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PHILIPPINE LAWS, STATUTES & CODES
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Republic Acts :
REPUBLIC ACTS
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REPUBLIC ACT NO. 821 - AN ACT TO
ESTABLISH AN AGRICULTURAL CREDIT AND COOPERATIVE FINANCING SYSTEM TO
ASSIST SMALL FARMERS IN SECURING LIBERAL CREDIT AND TO PROMOTE THE
EFFECTIVE GROUPINGS OF FARMERS INTO COOPERATIVE ASSOCIATIONS TO ENABLE
THEM TO MARKET EFFICIENTLY THEIR AGRICULTURAL COMMODITIES, AND TO PLACE
AGRICULTURE ON A BASIS OF ECONOMIC EQUALITY WITH OTHER INDUSTRIES, AND
FOR OTHER PURPOSES |
Section 1. It is
hereby declared to the policy of Congress to assist small farmers in
securing liberal credit and to promote the effective groupings of
farmers into cooperative associations to enable them to market
efficiently their agricultural commodities, so as to place agriculture
(including livestocks, poultry and fishing) on a basis of economic
equality with other industries, and to improve the standard of living
of our people engaged in agriculture — (1) By granting personal loans to eligible small producers who are actually engaged in agriculture and by encouraging the organization of farmers into effective cooperative associations under their own control for greater unity of effort in productive processing, storage and marketing and by promoting the establishment and financing of a farm marketing system of producer-controlled and producer-owned cooperative associations. (2) By extending government assistance in financing of facilities which may be required by cooperative associations for the processing, storage and marketing of agricultural produce as well for production and other essential services which may be needed for improved rural living. (3) By promoting the effective merchandising of agricultural commodities in domestic and foreign commerce so that profits of agriculture may be kept by the farmers through the mediums of their cooperative associations who may operate the facilities stated above, thus minimizing speculation and preventing inefficient and wasteful methods of distribution. (4) By encouraging private banks to establish agencies in the rural areas through the concentration of storage of farm produce and by making available to credit institutions comprehensive production and credit information. (5) By granting the Administration organized in this Act the privilege of rediscounting with the Central Bank of the Philippines, the Rehabilitation Finance Corporation and the Philippine National Bank eligible evidence of indebtedness acquired by it in carrying out its authorized activities. Sec. 2. To effectuate the foregoing policy, a body
corporate to be known as the Agricultural Credit and Cooperative
Financing Administration, hereafter referred to as the
"Administration", is hereby created. Said Administration shall execute
the powers and functions vested in, and conferred upon it, by this Act
only in such manner as will, in the judgment of the Board of
Governors,d to the fullest practicable extent in carrying out the
policy above declared. AGRICULTURAL
CREDIT AND COOPERATIVE FINANCING Sec. 3. Place of business. — The Administration shall have its principal place of business in the City of Manila, but may have representatives in other places as are necessary for the proper conduct of its business. Sec. 4. General powers. — The Administration is
hereby authorized to adopt, alter, and use a corporate seal which shall
be judicially noticed; to make contracts; to lease or own real and
personal property, and to sell or otherwise dispose of the same; to sue
and be sued; to make an annual report to Congress upon the
administration of this Act and any other matter relating to the better
effectuation of the policy declared in section one, including
recommendations for legislation; to make such regulations as are
necessary to execute the functions vested in it by this Act; to appoint
and fix the salaries of a secretary and such experts, and subject to
the provisions of the civil service laws, such other officers and
employees, as are necessary to execute such functions; to make such
expenditures for the rent and personal services at the seat of
government and elsewhere, for cooperative and law books, periodicals,
and books of reference, and for printing and binding as are necessary
to execute such functions. Expenditures by the Board shall be allowed
and paid upon the presentation of itemized vouchers thereof approved by
the Chairman of the Board; and otherwise to do and perform any and all
things that may be necessary or proper to carry out the purpose of this
Act. Sec. 5. Special powers. — The Administration is
authorized and directed. Sec. 6. Board of Governors. — Its compensation. — The powers and functions of the Administration shall be exercised by a Board of Governors to be composed of the Chairman and six members who shall be appointed by the President of the Philippines with the consent of the Commission on Appointments for a term of three years: Provided, however, That the first members appointed under the provisions of this section shall have terms of office two for one, two for two, and two for three years, respectively. Sec. 7. Vacancies. — Any vacancy in the Board of
Governors created by the death, resignation, or removal of an
appointive member shall be filled by the appointment, as provided for
in section six hereof, of a new member to complete the unexpired period
of the term of the member concerned. Sec. 8. Powers and duties of the Chairman. — The
Chairman of the Board shall be the chief executive of the
Administration. He shall be known as Administrator and shall cease only
when his term expires, or when he resigns or is removed for cause. The
person appointed as Administrator shall be possessed of administrative
ability, experience related to agricultural financing and, in general,
knowledge of Philippine agriculture. The Administrator's compensation
shall be fixed by the President of the Philippines but it shall not be
less than eighteen thousand pesos per year. The powers and duties of
the Administrator shall be: Sec. 9. Activities of the Administration. — The
activities of the Administration shall be carried out under the
supervision of the Administrator through the following administrative
officials who will be responsible directly to him: Section 10. Revolving fund. — (a) There is hereby
authorized to be appropriated the sum of one hundred million pesos
which shall be made available by the Congress as soon as practicable
after the approval of this Act and shall constitute a revolving fund to
be administered by the Administration as provided in this Act. Section 11. Loaning activities. — Loaning activities
of the Administration shall be directed towards: Section 12. Definitions. — For purposes relating to
the implementation of this Act, the following definitions shall apply: Section 13. Credit to small farmers. — Credit extended to small farmers, either with titles or no titles over their lands, whether tenants or part owners, should be based upon the anticipated productive capacity of farmers insofar as repayment probabilities are concerned: Provided, however, That the amount does not exceed two thousand pesos. Such loans may be granted for the purchase of fertilizer, seed, feed, work animals and corresponding tillage equipment, poultry, livestock and such other items specified by regulations as are directly related to the production of crops and livestock. The ability of such a borrower to provide security in the form of land or other tangible securities should not be the primary deciding factor in approving or disapproving a loan. Instead, the size of the loans should be predicated upon his production with other security being considered as supplemental. In instances where credit is extended for items which are not consumed in their use, such items should be pledged as security, but in such cases approval of the loan should be dependent upon the borrower's productive capacity after receiving the item rather than upon the return which can be anticipated in the event of forced sale of the item. Loans made to farmers should be conditioned upon compliance by them with those proven practices which are reasonably within their capacity to carry out and will result in the maximum income and production from such farming units. The supervision necessary to insure full implementation of this policy will be maintained by the Administration. Section 14. Terms of loans. — The terms of loans made
to farmers should be adjusted to the needs of the borrower with special
attention being given to the following: Section 15. Loan to cooperatives. — Loan shall be
made to any cooperative association, if in the judgment of the board of
directors of the association concerned, the loan is in furtherance of
the policy declared in section one, and the cooperative association
applying for the loan has an organization and management, and business
policies, of such character as to insure the reasonable safety of the
loan and the furtherance of such policy. No cooperative association
shall be entitled to apply for a loan unless it has been registered
with the Securities and Exchange Commission. The provision of existing
cooperative laws regarding minimum number of members shall apply to
cooperative associations mentioned in this Act. Section 16. Interest in all kinds of loans shall not be more than eight per centum per annum. Loans to any cooperative association shall be made upon the terms specified in this Act and upon such other terms not inconsistent therewith and upon such security the Board of Governors may deem necessary. Loans may be subjected to a five per centum insurance fee which is to be paid at the time the loan is granted. Section 17. Personal short term loans to members in good standing with cooperatives may be granted by the association from funds which it may receive in advance from the Administration for the said purpose; such loans may be granted against warehouse receipt of the Cooperative Association to the extent of eighty per centum of the market value of the stored produce; loans upon the security of expected production from the current crop to the extent of sixty per cent of the value of expected yield: Provided, however, That no loan shall be granted on any production estimated to exceed the applicant's previous year's stored crop with the Cooperative by more than fifty per centum. Section 18. Transfer of functions, personnel, and
equipment of the Cooperatives Administration Office. — All the powers
vested in and the duties conferred upon the Cooperatives Administration
Office by Commonwealth Act Numbered Five hundred and sixty-five, as
amended by Commonwealth Act Numbered Seven hundred and thirteen,
relative to the promotion, organization and supervision of Cooperative
Marketing Associations as authorized by Act Numbered Three thousand
four hundred and twenty-five and such number of personnel equipment as
are now used and utilized in the promotion, organization and
supervision of said cooperative marketing associations by the
Cooperatives Administration Office and the unexpended balance of the
funds provided for in Commonwealth Act Numbered Seven hundred and
thirteen and Republic Act Numbered Five hundred and eighty-three, are
hereby absorbed by, and transferred to the Agricultural Credit and
Cooperative Financing Administration. GENERAL PROVISIONS Section 19. (a) Obligations issued by the Administration in accordance with the authority of paragraph (2) of section five of this Act shall be secured by the assets of the Administration including all securities held by it under the provisions of this Act. These obligations shall be redeemable at the option of the Administration at or before maturity and in such manner as may be stipulated therein and shall bear such rate of interest as may be fixed by the Administration. The Administration shall provide for appropriate reserves for the redemption or retirement of such obligations. Obligations issued and offered for sale by the Administration may be offered at such price or prices as the Administration may determine. The said obligations shall and are hereby fully and unconditionally guaranteed both as to principal and interest by the Government of the Republic of the Philippines, and such guaranty shall be expressed on the face thereof. (b) In the event that the Administration shall be unable to pay debentures, bonds, collaterals, notes or such other obligations issued by it, the Secretary of Finance shall pay the amount thereof which is hereby appropriated out of any funds in the National Treasury not otherwise appropriated and thereupon, to the extent of the amounts so paid, the Government of the Republic of the Philippines shall succeed to all of the rights of the holders of such bonds, debentures, notes, collaterals or other obligations. Sec. 20. All notes, bonds, debentures, and other obligations issued by the Administration shall be exempt from all taxation both as to principal and interest, except inheritance and gift taxes. Sec. 21. Upon the request of the Board, the Central Bank of the Philippines and Rehabilitation Finance Corporation shall lend or provide technical assistance needed by the Administration. Sec. 22. Any justice of the peace, in his capacity as notary ex officio, shall render service free of charge to any person applying for a loan under this Act not exceeding five hundred pesos either in administering the oath or in the acknowledgment of instruments relating to such loan. Sec. 23. Any register of deeds shall accept for
registration, free of charge, any instrument relative to a loan made
under this Act and which does not exceed five hundred pesos. PENAL PROVISIONS Sec. 24. Any justice of the peace or register of deeds who shall demand or accept directly or indirectly, any gift, fee, commission or other form of compensation in connection with the service required to be performed by the said justice of the peace as provided in section twenty-two and by the said registry official as provided in section twenty-three of this Act, shall be punished by a fine not exceeding one thousand pesos or by imprisonment for not more than one year, or both, at the discretion of the court. Sec. 25. No officer or employee of the Administration nor any government official who may exercise executive or supervisory authority over the said Administration, either directly or indirectly, for himself or as the representative or agent of others, shall become a guarantor, indorser, or surety for loans from the said Administration to others. Any such officer or employee who violates the provisions of this section shall be immediately removed by competent authority and said officer or employee shall be punished by imprisonment for not less than one year not exceeding five years and by a fine of not less than one thousand nor more than five thousand pesos. Sec. 26. No fee, commission, gift, or charge of any kind shall be exacted, demanded, or paid, for obtaining loans from the Administration, and any officer, employee, or agent of the Administration exacting, demanding, or receiving any fee for service in obtaining a loan, shall be punished by a fine of not less than one thousand nor more than three thousand pesos and imprisonment for not less than one year nor more than three years. Sec. 27. Any person who, for the purpose of obtaining, renewing, or increasing a loan or the extension of the period thereof in his own or another's behalf, should give false information or cause, through his intrigue or machination, the existence and production of any false information with regard to the identity, situation, productivity, or value of the security, or with regard to a point which would affect the granting or denial of the loan, whether the latter has been consummated or not, and every officer or employee of the Administration who, through connivance or negligence, should allow by action or omission such false information to pass unnoticed, thereby causing damage to the Administration or exposing the latter to the danger of suffering such damage, shall be punished with imprisonment of not less than three months or more than three years, and a fine of not less than the amount of the loan obtained or applied for, nor more than three times such amount. Sec. 28. It shall be unlawful for any member, officer, or employee of the Administration to speculate, directly or indirectly, in any agricultural commodity or product thereof, or in contracts relating thereto, or in the stock of membership interests of any association or corporation engaged in handling, processing, or disposing of any such commodity or product. Any such person violating this section shall, upon conviction thereof, be fined not more than twenty thousand pesos, or imprisoned not more than ten years, or both. Sec. 29. It shall be unlawful for any director,
officer, employee or member of any cooperative association, clearing
house association, or commodity committee, or for any person acting on
behalf of any such association or committee, to which or to whom
information has been imparted in confidence by the Board of Governors
of the Administration to disclose such information in violation of any
regulation of the Board. Any director, officer, employee, or member of
such association or committee violating this section, shall be fined
not more than ten thousand pesos or imprisoned for not more than five
years, or both. MISCELLANEOUS PROVISIONS Sec. 30. If any provision of this Act is declared unconstitutional, or the applicability thereof to any person, circumstance, commodity or class or of transactions with respect to any commodity is held invalid, the validity of the remainder of the Act and the applicability of such provision to other persons, circumstances, commodities, and classes of transactions shall not be affected thereby. Sec. 31. All Acts, parts of Acts, and any special charters, or parts thereof, of the banking and financial institutions inconsistent herewith are hereby repealed. Sec. 32. This Act shall take effect upon its
approval. Approved: August 14, 1952 |
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