SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. B._2089 
Introduced by Senator Poe 
EXPLANATORY NOTE 
'14 
JAN 28 P 4 :20 
The current food crisis especially on the rice importation fiasco has brought to 
focus the need to review the government policy on food security as well as the need to 
seek creative means to reinvigorate the agricultural sector. 
Viewed through the prism of a liberalizing economy seeking to complete against 
well-entrenched world economies, the Philippines however is hard-pressed to make its 
agricultural pOlicies more responsive and more advanced in order to hope for a modicum 
of parity with the rest of the world. 
vi 
Investments in the agricultural sector, while very needed, cannot be 
. 
shouldered by the public sector alone in the light of the government's perennial fiscal 
challenges since decades past. 
Corporate farming programs aim to attract more private engagement in the 
agriculture sector. Corporate farming's unique advantage is its ability to vertically integrate 
the entire process of food production and offers more efficient and effective management 
not only of the farm itself, and also the entire chain of agriculture-related business, 
including seed supply, agrochemicals, food processing, machinery, storage, transport, 
distribution, marketing, advertising, and retail sales. This would have significant impact on 
the ensuring a more stable rice and corn supply, as well as making rice and corn prices 
more predictable. 
This bill is a counterpart version of the BUTIL farmers' proposed policy measure. 
Early recognition of this legislation is earnestly sought. 


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regu/ar Session 
SE~~1..1;.. 
S. B. "",~,,-,U~{)!...::::t;!. 
Introduced by Senator Poe 
AN ACT 
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'14 
J~N 28 P 4 :20 
PROMOTING CORPORATE FARMING AND PROVIDING INCENTIVES FOR ITS 
EFFECTIVE IMPLEMENTATION 
Be it enacted by the Senate and House of Representatives of the PhHippines in 
Congress assembled: 
SECTION 1. Domestic Corporations and Partnerships. - For the purpose of 
this act, domestic corporations and partnership shall refer to all corporation and 
partnerships organize and existing under Philippine laws, operating for profit: Provided, 
that said corporations and partnerships report earnings over the last four (4) years that 
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 partnership that are to be recovered by this act. 
SECTION 2. Corporate Farming Arrangements. - Participation to the Corporate 
Farming Program shall be on a voluntary basis. For the purpose of this act, the following 
are the corporate farming schemes that the corporations/partnerships may engage in: 
(a) Corporations/partnerships with existing landholdings suitable for rice!corn 
production may manage the land and produce the rice!corn or may enter into 
a managementlcontractual arrangement with farmers' groups such as farmers' 
groups such as farmers' associations, cooperatives and agrarian reform 
communities (ARCs); 
(b) Corporations! partnerships may purchase or lease on a long term basis, public 
or private agricultural lad suitable for rice!corn production. Whereby the 
corporation!partnership 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 corporate farming venture ceases 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) Corporation! 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 "Organic Agriculture Act 
of 2010" 
The 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 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 corporate farming. 
(d) Farmer's or other agricultural cooperatives with existing landholdings and 
sufficient capitalization to undertake a "corporative" farming scheme for rice! 
corn. 
SECTION. 3. Disposition of 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). 
SECTION 
4. 
Implementing Agencies and Implementing Rules and 
Regulations (IRRJ. - 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 corporate farming schemes. 
Moreover, the DA and the DAR shall facilitate with the appropriate government 
agencies the processing 
of management contracts between the corporations! 
partnerships ad farers' groups. Further, the DA and the DAR shall oversee and monitor 
the IRR and guideline of this ct. the DA and the DAR shall exercise the following functions: 
(a) Develop eligibility criteria for both corporation! 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 corporate farm. 
(b) Identify suitable private and public-owned rice! corn production areas for 
corporate farming and determine the maximum ceiling of landholdings for 
corporate farming arrangements: Provided, that the DA and the DAR shall 
periodically determine the need to expand! reduce rice! corn production areas 
for corporate farming schemed on the basis of rice! corn demand-supply gaps; 
(c) Facilitate and promote grass roots cooperation to access agricultural services 
such as information, inputs and technical assistance; 
(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. 
SECTION 5. Incentive package. -
Corporations! partnerships which shall 
participate in the corporate Farming act shall be entitled to tax incentives covering all 
aspects of the operation germane to corporate 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 provision of republic Act 10068 or the "Organic Agriculture 
Act of 2010". 
(c) Exemption from the payment of capital gain tax for a person either natural or 
juridical, who sells and or transfers idle agricultural land to corporations and 
partnerships engage in corporate farming; and 
(d) Tax incentives, including income tax holiday, in accordance with the provisions 
of executive Order No. 226 or the omnibus Investment Incentives Code, as 
amended. 
SECTION 6. Other Incentives. - Loans extended by banks, both government and 
private, to participating corporations! partnerships shall be treated as compliance to 
Republic act 10000 or "The Agri-Agra reform Credit Act of 2009" 
SECTION 7. Duration. - Participating corporations! partnerships with existing 
landholdings may engage in rice! corn production within a period of time to be determined 
by this Act. However, those corporations! partnerships which purchased agricultural lands 
for the purpose cannot convert the land to other uses and must relinquish land ownership 
in favour of agrarian reform beneficiaries within a period of three (3) years in the case of 
public agricultural lands and for private lands originally distributed under the 
Comprehensive reform Program should they wish to terminate the corporate farming 
agreement. 
Arrangements! negotiations for leased public or idle private agricultural lands shall 
be for a period not less than ten (1 D) years. 
SECTION 8. Automatic review. -
The DA and the DAR, being the lead 
government agencies in the Corporate farming Program, shall submit periodic reports to 
both House of Congress on the accomplishment of the Program. 
A review on the viability of the program shall made by the concerned agencies 
after five (5) YEARS OF ITS IMPLEMENTATION. 


SECTION 9. Effectivity. - This act shall take effect after (15) days following its 
pUblication in the official gazette or in a national newspaper of general circulation. 
Approved,