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Republic of the Philippines DZ
House of Representatives RECEIVED
Quezon City pate 28 JUL
TIME _ Fe
TWENTIETH CONGRESS
First Regular Session OY

HOUSE BILL NO‘. 2417

Introduced by Hon. Felimon M. Espares

AN ACT ENSURING THE DEVELOPMENT, PROMOTION,
AND PROTECTION OF AGRICULTURAL COOPERATIVES

EXPLANATORY NOTE

‘A Social Weather Stations (SWS) survey conducted in the first quarter of 2025
revealed that involuntary hunger—defined as experiencing hunger and having nothing
to eat at least once in the past three months—rose to 20%,! a significant increase
from 14.2% recorded in the same period in 2024.?

Meanwhile, based on the 2021 data from the Philippine Statistics Authority
(PSA), fisherfolk (30.6%) and farmers (30.0%) remain the poorest sectors in terms of
poverty incidence? — ironically, the very sectors responsible for producing the nation’s
food.

In recognition of this reality, the Department of Agriculture (DA) has
underscored the vital role of the local agricultural sector in addressing food security,
specifically through the implementation of a “farm-to-market network plan.”
Moreover, the growing role of the cooperative sector in this effort was institutionalized
with the establishment of the Agricultural Cooperative Enterprise Development
Services (ACEDS) in September 2024.

“SWS: Filipinos who experienced involuntary hunger rose to 20% in April.” Inquirer.net, 29 June 2025,
available at https://newsi uirer.neV2076066/sws-filipinos-who-experienced-involuntary-hunger-rase-to-
20-in-april
More hungry and poor. first quarter 2024,” The Philippine Star, 11 May 2024, available at

https://www.philstar.comvthe-freeman/opinion/2024/05/1 1/2354283/more-hungry-and-poor-first-quarter-2024
3 Merged datafile of the 2015 Family Income and Expenditure Survey (FIIS) and January 2016 Labor Force

Survey (LFS), merged datafile of the 2018 FIES and January 2019 LFS and merged datafile of the preliminary

2021 PIES and January 2022 LFS, Philippine Statistics Authority available at

hhups://www.psa.gov.ph/contentfisherfolks-and-farmers-remain-have-highest-poverty-incidences-among-
basic-sectors-

20214:~:text=Fisherfolks%20and%20Farmers’%20Remain%20to,Authority %20%7C%20Republic%200f%20.
hhe%20Philippines



The DA Secretary further emphasized President Ferdinand R. Marcos Jr.’s
directive to transform and consolidate farmers’ cooperatives and associations. This
transformation involves the formulation of inclusive plans and policies, the delivery of
comprehensive training programs, and the adoption of digital platforms, data
analytics, online marketplaces, and climate adaptation tools—all aimed at improving
the livelihoods of farmers and fisherfolk while advancing the national goal of food
security.

Clearly, the lands and the people are already in place—what is needed is the
institutional support to enable the local agricultural industry to stand on its own and
meet the needs of the Filipino people.

Unfortunately, the current weak and fragmented agricultural service delivery
system continues to hinder the effective implementation of agricultural development
programs. This can be addressed by strengthening the link between the Department
of Agriculture and the grassroots farming communities through agricultural
cooperatives.

This proposed measure seeks to strengthen agricultural cooperatives as vital
agents of food security in the Philippines. Recognizing the agricultural sector's central
role in national development, the bill proposes targeted interventions to support and
empower agricultural cooperatives and their contributions to food production and rural
development.

By providing adequate resources and funding, this bill seeks to enhance the
capacity of agricultural cooperatives to sustainably produce high-quality agricultural
products. It aims to promote the adoption of modern farming technologies,
sustainable practices, and efficient agricultural techniques to increase productivity and
improve the livelihoods of family farmers.

Furthermore, this bill encourages the establishment of agricultural
cooperatives, associations, and support networks to facilitate knowledge sharing,
access to credit, and collective marketing efforts. It also promotes the provision of
training programs, agricultural extension services, and technical assistance to
empower family farmers with the necessary skills and knowledge to thrive in today's
evolving agricultural landscape.

By strengthening the support and developing the network of agricultural
cooperatives, this bill recognizes the importance of empowering small-scale farmers,
who form the backbone of the agricultural sector, in achieving sustainable growth and
food security.

In view of the foregoing, the early passage of this bill is earnestly sought.

HON. FI oy ARES


Republic of the Philippines
House of Representatives
Quezon City

TWENTIETH CONGRESS
First Regular Session

2417

HOUSE BILL NO.

Introduced by Hon. Felimon M. Espares

AN ACT ENSURING THE DEVELOPMENT, PROMOTION,
AND PROTECTION OF AGRICULTURAL COOPERATIVES

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

CHAPTER I
DECLARATION OF POLICY

Section 1. Short Title. — This Act shall be known as the “Agricultural
Cooperatives Act of 2024.”

Sec. 2. Declaration of Policy. - It is hereby declared to be the policy of the State,
in line with the Constitution, that expanding productivity is the key to raising the
quality of life for all, especially the underprivilzzeged, together with a sustained
increase in the amount of goods and services produced by the nation for the benefit
of the people.

In line with this, the State recognizes the need to hasten the growth, integration,
and modernization of the agricultural sector in order to meet the rising dilemma of
food insecurity, which disproportionately affects the marginalized sectors of society.
The State further recognizes the indispensable need to encourage the participation of
women and youth as a primary force in the government's drive to empower the
agricultural sector. Therefore, the State shall focus on establishing a structure and
network that institutionalizes support, capacity-building, and inclusive growth for


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agricultural cooperatives.

Similarly, it is the declared policy of the State to foster the creation and growth
of cooperatives as a practical vehicle for promoting self-reliance and harnessing people
power towards the attainment of economic development and social justice. Towards
this end, the Government and all of its branches, subdivisions, instrumentalities, and
agencies shall ensure the provision of technical guidance, financial assistance, and
other relevant services to enable farmers, fisherfolk, and other agricultural workers to
organize themselves into self-sustaining cooperatives that work together to strengthen
the Philippine agricultural industry.

CHAPTER II
GENERAL PROVISIONS

Sec. 3. Definition of Terms. — In so far as they are used in this Act, the following
terms shall mean:

a. Agribusiness — refers to a range of activities that occur in the agricultural
value chain utilized in modern food production, including but not limited
to farming, forestry, fishing operations, as well as seed supply,
agrichemicals, related machineries, processing, storage, marketing,
distribution, and sales, whether wholesale or retail;

b. Agricultural Cooperative — refers to a type of cooperative comprising
farmers, fisherfolk, agrarian reform beneficiaries, dairy farmers,
community forestry farmers, aquaculture farmers, and other individuals
engaged in agricultural activities. These individuals voluntarily organized
themselves into an agricultural-based economic enterprise, including
subsidiary agricultural cooperatives formed by existing multi-purpose
cooperatives and multi-purpose cooperatives whose primary business
activity is at least fifty percent (50%) related to agricultural production,
agro-industry, agri-business, or services related to agricultural production.
Agricultural activities encompassed by the cooperative include the
production, processing, agrologistics, and distribution of agricultural,


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fishery, and forestry products. The cooperative also provides a range of
services aimed at improving the livelihood, income, and overall welfare of
its members. These services include savings and credit, marketing,
agricultural extension, farm education, agri-tourism, digital agriculture,
and other allied services related to climate resiliency and safety nets;

. Asset Development - refers to the growth and improvement, according to

targeted goals and objectives, of key instruments and resources for
agricultural operations, such as, but not limited to, land, buildings, which
may include residences, warehouses, or barns, irrigation systems, fences,
and trees;

. Build Scale - refers to the growth or expansion of agribusiness in a

proportional and profitable manner;

. Cooperative — refers to an autonomous and duly registered association of

persons, with a common bond of interest, who have voluntarily joined
together to achieve their social, economic, and cultural needs and
aspirations by making equitable contributions to the capital required,
patronizing their products and services, and accepting a fair share of the
risks and benefits of the undertaking in accordance with universally
accepted cooperative principles;

Clustering ~ refers to the process by which multiple agribusinesses, each
involved in different stages of the agricultural value chain, combine their
operations into a single hub. This collaboration aims to enhance
operational efficiency, streamline processes, and maximize profits through
integrated efforts;

g. Criteria for Assessment and Ratings - refers to a set of standards in

determining that the performance of an agricultural cooperative, which
includes, among others, enterprise management, adherence to cooperative
principles, and product or service quality;


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105 h. Family Farming — refers to an agribusiness operation that is managed and
106 operated by a family unit, related by consanguinity or affinity, whether
107 nuclear or extended, and which predominantly relies on the labor of the
108 members of such family for its operations. The family and the farm,
109 therefore, are inextricably linked, and co-evolve with each other;

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cant i. Local Development Hub (LDH) - refers to a farming zone or transport
112 infrastructure, which is generally far from formal markets. An LDH serves
113 around five hundred (500) to one thousand (1,000) farmers, and links
14 them to buyers, which may be, among others, traders, processors, and
15 export companies, among others.

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117 j. National Federation of Agricultural Cooperatives (NFAC) — refers to a
118 federation of agricultural cooperatives that are engaged in agribusiness
119 and financial business for the benefit of the members through its
120 subsidiaries.

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122 k. Wholesale Market — refers to a market, owned by the government and
123 managed by the National Federation of Agricultural Cooperatives (NFAC)
124 through its subsidiary/ies, where a trader buys farm produce from the
125 farmers, through the agricultural cooperatives, in bulk and re-sells the
126 goods to business houses or retailers to further sell the goods to end
127 consumers.

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129 m. Cooperative Climate Resilience Fund — refers to a grant-making
130 mechanism that aims to ensure that agricultural cooperatives and their
131 farmer-members are protected from and resilient to the impact of climate
132 change.

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134 Sec. 4. Registration and Supervision. — Agricultural Cooperatives shall be
135 governed by the general law on cooperatives, except as otherwise provided herein. In

136 connection with this, agricultural cooperatives must be registered with the Cooperative


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Development Authority (CDA) in order to be entitled to the privileges and exemptions
extended to cooperatives under Republic Act (RA) No. 9520, otherwise known as the
Philippine Cooperative Code of 2008.

An agricultural cooperative shall file its application for registration with the CDA
regional office that has jurisdiction over its area of operation. No fees shall be assessed
or charged to any agricultural cooperative by any government entity, national or local,
at any stage of its organization and registration process.

This notwithstanding, as the agency with the mandate to promote agricultural
development by providing policy framework, public investments, and support services,
the Department of Agriculture (DA) shall be the regulatory agency exercising primary
supervision over the National Federation of Agricultural Cooperatives (NFAC). The
Federation shall exercise supervision and control over its member-primary agricultural
cooperatives.

Sec. 5. Capital Requirements of Agricultural Cooperatives. - The authorized
share capital of an agricultural cooperative shall be stated in its Articles of Cooperation.
Prior to its registration, at least twenty-five percent (25%) of the authorized share
capital shall be subscribed to by the members, and at least twenty-five percent (25%)
of the subscribed share capital shall be paid-up: Provided, That the paid-up
capitalization requirement for primary cooperatives shall not be less than Fifteen
Thousand Pesos (P15,000.00).

Sec. 6. Cooperative Business Activities and Allied Services, - A duly registered

agricultural cooperative may engage in all or any of the following activities:

a. Raising and/or culture of plants, high-value crops, animals, fish, poultry,
livestock, other agri-products as source of food, feed, and fiber, and other
agri-fishery or non-food commodities;

. Production of salt;
. Community and social forestry;
. Provision of savings and credit facilities for marginal farmers and fishermen;

eangs

. Facilitating the procurement and distribution of farm inputs/implements for


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its members;

f. Processing, marketing, and sale of members’ agri-products or produce;

g. Maintenance and management of irrigation systems, water impounding, and
other agricultural facilities; and

h. Other allied services such as, but not limited to, warehousing, cold storage
and other post-harvest services, hauling, transport of members’ products or
produce, and such other similar business services and activities that will
reduce cost or add value.

Sec. 7. Bond of Membership. - The bond of membership of agricultural

cooperatives shall be any of the following:

a. Residential - members are farmers, farm workers, or fisherfolk who are
actually and physically residing within the area of operation;

b. Occupational —- members are those who are engaged in raising or culture of
plants or animals, or are part of the technical and scientific communities of
the agriculture sector;

c. Associational - members are from registered associations, groups, clubs,
cultural and other similar aggrupation of farmers, farm workers, and
fisherfolk; and

d. Institutional - members are employees, workers, or officers of a particular
institution who are undertaking or will undertake agricultural projects.
Provided, that at least fifty-one per centum (51%) of its members are duly
registered with the Registry System for Basic Sectors in Agriculture (RSBSA).

CHAPTER III
BENEFITS OF AGRICULTURAL COOPERATIVES

Sec. 8. Tax Treatment of Agricultural Cooperatives that Transact with Non-
members. — Notwithstanding any law or regulation to the contrary, duly registered
agricultural cooperatives that transact with both members and non-members, and
with reserve funds of One Hundred Million Pesos (P100,000,000.00) or below shall be
exempt from all national internal revenue taxes, fees, and charges of whatever name


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and nature.

On the other hand, if such agricultural cooperatives have reserve funds of greater
than One Hundred Million Pesos (P100,000,000.00) shall pay the following taxes on
their transactions with non-members:

a. Income Tax on income derived from transactions with non-members:

Provided, That the same tax is not consequently imposed on interest

individually received by members. The tax base for all cooperatives liable to

Pay income tax shall be the income directly related from the business

transactions with non-members after deducting the amounts for the statutory

funds;

b, Value-Added Tax (VAT) on transactions with non-members: Provided,
however, that duly registered agricultural cooperatives shall be exempt from
the imposition of VAT, on the following:

(i)

(ii)

Sales by agricultural cooperatives duly registered with the DA to their
members as well as sale of their produce, whether in its original state
or processed form, to non-members; their importation of direct farm
inputs, machineries and equipment, including spare parts thereof, to
be used directly and exclusively in the production and/or processing
of their produce, and their resale to other agricultural cooperatives;
Gross receipts from lending activities towards its members or other
agricultural cooperatives;

Provided, That the exempt transactions in the foregoing shall include
sales made by agricultural cooperatives duly registered with the DA
organized and operated by their members to undertake the
production and processing of raw materials or of goods produced by
their members into finished or process products for sale by the
cooperatives to their members and non-members. Provided, however,
that any processed product or its derivative arising from the raw
materials produced by their members, sold in the name and for the
account of the cooperative shall be deemed a product of the


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cooperative and its members: Provided, further, That at least twenty-
five per centum (25%) of the net income of the cooperatives is
returned to the members in the form of interest and/or patronage
refunds.

cc. All sales of goods and/or services rendered for non-members shall be subject
to the applicable percentage taxes; and

d. All other taxes unless otherwise provided herein.

Donations to duly accredited charitable, research and educational institutions
and reinvestment to socioeconomic projects within the area of operation of the
cooperative may be tax deductible.

Sec. 9. Tax Treatment of Agricultural Cooperatives that Transact with Members
Only. - Duly registered agricultural cooperatives under this Act which do not transact
any business with non-members or the general public shall not be subject to any
taxes, fees, and charges imposed under the internal revenue laws and other tax laws.

Sec. 10. Other Benefits and Privileges of Agricultural Cooperatives, — An
agricultural cooperative shall enjoy the following benefits and privileges:
a. Taxes, Duties, and Liens:

(1) All benefits, privileges, and tax treatments of cooperatives as
defined and enumerated under RA 9520 and other relevant laws
shall apply to agricultural cooperatives;

(2) Agricultural cooperatives shall be exempt from customs duties,
advance sales or compensating taxes on their importation and
local purchase of machineries, equipment, accessories, batteries,
and spare parts used by them: Provided, That all tax- and duty-
free imports and local purchases shall not be sold nor the
beneficial ownership thereof be transferred to any person until
after five (5) years, otherwise, the cooperative and the transferee
or assignee shall be solidarily liable to pay twice the amount of


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the imposed tax and/or duties; and

(3) All real properties owned, and those directly used for the
operations, management, and maintenance of agricultural
cooperatives shall be exempt from the payment of real property
taxes imposed under existing laws.

b. Trainings and Conferences - All trainings and conferences necessary for the
organization, registration, management and operations of an agricultural
cooperative, rendered by the appropriate government agency, shall be given
free of charge, including costs of venue, training materials, speakers and
resource persons. The CDOs shall be primarily responsible for these trainings
and conferences within their respective localities.

c. Consolidation - Agricultural cooperatives may consolidate agricultural lands

owned by its members within in a contiguous area for purposes of agricultural
development.

e. Direct Purchase by National and Local Government Agencies — To promote
and support agricultural cooperatives, national and local government
agencies shall directly purchase at least fifty percent (50%) of their targeted
agricultural products from accredited agricultural cooperatives; Provided,
That said products are necessary in the performance of their respective
mandates.

Further, in areas where there are agricultural cooperatives, at least fifty per
centum (50%) of the supply to government institutions, agencies, and LGUs,
of rice, corn, grains, fish and other marine products, meat, eggs, milk,
vegetables, and other agricultural commodities such as fertilizers, seeds and
other agricultural inputs and implements, and related products, shall be
sourced from such cooperatives.

For the purposes of this Act, the procurement by national and local
government agencies of said agricultural products shall be exempt from the


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application of the bidding process prescribed under relevant government
procurement laws; Provided, That said agencies shall undergo a negotiated
procurement under the applicable guidelines of the Government Procurement
Policy Board.

e. Loans and Grants:

(1) All loans applied for by agricultural cooperatives in any
government-owned or -controlled banks or government financial
institutions shall enjoy preferential treatment as to the
requirements, rates, securities, and collaterals; and

(2) The DA shall coordinate with the Bangko Sentral ng Pilipinas
(BSP) to lower the requirements for all loans applied for and
granted to agricultural cooperatives.

f. Strengthening Program for Agricultural Cooperatives — the government
through the DA and CDA shall introduce a program aimed at strengthening
agricultural cooperatives through mergers and consolidations. This initiative,
part of the government's broader effort to enhance the stability and resilience

of the agriculture sector, offers income support incentives to encourage
smaller agricultural cooperatives and farmers associations to consolidate that
can lead to improved operational efficiencies, reducing costs and improving
service delivery for agricultural cooperatives. These may include grants or
subsidies that help build business scale and improve capital base, operational
synergies, broader service offerings, and risk mitigation.

Sec. 11. Organization as a Multi-Purpose Cooperative. — Notwithstanding any

law to the contrary, an agricultural cooperative may be organized as a multi-purpose
cooperative from its registration with the CDA: Provided, that it has complied with the
minimum requirements for an agricultural cooperative as prescribed by the CDA Rules
and Regulations.

Sec. 12. Pre-Cooperative Agricultural Organization. — Prior to registration with


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the CDA, a group of natural persons intending to form an agriculture cooperative may
voluntarily form a Pre-Cooperative Agricultural Organization (PCAO) that shall have its
own juridical personality to undertake activities that shall determine the viability of the
creation of an agricultural cooperative. The PCAO must be registered as such with the
Cooperative Development Offices (CDOs) of the appropriate LGU where the PCAO
intends to operate. The Bureau may assist and endorse PCAOs to CDA for registration.

The DA and CDA, in coordination with the CDOs, shall assist PCAOs so that they
can formally organize as agricultural cooperatives; Provided, that should the PCAO
decide to formally organize into a cooperative, it must comply with the requirements
under the law. Any contract executed by the PCAO prior to its registration as an
agricultural cooperative shall remain valid and binding between the parties insofar as
it redounds to the benefit of the cooperative.

The DA and CDA shall jointly issue guidelines on the mechanisms for PCAOs.

CHAPTER IV
NATIONAL FEDERATION OF AGRICULTURAL COOPERATIVES

Sec. 13. Organization of the National Federation of Agricultural Cooperatives
(NFAC). - There is hereby organized the National Federation of Agricultural
Cooperatives (NFAC), (hereinafter, the “Federation”), which shall be the single
federation of agricultural cooperatives.

Sec. 14. Consolidation/Merger of Existing Duly-Registered Agricultural
Cooperatives Federation. ~ Agricultural Cooperative Federations duly-registered with
the CDA prior to the effectivity of this Act shall merge or consolidate in accordance
with existing applicable laws, rules and regulations. The merged or consolidated
federation shall serve as the single National Federation of Agricultural Cooperatives
(NFAC).

The DA and CDA shall issue the guidelines on the merger and/or consolidation


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of existing federations of agricultural cooperatives.

Sec. 15. Mandatory Membership of Primary Agricultural Cooperatives to the
Federation. It is compulsory for Primary Agricultural Cooperatives to become members
of the National Federation of Agricultural Cooperatives (NFAC).

Sec. 16. Governance of the Federation. - The Chairpersons of the member-
primary agricultural cooperatives shall comprise the General Assembly of the
Federation who shall elect and appoint the Officers and Management Staff in
accordance with its duly-approved Articles of Cooperation and By-Laws.

Sec. 17. Primary Business Operations Through Subsidiary/ies. - The Federation
shall be allowed to organize subsidiary cooperatives and/or corporations that will
engage in Agribusiness and Financial Business the surplus and/or income of which
shall be utilized to fund, wholly or in part, the needed services of the member-primary
agricultural cooperatives. Such subsidiary/ies shall be registered with the necessary
regulatory authorities including, but not limiting to, the DA, CDA, SEC and Board of
Investments and shall enjoy the relevant exemptions and privileges under this Act,
the Cooperative Code, and other laws, rules and regulations.

Sec. 18. Channel And/Or Partner of Farmer-Related Government and Non-
Government Programs, Projects and Activities. - The Federation shall serve as channel
and/or partner in the implementation of various Programs, Projects and Activities of
National Government Agencies, Local Government Units and Non-Government
Organizations for the benefit of the farmers and their respective families.

Sec. 19. Inter-Cooperative Arrangements. - The Federation shall be allowed to
enter into inter-cooperative arrangements with and among other non-agriculture
cooperative federations and other entities to pursue value and supply chain solutions
and other agribusiness development programs, subject to the guidelines to be jointly
promulgated by the DA and CDA.

Sec. 20. Partnership and Joint Venture with Private Entities. - Duly registered


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private entities may enter into a partnership or joint venture with the Federation in
order to provide the latter with investments and technical support, such as, but not
limited to technological, logistics, and facilities support, among others. Such
partnership or joint venture shall be registered with the necessary regulatory
authorities, including the DA and CDA, and shall enjoy the relevant exemptions and
privileges under this Act, the Cooperative Code, and other laws, rules and regulations.

This notwithstanding, the equity or contribution of such private entity shall not
exceed forty percent (40%) of the partnership or joint venture.

Sec. 21. Supervision and Control — The DA shall exercise supervision and
control over the Federation. In like manner, the Federation shall exercise supervision
and control over its member-primary agricultural cooperatives through the conduct of
regular audit/s in accordance with the standards approved by the DA and the CDA.
Sanctions imposed on non-compliant member-primary cooperatives shall be approved
by the DA and CDA.

The DA and CDA shall, in consultation with the Federation, issue guidelines on
the supervision and control of agricultural cooperatives.

CHAPTER V
‘WHOLESALE MARKET

Sec. 22. Establishment of Wholesale Markets. —- There is hereby established at
least one Wholesale Market in every province owned by the respective Local
Government Units (LGUs) and operated by the National Federation of Agricultural
Cooperatives (NFAC) or its appropriate subsidiary/ies.

The DA, DILG and the CDA shall, in close coordination with the Federation, issue
the rules and regulations on Wholesale Market establishment and operation.

CHAPTER VI
COOPERATIVE CLIMATE RESILIENCE FUND


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Sec. 23. Creation of the Cooperative Climate Resilience Fund. — There is hereby
established a Cooperative Climate Resilience Fund managed by the National
Federation of Agricultural Cooperatives (NFAC) to be pooled from government,
agricultural cooperatives and other private entities, the utilization of which shall be
subject to the guidelines promulgated by the Agricultural Cooperatives Council. At
least fifty percentum (50%) of the Cooperative Climate Resilience Fund shall come
from the government.

CHAPTER VII
BUREAU OF AGRICULTURAL COOPERATIVES

Sec. 24. Creation of the Bureau of Agricultural Cooperatives. - The DA shall
establish a Bureau of Agricultural Cooperatives (hereafter, the “ Bureau’), which shall
be the primary coordinating, implementing, and administrative body responsible for
matters relating to agricultural cooperatives, including, but not limited to, monitoring
their performance and implementing plans and programs for their growth and
development. The Bureau shall be headed by a qualified Director, and its
organizational and staffing pattern shall be determined by the DA, in accordance with
the rules set forth by the Department of Budget and Management (DBM).

Sec. 25. Powers and Functions of the Bureau of Agricultural Cooperatives. - The
Bureau of Agricultural Cooperatives shall exercise the following powers and functions:
a. Collaborate and coordinate with various government agencies,
institutions, and units for the development and implementation of projects

and plans for agricultural cooperatives;

b. Promote the use of digital platforms and innovative technologies for the
growth and development of agricultural cooperatives, in coordination with
the relevant agencies;

¢. Consolidate and study all relevant information regarding agricultural
cooperatives that shall be used in the formulation of policies and programs
for the sector;

d. Develop advocacy programs for capacity-building and further education


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of members of agricultural cooperatives, with a particular focus on women
and youth;

e. Provide technical assistance to agricultural cooperatives;

f. In partnership with the NFAC, establish Local Development Hubs (LDHs)
in order to foster cooperation, collaboration, and mutual support among
agricultural cooperatives, in coordination with the CDA and LGUs;

g. Promote agricultural cooperative clusters and assist in the creation
thereof, as a means to forge strategic partnerships among cooperatives;
and

h. Monitor and evaluate the performance of agricultural cooperatives
according to an established assessment and ratings system.

Sec. 26. Sustainability Mapping. - Within one (1) year from the effectivity of
this Act, the Bureau shall undertake a comprehensive nationwide survey in order to
assess the agricultural sustainability status of each region and LGU. The findings of
such nationwide survey shall serve as the foundation for the formulation of a ten (10)-
year Food Security Master Plan. The Master Plan shall identify priority sectors and
projects aimed at promoting agricultural development and sustainability throughout
the country. The plan shall be designed to enhance food security, improve agricultural
productivity, and ensure long-term sustainability of the agricultural sector.

Sec. 27. Clustering and Consolidation. — In order to pool their resources for
increased viability and market competitiveness, the DA, Department of Agrarian
Reform (DAR), Department of Trade and Industry (DTI), CDA and NFAC shall jointly
establish a program that will promote, encourage agricultural cooperatives and
facilitate their cooperation into clusters that will encompass the whole agricultural
value chain, including but not limited to land consolidation, postharvest processing,
distribution, logistics, marketing, and promotions.

Within sixty (60) days from the effectivity of this Act, the DA, DAR, DTI and CDA,
in consultation with the NFAC, shall jointly issue the guidelines for the implementation
of the foregoing program, and shall provide the necessary assistance at every step of
the clustering and consolidation process, including the formulation of cluster


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development plans.

Notwithstanding any law to the contrary, the clustering or merger and
consolidation of agricultural cooperatives shall be in accordance with the
Implementing Rules and Regulations of this Act.

Sec. 28. Loca/ Development Hubs. - The DA and CDA shall jointly establish Local
Development Hubs (LDHs) in order to strengthen the market linkages between
farmers and buyers, fostering agricultural development and economic growth at the
local level. Further, they shall jointly issue the guidelines for the operations and
maintenance thereof.

Sec. 29. Collaboration with the NFAC, Cooperative Development Councils and
National Government Agencies. - The Bureau shall, in collaboration with the National
Federation of Agricultural Cooperatives (NFAC), LGUs through the Regional, Provincial,
City, and Municipal Cooperative Development Councils and the CDOs, facilitate and
promote programs and policies that enables the growth and development of
agricultural cooperatives. The DA, CDA, and the relevant LGU or agency in consultation
with NFAC shall issue a Joint Memorandum Circular for the implementation of this

provision.

Agricultural cooperatives shall be entitled to financing support from the relevant
government agencies that shall allocate funds for the establishment of projects and
programs for the development and promotion of agricultural cooperatives.

Sec. 30. Sustainability and Innovation. - The Bureau shall allocate funding and
support for the development and implementation of innovative and sustainable
agricultural practices.

Sec. 31. Mentorship and Training. - The Bureau shall implement programs that
will focus on the capacity- and capability-building of members of agricultural
cooperatives, especially the empowerment of women and young farmers. Among
others, these programs may include:


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a. Internship and apprenticeship programs with duly accredited agricultural
cooperatives, in partnership with the Committee on Higher Education
(CHED);

b. Certification programs for management and operation of agricultural
cooperatives, as well as related technical skills, in partnership with the
Technical Education and Skills Development Authority (TESDA);

c. Scholarships or student loan forgiveness, as may be necessary; and

d. Incentives for the discovery or development of innovative and sustainable
agricultural practices or techniques.

Sec. 32. Assessment and Ratings. - Upon the effectivity of this Act, the Bureau
shall establish an assessment and ratings system for agricultural cooperatives, which
shall measure the performance, including the social and community impact, of the
latter using both qualitative and quantitative metrics, and which shall be used to
classify and determine the best-performing agricultural cooperatives among various
categories. Thereafter, the Bureau and the CDA, in close coordination with NFAC shall
review the performance of registered agricultural cooperatives every three (3) years
and update their ratings accordingly.

The DA and CDA, in consultation with NFAC shall use the foregoing in the
provision of incentives and benefits to agricultural cooperatives under the law.

Sec. 33. Annual Trade Fair and Awards. - The Bureau, in coordination with the
CDA and the National Federation of Agricultural Cooperatives (NFAC), shall establish
the Annual Agricultural Cooperatives Trade Fair and Awards to showcase exemplary
business achievement, latest innovations, and other emerging trends in the sector.
The Bureau shall ensure that agricultural cooperatives are able to participate and
exhibit their products during said Fair and shall encourage the latter's participation in
other trade fairs and expos.

CHAPTER III
AGRICULTURAL COOPERATIVES COUNCIL


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Sec. 34. Creation of the Agricultural Cooperatives Council, - There is hereby
created the Agricultural Cooperatives Council (hereafter, the “Council”), which shall
be the primary policy and planning body for the promotion, development, and
modernization of agricultural cooperatives and organizations.

Sec. 35. Composition of the Council. - The Council shall be composed of the
following members, or their duly authorized representatives:
. Secretary of Agriculture, as Chairperson;
. Chairperson of the CDA, Vice-Chairperson;
. Undersecretary of the Department of Trade and Industry;

. Undersecretary of the Department of Environment and Natural Resources;
Undersecretary of the Department of Education;
. Undersecretary of the Department of Science and Technology;
|. Director-General of the National Economic Development Authority;
i. Director-General of the TESDA;
j. Executive Director of the National Disaster Risk Reduction and
Management Council;
k. Commissioner of the CHED;
|. Representative from the Philippine Statistics Authority;
m. One (1) Representative each from Cooperative Climate Resiliency Fund

a.
b.
c.
d. Undersecretary of the Department of Agrarian Reform;
e
f.
9.
h.

private donor entities;

n. Representative from the National Federation of Agricultural Cooperatives
(NFAC) and

0. Two (2) representatives each, from the primary agricultural cooperatives
sector who are members of the National Federation of Agricultural
Cooperatives (NFAC), for Luzon, Visayas, and Mindanao

Sec. 36. Powers and Functions of the Council. - The Council shall exercise the
following powers and functions:

a. Formulate and issue policies for the growth and development of the

agricultural cooperative sector, which shall encompass adoption of

innovative and ecological agricultural practices, access to resources and


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benefits, market opportunities, and capacity-building, among others;

. Formulate the Food Security Master Plan, in coordination with the Bureau;
. Provide an integrated framework in order to optimize all government

resources for the modernization and empowerment of the sector;

. Issue guidelines, rules, and regulations for the development of the

tangible assets, such as machineries, granaries, equipment, and lands,
among others, of agricultural cooperatives;

. Issue guidelines, rules, and regulations, in coordination with the

appropriate agencies, to ensure the rights and welfare of agricultural
cooperatives and their members, especially women, youth, and family
farmers, as well as their preferential treatment in government
procurement as enshrined under the law;

Formulate policies for the development of sustainable financial reform in
the agricultural cooperative sector, including the creation of a government
financial institution that will specifically cater to the sector, in coordination
with the relevant departments and agencies;

. Develop policies and guidelines for the institutionalization of Cooperative

Resilience Mechanism (CRM) that will aid agricultural to adapt to and
recover from the effects of climate change or other unforeseen
circumstances. The CRM shall embody a holistic approach, with provisions
for funding assistance, addressing production and distribution issues, and
use of new or innovative technologies, production technologies using
renewable energies, regenerative and sustainable agriculture, among
others; and

. Advocate for policy reforms and programs that enhance social protection

of the agricultural cooperatives and their members, including access to
healthcare, insurance, and retirement benefits, among others.

Sec. 37. Policies Fostering Inclusivity and Sustainability. — Recognizing the
contributions of women and youth to the agricultural sector, as well as the need to
improve inclusivity, the Council shall prioritize policies that seek to improve women
empowerment and youth participation in the sector, and which shall foster
sustainability and further opportunities for economic growth.


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Further, the Council shall prioritize the implementation of policies that enhance
biodiversity, sustainability, and agroecology, and the development of innovative
farming techniques and practices.

Sec. 38. Secretariat. - The Bureau shall serve as the Secretariat to the Council.

Sec. 39. Per Diem. - The members of the Council shall each receive a per diem
pursuant to existing laws, for each meeting of the Council actually attended; provided,
that in the case of representatives from the private sector, the Council is authorized
to provide funds to defray the cost of reasonable travel expenses, in addition to the
per diem, as may be necessary.

CHAPTER IV
OTHER PROVISIONS

Sec. 40. Role of LGUs. - The Local Government Units shall:

a. Ensure the appointment of CDOs in compliance with Republic Act NO. 11535;

b. Create a Committee on Agricultural Cooperatives Development in the Local
Government Legislatives Council, which shall focus on addressing legislative
concerns of agricultural cooperatives;

¢. Disseminate information and promote agricultural cooperatives in their
respective localities;

d. Facilitate the establishment and develop the management and operations of
agricultural cooperatives within their jurisdictions;

e. Expedite the issuance of necessary permits for the implementation of projects
and programs of the DA, CDA, and other government agencies and
instrumentalities for the benefit of agricultural cooperatives;

f. Upon written request of the CDA, assist in the resolution of inter-cooperative
disputes among agricultural cooperatives operating within their localities;

g. Facilitate and conduct seminars, trainings, and conferences necessary for the
organization, registration, management, and operations of agricultural
cooperatives, in coordination with cooperative federations and unions; and

h. Provide technical assistance and skills training for farmers, farm workers, and


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fisherfolk to engage in income-generating activities.

Sec. 41. Appropriation - The amount necessary for the initial implementation of
this Act shall be taken from the current fiscal year's appropriation of the DA and DTI.
Thereafter, the amount necessary to carry out the provisions of this Act shall be
appropriated in the General Appropriations Act of the year following its enactment into

law.

Sec. 42. Implementing Rules and Regulations. — Within ninety (90) days from
the effectivity of this Act, the DA, in coordination with the relevant departments and
agencies, shall issue the necessary rules and regulations to implement this Act.

Sec. 43. Annual Reports. - The Council shall submit an annual report to the
Congress of the Philippines on the progress of its projects and plans and offer
recommendations for possible legislation.

Sec. 44. Sunset Review. — Within five (5) years after the effectivity of this Act,
or as the need arises, the House Committee on Agriculture and Food shall conduct a
sunset review. For purposes of this Act, the term “sunset review” shall mean a
systematic evaluation of the accomplishments and impact of this Act, as well as the
performance and organizational structure of its implementing entities, for purposes of
determining remedial legislation.

Sec. 45. Repealing Clause. - All laws, decrees, executive orders, administrative
orders, rules and regulations or parts thereof inconsistent with the provisions of this
Act are hereby repealed or modified accordingly.

Sec. 46. Separability Clause. — In case any provisions of this Act or any portion
thereof is declared unenforceable, illegal, or unconstitutional by a competent court,
other provisions shall not be affected thereby.

Sec. 47. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in two (2) newspapers of general circulation.


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Approved,