Sponsorship Speech of Senator Cynthia A. Villar
on Senate Bill No. 2625 or the
Philippine Corn Industry Development Act
March 20,2024

Mr. President, esteemed colleagues, and fellow advocates for the agriculture sector, good afternoon!

It is with great honor that I stand before you today to sponsor Senate Bill No. 2625 under Committee Report No. 246, entitled "An Act to develop the Philippine Corn Industry, enhance the availability and affordable of quality feeds and staple food, and provide for a corn competitiveness enhancement fund". In coming up with this report, the Committee on Agriculture, Food and Agrarian Reform together with the Committees on Finance, and Ways and Means conducted one public hearing, two technical working group meetings, and several consultative meetings.

Mr. President, in championing this measure, our aim is to propel the competitiveness and expansion of the yellow corn industry. It is a crucial supplementary measure aligned with the objectives of the Livestock, Poultry and Dairy Industry Development Act which I earlier sponsored. It is imperative that we also bolster the corn industry.

The yellow corn industry plays a pivotal role in sustaining our livestock and poultry industry and feeding our nation. In 2023, the combined corn-livestock-poultry sector contributed 27.17% of gross value added in agriculture. It provided livelihood opportunities to more than 1.28 million corn farmers, 2.8 million livestock and poultry farmers and thousands of other industry players throughout the value chain. This underscores the impact of the industry on our economy, particularly on job creation, food security, and potentially on poverty alleviation.

Yet despite its significance, the yellow corn industry faces its share of challenges that require greater government attention. For instance, amidst increasing demand in the feeds, foods and other industrial markets, the Philippines remains a net importer of yellow corn. Approximately 84% of the yellow corn produced locally is being used by the animal industries as feeds, but in 2020, the country achieved only 57% self-sufficiency in yellow corn for feed use. It should be noted that in broiler and swine production, feeds make up about 50% and 60% of the overall production costs, respectively. The Philippines has the highest cost of production for livestock and poultry among ASEAN countries primarily due to feed costs.

Even while our yellow corn productivity has increased at an average of 4.2 metric tons per hectare from 2018 to 2022, the Philippines is still lagging behind, ranking 8th among its neighboring countries in Asia. The yellow corn industry has a lot of inefficiencies in supply and market chains as well as inadequacies in policies and governance.

• One issue that has been raised is the existing legal restriction (Presidential Decree No. 4) which prevents corn farmers from exporting corn unless there is excess production or supply. As a result, they cannot fully take advantage of the opportunities presented by the export market.

• Another pressing challenge that corn farmers have to grapple with is the high cost of inputs such as seeds and fertilizers.

• Almost all yellow corn hybrids sold are genetically engineered, which are about five times more expensive than the conventional seeds.

• In addition, the stringent standards for developing high-yielding varieties have hampered the participation of local Filipino companies in the seed industry. This underscores the need for more investments in R&D especially on seeds and biotechnology. Furthermore, the majority of the corn budget goes to the white corn program, with little attention paid to the growth of the yellow corn industry.

We can no longer turn a blind eye to the struggles of the yellow corn industry and the people who depend on it. Through this Senate Bill No. 2625, we will set a comprehensive framework for its promotion and development. We will acknowledge the organizational and institutional constraints and ensure that corn farmers are provided with adequate resources and support mechanisms that they need to thrive and compete in the market.

• First and foremost, we need to create an updated Corn Industry Development Roadmap, which shall address the current and emerging needs of the industry and set the strategic initiatives and direction to enhance its competitiveness. The creation of an updated roadmap shall be spearheaded by the Bureau of Plant Industry together with relevant stakeholders, particularly small hold farmers, feed processors, livestock farmers, regulatory offices, and Academe.

• Second, the Bureau of Plant Industry shall be designated as the implementing agency of this policy measure.

• Third, there shall be designated priority corn production provinces which will lead to the modernization and better performance of the yellow corn sector. These provinces will distribute the high-quality seeds and feeds they produce to other provinces through BPI field offices. According to PSA data for 2023, the top producing provinces which account for 61% of the total yellow corn production, includes Isabela (17.04%), Cagayan (9.75%), Bukidnon (14.83%), Maguindanao (8.06%), Pangasinan (5.74%), and South Cotabato (5.71%).

• Moreover, this proposed measure provides for the creation of the Corn Competitiveness Enhancement Fund. This is in addition to the annual General Appropriations Act regular budget. For ten years, the Corn Fund shall consist of an annual appropriation of Three Billion Pesos, which will come from tariff collection on imported corn, feed wheat, feeds and other products and ingredients for feeds.

We will not leave the white corn behind since the same is being used for human consumption. We are proposing the allocation of 20% of the fund to white corn development and other indigenous corn varieties, and Eighty percent of the Corn Fund shall be utilized for yellow corn, which shall be respectively divided by both as follows:

1. Forty percent (40%) for Philippine Center for Postharvest Development and Mechanization or PhilMech in which the 23% shall be utilized for post-production, 15% for mechanization of corn farms and 2% for its Program Management Office.

2. Twenty percent (20%) for BPI in its provision of seeds and fertilizers. The seeds produced by local Filipino and registered with the Philippine Seed Board or National Seed Industry Council are the ones to be sourced for distribution to farmers.

3. Twenty percent (20%) for the establishment and operations of the BPI Corn Unit and the field offices in corn producing provinces.

4. Ten percent (10%) for Agricultural Training Institute of DA which shall be utilized for the extension and training activities to increase corn productivity, maintenance servicing of machinery and equipment, and organizing and clustering of corn farmers into cooperatives and associations.

5. Ten percent (10%) for the Bureau of Agricultural Research which shall be spent for corn applied research, and basic research. The research output shall be owned by the government though BPI and any subsequent commercialization, propagation or distribution shall be subject of contractual arrangements between and among BPI, BAR and local Filipino private entities that developed the output.

The beneficiaries of the Corn Fund shall be the small hold corn farmers listed in the Registry System for Basic Sector in Agriculture (RSBSA) and preferably members of farmer cooperatives, associations or organizations.

To track our progress and determine if we are achieving our objectives, we are assigning the Congressional Oversight Committee on Agricultural and Fisheries Modernization (COCAFM) to conduct a mandatory review and the Philippine Institute for Development Studies (PIDS) to do an impact evaluation of the program on the third, sixth, and ninth years of the effectivity of this Act. This measure likewise recognizes that market expansion is essential for a healthy competitive market. In anticipation of increased production through the provision of high yielding variety seeds, fertilizers, machinery and equipment, and capacity budling for corn farmers, this policy initiative removes the export restriction on corn. Competitive corn producers are expected to benefit by having expanded market reach and consequently, higher income from their produce.

Finally, in the event of any impending or forecasted shortage, animal disease epidemic or other situation requiring government intervention for a limited period of time, this measure bestow to the President the power to (a) revise or adjust existing rates of customs duties of corn, feed, feeds and other products and ingredients for feeds products up to their respective bound rates under the WTO agreement on agriculture; and (b) allow importation of these commodity and its by-products at a lower applied tariff rate to address the situation.

At this juncture, I would like to personally extend my sincerest thanks to all the Senators, national agencies, and other stakeholders for attending the public hearings and TWG meetings that we conducted both this year and last. I also want to thank the members of the Committee on Agriculture, Food and Agrarian Reform and the Committees on Finance and Ways and Means headed by Senator Juan Edgardo "Sonny" Angara for his support to this bill.

Mr. President, my dear colleagues, by enacting this important measure, we not only support our farmers but also promote rural areas' economic development, fight poverty, and improve the Filipino people's access to affordable food. I therefore urge my distinguished colleagues to join me in enacting this measure on the Corn Industry Development Act.

Thank you very much, Mr. President!