Republic of the Philippines #f & a
HOUSE OF REPRESENTATIVES, pATEt; ——-
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 3248

Introduced by Representative Lex Anthony Cris A. Colada

EXPLANATORY NOTE

Food sufficiency should be the duty of everyone and not just the government. With
this in mind, it is only proper that we seek to entice the private sector, particularly large and
considerable corporations and partnerships to enter into agricultural production to augment
the country's food needs and contribute to the challenge of food security and sustainability

It can't be denied that most of our problems in agriculture can be explained by our
small and fragmented farm holdings. A lot of our farmers still rely on subsistence and
backyard farming, and though it might be enough to support the farmer's family, such
scheme is not productive or efficient enough to address the country's food security needs.
Small farms suffer from lack of economy of scale from land preparation all the way to post-
harvest handling, processing, domestic marketing, and exports.

This bill aims to introduce a corporate farming program with rice and corn as primary
crops, which would give corporations and partnerships incentives to take up farming. The
entry of the corporations and partnerships in farming would correct most of the shortcomings
of small-scale farms which include lack of capital, shortage of competent business
managers, and loose financial controls, to name a few.

The corporation may enter into contractual or joint venture arrangements with
landowners, farmers’ organizations and agrarian reform communities (ARCs) and provide
them with capital, production inputs, technology boost, and other technical and related
services. This will result higher levels of productivity compared with small family-managed
farms because the corporate farms have better access to inputs, modern technology and
markets.

This scheme also assures the farmer of higher income from his land because he
partakes of the margins in primary production as well as in the rest of the value chain to
which he is normally not entitied in conventional farming.

LEX ANTHONY CRIS A. COLADA
AAMBIS-Owa Partylist

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



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

HOUSE BILLNO,___3248

Introduced by Representative Lex Anthony Cris A. Colada

AN ACT
PROMOTING CORPORATE FARMING AND PROVIDING INCENTIVES
THEREFOR

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

SECTION 1. Title. - This Act shall be known as the “Corporate Farming
Program Act.”

SEC. 2. Participating Domestic Corporations and Partnerships. — For the
purpose of this Act, domestic corporations and partnerships shall refer to all
corporations and partnerships organized and existing under Philippine laws,
operating for profit, and with reported earnings over the last four (4) years that will
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 partnerships that are to be covered by this
Act.

SEC. 3. Corporate Farming Arrangements. — Participation in the Corporate
Farming Program shall be on a voluntary basis. For the purpose of this Act, the
following are the corporate farming schemes that corporations and partnerships may

engage in:


a. Corporations and partnerships with existing landholdings that are suitable for
rice and com production and which are subject for distribution under the
Comprehensive Agrarian Reform Program may enter into management
contracts or joint venture arrangements with the agrarian reform beneficiaries,
their associations or cooperatives for the production of rice and corn;

b. Corporations and partnerships may lease private agricultural land suitable for
rice and corn production by entering into contractual or joint venture
arrangements with landowners, farmers’ organizations and agrarian reform
communities (ARCs). Conversion of agricultural lands leased for the purpose
is strictly subject to the rules on land conversion, as provided for by RA 6657
as amended by RA 9700, otherwise known as the Comprehensive Agrarian
Reform Program, and its implementing rules guidelines. 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; and

c. Corporations and partnerships may enter into contractual arrangements with
farmers’ organizations and agrarian reform communities whereby the
corporations and partnerships shall provide the production inputs and
technical and related services, then buy the produce resulting from the
farming contract.

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 LGUs shall require the participating corporations
and partnerships to provide livelihood projects/opportunities to families which

will not be covered by the corporate farming program.


SEC. 4, Disposition of Excess Production. — Participating corporations and
partnerships shall be required to provide a minimum of six hundred (600) kilograms
of rice/corn per employee per year or fifty (50) kilograms per employee per month.
Production in excess of the employees’ consumption requirements may be sold in
the local markets, provided that such will be reported to the National Food Authority
(NFA).

SEC. 5. Corporate Farming Committee — The Corporate Farming
Committee, hereinafter referred to as the Committee, shall be constituted under the
Office of the President, and shall institute measures to ensure higher rice and com
productivity through corporate farming schemes. It shall be composed of the
following:

a. Secretary of the Department of Agriculture (DA);

b. Secretary of the Department of Agrarian Reform (DAR);

c. Commissioner of the Bureau of Customs (BOC);

d. Commissioner of the Bureau of Internal Revenue (BIR);

e. Secretary of the Department of the Interior and Local Government (DILG);

f. Representative of the National Food Authority (NFA);

g. Representative of Participating Corporations and Partnerships; and

h. Representative of farmers’ organizations and agrarian reform communities

(ARC);

SEC. 6. Duties of the Corporate Farming Committee. — In coordination with
the concemed agencies, the Committee shall facilitate the processing of
management contracts between corporations and partnerships and the farmers

groups. The Committee shall exercise the following functions:


a. Develop eligibility criteria for both corporations and partnerships and farmer
groups, including cooperatives and agrarian reform communities, for their
accreditation under this Act. Provided that, the accreditation criteria for the
farmers’ groups should include management capabilities, technical and
production skills critical to the effective operation of the corporate farm;

b. Facilitate and promote grassroots cooperation to access agricultural services
such as information, inputs, and technical assistance,

c. Initiate and develop periodic rural and farm assembly markets to provide
avenues to showcase their produce;

d. Exercise regulatory functions with respect to the adherence to the provisions
of contracts and arrangements entered into by both corporations and
partnerships and farmers groups, cooperatives and agrarian reform
communities and to develop mechanisms to facilitate negotiations and
mediate in disputes between stakeholders on matters of contract
enforcement,

e. Coordinate with appropriate government agencies to ensure the timely
establishment of support services such as credit, infrastructure, extension
services and others, and

f. Facilitate the registration of the participating corporations and partnerships
with the National Food Authority (NFA).

SEC. 7. Incentive Package. — Corporations and partnerships that will
participate in the Corporate Farming Program shall be entitled to tax incentives in all
aspects germane to the corporate fanning activities. These incentives include:

a. Exemption from the payment of customs duties for the importation of all types

of agricultural inputs particularly seeds, fertilizers, agricultural machinery, and


other agricultural implements as provided under RA 5435, as amended by RA
9281, or the Agricultural and Fisheries and Modernization Act, and

b. Exemption from the Value Added Tax (VAT) on the importation of agricultural
inputs particularly fertilizers, seeds and seedlings in accordance with Section

109 of the National Internal Revenue Code as amended.

SEC. 8. Other Incentives. — Loans extended by government and private
banks to participating corporations and partnerships shall be treated as compliance
to RA 10000, or the Agri-Agra Reform Credit Act of 2009.

SEC. 9. Duration. - Participating corporations and partnerships may lease
private agricultural lands for a period of seven (7) years which may be renewed for
another seven (7) years, subject to the consent of the farmers, their associations and
cooperatives.

SEC. 10. Automatic Review. ~ The Committee shail submit periodic reports
to both Houses of Congress on the accomplishment of the Program. A review on the
viability of the program shall be made by the concerned agencies after five (5) years
of its implementation.

SEC. 11. Implementing Rules and Regulations (IRR). — The Committee, in
consultation with other concerned government agencies, non-government
organizations, private sector and farmer go ups involved in rice/corn production, shall
within ninety (90) days after the effectivity of this Act, formulate the rules and
regulations for its effective implementation.

SEC. 12. Separability Clause. ~ The provisions of this Act are hereby
declared to be separable, and in the event one or more such provisions are held

unconstitutional, the validity of the other provisions shall not be affected thereby.


SEC. 13. Repealing Clause. ~ All laws, decrees, executive orders, rules and
regulations, issuances or parts thereof inconsistent with the provision of this Act are
hereby repealed or modified accordingly.

SEC. 14. Effectivity. - This Act shall take aster fifteen (15) days after its
publication in the Official Gazette or in a national newspaper of general circulation.

Approved,