Creation of Fertilizer and Pesticide Authority

Abolition of Fertilizer Industry Authority

Section 2 abolishes the Fertilizer Industry Authority (FIA) created under Presidential Decree No. 135, dated 22 February 1973.
Section 2 abolishes the FIA as amended by Presidential Decree Nos. 517 and 669, dated 19 July 1974 and 11 March 1975, respectively.
Section 2 provides that the FPA must assume FIA appropriations, assets and liabilities, and hire FIA personnel as may be determined by the FPA’s Board of Directors.
Section 2 requires that such assumption of appropriations, assets, liabilities, and hiring must be made within sixty (60) days from the effectivity of this decree.

Core definitions for regulation

Section 3(a) defines “Pesticide” as any substance or product, or mixture thereof, including active ingredients, adjuvants, and pesticide formulations, intended to control, prevent, destroy, repel, or mitigate directly or indirectly any pest.
Section 3(a) provides that “Pesticide” includes insecticide, fungicide, bactericide, nematocide, herbicide, molluscicide, avicide, rodenticide, plant regulator, defoliant, desiccant and the like.
Section 3(b) defines “Fertilizer” as any substance solid or liquid, or any nutrient element or elements, organic or inorganic, singly or in combination with other materials, applied directly to the soil to promote plant growth, increase crop yield, or improve quality.
Section 3(c) defines “Other agricultural chemicals” as chemicals, chemical inputs, and chemical compounds not covered by the fertilizer and pesticide definitions but utilized by the agricultural sector.
Section 3(d) defines “Handlers” as exporters, importers, manufacturers, formulators, distributors, suppliers, wholesalers, dealers, repackers, commercial applicators, warehousers, and retailers of fertilizers, fertilizer inputs, pesticide and other agricultural inputs.
Section 3(e) defines “Tolerance Level” as the maximum amount of pesticides allowed to remain in raw agricultural produce at any stage between harvesting and consumption, as determined by the FPA.
Section 3(f) defines “Imminent Hazard” as a situation where continued pesticide use will likely result in unreasonable adverse effects on the public and/or the environment, or will involve unreasonable hazards to the survival of a species declared endangered by the appropriate authorities.

Governance: Board of Directors structure

Section 4 vests the FPA’s powers and functions in a Board of Directors.
Section 4 establishes the Board composition as:
1. Secretary of Agriculture — Chairman
2. Secretary of Industry — Member
3. Secretary of Finance — Member
4. Secretary of Trade — Member
5. Governor, Central Bank — Member
6. President, Philippine National Bank — Member
7. Director, Bureau of Plant Industry — Member
8. Commissioner, Pollution Control Commission — Member
9. Administrator, Food & Drug Administration — Member
Section 4 provides that the Board members elect a Vice-Chairman who acts as Chairman during absence, inability, or temporary incapacity of the Chairman.

Organization and staffing powers

Section 5 empowers the FPA to determine and create its organizational structure, including the number, positions and salaries of officers and employees.
Section 5 empowers the Board to create positions of:
- Administrator
- Deputy Administrator for Fertilizer
- Deputy Administrator for Pesticides
- and other subordinate officials as required.
Section 5 mandates that the Board appoint all FPA officers.
Section 5 empowers the Board to establish a compensation scheme (including allowances and benefits) and set working hours and other employment conditions.
Section 5 empowers the Board to discipline and/or remove personnel for cause and exercise other necessary personnel powers for efficient operation.

Regulatory powers and operational control

Section 6 grants the FPA jurisdiction over all existing handlers of pesticides, fertilizers and other agricultural chemical inputs.
Section 6 requires the FPA to implement a regulatory system covering both fertilizers and pesticides, including manufacturing, marketing, safety, and public protection measures.

Common powers: fertilizers, pesticides, others

Section 6(I) requires the FPA to conduct information campaigns on safe and effective use of these products.
Section 6(I) requires the FPA to promote and coordinate fertilizer and pesticide research with the Philippine Council for Agriculture and Resources Research and other appropriate agencies to ensure:
- scientific pest control in the public interest,
- safety in the use and handling of pesticides,
- higher standards and quality of products, and
- better application methods.
Section 6(I) authorizes the FPA to call upon any government department, bureau, office, agency, instrumentality (including government-owned or controlled corporations), officers/employees, and the private sector for information or assistance needed to exercise its powers.
Section 6(I) requires the FPA to promulgate rules for:
- registration and licensing of handlers,
- collection of fees related to registration and licensing,
- renewal, suspension, revocation, or cancellation of registration/licenses, and
- other rules needed to implement the decree.
Section 6(I) authorizes the FPA to establish and impose appropriate penalties on handlers for violations of FPA rules and regulations.
Section 6(I) authorizes the FPA to institute proceedings against persons violating any decree provisions and/or FPA rules, after due notice and hearing.
Section 6(I) authorizes delegation of selected privileges, powers, or authority to corporations, cooperatives, associations, or individuals existing or organized to assist the FPA, where allowed by law.
Section 6(I) authorizes the FPA to do all acts not contrary to law or existing decrees and regulations necessary to carry out its functions.

Fertilizer-specific powers

Section 6(II) requires the FPA to continuously assess fertilizer supply and demand, both domestic and worldwide.
Section 6(II) authorizes the FPA to establish and enforce sales quotas, production schedules, distribution areas, and other marketing regulations to assure market stability and viable industry operations.
Section 6(II) requires the FPA to determine and set the volume and prices of fertilizer and fertilizer inputs for wholesale and retail.
Section 6(II) authorizes the FPA to establish and enforce regulations governing import and export of fertilizer and fertilizer inputs, including when necessary, allowing the FPA to itself import and/or export such items and negotiate/contract those imports and exports.
Section 6(II) authorizes importation of fertilizer and fertilizer inputs exempt from customs duties, compensating and sales taxes, and all other taxes, and authorizes purchase of naptha locally free from specific taxes and the corresponding duty on imported crude, followed by sale or conveyance to individuals/associations/corporations likewise exempt from customs duties and all other taxes.
Section 6(II) authorizes the FPA to control and regulate all marketing companies (importer, indentor, wholesaler or retailer) by controlling and regulating:
- prices,
- terms,
- mark-ups,
- distribution channels,
- promotion,
- storage, and
- other marketing factors in the domestic fertilizer market.
Section 6(II) requires the FPA to regulate and control quality of different grades of fertilizer and to set new grades when necessary.
Section 6(II) authorizes the FPA to control and regulate all aspects of domestic fertilizer production, including:
- utilization of idle capacity,
- orderly expansion of the industry,
- compelling utilization of unused or underutilized capacities, and
- directing improvements, modifications, or repairs.
Section 6(II) requires FPA approval or rejection for establishment of new fertilizer or fertilizer input plants and for expansion or contraction of existing capacities.
Section 6(II) authorizes the FPA to obtain complete access to pertinent industry information, including audited and/or unaudited financial statements, marketing, production, and inventory data.
Section 6(II) authorizes the FPA to control and assist in financing:
- importation of fertilizer and fertilizer inputs for production,
- inventory and working capital,
- and expansion of the industry.
Section 6(II) requires the FPA to maintain an adequate supply of fertilizers to the domestic market at reasonable prices while maintaining long-term industry viability.

Pesticide and other agricultural chemicals powers

Section 6(III) requires the FPA to determine specific uses or manners of use for each pesticide or pesticide formulation.
Section 6(III) requires the FPA to establish and enforce tolerance levels and good agricultural practices for pesticide use in raw agricultural commodities.
Section 6(III) authorizes the FPA to restrict or ban use of a pesticide or certain formulations in specific areas or during certain periods upon evidence that the pesticide:
- is an imminent hazard, or
- has caused, or is causing widespread serious damage to crops, fish or livestock, or
- has caused widespread serious harm to public health and the environment.
Section 6(III) requires the FPA to prevent importation of agricultural commodities containing pesticide residues above accepted tolerance levels and to regulate exportation of agricultural products containing pesticide residue above accepted tolerance levels.
Section 6(III) authorizes the FPA to inspect pesticide handlers’ establishments and premises to ensure compliance with industrial health and safety rules and anti-pollution regulations.
Section 6(III) authorizes the FPA to enter and inspect farmers’ fields to ensure only recommended pesticides are used in specific crops in accordance with good agricultural practice.
Section 6(III) authorizes the FPA to require, if and when necessary, every handler to submit reports stating the quantity and value of each kind of product exported, imported, manufactured, produced, formulated, repacked, stored, delivered, distributed, or sold.
Section 6(III) authorizes emergency public-interest controls if there are extraordinary and unreasonable price increases, severe shortages in pesticide supply, or imminent dangers or either occurrence, including:
- price ceilings,
- inventory controls,
- controls on distribution and transport, and
- tax-free importations of such pesticides or raw materials thereof that are in short supply.

Rulemaking authority

Section 7 authorizes the FPA to issue and promulgate rules and regulations to implement and carry out the purposes and provisions of the decree.

Prohibitions on fertilizer and pesticide conduct

Section 8 makes it unlawful for any handler of pesticides, fertilizer, and other agricultural chemicals, and for any farmers, planters, or end-users, to commit any of the following acts:
- Section 8(a) engaging in any form of production, importation, distribution, storage, and sale in commercial quantities without securing an FPA license.
- Section 8(b) using any pesticide or pesticide formulation contrary to good agricultural practices as defined/covered under the decree’s concept of good agricultural practices.
- Section 8(c) dealing in pesticides and/or fertilizers that are not registered with the FPA or whose registration has expired, or is suspended or revoked.
- Section 8(d) adulterating pesticide formulations and fertilizer grades.
- Section 8(e) imposing, as a condition for purchase of fertilizer, the simultaneous purchase of pesticide for other agricultural chemical inputs and vice-versa.
- Section 8(f) mislabeling or making claims that differ in substance from representations made in connection with registration or from the product’s actual effectiveness.
- Section 8(g) violating other rules and regulations promulgated by the FPA.

Registration and licensing requirements

Section 9 requires that no pesticides, fertilizers, or other agricultural chemicals be exported, imported, manufactured, formulated, stored, distributed, sold, offered for sale, transported, delivered for transportation, or used unless duly registered with the FPA or covered by a numbered provisional permit issued by the FPA for use under the permit’s conditions.
Section 9 requires separate registrations for each active ingredient and its possible formulations for pesticides, and separate registrations for each fertilizer grade for fertilizer.
Section 9 prohibits any person from engaging in business of exporting, importing, manufacturing, formulating, distributing, supplying, repacking, storing, commercially applying, selling, or marketing pesticides, fertilizers, and other agricultural chemicals unless under an FPA license.
Section 9 authorizes the FPA to suspend, revoke, or modify registration of any pesticide, fertilizer, and other agricultural chemicals after due notice and hearing.

Criminal penalties for violations

Section 10 imposes the following penalties for violations of the decree or FPA rules and regulations.

Penalties for fertilizer violations

Section 10(a) provides imprisonment of not less than 15 years and 1 day nor more than 20 years if the amount involved is more than P50,000.00.
Section 10(a) provides imprisonment of not less than 10 years and 1 day nor more than 15 years if the amount involved is P10,000.00 or less.
Section 10(a) provides that a violation also carries a fine ranging from an amount equal to the value involved to three times such value, but not less than P5,000.00 nor more than P20,000.00.
Section 10(a) provides a fine of P5,000.00 but not more than P10,000.00 for other violations where the amount involved cannot be determined.
Section 10(a) provides that if falsification of a public or commercial document is committed by reason of or on the occasion of the commission of any punishable acts, the offender must be imposed the maximum fine and term of imprisonment under the fertilizer penalties.
Section 10(a) provides that if the violation is committed by a corporation, firm, partnership, cooperative, association, or other entity, the penalty is imposed on the guilty office or offices and the entity.

Penalties for pesticide violations

Section 10(b) provides for a penal servitude of not in excess of one year or a fine of P5,000.00 but not more than P10,000.00 for violations of the decree or of rules and regulations issued or promulgated by the FPA on pesticides.
Section 10(b) provides that if the violation is committed by a corporation, firm, partnership, cooperative, association, or other entity, the penalty is imposed on the guilty officials or officers.

Funding, continued operation, and governance effect

Section 11 provides that P1.2 Million shall be released out of national treasury funds not otherwise appropriated, in addition to what is appropriated for the FIA for calendar year 1977.
Section 11 provides that for every calendar year thereafter, sums necessary for FPA operations shall be included in the General Appropriations Decree.
Section 11 authorizes, despite any contrary provision of existing law, the FPA to impose fees or receive grants, subsidies, donations, or contributions from any entity and retain such funds for its operation.
Section 12 provides that the FPA constitutes itself immediately and continues to exist until abolished by the President of the Philippines.

Separability, repeals, and effectivity

Section 13 declares the decree’s provisions separable, so that if any provision is held unconstitutional, the validity of the other provisions remains unaffected.
Section 14 repeals, amends, or modifies all laws, decrees, acts, executive order, ordinances, rules and regulations inconsistent with the decree’s provisions.
Section 15 provides that the decree takes effect upon approval.
The decree is May 30, 1977, issued by President Ferdinand E. Marcos, with signature by Juan C. Tuvera as Presidential Executive Assistant.