Deregulation in the Production and Trading of Food Grains and Related Agricultural Inputs

May 31, 1985

EXECUTIVE ORDER NO. 1028

PROVIDING FOR FURTHER DEREGULATION IN THE PRODUCTION AND TRADING OF FOOD GRAINS AND RELATED AGRICULTURAL INPUTS

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, it would be desirable, as a general policy, to encourage the participation of the private sector in the development of the country and to rely as much as feasible on the free interplay of competitive market forces in the production and trading of food grains and related agricultural inputs;

WHEREAS, for this purpose, it would also be desirable to liberalize the governmental regulatory framework in support of the above-stated national policy; 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; acd

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of 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;

SECTION 1. It is the policy of the State to achieve and maintain an adequate supply of food grains at mutually satisfactory price levels for both farmers and consumers, primarily through reliance upon the market mechanism and by encouraging the participation of competitive private enterprise in the production and trading of food grains as well as of related agricultural inputs, such as fertilizers, seeds and pesticides.

SECTION 2. The price of milled rice is hereby deregulated, and shall no longer be subject to price controls: Provided, however, That in order to ensure price and supply stability, the government, through the National Food Authority, shall, whenever necessary, engage in the procurement of palay from farmer-producers at such floor or support prices of palay or of maintaining a desirable buffer stock level: Provided, further, That the National Food Authority shall continue to have the exclusive authority to import rice when necessary and when authorized by the President: and Provided, finally, That deregulation of the price of milled rice shall take effect on October 1, 1985.

SECTION 3. The stabilization functions of the National Food Authority shall henceforth be limited to rice and corn, and where necessary, wheat: Provided, however, That the President may, for stabilization purposes, authorize the intervention of the appropriate government entity in the trading of other food items if so warranted by conditions as may exist from time to time.

Accordingly, the National Food Authority proper shall relinquish or transfer to another government entity or to the private sector, as appropriate, all its non-grain stabilization and trading activities. Steps shall accordingly be taken initially to effect (a) the transfer of all KADIWA and other non-grain operations of the National Food Authority to the Food Terminal, Incorporated, and subsequently (b) the transfer or divestment of the operations of Food Terminal, Incorporated, including the KADIWA operations, as a joint venture between the government and the private sector, without prejudice to the possibility of a full transfer to the private sector immediately or ultimately.

SECTION 4. The importation of wheat and the distribution of flour shall henceforth be open to the participation of and undertaken by the private sector: Provided, however, That the government through the National Food Authority may import wheat and distribute flour under competitive conditions with the private sector, whenever deemed necessary to maintain the domestic selling prices of flour within reasonable levels.

SECTION 5. The policy of open importation and distribution of fertilizer by all interested private parties, including distributors and end-users thereof, shall implemented. All remaining subsidies, whether direct or indirect, for fertilizers shall be removed as soon as possible to accelerate the development of less expensive similar inputs, such as azolla and other organic fertilizers, in order to eventually reduce the cost of food production. casia

SECTION 6. The National Food Authority shall issue the necessary guidelines for the implementation of the policies set forth under Section 2, 3, and 4 and the Fertilizer and Pesticide Authority for Section 5 hereof.

SECTION 7. 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 accordingly.

SECTION 8. This Executive Order shall take effect immediately except as provided in Section 2 hereof.

DONE in the City of Manila, this 31st day of May, in the year of Our Lord, Nineteen Hundred and Eighty-Five.

Published in the Official Gazette, Vol. 81 No. 23 page 2435 on June 10, 1985.