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

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EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. _3389

Introduced by Representative Sharon S. Garin

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 handiing,
processing, domestic marketing, and exports.

This bill aims to introduce a corporate farming program with rice and cor 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, modem 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 entitled in conventional farming.

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

IARON S. GARIN
\MBIS-Owa Partylist


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

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 3369

Introduced by Representative Sharon S. Garin

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:


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a. Corporations and partnerships with existing landholdings that are suitable for
rice and corn 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 com 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.


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SEC. 4. Disposition of Excess Production. — Participating corporations and

partnerships shall be required to provide a minimum of six hundred (600) kilograms of

ricelcom 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 corn productivity

through corporate farming schemes. It shall be composed of the following:

b.

Secretary of the Department of Agriculture (DA);

Secretary of the Department of Agrarian Reform (DAR);

Commissioner of the Bureau of Customs (BOC);

Commissioner of the Bureau of Internal Revenue (BIR);
Secretary of the Department of the Interior and Local Government (DILG);

Representative of the National Food Authority (NFA);

. Representative of Participating Corporations and Partnerships; and

. Representative of farmers’ organizations and agrarian reform communities

(ARC);

SEC. 6. Duties of the Corporate Farming Committee. - |n coordination with

the concerned 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


1 farmers’ groups should include management capabilities, technical and

2 production skills critical to the effective operation of the corporate farm;
3 b. Facilitate and promote grassroots cooperation to access agricultural services
4 ‘such as information, inputs, and technical assistance,
5 c. Initiate and develop periodic rural and farm assembly markets to provide
6 avenues to showcase their produce;
7 d. Exercise regulatory functions with respect to the adherence to the provisions of
8 contracts and arrangements entered into by both corporations and partnerships
9 and farmers groups, cooperatives and agrarian reform communities and to
10 develop mechanisms to facilitate negotiations and mediate in disputes between
4 stakeholders on matters of contract enforcement,
12 e. Coordinate with appropriate government agencies to ensure the timely
13 establishment of support services such as credit, infrastructure, extension
14 services and others, and
15 f. Facilitate the registration of the participating corporations and partnerships with
16 the National Food Authority (NFA),
7 SEC. 7. Incentive Package. - Corporations and partnerships that will

8 participate in the Corporate Farming Program shall be entitled to tax incentives in all

19 aspects germane to the corporate fanning activities. These incentives include:

20 a. Exemption from the payment of customs duties for the importation of all types
21 of agricultural inputs particularly seeds, fertilizers, agricultural machinery, and
22 other agricultural implements as provided under RA 5435, as amended by RA

23 9281, or the Agricultural and Fisheries and Modernization Act, and


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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 shall 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.


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

3 Approved,