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Republic of the Philippines ware 25 AUG 2016
HOUSE OF REPRESENTATIVE! TIME:
Quezon City, Metro Manila

Seventeenth Congress

> PES'STRATION UNIT
First Regular Session Bis my wns See

3829

HOUSE BILL NO.

Introduced by Honorable Michelle M. Antonio

EXPLANATORY NOTE

Food security is our investment in the future. With the changing world
food markets and climate, food is too important to be left to elements beyond
our reasonable control. We must pursue our national goal of food staples-
sufficiency in ways that make a positive impact on the lives of our food
producers.

Philippine agriculture has been the subject of voluminous studies and
grand plans, but the government can do a whole lot more in addressing hunger
through food self-sufficiency. Self-sufficiency in food staples means that the
country must produce the national food requirement while also maintaining a
buffer stock to be used in times of need, according to the Philippine Rice
Research Institute (Philrice). In 2012, the World Rice Statistics and the Food
and Agriculture Organization reported that the Philippines, despite being the
8" largest rice producer in 2008 (16.8 million tons), was also the world’s top rice
importer (1.8 million tons).

This bill intends to address the food self-sufficiency problem by allowing
private companies to engage in corporate farming. This will encourage the private
sector to engage in agricultural production by adopting a corporate farming
scheme, with rice and corn as the primary crops. It will also help eliminate the
chain of middlemen, thereby allowing the producers and processors to converse
face-to-face. In effect, there will be better product distribution, higher private
investment in agriculture, and higher outputs, income, and exports.

Through this bill, the government will link up farmers and companies.
While farmers tend to the farm, the companies will be providing them funds and


technology to boost production. This bill will instill some social responsibility on
the part of the companies instead of them just thinking about profits. The private
sector will take steps to help the government in addressing our food self-
sufficiency and other agricultural issues. After all, food sufficiency is a concern
for everybody and not just the government.

In view of the foregoing, approval of this bill is highly recommended.

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

Seventeenth Congress
First Regular Session

3329

HOUSE BILL N

Introduced by Honorable Michelle M. Antonio

AN ACT PROMOTING CORPORATE FARMING AND PROVIDING
INCENTIVES THEREFOR

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled:

SEC. 1. Participating Domestic Corporations and Partnerships. For the
purpose of this Act, domestic corporations and partnerships shall refer to all
corporations and partnerships organized and existing under Philippine laws,
operating for profit, and with reported earnings over the last four (4) years that
will allow them to engage in the production of rice/corn for their employees!
requirements without adversely affecting their financial viability. Appropriate
guidelines shall be issued to determine the corporations and partnerships that are to
be covered by this Act.

SEC. 2. Corporate Farming Arrangements, Participation in the Corporate
Farming Program shall be on a voluntary basis. For the purpose of this Act, the
following are the corporate farming schemes that corporations and partnerships

may engage in:

a. Corporations and partnerships with existing landholdings that are suitable
for rice and com production and which are subject for distribution under the


Comprehensive Agrarian Reform Program may enter into management
contracts or joint venture arrangements with the agrarian reform
beneficiaries, their associations or cooperatives for the production of rice and
com;

. Corporations and partnerships may lease private agricultural land suitable
for rice and corn production by entering into contractual or joint
venture arrangements with landowners, farmers' organizations and

agrarian reform communities (ARCs).

Conversion of agricultural lands leased for the purpose is strictly subject
to the rules on land conversion, as provided for by RA 6657 as amended by
RA 9700, otherwise known as the Comprehensive Agrarian Reform
Program, and its implementing rules guidelines. Fifty percent (50%) of
the land should have been developed within a period of three (3) years, and
ninety percent (90%) within a period of five (5) years; and

Corporations and partnerships may enter into contractual arrangements
with farmers’ organizations and agrarian reform communities whereby the
corporations and partnerships shall provide the production inputs and
technical and related services, then buy the produce resulting from the

farming contract.

Local Government Units (LGUs) shall be required to identify
appropriate land areas for corporate farming in consonance with their
comprehensive land use plan and ordinances. The LGUs shall require
the participating corporations and partnerships to provide
livelihood projects/opportunities to families which will not be covered by
the corporate farming program.


SEC. 3. Disposition of Excess Production. Participating corporations and
partnerships shall be required to provide a minimum of six hundred (600)
kilograms of rice/corn per employee per year or fifty (50) kilograms per employee
per month. Production in excess of the employees' consumption requirements may
be sold in the local markets, provided that such will be reported to the National
Food Authority (NFA).

SEC. 4. Implementing Agencies. The Department of Agriculture (DA) and the
Department or Agrarian Reform (DAR) shall be the lead agencies to institute
measures to ensure higher rice and com productivity through corporate farming
schemes. In coordination with the concemed agencies, the DA and DAR shall
facilitate the processing of management contracts between corporations and
partnerships and the farmers groups, The DA and DAR shall exercise the following
functions:

a. develop eligibility criteria for both corporations and partnerships and farmer
groups, including cooperatives and agrarian reform communities, for their
accreditation under this Act: Provided, That, the accreditation criteria for
the farmers’ groups should include management capabilities, technical and
production skills critical to the effective operation of the corporate farm;

b. facilitate and promote grassroots cooperation to access agricultural
services such as information, inputs, and technical assistance;

c. initiate and develop periodic rural and farm assembly markets to provide
avenues to showcase their produce;

d. exercise regulatory functions with respect to the adherence to the provisions
of contracts and arrangements entered into by both corporations and
partnerships and farmers groups, cooperatives and agrarian reform

communities and to develop mechanisms to facilitate negotiations and


mediate in disputes between stakeholders on matters of contract
enforcement;

e. coordinate with appropriate government agencies to ensure the timely
establishment of support services such as credit, infrastructure, extension
services and others; and

f. facilitate the registration of the participating corporations and
partnerships with the National Food Authority (NFA).

SEC. 5. Incentive Package. Corporations and partnerships that will participate
in the Corporate Farming, Program shall be entitled to tax incentives in all aspects
germane to the corporate
fanning activities. These incentives include:

a. exemption from the payment of customs duties for the importation of
all types of agricultural inputs particularly seeds, fertilizers, agricultural
machinery, and other agricultural implements as provided under RA
5435, as amended by RA 9281, or the Agricultural and Fisheries and
Modernization Act; and

b. exemption from the Value Added Tax (VAT) on the importation of
agricultural inputs particularly fertilizers, seeds and seedlings in accordance
with Section 109 of the National Internal Revenue Code as amended.

SEC. 6. Other Incentives. Loans extended by government and private banks to
participating corporations and partnerships shall be treated as compliance to RA
10000, or the Agri-Agra Reform Credit Act of 2009.

SEC

agricultural lands for a period of seven (7) years which may be renewed for

Duration. Participating corporations and partnerships may lease private

another seven (7) years, subject to the consent of the farmers, their associations

and cooperatives.


SEC. 8. Automatic Review. The Department of Agriculture and the Department
of Agrarian Reform, being the lead government agencies in the Corporate
Farming Program, shall submit periodic reports to both Houses of Congress on
the accomplishment of the Program. A review on the viability of the program
shall be made by the concerned agencies after five (5) years of its

implementation.

SEC. 9. Implementing Rules and Regulations (IRR). The Department of
Agriculture (DA) and the Department of Agrarian Reform (DAR), in
consultation with other concerned government agencies, non-government
organizations, private sector and farmer go ups involved in rice/corn
production, shall within ninety (90) days after the effectivity of this Act,

formulate the rules and regulations for its effective implementation.

SEC. 10. Separabi
declared to be separable, and in the event one or more such provisions are held

y Clause. The provisions of this Act are hereby

unconstitutional. the validity of the other provisions shall not be affected thereby.

SEC. 11. Repealing Clause. All laws, decrees, executive orders, rules and
regulations, issuances or parts thereof inconsistent with the provision of this Act

are hereby repealed or modified accordingly.

SEC. 12. Effectivity. This Act shall take aster fifteen (15) days after its
publication in the Official Gazette or in a national newspaper of general

circulation.

Approved,