SEVENTEENTH CONGRESS ——)
REPUBLIC OF THE PHILIPPINES )
Second Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Maximo B. Rodriguez, Jr.
House Bill No. ‘7610

EXPLANATORY NOTE

Farm-to-market roads (FMR’s) are roads that connect rural or agricultural
areas to market towns and are used by farmers transport products to market towns
or distribution centers. FMRs will provide access to agricultural goods to the market,
as well as support for the establishment of agri-business enterprises by promoting
linkages between and among the agrarian reform communities in different provinces.

In the Philippines, agricultural markets play a key role in the lives of poor
people especially considering that we are a developing country. Majority of our
population are in developing regions and in rural areas where agriculture typically
constitutes 50-90 percent of household income. As a result, the development of
efficient agricultural markets has a large impact on the economic opportunities of
tural households. Rural households, however, are subject to a number of constraints
including lack of access to buyers of their products. These make their participation in
the market both costly and risky, often leaving them “unconnected.” When these
constraints are removed, farmers can eam more by specializing in crops for which
they have a comparative advantage and purchase commodities that are relatively
costly for them to grow. Further, FMR’s also generate jobs that would also help our
economy

Republic Act 8435, or the “Agriculture and Fisheries Modernization Act of
1997" was enacted in order to have a more equitable distribution of opportunities,
income and wealth; a sustainable increase in the amount of goods and services
produced by the nation for the benefit of the people: and an expanding productivity
as the key to raising the quality of life for all, especially the underprivileged. However,
the same law seems to have a provision that is in contravention with the stated
policies of the State provided for in the same law, particularly on the section on
Farm-to-Market Roads. The law requires Local Government Units to provide a
counterpart of not less than ten percent (10%) of the project cost subject to their
Internal Revenue Allotment (IRA) level.

As we all know, the IRA is a local government unit's (LGU) share of revenues
from the Philippine national government. Provinces, independent cities, component
Cities, municipalities, and barangays each get a separate allotment. The allotment is
largely based upon the type of government they are and a formula based upon their
land area and population. Section 284 of the Local Government Code of the
Philippines (RA 7160) sets up the formula for the distribution of the allotment. For
some municipalities, the IRA accounts for 90% of total revenues. Since cities have
more sources of local revenues, their IRA ranges from 50% to 70% of their total
budget.

Since some LGUs solely rely on IRA for their revenue, it would be very
difficult for them and unfair to still require them to use their IRA for the construction of
FMR's which these LGUs really need to increase their revenue.


In view of the foregoing, immediate passage of this bill is eamestly requested:

(i

MAXIMO B. RODRIGUEZ, JR.


SEVENTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
‘Second Regular Session )

HOUSE OF REPRESENTATIVES,

Introduced by Representative Maximo B. Rodriguez, Jr.

House Bill No. 7610

AN ACT
AMENDING SECTION 52 OF REPUBLIC ACT NO. 8435 OR THE AGRICULTURE
AND FISHERIES MODERNIZATION ACT OF 1997

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

SECTION 1. Section 52 of Republic Act 8435 is hereby amended to read as follows:

“Section 52. Farm-to-Market Roads

The Department shall coordinate with the LGUs and the
resident-farmers and fisherfolk in order to identify priority
locations of farm-to-market roads that take into account the
number of farmers and fisherfolk and their families who
shall benefit therefrom and the amount, kind and
importance of agricultural and fisheries products produced
in the area.

Construction of farm-to-market roads shall be a priority
[investment] of the LGUs. [which shall provide a
counterpart of not less than ten percent (10%) of the
project cost subject to their IRA level] “

SECTION 2. Repealing Clause. - All laws, decrees, executive orders, rules and
regulations and other issuances or part thereof, which are inconsistent with this Act,
are hereby repealed, amended, or modified accordingly.

SECTION 3. Effectivity Clause. - This Act shall take effect fifteen (15) days following
the completion of its publication in the Official Gazette or in two (2) newspapers of
general circulation.

Approved,