SEVENTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
o{ tlie
■17 FEB 23 P1S5
SENATE
RECEIVcD iJV:
S. B. No.
Introduced by Senator Ana Theresia “ Risa” Hontiveros - Baraquel
AN ACT REGULATING THE ESTABLISHMENT AND 
IMPLEMENTATION OF AGRIBUSINESS VENTURES 
ARRANGEMENTS (AVAS) IN AGRARIAN REFORM LANDS
EXPLANATORY NOTE
The advent of increasing interest on land investments in the Philippines fuelled 
by the rising global demand for food and raw materials for agro-fuel production, 
tourism and mining calls for a strong regulatory mechanism to govern land 
investments. The influx of both local and foreign investments in our country has 
exposed the basic sectors, particularly the farmers, fisher folk and indigenous 
peoples, not only to the threat of displacement and loss of control, ownership and 
possession over their lands, but also to adverse incorporation -  whereby they are 
incorporated into the capitalist economy but under terms grossly unfavorable to 
them.
In the Southern part of the Philippines, rich in natural resources and blessed with 
fertile lands, large tracts of lands are being developed into pineapple and banana 
plantations for the export markets. The narrative is that the investments are 
beneficial to the country and uplift the lives of othen/vise impoverished agrarian 
reform beneficiaries. However, a closer look at the agrarian rural economy in 
these areas shows stark asymmetrical relations between the smallholder farmers 
and the transnational investor. And study of the contracts signed between these 
farmers and the investor demonstrates how these asymmetries in economic 
power are translated in legally binding documents that are barely understood by 
the farmer.
It is in this regard that this bill is being proposed. While the economic benefits of 
these agreements cannot be discounted, regulation is necessary in order to 
protect the weaker party to the contract and to ensure that welfare-enhancing 
outcomes are obtained, and will have meaningful impacts on rural poverty 
reduction. This bill seeks to promote productive, collaborative and just relations 
between the private sector and the ARBs, transform the latter into farmer- 
entrepreneurs, and maximize distributed agrarian lands without compromising 
the famers’ tenure rights.
The provisions in this bill emphasize the principle of agrarian reform of providing 
“farmers and farm workers with the opportunity to enhance their dignity and 
improve the quality of their lives through greater productivity of agricultural 
lands.” AVAs should not be a threat to the ARBs’ land rights but should give 
incentive to develop their lands and improve their productivity.
Moreover, the bill likewise ensures that there are social preparation, capacity 
building, and assistance provided to ARBs to better equip them in the negotiation 
for and evaluation of the agreement they are entering into.


In view of the foregoing, the immediate passage of the bill is earnestly sought.
ANA THERESIA “ RISA” HONTIVEROS - 
BARAQUEL


ot hit1
f 1
S?*1
SEVENTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
S. B. No. 1351
*17 FEB 23 PI 55
RtCtiVEDBf;
Introduced by Senator Ana Theresia “ Risa” Hontiveros - Baraquel
AN ACT REGULATING THE ESTABLISHMENT AND IMPLEMENTATION OF 
AGRIBUSINESS VENTURES ARRANGEMENTS (AVAS) IN AGRARIAN
REFORM LANDS
Be it enacted by the Senate and the House of Representatives o f the Philippines 
in Congress Assembled:
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SECTION 1. Title. - This Act shall be entitled as Agribusiness Ventures Arrangements 
in Agrarian Reform Lands Act.
SECTION 2. Governing Principles and Policies. - The 1987 Constitution mandates that 
the State shall promote social justice in all phases of national development, and 
guarantee full respect for human rights.
Predicated on these overarching principles, the agrarian reform program is founded on 
the right of farmers and regular farmworkers, who are landless, to own directly or 
collectively the lands they till or, in the case of other farm workers, to receive a just 
share of the fruits thereof. The State shall ensure that control over the lands awarded 
under the agrarian reform program shall remain always with the agrarian reform 
beneficiaries so that they can plan, organize and manage their farmlands independently 
and productively with adequate support services from the State and investors.
To provide support services to the ARBs, the State shall encourage the participation of 
the private sector in order to enhance the development and productivity of the awarded 
lands under the agrarian reform program. In providing such support services, the State 
shall take utmost consideration of the following, to wit:
a. Ensure the security of ownership, tenure and income of all agrarian reform 
beneficiaries;
b. Optimize the use of distributed lands for agricultural production;
c. Facilitate the development of ARBs or Cooperatives/Associations into viable 
agricultural entrepreneurs or enterprises;
d. Encourage responsible private sector investments in developing agrarian 
reform areas;
e. Address the concerns on food security of the Philippines;
f. Enhance and sustain the productivity and profitability of agrarian reform lands; 
and
g. Transform the local agriculture sector into a globally competitive industry.
SECTION 3. Definition of Terms. - For purposes of this Act, the following terms are 
hereunder defined:
1


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A. Agrarian Reform Beneficiaries (ARBs) refer to qualified individual beneficiaries 
under Presidential Decree (P.D.) No. 27 or R.A. No. 6657, as amended, or 
their cooperative or association duly registered with the Cooperative 
Development Authority (CDA), the Securities and Exchange Commission 
(SEC) or the Bureau of Rural Workers (BRW) of the Department of Labor and 
Employment (DOLE).
B. Agrarian Reform Lands refer to lands awarded under P.D. No. 27 and R.A. No. 
6657, and their amendments.
C. Agribusiness Venture Arrangement (AVA) refers to the entrepreneurial 
collaboration between ARBs and private investors in the implementation of an 
agriculturally-related business venture involving lands distributed under CARP.
D. Arbitration is a voluntary dispute resolution process where the parties submit 
their dispute to an arbitral committee who, in turn, conducts hearings and 
makes final decisions binding upon the parties.
E. Association refers to ARBs who voluntarily form a group duly recognized by 
the SEC or DOLE, and organized for the purpose of, but not limited to, 
entering into an AVA with a common investor.
F. Buiid-Operate-Transfer (BOT) is an AVA scheme where the investor builds, 
rehabilitates or upgrades, at his own cost, capital assets, infrastructure and 
facilities applied to the production, processing and marketing of agricultural 
products and operates the same for a fixed period after which ownership 
thereof is conveyed to the ARBs.
G. Contract Growing is an AVA scheme where the investor provides farm inputs 
and technology at reasonable cost in exchange for the ARBs’ commitment to 
produce certain crops at pre-arranged agreement involving volume, quality 
standards, selling price, delivery and other terms and conditions.
H. Control refers to the power of ARBs to direct the whole operation of the farm.
I. 
Cooperative refers to a group of ARBs, duly registered under R.A. No. 9520, 
otherwise known as the "Philippine Cooperative Code of 2008", who have 
voluntarily (i) pooled their land, human, technological, financial and/or 
economic resources to achieve social and economic ends, (ii) made equitable 
contributions to the capital required, and (iii) accepted a fair share of the risks 
and benefits of the group’s undertakings.
J. Equity is the value of the shares subscribed to and paid for by each party in 
relation to the authorized capital stock of a joint venture corporation.
K. Growership is an AVA scheme where the investor supplies all the inputs and 
required technology for the production of certain crops, with no cost to the 
ARBs, in exchange for the latter’s commitment to produce particular crops at 
pre-arranged agreement involving volume, quality standards, growership fee, 
delivery and other terms and conditions.
L. Investors refer to the former landowners, private individuals, corporations, non­
government 
organizations, 
ARB 
cooperatives/associations, 
government 
owned and/or controlled corporations or any entity duly authorized by law, who 
are willing and able to contribute their capital, equipment and facilities, 
technology, and/or management services in an AVA.


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M. Joint Venture Agreement (JVA) is an AVA scheme where the ARBs and 
investors form a joint venture corporation (JVC) for the purpose of managing 
the farm operations.
N. Lease Agreement is an AVA scheme where the ARBs bind themselves to give 
the investor general control over the use and management of the land for a 
certain amount and for a definite period.
O. Management Contract is an AVA scheme where the ARBs contract the 
services of an individual, partnership or corporation in order to assist in the 
management and operation of the farm in exchange for a fixed wage or 
commission.
P. Marketing Agreement is an AVA scheme where the ARBs engage the investor 
to promote their produce in exchange for commission on actual sales.
Q. Mediation is a voluntary dispute resolution process where a neutral facilitator 
assists the parties in reaching a settlement regarding a dispute.
R. Service Contract is an AVA scheme where the ARBs engage the services of a 
contractor 
for 
mechanized 
land 
preparation, 
cultivation, 
harvesting, 
processing, post-harvest operations and/or other farm activities for a fee.
S. Voiuntary Dispute Resolution is a mode of resolving disputes other than by 
adjudication of a presiding judge of a court or an officer of a government 
agency, in which a neutral third party assists in the resolution of issues.
T. Take-over -  is an act of the investor in controlling the operation of the farm 
and/or assuming any of the responsibilities of the ARBs in an AVA.
U. Transfer is the conveyance of the use and possession of CARP awarded lands 
from one person or entity to another.
SECTION 4. Coverage. - This Act shall apply to all awarded lands distributed under 
Republic Act No. 6657, as amended, or the Comprehensive Agrarian Reform Program 
(CARP), and other agrarian reform laws.
Former landowners (LO) with respect to their untenanted retained areas, and ARBs, 
who have completely paid their land amortizations and tenants in certain cases, shall be 
covered should they opt to place the said landholdings under this Act.
SECTION 5. Agribusiness Venture Arrangements. - Individual ARBs and ARB 
cooperatives or associations, who are bonafide holders of Emancipation Patent (EP), 
Certificate of Land Ownership Award (CLOA) or similar tenurial instruments issued by 
the Department of Agrarian Reform (DAR) or its predecessor may enter into any of the 
following Agribusiness Venture Arrangements, namely:
A. Growership
B. Contract Growing
C. Marketing Contract
D. Management Contract
E. Service Contracts
F. Build-Operate-Transfer
G. Joint Venture Agreements
H. Lease Agreements; and
I. Any combination of the foregoing AVAs without violating any provisions of this
Act.


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SECTION 6. Contracting Parties and their Qualifications. - The parties to an 
agribusiness venture agreement shall have the following qualifications, namely:
A. ARBs (whether individual or organized) should be holders of an Emancipation 
Patent (EP), a Certificate of Land Ownership Award (CLOA) or similar tenurial 
instruments and are in possession of their land. In no case shall potential ARBs 
be allowed to enter into an AVA or any interim agreement prior to the award of 
such tenurial instrument and prior to the actual possession of the land.
B. ARB cooperatives or associations shall have the legal personality to transact or 
enter into any contract. For ARB cooperatives or associations with CLOAs in 
the name of the organization, the Board of Directors/Trustees of such 
cooperative or association shall secure the vote of approval by the general 
membership in accordance with their articles of cooperation/association and by 
laws. In the absence thereof, a vote of approval of at least 2/3 of the general 
membership shall be secured.
C. Prospective investors must have the following qualifications, namely;
1,
2.
3.
4.
5.
6.
Must be registered with the appropriate regulatory agencies, such as 
Securities and Exchange Commission, Department of Trade and 
Industry.
Good financial standing for the past three (3) years;
Good track record in food and agribusiness;
Stable business relations;
Capable of managing and operating the AVA undertaking;
Shall not have violated any laws, rules and regulations, and contracts as 
the case may be.
SECTION 7. Mandatory Provisions of the AVAs. - Agribusiness Venture Arrangements 
entered into under this Act, being imbued with public interest, shall have the following 
mandatory provisions, to wit:
A. The landholding subject of the AVA shall be used exclusively for agricultural 
purposes. Only two thirds of the entire area shall be subjected to the AVA, the 
remaining one third portion shall be exclusively controlled and used by the 
ARBs with full support from the government;
B. The contract shall guarantee the participation of the ARB/s in the farm 
management operations and shall include, among others, capacity building 
programs aimed to facilitate transfer of technology and management 
techniques to the ARBs;
C. The AVA shall include provisions for workers’ productivity and quality incentives 
for the employed ARBs over and above the compensation from the AVA.
For the duration of the contract, the investor shall provide funds necessary to 
ensure ecological protection of the farm and safety of its workers, particularly for 
the conservation and maintenance of land quality, proper handling, storage and 
disposal of hazardous residues and waste products, and proper protective and 
acceptable safe methods of application of fertilizers, pesticides and other 
chemicals; provided that decisions as to the ecological protection of the farm and 
safety of workers, and the methods employed in the application of fertilizers, 
pesticides and other chemicals, shall be mutually agreed upon by the investor 
and the ARBs;
D. There shall be a periodic review and/or renegotiation of the terms of the 
contract by the contracting parties to allow for some changes in the economic


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assumptions and/or the prevailing economic conditions at the time of AVA 
application and processing as well as changes on the physical attributes of the 
land.
E. The review and/or renegotiation shall also be undertaken upon request or 
petition of any of the parties on any of the following grounds: (1) extraordinary 
increase of inflation rate as declared by the Bangko Sentral ng Pilipinas (BSP); 
(2) drastic change in price fluctuation on both input and output by at least 20% 
from the previous price; (3) declaration by the executive department of 
government or the
F. Local government unit of the area where the land is located as calamity or 
disaster area; and (4) other meritorious grounds to be determined by the DAR 
Secretary.
G. The AVAs shall be subject to the approval of the PARC Executive Committee 
(EXECOM). Otherwise, it shall become void and unenforceable.
All renegotiated/renewed/extended contracts and their effectivity shall be 
subject to the same process of review and approval by the PARC EXECOM in 
accordance with the rules and regulations issued therefor.
H. The duration of the AVA shall be mutually agreed upon by all parties, but not 
more than 10 years subject to renewal. It shall take into consideration the 
following parameters: (i) crop or production cycle; (ii) gestation period of the 
crop; (iii) economic lifespan of existing major and essential facilities or 
infrastructure; and (iv) payback or recoup period of investments. 
All AVA 
contracts must contain a provision allowing the ARB to rescind the AVA, upon 
due notice to the investor.
I. 
In addressing the food security concerns of the country, the parties should 
agree that, in case of food shortage in the country, at least fifty percent (50%) of 
the produce in investment involving staple crops will automatically be set aside 
for the domestic market. For purposes of its enforcement, the DAR may invoke 
said provision, if and when necessary.
J. The 
roles 
and 
responsibilities 
of 
DAR, 
the 
ARBs 
(individual 
or 
cooperatives/associations) and the investor shall be clearly identified in the 
contract as well as the expected output from each party. It must be clear that 
successors-in-interest of both the investors and the ARBs are bound by the 
terms of the contract.
K. Consent of the other party in cases of transfer of rights and responsibilities shall 
be secured.
L. An alternative dispute resolution mechanism in resolving disputes between the 
parties shall be established.
M. Terms and conditions of the AVA contract shall be made known to all parties. 
The contract shall be translated to the language known to the ARBs.
N. Terms and conditions for pre-termination of contracts shall be clearly stipulated 
in the AVA contract.
O. In case of lease agreements, the rental shall be at least ten per cent (10%) of 
the gross sales per harvest;


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P. Where the AVA requires the employment of workers, the parties shall comply 
with labor laws, rules and regulations particularly the prohibition on employment 
of children fifteen years and below.
SECTION 8. 
Control over Agrarian Reform Lands. - In any AVA, control over the 
agrarian reform land shall always remain with the agrarian reform beneficiaries. For this 
purpose, joint venture agreements between agrarian reform beneficiaries and investors 
which result to a minority equity of the agrarian reform beneficiaries shall not be allowed 
or approved by PARC EXECOM. Also, any provision of permanent take-over in the 
AVAs that takes away the management of the agricultural production in growership 
contract or contract growing agreement shall be void.
Temporary takeover may be allowed provided that all of the following conditions are 
present:
A. Upon mutual agreement of the parties;
B. The takeover shall only be for one (1) cropping cycle;
C. When both parties mutually determine that the agreed quantity and/or quality of 
production cannot be delivered by the ARBs.
Temporary takeover shall not take place during the transition to a new production 
technology.
SECTION 9. Approval of Agribusiness Ventures Agreements. - All AVAs entered into 
between ARBs and any other person under this Act shall be approved by the PARC 
EXECOM as established under Proclamation No. 129-A. For this purpose, the PARC 
EXECOM, through the DAR, shall issue policies, rules and regulations relative to such 
approval taking into consideration of the following, namely: a) economic viability; b) 
legal enforceability; c) ARB control over the land/or business operation; d) ARB skill 
development; (e) ecological soundness; f) non-transferability of ownership over the land 
to investor; and other considerations which PARC EXECOM may deem proper under 
the circumstances.
SECTION 10. Revocation of AVA Contracts by the PARC EXECOM. - 
Without 
prejudice to the right of rescission by the investor and the ARBs, AVA contracts may be 
revoked by the PARC EXECOM based on the following grounds:
A. Gross violation or non-compliance of the terms and conditions of the contract 
such as, but not limited to:
1. 
Non-implementation of the human resources development plan provisions;
2. 
Non-employment of the ARBs;
3. 
Concealment of the true financial status of the enterprise; and
4. 
Commission of fraud in the application or implementation of the AVA;
5. 
Other analogous cases.
B. When, without justifiable reasons, the AVA fails to provide benefits and 
incentives stipulated in the approved AVA contracts, such as, but not limited to, 
dividends accruing to ARB's equity shares, production and quality incentives. For 
this purpose, situations beyond the control of the investor such as force majeure 
are considered justifiable reasons;
C. When the AVA is no longer financially and economically viable;
D. When a portion of the commercial farm subject of the AVA is converted or 
fragmented into non-agricultural use without prior written consent of the ARBs 
and the DAR;
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E. Any action resulting to the transfer of ownership of the landholding subject of 
AVA to the investors:
F. In cases of permanent take-over or temporary take over when the conditions set 
forth under Article 8 are not present;
G. Acquisition or approval of AVA through fraud, intimidation, coercion, deceit, etc
H. Other analogous or meritorious grounds.
SECTION 11. Support Services for ARBs Entering an AVA. - The State shall establish 
an AVA Capacity Building Program with sufficient funding from the General 
Appropriations Act. The purpose of the capacity building program is to strengthen the 
farmer’s ability to negotiate fairer terms for agribusiness contracts, deal with markets, 
harness local and international opportunities, and identify and act on onerous 
agreements to protect their rights.
The program shall be jointly formulated by the DAR, DA, DTI, LBP, and CDA, upon 
consultations with civil society organizations and people’s organizations, within 60 
days from the enactment of this law. It shall include, but will not be limited to, the 
following components: acquisition and design of technology for production and 
packaging, access and management of production credit, organizing of business units 
like clustering and sugar blocks, registration of juridical entities (cooperative, corporation 
or association), business ideation, organizational development and strengthening, 
market linkages, product development and value addition, certification of products and 
processes of DAR, enterprise lawyering, the review and renegotiation of onerous 
agreements, and compliance with sanitary and phytosanitary requirements.
SECTION 12. Disaster and Calamity Relief and Rehabilitation Assistance. - In the event 
of a disaster or calamity affecting production, or where a State of Calamity has been 
declared in the province, the contract may be temporarily suspended upon the request 
or petition of any of the parties and the investor shall assist the ARBs in disaster relief 
and rehabilitation efforts. The existence of a valid AVA shall not be used a precondition 
by government agencies in granting or denying calamity loans or disaster relief funds.
SECTION 13. Jurisdiction. - The PARC Executive Committee shall have primary and 
exclusive jurisdiction over the approval and revocation of AVAs :
The DAR Adjudication Board (DARAB) shall have jurisdiction over disputes involving 
the 
interpretation 
and 
enforcement 
of 
agribusiness 
agreements 
or 
agrarian disputes as defined in Sec. 3 (d) of R.A. No. 6657;
The DAR Secretary, in his/her capacity as Chairperson of the PARC Executive 
Committee, may issue orders, as may be appropriate, to maintain the status quo and 
preserve peace and order in the farm subject of AVAs, particularly in the following cases 
pursuant to Sec. 5 (b) in relation to Sec. 7 of E.O. No. 129-A:
A. Where there is clear and imminent threat to life or property:
B. Where the dispute will cause serious and irreparable damage to either party 
or to the AVA; or
C. Where, in the Secretary’s judgment, there is an urgent need to protect the 
national interest


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SECTION 14. Penal Provisions. -  Any act that wrests control over the agricultural land 
from agrarian reform beneficiaries not constituting a temporary take-over as defined in 
this Act shall be punishable by imprisonment of not less than three (3) years and one 
day but not more than six (6) years.
Any act to impose undue pressure to the ARBs to enter into an AVA, or renew an 
existing AVA, or rescind and existing AVA, or agree to new terms of an existing AVA, 
including but not limited to threats, harassment, economic coercion, denial of 
government support, and the like, shall be punishable by imprisonment of not less than 
three (3) years and one day but not more than six (6) years.
Additional administrative sanctions will apply if the offender is a government employee.
SECTION 15. 
Repealing Clause. — All other laws, decrees, executive orders, 
issuances, rules and regulations, or part thereof inconsistent with this Act are hereby 
likewise repealed or amended accordingly.
SECTION 16. Separability Clause. -  If, for any reason, any section or provisions of this 
Act is declared unconstitutional or invalid, the other sections or provisions not affected 
thereby shall remain in full force and effect.
SECTION 17. Transitory Provision. -  All existing AVAs without PARC approval shall be 
subject for review and approval of the PARC. Parties to existing AVAs shall submit their 
contracts to PARC within 60 days from the effectivity of this Act. Failure to comply with 
this requirement within the given period shall render the AVAs void.
SECTION 18. Effectivity Clause. -  This Act shall take effect after fifteen (15) days upon 
publication in at least two (2) newspapers of general circulation.
Approved,
ih
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