Corporate farming act offers incentives to firms producing rice and corn

A LEGISLATOR has filed a bill granting incentives to firms that successfully bring corporate efficiencies and the ability to tap financing to the process of producing rice and corn.

House Bill 8076, filed by Bohol Representative Erico Aristotle C. Aumentado, is known as the proposed Corporate Farming Act, which outlines tax exemptions for companies that manage to bring efficiencies to rice and corn farming.

“To promote rice and corn self-sufficiency and ensure food security, it is necessary to implement a viable national program that will encourage corporate farming,” Mr. Aumentado said in the explanatory note.

The measure proposes to exempt corporations from customs and duties on the importation of seed, fertilizer, machinery and other agricultural implements, as authorized by the Agriculture and Fisheries Modernization Act of 1997.

It also calls for value-added tax (VAT) exemptions on similar imports as authorized by the Tax Reform Act of 1997.

The bill will also grant a capital gains tax exemption to corporations or partnerships buying or transferring idle agricultural land to engage in corporate farming.

Mr. Aumentado added that the bill will consider loans taken on by such firms as helping banks comply with the Agri-Agra Reform Credit Act of 2009, which requires financial institutions to lend 25% of their portfolios to agriculture and fisheries ventures. Of this quota, at least 10% must be issued to agrarian reform beneficiaries.

Mr. Aumentado also said corporations or partnerships have “the option to sell all the produce or only the excess of their employees’ consumption requirements.

The measure requires that corporations or partnerships that opt to join the corporate farming program, as designed by the Department of Agriculture, should have been organized “under the Philippine laws and operating at a profit for the last four years.”

Participants may choose to manage production on their own on land that may either be purchased or leased, or partner with farmers’ groups through contractual agreements. —