Key Components of the Program
- Farmers Trust: Landholders convey usufructuary rights but retain ownership and share profits equitably.
- Service Consortium: Selected by farmers, manages the enterprise, provides inputs, technology, and market arrangements.
- Trust Agreement: Defines roles, usufruct conveyance, services, profit sharing, exit options, and duties enforced by a Trustee Bank.
- Project Securitization: Financing through project securitization secured by the asset pool.
- Asset Pool: Includes usufruct rights and project assets held by a trusted banking institution.
- Land Rights Approval: Conveyance approved by DAR or DENR depending on land jurisdiction.
- Enterprise Business Plan: Governs project viability, fund management, and revenue distribution.
- Project Participation Certificates: Issued to private investors, backed by the asset pool, with guaranty coverage by Quedancor.
- Funds Nature: Treated as private funds adhering to standard auditing rules.
- Insurance and Exit Provisions: Insurance for force majeure and bad management; participants have exit options.
Program Governance
- Program Committee: Chaired by Secretary of Agrarian Reform; includes Secretaries of Agriculture, Finance, Environment and Natural Resources, and Quedancor President.
- Oversees coordination, guidelines, protection, and risk sharing among participants.
Funding and Financial Support
- Role of Department of Finance (DOF): Provides start-up funds, establishes Farmers Trust Development and Guaranty Funds, and issues sovereign guarantees.
- Farmers Trust Development Fund: Managed by DAR and DOF through a Special Purpose Vehicle (SPV) issuing Development Trust Certificates.
- Farmers Trust Guaranty Fund: Established by Quedancor to guarantee securities.
Role of Quedan and Rural Credit Guarantee Corporation (Quedancor)
- Extends guaranty support for Project Participation Certificates issued under the Program.
- Acts in accordance with its expanded mandate under AFMA and original charter.
Compliance with Agri-Agra Law
- Project Participation Certificates qualify as eligible securities for Agri-Agra compliance when guaranteed by Quedancor.
- Bangko Sentral ng Pilipinas issues implementing rules for banking institutions.
- Potential for additional incentives such as recognition as bank reserves.
Applicability to Other Rural Sectors
- Trust mechanism adaptable to fisheries, pasture, forest lands, and other consolidatable enterprises.
- Participation permitted for holders of titled or long-term leased lands.
- Requires approval from DAR, DENR, or DA depending on jurisdiction.
Repealing Clause
- Repeals or modifies inconsistent existing issuances, orders, and regulations.
Effectivity
- Executive Order takes immediate effect upon issuance.