Mandatory Sale of Surplus Production
- Requires all government producers of palay and corn to sell their surplus production exclusively to the National Rice and Corn Corporation (NARIC).
- Surplus is defined as the quantity exceeding the producer’s immediate internal use or requirements.
Role of the National Rice and Corn Corporation (NARIC)
- NARIC is designated the responsibility to stabilize prices of palay and corn across the country.
- It accomplishes this stabilization by purchasing palay and corn from farmers, planters, and now government producers, thereby regulating supply and demand.
Pricing Mechanism
- The sale of surplus palay and corn by government producers to NARIC is to be at prevailing government prices.
- This ensures uniformity and fairness in pricing and supports market stability.
Legal Authority and Enforcement
- The order is issued by the President of the Philippines under the authority vested by law, signifying executive power intervention.
- Compliance with this order is mandatory for relevant government entities.
Objective and Policy Rationale
- Aims to support the government’s broader economic policy of price stabilization for essential agricultural commodities.
- Prevents market distortions by consolidating surplus supply through a single government corporation, enhancing the government’s ability to manage agricultural markets effectively.