Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session
7006

House Bill No.

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

It is often argued that the very pitfall of agrarian or land reform is the
concept itself.

Through land reform, there is a transfer of ownership of land from the
hacienderos or big landowners to tenant farmers, in the well intentioned belief
that giving land to the tiller will make him work harder and set him off on the
road to prosperity. We herald this as a victory for peasant farmers and social
justice achieved. However, without correct farming technology,
mechanization, post harvest processes, logistics support and market access,
all that we have achieved in the Philippines’ land reform program is
continuing poverty for our rural folk with formerly contiguous agricultural
lands split into small and unmanageable parcels.

Naturally, this split translates to the discontinuation of the former
purpose and use of the land. It is not an uncommon occurrence that a formerly
large tract of land planted with palay would now be used for various purposes.
The new landowners can now plant whatever crop they would like. At best,
the fractured lands that resulted from the break-up are now planted in-
efficiently with the farmer getting deeper in debt every planting season and at
worse, actually left idle, unproductive and dormant.

In case the lands were previously planted with plantation crops, like
sugar cane, such would spell the end of it as these crops thrive on bigger
economies of scale. In any case, what results is declining productivity, higher
costs of production and greater damages in the face of climate change.
Locally, income security is affected and regionally and nationally, even food
security is at risk.

Considering the reality of fractured farm lots dotting the Philippine
countryside today, the absence of rural finance and crop insurance, as well as
archaic chattel mortgage and warehouse receipts laws, the absence of
economies of scale in production, mechanization, post harvest processing and


preservation of crop harvests and poor logistics infrastructure and digital
connectivity to enhance technology, extension, price discovery and market
access, there is an urgent need, in these times of climate change, to incentivize
and encourage farmers to come together and consolidate their farm lots to
afford them a chance to produce in scale to lower their costs and attract
businessmen, traders and entrepreneurs to partner with them for production
and marketing activities.

This proposed bill is inspired by the practice in Malaysia, where the
Federal Land Development Authority (FELDA), and the Sarawak Land
Consolidation and Rehabilitation Authority (SALCRA), pioneered in land
distribution to tillers but under the condition that lands cannot be distributed
and fractured into small lots, but distributed at a minimum land size of 4
hectares with the lots aggregated into vast sizes of thousands of hectares to
corporatized farming. This way, the decided and focused to growing
corporate and plantation type crops, affords farmers the Chane to employ the
best science and technology, to growing crops at the lowest possible costs.
This system is what gave Malaysia present day dominance in palm oil, rubber,
tea and fruit trees.

Our objective now must be to incentivize farmers and cooperatives to
come together and produce together and as one. They must be the given the
opportunity to produce in scale. Small farm lot owners and agrarian
beneficiaries must be encouraged to explore partnership arrangements with
each other, or together as one, deal with Government and business to produce
efficiently and at a profit. The objective is to consolidate small contiguous
landholdings into bigger agricultural estates. The consolidation of said lands
may be by direct acquisition or sale by the small landowners, usufruct, and/or
long term lease of rights. Priority shall be the consolidation of unused,
underutilized and underdeveloped lands. A comprehensive plan and study on
optimum utilization and long term productivity of bigger landholdings shall
be crafted. There shall be private sector participation in agricultural
production and management through adequate security, incentives and
reasonable returns on investments. A cooperative system shall be adopted to
increase participation and protection of small farmers. There shall be
employment opportunities for farmers so that they would be provided with a
reasonable standard of living and improved level of income.

Most importantly, the nucleus provision of this Act, is to mandate
mandatory state assistance in developing road, utility, logistics, processing
and marketing support for farmers and parties who are willing to consolidate
their lands into a minimum contiguous area of 50 hectares of agricultural land
devoted to the production of a crop in scale in partnership with the private
sector.

As the primary task under this Act is incentivizing and encouraging the
consolidation of agricultural lands, primarily prioritizing, but nor exclusively
devoted to, agrarian reform beneficiaries, the Department of Agrarian Reform
shall be the agency tasked to implement the provisions of this Act. The


Presidential Agrarian Reform Council (PARC) created under Section 41,
Chapter XI of Republic Act No. 6657, as amended is hereby tasked to craft a
formulate, advocate, coordinate, oversee and assess the implementation the
land consolidation program under this Act.

The country’s need for food security cannot be over emphasized but
our farmer’s prosperity and rise from poverty is the ultimate objective. There
is a grave need for the attainment of economies of scale in agricultural
production. The consolidation of small landholdings into bigger agricultural
estates, along with careful and proper planning, and most important, the
cooperation of corporate businesses with small farmers, WITH
MANDATORY STATE SUPPORT for basic infrastructure, utilities,
processing and marketing, this can be achieved.

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

ARTH! xYAP
Representative


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
SEVENTEENTH CONGRESS
First Regular Session

7006

House Bill No.

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

AN ACT
ENSURING FOOD SECURITY, INCREASING
AGRICULTURAL YIELD, PRODUCTIVITY, AND
FARMERS’ INCOME BY CONSOLIDATING
OWNERSHIP, RIGHTS AND UTILIZATION OF SMALL
LANDHOLDINGS, PROVIDING FUNDS THEREFOR,
AND FOR OTHER PURPOSES

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 “Land
Consolidation and Utilization Act”.

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the
State to ensure food security, maximize agricultural yield and productivity
and increase farmers’ income. Towards this end, the State shall promote the
consolidation of small scale agricultural landholdings, for unified or common
utilization, planting, production, and development, adopt effective field
management practices to increase farmers income by maximizing yields and
minimizing costs, contribute towards improving farmers’ well-being by
ensuring that they achieve a higher standard of living in a well-organized and
conducive manner; and to establish a dedicated and efficient management

team capable of implementing all the activities as planned.


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SEC. 3. Land Consolidation and Utilization Program. -There is

hereby established a Land Consolidation and Utilization Program under this

Act. The objectives of the said program are as follows:

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To consolidate small contiguous landholdings into bigger agricultural
estates. The consolidation of said lands may be by usufruct, and/or long
term lease of rights. Priority shall be the consolidation of unused,
underutilized and underdeveloped lands with a minimum of fifty (50)-
hectare cluster with at least ten (10) small landowners for synchronized
farming operations, from land preparation to harvesting, in cooperation
or contract with agricultural mechanized operation service providers.
Once farming operations over a fifty (50) — hectare cluster has been
done, development of these agricultural lands thru the allocation of
funds to develop farm to market roads, irrigation, utility, logistics,

processing and marketing support for farmers is hereby mandated.

. To craft a comprehensive plan and study on optimum utilization and

long term productivity of bigger landholdings;

. To enable private sector participation in agricultural production and

management through adequate security, incentives and reasonable

returns on investments;

. To develop and adopt a cooperative system to increase participation and

protection of small farmers and other groups;

. To create employment opportunity and increased family incomes in the

agriculture sector;

. To provide a reasonable standard of living to the rural population

through stable and improved level of income on sustainable basis; and


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7. To improve the quality of rural life through provisions on the upgrading
of the basic social amenities and facilities.

SEC. 4. Program Implementation. — The Presidential Agrarian
Reform Council (PARC) created under Section 41, Chapter XI of Republic
Act No. 6657, as amended is hereby tasked to craft a formulate, advocate,
coordinate, oversee and assess the implementation the land consolidation
program under this Act.

The Executive Committee under Section 42, as well as the Secretariat
under Section 43, shall likewise perform their functions for the Council under
this Act.

The Department of Agrarian Reform shall be the agency tasked to
implement the provisions of this Act.

SEC. 5. Manner of Land Acquisition, Compensation and
Consolidation. — Land acquisition and compensation shall be in accordance
with Chapters V and VI of Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law, and which function shall be performed
by the pertinent office of the Department of Agrarian Reform.

As for long term lease and/or usufruct of lands, the Board shall take
into consideration existing market rates, among other factors. For lands
determined to be unused, undeveloped, underdeveloped or underutilized,
profit sharing schemes shall be adopted in lieu of rental payments.

SEC. 6. Administrative Adjudication and Judicial Review. — The
administrative adjudication under Chapter XII and Judicial Review under
Chapter XIII of Republic Act No. 6657, as amended, particularly as to

valuation of land acquisition shall be enforced under this Act.


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SEC. 7. Appropriations. — The initial amount of TEN BILLION
PESOS (Php10,000,000,000.00) from the income of the Philippine
Amusement and Gaming Corporation (PAGCOR) shall be allocated for this
Act. Thereafter, such amount as may be necessary for the continuous
implementation of the Program under this Act shall be included in the annual

General Appropriations Act.

SEC. 8. Implementing Rules and Regulations. - The PARC shall
issue the implementing rules and regulations of this Act within ninety (90)
days starting from the effectivity of this Act.

SEC. 9. Repealing Clause. — All laws, decrees, executive orders and
rules and regulations or part or parts thereof inconsistent with any provision
of this Act are hereby repealed, modified or amended accordingly.

SEC. 10. Separability Clause. — If any provision of this Act is declared
unconstitutional, the validity of the remaining provisions hereof shall remain
in full force and effect.

SEC. 11. Effectivity. — This Act shall take effect fifteen (15) days after

its publication in the Official Gazette or in a newspaper of general circulation.

APPROVED.