Use of Virgin Public Lands for Agriculture

The decree is issued pursuant to Proclamation No. 1081 dated September 21, 1972.
The decree authorizes the use of virgin public lands for agriculture to support food sufficiency.
The State’s objective is self-sufficiency in rice and other agricultural food commodities.
The decree recognizes urgent need to supplement current programs to achieve food sufficiency.
The Palayan ng Bayan is proposed as a project of the Office of the President and provincial governors, initially involving development and use of some 150,000 hectares of virgin public land.
The project is intended primarily for rice and secondarily for corn and other selected food crops.

The decree authorizes and requires that the Palayan ng Bayan Project be aggressively pursued and implemented.
The project focuses on development and use of virgin public lands for production of rice and, secondarily, corn and other selected food crops.
The decree anticipates the project’s contributions: increased rice production, supplementation of other food crops production, injection of substantial revenues into provincial economies, creation of additional employment opportunities, and development of agricultural management capabilities of provincial governments.

The National Government, through the Secretary of Finance, shall issue Cereal Bonds of up to P200 million.
The Cereal Bonds are for purchase by government and other financing institutions.
Proceeds from the sale of the bonds must be deposited with the Philippine National Bank for the account of the Office of the President.
Bond proceeds must be used for:
- (a) development and operation of virgin public lands approved for use under the Palayan ng Bayan Project by a National Advisory Council to be created under an appropriate Letter of Instruction;
- (b) awards for Palayan ng Bayan provincial projects to provide incentives for outstanding performance, with awards not exceeding PHP 250,000 for each crop season; and
- (c) support for the staff that will help manage the Palayan ng Bayan Project.

The funding is to be given as interest-free loans to the provincial government.
The provincial government’s loan requires the personal guarantee of the Provincial Governor.
Loans for land development and use are at a rate of P1,000 per hectare.
Such loans are payable within a period of two years.
Loans for related expenditures may be extended when authorized by the National Advisory Council by resolution, subject to the approval of the Secretary of Finance.

Virgin public land authorized for use by the National Advisory Council under the Palayan ng Bayan Project is automatically set aside for that purpose.
The set-aside lands remain public land during the project’s use.
When a set-aside virgin public land is no longer needed for the Palayan ng Bayan Project, it reverts to its original purpose.
Reversion to the original purpose occurs unless otherwise decreed.

The decree establishes a National Advisory Council to approve virgin public lands for use and to authorize certain related expenditure loans through resolutions.
The decree directs that the Council be created under an appropriate Letter of Instruction.
The decree provides for awards to Palayan ng Bayan provincial projects for outstanding performance, capped at PHP 250,000 per crop season.
The decree places the management effort under the project’s staff supported by bond proceeds, with overall handling through the Office of the President account at the Philippine National Bank.