Scope of Application
- Covers upland dwellers, lowland tenants, indigenous peoples, CARP beneficiaries, upland farm owners, farmers, farmer organizations, cooperatives, community associations, and farm workers.
- Applies to government departments and agencies in areas identified by the Department of Agriculture as key commercial crop production zones.
Definition of Key Terms
- Non-traditional crops: Crops other than rice, corn, coconut, and sugar.
- High-Value Crops (HVC): Crops aside from traditional ones, such as coffee, cacao, diverse fruit crops, root crops, vegetables, legumes, spices, cut flowers, and ornamental plants.
- Idle and abandoned land: Agricultural land not cultivated or economically used for at least three years prior to government notice under CARP.
- Alienable and disposable lands: Public domain lands classified as not needed for forest purposes.
- Forest land: Public domain lands designated as forests, reserves, timberlands, or protected areas.
Site Identification
- The Departments of Agrarian Reform, Agriculture, Environment and Natural Resources, and municipal governments will identify areas suitable for HVC production within six months of the Act's effectivity.
- Site identification must be reviewed regularly to align with agrarian reform and national land use policies.
Tenurial Arrangement
- Farmer cooperatives may lease agricultural land up to 1,000 hectares for 25 years, renewable once for an additional 25 years.
Cooperative Farm Model
- Farmers encouraged to form cooperatives managing economically-sized farms collectively.
- Cooperatives handle contracting, production planning, crop variety coordination, and market-oriented production.
- Farm models are replicable nationwide.
High-Value Crops Development Fund (HVCDF)
- Established with an initial fund of ₱1 billion, sourced from the Comprehensive Agricultural Loan Fund (CALF).
- Managed by Land Bank of the Philippines (LBP) and Development Bank of the Philippines (DBP).
- 60% for direct loans to HVC producers; 40% allocated as credit guarantees for loans from private financial institutions.
- Loans to farmers’ organizations/cooperatives are prioritized.
- Participating banks exempt from PD No. 717 compliance but must lend at least 5% of loanable funds directly to farmers’ groups.
- Additional funding may come from local and international borrowings.
Incentives for Program Proponents
- Crop insurance expanded through the Philippine Crop Insurance Corporation, with adjusted premium rates.
- Credit assistance from the HVCDF at prevailing Land Bank interest rates.
- Credit guarantees provided by QUEDANCOR backed by HVCDF equity.
- Grace period of up to two years for lease payments of government lands, based on crop gestation.
- Tax exemptions including cooperative code provisions, VAT exemptions, and local government taxes.
- Marketing support through linkages with consumers, processors, and exporters, with agro-processing firms granted tax rebates.
- Department of Agriculture to set standards for grading, packaging, and conservation of HVCs.
- Technical and infrastructure support from various government agencies and institutions.
- Assistance with access to post-harvest facilities and loans or grants for facility construction.
- Availability of quality seeds and planting materials; importation duty-free subject to quarantine and relevant laws.
- Automatic entitlement to Board of Investments fiscal incentives.
Inter-Agency Committee
- Composed of representatives from key government departments, financial institutions, cooperative authority, and two representatives from small farmers and commercial producers.
- Tasked with formulating and prescribing implementing rules and regulations after public hearings.
- The Secretary of Agriculture reports biannually to Congress on program status.
Agribusiness Development Group
- Strengthened Department of Agriculture unit responsible for implementation, coordination, and monitoring.
- Functions include policy assistance, monitoring fund utilization, marketing support, infrastructure advocacy, market information dissemination, training programs, research linkages, and operational market data systems.
- Funded initially from the Department of Agriculture’s appropriations, thereafter through the General Appropriations Act.
Repealing, Separability, and Effectivity Clauses
- Laws inconsistent with this Act are repealed or modified, excluding amendments to the CARL or other agrarian reform laws.
- Invalidity of any provision does not affect the rest of the Act.
- The Act takes effect immediately upon publication in a newspaper of general circulation or the Official Gazette.