Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL nob 559

INTRODUCED BY REPRESENTATIVE ALFRED VARGAS

EXPLANATORY NOTE

Agriculture is the major pillar of the country’s economy: it accounts for 9% of the
Philippines’ gross domestic product and 29 % of total employment in 2015. However,
according to the Philippine Statistics Authority, field crop workers and aqua-farm
cultivators are among the least paid laborers in the country, earning a monthly salary of
Php7,949.00 and Php 7,088.00, respectively.

Thus, to contribute to the sustainability of the country’s agricultural industry, this
bill directs the national and local government agencies to purchase agricultural and
aqua-cultural products from accredited farmers’ and fisherfolks’ cooperatives.
Furthermore, the bill grants incentives to private entities and corporations that support
the farmers and fisherfolk enterprise development initiatives of the government.

In view of the foregoing, the passage of this bill is earnestly sought.


Republic of the Philippines
HOUSE OF REPRESENTATIVES.
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

£559

HOUSE BILL Ni

INTRODUCED BY REPRESENTATIVE ALFRED VARGAS

AN ACT
INSTITUTING THE FARMERS AND FISHERFOLK ENTERPRISE DEVELOPMENT PROGRAM OF THE
DEPARTMENT OF AGRICULTURE AND FOR OTHER PURPOSES

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

SECTION 1. Short Title. - This Act shall be known as the ‘Sagip Saka Act.”

SECTION 2. Declaration of Policy. - \t is the declared policy of the State to achieve
sustainable modern agriculture and food security by transforming agricultural and fishing
communities to reach their full potential, improving farmers and fishers’ incomes and

quality of life, and bridging gaps through public-private partnerships.

Towards these ends, the State recognizes the essential role of the private sector in
promoting and supporting enterprise development in the agriculture and fisheries sectors,
opening up of opportunities and markets for agricultural and fishery products in the
domestic and world markets, and developing entrepreneurship among our farmers and
fisherfolk.

In pursuance of this policy, the State shall strengthen the farmers and fisherfolk
enterprise development program of government by establishing a comprehensive and
holistic approach in the formulation, coordination and implementation of enterprise
development initiatives, consolidate the roles of different government agencies involved
in farmers and fisherfolk enterprise development, intensify the building of
entrepreneurship culture among farmers and fisherfolk, and provide incentives to private
entities that support the farmers and fisherfolk enterprise development initiatives of the

government.


SEC. 3, The Farmers and Fisherfolk Enterprise Development Program. - There is
hereby established the Farmers and Fisherfolk Enterprise Development Program, herein
referred to as the Program, which shall refer to the comprehensive set of objectives,
targets, and holistics approach and assistance in promoting the establishment of
enterprises involving agricultural and fishery products. It shall be integrated and be made
consistent with the Agriculture and Fisheries Modernization Plan, and the Micro, Small
and Medium Enterprises Development Plan.

In the identification and prioritization of agricultural and fishery products that will
be supported, the Program shall make use of science-based methodologies, such as the
value chain analysis.

The forms of assistance to be provided under the Program shall include:

1) Improvements of production and productivity, including agricultural
extension services, skills development, provision of production inputs, equipment and
facilities/infrastructure for production and post-production activities;

2) Improvement of producers’ and enterprises’ access to financing in the form
of credit grants as well as crop insurance;

3) Provision of access to improved technologies through research and
development; and

4) __ Provision of business support and development services, particularly in the
areas of access to markets, marketing, and networking.

SEC. 4. Coverage of the Program. - The Program shall cover the following areas:

a, Agricultural and fisheries production, including processing of fisheries and
agri-based products and farm inputs;

b. Acquisition of work animals, farm and fishery equipment and machinery;

Acquisition of seeds, fertilizer, poultry, livestock, feeds and other similar
items;

d. Procurement of agricultural and fisheries products for storage, trading,

processing and distribution;


e. Construction, acquisition and repair of facilities for production, processing,
storage, transportation, communication, marketing and such other facilities in support of
agriculture and fisheries;

f Working capital for agriculture and fisheries graduates to enable them to

engage in agriculture and fisheries related economic activities;

Agribusiness activities which support soil and water conservation and
ecology-enhancing activities;
h. Working capital for long gestating projects; and

Credit guarantees on uncollateralized loans to farmers and fisherfolk.

The Farmers and Fisherfolk Enterprise Development Council, created under
Section 8 of this Act, may include other areas of intervention in order to expand and
support enterprise development in the agriculture and fisheries sector.

SEC. 5. Beneficiaries of the Program. - The possible proponent groups or
beneficiaries of the Program are the following:

a. Existing producer groups with members producing commodities which are
included in the priority commodity value chains and have potential to increase their
marketable surplus;

b. Farmer and fisher groups which have potential to produce marketable
surplus and demonstrate willingness to voluntarily adopt clustering with other groups
and forge contracts or formal marketing agreements with buyers or private
intermediaries;

c. Producer groups or cluster of growers that are either operational and/or
show a willingness to undergo capacity building on enterprise development and
management; and

d. Micro, small and medium scale processors, consolidators, exporters, and
other enterprises, who are willing to assist producer groups in vertical clustering or joint
business planning, and forge contracts or formal marketing agreements with such
producer groups. Joint business planning and investments of the producer groups and
agro-processors will be supported if it will result in increased engagement of the producer

groups in value adding activities.


Farmers and fishers who are not members of any organization operating in the
priority commodity value chain must join the proponent groups for them to be eligible
either as a member of the proponent group or as supplier to the enterprise.

SEC. 6. Implementing agency and Partner Agencies. - The Department of
Agriculture (DA) shall be the implementing agency of the Program. It shall tap the
assistance, expertise and resources of the following agencies, such as, but not limited to,
the Philippine Coconut Authority, the National Dairy Authority, the Bureau of Soils and
Water Management, the Philippine Center for Post-Harvest Development and
Mechanization, Bureau of Fisheries and Aquatic Resources, Agricultural Training Institute,
Agricultural Credit and Policy Council, and the Bureau of Agricultural Research.

The DA shall likewise collaborate and secure the technical support and assistance
of other department and their attached agencies and corporations to support enterprise
development in the priority commodity value chain, such as: the Department of Agrarian
Reform, the Department of Environment and Natural Resources, the Department of
Science and Technology, the Department of Trade and Industry, and the Department of the
Interior and Local Government.

SEC. 7. Private Sector Partnership. - Partnerships or alliances between farmer and
fishers groups and the private sector may be formed to improve market access of producer
groups.

The following criteria shall be considered in the selection of private sector

partners:

a) Committed to enter into marketing contract or buy-back agreement with the
producers group;

b) —_- Will undertake technology transfer on the provided goods and/or services;

©) Financial and organizational capability to undertake the proposed
enterprise; and

d) Established actual experience in undertaking or implementing the proposed
enterprise.

Private sector partners may also provide or donate equipment, machineries, and
other forms of assistance to farmers and fisherfolk engaging in enterprise development.

The DA shall issue the guidelines and impose the qualification requirements in

recognizing private sector partners of the Program.


SEC. 8. Creation of the Farmers and Fisherfolk Enterprise Development Council. -
To oversee the proper implementation of the Program, the Farmers and Fisherfolk
Enterprise Development Council is hereby created. It shall be composed of: (a) the
Secretary of DA, or his duly authorized representative who is at least an Undersecretary,
who shall be the chair, (b) a representative of the Department of Trade and Industry (DTI),
who shall likewise at least be an Undersecretary; (3) a representative of the Department
of the Interior and Local Government (DILG); (4) a representative of the Department of
Finance (DOF); (5) Cooperative Development Authority (CDA); (6) a representative of a
national organization of farmers cooperatives or associations; (7) a representative of a
national organization of fisherfolk cooperatives or associations; and (8) two (2)
representatives from the agriculture, food, restaurant and business sectors.

SEC. 9, Local Councils for Farmers and Fisherfolk Enterprise Development. - The
Agricultural and Fishery councils (AFCs) of the Philippine Council for Agriculture and
Fisheries shall provide the mechanisms for private sector participation in the

development processes at the regional, provincial, and city/municipal levels.

SEC. 10. Creation of the Farmer and Fisherfolk Enterprise Development Fund. - To
support the implementation of the Program, there is hereby created a Farmer and
Fisherfolk Enterprise Development Fund, to be funded through annual general
appropriations, grants from multilateral and bilateral agencies, and donations from the
private sector.

The Development Fund shall be used to promote business opportunities available
in the agriculture and fisheries sector, and to fund projects in areas identified in Section 4
of this Act.

In order to ensure a holistic approach in supporting projects in identified priority
value cash, the Department shall, in addition to the Development Fund, tap resources
under the management of its attached agencies and commodity development programs,
and require counterpart funding from partner local government units and farmers and

fisherfolk organizations and enterprises in the form of cash, land, building, labor, or


machineries and equipment. Releases from the Development Fund shall be considered as
a project grant.

SEC. 11. Farmers and Fisherfolk Enterprise Development Information System. -
The Department of Agriculture, through the Agribusiness and Marketing Assistance
Service, shall maintain a Farmers and Fisherfolk Enterprise Development Information
System to assist government in formulating plans and programs on enterprise
development, and to enable producer groups, the private sector, local government units,
and potential donors to respond to the needs of the local and world markets and in
generating resources for further enterprise development. The information system shall
contain a list of possible and implemented programs and projects; a registry of agricultural
and fisheries enterprises, and private companies engaging these enterprises or have
expressed interest in participating in the Program, and other information that may be
identified by the Department or by the Council.

SEC. 12, Direct Purchase by National and Local Government Agencies.- To promote
and support farmers and fisherfolk enterprise development, national and local
government agencies are hereby mandated to directly purchase agricultural and fishery
products from accredited farmers and fisherfolk cooperatives and enterprises: Provided,
That, said agricultural and fishery products are necessary in the performance of their
respective mandates.

For purposes of this Act, the procurement by national and local government
agencies of said agricultural and fishery products shall be exempt from the application of
the bidding process prescribed under relevant government procurement laws: Provided,
That, said agencies shall undergo a negotiated procurement under the applicable
guidelines of the Government Procurement Policy Board.

SEC. 13, Tax Incentives and Exemptions. - The provisions of any general or special
law to the contrary notwithstanding:

a. Gifts and donations of real and personal properties shall be exempt from
donor's tax and the same shall be considered as allowable deductions from the gross

income of the donor, in accordance with the provisions of the National Internal Revenue


Code of 1997, as amended: Provided, That, the allowable deduction shall be equivalent to
One Hundred Fifty percent (150%) of the value of such donation.

The valuation of a donation other than money shall be based on the acquisition
cost of the property and shall take into consideration its depreciated value, if applicable.

b. LGUs shall identify local taxes that may be waived or reduced and offer them
as incentives to organic input production and utilization;

¢. _ The Land Bank of the Philippine shall provide preferential rates and special
window to accredited and fisherfolk enterprises; and

d. Exemptions from income tax may be provided for income arising from the
operations of the enterprise, as provided under Republic Act No. 9178, otherwise known

as the “Barangay Micro-Business Enterprises.”

SEC. 14. Implementing Rules and Regulations. - Within sixty (60) days from the
date of effectivity of this Act, the Department of Agriculature (DA), in consultation with
the Department of Trade and Industry (DTI), and the Department of Finance, shall
formulate the rules and regulations for the proper implementation of this Act.

SEC. 15. Separability Clause. ~ If any provision of this Act is declared invalid or
unconstitutional, the other provisions not affected by such declaration shall remain in full
force and effect.

SEC. 16. Repealing Clause. - All laws, executive and administrative orders, rules
and regulations inconsistent with the foregoing provisions are hereby repealed or

modified accordingly.

SEC. 17. Effectivity Clause. - This Act shall take effect after fifteen (15) days from
its publication in the Official Gazette or in two (2) newspapers of general circulation.

Approved,