QuestionsQuestions (Republic Act No. 7884)
RA 7884 is known as the “National Dairy Development Act of 1995.” Its policy is to strive for national self-sufficiency in milk and dairy products, recognize the primary role of the private sector in dairy activities, and have government limit itself to policy-making, facilitation, and regulation while creating an agency to accelerate dairy industry development under cooperativism.
They include promoting accelerated dairy industry development; supporting milk production/processing/marketing especially for small rural dairy farmers; encouraging participation of farm families, rural cooperatives, and the private sector; ensuring adequate milk supply at affordable prices; improving livelihood and nutrition (including children and pregnant/nursing mothers); developing smallholder-based dairy technology; improving milk production and building productive milking herds; and conserving foreign exchange by supporting local milk production.
RA 7884 creates the National Dairy Authority (NDA). For policy and program coordination, the NDA is attached to the Department of Agriculture.
The Board includes: the Secretary of Agriculture (chairperson); the NDA Administrator (ex officio); and the Secretaries of Trade and Industry, Health, Education, Culture and Sports, Science and Technology, and Agrarian Reform; plus the Director of the Dairy Training and Research Institute; and four (4) other members appointed by the President upon the recommendation of the chairperson—one from commercial milk processors and three from dairy cooperatives/national dairy federation, with one representative each from Luzon, Visayas, and Mindanao.
Board members appointed by the President serve for three (3) years from their respective appointment dates without reappointment. Appointees to a vacancy serve only the unexpired term of the member they replace.
At least seven (7) members constitute quorum. The vote of a majority of those present is sufficient. The chairperson does not vote except in case of a tie. Department secretaries may be represented permanently by their undersecretaries or assistant secretaries with full voting power for quorum purposes.
Among others: formulate and execute dairy programs; assist in purchase/importation/propagation/storage/distribution of dairy animals, semen, forage seeds, fertilizers, veterinary supplies, dairy equipment/engineering supplies; encourage integration of dairy production into livelihood/nutrition programs; assume control/supervision over specified dairy-related government personnel and programs (subject to Civil Service Commission guidelines); borrow/raise funds and issue bonds subject to public debt/expenditure laws; receive grants/subsidies/donations; establish field units; help design credit systems; charge reasonable fees; promulgate rules and regulations; and sue and be sued/operate under its corporate seal.
A full-time Administrator manages operations, assisted by a Deputy Administrator. Both are appointed by the President of the Philippines.
The Administrator must be a Filipino citizen, at least thirty-five (35) years old, of good moral character, with recognized executive ability and competence, and preferably well-versed in various aspects of the dairy industry.
They include: submitting policy recommendations and measures; recommending an organizational structure/plantilla for Board approval; executing and implementing Board-approved policies; preparing the annual budget for Board consideration; representing the Authority in dealings with public/private entities subject to limitations; appointing/disciplining/removing personnel (subject to Board confirmation and civil service rules); and performing other duties assigned by the Board or the Secretary of Agriculture.
The Authority must help organize small producers and processors into cooperatives or other organizations, including facilitating collective arrangements to acquire inputs on favorable terms; providing a forum to discuss common problems; helping design credit systems; assisting cooperatives in developing market channels and negotiating bulk outlets; and supporting the formation of a Dairy Cooperatives Federation.
A Dairy Development Fund is created to implement priority programs. It is used exclusively for those programs and initially provided in the amount of Two hundred million pesos (P200,000,000) from unappropriated National Treasury funds. Thereafter, at least One hundred forty million pesos (P140,000,000) annually is provided via the General Appropriations Act.
Within three (3) years, dairy cooperatives and the commercial sector must mutually agree on a volume of local milk production to be absorbed by the commercial sector; otherwise, the commercial sector absorbs a fixed portion determined by the Authority. Processors purchasing locally produced milk from cooperatives in excess of the Authority-prescribed volume receive tax credits equivalent to 10% of the value of the excess volume purchased.
The NDA is exempt from customs duties and taxes on importation of dairy animals, veterinary and farm inputs, dairy equipment and machineries (and spare parts) for distribution to dairy cooperatives, subject to conditions (e.g., not domestically available in sufficient quantity/quality/price; actual exclusive use by cooperatives for manufacture; no disposal within three years without Authority approval). Small farmers and small dairy cooperatives are exempt from all taxes on proceeds from sale of raw milk and milk products. Milk processors get a presumptive input tax credit of 4% of the value of gross purchases from small farmers/small cooperatives.
Bangko Sentral ng Pilipinas must adopt monetary and re-discounting policies to encourage rural banks, savings and loan associations, commercial banks, and other credit institutions to meet dairy financing needs. PNB, Land Bank of the Philippines, and Development Bank of the Philippines must design and establish special lending programs at affordable terms for small dairy farmers and dairy cooperatives.
The Philippine Dairy Corporation is abolished. Dairy functions of the Livestock Development Council’s Dairy Division, the Bureau of Animal Industry’s Dairy Division, and the Livelihood Corporation’s Laguna Processing Center are transferred to the NDA. Their personnel, assets, funds, grants, subsidies, and records are also transferred. The Secretary of Agriculture designates an officer-in-charge pending appointment of the NDA Administrator.
Any person or entity found guilty of violating any provision of the Act shall be sentenced to imprisonment of not more than six (6) months or a fine of not more than Twenty thousand pesos (P20,000.00), or both, at the discretion of the court.
RA 7884 takes effect after fifteen (15) days following its publication in the Official Gazette or in a newspaper of general circulation. The Department of Agriculture, in coordination with member agencies and private sector representatives of the Dairy Industry Board, must issue implementing rules within six (6) months from effectivity; the DA Secretary reports to both Houses of Congress on the status within ninety (90) days from effectivity.