NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
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SENATE 
s. No. 961
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*22 AU6 -1 PI 30
RECEIVED iV:
Introduced by Senator Grace Poe
AN ACT
PROMOTING CORPORATIVE FARMING AND PROVIDING INCENTIVES FOR 
ITS EFFECTIVE IMPLEMENTATION
EXPLANATORY NOTE
The current food crisis and the rice importation fiasco highlight the need to 
review government policies on food security and to seek creative means to 
reinvigorate the agricultural sector. As a newly liberalizing economy competing 
against well-entrenched world economies, the Philippines is hard-pressed to make its 
agricultural policies more responsive.
Investments in the agricultural sector cannot be shouldered by the public 
sector alone. Hence, this measure aims to implement corporative farming programs 
to attract more private sector engagement in the agriculture sector. Corporative 
farming enables the vertical integration the entire process of food production. 
Moreover, it offers more efficient management not only of the farm itself, but also 
of the entire chain of agriculture-related business, including seed supply, 
agrochemicals, food processing, machinery, storage, transport, distribution, 
mariceting, advertising, and retail sales. This would ensure more stable rice and corn 
supplies and make rice and corn prices more predictable.
The immediate approval of this measure is earnestly sought. 
f
jf GRACE POE
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NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
fQ'k Senate
•22 AUS-1 PI 30
RECEIVED BY;
Introduced by Senator Grace Poe
AN ACT
PROMOTING CORPORATIVE FARMING AND PROVIDING INCENTIVES FOR 
ITS EFFECTIVE IMPLEMENTATION
Be it enacted by the Senate and House of Representatives of the Phiiippines in 
Congress assembied:
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Section 1. Domestic Corporations and Partnerships, - For the purpose of this
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Act, domestic corporations and partnerships shall refer to all corporations and
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partnerships organized and existing under Philippine laws, operating for profit:
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Provided, that said corporations and partnerships report earnings over the last four
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(4) years that allow them to engage in the production of rice/ corn for their
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employees' requirements without adversely affecting their financial viability.
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Appropriate guidelines shall be issued to determine the corporations and
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partnerships that are to be covered by this Act.
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Sec. 2. Corporative Farming Arrangements. - Participation in Corporative
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Farming programs shall be on a voluntary basis. For the purpose of this Act,
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corporations/partnerships may engage in the following Corporative Farming
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programs:
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a. Corporations/partnerships with existing landholdings suitable for rice/corn
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production may manage the land and produce the rice/corn or may enter into
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a management/contractual arrangement with farmers' groups such as
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farmers' associations, cooperatives, and agrarian reform communities (ARCs);
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b. Corporations/ partnerships may purchase or lease, on a long term basis,
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public or private agricultural land suitable for rice/corn production, whereby


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the corporations/partnerships are given full management and production 
control over the purchased or leased lands or may enter into contractual 
arrangements, or joint ventures with landowners, farmers' organizations and 
ARCS.
Agricultural land purchased or leased for the purpose cannot be 
converted to other uses. Should the Corporative Farming venture cease to be 
financially viable and the partners declare bankruptcy or insolvency, land 
ownership shall automatically revert to the agrarian reform beneficiaries 
within a period of three (3) years In the case of public agriculture lands and 
private lands originally distributed under the Comprehensive Agrarian Reform 
program. 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.
c. Corporations/partnerships may enter Into contractual arrangements with 
farmers' organizations/ ARCs, whereby the corporations and partnerships will 
provide the production inputs and technical and related services, then buy 
back the produce. Provided, that the farm inputs that shall be utilized shall 
subscribe to the requirements set forth by Republic Act 10068 or the "Organic 
Agriculture Act of 2010."
Local Government Units (LGUs) shall be required to identify 
appropriate land areas for Corporative Farming in consonance with their 
comprehensive land-use plan and ordinances. The LGU shall require the 
participating corporations/partnerships to provide livelihood 
projects/opportunities to families who will not be hired by the said entitles.
Further, the LGUs may also identify local taxes that may be offered as 
incentives for Corporative Farming.
d. Corporations/partnerships may enter into contractual arrangements with 
farmers' organizations/ ARCs, whereby farmers' organization shall be 
responsible for the production of raw agricultural materials while the 
corporations/partnerships shall perform the agro-processing/value-additlon 
and look for domestic and International markets.


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e. Farmers/ or other agricultural cooperatives with existing landholdings and 
sufficient capitalization to undertake a "corporative" farming scheme for 
rice/corn.
Sec. 3. Disposition of Excess Production. - The corporations/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. 4. Impiementing Agencies and Impiementing Ruies and Reguiations 
(IRR). - The Department of Agriculture (DA) and the Department of Agrarian 
Reform (DAR) shall be the lead agencies to institute measures to ensure higher 
rice/corn productivity through Corporative Farming schemes.
Moreover, the DA and the DAR shall facilitate with the appropriate 
government agencies the processing of management contracts between the 
corporations/ partnerships and farmers' groups. Further, the DA and the DAR shall 
oversee and monitor the IRR and guidelines of this Act. The DA and the DAR shall 
exercise the following functions:
a. Develop ellgibilit/ criteria for both corporations/ partnerships and farmers' 
groups, cooperatives and/ or ARCs for consideration under this Act and to 
institute their accreditation: Provided, that the farmers' group criteria should 
Include management capabilities, technical and production skills critical to the 
effective operation of the Corporative farm;
b. Identify suitable private and public-owned rice/ corn production areas for 
Corporative farming and determine the maximum ceiling of landholdings for 
Corporative Farming arrangements: Provided, that the DA and the DAR shall 
periodically determine the need to expand/reduce rice/corn production areas 
for Corporative Farming schemed on the basis of rice/corn demand-supply 
gaps;
c. Facilitate and promote grassroots cooperation to access agricultural services 
such as information, inputs, and technical assistance;
d. Initiate and develop periodic srural/arm assembly markets to provide avenues 
to showcase their produce;


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e. Exercise regulatory functions with respect to the adherence to the provisions 
of contracts and arrangements entered Into by both corporations/ 
partnerships and farmers' groups, cooperatives and/or ARCs and to develop 
mechanism to facilitate negotiations and mediate in disputes between 
stakeholders on matters of contract enforcement;
f. Coordinate with the appropriate government agencies to ensure the timely 
establishment of support services such as credit, infrastructure, extension 
services, and others;
g. In consultation with other concerned government agencies, non-government 
organizations, private sectors, and formers' groups Involve In rice/corn 
production, formulate the IRR necessary to operationalize the provisions of 
this Act within ninety (90) days from approval; and
h. Facilitate the registration of the participating corporations/ partnerships with 
the NFA.
Sec. 5. Incentive package. - Corporations/partnerships which shall participate 
In the Corporative Farming Act shall be entitled to tax Incentives covering all aspects 
of the operation germane to Corporative Farming activities.
These include the following:
a. Exemption from the payment of customs duties on the Importation of all types 
of agricultural inputs, particularly seeds, fertilizers, agricultural machinery, 
and other agricultural implements as provided under Republic Act No. 9281, 
which amends Republic Act No. 8435 or the Agriculture and Fisheries 
Modernization Act;
b. Exemption from the value-added tax (VAT) on the importation of agricultural 
inputs in accordance with Section 109(d) of the Natbnal Internal Revenue 
Code, as amended; Provided, that the Importation requirement shall be in 
accordance with the provisions of Republic Act No. 10068 or the "Organic 
Agriculture Act of 2010";
c. Exemption from the payment of capital gain tax for a person either natural or 
juridical, who sells and or transfers Idle agricultural land to corporations and 
partnerships engage in Corporative Farming; and


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d. Tax incentives, including Income tax holiday, In accordance with the 
provisions of Executive Order No. 226 or the Omnibus Investment Incentives 
Code, as amended.
Sec. 6. Other Incentives. - Loans extended by banks, both government and 
private, to participating corporations/partnerships shall be treated as compliance to 
Republic Act No. 10000 or "The Agri-Agra Reform Credit Act of 2009."
Sec. 7. Duration. - Participating corporations/partnerships with existing 
landholdings may engage in rice/corn production within a period of time to be 
determined by this Act. However, those corporations/partnerships which purchased 
agricultural lands for the purpose cannot convert the land to other uses and must 
relinquish land ownership In favour of agrarian reform beneficiaries within a period 
of three (3) years In the case of public agricultural lands and for private lands 
originally distributed under the Comprehensive Agrarian Reform Program should 
they wish to terminate the Corporative Farming agreement.
Arrangements/negotiations for leased public or Idle private agricultural lands 
shall be for a period not less than ten (10) years.
Sec. 8. Automatic review. - The DA and the DAR, being the lead government 
agencies In the Corporative Farming Program, shall submit periodic reports to both 
Houses of Congress on the accomplishments 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. 9. Effectivity. - This act shall take effect after (15) days following Its 
publication in the Official Gazette or In a national newspaper of general circulation. 
Approved,