AN ACT TO PROMOTE THE PRODUCTION, PROCESSING, MARKETING, AND DISTRIBUTION OF HIGH-VALUE CROPS, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES

Nineth Congress
Third Regular Session

[ REPUBLIC ACT No. 7900, February 23, 1995 ]

AN ACT TO PROMOTE THE PRODUCTION, PROCESSING, MARKETING, AND DISTRIBUTION OF HIGH-VALUE CROPS, 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 "High-Value Crops Development Act of 1995."

Section 2. Declaration of Policy. - It is hereby policy of the State to accelerate the growth and development of agriculture in general, enhance productivity and incomes of farmers and the rural population, improve investment climate, competencies and efficiency of agribusiness and develop high-value crops as export crops that will significantly augment the foreign exchange earnings of the country, through an all-out promotion of the production, processing, marketing, and distribution of high-value crops in suitable areas of the country.

The State shall be guided by the principles that land has a social function and that land ownership has a social responsibility. as such, owners and lessees of agricultural land, being stewards, have the obligation to cultivate the lands they own or lease and make the land economically productive on a sustainable and environmentally friendly manner. the State has the right to expropriate lands not utilized for the benefit of the community and the country as a whole.

The State shall effect an efficient use of land and other productive resources with due regard to ecological balance and environmental protection, rural development, equity consideration, mobilization of human resources, and increased agro-industrial production for the alleviation of poverty and sustainable growth objectives.

Section 3. Scope of Application. - This Act shall cover upland dwellers as well as lowland tenants, indigenous and cultural communities, Comprehensive Agrarian Reform Program (CARP) beneficiaries, upland farm owners, farmers, farmers' organizations/associations/cooperatives, community associations and farmworkers, and to the extent herein provided, the departments, offices, agencies, subdivisions, branches or instrumentalities in the areas identified by the Department of Agriculture as key commercial crop production areas.

Section 4. Definition of Terms. - for purposes of this Act, the term:

Section 5. Site Identification. - the Department of Agrarian Reform and the Department of Agriculture, in coordination with the Department of Environment and Natural Resources, and the municipal government concerned, shall identify the broad areas suitable for high-value crops production, within six (6) months after the effectivity of this Act: Provided, That such site identification shall be reviewed at appropriate intervals to ensure consistency with the agrarian reform program and the national land use policy.

Section 6. Tenurial Arrangement. - Farmer cooperatives may lease the land for a period of twenty-five (25) years, renewable for another twenty-five (25) years, and not to exceed one thousand hectares (1,000 has.) in area.

Section 7. Farm Model. - for the program, farmers may adopt the cooperative system in putting up economically-sized farms for high-value crop farming. Farmer members shall collectively manage individual farms which includes contracting process and means of production; planning and coordinating crop varieties; and raising breed, hectarage, distribution and some production measures with reference to the market it shall serve. Said farm models may be replicated by farmers' organizations all over the country.

Section 8. High-Value Crops Development Fund (HVCDF). -For the purpose of providing the funding requirements of the production, marketing, and processing of high-value crops, and the establishment of low-cost credit to qualified project proponents, there is hereby created a High-Value Crops Development Fund (HVCDF), with an initial amount of One billion pesos (P1,000,000,000) . the HVCDF shall be sourced from the Comprehensive Agricultural Loan Fund (CALF) and shall be managed by the Land Bank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) . Other sources of funds, including but not limited to borrowings from local and international financial institutions, shall also be considered to further support the program: Provided, That sixty percent (60%) of the HVCDF shall be utilized for direct lending to high-value crop producers while the remaining forty percent (40%) shall be allocated by the Department of Agriculture to guarantee loans granted by private financial institutions toward high-value crop production through existing guarantee institutions. the Department of Agriculture, which is directly responsible for the management of the HVCDF, is hereby authorized to designate the Land Bank of the Philippines and the Development Bank of the Philippines to manage the direct lending operations of the sixty percent (60%) portion of the HVCDF through LBP and DBP facilities or their conduits.

All financial institutions, whether public or private, shall be tapped to support the program. Participating banks are hereby exempted from the compliance requirement of Presidential Decree No. 717: Provided, That they shall lend a minimum of five percent (5%) of their loanable funds without alternative compliance directly to farmers' associations or cooperatives.

Other sources of funds, including but not limited to borrowings from local and international financial institutions, shall also be considered to further support the program.

Section 9. Incentives. - the proponents of the program shall be entitled to the following incentives:

Section 10. Inter-agency Committee. - a committee, composed of representatives from the Department of Agriculture, the Department of Agrarian Reform, the Bangko Sentral ng Pilipinas, the Land Bank of the Philippines, the Development Bank of the Philippines, the Cooperative Development Authority, the Department of Science and Technology, the Department of Trade and Industry, the Department of Environment and Natural Resources, and the Department of the Interior and Local Government and one (1) each from the small farmers and commercial producers sectors to be designated by the Secretary of Agriculture, shall formulate and prescribe, after public hearing and publication as required by law, the implementing rules and regulations in order to carry out the provisions of this Act. the representatives from the Department of Agriculture and the Department of Trade and Industry shall be the chairman and the vice-chairman, respectively, of the committee.

The Secretary of the Department of Agriculture shall report to both Houses of Congress on the status of the High-Value Crops Development Program biannually.

Section 11. Agribusiness Development Group. - the agribusiness development group of the Department of Agriculture shall be strengthened to implement, coordinate and monitor the program based on the rules and regulations set forth by the inter-agency committee. Aside from its usual functions, it shall be am to perform the following functions:

Such amount as may be needed for the initial operating expenses of the group shall be charged to any available funds in the appropriation for current operating expenditures of the Department of Agriculture. Thereafter, the amount necessary for its operations shall be included in the annual General Appropriations Act.

Section 12. Repealing Clause. - All laws or parts thereof, decrees, orders, rules and regulations inconsistent with the provisions of this Act are hereby repeated or modified accordingly: Provided, however, That nothing in this Act shall be construed or applied as amending the CARL and other laws on agrarian reform.

Section 13. Separability Clause. - If any of the provisions of this Act is declared invalid, the other provisions not affected thereby shall remain in full force and effect.

Section 14. Effectivity Clause. - This Act shall take effect immediately following its publication in a newspaper of general circulation or in the Official Gazette, whichever comes first.

Approved,

This Act which is a consolidation of House Bill No. 9288 and Senate Bill No. 1311 was finally passed by the House of Representatives and the Senate on February 16, 1995 and February 20, 1995, respectively.

Approved: February 23, 1995

(Sgd.) FIDEL V. RAMOS President of the Philippines