Sec. 2. Declaration of
Policy. — It is hereby declared the policy of the State to
the growth and development of agriculture in general, enhance
and incomes of farmers and the rural population, improve investment
competencies and efficiency of agribusiness and develop high-value
as export crops that will significantly augment the foreign exchange
of the country, through an all-out promotion of the production,
marketing, and distribution of high-value crops in suitable areas of
The State shall be guided
by the principles that land has a social function and land ownership
a social responsibility. As such, owners and lessees of agricultural
being stewards, have the obligation to cultivate the lands they own or
lease and make the land economically productive on a sustainable and
friendly manner. The State has the right to expropriate lands not
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,
consideration, mobilization of human resources, and increased
production for the alleviation of poverty and sustainable growth
Sec. 3. Scope of Application.
— This Act shall cover upland dwellers as well as lowland tenants,
and cultural communities, Comprehensive Agrarian Reform Program (CARP)
beneficiaries, upland farm owners, farmers, farmers'
community associations and farmworkers, and to the extent herein
the departments, offices, agencies, subdivisions, branches or
in the areas identified by the Department of Agriculture as key
crop production areas.
Sec. 4. Definition of
Terms. — For purposes of this Act, the term:
crops" — refer to crops other than rice, corn, coconut and sugar.
(HVC)" — these are crops other than traditional crops which include,
are not limited to: coffee and cacao, fruit crops (citrus, cashew,
papaya, mango, pineapple, strawberry, jackfruit, rambutan, durian,
guava, lanzones, and watermelon), root crops (potato and ubi),
crops (asparagus, broccoli, cabbage, celery, carrots, cauliflower,
tomato, bell pepper, and patola), legumes, pole sitao (snap beans and
pea), spices and condiments (black pepper, garlic, ginger, and onion),
and cutflower and ornamental foliage plants (chrysanthemum, gladiolus,
anthuriums, orchids, and statice).
c. "Idle and
land" — refers to any agricultural land not cultivated, titled or
to produce any crop nor devoted to any specific economic purpose
for a period of three (3) years immediately prior to the receipt of
of acquisition by the government as provided under the CARP.
disposable lands" — refer to those lands of the public domain which
been the subject of the present system of classification and declared
not needed for forest purposes.
to the lands of the public domain which have not been declared as
or disposable, public forests, permanent forests or forest reserves,
reservations, timberlands, grazing lands, game refuge, and bird
Sec. 5. Site Identification. — The
Agrarian Reform and the Department of
in coordination with the Department of Environment and Natural
and the municipal government concerned, shall identify the broad areas
suitable for high-valued crops production, within six (6) months after
the effectivity of this Act: Provided, That such site identification
be reviewed at appropriate intervals to ensure consistency with the
reform program and the national land use policy.
Sec. 6. Tenurial Arrangement.
— Farmer cooperatives may lease the land for a period of twenty-five
years, and not to exceed one thousand hectares (1,000 has.) in area.
Sec. 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
and means of production; planning and coordinating crops varieties; and
raising breed, hectarage, distribution and some production measures
reference to the market it shall serve. Said farm models may be
by farmers' organizations all over the country.
Sec. 8. High-Value Crops
Development Fund (HVCDF). — For the purpose of providing the
requirements of the production, marketing, and processing of high-value
crops, and the establishment of low-cost credit to qualified project
there is hereby created a High-Value Crops Development Fund (HVCDF),
an initial amount of One billion pesos (P1,000,000,000). The HVCDF
be sourced from the Comprehensive Agricultural Loan Fund (CALF) and
be managed by the Land Bank of the Philippines (LBP) and the
Bank of the Philippines (DBP). Other sources of funds, including but
limited to borrowings from local and international financial
shall also be considered to further support the program: Provided, That
sixty percent (60%) of the HVCDF shall be utilized for direct lending
high-value crop producers while the remaining forty percent (40%) shall
be allocated by the Department of Agriculture to guarantee loans
by private financial institutions toward high-value crop production
existing guarantee institutions. The Department of Agriculture, which
directly responsible for the management of the HVCDF, is hereby
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
All financial institutions,
whether public or private, shall be tapped to support the program.
banks are hereby exempted from the compliance requirement of
Decree No. 717: Provided, That they shall lend a minimum of
percent (5%) of their loanable funds without alternative compliance
to farmers' associations or cooperatives.
Other sources of funds, including
but not limited to borrowings from local and international financial
shall also be considered to further support the program.
Sec. 9. Incentives. —
The proponents of the program shall be entitled to the following
— the insurance program of the Philippine Crop Insurance Corporation
shall be expanded to cover high-value crops. The premium rates shall be
set not on the basis of the performance of previous programs
on rice and corn;
— the HVCDF shall be loaned out to farmers' organizations/
composed of, but not limited to, CARP beneficiaries, subject to the
Land Bank interest rates;
— to enhance the bankability of projects, a credit guarantee cover
be extended by the Quedan and Rural Credit Guarantee Corporation
which shall thereby be provided with a commensurate guarantee fund, in
the form of equity, out of the HVCDF;
lease of government lands payments — project proponents shall effect
on the lease not earlier than two (2) years after the lease agreement
signed and approved. The grace period shall be determined by the
periods of the crops;
project proponents as defined in Section 7 of this Act shall be
to the following tax exemptions:
taxes and duties subject to the provisions of Article 62 of Republic
No. 6938 or the Cooperative Code of the Philippines;
linkage — the
Department of Agriculture, in coordination with the Department of Trade
and Industry, shall link-up agribusiness cooperatives directly with
cooperatives, agro-processing companies, or exporters to provide
outlets and assure relatively higher and stable prices. Agro-processing
firms buying directly from project proponents shall be granted tax
the value-added tax in accordance with Section 103 of the National
Revenue Code, as amended; and
taxes, fees and charges under Title One of Book Two of the Local
Code of 1991 in accordance with Section 133(n) of the said Code.
trading, the agribusiness development group of the Department of
shall establish and enforce standards in grading, sampling and
tests and analysis, specifications, nomenclature, units of measurement,
code of practice and packaging, preservation, conservation and
of high-value crops.
support — technical support on research and extension, infrastructure
financial and market information shall be provided by the Department of
Agriculture, Department of Trade and Industry, Department of Science
Technology, Cooperative Development Authority, state universities and
and other relevant government agencies;
— access to post harvest facilities, storage and distribution/transport
facilities of existing government agencies shall be facilitated.
shall be given to qualified and viable farmers/growers cooperatives in
the availment of soft loans or grants for the construction of
processing and storage facilities. Guidelines for the eventual transfer
of ownership of these facilities to the proponent shall be formulated
the Department of Agriculture;
i. Good seeds
planting materials — the Department of Agriculture, in coordination
the state universities and colleges, the Department of Trade and
and farmers organizations shall make good seeds and materials readily
to farmers/farmers' cooperatives to ensure high yield and good quality
produce. However, the project proponents may be allowed to import, free
of duties, high quality seeds/planting materials subject to quarantine
laws and Section 15 of Republic Act No. 7083 or the Seed Industry
Act of 1992; and
— the same fiscal incentives granted by the Board of Investments shall
be automatically granted to project proponents.
Sec. 10. Inter-Agency Committee.
— A committee, composed of representatives from the Department of
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
the Department of Trade and Industry, the Department of Environment and
Natural Resources, and the Department of the Interior and Local
and one (1) each from the small farmers and commercial producers
to be designated by the Secretary of Agriculture, shall formulate and
after public hearing and publication as required by law, the
rules and regulations in order to carry out the provisions of this Act.
The representatives from the Department of Agriculture and the
of Trade and Industry shall be the chairman and the vice-chairman,
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.
Sec. 11. Agribusiness
Development Group. — The agribusiness development group of the
of Agriculture shall be strengthened to implement, coordinate and
the program based on the rules and regulations setforth by the
committee. Aside from its usual functions, it shall be tasked to
the following functions:
Assist in the
of general and specific policies for the development of high-value
b. Set up the
system to monitor the utilization of the HVCDF and shall furnish the
Sentral ng Pilipinas regular reports on the financial institutions'
to the program;
in marketing and distribution of high-value crops through monitoring
dissemination of market information, including identification of the
supply-demand situation, domestic market matching and overseas market
and promotion activities on high-value crops;
d. Enjoin the
of Transportation and Communications to effect a more efficient,
adequate, suitable, and economical means of transporting and/or
of high-value crops, for purposes of reducing marketing costs and
stable consumer supply;
of wholesale markets in identified major centers of the country:
That agricultural produce collection centers may also be established in
areas where feasible, which may also serve as buying stations of farm
packaging houses, pick-up points and meeting places of
with various government and private research institutions for the
of studies and researches designed to promote the production, marketing
and processing of high-value crops;
training programs primarily aimed at increasing their knowledge on
technologies and on market potentials and prospects for various types
high-value crops, through the DA-Agricultural Training Institute (ATI),
the DTI or the LGU's technicians or by contracting agriculturists and
specialists from private or academic institutions;
stations and seed farms for the development of varieties suitable to
agro-climatic conditions of the area and markets that will provide
value added to high-value crops; and
i. Devise and
a system for regularly obtaining information on current and future
their prices and movement in trade, to determine and effect a balanced
distribution of high-value crops by means of inter-trading or
among the established wholesale markets. Such amount as may be needed
the initial operating expenses of the group shall be charged to any
funds in the appropriation for current operating expenditures of the
of Agriculture. Thereafter, the amount necessary for its operations
be included in the annual General Appropriations Act.
Sec. 12. Repealing Clause.
— All laws or parts thereof, decrees, orders, rules and regulations
with the provisions of this Act are hereby repealed or modified
Provided, however, That nothing in this Act shall be construed
applied as amending the CARL and other laws on agrarian reform.
Sec. 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
Sec. 14. Effectivity Clause.
— This Act shall take effect immediately following its publication in a
newspaper of general circulation or in the Official Gazette, whichever
Approved: 23 February 1995.