Agricultural free patent act unleashes substantial capital

The Senate has unleashed trillions of pesos worth of dead capital after it removed restrictions on agricultural free patents issued to farmers and made agricultural land titles immediately available for trade.

The move, aimed to help spur development of the agricultural sector, followed the recent unanimous approval on third and final reading by the Upper House of Senate Bill No. 1454 (Agricultural Free Patent

Reform Act of 2017).

Sen. Richard J. Gordon, chairman of the Senate justice and human rights committee, sponsored and authored the measure. Senators Paolo Benigno Aquino IV and Cynthia A. Villar were the co-authors.

Gordon said that the bill sought to “make agricultural land titles immediately tradeable and bankable, to provide farmer entrepreneurs the much-needed access to credit, and create capital to make investments, create jobs, increase productivity, and reduce poverty in rural areas.”

“This bill will do much to address our unbalanced development and give agriculture a much-needed shot in the arm. Trillions (of pesos) in dead capital will be unleashed in the market in the form of credit and livelier investments,” he said.

Gordon said that the bill would primarily amend the Commonwealthera Public Land Use Act and “abolish provisions that prevent banks from lending to farmers against agricultural patents.”

Enacted in 1936, the Public Land Use Act entitles any Filipino who has “continuously occupied and cultivated, either by himself or through his predecessors, a tract or tracts of agricultural public lands subject to disposition” to have an agricultural free patent issued to him, for the same land not exceeding 24 hectares.

Gordon, however, said that under the act, agricultural patent holders are “prohibited from mortgaging or selling their land within five years from the issuance of the patent, and given the right to repurchase the patents within five years from transfer or conveyances.”

“Removing these restrictions will unleash the power of freer land markets. It will make agricultural patents bankable to improve the economy, because right now, nobody will want to buy it because of the restrictions,” he stressed.

Gordon said that the bill would help boost development in the agricultural sector, as it is expected to “unleash about two to three million agri-free patents, equivalent to at least 1387 billion up to 11 trillion worth of agricultural land.”

“More importantly, we will empower the farmer. We will give him options about what he can do with the land – options such as borrowing against the land to develop it, or selling the land to a more productive farmer,” he stressed.

Gordon said that the bill could also help attract the younger generation of Filipinos back into farming, noting that according to the Department of Agriculture (DA), the average age of farmers now is 57.

Gordon lamented that young people are turning away from farming because they do not see any future in it.

“It is not hard to see why. It is so hard for farmers to obtain credit. It is also hard for them to expand and buy more land if they are successful. If enacted into law, this bill will help solve the problems our young generations face with farming,” he said.