EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
- 
i3KiL: O i; 
•■••tfi"
S E N A T E
S. NO. 75Q
‘■9 
j 1.'. 24 
a:: 53
Introduced by Senator Grace Poe
AN ACT
PROMOTING CORPORATIVE FARMING 
AND PROVIDING INCENTIVES FOR ITS EFFECTIVE IMPLEMENTATION
Explanatory Note1
The current food crisis and the rice importation fiasco highlight the need to 
review government policies on food security and to seek creative means to 
reinvigorate the agricultural sector. As a newly liberalizing economy competing 
against well-entrenched world economies, the Philippines is hard-pressed to make its 
agricultural policies more responsive.
Investments in the agricultural sector cannot be shouldered by the public 
sector alone. Hence, this measure aims to implement corporative farming programs 
to attract more private sector engagement in the agriculture sector. Corporative 
farming enables the vertical integration the entire process of food production. 
Moreover, it offers more efficient management not only of the farm itself, but also 
of the entire chain 
of agriculture-related 
business, 
including 
seed 
supply, 
agrochemicals, 
food 
processing, 
machinery, 
storage, 
transport, 
distribution, 
marketing, advertising, and retail sales. This would ensure more stable rice and corn 
supplies and make rice and corn prices more predictable.
The immediate approval of this measure is earnestly sought.
1 A version of this biil was previously filed during the 17th Congress as a counterpart of the measure 
proposed by BUTIL farmers party-list.


EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S E N A T E
’ 9 
JUL 24 /lii :58
Introduced by Senator Grace Poe
AN ACT
PROMOTING CORPORATIVE FARMING 
AND PROVIDING INCENTIVES FOR ITS EFFECTIVE IMPLEMENTATION
Be it enacted by the Senate and House o f Representatives o f the Philippines in 
Congress assembled:
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Section 1. Domestic Corporations and Partnerships. -  For the purpose of this
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Act, domestic corporations and partnerships shall refer to all corporations and
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partnerships organized and existing under Philippine laws, operating for profit:
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Provided, that said corporations and partnerships report earnings over the last four
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(4) years that allow them to engage in the production of rice/ corn for their
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employees' requirements without adversely affecting their financial viability.
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Appropriate guidelines shall 
be 
issued to determine the corporations and
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partnerships that are to be covered by this Act.
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Sec. 2. Corporative Farming Arrangements. -  Participation in Corporative
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Farming programs shall be on a voluntary basis. For the purpose of this Act,
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corporations/partnerships 
may engage in the following 
Corporative 
Farming
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programs:
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(a) 
Corporations/partnerships with existing landholdings suitable for
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rice/corn production may manage the land and produce the rice/corn or may
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enter into a management/contractual arrangement with farmers' groups such
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as farmers' associations, cooperatives, and agrarian 
reform communities
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(ARCS);


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(b) 
Corporations/ partnerships may purchase or lease, on a long 
term basis, public or private agricultural land suitable for rice/corn production, 
whereby the corporations/partnerships are given full management and 
production control over the purchased or leased lands or may enter into 
contractual arrangements, or joint ventures with landowners, farmers' 
organizations and ARCS.
Agricultural land purchased or leased for the purpose cannot be 
converted to other uses. Should the Corporative Farming venture cease to be 
financially viable and the partners declare bankruptcy or insolvency, land 
ownership shall automatically revert to the agrarian reform beneficiaries 
within a period of three (3) years in the case of public agriculture lands and 
private lands originally distributed under the Comprehensive Agrarian Reform 
program. 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.
(c) 
Corporations/partnerships 
may 
enter 
into 
contractual 
arrangements with farmers' organizations/ ARCS, whereby the corporations 
and partnerships will provide the production inputs and technical and related 
services, then buy back the produce. Provided, that the farm inputs that shall 
be utilized shall subscribe to the requirements set forth by Republic Act 10068 
or the "Organic Agriculture Act of 2010."
Local 
Government 
Units 
(LGUs) 
shall 
be 
required 
to 
identify 
appropriate land areas for Corporative Farming in consonance with their 
comprehensive land-use plan and ordinances. The LGU shall require the 
participating 
corporations/partnerships 
to 
provide 
livelihood 
projects/opportunities to families who will not be hired by the said entities.
Further, the LGUs may also identify local taxes that may be offered as 
incentives for Corporative Farming.
(d) 
Corporations/partnerships 
may 
enter 
into 
contractual 
arrangements 
with 
farmers' 
organizations/ 
ARCs, 
whereby 
farmers' 
organization shall be responsible for the production of raw agricultural


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materials while the corporations/partnerships shall 
perform the agro- 
processing/value-addition and look for domestic and international markets.
(e) 
Farmers' or other 
agricultural 
cooperatives 
with 
existing 
landholdings and sufficient capitalization to undertake a "corporative" farming 
scheme for rice/corn.
Sec. 3. Disposition o f Excess Production. -  The corporations/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. Impiementing Agencies and Impiementing Ruies and Reguiations 
(IRR). -  The Department of Agriculture (DA) and the Department of Agrarian 
Reform (DAR) shall be the lead agencies to institute measures to ensure higher 
rice/corn productivity through Corporative Farming schemes.
Moreover, the DA and the DAR shall facilitate with the appropriate 
government agencies the processing of management contracts between the 
corporations/ partnerships and farmers' groups. Further, the DA and the DAR shall 
oversee and monitor the IRR and guidelines of this Act. The DA and the DAR shall 
exercise the following functions:
(a) 
Develop eligibility criteria for both corporations/ partnerships 
and farmers' groups, cooperatives and/ or ARCs for consideration under this 
Act and to institute their accreditation: Provided, that the farmers' group 
criteria should include management capabilities, technical and production 
skills critical to the effective operation of the Corporative farm.
(b) 
Identify suitable private and public-owned rice/ corn production 
areas for Corporative farming and determine the maximum ceiling of 
landholdings for Corporative Farming arrangements: Provided, that the DA 
and the DAR shall periodically determine the need to expand/reduce rice/corn 
production areas for Corporative Farming schemed on the basis of rice/corn 
demand-supply gaps;
(c) 
Facilitate 
and 
promote 
grassroots 
cooperation 
to 
access 
agricultural services such as information, inputs, and technical assistance;


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(d) 
Initiate and develop periodic rural/arm assembly markets to 
provide avenues to showcase their produce;
(e) 
Exercise regulatory functions with respect to the adherence to 
the provisions of contracts and arrangements entered 
into by both 
corporations/ partnerships and farmers' groups, cooperatives and/or ARCs 
and to develop mechanism to facilitate negotiations and mediate in disputes 
between stakeholders on matters of contract enforcement;
(f) 
Coordinate with the appropriate government agencies to ensure 
the timely establishment of support services such as credit, infrastructure, 
extension services, and others;
(g) 
In consultation with other concerned government agencies, non­
government organizations, private sectors, and farmers' groups involve in 
rice/corn production, formulate the IRR necessary to operationalize the 
provisions of this Act within ninety (90) days from approval; and
(h) 
Facilitate the registration of the participating corporations/ 
partnerships with the NFA.
Sec. 5. Incentive package. -  Corporations/partnerships which shall participate 
in the Corporative Farming Act shall be entitled to tax incentives covering all aspects 
of the operation germane to Corporative Farming activities.
These include the following:
(a) 
Exemption from the payment of customs duties on the 
importation of all types of agricultural Inputs, particularly seeds, fertilizers, 
agricultural machinery, and other agricultural implements as provided under 
Republic Act No. 9281, which amends Republic Act No. 8435 or the 
Agriculture and Fisheries Modernization Act;
(b) 
Exemption from the value-added tax (VAT) on the importation 
of agricultural inputs in accordance with Section 109(d) of the National 
Internal 
Revenue Code, as amended; 
Provided, that the importation 
requirement shall be in accordance with the provisions of Republic Act No. 
10068 or the "Organic Agriculture Act of 2010";


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(c) 
Exemption from the payment of capital gain tax for a person
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either natural or juridical, who sells and or transfers idle agricultural land to
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corporations and partnerships engage in Corporative Farming; and,
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(d) 
Tax incentives, including income tax holiday, in accordance with
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the provisions of Executive Order No. 226 or the Omnibus Investment
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Incentives Code, as amended.
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Sec. 6. Other Incentives. -  Loans extended by banks, both government and
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private, to participating corporations/partnerships shall be treated as compliance to
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Republic Act No. 10000 or "The Agri-Agra Reform Credit Act of 2009."
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Sec. 7. Duration. -  Participating corporations/partnerships with existing
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landholdings may engage in rice/corn production within a period of time to be
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determined by this Act. However, those corporations/partnerships which purchased
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agricultural lands for the purpose cannot convert the land to other uses and must
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relinquish land ownership in favour of agrarian reform beneficiaries within a period
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of three (3) years in the case of public agricultural lands and for private lands
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originally distributed under the Comprehensive Agrarian Reform Program should
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they wish to terminate the Corporative Farming agreement.
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Arrangements/negotiations for leased public or idle private agricultural lands
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shall be for a period not less than ten (10) years.
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Sec. 8. Automatic review. -  The DA and the DAR, being the lead government
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agencies in the Corporative Farming Program, shall submit periodic reports to both
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Houses of Congress on the accomplishments of the Program.
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A review on the viability of the program shall be made by the concerned
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agencies after five (5) years of its implementation.
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Sec. 9. Effectivity. -  This act shall take effect after (15) days following its
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publication in the Official Gazette or in a national newspaper of general circulation.
Approved,