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

Seventeenth Congress
Second Regular Session

HOUSE BILL. no.6828

Introduced by Representative Sharon S. Garin

EXPLANATORY NOTE

Food sufficiency should be the duty of everyone and not just the government, With
this in mind, it is only proper that we seek to entice the private sector, particularly large and
considerable corporations and partnerships to enter into agricultural production to augment
the country’s food needs and contribute to the challenge of food security and sustainability.

It can’t be denied that most of our problems in agriculture can be explained by our
small and fragmented farm holdings. A lot of our farmers still rely on subsistence and
backyard farming, and though it might be enough to support the farmer’s family, such
scheme is not productive or efficient enough to address the country’s food security needs.
‘Small farms suffer from lack of economy of scale from land preparation all the way to post-
harvest handling, processing, domestic marketing, and exports.

This bill aims to introduce a corporate farming program with rice and com as primary
crops, which would give corporations and partnerships incentives to take up farming. The
entry of the corporations and partnerships in farming would correct most of the shortcomings
of small-scale farms which include lack of capital, shortage of competent business managers,
and loose financial controls, to name a few.

The corporation may enter into contractual or joint venture arrangements with
landowners, farmers’ organizations and agrarian reform communities (ARCs) and provide
them with capital, production inputs, technology boost, and other technical and related
services. This will result higher levels of productivity compared with small family-managed
farms because the corporate farms have better access to inputs, modern technology and
markets.

This scheme also assures the farmer of higher income from his land because he
partakes of the margins in primary production as well as in the rest of the value chain to
which he is normally not entitled in conventional farming.

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



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

Seventeenth Congress
Second Regular Session

HOUSE BILL NO. 6328

Introduced by Representa

AN ACT
PROMOTING CORPORATE FARMING AND PROVIDING INCENTIVES
THEREFOR

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

SECTION 1. Title. — This Act shall be known as the “Corporate Farming Program
Act.”

SEC. 2. 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. 3. 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
cor production and which are subject for distribution under the Comprehensive

Agrarian Reform Program may enter into management contracts or joint venture


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arrangements with the agrarian reform beneficiaries, their associations or cooperatives

for the production of rice and corn;

b. Corporations and partnerships may lease private agricultural land suitable for rice and
com 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. 4. 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. 5. Corporate Farming Committee — The Corporate Farming Committee,

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hereinafter referred to as the Committee, shall be constituted under the Office of the
3 President, and shall institute measures to ensure higher rice and corn productivity through
4 corporate farming schemes. It shall be composed of the following:

6 a. Secretary of the Department of Agriculture (DA);

6 b. Secretary of the Department of Agrarian Reform (DAR);
7 ¢. Commissioner of the Bureau of Customs (BOC);

8 d. Commissioner of the Bureau of Internal Revenue (BIR);

9 €. Secretary of the Department of the Interior and Local Government (DILG);
10 f, Representative of the National Food Authority (NFA);
" g. Representative of Participating Corporations and Partnerships; and
12 h. Representative of farmers’ organizations and agrarian reform communities (ARC);
13 SEC. 6. Duties of the Corporate Farming Committee. — In coordination with the

14 concerned agencies, the Committee shall facilitate the processing of management contracts
15 between corporations and partnerships and the farmers groups. The Committee shall exercise

16 the following functions:

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

22 b. Facilitate and promote grassroots cooperation to access agricultural services such as
23 information, inputs, and technical assistance,

24 ©. Initiate and develop periodic rural and farm assembly markets to provide avenues to

25 showcase their produce;


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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,

©. 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. 7. 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. 8. 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. 9. Duration. ~ Participating corporations and partnerships may lease private
agricultural lands for a period of seven (7) years which may be renewed for another seven (7)

years, subject to the consent of the farmers, their associations and cooperatives.


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SEC. 10. Automatic Review. ~The Committee 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. 11. Implementing Rules and Regulations (IRR). ~ The Committee, 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. 12. Separability Clause. ~ The provisions of this Act are hereby declared to be
separable, and in the event one or more such provisions are held unconstitutional, the validity
of the other provisions shall not be affected thereby.

SEC. 13. 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. 14. 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,