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Speaker, House Agri chair team up to fight rice problem
12 April 2008 02:03:40 PM

Responding to the International Rice Research Institute (IRRI) projection of a prolonged rice problem until 2010, a twin measure - one that would promote food production through corporate farming and one that would impose higher penalties to hoarders - will be filed early next week by no less than Speaker Prospero C. Nograles and the chair of the House Committee on Agriculture, Palawan Rep. Abraham "Baham" Mitra as co-authors.

With both the Speaker and the head of the committee which would deliberate on the measures teaming up as co-authors, the swift passage of these two bills in the House of Representatives is forthcoming, Speaker Nograles said, adding that these measures will be included in the House legislative priorities.

"The projection of the IRRI, the world's leading authority on rice, is really something that we should be worried about. We have to put the necessary safety nets to protect us from this prolonged global rice problem," Nograles said.

Mitra, also one of the leading proponents of corporate farming, on the other hand said that the twin proposals will not only lay down the necessary safety nets to dodge IRRI's rice scenario but it would also provide a long-term formula to ensure food security.

"One bill promotes food production and the other adds more teeth on our present laws against hoarders who are also to be blamed on our present rice problem. These two measures will hopefully provide us with a long-term formula in promoting food security," Mitra said.

Under the proposed bill entiled "An Act promoting corporate farming and providing incentive thereof," Nograles and Mitra seeks to require the country’s most profitable corporations to engage in agricultural production to feed their own employees.

"In addition, corporations and other business entities shall be required to engage in corporate farming with rice as their primary crop. Vast tracks of unused public lands can be tapped for such corporate farms. Corporations can also enter into joint venture agreements with farmer beneficiaries of agrarian reform communities. As such, employers will not only be able to feed their own employees and but will ensure provide amply supply to local consumers," the proposed bill's explanatory note stated.

In order to encourage the participation of the country's top corporations, the bill seeks to advance a two-pronged approach to facilitate policies related to corporate farming.

The first one involves the adjustment of the regulatory regime to reduce the transaction costs for stakeholders to enter in such contractual arrangements, and second is to provide the right incentive environment to encourage corporate farming.

The regulatory adjustments to create a desirable policy environment for corporate farming include reducing/exempting certain import taxes, removing import restrictions, particularly on farm inputs. Moreover, government support to reduce transaction cost in drafting, negotiating and enforcing contracts is considered critical in creating the "right" contract environment, Nograles and Mitra said in their explanatory note.

Under the bill's proposed incentive package, domestic corporations and partnerships who shall participate in the corporate farming initiative shall be entitled to tax incentives covering all aspects of their operations germane to corporate farming activities. These include the following:

  • import duties and quotas on the importation of agricultural inputs particularly feeds, fertilizers, agricultural machineries, and other agricultural implements as provided under RA No. 9281;
  • Value-added tax (VAT) input tax credits;
  • income taxes from rice production and dividends;
  • capital gains on the sale and/or transfer of idle lands to be developed into lands for rice production under cooperative farming.


The bill also proposes that the "National Government shall appropriate ten percent (10%) to fifteen percent (15%) out of the total loanable funds of all locally-based banks, both private and government-owned or controlled and irrespective of size, to be utilized as source of financing for corporate farming."

"Corporate farming systems help eliminate the chain of middlemen and brings the producers and processors face-to-face. In the long-run, it leads to to better allocative efficiency, induces higher private investment in agriculture, and results in higher outputs, income and exports," Nograles and Mitra stated.

Together with the corporate farming bill is the measure entitled "An Act granting reward for persons who could provide information that will help in identification of rice hoarders,recovery of hoarded rice, and prosecution of rice hoarders."

Under this proposal which seeks to establish an effective whistleblowing scheme against rice hoarders, whistleblowers of rice hoarding operations can be entitled to at least 10% of the goods recovered and confiscated by the National Food Authority (NFA).

The payment of the reward will be subject to certain conditions. These conditions include:
  1. the information provided by the whistleblower being corroborated by material and physical evidence; and
  2. the information provided is substantial enough to ensure the recovery of the hoarded goods.


"The Philippines must take urgent steps to address this gap and achieve genuine food security. Taking decisive action against rice hoarders is a major step towards ensuring that the nation becomes rice-secure," Nograles and Mitra said.