No. 4155, as amended, entitled: An Act to Promote and Strengthen the Virginia Tobacco Industry; and (7) Presidential Decree No. 1483, entitled: Authorizing the Importation of Foreign Cigar Leaf Tobacco for Blending Purposes. Section 5. Amendment. Subparagraph (xii), paragraph (1) Section 6 of Presidential Decree No. 4 (National Grains Authority Act), as amended,

Food Availability Laws 503 is hereby further amended to read as follows: Section 6. (a) Powers. (xii) to establish rules and regulations governing the importation of rice and to license, impose and collect fees and charges for said importation for the purpose of equalizing the selling price of such imported rice with normal prevailing domestic prices. In the exercise of this power, the Council after consultation with the Office of the President shall first certify to a shortage of rice that may occur as a result of a short-fall in production, a critical demand-supply gap, a state of calamity or other verified reasons that may warrant the need for importation: Provided, That this requirement shall not apply to the importation of rice equivalent to the Minimum Access Volume obligation of the Philippines under the WTO. The Authority shall undertake direct importation of rice or it may allocate import quotas among certified and licensed importers, and the distribution thereof through cooperatives and other marketing channels, at prices to be determined by the Council regardless of existing floor prices and the subsidy thereof, if any, shall be borne by the National Government. Section 6. Tariffication In lieu of quantitative restrictions, the maximum bound rates committed under the Uruguay Round Final Act shall

504 COMPENDIUM OF RTF LAWS be imposed on the agricultural products whose quantitative restrictions are repealed by this Act. The President shall issue the corresponding tariffs beginning 1996 up to year 2000: Provided, That the schedule of the initial and final applied rates shall be consistent with the countrys tariff binding commitments. In case of shortages or abnormal price increases in agricultural products, whose quantitative restrictions are lifted under this Act, the President may propose to Congress, revisions, modifications or adjustments of the Minimum Access Volume (MAV): Provided, however, That in the event Congress fails to act after fifteen (15) days from receipt of the proposal, the same shall be deemed approved. Section 7. Mechanism for the Implementation of Minimum Access Volume (MAV) An equitable and transparent mechanism for allocating the Minimum Access Volume (MAV) of agricultural products, whose quantitative restrictions are herein lifted, shall be developed and established, having the least government intervention, addressing the requirements of each geographical area, and without entailing any cost to importers/users of these products to the detriment of local consumers and other end-users.

Food Availability Laws 505 For this purpose and in accordance with the abovementioned guiding principles, the Cabinet Committee created by Memorandum Order No. 245 dated December 13, 1994 to oversee and manage the minimum access quotas committed by the Philippines under the General Agreement on Tariffs and Trade Uruguay Round with the inclusion of the National Economic and Development Authority (NEDA), and in consultation with all concerned agricultural farmer/ producer/processor/importer groups, shall submit to Congress within a period of sixty (60) days from the effectivity of this Act, the appropriate mechanism for the implementation of the minimum access volumes. Section 8. Agricultural Competitiveness Enhancement Fund To implement the policy enunciated in this Act, there is hereby created the Agricultural Competitiveness Enhancement Fund, hereinafter referred to as the Fund. The proceeds of the importation of minimum access volume shall accrue to the General Fund and shall be deposited with the National Treasury. The entire proceeds shall be set aside and earmarked by Congress for irrigation, farmto-market roads, post-harvest equipment and facilities, credit, research and

506 COMPENDIUM OF RTF LAWS development, other marketing infrastructure, provision of market information, retraining, extension services, and other forms of assistance and support to the agricultural sector. The Committees on Agriculture and Food, Appropriations and Finance of both the Senate and the House of Representatives shall conduct a periodic review of the use of the Fund. The Fund shall have a life of nine (9) years, after which all remaining balances shall revert to the General Fund. Section 9. Repealing Clause All laws, decrees, executive issuances, rules and regulations inconsistent with this Act are hereby repealed or modified accordingly. Section 10. Separability Clause The provisions of this Act are hereby declared to be separable, and in the event one or more of such provisions are held unconstitutional, the validity of the other provisions shall not be affected thereby. Section 11. Effectivity This Act shall take effect thirty (30) days from the date of its publication in the Official Gazette or in at least two (2) newspapers of general circulation. Approved, March 28, 1996

Food Availability Laws 507 Republic of the Philippines Congress of the Philippines Metro Manila Eleventh Congress First Special Session Begun and held in Metro Manila, on Monday, the twelfth day of July, nineteen hundred and ninety-nine. REPUBLIC ACT NO. 8752 AN ACT PROVIDING THE RULES FOR THE IMPOSITION OF AN ANTI-DUMPING DUTY, AMENDING FOR THE PURPOSE SECTION 301, PART 2, TITLE II, BOOK I OF THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED BY REPUBLIC ACT NO. 7843, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives ofthe Philippinesin Congress assembled.Section 1. This Act shall be known as the AntiDumping Act of 1999. Section 2. It is hereby declared the policy of the State to protect domestic enterprises against unfair foreign competition and trade practices. Towards this end, substantive and procedural remedies available to domestic enterprises shall be strengthened and made responsive to recent developments in world trade.

508 COMPENDIUM OF RTF LAWS Section 3. Section 301, Part 2, Title II, Book 1 of the Tariff and Customs Code of the Philippines, as amended, is hereby further amended to read as follows: PART 2. SPECIAL DUTIES Section 301.Anti-Dumping Duty. (a) Whenever any product, commodity or article of commerce imported into the Philippines at an export price less than its normal value in the ordinary course of trade for the like product, commodity or article destined for consumption in the exporting country is causing or is threatening to cause material injury to a domestic industry, or materially retarding the establishment of a domestic industry, or materially retarding the establishment of a domestic industry producing the like product, the Secretary of Trade and Industry, in the case of non-agricultural product, commodity or article, or the Secretary of Agriculture, in the case of agricultural product, commodity or article (both of whom are hereinafter referred to as the Secretary, as the case may be), after formal investigation and affirmative finding of the Tariff

Food Availability Laws 509 Commission (hereinafter referred to as the Commission), shall cause the imposition of an anti-dumping duty equal to the margin of dumping on such product, commodity or article and on like product, commodity or article thereafter imported to the Philippines under similar circumstances, in addition to ordinary duties, taxes and charges imposed by law on the imported product, commodity or article. However, the anti-dumping duty may be less than the margin if such lesser duty will be adequate to remove the injury to the domestic industry. Even when all the requirements for the imposition have been fulfilled, the decision whether or not to impose a definitive anti-dumping duty remains the prerogative of the Commission. It may consider, among others, the effect of imposing an anti-dumping duty on the welfare of consumers and/or the general public, and other related local industries. In the case where products are not imported directly from the country of origin but are exported to the Philippines from an intermediate country, the price at which the products are sold from the country of export to the Philippines

510 COMPENDIUM OF RTF LAWS shall normally be compared with the comparable price in the country of export. However, comparison may be made with the price in the country of origin, if for example, the products are merely transshipped through the country of export, or such products are not produced in the country of export, or there is no comparable price for them in the country of export. (b) Initiation of Action. - An anti-dumping investigation may be initiated upon receipt of a written application from any person whether natural or juridical, representing a domestic industry, which shall include evidence of a) dumping, b) injury, and c) causal link between the dumped imports and the alIeged injury. Simple assertions, unsubstantiated by relevant evidence, cannot be considered sufficient to meet the requirements of this paragraph. The application shall contain such information as is reasonably available to the applicant on the following, 1) the identity of the applicant and a description of the volume and the value of the domestic production of the like product of the applicant; 2) a complete description of the alleged dumped product, the name of the country of origin or export

Food Availability Laws 511 under consideration, the identity of each known exporter or foreign producer, and a list of known persons importing the product under consideration; 3) information on the normal value of the product under consideration in the country of origin or export, and 4) information on the evolution of the volume of the alleged dumped imports, the effect of these imports on the price of the like product in domestic market, and the consequent impact of the imports on the domestic industry. Philippine Trade, Agriculture or Finance Attachs and other Consular Officials or Attachs in the concerned exporting member countries are mandated to furnish the applicant pertinent information or documents to support his complaint within a period not exceeding thirty (30) days from receipt of a request. The application shall be filed with the Secretary of Trade and Industry in the case of non-agricultural product, commodity or article, or with the Secretary of Agriculture in the case of agricultural product, commodity or article.

512 COMPENDIUM OF RTF LAWS The Secretary shall require the petitioner to post a surety bond in such reasonable amount as to answer for any and all damages which the importer may sustain by reason of the filing of a frivolous petition. He shall immediately release the surety bond upon making an affirmative preliminary determination. The application shall be considered to have been made by or on behalf of the domestic industry if it is supported by those domestic producers whose collective output constitutes more than fifty percent (50%) of the total production of the like product produced by that portion of the domestic industry expressing either support for or opposition to the application. In cases involving an exceptionally large number of producers the degree of support and opposition may be determined by using a statistically valid sampling technique or by consulting their representative organizations. However, no investigation shall be initiated when domestic producers expressly supporting the application account for less than twenty -five percent (25%) total production of the like product produced by the domestic industry.

Food Availability Laws 513 In exceptional circumstances, the Philippines may be divided into two or more competitive markets and the producers within each market may be regarded as a separate industry if (a) the producers within such market have the dominant market share; and (b) the demand in that market is not substantially supplied by other producers elsewhere in the Philippines. If in special circumstances, the Secretary decides to initiate an investigation without having received a written application by or on behalf of a domestic industry for the initiation of such investigation, he shall proceed only if he has sufficient evidence of dumping, injury and a causal link, to justify the initiation of an investigation. Within five (5) working days from receipt of a properly documented application, the Secretary shall examine the accuracy and adequacy of the petition to determine whether there is sufficient evidence to justify the initiation of investigation. If there is no sufficient evidence to justify initiation, the Secretary shall dismiss the petition and properly notify the Secretary of Finance, the Commissioner of Customs, and other parties concerned regarding such dismissal. The Secretary

514 COMPENDIUM OF RTF LAWS shall extend legal, technical, and other assistance to the concerned domestic producers and their organizations at all stages of the anti-dumping action. (c) Notice to the Secretary of Finance. Upon receipt of the application, the Secretary shall, without delay, notify the Secretary of Finance and furnish him with a complete copy of the application, or information in case the initiation is made on his own motion including its annexes, if any. The Secretary of Finance shall immediately inform the Commissioner of Customs regarding the filing and pendency of the application or information and instruct him to gather and to furnish the Secretary within five (5) days from receipt of the instructions of the Secretary of Finance copies of all import entries and relevant documents covering such allegedly dumped product, commodity or article which entered the Philippines during the last twelve (12) months preceding the date of application. The Commissioner of Customs shall also make such similar additional reports on the number, volume, and value of the importation of the allegedly dumped product, commodity or article to the Secretary every ten (10) days thereafter.

Food Availability Laws 515 (d) Notice to Exporting MemberCountry - Upon receipt of a properly documented application and before proceeding to initiate an investigation, the Secretary shall notify the government of the exporting country about the impending anti-dumping investigation. However, the Secretary shall refrain from publicizing the application for the initiation of the investigation before a decision has been made to initiate an investigation. (e) Notice to Concerned Parties and Submission of Evidences - Within two (2) days from initiation of the investigation and after having notified the exporting country, the Secretary shall identify all interested parties, i.e., protestee-importer, exporter and/or foreign producer, notify and require them to submit within thirty (30) days from receipt of such notice evidences and information or reply to the questionnaire to dispute the allegations contained in the application. At this point, the respondent is given the opportunity to present evidences to prove that he is not involved in dumping. He shall furnish them with a copy of the application and its annexes subject to the requirement to protect confidential

516 COMPENDIUM OF RTF LAWS information. The notice shall be deemed to have been received five (5) days from the date on which it was sent to the respondent or transmitted to the appropriate diplomatic representative of the exporting member, or an official representative of the exporting territory. If the respondent fails to submit his answer, he shall be declared in default, in which case, the Secretary shall make such preliminary determination of the case on the basis of the information available, among others, the facts alleged in the petition and the supporting information and documents supplied by the petitioner. (f) Preliminary Determination - Not later than thirty (30) working days from receipt of the answer of the respondent importer, exporter, foreign producer, exporting member-country and other interested parties, the Secretary shall, on the basis of the application of the aggrieved party and the answer of the respondent/s and their respective supporting documents or information, make a preliminary determination of the application for the imposition of an antidumping duty. In the preliminary determination , the Secretary shall essentially determine the following:

Food Availability Laws 517 (1) Price difference between the export price and the normal value of the article in question in the country of export of origin; (2) The presence and extent of material injury or threat of injury to the domestic industry producing like product or the material retardation like of the establishment of a domestic industry; and (3) The causal relationship between the allegedly dumped product, commodity or article and the material injury or threat of material injury to the affected domestic industry or material retardation of the establishment of the domestic industry. The preliminary finding of the Secretary, together with the records of the case shall, within three (3) days, be transmitted by the Secretary to the Commission for its immediate formal investigations. In case his preliminary finding is affirmative, the burden of proof is shifted to the respondent to rebut the preIiminary finding. The Secretary shall immediately issue, through the Secretary of Finance, written instructions to the Commissioner of Customs to impose within three (3) days

518 COMPENDIUM OF RTF LAWS from receipt of instructions a cash bond equal to the provisionally estimated anti-dumping duty but not greater than the provisionally estimated antidumping margin of dumping in addition to any other taxes and charges imposed by law on articles. The cash bond shall be deposited with the government depository bank and shall be held in trust for the respondent. Moreover, the posting of the cash bond shall only be required no sooner than sixty (60) days from the date of investigation is deemed to be the date the Secretary publishes such notice in two (2) newspapers of general circulation. The Secretary shall cause such publication immediately after a decision to initiate the investigation has been made. The provisional anti-dumping duty may only be imposed for a four (4) month period which may be extended to six (6) months upon request by the exporter/s representing a significant percentage of the trade involved. However, a provisional anti-dumping duty lower than the provisionally estimated margin of dumping can be imposed for a period of six (6) to nine (9) months, if it is deemed sufficient to remove or prevent the material injury.

Food Availability Laws 519 (g) Termination of Investigation. The Secretary or the Commission, as the case may be, shall motu proprio terminate the investigation at any stage of the proceedings if the provisionally estimated margin of dumping is less than two percent (2%) of export price or the volume of dumped imports or injury is negligible. The volume of dumped imports from a particular country shall normally be regarded as negligible if it accounts for less than three percent (3%) of the imports of the like article in the Philippines unless countries which individually account for less than three percent (3%) of the imports of the like article in the Philippines collectively account for more than seven percent (7%) of the total imports of that article. (h) Investigation of the Commission. -Within three (3) working days upon its receipt of the records of the case from the Secretary, the Commission shall start the formal investigation and shall accordingly notify in writing all parties on record and, in addition, give public notice of the exact initial date, time and place of the formal investigation through the publication of such particulars and a concise summary of the petition in two (2) newspapers of general circulation.

520 COMPENDIUM OF RTF LAWS In the formal investigation, the Commission shall essentially determine the following: (1) If the article in question is being imported into, or sold in the Philippines at a price less than its normal value; and the difference, if any, between the export price and the normal value of the article. (2) The presence and extent of material injury or the threat thereof to the domestic industry, or the material retardation of the establishment of a domestic industry; (3) The existence of a causal relationship between the allegedly dumped product, commodity or article and the material injury or threat of material injury to the affected domestic injury, or material retardation of the establishment of a domestic industry; (4) The anti-dumping duty to be imposed; and (5) The duration of the imposition of the anti-dumping duty. The Commission is hereby authorized to require any interested party to allow its access to or otherwise provide necessary information to enable the Commission to expedite the investigation.

Food Availability Laws 521 The formal investigation shall be conducted in a summary manner. No dilatory tactics or unnecessary or unjustified delays shall be allowed and the technical rules of evidence used in regular court proceedings shall not be applied. In case any or all of the parties on record fail to submit their answers to questionnaires/position papers within the prescribed period, the Commission shall base its findings on the best available information. The Commission shall complete the formal investigation and submit a report of its findings, whether favorable or not, to the Secretary within one hundred twenty (120) days from receipt of the records of the case: Provided, however, That the Commission shall, before a final determination is made, inform all the interested parties in writing of the essential facts under consideration which form the basis for the decision to apply definitive measures. Such disclosure should take place in sufficient time for the parties to defend their interests. (i) Determination of Material Injury or Threat Thereof . The presence and extent of material injury to the domestic

522 COMPENDIUM OF RTF LAWS industry, as a result of the dumped imports shall be determined on the basis of positive evidence and shall require an objective examination of, but shall not be limited to the following: (1) The rate of increase and amount of imports, either in absolute terms or relative to production or consumption in the domestic market; (2) The effect of the dumped imports on the price in the domestic market for like product, commodity or article, that is, whether there has been a significant price undercutting by the dumped imports as compared with the price of like product, commodity or article in the domestic market, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree; and (3) The effect of the imports on the domestic producers or the resulting retardation of the establishment of a domestic industry manufacturing like product, commodity or article, including an evaluation

Food Availability Laws 523 of all relevant economic factors and indices having a bearing on the state of the domestic industry concerned, such as, but not limited to, actual or potential decline in output, sales, market share, profits, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; the magnitude of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, and ability to raise capital or investments. The extent of injury of the dumped imports to the domestic industry shall be determined by the Secretary and the Commission upon examination of all relevant evidence. Any known factors other than the dumped imports which at the same time are injuring the domestic industry shall also be examined and the injuries caused by these factors must not be attributed to the dumped imports. The relevant evidence may include, but shall not be limited to, the following: (1) The volume and value of imports not sold at dumping prices; (2) Contraction in demand or changes in consumption pattern;

524 COMPENDIUM OF RTF LAWS (3) Trade restrictive practices and competition between foreign and domestic producers; (4) Developments in technology; and (5) Export performance and productivity of the domestic industry. A determination of threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances which will create a situation in which the dumping will cause injury must be clearly foreseen and imminent. In making a determination regarding the existence of a threat of material injury, the following shall be considered,inter alia, collectively: (1) A significant rate of increase of the dumped imports in the domestic market indicating the likelihood of substantially increased importation; (2) Sufficient freely disposable, or an imminent, substantial increase in capacity of the exporter indicating the likelihood of substantially increased dumped exports to the domestic market, taking into account the availability of other export markets to absorb any additional exports;

Food Availability Laws 525 (3) Whether imports are entering at prices that will have significant depressing or suppressing effect on domestic prices and will likely increase demand for further imports; and (4) Inventories of the product being investigated. (j) Voluntary Price Undertaking - Antidumping investigation may be suspended or terminated without the imposition of provisional measures or anti-dumping duties upon receipt of the Commissionof a satisfactory voluntary price undertaking executed by the exporter or foreign producer under oath and accepted by the affected industry that he will increase his price or will cease exporting to the Philippines at a dumped price, thereby eliminating the material injury to the domestic industry producing like product. Price increases under such undertakings shall not be higher than necessary to eliminate the margin of dumping. A price undertaking shall be accepted only after a preliminary affirmative determination of dumping and injury caused by such dumping has been made.No price undertaking shall take effect unless it is approved by the

526 COMPENDIUM OF RTF LAWS Secretary after a recommendation by the Commission. Even if the price undertaking is acceptable, the investigation shall nevertheless be continued and completed by the Commission if the exporter or foreign producer so desires or upon advice of the Secretary. The undertaking shall automatically lapse in case of a negative finding. In case of any affirmative finding, the undertaking shall continue, consistent with the provisions of Article VI of the GATT 1994. (k) Cumulation of Imports. - When imports of products, commodities or articles from more than one country are simultaneously the subject of an antidumping investigation, the Secretary or the Commission may cumulatively assess the effects of such imports only if the Secretary and the Commission are convinced that: (1) The margin of dumping established in relation to the imports from each country is more than de minimis as defined in Subsection G; (2) The volume of such imports from each country is not negligible, also as defined in Subsection G; and

Food Availability Laws 527 (3) A cumulative assessment of the effects of such imports is warranted in the light of the conditions of competition between the importedproducts, commodities or articles, and the conditions of competition between the imported products and the like domestic products, commodities or articles. (l) Imposition of the Anti-Dumping Duty. - The Secretary shall, within ten (10) days from receipt of the affirmative final determination by the Commission, issue a Department Order imposing an anti-dumping duty on the imported product,commodity, or article, unless he has earlier accepted a price undertaking from the exporter or foreign producer. He shall furnish the Secretary of Finance with the copy of the order and request the latter to direct the Commissioner of Customs to collect within three (3) days from receipt thereof the definitive antidumping duty. In case a cash bond has been filed. the same shall be applied to the anti-dumping duty assessed. If the cash bond is in excess of the anti-dumping duty assessed, the remainder shall be returned to the importer immediately including interest earned, if any: Provided, That no interest

528 COMPENDIUM OF RTF LAWS shall be payable by the government on the amount to be returned. If the assessed anti-dumping duty is higher than the cash bond filed, the difference shall not be collected. Upon determination of the anti-dumping duty, the Commissioner of Customs shall submit to the Secretary, through the Secretary of Finance, certified reports on the disposition of the cash bond and the amounts of the anti-dumping duties collected. In case of a negative finding by the Commission, the Secretary shall issue, after the lapse of the period for the petitioner to appeal to the Court of Tax Appeals, through the Secretary of Finance, an order for the Commissioner of Customs for the immediate release of the cash bond to the importer. In addition, all the parties concerned shall also be properly notified of the dismissal of the case. (m) Period Subject to Anti-Dumping Duty. - An anti-dumping duty may be levied retroactively from the date the cash bond has been imposed and onwards, where a final determination of injury is made, or in the absence of provisional measures, a threat of injury has led to actual injury. Where a determination of threat of

Food Availability Laws 529 injury or material retardation is made, anti-dumping duties may be imposed only from the date of determination thereof and any cash bond posted shall be released in an expeditious manner. However, an anti-dumping duty may be levied on product which were imported into the country not more than ninety (90) days prior to the date of application of the cash bond, when the authorities determine for the dumped product in question that: (1) There is a history of dumping which caused injury or that the importer was or should have been, aware thatthe exporter practices dumping and that such dumping would cause injury; and (2) The injury is caused by massive dumped imports of a product in a relatively short time which in light of the timing and the volume of the dumped imports and other circumstances (such as a rapid build-up of inventories of the imported product) is likely to seriously undermine the remedial effect of the definitive anti-dumping duty to be applied: Provided, That the importers concerned have been given an opportunity to comment.

530 COMPENDIUM OF RTF LAWS No duties shall be levied retroactively pursuant to herein subsection on products entered for consumption prior to the date of initiation of the investigation. (n) Computation of Anti-Dumping Duty- If the normal value of an article cannot be determined, the provisions for choosing alternative normal value under Article VI of GATT 1994 shall apply. If possible, an individual margin of dumping shall be determined for each known exporter or producer of the article under investigation. In cases where the number of exporters, producers, importers or types of products involved is so large as to make such determination impracticable, the Secretary and the Commission may limit their examination either to a reasonable number of interested parties or products by using samples which are statistically valid on the basis of information available to them at the time of the selection, or to the largest percentage of volume of exports from the country in question which can reasonably be investigated. However, if a non-selected exporter or producer submits information, the investigation must extend to that exporter or producer unless this will prevent the timely completion of the investigation.

Food Availability Laws 531 New exporters or producers who have not exported to the Philippines during the period of investigation will be subject to an accelerated review. No anti-dumping duties shall be imposed during the review. Cash bonds may be requested to ensure that in case of affirmative findings, anti-dumping duties can be levied retroactively to the date of initiation of the review. (o) Duration and Review of the Anti-Dumping Duty- As a general rule, the imposition of an antidumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing or threatening to cause material injury or material retardation of the establishment of such industry. However, the need for the continued imposition of the anti-dumping duty may be reviewed by the Commission when warrantedmotu proprio, or upon the direction of the Secretary, taking into consideration the need to protect the existing domestic industry against dumping. Any interested party with substantial positive information may also petition the Secretary for a review of the continued imposition of the anti-dumping

532 COMPENDIUM OF RTF LAWS duty: Provided, That a reasonable period of time has elapsed since the imposition of the anti-dumping duty. Interested parties shall have the right to request the Secretary to examine: 1) whether the continued imposition of the anti-dumping duty is necessary to offset dumping; and 2) whether the injury would likely continue or recur if the antidumping duty were removed or modified, or both. If the Commission determines that the anti-dumping duty is no longer necessary or warranted, the Secretary shall, upon its recommendation, issue a department order immediately terminating the imposition of the anti-dumping duty. All parties concerned shall be notified accordingly of such termination, including the Secretary of Finance and the Commissioner of Customs. The duration of the definitive antidumping duty shall not exceed five (5) years from the date of its imposition (or from the date of the most recent review if that review has covered both dumping and injury) unless the Commission has determined in a review initiated before that date on their own initiative or upon a duly substantiated request made by

Food Availability Laws 533 or on behalf of the domestic industry within a reasonable time period prior to the termination date that the terminationof the anti-dumping duty will likely lead to the continuation or recurrence of dumping and injury. The provisions of this Section regarding evidence and procedures shall apply to any review carried out under this Subsection and any such review should be carried out expeditiously and shouId be conducted not later than one hundred fifty (150) days from the date of initiation of such review. (p) Judicial Review . - Any interested party in an anti-dumping investigation who is adversely affected by a final ruling in connection with the imposition of an anti-dumping duty may file with the Court of Tax Appeals, a petition for the review of such ruling within thirty (30) days from his receipt of notice of the final ruling: Provided, however, That the filing of such petition for review shall not in any way stop, suspend, or otherwise hold the imposition or collection, as the case may be, of the anti-dumping duty on the imported product, commodity or article. The rules of procedure of the court on the petition for review filed with the Court of Tax Appeals shall be applied.

534 COMPENDIUM OF RTF LAWS (q) Public Notices. - The Secretary or the Commission shall inform in writing all interested parties on record and, in addition, give public notices by publishing in two (2) newspapers of general circulation when: (1) Initiating an investigation; (2) Concluding or suspending investigation; (3) Making any preliminary or final determination whether affirmative or negative; (4) Making a decision to accept or to terminate an undertaking (5) Terminating a definitive anti-dumping duty. (r) Report to be Submitted by the Bureau of Customs - The Secretary shall regularly submit to the Commissioner of Customs a list of imported products susceptible to unfair trade practices. The Commissioner of Customs is hereby mandated to submit to the Secretary monthly reports covering importations of said products, including but not limited to the following: (1) Commercial invoice; (2) Bill of lading; (3) Import Entries; and (4) Pre-shipment reports.

Food Availability Laws 535 Failure to comply with the submission of such report as provided herein shall hold the concerned officials liable and shall be punished with a fine not exceeding the equivalent of six (6) months salary or suspension not exceeding one (1) year. (s) Definition of Terms . For purposes of this Act, the following definitions shall apply: (1) Anti-dumping dutyrefers to a special duty imposed on theimportation of a product, commodity or article of commerce into the Philippines at less than its normal value when destined for domestic consumption in the exporting country, which is the difference between the export price and the normal value of such product, commodity or article. (2) Export price refers to (1) the exfactory price at the point of sale for export; or (2) the F.O.B. price at the point of shipment. In cases where (1) or (2) cannot be used, then the export price and the normal value of such product, commodity or article. (3) Normal value refers to a comparable price at the date of sale of the like product, commodity or article in the

536 COMPENDIUM OF RTF LAWS ordinary course of trade when destined for consumption in the country of export. (4) Domestic industry refers to the domestic producers as a whole of the like product or to those of them whose collective output of the product constitutes a major proportion of the total domestic production of that product except when producers are related to the exporters or importers or are themselves importers of the allegedly dumped product, the term domestic industry may be interpreted as referring to the rest of the producers. (5) Dumped import / productrefers to any product, commodity or article of commerce introduced into the Philippines at an export price less than its normal value in the ordinary course of trade, for the like product, commodity or article destined for consumption in the exporting country, which is causing or is threatening to cause material injury to a domestic industry, or materially retarding the establishment of a domestic industry producing the like product.

Food Availability Laws 537 (6) Like product refers to a product which is identical or alike in all respects to the product under consideration, or in the absence of such a product, another product which although not alike in all respects, has characteristics closely resembling those of the product under consideration. (7) Non-selected exporter or producerrefers to an exporter or producer who has not been initially chosen as among the selected exporters or producers of the product under investigation. (t) Administrative Support. - Upon the effectivity of this Act, the Department of Trade and Industry, Agriculture and the Tariff Commission, shall ensure the efficient and effective implementation of this Act by creating a special unit within their agencies that will undertake the functions relative to the disposition of anti-dumping cases. All anti-dumping duties collected shall be earmarked for the strengthening of the capabilities of these agencies to undertake their responsibilities under this Act. Section 4. Penalty Clause. Failure of the government officials herein mentioned to prosecute, investigate and initiate necessary action

538 COMPENDIUM OF RTF LAWS against the exporter as provided in this Act and of the rules and regulations issued pursuant hereto shall be a ground for dismissal from office, in addition to the sanctions provided in the Revised Penal Code and the AntiGraft and Corrupt Practices Act. Failure of the concerned officials of the Bureau of Customs to collect the cash bond or definitive dumping duty pursuant to the department order of the Secretary shall constitute prima facie evidence and dereliction of duty which shall be punishable by removal from the office. The importers license or charter to do business shall be revoked for those found guilty of dumping. Further, its officers shall be disqualified from holding official positions in corporations of other business entities in the Philippines. A fine equal to twice the definitive anti-dumping duty shall be imposed. Section 5. Annual Report .-The use of funds under this Act shall be subject to regular audit by the Commission on Audit which shall render an annual report of its findings to Congress. Likewise, the Secretary shall submit an annual report of its operation under this Act to Congress. Section 6. Oversight . There shall be a Congressional Oversight Committee composed of the Chairmen of the Committee on Trade

Food Availability Laws 539 and Industry of both the Senate and the House of Representatives, and Members from the Committee on Ways and Means as designated in both chambers. Section 7. Rules and Regulations. -An inter-agency committee to be composed of the Secretaries of the Departments of Trade and Industry, Agriculture and Finance, the Commissioner of the Bureau of Customs and the Chairman of the Tariff Commission shall promulgate all rules and regulations necessary to carry out their respective functions under this Act. Section 8. Repealing Clause. -Section 301, Part 2, Title II, Book I of the Tariff and Customs Code, as amended by Republic Act No. 7843 and all other laws, decrees, rules and regulations, ordinances, executive or administrative orders, and such other presidential issuances related to dumping which are inconsistent with any of the provisions of this Act are hereby repealed, amended or otherwise modified accordingly. Section 9. Separability Clause. -If any of the provisions of this Act is declared invalid by a competent court, the remainder of this Act or any provisions not affected by such declaration of invalidity shall remain in full force and effect. Section 10. Effectivity Clause. -This Act shall take effect after fifteen (15) days following its publication in at least two (2) newspapers of general circulation.

540 COMPENDIUM OF RTF LAWS Republic of the Philippines Congress of the Philippines Metro Manila Eleventh Congress Third Special Session Begun and held in Metro Manila, on Monday, the seventeenth day of July, two thousand. [REPUBLIC ACT NO. 8800] AN ACT PROTECTING LOCAL INDUSTRIES BY PROVIDINGSAFEGUARDMEASURES TO BE UNDERTAKEN IN RESPONSE TO INCREASED IMPORTS AND PROVIDING PENALTIES FOR VIOLATION THEREOF Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: CHAPTERI GENERAL PROVISIONS Section 1. Short Title. -This Act shall be known as the Safeguard Measures Act. Section 2. Declaration of Policy.- The State shall promote the competitiveness of domestic industries and producers based on sound industrial and agricultural development policies, and the efficient use of human, natural and technical resources. In pursuit of this goal and in the public interest, the State shall provide safeguard

Food Availability Laws 541 measures to protect domestic industries and producers from increased imports which cause or threaten to cause serious injury to those domestic industries and producers. Section 3. Scope of Application. -This Act shall apply to products being imported into the country irrespective of source. Section 4. Definitions. -For the purposes of this Act, the following terms are defined as follows: (a) Agricultural product refers to a specific commodity under Chapters 1 to 24 of the Harmonized System (HS) of Commodity Classification as used in the Tariff and Customs Code of the Philippines; (b) Commission shall refer to the Tariff Commission; (c) Consumers shall refer to natural persons or organized consumer groups who are purchasers, lessees, recipients, or prospective purchasers, lessees, recipients of consumer products, services or credit; (d) Critical circumstances shall mean circumstances where there is prima facie evidence that increased imports, whether absolute or relative to domestic production, are a substantial cause of serious injury or threat thereof to the domestic industry and that delay in taking action under this Act would cause damage to the industry that would be difficult to repair;

542 COMPENDIUM OF RTF LAWS (e) Directly competitive products shall mean domestically-produced substitutable products; (f) Domestic industry shall refer to the domestic producers, as a whole, of like or directly competitive products manufactured or produced in the Philippines or those whose collective output of like or directly competitive products constitutes a major proportion of the total domestic production of those products; (g) Interested parties shall include domestic producers, consumers, importers and exporters of the products under consideration; (h) Like product shall mean a domestic product which is identical, i.e., alike in all respects to the imported product under consideration, or in the absence of such a product, another domestic product which, although not alike in all respects, has characteristics closely resembling those of the imported product under consideration; (i) Market access opportunity shall mean the percentage of the total annual volume of imports of an agricultural product to the corresponding total volume of domestic consumption of the said product in the country in the three (3) immediately preceding years for which data are available;

Food Availability Laws 543 (j) Minimum Access Volume (MAV) is the amount of imports of an agricultural product allowed to be imported into the country at a customs duty lower than the out-quota customs duty; (k) Positive adjustment to import competition shall refer to the ability of the domestic industry to compete successfully with imports after the termination of any safeguard measure, or to the orderly transfer of resources to other productive pursuits; and to the orderly transition of dislocated workers in the industry to other productive pursuits; (l) Price difference is the amount obtained after subtracting the c.i.f. import price from the trigger price; (m) Product refers to articles, commodities or goods; (n) Secretary shall refer to either the Secretary of the Department of Trade and Industry in the case of non-agricultural products or the Secretary of the Department of Agriculture in the case of agricultural products; (o) Serious injury shall mean a significant impairment in the position of a domestic industry after evaluation by competent authorities of all relevant factors of an objective and quantifiable nature having a bearing on the situation of the industry

544 COMPENDIUM OF RTF LAWS concerned, in particular, the rate and amount of the increase in imports of the product concerned in absolute and relative terms, the share of the domestic market taken by increased imports, changes in levels of sales, production, productivity, capacity utilization, profit and losses, and employment; (p) Substantial cause means a cause which is important but not less than any other cause; (q) Threat of serious injury shall be understood to mean serious injury that is imminent; (r) Trigger price is the price benchmark for applying the special safeguard measure; and (s) Trigger volume is the volume benchmark for applying the special safeguard measure. CHAPTER II GENERAL SAFEGUARD MEASURE Section 5. Conditions for the Application of General Safeguard Measures. The Secretary shall apply a general safeguard measure upon a positive final determination of the Commission that a product is being imported into the country in increased quantities, whether absolute or relative to the domestic production, as to be a substantial cause of serious injury or threat

Food Availability Laws 545 thereof to the domestic industry; however, in the case of non-agricultural products, the Secretary shall first establish that the application of such safeguard measures will be in the public interest. Section 6. I nitiation of Action Involving General Safeguard Measure.- Any person, whether natural or juridical, belonging to or representing a domestic industry may file with the Secretary a verified petition requesting that action be taken to remedy the serious injury or prevent the threat thereof to the domestic industry caused by increased imports of the product under consideration. The petition shall include documentary evidence supporting the facts that are essential to establish: (1) an increase in imports of like or directly competitive products; (2) the existence of serious injury or threat thereof to the domestic industry; and (3) the causal link between the increased imports of the product under consideration and the serious injury or threat thereof. The Secretary shall review the accuracy and adequacy of the evidence adduced in the petition to determine the existence of aprima faciecase that will justify the initiation of a preliminary investigation within five (5) days from receipt of the petition.

546 COMPENDIUM OF RTF LAWS The Secretary may also initiate action upon the request of the President; or a resolution of the House or Senate Committee on Agriculture, or House or Senate Committee on Trade and Commerce. In the absence of such a petition, the Secretary may, motu proprio, initiate a preliminary safeguard investigation if there is evidence that increased imports of the product under consideration are a substantial cause of, or are threatening to substantially cause, serious injury to the domestic industry. The Secretary may extend legal, technical and other assistance to the concerned domestic producers and their organizations at all stages of the safeguard action. Section 7. Preliminary Determination -Not later than thirty (30) days from receipt of the petition or a motu proprioinitiation of the preliminary safeguard investigation, the Secretary shall, on the basis of the evidence and submission of the interested parties, make a preliminary determination that increased imports of the product under consideration are a substantial cause of, or threaten to substantially cause, serious injury to the domestic industry. In the process of conducting a preliminary determination, the Secretary shall notify the interested parties and shall require them to submit their answers within five (5) working days from receipt of such notice.

Food Availability Laws 547 The notice shall be deemed received five (5) working days from the date of transmittal to the respondent or appropriate diplomatic representative of the country of exportation or origin of the imported product under consideration. When information is not applied within the above time limit set by the Secretary or if the investigation is significantly impeded, decision will be based on the facts derived from the evidence at hand. Upon a positive preliminary determination that increased importation of the product under consideration is a substantial cause of, or threatens to substantially cause, serious injury to the domestic industry, the Secretary shall, without delay, transmit its records to the Commission for immediate formal investigation. Section 8. Provisional Measures. - In critical circumstances where a delay would cause damage which would be difficult to repair, and pursuant to a preliminary determination that increased imports are a substantial cause of, or threaten to substantially cause, serious injury to the domestic industry, the Secretary shall immediately issue, through the Secretary of Finance, a written instruction to the Commissioner of Customs authorizing the imposition of a provisional general safeguard measure. Such measure shall

548 COMPENDIUM OF RTF LAWS take the form of a tariff increase, eitherad valorem or specific, or both, to be paid through a cash bond set at a level sufficient to redress or prevent injury to the domestic industry: Provided, however, That in the case of agricultural products where the tariff increase may not be sufficient to redress or to prevent serious injury to the domestic producer or producers, a quantitative restriction may be set. The cash bond shall be deposited with a government depository bank and shall be held in trust for the importer who posted the bond. The duration of the provisional measure shall not exceed two hundred (200) days from the date of imposition during which period the requirements of the subsequent sections of this Act on the initiation of a formal investigation, notification and consultation shall have been met: Provided, That the duration of any provisional measure shall be counted as part of the initial period and any extension, of the imposition of the definitive final safeguard measure. When the provisional safeguard measure is in the form of a tariff increase, such increase shall not be subject or limited to the maximum levels of tariff as set forth in Section 401(a) of the Tariff and Customs Code of the Philippines.

Food Availability Laws 549 Section 9. Formal Investigation- Within five (5) working days from receipt of the request from the Secretary, the Commission shall publish the notice of the commencement of the investigation, and public hearings which shall afford interested parties and consumers an opportunity to be present, or to present evidence, to respond to the presentation of other parties and consumers and otherwise be heard. Evidence and positions with respect to the importation of the subject article shall be submitted to the Commission within fifteen (15) days after the initiation of the investigation by the Commission. The Commission shall complete its investigation and submit its report to the Secretary within one hundred twenty (120) calendar days from receipt of the referral by the Secretary, except when the Secretary certifies that the same is urgent, in which case the Commission shall complete the investigation and submit the report to the Secretary within sixty (60) days. Section 10. Inspection of Evidence. -The Commission shall make available for inspection by interested parties, copies of all evidence submitted on or before the relevant due date: Provided, however,That any information which is by nature confidential or which is provided on a confidential basis, shall, upon cause being shown, not be disclosed without permission

550 COMPENDIUM OF RTF LAWS of the party submitting it. Parties providing confidential information may be requested to furnish non-confidential summaries thereof or if such parties indicate that such information cannot be summarized, the reasons why a summary cannot be provided: Provided, further, That if the Commission finds that a request for confidentiality is not warranted and if that party concerned is either unwilling to make the information public or to authorize its disclosure in generalized or summary form, the Commission may disregard such information unless it can be demonstrated to its satisfaction from appropriate sources that the information is correct. Section 11. Adjustment Plan - In the course of its investigation, the Commission shall issue appropriate notice to representatives of the concerned domestic industry or other parties, to submit an adjustment plan to import competition, within forty-five (45) days upon receipt of the notice, except when the Secretary certifies that the same is urgent, in which case the adjustment plan must be submitted within thirty (30) days. If the Commission makes an affirmative determination of injury or threat thereof, individual commitments regarding actions such persons and entities intend to take to

Food Availability Laws 551 facilitate positive adjustment to import competition shall be submitted to the Commission by any (a) firm in the domestic industry, (b) certified or recognized union or group of workers in the domestic industry, (c) local community, (d) trade association representing the domestic industry, or (e) other person or group of persons. Section 12. Determination of Serious Injury or Threat Thereof -In reaching a positive determination that the increase in the importation of the product under consideration is causing serious injury or threat thereof to a domestic industry producing like products or directly competitive products, all relevant factors having a bearing on the situation of the domestic industry shall be evaluated. These shall include, in particular, the rate and amount of the increase in imports of the products concerned in absolute and relative terms, the share of the domestic market taken by the increased imports, and changes in the level of sales, production, productivity, capacity utilization, profits and losses, and employment. Such positive determination shall not be made unless the investigation demonstrates, on the basis of objective evidence, the existence of

552 COMPENDIUM OF RTF LAWS the causal link between the increased imports of the product under consideration and serious injury or threat thereof to the domestic industry. When factors other than increased imports are causing injury, such injury shall not be attributed to increased imports. Section 13. Adoption of Definitive Measures - Upon its positive determination, the Commission shall recommend to the Secretary an appropriate definitive measure, in theform of: a) An increase in, or imposition of, any duty on the imported product; b) A decrease in or the imposition of a tariffrate quota (MAV) on the product; c) A modification or imposition of any quantitative restriction on the importation of the product into the Philippines; d) One or more appropriate adjustment measures, including the provision of trade adjustment assistance; e) Any combination of actions described in subparagraphs (a) to (d). The Commission may also recommend other actions, including the initiation of international negotiations to address the underlying cause of the increase of imports of the product, to alleviate the injury or threat thereof to the domestic industry, and to facilitate positive adjustment to import competition.

Food Availability Laws 553 The general safeguard measure shall be limited to the extent of redressing or preventing the injury and to facilitate adjustment by the domestic industry from the adverse effects directly attributed to the increased imports:Provided, however,That when quantitative import restrictions are used, such measures shall not reduce the quantity of imports below the average imports for the three (3) preceding representative years, unless clear justification is given that a different level is necessary to prevent or remedy a serious injury. A general safeguard measure shall not be applied to a product originating from a developing country if its share of total imports of the product is less than three percent (3%): Provided, however, That developing countries with less than three percent (3%) share collectively account for not more than nine percent (9%) of the total imports. The decision imposing a general safeguard measure, the duration of which is more than one (1) year, shall be reviewed at regular intervals for purposes of liberalizing or reducing its intensity. The industry benefiting from the application of a general safeguard measure shallbe required to show positive adjustment within the allowable period. A general safeguard measure shall

554 COMPENDIUM OF RTF LAWS be terminated where the benefiting industry fails to show any improvement, as may be determined by the Secretary. The Secretary shall issue a written instruction to the heads of the concerned government agencies to implement the appropriate general safeguard measure as determined by the Secretary within fifteen (15) days from receipt of the report. In the event of a negative final determination, or if the cash bond is in excess of the definitive safeguard duty assessed, the Secretary shall immediately issue, through the Secretary of Finance, a written instruction to the Commissioner of Customs, authorizing the return of the cash bond or the remainder thereof, as the case may be, previously collected as provisional general safeguard measure within ten (10) days from the date a final decision has been made:Provided,That the government shall not be liable for any interest on the amount to be returned. The Secretary shall not accept for consideration another petition from the same industry, with respect to the same imports of the product under consideration within one (1) year after the date of rendering such a decision. When the definitive safeguard measure is in the form of a tariff increase, such increase shall not be subject or limited to

Food Availability Laws 555 the maximum levels of tariff as set forth in Section 401 (a) of the Tariff and Customs Code of the Philippines. Section 14. Contents of the Report by the Commission -Based on its findings, the Commission shall submit to the Secretary: (a) the investigation report; (b) the proposed recommendations; (c) a copy of the submitted adjustment plan; and (d) the commitments made by the domestic industry to facilitate positive adjustment to import competition. The report shall also include a description of the short and long-term effects of the affirmative or negative recommendation, as the case may be, on the petitioner, the domestic industries, the consumers, the workers, and the communities where production facilities of such industry are located. The Commission, after submitting the report to the Secretary, shall make it available to the public except confidential information obtained under Section 10 and publish a summary in two (2) newspapers of general circulation. Section 15. Limitations on Actions - The duration of the period of an action taken under theGeneral Safeguard Provisions of this Act shall not exceed four (4) years. Such period shall include the period, if any, in which provisional safeguard relief under Section 8 was in effect.

556 COMPENDIUM OF RTF LAWS The effective period of any safeguard measure, including any extensions thereof under Section 19 may not, in the aggregate, exceed ten (10) years. (1) Any additional duty, or any duty imposed under this Section may be specific and/or ad valorem. It shall be in the amount necessary to prevent or redress or remedy the injury to the domestic industry; (2) If a quantitative restriction is used, such measure shall not reduce the quantity of imports below the level of a recent period which shall be theaverage of imports in the last three (3) representative years for which statistics are available, unless clear justification is given that a different level is necessary to prevent or remedy serious injury; (3) An action described in Section 13 (a), (b), or (c) that has an effective period of more than one (1) year shall be phased down at regular intervals within the period in which the action is in effect; (4) Within two (2) years after the expiration of the action, the Secretary shall not accept any further petition for the same article: Provided, however, That a safeguard measure with a duration of one hundred eighty (180) days or less may be applied again to the same product if:

Food Availability Laws 557 (i) At least one (1) year has elapsed since the date of introduction of the safeguard measure; and (ii) Such measure has not been applied on the same product more than twice in the five (5) year period immediately preceding the date of introduction of the measure. Section 16. Monitoring -So long as any action taken under Section 13 remains in effect, the Commission shall monitor developments with respect to the domestic industry, including the progress and specific efforts made by workers and firms in the domestic industry to make a positive adjustment to import competition. (1) If the initial application of action taken under Section 13 exceeds three (3) years, or if an extension of such action exceeds three (3) years, the Commission shall submit to the Secretary a report on the results of the monitoring, not later than the date which is the midpoint of the initial period, and of each such extension, during which the action is in effect. (2) The Commission, in the preparation of each monitoring report, shall conduct a hearing at which interested parties shall be given reasonable opportunity to be present, to present evidence, and to be heard.

558 COMPENDIUM OF RTF LAWS Section 17. Notice of General Safeguard Measure -The Secretary shall notify the concerned Committee on Safeguards of the World Trade Organization: (a) When initiating an action relating to serious injury or threat thereof and the reasons for it; (b) When adopting a provisional general safeguard measure following a positive preliminary determination; and (c) When applying or extending a definitive general safeguard measure following a positive final determination. Section 18. Reduction, Modification, and Termination of Action - Action taken under Section 13 may be reduced, modified, or terminated by the Secretary only after: (a) Taking into account the results of the monitoring indicated in the report submitted by the Commission under Section 16, he determines that: (i) No adequate efforts to make a positive adjustment to import competition have been undertaken by the domestic industry; and (ii) C hanged economic circumstances have impaired the effectiveness of action taken under Section13. (b) A majority of the representatives of the domestic industry submits to the Secretary, at least one (1) year before the

Food Availability Laws 559 expiration, a petition requesting such reduction, modification, or termination on the basis that the domestic industry has made a positive adjustment to import competition. If reduction, modification, or termination of action is being requested for an action that has been in effect for three (3) years or less, the petitioning industry shall submit its request to the Secretary. The Secretary shall refer the request to the Commission which shall conduct an investigation following the procedures under Section 9, to be completed within sixty (60) days from receipt of the request. The Commission shall submit a report to the Secretary who shall then take action after taking into consideration conditions under Section 16 (1) and (2), not later than thirty (30) days after receipt of the Commissions report. Section 19. Extension and Re-application of Safeguard Measure (1) Subject to the review under Section 16, an extension of the measure may be requested by the petitioner if the action continues to be necessary to prevent or remedy the serious injury and there is evidence that the domestic industry is making positive adjustment to import competition.

560 COMPENDIUM OF RTF LAWS (2) The petitioner may appeal to the Secretary at least ninety (90) days before the expiration of the measure for an extension of the period by stating concrete reasons for the need thereof and a description of the industrys adjustment performance and future plan. The Secretary shall immediately refer the request to the Commission. Following the procedures required under Section 9, the Commission shall then submit a report to the Secretary not later than sixty (60) days from its receipt of the request. Within seven (7) days from receipt of the report, the Secretary shall issue an order granting or denying the petition. In case an extension is granted, the same shall be more liberal than the initial application. Section 20. Evaluation of Effectiveness of Action -After termination of any action under Section 13, the Commission shall evaluate the effectiveness of the actions taken by the domestic industry in facilitating positive adjustment to import competition. The Commission shall hold a public hearing on the effectiveness of the action at which all interested parties shall be afforded opportunity to present evidence or testimony.

Food Availability Laws 561 CHAPTER Ill SPECIAL SAFEGUARD MEASURE FOR AGRICULTURAL PRODUCTS Section 21. Authority to Impose the Special Safeguard Measure - The Secretary of Agriculture shall issue a department order requesting the Commissioner of Customs, through the Secretary of Finance, to impose an additional special safeguard duty on an agricultural product, consistent with Philippine international treaty obligations, if: (a) Its cumulative import volume in a given year exceeds its trigger volume, subject to the conditions stated in this Act, in Section 23 below; or but not concurrently; and (b) Its actual c.i.f. import price is less than its trigger price subject to the conditions stated in this Act, in Section 24 below. Section 22. Initiation of Action Involving Special Safeguard Measure - Any person, whether natural or juridical, may request the Secretary to verify if a particular product can be imposed a special safeguard duty subject to the conditions set in Section 21 of this Act. The request shall include data which would show that the volume of imports of a particular product has exceeded its trigger volume or that the c.i.f. import price of a particular product has gone below its trigger price. The Secretary shall come up

562 COMPENDIUM OF RTF LAWS with a finding within five (5) working days from the receipt of a request. The Secretary may, motu proprio, initiate the imposition of a special safeguard measure following the satisfaction of the conditions for imposing the measure set in this Chapter. Section 23. Determination of Special Duty Based on the VolumeTest - The special safeguard duty allowed to be imposed on the basis of the volume test pursuant to Section 21 (a) of this Act shall be determined as follows: (a) The trigger volume referred to in Section 21 (a) of this Act is the amount obtained, after adding the change in the annual domestic consumption of the agricultural product under consideration, for the two (2) preceding years for which data are available, to: (i) One hundred twenty-five percent (125%) of the average annual volume of imports of the agricultural product under consideration in the three (3) immediately preceding years for which data are available, hereinafter referred to as the average import volume, if the market access opportunity is at most ten percent (10%); or (ii) One hundred ten percent (110%) of the average annual import volume, if the market access opportunity

Food Availability Laws 563 exceeds ten percent (10%) but is not more than thirty percent (30%); or (iii) One hundred five percent (105%) of the average annual import volume, if the market access opportunity exceeds thirty percent (30%): Provided, That if the change in the volume of domestic consumption mentioned above is not taken into account in computing the trigger volume, the trigger volume shall be equal to one hundred twenty-five percent (125%) of the average import volume for the immediate three (3) preceding years for which data are available, unless a clear justification is given that a different level is necessary to prevent or remedy serious injury:Provided, further,That the trigger volume shall at least be one hundred five percent (105%) of the average imports of the agricultural product under consideration. (b) The special safeguard duty to be imposed subject to the conditions stated under the volume test shall be appropriately set to a level not exceeding one-third of the applicable out-quota customs duty on the agricultural product under consideration in the year when it is imposed: Provided, That this duty shall only be maintained until the end of the

564 COMPENDIUM OF RTF LAWS year in which it is imposed: Provided, further,That this duty may bereduced or terminated in special casessuch aswhen a shortage of a particular agricultural product exists, as determined by the Secretary. (c) In transit volumes of imports of the agricultural product under consideration at the time the special safeguard duty is imposed shall be exempted from the additional duty. However, such volumes shall be counted in the computation of the cumulative volume of imports of the said agricultural product for the following year. Section 24. Determination of Special Safeguard Duty Based on thePrice Test -The additional duty allowed to be imposed on the basis of the price test pursuant to Section 21 (b) of this Act shall be determined as follows: (a) The trigger price referred to in Section 21 (b) of this Act is the average actual c.i.f. import price or relevant reference price of the agricultural product under consideration from 1986 to 1988, unless clear justification is given that a different reference price is necessary to prevent or remedy serious injury. The Secretary shall publish the list of trigger prices corresponding to each of the agricultural products covered by this Act, after the conduct of public hearings on the subject; and

Food Availability Laws 565 (b) The special safeguard duty to be imposed subject to the conditions stated under Section 21(b) of this Act shall be computed as follows: (i ) Zero, if the price difference is at most ten percent (10%) of the trigger price; or (ii) Thirty percent (30%) of the amount by which the price difference exceeds ten percent (10%) of the trigger price, if the said difference exceeds ten percent (10%) but is at most forty percent (40%) of the trigger price; or (iii) Fifty percent (50%) of the amount by which the price difference exceeds forty percent (40%) of the trigger price, plus the additional duty imposed under Section 24 (b)(ii), if the said difference exceeds forty percent (40%) but is at most sixty percent (60%) of the trigger price; or (iv) Seventy percent (70%) of the amount by which the price difference exceeds sixty percent (60%) of the trigger price, plus the additional duties imposed under Section 24 (b) (ii) and (b)(iii), if the said difference exceeds sixty percent (60%) and is at most seventy-five percent (75%) of the trigger price; or

566 COMPENDIUM OF RTF LAWS (v) Ninety percent (90%) of the amount by which the price difference exceeds seventy-five percent (75%) of the trigger price; plus the additional duties imposed under Section 24 (b)(ii), (b) (iii), and (b)(iv), if the said difference exceeds seventy-five percent (75%) of the trigger price. As far as practicable, a special safeguard measure determined under the provisions of this Section shall not be resorted to when the volume of the imported agricultural product under consideration is declining. Section 25. Agricultural Products Subject to Minimum Access VolumeCommitments -The special safeguard duty shall not apply to the volumes of the imported agricultural product under consideration that are brought into the country under the minimum access volume mechanism: Provided, however, That these volumes shall be included in computing the cumulative volume of imports of the said agricultural product pursuant to Section 21 (a) of this Act. Section 26. Perishable and Seasonal Agricultural Products- Shorter time periods and different reference prices may be used in determining the applicable special safeguard measure taking into account the special characteristics of perishable and seasonal agricultural imports.

Food Availability Laws 567 Section 27. Notice of Special Safeguard Measure -The Secretary shall make the administration of the safeguard measure transparent by giving notice in writing to the WTO Committee on Agriculture, in advance to the extent practicable, but in any event within ten (10) days from the implementation of such measure: Provided, however, That for perishable and seasonal agricultural products, notification shall be made from the first action in any period. The notice shall include relevant data or as may be deemed necessary, information and methods used in cases where changes in consumption volumes must be allocated to individual tariff lines subject to action under Chapter III of this Act. Where a special safeguard measure action is taken under the provisions of this Act, the Secretary shall consult with interested WTO members and provide all relevant information on the conditions of the application of such action. Section 28. Duration of Special Safeguard Measures -Thespecial safeguard measures for agricultural products shall lapse with the duration of the reform process in agriculture as determined in the WTO. Thereafter, recourse to safeguard measures shall be subject to the provisions on general safeguard measures as provided in Chapter II of this Act.

568 COMPENDIUM OF RTF LAWS CHAPTER IV SPECIAL PROVISIONS Section 29. Judicial Review - Any interested party who is adversely affected by the ruling of the Secretary in connection with the imposition of a safeguard measure may file with the Court of Tax Appeals, a petition for review of such ruling within thirty (30) days from receipt thereof: Provided, however, That the filing of such petition for review shall not in any way stop, suspend or otherwise toll the imposition or collection of the appropriate tariff duties or the adoption of other appropriate safeguard measures, as the case may be. The petition for review shall comply with the same requirements and shall follow the same rules of procedure and shall be subject to the same disposition as in appeals in connection with adverse rulings on tax matters to the Court of Appeals. Section 30. Penalty Clause - Any government official or employee who shall fail to initiate, investigate, and implement the necessary actions as provided in this Act and the rules and regulations to be issued pursuant hereto, shall be guilty of gross neglect of duty and shall suffer the penalty of dismissal from public service and absolute

Food Availability Laws 569 disqualification from holding public office. Section 31. Prohibition of Concurrent Recourse to SafeguardMeasures -There shall be no recourse to the use of the general safeguard measure under Chapter II of this Act concurrently with the special safeguard measure as provided for under Chapter III of this Act and vice-versa. Section 32. Issuance of Implementing Rules and Regulations -Within sixty (60) days after the effectivity of this Act, the Department of Agriculture and the Department of Trade and Industry in consultation with the Department of Finance, the Bureau of Customs, the National Economic and Development Authority, and the Tariff Commission, after consultations with domestic industries and with the approval of the Congressional Oversight Committee which is hereby created under this Act, shall promulgate the necessary rules and regulationsto implement this Act. Section 33. Oversight -There shall be a Congressional Oversight Committee composed of the Chairmen of the Committee on Trade and Industry, the Committee on Ways and Means, and the Committee on Agriculture of both the Senate and the House of Representatives to oversee the implementation of this Act.

570 COMPENDIUM OF RTF LAWS Section 34. Administrative System Support - Upon the effectivity of this Act, any sum as may be necessary for the Department of Agriculture, the Department of Trade and Industry, and the Tariff Commission to undertake their functions efficiently and effectively shall be included in the General Appropriations Act. The aforementioned government agencies are hereby authorized to collect such fees, charges, and safeguard duties that are deemed necessary. Fifty percent (50%) of the revenue collected from such fees, charges, and safeguard duties shall be set aside in a Remedies Fund which shall be earmarked for the use of these agencies in the implementation of remedies, including the safeguard measures. The remaining fifty percent (50%) shall be deposited under a special account to be created in the National Treasury and shall be earmarked for competitiveness enhancement measures for the industries affected by the increased imports. The disposition thereof shall be determined through the General Appropriations Act. Section 35. Assistance to Farmers and Fisherfolk - To safeguard and enhance the interest of farmers and fisherfolk, nothing in this Act shall in any manner affect the provisions

Food Availability Laws 571 of Republic Act No. 8435, otherwise known as the Agriculture and Fisheries Modernization Act. 36. Conditions for Application of Safeguard Measures -In the application of any safeguard measure under this Act, the following conditions must be observed: (1) All actions must be transparent and shall not allow any anti-competitive, monopolistic or manipulative business devise; and (2) Pursuant to the non-impairment clause of the Constitution, nothing in this Act shall impair the obligation of existing supply contracts. 37. Separability Clause - If any provision of this Act is held invalid, the other provisions of this Act not affected shall remain in force and effect. 38. Repealing Clause - All laws, decrees, rules and regulations, executive or administrative orders and such other presidential issuances as are inconsistent with any of the provisions of this Act are hereby repealed, amended or otherwise modified accordingly. 39. Effectivity Clause -This Act shall take effect fifteen (15) days following its complete publication in two (2) newspapers of general circulation or in the Official Gazette,whichever comes earlier.

Section

Section

Section

Section

572 COMPENDIUM OF RTF LAWS Republic of the Philippines Congress of thePhilippines Metro Manila Eleventh Congress First Special Session Begun and held in Metro Manila, on Monday, the twentyseventh day of July, nineteen hundred and ninety-eight. REPUBLIC ACT NO. 8751 AN ACT STRENGTHENING THE MECHANISMS FOR THE IMPOSITION OF COUNTERVAILING DUTIES ON IMPORTED SUBSIDIZED PRODUCTS, COMMODITIES OR ARTICLES OF COMMERCE IN ORDER TO PROTECT DOMESTIC INDUSTRIES FROM UNFAIR TRADE COMPETITION, AMENDING FOR THE PURPOSE SECTION 302, PART 2, TITLE II, BOOK I OF PRESIDENTIAL DECREE NO. 1464, OTHERWISE KNOWN AS THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled Section 1. Section 302, Part 2, Title II, Book 1 of Presidential Decree No. 1464, otherwise known as the Tariff and Customs Code of the Philippines, as amended, is hereby further amended to read as follows:

Food Availability Laws 573 Section 302. Countervailing Duty Whenever any product, commodity or article of commerce is granted directly or indirectly by the government in the country of origin or exportation, any kind or form of specific subsidy upon the production, manufacture or exportation of such product, commodity or article, and the importation of such subsidized product, commodity or article has caused or threatens to cause material injury to a domestic industry or has materially retarded the growth or prevents the establishment of a domestic industry as determined by the Tariff Commission (hereinafter referred to as the Commission) the Secretary of Trade and Industry, in the case of non-agricultural product, commodity or article, or the Secretary of Agriculture, in the case of agricultural product, commodity or article (both of whom are hereinafter simply referred to as the Secretary, as the case may be) shall issue a department order imposing a countervailing duty equal to the ascertained amount of the subsidy. The same levy shall be imposed on the like product, commodity or article thereafter imported to the Philippines under similar circumstances. The countervailing duty shall be in addition to any ordinary duties, taxes and charges imposed by law on such imported product, commodity or article.

574 COMPENDIUM OF RTF LAWS (A) Initiation of Action. - A countervailing action may be initiated by the following: (1) Any person, whether natural or juridical who has an interest to protect, by filing a verified petition for the imposition of a countervailing duty by or on behalf of the domestic industry; (2) The Secretary of Trade and Industry or the Secretary of Agriculture, as the case may be, in special circumstances where there is sufficient evidence of the existence of a subsidy, injury and causal link. (B) Requirements. - A petition shall be filed with the Secretary and shall be accompanied by documents, if any, which are reasonably available to the petitioner and which contain information supporting the facts that are essential to establish the presence of the elements for the imposition of countervailing duty and shall further state, among others; (1) The domestic industry to which the petitioner belongs and the particular domestic product, commodity or article or class of domestic product, commodity or article being prejudiced;

Food Availability Laws 575 (2) The number of persons employed, the total capital invested, the production and sales volume, and the aggregate production capacity of the domestic industry that has been materially injured or is threatened to be materially injured or whose growth or establishment has been materially retarded or prevented; (3) The name and address of the known importer, exporter, or foreign producer, the country of origin or export, the estimated aggregate or cumulative quantity, the port and the date of arrival, the import entry declaration of the imported product, commodity or article, as well as the nature, the extent and the estimated amount of the subsidy thereon and (4) Such other particulars, facts or allegations as are necessary to justify the imposition of countervailing duty on the imported product, commodity or article. A petition for the imposition of a countervailing duty shall be considered to have been made by or on behalf of the domestic industry if it is supported by those domestic producers whose

576 COMPENDIUM OF RTF LAWS collective output constitutes more than fifty percent (50%) of the total production of the like product produced by that portion of the domestic industry expressing either her support for or opposition to the application. However, an investigation shall be initiated only when domestic producers supporting the application account for at least twenty-five percent (25%) of the total production of the like product produced by the domestic industry. In cases involving an exceptionally large number of producers, degree of support or opposition may be determined by using statistically valid sampling techniques or by consulting their representative organizations. Within ten (10) days from his receipt of the petition or information, the Secretary shall review the accuracy and adequacy of the information to determine whether there is sufficient basis to justify the initiation of an investigation. If there is no sufficient basis to justify the initiation of an investigation, the Secretary shall dismiss the petition and shall properly notify the Secretary of Finance, the Commissioner of Customs and other parties concerned regarding such

Food Availability Laws 577 dismissal. The Secretary shall extend legal, technical and other assistance to the concerned domestic producers and their organizations at all stages of the countervailing action. (C) Notice to the Secretary of Finance. Upon his receipt of the petition, the Secretary shall, without delay, furnish the Secretary of Finance with a summary of the essential facts of the petition, and request the latter to immediately inform the Commissioner of Customs regarding such petition and to instruct him to gather and secure all import entries covering such allegedly subsidized product, commodity or article without liquidation. The Commissioner of Customs shall submit to the Secretary a complete report on the number, volume, and value of the importation of the allegedly subsidized product, commodity or article within ten (10) days from his receipt of the instruction from the Secretary of Finance, and to make similar additional reports every ten (10) days thereafter. (D) Notice to and Answer of Interested Parties. Within five (5) days from finding of the basis to initiate an investigation, the Secretary shall notify all interested parties, and shall furnish them

578 COMPENDIUM OF RTF LAWS with a copy of the petition and its annexes, if any. The interested parties shall, not later than thirty (30) days from their receipt of the notice, submit their answer, including such relevant evidence or information as is reasonably available to them to controvert the allegations of the petition. If they fail to submit their answer, the Secretary shall make such preliminary determination of the case on the basis of the facts and/or information available. The Secretary shall avoid, unless a decision has been made to initiate an investigation, any publicizing of the petition. However, after receipt of a properly documented petition and before proceeding to initiate an investigation, he shall notify the government of the exporting country about the impending investigation. (E) Preliminary Determination. - Within twenty (20) days from his receipt of the answer of the interested parties, the Secretary shall, on the basis of the petition of the aggrieved party and the answer of such interested parties and their respective supporting documents or information, make a preliminary determination on whether

Food Availability Laws 579 or not a prima facie case exists for the imposition of a provisional countervailing duty in the form of a cash bond equal to the provisionally estimated amount of subsidy. Upon finding of a prima faciecase, the Secretary shall immediately issue, through the Secretary of Finance, a written instruction to the Commissioner of Customs to collect the cash bond, in addition to the corresponding ordinary duties, taxes and other charges imposed by law on such product, commodity or article. The posting of a cash bond shall be required not earlier than sixty (60) days from the date of initiation of the investigation. The cash bond shall be deposited with a government depository bank and shall be held in trust for the respondent importer. The application of the cash bond shall not exceed four (4) months. The Secretary shall immediately transmit his preliminary findings together with the records of the case to the Commission for its formal investigation. (F) Termination of Investigation by the Secretary or the Commission. - The Secretary or the Commission, as the case may be, shall motu proprio terminate the investigation

580 COMPENDIUM OF RTF LAWS at any stage of the proceedings if the amount of subsidy is de minimis as defined in existing international trade agreements of which the Republic of the Philippines is a party; or where the volume of the subsidized imported product, commodity or article, actual or potential, or the injury is negligible. (G) Formal Investigation by the Commission - Immediately upon its receipt of the records of the case from the Secretary, the Commission shall commence the formal investigation and shall accordingly notify in writing all interested parties and, in addition, give public notice of such investigation in two (2) newspapers of general circulation. In the formal investigation, the Commission shall essentially determine: (1) The nature and amount of the specific subsidy being enjoyed by the imported product, commodity or article in question; (2) The presence and extent of the material injury or the threat thereof to, or the material retardation of the growth, or the prevention of the establishment of, the affected domestic industry; and (3) Th e existe nc e of a c a usa l relationship between the allegedly

Food Availability Laws 581 subsidized imported product, commodity or article and the material injury or threat thereof to, or the material retardation of the growth, or the prevention of the establishment of, the affected domestic industry. The Commission is hereby authorized to require any interested party to allow it access to, or otherwise provide necessary information to enable the Commission to expedite the investigation. In case any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period of time or significantly impedes the investigation, a final determination shall be made on the basis of the facts available. The formal investigation shall be conducted in a summary manner. No dilatory tactics nor unnecessary or unjustified delays shall be allowed, and the technical rules of evidence shall not be applied strictly. (H) Determination of the Existence of Subsidy. A subsidy is deemed to exist: (1) When the government or any public body in the country of origin or export of the imported product, commodity or article

582 COMPENDIUM OF RTF LAWS extends financial contribution to the producer, manufacturer or exporter of such product, commodity or article in the form of: (a) Direct transfer of funds such as grants, loans or equity infusion; or (b) Potential direct transfer of funds or assumption of liabilities such as loan guarantees; or (c) Foregone or uncollected government revenue that is otherwise due from the producer, manufacturer or exporter of the product, commodity or article: Provided, That the exemption of any exported product, commodity or article from duty or tax imposed on like product, commodity or article when destined for consumption in the country of origin and/ or export or the refunding of such duty or tax, shall not be deemed to constitute a grant of a subsidy:Provided, further, That should a

Food Availability Laws 583 product, commodity or article be allowed drawback by the country of origin or export, only the ascertained or estimated amount by which the total amount of duties and/or internal revenue taxes was discounted or reduced, if any, shall constitute a subsidy; or (d) Provision of goods or services other than general infrastructure; or (e) Purchases of goods from the producer, manufacturer or exporter, or (f) Pay ment s t o a f unding mechanism; or (g) Other financial contributions to a private body to carry out one or more of the activities mentioned in subparagraphs (a) to (f) above; or (h) Direct or indirect income or price support, and (2) When there is a benefit conferred. (I) Determination of Specific Subsidy - In the determination of whether or not a subsidy is specific, the following principles shall apply:

584 COMPENDIUM OF RTF LAWS (1) Where the government or any public body in the country of origin or export of the imported product, commodity or article explicitly limits access to a subsidy to certain enterprises, such subsidy shall be specific; (2) Where such government or public body through a law or regulation establishes objective criteria and conditions governing the eligibility for, and the amount of, a subsidy, specificity shall not exist:Provided, That the eligibilitv is automatic and that such criteria or conditions are strictly adhered to. Objective criteria shall mean those which are neutral, do not favor certain enterprises over others, and are economic in nature and horizontal in application, such as number of employees or size of enterprise; (3) In case a subsidy a ppe a rs to be non-specific according to subparagraphs (1) and (2) above, but there are reasons to believe that the subsidy may in fact be specific, factors that may be considered are: use of a subsidy program by a limited number

Food Availability Laws 585 of certain enterprises for a relatively longer period; granting of disproportionately large amounts of subsidy to certain enterprises; and exercise of wide and unwarranted discretion for granting a subsidy; and (4) A subsidy which is limited to certain enterprises located within a designated geographical region within the territory of the government or public body in the country of origin or export shall be specific. (J) Determination of lnjury. -- The presence and extent of material injury or threat thereof to a domestic industry, or the material retardation of the growth, or the prevention of the establishment of a nascent enterprise because of the subsidized imports, shall be determined by the Secretary or the Commission, as the case may be, on the basis of positive evidence and shall require an objective examination of: (1) The volume of the subsidized imports, that is, whether there has been a significant increase either absolute or relative to production or consumption in the domestic market;

586 COMPENDIUM OF RTF LAWS (2) The effect of the subsidized imports on prices in the domestic market for the like product, commodity or article, that is, whether there has been a significant price undercutting, or whether the effect of such imports is otherwise to depress prices to a significant degree or to prevent price increases, which otherwise would have occurred to a significant degree; (3) The effect of the subsidized imports on the domestic producers of the like product, commodity or article, including an evaluation of all relevant economic factors and indices having a bearing on the state of the domestic industry concerned, such as, but not limited to, actual and potential decline in output, sales, market share, profits, productivity, return on investments, or utilization of capacity. Factors affecting domestic prices: actual or potential negative effects on the cash flow, inventories, employment, wages, growth, ability to raise capital or investments and, in the case of agriculture, whether there has been an increased burden on the

Food Availability Laws 587 support programs of the national government; and (4) Factors other than the subsidized imports which at the same time are injuring the domestic industry such as: volumes and prices of nonsubsidized imports of the product, commodity or article in question; contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers; developments in technology and the export performance and productivity of the domestic industry. In determining threat of material injury, the Secretary or the Commission, as the case may be, shall decide on the basis of facts and not merely allegation, conjecture or remote possibility. The change in circumstances which would create a situation in which the subsidized imports would cause injury should be clearly foreseen and imminent considering such relevant factors as: (1) Nature of the subsidy in question and the trade effects likely to arise therefrom; (2) Significant rate of increase of subsidized imports into the domestic

588 COMPENDIUM OF RTF LAWS market indicating the likelihood of substantially increased importations; (3) Sufficient freely disposable, or an imminent substantial increase in, capacity of the exporter of such subsidized imported product, commodity or article indicating the likelihood of substantially increased subsidized imports to the domestic market, taking into account the availability of other markets to absorb the additional exports; (4) Whether these subsidized imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and will likely increase demand for further imports; and (5) Inventories of the product, commodity, or article being investigated. In the case where the effect of the subsidized import will materially retard the growth or prevent the establishment of a domestic industry, information on employment, capital investments, production and sales, and production capacity of said domestic industry can be augmented or substituted by showing

Food Availability Laws 589 through, a factual study, report or other data that an industry which has potential to grow domestically is adversely affected by the subsidized import. For this purpose, the Department of Trade and Industry for non-agricultural products and the Department of Agriculture for agricultural products, shall conduct continuing studies to identify and determine the specific industries, whether locally existing or not, which have the potential to grow or to be established domestically and whose growth or establishment will be retarded or prevented by a subsidized import. (K) Cumulation of Imports- When imports of products, commodities or articles from more than one (1) country are simultaneously the subject of an investigation for the imposition of a countervailing duty, the Secretary or the Commission, as the case may be, may cumulatively assess the effects of such imports only if : (1) The amount of subsidization established in relation to the imports from each country is more thande minimisas defined in existing international trade agreements of which the Republic of the Philippines is a party, and

590 COMPENDIUM OF RTF LAWS (2) The volume of such imports from each country is not negligible; and (3) A cumulative assessment of the effects of such imports is warranted in the light of the conditions of competition between the imported products, commodities or articles, and the conditions of competition between the imported products, commodities or articles and the like domestic products, commodities or articles. (L) Public Notices and Consultation Proceedings The Secretary or the Commission, as the case may be, shall make public notices and conduct consultation with the government of the exporting country when: (1) Initiating an investigation; (2) Concluding or suspending an investigation; (3) Making a preliminary or final determination; (4) Making a decision to accept an undertaking or the termination of an undertaking; and (5) Terminating a def init ive countervailing duty.

Food Availability Laws 591 (M) Voluntary Undertaking-- When there is an offer from any exporter of subsidized imports to revise its price, or where the government of the exporting country agrees to eliminate or limit the subsidy or take other measures to that effect, the Commission shall determine if the offer is acceptable and make the necessary recommendation to the Secretary. If the undertaking is accepted, the Secretary may advise the Commission to terminate, suspend or continue the investigation. The Secretary may also advise the Commission to continue its investigation upon the request of the government of the exporting country. The voluntary undertaking shall lapse if there is a negative finding of the presence of a subsidy or material injury. In theevent of a positive finding of subsidization and material injury, the undertaking will continue, consistent with its terms and the provisions of this section. (N) Final Determination and Submission of Report by the Commission- The Commission shall complete the formal investigation and submit a report of its findings to the Secretary within one hundred twenty (120) days from receipt of the records

592 COMPENDIUM OF RTF LAWS of the case:Provided, however, That it shall, before a final determination is made, inform all the interested parties of the essential facts under consideration which form the basis for the decision to impose a countervailing duty. Such disclosure should take place in sufficient time for the parties to defend their interests. (O) Imposition of Countervailing Duty - The Secretary shall, within ten (10) days from his receipt of an affirmative final determination by the Commission, issue a department order imposing the countervailing duty on the subsidized imported product, commodity or article. He shall furnish the Secretary of Finance with the copy of the order and request the latter to direct the Commissioner of Customs to cause the countervailing duty to be levied, collected and paid, in addition to any other duties, taxes and charges imposed by law on such product, commodity or article. In case of an affirmative final determination by the Commission, the cash bond shall be applied to the countervailing duty assessed. If the cash bond is in excess

Food Availability Laws 593 of the countervailing duty assessed, the remainder shall be returned to the importer immediately: Provided, That no interest shall be payable by the government on the amount to be returned. If the cash bond is less than the countervailing duty assessed, the difference shall not be collected. If the order of the Secretary is unfavorable to the petitioner, the Secretary shall, after the lapse of the period for appeal to the Court of Tax Appeals, issue through the Secretary of Finance a department order for the immediate release of the cash bond to the importer. (P) Duration and Review of Countervailing Duty- As a general rule, any imposition of countervailing duty shall remain in force only as long as and to the extent necessary to counteract a subsidization which is causing or threatening to cause material injury. However, the need for the continued imposition of the countervailing duty may be reviewed by the Commission when warranted,motu proprio or upon direction of the Secretary. Any interested party may also petition the Secretary for a review of the continued imposition of the countervailing duty:

594 COMPENDIUM OF RTF LAWS Provided, That at least six (6) months have elapsed since the imposition of the countervailing duty, and upon submission of positive information substantiating the need for a review. Interested parties may request the Secretary to examine: (1) whether the continued imposition of the countervailing duty is necessary to offset the subsidization; and/or (2) whether the injury will likely continue or recur if the countervailing duty is removed or modified. If the Commission determines that the countervailing duty is no longer necessary or warranted, the Secretary shall, upon its recommendation, immediately issue a department order terminating the imposition of the countervailing duty and shall notify all parties concerned, including the Commissioner of Customs through the Secretary of Finance, of such termination. Notwithstanding the provisions of the preceding paragraphs of this subsection, any countervailing duty shall be terminated on a date not later than five (5) years from the date

Food Availability Laws 595 of its imposition (or from the date of the most recent review if that review substantiated request by has covered both subsidization and material injury, unless the Commission has determined, in a review initiated at least six (6) months prior to the termination date upon the direction of the Secretary or upon a duly or on behalf of the domestic industry, that the termination of the countervailing duty will likely lead to the continuation or recurrence of the subsidization and material injury. The procedure and evidence governing the disposition of the petition for the imposition of countervailing duty shall equally apply to any review carried out under this subsection. Such review shall be carried out expeditiously and shall be concluded not later than ninety (90) days from the date of the initiation of such a review. (Q)Judicial Review - Any interested party who is adversely affected by the department order of the Secretary on the imposition of the countervailing duty may file with the order within thirty (30) days from his receipt of notice Court of Tax Appeals a petition for review of such thereof: Provided,however, That the filing of such petition for review

596 COMPENDIUM OF RTF LAWS shall not in any way stop, suspend or otherwise toll the imposition and collection of the countervailing duty on the imported product, commodity or article. The petition for review shall comply with the same requirements, follow the same rules of procedure, and be subject to the same disposition as in appeals in connection with adverse rulings on tax matters to the Court of Tax Appeals. (R) Definition of Terms - For purposes of this subsection, the term: (1) Domestic industry shall refer to the domestic producers as a whole of the like product, commodity or article or to those of them whose collective output of the product, commodity or article constitutes a major proportion of the total domestic production of those products except that when producers are related to the exporters or importers or are themselves importers of the allegedly subsidized product or a like product from other countries, the term domestic industry may be interpreted as referring to the rest of the

Food Availability Laws 597 producers. In case the market in the Philippines is divided into two or more competitive markets, the term domestic industry shall refer to the producers within each market although their production does not constitute a significant portion of the total domestic industry: Provided, That there is a concentration of subsidized imports into such a separate market: and Provided, further, That the subsidized imports are causing injury to the producers of all or almost all of the production within such market. (2) Interested parties shall include: (a) An exporter or foreign producer or the importer of a product subject to investigation, or the government of the exporting country or a trade or business association a majority of members of which are producers, exporters or importers of such product; (b) A producer of the like product in the Philippines or a trade a nd business

598 COMPENDIUM OF RTF LAWS association a majority of the members of which produce the like product in the Philippines; and (c) Labor unions that are representative of the industry coalitions of producers and/ or labor unions. (3) Like product shall mean a product, commodity or article which is identical, i.e., alike in all respects to the product, commodity or article or in the absence of such product, commodity or article, another product, commodity article which although not alike in all respects, has characteristics closely resembling those of the imported product, commodity or article under consideration. (S) An inter-agency committee composed of the Secretaries of Trade and Industry, Agriculture, and Finance, Chairman of the Tariff Commission, and the Commissionerof Customs shall promulgate all rules and regulations necessary for the effective implementation of this section. Section 2. Administrative Support - Upon the effectivity of this Act, the Departments of Trade and Industry and and Agriculture

Food Availability Laws 599 and the Tariff Commission shall ensure the efficient and effective implementation of the provisions of this Act by creating a special unit within each agency that will undertake the functions relative to the disposition of countervailing cases. All countervailing duties collected shall be earmarked for the strengthening of the capability of the Departments of Trade and lndustry and Agriculture and the Tariff Commission to undertake their responsibilities under this Act. Additional funding shall come from fees and charges which the aforementioned government agencies are authorized to collect under this Act. Section 3. Separability Clause - If any of the provisions of this Act is declared invalid by a competent court, the remainder of this Act or any provision not affected by such declaration of invalidity shall remain in force and effect. Section 4. Repealing Clause - All laws, decrees, ordinances, rules and regulations, executive or administrative orders, and such other presidential issuances as are inconsistent with any of the provisions of this Act are hereby repealed, amended or otherwise modified accordingly. Section 5. Effectivity Clause - This Act shall take effect after fifteen (15) days following its publication in at least two (2) newspapers of general circulation.

600 COMPENDIUM OF RTF LAWS Republic of the Philippines Congress of the Philippines Metro Manila Thirteenth Congress Third Regular Session

Begun and held in Metro Manila, on Monday, the twentyfourth day of July, two thousand six. Republic Act No. 9367 January 12, 2007 AN ACT TO DIRECT THE USE OF BIOFUELS, ESTABLISHING FOR THIS PURPOSE THE BIOFUEL PROGRAM, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES. Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. Short Title- This act shall be known as the Biofuels Act of 2006. Section 2. Declaration Policy- It is hereby declared the policy of the State to reduce dependence on imported fuels with due regard to the protection of public health, the environment, and the natural ecosystems consistent with the countrys sustainable economic growth that would expand opportunities for livelihood by mandating the use of biofuels as a measure to:

Food Availability Laws 601 a) Develop and utilize indigenous renewable and sustainable-sources clean energy sources to reduce dependence on imported oil. b) Mitigate toxic and greenhouse gas (GSG) emissions; c) Increase rural employment and income; and d) Ensure the availability of alternative and renewable clean energy without any detriment to the natural ecosystem, biodiversity and food reserves of the country. Section 3. Definition of terms - As used in this act, the following term shall be taken to mean as follows: a) AFTA- shall refer to the ASIAN Free Trade Agreement initiated by the Association of South East Asian Nation; b) Alternative Fuel Vehicle/Engine shall refer to vehicle/engines that use alternative fuels such as biodiesel, bioethanol, natural gas, electricity, hydrogen and automotive LPG instead of gasoline and diesel; c) Bioethanol fuel - shall refer to ethanol (C2H30H) produced from feedback and other biomass. d) Biodiesel - shall refer to Fatty Acid Methyl Ester (FAME) or mono-alkyl ester derived from vegetable oil, or animal fats

602 COMPENDIUM OF RTF LAWS and other biomass-derived oils that shall be technically proven and approved by the DOE for use in diesel engines, with quality specifications in accordance with the Philippine National Standards (PNS) Bioethanol fuels - shall refer to the hydrous and anhydrous bioethanol suitably denatured for use as motor fuel with quality specifications in accordance with the PNS; Biofuel - shall refer to the bioethanol and biodiesel and other fuels made from biomass and primarily used for motive, thermal power generation, with quality specifications in accordance with PNS; Biomass - shall refer to any organic matter, particularly cellulosic or ligno-cellulosic matter, which is available on a renewable or recurring basis, including trees, crops and associated residues, plant fiber, poultry litter and other animal wastes, industrial wastes and biodegradable component of solid waste; DA - shall refer to the Department of Agriculture created under Executive Order No. 116, as amended; Diesel - shall refer to the refined petroleum distillate, which may contain small amount of hydrocarbon or nonhydrocarbon additives to improve ignition quality

e)

f)

g)

h)

i)

Food Availability Laws 603 or other characteristic, suitable for compression ignition engine and other suitable types of engines with quality specifications in accordance with PNS; j) DENR - shall refer to the Department of Environment and Natural Resources created under Executive No. 192, as amended; k) DOE - shall refer to the Department of Energy created under Republic Act No. 7638, as amended; l) DOLE - shall refer to the Department of Labor and Employment created under Executive Order No. 126, as amended; m) DOF- shall refer to the Department of Finance created under Administrative Orders No. 127 and 127-A; n) DOST - shall refer to the Department of Science and Technology created under Republic Act no. 2067 o) DOTC - shall refer to the Department of Transportation and Communication created under Executive Order No. 125A, as amended; p) DTI - shall refer to the Department of Trade and Industry created under Executive Order No. 133; q) Feedstock- shall refer to the organic sources such as molasses, sugarcane, cassava, coconut, jatropha, sweet sorghum or other biomass used in the production of biofuels;

604 COMPENDIUM OF RTF LAWS r) Gasoline shall refer to volatile mixture of liquid hydrocarbon, generally containing small amounts of additives suitable for use as fuel in spark-ignition internal combustion engines with quality specifications in accordance with the PNS; s) Motor fuel- shall refer to all volatile and inflammable liquids and gas produced, blended or compounded for the purpose of, or which are suitable or practicable for, operating motor vehicle; t) MTBE - shall refer to Methyl Tertiary Butyl Ether; u) NBB or Board - shall refer to the National Biofuel Board created under Section 8 of this Act ; v) Oil Company - shall refer to any entity that distributes and sells petroleum fuel products; w) Oxygenate- shall refer to substances, which, when added to gasoline, increase the amount of oxygen in that gasoline blend; x) PNS shall refer to the Philippine National Standard; consistent with section 26 of R.A. No. 8749 otherwise known as the Philippine Clean Air Act of 1999; y) Renewable Energy Sources - shall refer to energy sources that do not have an upper limit on the total quantity to be used. Such resources are renewable on a regular basis; and

Food Availability Laws 605 z) WTO - shall refer to the World Trade Organization. Section 4. Phasing Out of the Use of Harmful Gasoline Additives and/or Oxygenates Within six months from effectivity of this Act, the DOE, according to duly accepted international standards, shall gradually phase out the use of harmful gasoline additives such as, but not limited to MTBE Section 5. Mandatory Use of Biofuels Pursuant to the above policy, it is hereby mandated that all liquid fuels for motors and engines sold in the Philippines shall contain locally-sourced biofuel components as follows: 5.1 Within two years from the effectivity of this Act, at least five percent (5%) bioethanol shall comprise the annual total volume of gasoline fuel actually sold and distributed by each and every oil company in the country; subject to requirement that all bioethanol blended gasoline shall contain a minimum of five percent (5%) bioethanol fuel by volume.Provided, that ethanol blend conforms to PNS. 5.2 Within four years from the effectivity of this Act, the NBB created under this Act is empowered to determine the feasibility thereafter recommend to DOE to mandate a minimum of ten percent(10%) blend of bioethanol by volume into all gasoline fuel distributed

606 COMPENDIUM OF RTF LAWS and sold by each and every oil company in the country. In the event of supply shortage of locallyproduced bioethanol during the fouryear period, oil companies shall be allowed to import bioethanol but only to the extent of the shortage as may be determined by NBB. 5.3 Within three months from the effectivity of this Act, a minimum of one percent (1%) biodiesel by volume shall be blended into all diesel engine fuels sold in the country:ProvidedThat the biodiesel blend conforms to PNS for biodiesel. Within two years from the effectivity of this Act, the NBB created under this Act is empowered to determine the feasibility and thereafter recommend to DOE to mandate a minimum of two percent (2%) blend of biodiesel by volume which may be increased taking into account considerations including but not limited to domestic supply and availability of locally-sourced biodiesel component. Section 6. Incentive Scheme T o encourage investments in the production, distribution and use of locallyproduced biofuels at and above the minimum mandated blends, and without prejudice to enjoying applicable incentives and benefits under existing laws, rules and regulations, the following additional incentives are hereby provided under this Act.

Food Availability Laws 607 a) Specific tax The specific tax on local or imported biofuels component, per liter of volume shall be zero (0). The gasoline and diesel fuel component, shall remain subject to the prevailing specific tax rate. b) Value Added Tax The sale of raw material used in the production of biofuels such as, but not limited to, coconut, jatropha, sugarcane, cassava, corn, and sweet sorghum shall be exempt from the value added tax. c) Water Effluents All water effluents, such as but not limited to distillery slops from the production of biofuels used as liquid fertilizer and for other agricultural purposes are considered reuse, and are therefore, exempt from wastewater charges under the system provided under section 13 of R.A No. 9275, also known as the Philippine Clean Water Act: Provided, however, That such application shall be in accordance with the guidelines issued pursuant to R.A. No. 9275, subject to the monitoring and evaluation by DENR and approved by DA. d) Financial Assistance Government financial institutions, such as the Development Bank of the Philippines, Land Bank of the Philippines,

608 COMPENDIUM OF RTF LAWS Quedancor and other government institutions providing financial services shall, in accordance with and to the extent by the enabling provisions of their respective charters or applicable laws, accord high priority to extend financing to Filipino citizens or entities, at least sixty percent (60%) of the capital stock of which belongs to citizens of the Philippines that shall engage in activities involving production storage, handling and transport of biofuel feedstock, including the blending of biofuels with petroleum, as certified by the DOE. Section 7. Powers and Functions of the DOE In addition to its existing powers and functions, the DOE is hereby mandated to take appropriate and necessary actions to implement the provisions of this Act. In pursuance thereof, it shall within three months from effectivity of this Act: a) Formulate the implementing rules and regulations under Section 15 of this Act; b) Prepare the Philippines Biofuel program consistent with the Philippine Energy Plan and taking into consideration the DOEs existing biofuels program; c) Establish technical fuel quality standards for biofuels and biofuel-blended gasoline and diesel which comply with the PNS. d) Establish guidelines for the transport, storage and handling of biofuels;

Food Availability Laws 609 e) Impose fines and penalties against persons or entities found to have committed any of the prohibited acts under Section 12 (b) to (e) of this Act; f) Stop the sale of biofuels and biofuelblended gasoline and diesel that are not in conformity with the specifications provided for under Section 5 of this Act, the PNS and corresponding issuances of the Department; and g) Conduct an information campaign to promote the use of biofuels Section 8. Creation of the National Biofuel Board (NBB) The National Biofuel Board is hereby created. It shall be composed of the Secretary of the DOE as chairman and the Secretaries of the DTI, DOST, DA, DOF, DOLE, and the Administrators of the PCA, and the SRA, as members. The DOE Secretary, in his capacity as Chairperson, shall, within one month from the effectivity of this Act, convene the NBB. The Board shall by assisted by a Technical Secretariat attached to the Office of the Secretary of the DOE. It shall be headed by a Director to be appointed by the Board. The number of staff of the Technical Secretariat and the corresponding positions shall be determined by the Board, subject to approval by the Department of Budget and Management (DBM) and existing civil services rules and regulations.

610 COMPENDIUM OF RTF LAWS Section 9. Powers and Functions of the NBB The NBB shall have the following powers and functions: a) Monitor the implementation of, and evaluate for further expansion, the National Biofuel Program (NBP) prepared by the DOE pursuant to Section 7 (b) of this Act; b) Monitor the supply and utilization of biofuels and biofuel-blends and recommend appropriate measures in cases of shortage of feedstock supply for approval of the Secretary of DOE. For this purpose: 1. The NBB is empowered to require all entities engaged in the production, blending and distribution of biofuels to submit reports of their actual and projected sales and inventory of biofuels, in a format to be prescribed for this purpose; and 2. The NBB shall determine availability of locally-sourced biofuels and recommend to DOE the appropriate level or percentage of locally sourced biofuels to the total annual volume of gasoline and diesel sold and distributed in the country. c) Review and recommend to DOE the adjustment in the minimum mandated biofuel blends subject to the availability of

Food Availability Laws 611 locallysourced biofuels:Provided, That the minimum blend may be decreased only within the first four years from the effectivity of this Act. Thereafter, the minimum blends of the five percent (5%) and two percent (2%) for bioethanol and biodiesel respectively, shall not be decreased; d) Recommend to DOE a program that will ensure the availability of alternative fuel technology for vehicles, engine and parts in consonance with the mandated minimum biofuel-blends, and to maximize the utilization of biofuels including other biofuels; e) Recommend to DOE the use of biofuel blends in air transport taking into account safety and technical viability; and f) Recommend specific actions to be executed by the DOE and other appropriate government agencies concerning the implementation of the NBP, including its economic, technical, environment, and social impact. Section 10. Security of Domestic Sugar Supply- Any provision of this Act to the contrary notwithstanding, the SRA, pursuant to its mandate, shall, at all times, ensure that the supply of sugar is sufficient to meet the domestic demand and that the price of sugar is stable.

612 COMPENDIUM OF RTF LAWS To this end, the SRA shall recommend and the proper agencies shall undertake the importation of sugar whenever necessary and shall make appropriate adjustments to the minimum access volume parameters for sugar in the Tariff and Custom Code. Section 11. Role of Government Agencies To ensure the effective implementation of the NBP, concerned agencies shall perform the following functions: a) The DOF shall monitor the production and importation of biofuels through the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC); b) The DOST and the DA shall coordinate in identifying and developing viable feedstock for the production of biofuels; c) The DOST, through the Philippine Council for Industry and Energy Research and Development (PCIERD), shall develop and implement a research and development program supporting a sustainable improvement in biofuel production and utilization technology. It shall also publish and promote related technologies developed locally and abroad. d) The DA through its relevant agencies shall: (1) Within three months from effectivity of this Act, develop a national program

Food Availability Laws 613 for the production of crops for use as feedstock supply. For this purpose, the Administrators of the SRA and the PCA, and other DA-attached agencies shall, within their authority develop and implement policies supporting the Philippine Biofuel Program and submit the same to the Secretary of the DA for consideration; (2) Ensure increased productivity and sustainable supply of biofuel feedstocks. It shall institute a program that would guarantee that a sufficient and reliable supply of feedstocks is allocated for biofuel production; and (3) Publish information on available and suitable areas for cultivation and production of such crops. e) The DOLE shall: (1) Promote gainful livelihood opportunities and facilitate productive employment through effective employment services and regulation; (2) Ensure the access of workers to productive resources and social coverage; and (3) Recommend plans, policies and programs that will enhance the social impact of the NBP. f) The Tariff Commission, in coordination with the appropriate government

614 COMPENDIUM OF RTF LAWS agencies, shall create and classify a tariff line for biofuels and biofuel-blends in consideration of WTO and AFTA agreements; and g) The local government units (LGU) shall assist the DOE in monitoring the distribution sale in use of biofuels and biofuel-blends Section 12. Prohibited Acts- The following acts shall be prohibited: a) Diversion of biofuels, whether locally produced or imported, to purposes other than those envisioned in this Act; b) Sale of biofuelblended gasoline or diesel that fails to comply with the minimum biofuelblend by volume in violation of the requirement under Section 5 of this Act; c) Distribution, sale and use of automotive fuel containing harmful additives such as, but not limited to, MTBE at such concentration exceeding the limits to be determined by the NBB. d) Noncompliance with the established guidelines of the PNS and DOE adopted for the implementation of this Act; and e) False labeling of gasoline, diesel, biofuels and biofuel-blended gasoline and diesel. Section 13. Penal Provisions- Any person, who willfully aids or abets in the commission of a crime

Food Availability Laws 615 prohibited herein or who causes the commission of any such act by another shall be liable in the same manner as the principal. In the case of association, partnerships or corporations, the penalty shall be imposed on the partner, president, chief operating officer, chief executive officer, directors or officers responsible for the violation. The commission of an act enumerated in Section 12, upon conviction thereof, shall suffer the penalty of one year to five years imprisonment and a fine ranging from a minimum of One million pesos (P 1,000,000.00) to Five million pesos (P5,000,000.00). In addition, the DOE shall confiscate any amount of such products that fail to comply with the requirements of Sections 4 & 5 of this Act, and implementing issuance of the DOE. The DOE shall determine the appropriate process and the manner of disposal and utilization of the confiscated products. The DOE is also empowered to stop and suspend the operation of businesses for refusal to comply with any order or instruction of the DOE Secretary in the exercise of his functions under this Act. Further, the DOE is empowered to impose administrative fines and penalties for any violation of the provisions of this Act, implementing rules and regulations and other issuance relative to this Act.

616 COMPENDIUM OF RTF LAWS Section 14. Appropriations- Such sums as may be necessary for the initial implementation of this Act shall be taken from the current appropriations of the DOE. Thereafter, the fund necessary to carry out provisions of this Act shall be included in the annual General Appropriation Act. Section 15. Implementing Rules and Regulations (IRR).The DOE, in consultation with the NBB, the stakeholders and the other agencies concerned, shall within three months from effectivity of this Act, promulgate the IRR of this Act:Provided, That prior to its effectivity, the draft of the IRR shall be posted at the DOE web site for at least one month, and shall be published in at least two newspapers of general circulation. Section 16. Congressional Oversight Committee- Upon effectivity of this act, a Congressional Committee, hereinafter referred to as the Biofuels Oversight Committee, is hereby constituted. The biofuels oversight committee shall be composed of (14) members, with the Chairmen of the Committees on Energy of, both Houses of Congress as co-chairmen. The Chairmen of the Committee on Agriculture and Trade and Industry shall beex officiomembers. An additional four members from each House, shall be designated by the Senate President and Speaker of the House of Representatives

Food Availability Laws 617 respectively. The minority shall be entitled to pro-rata representation but shall have at least one representative in the Biofuel Oversight Committee. Section 17. Benefits of Biofuel Workers - This Act shall not in any way result in the forfeiture or diminution of the existing benefits enjoyed by the sugar workers as prescribed under R.A. No. 6982, or the Sugar Amelioration Act of 1991, in case sugarcane shall be used as feedstock. The NBB shall establish a mechanism similar to that provided under the Sugar Amelioration Act of 1991 for the benefit of other biofuel workers. Section 18. Special Clause- This act shall not be interpreted as prejudicial to clean development mechanism (CDM) projects that cause carbon dioxide (CO2) and greenhouse gasses (GHG) emission reductions by means of biofuel use. Section 19. Repealing Clause- The provision of Section 148 (d) of R.A. No. 8424, otherwise known as Tax Reform Act. of 1997, and all other laws, presidential decrees or issuances, executive orders, presidential proclamations,. rules and regulations or part thereof inconsistent with the provisions of this Act, are hereby repealed, modified or amended accordingly. Section 20. Separability Clause- If any provision of this Act is declared unconstitutional the same

618 COMPENDIUM OF RTF LAWS shall not affect the validity and effectivity of the other provisions hereof. Section 21. Effectivity- This act shall take effect fifteen (15) days after publication in at least two newspapers of general circulation. Approved, JOSE DE VENECIA JR. Speaker of the House of Representatives MANNY VILLAR President of the Senate This Act which is a consolidation of Senate Bill No. 2226 and House Bill No. 4629 was finally passed by the Senate and the House of Representatives on November 29, 2006. ROBERTO P. NAZARENO Secretary General House of Represenatives OSCAR G. YABES Secretary of Senate Approved: January 12, 2007 GLORIA MACAPAGAL-ARROYO President of the Philippines

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