Republic of the Philippines
House of Representatives
Quezon City
NINETEENTH CONGRESS
Second Regular Session
HOUSE  BILL NO. 1C!79
REC[lvED
a
I     DATE
'      TIME-`e
Introduced by Hon. Felimon M. Espares
(COOP-NATCCO PARTYLIST)
AN ACT ENSURING THE DEVELOPMENT, PROMOTION,
AND PROTECTION OF AGRICULTURAL COOPERATIVES
EXPLANATORY NOTE
A Social  Weather Station  (SWS) survey conducted  during the first quarter of
2024 showed that ``involuntary hunger" rose from 12.6% in December 2023, to 14,2%
in  March  2024.1 The SWS further noted  that the March  2024  hunger figure was 3.5
points above the  10.7% annual hunger rate of 2023, and that the same was also the
highest since  16.8% in May 2021.2
0n  the  other  hand,  fisherfolks  (30.6  percent)  and  farmers  (30.0  percent)
remained the poorest sectors in terms of poverty incidence in 2021. 3
In   line  with  this,  the  Department  of  Agriculture  (DA)  has  recognized  the
indispensable role that the local agricultural sector plays in the govemment's plans to
improve  food  security,  specifically  mentioning   a  ``farm-to-market  network  plan.'4
Further,  DA  Undersecretary  Mercedita  A.  Sombilla  emphasized  that  developing  the
local agricultural sector not only needs investment in research and technology but also
capacitating farmers to utilize such technology.
1  "More  hungry  and   poor,   first  quarter  2024,"  The   Phlllppine  Star,   11   May  2024,   are/./a4/e  af
https://www.philstar.com/the-freeman/opinion/2024/05/11/2354283/more-hungry-and-pcor-first-
quarter-2024
2Id.
3 Merged datafile of the 2015  Family Income and  Expenditure Survey (FIES) and January 2016 Labor
Force Survey (LFS),  merged  datafile of the 2018 FIES and January 2019  LFS and  merged data file of
the   preliminary   2021   FIES   and   January   2022   LFS,   Phillpplne   Statistics   Authority   available   at
https://www.psa,gov.ph/contenvfisherfolks-and-farmers-remain-have-highest-poverty-incidences-
among-basic-sectors-
2021#:~:text=Fisherfolks%20and%20Farmers%20Remain%20to,Authority%20%7C%20Republic%2
0of%20the%20Philippines
4 Igmacio,  Chelsey Keth  P., ``Developing agriculture to achieve food security," Businessworld, 07 June
2023,   are/./a4fe   af  https://www.bworldon line.com/special-features/2023/06/07/527312/developing-
agriculture-to-achieve-food-security/.
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Accordingly, it is clear that the lands and the people are thererwhat they need
is the support so that the local agricultural industry can stand on its own to meet the
needs of the Filipino public,
The    weak    and    fragmented    agricultural    service    delivery    hampers    the
implementation   of  government  agricultural   development  programs.   This  can   be
remedied   by   linking   the   DA   directly   to   the   farmers   through   the   agricultural
cooperatives.
This bill aims to strengthen agricultural ccoperatives as a vital force in ensuring
food security in  the  Philippines.  Recognizing the significant role that the agricultural
sector  plays  in  ensuring  food  security  across the  country,  this  legislation  proposes
measures to support and empower them in their crucial contributions to the nation's
food production.
By providing  adequate  resources and funding,  this  bill  seeks to enhance the
capacity of agricultural  cooperatives to  sustainably produce  high-quality agricultural
products.   It   aims   to   promote   the   adoption   of   modern   farming   technologies,
sustainable practices, and efficient agricultural techniques to increase productivity and
improve the livelihcods of family farmers.
Furthermore,    this     bill    encourages    the    establishment    of    agricultural
cooperatives,  associations,  and  support  networks  to  faciljfate  knowledge  sharing,
access to credit,  and  collective  marketing  efforts.  It also  promotes the  provision  of
training   programs,   agricultural   extension   services,   and   technical   assistance   to
empower family farmers with the necessary skills and knowledge to thrive in today's
evolving agricultural landscape,
By  strengthening  the  support  and  developing  the  network  of  agricultural
cooperatives, this bill seeks to ensure food security, promote rural development, and
contribute  to  poverty  alleviation  in  the  Philippines.  It  recognizes the  importance  of
empowering small-scale farmers, who form the backbone of the agricultural sector, in
achieving sustainable and inclusive growth.
In  conclusion,  this  legislation  aims  to  create  an  enabling  environment  that
supports agricultural ccoperatives, enhances their productivity and  competitiveness,
and ultimately contributes to the nation's overall food security goals.
In view of the foregoing, the early passage of this bill is earnestly sought.
?


Republic of the Philippines
H ouse of Representatives
Quezon City
NINETEENTH CONGRESS
Second Regular Session
HOUSEBILLNo       lc47g
Introduced by Hon. Felimon M. Espares
coop-NATccO pARrvLlsT
AN ACT ENSURING THE DEVELOPMENT, PROMOTION,
AND PROTECTION OF AGRICULTURAL COOPERATIVES
Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  Philippines  in
Cong ress assembled :
CHAPTER I
DECLARATloN OF roLlcy
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13                 Section   1.   £4orf   77.#e.   -   This   Act   shall   be   known   as   the   ``Agricultural
14      Cooperatives Act of 2024."
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16               Sec. 2. flecfaraf/on offto/May. -It is hereby declared to be the poliey of the state,
17       in  line  with  the  Constitution,  that  expanding  productivity  is  the  key  to  raising  the
18       quality of life for all, especially the underprivileged, together with a sustained increase
19      in  the amount of gcods and  services  produced  by the  nation for the benefit of the
20       people.
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22                In line with this, the state recognizes the need to hasten the growth, integration,
23      and  medemization of the agricultural  sector in order to meet the rising  dilemma of
24      food  insecurity, which disproportionately affects the marginalized sectors of society.
25      The state further recognizes the indispensable need to encourage the participation of
26      women  and  youth  as  a  primary  force  in  the  government's  drive  to  empower  the
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27      agricultural  sector.  Therefore,  the  State shall  focus on  establishing  a  structure  and
28       network  that  institutionalizes  support,  capacity-building,  and  inclusive  growth  for
29      agricultural cooperatives.
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31                 Similarly, it is the declared policy of the state to foster the creation and growth
32      of cooperatives as a practical vehicle for promoting self-reliance and harnessing people
33      power towards the attainment of economic development and social justice. Towards
34      this end, the Government and all of its branches, subdivisions, instrumentalities, and
35       agencies  shall  ensure  the  provision  Of technical  guidance,  financial  assistance,  and
36      other relevant services to enable farmers, fisherfolk, and other agricultural workers to
37      organize themselves into self-sustaining ccoperatl.ves that work together to strengthen
38       the philippine agricultural industry.
39
CHAPTER 11
GENERAL PROVISIONS
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43                Sec. 3. Og#y7+tfon ofrerms, -In so far as they are used in this Act, the following
44      termsshall mean:
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a.   Agribusiness -refers to a range of activities that occur in the agricultural
value chain  utilized  in  modern food  production,  including  but not limited
to   farming,   forestry,   fishing   operations,   as   well   as   seed   supply,
agrichemicals,    related    machineries,    processing,   storage,    marketing,
distribution, and sales, whether wholesale or retail;
b,   Agricultural  Cooperative  -  refers  to  a  type  of  cooperative  comprising
farmers,    fisherfolk,    agrarian    reform    beneficiaries,    dairy    farmers,
community forestry farmers,  aquaculture  farmers,  and  other  individuals
engaged  in  agricultural activities.  These  individuals voluntarily organized
themselves   into   an   agricultural-based   economic  enterprise,   including
subsidiary  agricultural   cooperatives  formed   by  existing   multi-purpose
cooperatives  and   multi-purpose  cooperatives  whose  primary  business
activity is at least fifty percent (50%)  related to  agricultural  production,
agro-industry, agri-business, or services related to agricultural production.
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Agricultural   activities   encompassed   by   the   cooperative   include   the
production,   processing,   agrologistics,   and   distribution   of  agricultural,
fishery, and forestry products. The cooperative also provides a  range of
services aimed at improving the livelihood, income, and overall welfare of
its   members.   These   services   include   savings   and   credit,   marketing,
agricultural  extension,  farm  education,  agri-tourism,  digital  agriculture,
and other allied services related to climate resiliency and safety nets;
c.   Asset Development - refers to the growth and improvement, according to
targcted  goals  and  objectives,  of  key  instruments  and  resources  for
agricultural operations, such as, but not limited to, land, buildings, which
may indude residences, warehouses, or barns, irrigation systems, fences,
and trees;
d.   Build  Scale  -  refers  to  the  growth  or  expansion  of  agribusiness  in  a
proportional and profitable manner;
e.   Cooperative - refers to an autonomous and duly registered association of
persons,  with  a  common  bond  of interest,  who  have voluntarily joined
together  to  achieve   their  social,   economic,   and   cultural   needs   and
aspirations  by  making  equitable  contributions  to  the  capital  required,
patronizing their products and services, and accepting a fair share of the
risks  and   benefits  of  the  undertaking   in  accordance  with   universally
accepted cooperative principles;
f.    Clustering - refers to the process by which multiple agribusinesses, each
involved in different stages of the agricultural value chain, combine their
operations   into   a   single   hub,   This   collaboration   aims   to   enhance
operational efficiency, streamline processes, and maximize profits through
integ rated efforts;
g,   Criteria  for  Assessment  and  Ratings  -  refers  to  a  set  of  standards  in
determining  that  the  performance  of  an  agricultural  cooperative,  which
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includes, among others, enterprise management, adherence to cooperative
principles, and product or service quality;
h.   Family Farming -refers to an agribusiness operation that is managed and
operated  by  a  family  unit,  related  by  consanguinity  or  affinity,  whether
nuclear or extended,  and  which  predominantly  relies on  the  labor of the
members  of  such  family  for  its  operations.  The  family  and  the  farm,
therefore, are inextricably linked, and co-evolve with each other;
i.    Local  Development  Hub  (LDH)  -  refers  to  a  farming  zone  or  transport
infrastructure, which is generally far from formal markets. An LDH serves
around  five  hundred  (500)  to  one  thousand  (1,000)  farmers,  and  links
them  to buyers,  which  may be,  among  others,  traders,  processors,  and
export companies, among others.
j.    National  Federation  of  Agricultural  Cooperatives  (NFAC)  -  refers  to  a
federation  of agricultural ccoperatives that are  engaged  in  agribusiness
and   financial   business  for  the   benefit  of  the   members  through   its
subsidiaries.
k,   Wholesale  Market - refers to a  market,  owned  by the government and
managed  by the  National  Federation of Agricultural  Cooperatives (NFAC)
through  its  subsidiary/ies,  where  a  trader  buys  farm  produce  from  the
farmers,  through  the  agricultural  cooperatives,  in  bulk  and  re-sells  the
gcods  to  business  houses  or  retailers  to  further  sell  the  goods  to  end
consumers,
in.    Cooperative   Climate    Resilience   Fund   -   refers   to   a   grant-making
mechanism  that aims to ensure that agricultural  ccoperatives and  their
farmer-members are protected from and resilient to the impact of climate
change.
See.  4.   Aeyx5fraf7.an  and  StApervisy.an,  -  Agricultural  Cooperatives  shall  be
f:


126      governed by the general law on cooperatives, except as otherwise provided herein. In
127      connection with this, agricultural cooperatives must be registered with the cooperative
128      Development Authority (CDA) in order to be entitled to the privileges and exemptions
129      extended to cooperatives under Republic Act (RA) No. 9520, otherwise known as the
130      Philippine cooperative code of 2008.
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132                 An agricultural cooperative shall file its application for registration with the CDA
133      regional office that has].urisdiction over its area of operation, No fees shall be assessed
134      or charged to any agricultural cooperative by any government entity, national or local,
135      at any stage of its organization and registration process.
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137                This notwithstanding, as the agency with the mandate to promote agricultural
138      development by providing policy framework, public investments, and support services,
139      the Department of Agriculture (DA) shall be the regulatory agency exercising primary
L40      supervision  over the  National  Federation  of Agricultural  Cooperatives  (NFAC).    The
141       Federation shall exercise supervision and control over its member-primary agricultural
142      cooperatives.
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144                S®k;. 5.  Capital  Requirements  of Agricultural  Cooperatives.  -The  aNNhiyrirz!nd
145      share capital of an agricultural cooperative shall be stated in its Articles of cooperation.
146      Prior to  its  registration,  at  least twenty-five percent (25%) of the authorized  share
147      capital shall be subscribed to by the members, and at least twenty-five percent (25%)
148      of  the   subscribed   share   capital   shall   be   paid-up:   Proiw.d(ed,   That  the   paid-up
149      capitalization  requirement  for  primary  cooperatives  shall  not  be  less  than  Fifteen
150      Thousand pesos (P15,000.00).
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1S2                Sek:. 6. Cooperative Business Activities and Allied services. -A chrty regivstfgred
153       agricultural cooperative may engage in all or any of the following activities:
154                 a.   Raising  and/or  culture  of  plants,  high-value  crops,  animals,  fish,  poultry,
155                       livestock,  other agri-products as source of food,  feed,  and  fiber, and  other
156                       agri-fishery or non-food commodities;
157                  b.   Production of salt;
158                 c.   Community and social forestry;
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d.   Provision of savings and credit facilities for marginal farmers and fishermen;
e.   Facilitating  the  procurement and distribution  of farm  inputs/implements for
its members;
f.    Processing, marketing, and sale of members' agri-products or produce;
9.   Maintenance and management of irrigation systems, water impounding, and
other agricultural facilities; and
h.   Other allied  services such  as,  but not limited to,  warehousing,  cold  storage
and other post-harvest services, hauling, transport of members' products or
produce,  and  such  other  similar  business  services  and  actMties  that  will
reduce cost or add value.
Sec.  7.  Gomd  cif "emb€rs»/P,  -  The  bond  of  membership  of  agricultural
171       cooperatives shall be any of the following:
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a.   Residential  -  members  are  farmers,  farm  workers,  or  fisherfolk  who  are
actually and physically residing within the area of operation;
b.   Occupational -members are those who are engaged in raising or culture of
plants or animals,  or are part of the technical and  scientific communities of
the agriculture sector;
c.   Associational  -  members  are  from  registered  associations,  groups,  clubs,
cultural   and   other   similar   aggrupation   of  farmers,   farm   workers,   and
fisherfolk; and
d.   Institutional - members are employees,  workers, or officers of a  particular
institution who are undertaking or will undertake agricultural projects.
Provided, that at least fifty-one per centum  (51%) of its members are duly
registered with the Registry System for Basic Sectors in Agriculture (RSBSA).
CHAPTER Ill
BENEFITS OF AGRICULTURAL COOPERATIVES
SGee. 8.  Tax  Treatment  of Agricultural  Cooperatives  that  Transact  with  Non-
190      members. - Notwithstanding  any  law or  regulation  to the contrary,  duly registered
191       agricultural  cooperatives  that  transact  with  both  members  and  non-members,  and
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192      with reserve funds of one Hundred Million pesos (P100,000,000.00) or below shall be
193      exempt from all national internal revenue faxes, fees, and charges of whatever name
194      andnature.
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196                0n the other hand, if such agricultural cooperatives have reserve funds of greater
197       than  One  Hundred  Million  Pesos (P100,000,000.00)  shall  pay the following taxes on
198      their transactions with non-members:
199                a.   Income   Tax   on   income   derived   from   transactions   with   non-members:
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Provided,  That  the  same  tax  is  not  consequently  imposed   on   interest
individually received by members. The tax base for all cooperatives liable to
pay  income  tax  shall  be  the  income  directly  related  from  the  business
transactions with non-members after deducting the amounts for the statutory
funds;
2o6                 b.   Value-Added   Tax   (VAT)   on   transactions   with   non-members:   Prol+j`ded,
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however, that duly registered agricultural cooperatives shall be exempt from
the imposition of VAT, on the following:
(i)    Sales by agricultural ccoperatives duly registered with the DA to their
members as well as sale of their produce, whether in its original state
or processed form, to non-members; their importation of direct farm
inputs, machineries and equipment, including spare parts thereof, to
be used  directly and  exclusively in the preduction and/or processing
of their produce, and their resale to other agricultural ccoperatives;
(ii)   Gross receipts from  lending  activities towards its members or other
agricu ltural cooperatives;
Provided, That the exempt transactions in the foregoing shall include
sales made by agricultural cooperatives duly registered  with the DA
organized   and   operated   by   their   members   to   undertake   the
production and processing of raw materials or of gcods produced by
their  members  into  finished  or  process  products  for  sale  by  the
cooperatives to their members and non-members,' Proi//.ded, however,
that  any  processed  product  or  its  derivative  arising  from  the  rawa


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materials produced  by their members, sold  in the name and for the
account  of  the   cooperative   shall   be  deemed   a   product  of  the
cooperative and its members: Provided, further, That at least twenty-
five  per  centum  (25%)  of  the  net  income  of  the  ccoperatives  is
returned  to the  members  in  the form  of interest and/or  patronage
refunds.
c.   All sales of gcods and/or services rendered for non-members shall be subject
to the applicable percentage taxes; and
d.   All other taxes unless otherwise provided herein.
Donations  to  duly  accredited  charitable,  research  and  educational  institutions
and  reinvestment  to  socioeconomic  projects  within  the  area  of  operation  of  the
cooperative may be tax deductible.
Sea. 9. Tax Treatment of Agricultural Cooperatives that Transact with Members
Oy7/y, - Duly registered agricultural cooperatives under this Act which do not transact
any  business  with  non-members  or  the  general  public shall  not  be  subject to  any
taxes, fees, and charges imposed under the internal revenue laws and other tax laws.
Se!£.  ufJ.  Other  Benefits  and   Privileges  of  Agricultural  Cooperatives.  -  An
agricultural cooperative shall enjoy the following benefits and privileges:
a.  Taxes, Duties, and Liens:
(1)     All  benefits,  privileges,  and  tax  treatments  of  cooperatives  as
defined and enumerated under RA 9520 and other relevant laws
shall apply to agricultural cooperatives;
(2)     Agricultural  cooperatives  shall  be  exempt from  customs duties,
advance  sales  or  compensating  taxes on  their  importation  and
local purchase of machineries, equipment, accessories, batteries,
and spare parts used by them:  Prov«.deb, That all tax-and duty-
free   imports  and   local   purchases  shall   not  be  sold   nor  the
beneficial  ownership  thereof be transferred  to  any person  until
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after five (5) years, otherwise, the cooperative and the transferee
or assignee shall  be solidarily liable to  pay twice the amount of
the imposed tax and/or duties; and
(3)     All   real   properties   owned,   and   those   directly   used   for  the
operations,    management,    and    maintenance   of   agricultural
cooperatives shall be exempt from the payment of real property
taxes imposed under existing laws.
b.  Trainings and Conferences - All trainings and conferences necessary for the
organization,  registration,  management  and  operations  of  an  agricultural
cooperative, rendered by the appropriate government ageney, shall be given
free  of charge,  including  costs  of venue,  training  materials,  speakers  and
resource persons. The CDOs shall be primarily responsible for these trainings
and conferences within their respective lou:alities.
c.   Consolidation  -  Agricultural  cooperatives  may consolidate  agricultural  lands
owned by its members within in a contiguous area for purposes of agricultural
development.
e.   Direct Purchase by National and  Local  Government Agencies -To promote
and   support   agricultural   cooperatives,    national   and   local   government
agencies  shall  directly  purchase  agricultural  products  from  registered  and
accredited   agricultural   cooperatives;   Prov]J.ded,   That   said   products   are
necessary in the performance of their respective mandates.
Further, in areas where there are agricultural ccoperatives, at least fifty per
centum (50%) of the supply to government institutions, agencies, and LGUs,
of  rice,  corn,  grains,  fish  and  other  marine  products,  meat,  eggs,  milk,
vegetables, and other agricultural commodities such as fertilizers, seeds and
other  agricultural  inputs  and  implements,  and  related  products,  shall  be
sourced from such cooperatives.
For  the  purposes  of  this  Act,  the  procurement  by  national  and  local
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government agencies of said agricultural products shall be exempt from the
application  of  the  bidding  process  prescribed  under  relevant  government
procurement laws;  frorMZ7(ed, That said agencies shall  undergo a  negotiated
procurement under the applicable guidelines of the Government Procurement
Policy Board.
297                 e.   Loans and Grants:
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(1)     All    loans   applied    for    by   agricultural    cooperatives    in    any
government-owned or -controlled banks or government financial
institutions    shall    enjoy    preferential    treatment   as    to    the
requirements, rates, securities, and collaterals; and
(2)      The  DA  shall  ccordinate  with  the  Bangko  Sentral  ng  Pilipinas
(BSP)  to  lower  the  requirements  for  all  loans  applied  for  and
granted to agricultural ccoperatives.
Strengthening   Program   for  Agricultural   Ccoperatives  -  the  government
through the DA and CDA shall introduce a program aimed at strengthening
agricultural cooperatives through mergers and consolidations. This initiative,
part of the governmenrs broader effort to enhance the stability and resilience
of  the  agriculture  sector,  offers  income  support  incentives  to  encourage
smaller agricultural cooperatives and farmers associations to consolidate that
can  lead to improved operational efficiencies,  reducing costs and  improving
service  delivery  for agricultural  ccoperatives.  These  may  include  grants  or
subsidies that help build business scale and improve capital base, operational
synergies, broader service offerings, and risk mitigation.
318               See. T1.  Organization  as a  Multi-Purpose  COoperative. -NotwENskfmding arry
319      law to the contrary, an agricultural cooperative may be organized as a multi-purpose
32o      cooperative from its registration with the CDA: Proiflz/gd, that it has complied with the
321       minimum requirements for an agricultural cooperative as prescribed by the CDA Rules
322       and  Regulations.
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seic. T2.  Pre-Cboperative Agricultural Organization. -Prior to reqjHstratton wiidn
the CDA, a group of natural persons intending to form an agriculture cooperative may
voluntarily form a Pre-Cooperative Agricultural Organization (PCAO) that shall have its
own juridical personality to undertake activities that shall determine the viability of the
creation of an agricultural cooperative. The PCAO must be registered as such with. the
Cooperative  Development Offices  (CDOs)  of the  appropriate  LGU  where the  PCAO
intends to operate. The Bureau may assist and endorse PCAOs to CDA for registration.
The DA and CDA, in coordination with the CDOs, shall assist PCAOs so that they
can  formally organize  as agricultural  cooperatives;  ProM/`ded,  that should  the  PCAO
decide to formally organize into a ccoperative, it must comply with the requirements
under  the  law.  Any  contract  executed  by  the  PCAO  prior  to  its  registration  as  an
agricultural cooperative shall remain valid and binding between the parties insofar as
it redounds to the benefit of the cooperative.
The DA and CDA shall jointly issue guidelines on the mechanisms for PCAOs.
CHAPTER IV
NATIONAL FEDERATION OF AGRICULTURAL COOPERATIVES
Se!¢, T3.  Onganization  of the  National  Federation  Of Agricultural  Cooperatives
/rvf4C/,   -   There   is   hereby   organized   the   National   Federation   of  Agricultural
Cooperatives   (NFAC),   (hereinafter,   the  ``Federation'),   which   shall   be  the   single
federation of agricultural cooperatives.
Srf±ik;.    +4.    Consolidation/Merger    of    Existing    Duly-Registered    Agricultural
Cbepera/7.L@sfediif/€yat-t]n,-AgriculturalCcoperatjveFederationsduly-registeredwith
the CDA prior to the effectivity of this Act shall  merge or consolidate in  accordance
with  existing  applicable  laws,  rules  and  regulations.  The  merged  or  consolidated
federation  shall  serve as the  single  National  Federation  of Agricultural  Cooperatives
(NFAC)'
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The  DA and CDA shall issue the guidelines on the  merger and/or consolidation
of existing federations of agricultural cooperatives.
SGyG. T5,  Mandatory  Membership  of  Primary Agricultural  Cooperatives  to  the
fied€raffo#. It is compulsory for Primary Agricultural Cooperatives to become members
of the National Federation of Agricultural Cooperatives (NFAC).
Sec.  16.  Goyg/ma#cie cif #e Fedgr7f7'on, - The Chairpersons of the member-
primary   agricultural   cooperatives   shall   comprise   the   General   Assembly   of  the
Federation   who  shall   elect  and  appoint  the  Officers  and   Management  Staff  in
accordance with its duly-approved Articles of Ccoperation and By-Laws.
Set:. T] . Primary Business Operations Through Subsidiary/ies. -TheFederairfuon
shall  be  allowed  to  organize  subsidiary  cooperatives  and/or  corporations  that  will
engage  in  Agribusiness  and  Financial  Business  the  surplus  and/or  income of which
shall be utilized to fund, wholly or in part, the needed services of the member-primary
agricultural cooperatives.  Such  subsidiary/ies shall be registered with the  necessary
regulatory authorities  including,  but not limiting to, the  DA,  CDA,  SEC and  Board  of
Investments and  shall enjoy the  relevant exemptions and  privileges  under this Act,
the Cooperative Cede, and other laws, rules and regulations.
Sea, TS.  Channel  And/Or  Partner  of  Farmer-Related  Government  and  Non-
GOMemmenf Programs, Pyio/.gcts ant/Act7-v#.f7.es. -The Federation sha ll serve as channel
and/or partner in the implementation of various Programs,  Projects and Activities of
National   Government   Agencies,   Local   Government   Units   and   Non-Government
Organizations for the benefit of the farmers and their respective families.
See. 19. /nfEir-Coaperaf7.ra Arra#ggm€»ts, -The Federation shall be allowed to
enter  into  inter{ooperative  arrangements  with  and  among  other  non-agriculture
cooperative federations and other entities to pursue value and supply chain solutions
and other agribusiness development programs, subject to the guidelines to be jointly
promulgated by the DA and CDA.
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Se!R;, 21®.  Partnership and Joint Venture with  Private Entities. -Ourty rerfHstfyred
private entities may enter into a  partnership or joint venture with the Federation  in
order to provide the latter with investments and technical support, such as,  but not
limited   to   technological,   logistics,   and   facilities   support,   among   others.   Such
partnership   or  joint  venture   shall   be   registered   with   the   necessary   regulatory
authon.ties,  including  the  DA and  CDA,  and  shall  enjoy the relevant exemptions and
privileges under this Act, the Ccoperative Cede, and other laws, rules and regulations.
This notwithstanding,  the equity or contribution of such  private entity shall  not
exceed forty percent (40%) of the partnership or joint venture.
Sec.  21.  S"pe~x5/an and CZ7nfro/   -   The  DA shall  exercise  supervision  and
control over the Federation.  In like manner, the Federation shall exercise supervision
and control over its member-primary agricultural ccoperatives through the conduct of
regular audivs in accordance with the standards approved  by the DA and the CDA.
Sanctions imposed on non-compliant member-primary cooperatives shall be approved
by the DA and CDA.
The  DA and  CDA shall,  in  consultation with the Federation,  issue guidelines on
the supervision and control of agricultural cooperatives.
CHAPTER V
WHOLESALE MARKET
See. 22. fffa4/kEAmer7f of M4+a/EL5a/g "anfets, - There is hereby established at
least  one  Wholesale   Market   in   every   province   owned   by  the   respective   Local
Government  Units  (LGUs)  and  operated  by  the  National  Federation  of Agricultural
Cooperatives (NFAC) or its appropriate subsidiary/ies.
The DA, DILG and the CDA shall, in close coordination with the Federation, issue
the rules and regulations on Wholesale Market establishment and operation.
CHAPTER VI
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COOPEfIATIVE CLIMATE RESILIENCE FUND
Sea. 2:3. Creation of the Cooperative Climate Resilience Fund. -The!re .rs helcdy
established   a   Cooperative   Climate   Resilience   Fund   managed   by   the   National
Federation   of  Agricultural   Ccoperatives   (NFAC)   to  be  pooled   from   government,
agricultural  cooperatives and  other private entities,  the  utilization  of which  shall  be
subject  to  the  guidelines  promulgated  by  the  Agricultural  Cooperatives  Council.  At
least fifty  percentum  (50%)  Of the  Cooperative  climate  Resilience  Fund  shall  come
from the government.
CHAPTER VII
BU REAu OF AGRICULTURAL COOPERATIVES
S®R;, 2A.  Creation  of the  Bureau  of Agricultural  Cooperatives. - The DA shiiheM
establish a Bunca" of4gr/.cz//rura/ Ccaperaf7.Mrs (hereafter, the ``Bunea4/), which shall
be the  primary coordinating,  implementing,  and  administrative bedy responsible for
matters relating to agricultural ccoperatives, including, but not limited to, monitoring
their  performance  and   implementing   plans  and   programs  for  their  growth   and
development.   The   Bureau   shall   be   headed   by   a   qualified   Director,   and   its
organizational and staffing pattern shall be determined by the DA, in accordance with
the rules set forth by the Department of Budget and Management (DBM).
Sere. 2!5. Powers and Functions of the Bureau of Agricultural Cooperatives. -Thee
Bureau of Agricultural Cooperatives shall exercise the following powers and functions:
a.   Collaborate    and    coordinate    with    various    government    agencies,
institutions, and units for the development and implementation of projeds
and plans for agricultural cooperatives;
b.   Promote the use of digital platforms and innovative technologies for the
growth and development of agricultural ccoperatives, in coordination with
the relevant agencies;
c.   Consolidate   and   study  all   relevant   information   regarding   agricultural
cooperatives that shall be used in the formulation of policies and programs
for the sector;
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d.   Develop advocaey programs for capacity-building  and  further education
of members of agricultural cooperatives, with a particular focus on women
and youth;
e.   Provide technical assistance to agricultural cooperatives;
f.    In  partnership with the NFAC, establish  Local Development Hubs (LDHs)
in order to foster cooperation, collaboration, and mutual support among
agricultural cooperatives, in ccordination with the CDA and LGUs;
a.   Promote  agricultural   ccoperative   clusters   and   assist  in   the   creation
thereof, as a means to forge strategic partnerships among cooperatives;
and
h.   Monitor   and   evaluate   the   performance   of   agricultural   cooperatives
according to an established assessment and ratings system.
Sec.  26,  St/sta/had/./yfy "a4pw.ng. - Within  one (1) year from  the effectivity of
this Act, the Bureau shall  undertake a comprehensive nationwide survey in order to
assess the agricultural  sustainability status of each  region and  LGU.  The findings of
such nationwide survey shall serve as the foundation for the formulation of a ten (10)-
year  Food  Security  Master  Plan.  The  Master  Plan  shall  identify  priority  sectors  and
projects aimed  at promoting  agricultural development and  sustainability throughout
the country. The plan shall be designed to enhance food security, improve agricultural
productivity, and ensure long-term sustainability of the agricultural sector.
Sec.  27.  C}/ustgwig a"d Consa/M.daf7.on, - In  order to  pcol  their  resources for
increased  viability  and  market  competitiveness,  the  DA,  Department  of  Agrarian
Reform  (DAR),  Department of Trade and Industry (DTI),  CDA and  NFAC shall jointly
establish  a   program  that  will   promote,  encourage  agricultural  cooperatives  and
facilitate  their  cooperation  into  clusters  that will  encompass  the  whole  agricultural
value chain,  including  but not limited  to  land  consolidation,  postharvest processing,
distribution, logistics, marketing, and promotions.
Within sixty (60) days from the effectivity of this Act, the DA, DAR, DTI and CDA,
in consultation with the NFAC, shall jointly issue the guidelines for the implementation
of the foregoing program, and shall provide the necessary assistance at every step of
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the   clustering   and   consolidation   process,   including   the   formulation   of   cluster
development plans.
Notwithstanding   any   law   to   the   contrary,   the   clustering   or   merger   and
consolidation    of   agricultural    cooperatives    shall    be    in    accordance    with    the
Implementing Rules and Regulations of this Act.
See. 28. £caa/Ogw{£/opmenf #wds, -The DA and CDA shall jointly establish Local
Development  Hubs  (LDHs)  in  order  to  strengthen  the  market  linkages  between
farmers and buyers, fostering agricultural development and economic growth at the
local  level.  Further,  they  shall  jointly  issue  the  guidelines  for  the  operations  and
maintenance thereof.
Sea. 2!9.  Collaboration with the  NFAC, Cooperative Development Councils and
A/af7'o#a/ GOMfrpmenf Ag€nc/es. -The Bureau shall, in collaboration with the National
Federation of Agricultural Cooperatives (NFAC), LGUs through the Regional, Provincial,
City,  and  Municipal  Cooperative  Development Councils and  the  CDOs,  facilitate  and
promote   programs   and   policies   that   enables   the   growth   and   development  of
agricultural ccoperatives. The DA, CDA, and the relevant LGU or agency in consultation
with  NFAC  shall  issue  a  Joint  Memorandum  Circular  for the  implementation  of this
provision.
Agricultural cooperatives shall be entitled to financing support from the relevant
government agencies that shall allocate funds for the establishment of projects and
programs for the development and promotion of agricultural ccoperatives.
See. 30. 5usfa/t7ab/.//fy and /n„oi/af7.o#. -The Bureau shall allocate funding and
support  for  the  development  and   implementation  of  innovative  and  sustainable
agricultural practices.
Sec. 31. "enfz}rsA¢ and 77a/.„/.ng, -The Bureau shall implement programs that
will   focus   on   the   capacity-   and   capability-building   of   members   of   agricultural
521       cooperatives,  especially  the  empowerment  of women  and  young  farmers.  Among
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522      others, these programs may include:
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a.   Internship  and  apprenticeship  programs  with  duly  accredited  agricultural
cooperatl.ves,   in   partnership   with   the   Committee   on   Higher   Education
(CHED);
b.   Certification   programs   for   management   and   operation   of   agricultural
cooperatives,  as  well  as  related  technical  skills,   in  partnership  with  the
Technical Education and Skills Development Authority (TESDA);
c.   Scholarships or student loan forgiveness, as may be necessary; and
d.   Incentives for the discovery or  development of innovative and  sustainable
agricultural practices or techniques.
Sec. 32. Asses:5m€"f awd Aaf}.ngs, - Upon the effectivity of this Act, the Bureau
534      shall establish an assessment and  ratings system for agricultural cooperatives, which
535      shall  measure  the  performance,  including  the  social  and  community  impact,  of the
536      latter  using  both  qualitative  and  quantitative  metrics,  and  which  shall  be  used  to
537      classify and  determine the best-performing  agricultural  cooperatives among  various
538      categories. Thereafter, the Bureau and the CDA, in close coordination with NFAC shall
539      review the performance of registered agricultural cooperatives every three (3) years
540      and update their ratings accordingly.
541
542                 The  DA  and  CDA,  in  consultation  with  NFAC  shall  use  the  foregoing  in  the
543       provision of incentives and benefits to agricultural cooperatives under the law.
544
545               Sec. 33. AAn"a/ 7fade fat`r a#dAwand5. -The Bureau, in coordination with the
546      CDA and the National  Federation of Agricultural ccoperatives (NFAC), shall establish
547      the Annual Agricultural cooperatives Trade Fair and Awards to showcase exemplary
548      business achievement,  latest innovations,  and  other emerging trends  in  the sector.
549      The  Bureau  shall  ensure  that  agricultural  cooperatives  are  able  to  participate  and
550      exhibit their products during said Fair and shall encourage the latter's participation in
551       othertrade fairs and expos.
552
CHAPTER Ill
AGRICULTURAL COOPERA[TIVES COUNCIL
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555
5S(.                 See. 34.  Creation  of the  Agricultura/  Cooperatives  Council. ~ There.rs heredry
557       created  the  Agricultural  Cooperatives  Council  (hereafter,  the  ``Council''),  which  shall
558       be   the   primary   policy   and   planning   body   for   the   promotion,   development,   and
559       modernization  of agricultural  cooperatives and  organizations.
560
561                  Sec.  35.  Compo57.f7.on  of4rie  Cou"cy./,  -The  Council  shall  be  composed  of the
562       following  members,  or their duly authorized  representatives:
563                          a.    Secretary of Agriculture,  as  chairperson;
564                           b.    Chairperson  of the  CDA,  Vice-Chairperson;
565                         c.    undersecretary of the  Department of Trade and  Industry;
566                         d.   undersecretary of the  Department of Agrarian  Reform;
567                         e.   Undersecretary of the Department of Environment and Natural Resources;
568                         f.     Undersecretary of the  Department of Education;
569                         g.   Undersecretary of the  Department of science and Technology;
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578
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582
h,    Director-General  of the  National  Economic  Development Authority;
i.     Director-General  of the TESDA;
j.     Executive     Director    of    the     National     Disaster     Risk    Reduction     and
Management Council;
k.    Commissioner of the  CHED;
I.     Representative  from  the  philippine statistics Authority;
in.  One  (1)   Representative  each  from  Cooperative  Climate  Resiliency  Fund
private donor entities;
n.   Representative  from  the  National  Federation  of Agricultural  Cooperatives
(NFAC)  and
o.   Two  (2)  representatives  each,  from  the  primary  agricultural  cooperatives
sector   who   are   members   of   the   National    Federation   of   Agricultural
Cooperatives  (NFAC),  for  Luzon,  Visayas,  and  Mindanao
583
584                 Sec.  36.  Powers ant/ fu^c`f/.ons oft4e Councy./, -The Council  shall  exercise the
585        following  powers and  functions:
586                         a.    Formulate   and   issue   policies  for  the  growth   and   development  of  the
587                                 agricultural    cooperative   sector,    which    shall    encompass    adoption    of
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innovaitive  and  ecological  agricultural  practices,  access  to  resources  and
benefits,  market opportunities,  and  capacity-building,  among  others;
b.    Formulate the  Food Security Master Plan,  in coordination with the Bureau;
c.    Provide  an   integrated  framework  in  order  to  optimize  all  government
resources for the  modernization and empowerment of the sector;
d.   Issue   guidelines,   rules,   and   regulations   for   the   development   of   the
tangible  assets,  such  as  machineries,  granaries,  equipment,  and  lands,
among  others,  of agricultural  cooperatives;
e.    Issue    guidelines,    rules,    and    regulations,    in    coordination    with    the
appropriate  agencies,   to  ensure  the  rights  and   welfare  of  agricultural
cooperatives  and  their  members,  especially  women,  youth,  and  family
farmers,     as    well    as    their    preferential    treatment    in    government
procurement as enshrined  under the  law;
f.     Formulate  policies  for the  development  of sustainable  financial  reform  in
the agricultural cooperative sector, including the creation of a government
financial  institution that will specifically cater to the sector,  in coordination
with the  relevant departments and  agencies;
9.    Develop  policies  and  guidelines  for the  institutionalization  of Cooperative
Resilience   Mechanism   (CRM)   that  will   aid   agricultural   to   adapt  to   and
recover   from    the    effects    of   climate    change    or    other    unforeseen
circumstances. The CRM shall  embody a  holistic approach, with  provisions
for funding  assistance,  addressing  production  and  distribution  issues,  and
use  of  new  or   innovative  technologies,   production   technologies   using
renewable   energies,   regenerative   and   sustainable   agriculture,   among
others;  and
h.   Advocate for  policy  reforms and  programs that enhance  social  protection
of the  agricultural  cooperatives  and  their  members,  including  access  to
healthcare,  insurance,  and  retirement benefits,  among  others.
()16
617               Sea,  I].   Policies   Fostering   Inclusivity   and   Sustainability.  -R!ecogri+I:ing  the
618       contributions  of women  and  youth  to  the  agricultural  sector,  as  well  as  the  need  to
619        improve  inclusivity,  the  Council  shall   prioritize  policies  that  seek  to  improve  women
620       empowerment    and    youth    participation    in    the    sector,    and    which    shall    foster
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(>21        sustainability and  further opportunities for economic growth.
622
623                 Further,  the  Council  shall  prioritize  the  implementation  of  policies  that  enhance
624       biodiversity,   sustainability,   and   agroecology,   and   the   development   of   innovative
625       farming  techniques  and  practices.
()2(t
627
Sec.  38. 5ec7€fart.af, -The  Bureau shall serve as the Secretariat to the Council.
628
629              Sec.  39.  Pero/.€m, -The members of the Council  shall each  receive a  p€rc//.on
630       pursuant to existing  laws, for each meeting of the council actually attended; prow.dec7,
631        that  in  the  case  of representatives  from  the  private  sector,  the  Council  is  authorized
(i32       to  provide  funds  to  defray  the  cost of reasonable  travel  expenses,  in  addition  to  the
633       pe/c7/.em,  as  may be  necessary.
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635
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CHAPTER IV
OTHER PROVISIONS
Sec. 40.  ACJ/a of£Gt/5, -The  Local  Government Units shall:
a.    Ensure the appointment of CDOs in compliance with  Republic Act NO.11535;
b.   Create  a  Committee  on  Agricultural  Cooperatives  Development  in  the  Local
Government  Legislatives  Council,  which  shall  focus  on  addressing  legislative
concerns of agricultural  cooperatives;
c.    Disseminate    information   and    promote   agricultural   cooperatives   in   their
respective  localities;
d.   Facilitate the establishment and  develop the  management and  operations of
agricultural  cooperatives within  their jurisdictions;
e.   Expedite the issuance of necessary permits for the implementation of pro].ects
and    programs   of   the   DA,   CDA,   and   other   government   agencies   and
instrumentalities for the  benefit of agricultural  cooperatives;
f.     Upon written  request of the CDA,  assist in the  resolution of inter-cooperative
disputes  among  agricultural  cooperatives  operating  within  their  localities;
9.    Facilitate and  conduct seminars, trainings,  and conferences necessary for the
organization,    registration,    management,    and    operations    of   agricultural
cooperatives,  in  coordination with  cooperative federations and  unions;  and
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654                   h.    Provide technical assistance and skills training for farmers, farm workers, and
655                           fisher folk to  engage  in  income~generating  activities.
656
657                 Sec. 41. Af?pnop".af/.o„-The amount necessary for the initial implementation of
658       this Act shall  be taken  from  the current fiscal  year's appropriation  of the  DA and  DTI.
(t59       Thereafter,  the  amount  necessary  to  carry  out  the  provisions  of  this  Act  shall   be
660       appropriated  in the General Appropriations Act of the year following its enactment into
661          law.
662
6(.3                See, 42.  Implementing  Rules and  Regulations. -WNhin rin€rty  (9rJ) trys from
664       the  effectivity  of this Act,  the  DA,  in  coordination  with  the  relevant departments  and
(i65       agencies,  shall  issue the  necessary  rules  and  regulations to  implement this Act.
666
667                 Sec.  43.  An^ua/ Aaporfs.  -The  Council  shall  submit  an  annual  report  to  the
6(t8       Congress  of  the   Philippines   on   the   progress   of   its   projects   and   plans   and   offer
669       recommendations  for  possible  legislation.
670
671                  Sec. 44.  Sunset Aevt.ew, -Within five (5) years after the effectivity of this Act,
672       or as the  need  arises,  the  House committee on  Agriculture  and  Food  shall  conduct a
673       sunset  review.   For   purposes   of  this  Act,   the  term  ``sunset  review''  shall   mean   a
674       systematic  evaluation  of the  accomplishments  and  impact of this  Act,  as  well  as  the
675       performance and organizational structure of its implementing  entities, for purposes of
676        determining  remedial  legislation.
677
(>78                  Sec. 45.  Aep€a//.ng cyause, -All  laws, decrees, executive orders,  administrative
679       orders,  rules  and  regulations  or  parts thereof inconsistent with  the  provisions  of this
680       Act are  hereby repealed or modified  accordingly.
()81
682                 Sec. 46.  5epara4;.//fy c7ause, -In case any provisions of this Act or any portion
683       thereof is  declared  unenforceable,  illegal,  or  unconstitutional  by  a  competent  court,
684       other provisions shall  not  be affected thereby.
()85
(>8(t                  Sec. 47.  £7rec`f7.vy.fy c7ause. -This Act shall take effect fifteen  (15)  days after its
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(t87       publication  in  the  official  Gazette or  in  two  (2)  newspapers  ofgeneral  circulation.
688
689
Approved,
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