EXECUTIVE ORDER NO. 976 August 1, 1984
PROVIDING FOR AN EXPANDED YELLOW CORN PRODUCTION ASSISTANCE PROGRAM AND FOR OTHER PURPOSES
WHEREAS, under the New Republic, national development shall be pursued with renewed dedication and greater determination through a more efficient, effective, and economical government;
WHEREAS, the increased production of yellow corn has become of even critical importance to the country, both in terms of reducing if not eliminating present imports of over $150 million of feed grains annually for animal feed requirements, as well as for the generation of exports;
WHEREAS, the existing program for corn production may still be improved upon by way of extending financial and other incentives to those who convert agricultural land presently used for other purposes to yellow corn production, especially excess or marginal sugar lands;
WHEREAS, it is desirable to utilize a gradual approach involving the various incentive options, initially to a limited number of provinces without prejudice to the eventual expansion of coverage;
WHEREAS, a successful expanded yellow corn production involving the various incentive options, initially to a liduction of similar crops such as soy beans, in order that self-sufficiency in animal feed requirements may be ultimately achieved; and
WHEREAS, under Presidential Decree No. 1416 as amended, the President is empowered to undertake such organizational and related improvements as may be appropriate in the light of changing circumstances and new developments;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution and the authority vested in me by Presidential Decree No. 1416 as amended, do hereby order and ordain:
Sec. 1. Statement of Policy. It is hereby declared the policy of the State to develop self-sufficiency in domestic agricultural production of food and feed grain requirements, such as yellow corn, and in addition to stimulate the export of such agricultural produce. The Government and its instrumentalities and agencies shall extend its full assistance and support, and employ its human, technical, and financial resources efficiently and effectively toward the attainment of this policy.
Sec. 2. The Expanded Yellow Corn Production Program. The basic objective of the expanded yellow corn production program shall be to increase significantly and in as short a time as possible the domestic production of yellow corn, through (a) improved productivity of existing corn land, (b) the development of idle land, and particularly (c) through the conversion of agricultural land presently used for other crops, such as excess sugar land and the intercropping with yellow corn of land planted to other crops. The incentives to be provided shall be in the form of financial and similar assistance, basically through loans, (a) for the procurement of input requirements of farmers, (b) for the marketing of their produce, and (c) for post-harvest financing and the provision of appropriate service facilities. The expanded yellow corn production program shall be in addition to the existing Masagana and Maisagana programs which shall continue to be in full force and effect.
There is hereby established a Yellow Corn Fund, which shall be a revolving loan fund, and which shall be used to augment the financial resources required for the expansion of the yellow corn production program, in accordance with the alternative approaches indicated hereunder. The Fund shall continue to be used for the purposes for which it is herein established, until such time as it may be deemed no longer necessary for such purposes as determined by the President, upon the recommendation of the National Food and Agriculture Council.
Upon recommendation of the National Food and Agriculture Council, the President may extend the coverage of the expanded yellow corn production program and the availability of the Yellow Corn Fund to such other animal feed and food grains as may be deemed desirable and in the national interest.
Sec. 3. The Responsibility of NFAC. The National Food and Agriculture Council (NFAC) shall formulate the necessary policies and general programs for the expanded yellow corn production program. It shall formulate the implementing guidelines which shall include but not be limited to the permissible use of loan proceeds, the criteria for farmers/planter/beneficiary selection and for priority target areas, and the specific functions and responsibilities of each of the participating agencies in the implementation of the program.
The Minister of Agriculture and Food as NFAC Chairman shall oversee and coordinate the implementation of the program, as well as establish and execute, where called for, the necessary supportive policies and sub-programs when the Council itself is not in session. With the approval of the President, the Minister of Agriculture and Food shall determine the allocation of available monies of the Yellow Corn Fund for distribution among the various selected participating provinces.
At the provincial level, the Provincial Agricultural Officer shall be responsible for coordinating and monitoring the progress of the various assistance options of the expanded yellow corn production program, including the compilation of the appropriate statistics and the evaluation of the alternative programs.
Sec. 4. Scope of the Program. Initially, those provinces with the greatest potential for an immediate increase in yellow corn production such as those provinces with available excess sugar lands, are hereby selected for immediate implementation of the program, without prejudice to further expansion of coverage as the need arises. These provinces are Batangas, Bukidnon, Cagayan, Camarines Sur, Davao del Sur, Iloilo, Isabela, Maguindanao, Negros Occidental, Negros Oriental, North Cotabato, Pampanga, Pangasinan, South Cotabato, Sultan Kudarat, and Tarlac.
There will be three major options or conduits for availing of assistance from the Yellow Corn Fund, as follows: (a) those under, the institutional endusers and suppliers assistance program, (b) those under the National Food Authority assistance program, and (c) those under the banking system assistance program.
NFAC shall prepare coordinated and consistent general guidelines for the three conduit programs; provided, that adequate safeguards shall be provided against duplicative financing for the same yellow corn production venture, although the use of various modes of financial assistance for different aspects of the same production venture may be considered; provided, further, that the relative implicit and explicit financial incentives offered under each alternative conduit program shall be as equal as possible, so that any subsequent assessment of the relative efficacy of the various approaches shall not have been affected by unequal financial incentives; provided, further, that the implementing agencies for the three conduit programs as well as the industry representatives concerned shall have been consulted; and provided, finally, that the incentives formulated for the expanded yellow corn and production program shall also be applicable for the existing Maisagana programs.
Sec. 5. The Endusers/Suppliers Assistance Program. Under such guidelines as may be stipulated by NFAC in consultation with the appropriate regulatory agencies and industry associations concerned, the various local institutional endusers of yellow corn as well as the various local input suppliers for yellow corn production, hereinafter referred to collectively as endusers/suppliers, may avail of the Yellow Corn Fund. The Ministry of Agriculture and Food shall be primarily responsible for the implementation of the endusers/suppliers assistance.
The extension of credit from the Fund shall be to the participating endusers/suppliers, which may have undertaken extensions of credit to the appropriate farmers, The repayment of loans made to the endusers/suppliers from the Fund shall be the responsibility of the endusers/suppliers, and shall not be dependent in turn upon their efficiency of collections from the farmers.
The NFAC guidelines shall indicate, among others, the permissible forms of contracts between endusers/suppliers and farmers, for purposes of access to the Fund. Participating institutional endusers and input suppliers shall be required to present supporting documentation as evidence of direct assistance to qualified farmers before they can avail of the Fund.
Among other possible arrangements, institutional endusers may adopt the "forward selling" method where a contract shall be signed between the farmer and the local institutional enduser stating among others that the former's produce shall be sold to the latter at an agreed price, with the latter providing initial payments or actual input material at planting time, for such items as seeds, fertilizer and chemicals, union the balance payable upon delivery of the contracted volume.
Local private input suppliers, either directly or through their local distributors or dealers, may sell agricultural inputs to qualified farmers on credit payable at harvest time or at some other mutually satisfactory time.
For purposes of this Executive Order, the term "institutional endusers" shall refer to enterprises which purchase yellow corn from farmers for the purpose of further physical processing or for packaging, such as for feed or for cornstarch production; however, traders and consumers by themselves are not institutional endusers, this sense. The term "input supplier" shall refer to enterprises which sell inputs for the production of yellow corn to farmers, such as fertilizer, hybrid seeds, pesticides and other chemicals. In both cases, NFAC may determine the possible necessity of prior certification of participants by the appropriate government entity.
The NFAC Chairman, in consultation with the Central Bank and the Bureau of the Treasury, shall determine the manner by which availment from the fund shall be released to the endusers/suppliers.
Sec. 6. The NFA Assistance Program. Pursuant to existing law, the National Food Authority (NFA) shall continue to stand ready to purchase the farmers' produce of yellow corn at a support price stipulated before the planting season; provided, that participating farmers shall have been registered as NFA passbook holders; provided, further, that farmers shall continue to have the option to sell to other buyers in any case.
NFA is hereby authorized to likewise extend to farmers and other appropriate private sector entities other forms of appropriate storage, marketing, and distribution assistance through the utilization of its physical facilities for storage, transport, and communications purposes, as may be necessary and under such terms and conditions as may be formulated by NFA.
NFA may also engage in the procurement and distribution, either through its own outlets or through such other appropriate outlets as it may determine, of agricultural input materials for the production of yellow, corn, such as certified seed, fertilizer and the like, in consultation with the appropriate private sector industry representatives concerned; provided, that any such distribution and sale to farmers as may undertaken on credit terms shall be limited to NFA farmer passbook holders, and under such reasonable financial terms and conditions as may be formulated by NFA.
In the implementation of these programs, NFA is hereby authorized to participate in the availment and utilization of the Yellow Corn Fund. The NFAC Chairman, in consultation with NFA, the Central Bank, and the Bureau of the Treasury shall determine the manner by which availment from the Fund shall be released to the NFA.
Sec. 7. The Banking System Assistance Program. The Central Bank shall serve as administrator of the Yellow Corn Fund for financial assistance to farmers through the banking system, and shall have primary responsibility for the implementation of the banking system assistance program.
Unless otherwise modified by the Monetary Board, the existing Maisagana lending guidelines shall continue to govern the credit operations under this program. However, the participating lending banks are hereby enlarged to include not only the rural banks and the government banks such as the Philippine National Bank, but also such qualified commercial banks and thrift banks as may be determined by the Monetary Board.
The Monetary Board may issue such additional or amendatory rules and regulations governing the qualification of banks which can participate in the program, procedural mechanics of the release of funds to these banks, the responsibility of these participating financial institutions, and the provision for an effective monitoring system to amend, complement or supplement the said existing guidelines; provided, that in the formulation of such rules the Monetary Board shall be guided by the objectives of the program, which is to accelerate the production of yellow corn, through simple, expedient, and financially reasonable operating policies to facilitate the endeavors of the intended farmer/borrowers.
Sec. 8. Funding Source and Release of Funds. The initial sum of two hundred thirty million pesos (P230,000,000) for the implementation of the projects and activities under the expanded yellow corn production program which is herein constituted into the Yellow Corn Fund mentioned above, shall be charged against the applicable appropriation items in Batas Pambansa Blg. 640, and the corresponding release shall be made by the Director General of the Office of Budget and Management to the Ministry of Agriculture and Food in accordance with guidelines as may be established by the Office.
Sec. 9. NFAC shall prepare and submit to the President, the Prime Minister, the Cabinet and the Batasang Pambansa a report on the progress of the expanded yellow corn production program, with particular emphasis on the utilization of land for yellow corn, production performances, price behavior, exports undertaken, an assessment of the comparative merits of the various programs above-mentioned, as well as recommendations for further action. The report shall be submitted at the end of the every crop year for yellow corn, as determined by NFAC.
Sec. 10. NFAC, the Ministry of Agriculture and Food, the Central Bank of the Philippines, the National Food Authority, and such other member-agencies of NFAC which may have particular and specific functions under this expanded yellow corn program are hereby authorized to issue the appropriate implementing rules and regulations, provided, that such rules shall be issued within thirty days from approval of this Executive Order.
Sec. 11. All laws, decrees, orders, proclamations, rules, regulations, or parts thereof, which are inconsistent with any of the provisions of this Executive Order are hereby repealed or modified.
Sec. 12. Any portion or provision of this Executive Order that may be declared unconstitutional shall not have effect of nullifying the other provisions thereof, provided that such remaining portions can still stand and be given effect in their entirety to accomplish the objectives of this Executive Order.
Sec. 13. This Executive Order shall take effect immediately.
Done in the City of Manila, the 1st day of August, in the year of Our Lord, nineteen hundred and eighty-four.
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