Multi-sectoral study on Agribusiness Venture Arrangement policy and implementation under the

124 Pages·2016·1.61 MB·English

Mult i-sectoral study on Agribusiness Venture Arrangement policy and implementation under the
Comprehensive Agrarian Reform Program

Multi-sectoral study on the Agribusiness Venture Arrangement policy and implementation under the
Comprehensive Agrarian Reform Program

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS
Rome, 2016
The designations employed and the presentation of material in this information product do
not imply the expression of any opinion whatsoever on the part of the Food and
Agriculture Organization of the United Nations (FAO) concerning the legal or development
status of any country, territory, city or area or of its authorities, or concerning the
delimitation of its frontiers or boundaries. The mention of specific companies or products
of manufacturers, whether or not these have been patented, does not imply that these
have been endorsed or recommended by FAO in preference to others of a similar nature
that are not mentioned.

The views expressed in this information product are those of the author(s) and do not
necessarily reflect the views or policies of FAO.

ISBN 978-92-5-109452-5

© FAO, 2016

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can be purchased through [email protected].

Cover photo: ©FAO/Shannon Miskelly
Pineapple is one of the major crops covered by agribusiness venture arrangements in the
Philippines

Multi-sectoral study on the Agribusiness Venture Arrangement (AVA) policy and implementation under the
Comprehensive Agrarian Reform Program
Table 1. Land use for selected agribusiness crops for ARB and non-ARB areas, Philippines 6
Table 2. Classification of AVAs by type, number and area covered 10
Table 3. Sample terms and conditions of lease contracts 19
Table 4. Insurance coverage of AVA plantation crops 40

Figure 1. Stages in the contract-signing process 12

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Multi-sectoral study on the Agribusiness Venture Arrangement (AVA) policy and implementation under the
Comprehensive Agrarian Reform Program
About this document v
Acknowledgments vi
Acronyms and abbreviations vii
Executive summary x
I. Background on the Comprehensive Agrarian Reform Program and commercial farms 1
II. Purpose and methodology of the study 4
III. The land tenure situation in the AVA sector 6
IV. The AVA contract process 12
V. AVA leases between ARBs and investors 15
VI. AVA growership arrangements between ARBOs or ARBs and investors 33
VII. Nature of contract/ dispute resolution mechanisms in AVAs 49
VIII. Issues and challenges within ARB cooperatives 52
IX. Issues and challenges for government 62
X. Issues and challenges for NGOs 72
XI. Issues and challenges for investors 75
Conclusion 80
References 83
Annexes 86
Summary of AVA inventory 86
Model lease agreement 88
Summary of Recommendations 97
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Multi-sectoral study on the Agribusiness Venture Arrangement (AVA) policy and implementation under the
Comprehensive Agrarian Reform Program
This multi-sectoral study on the Agribusiness Venture Arrangement (AVA) policy and
implementation under the Comprehensive Agrarian Reform Program is a joint
undertaking of FAO and the Philippines’ Department of Agrarian Reform (DAR). This
research presents an in-depth analysis of the issues and challenges confronted by
agrarian reform beneficiaries and rural cooperatives as they enter into AVAs. The study
focuses on leasehold and growerships (contract farming) as the most common
agribusiness arrangements in the Philippines.

All names and identifying details of cooperatives agrarian reform beneficiary
organizations and investor-companies have been changed to protect anonymity and
confidentiality.

Queries regarding this project must be addressed to: José Luis Fernandez, FAO
Representative with email [email protected].

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Multi-sectoral study on the Agribusiness Venture Arrangement (AVA) policy and implementation under the
Comprehensive Agrarian Reform Program

The study team thanks DAR Secretary Virgilio de los Reyes for his unwavering
support for this study and for raising relevant issues on the subject of this inquiry.
The team also thanks DAR Undersecretary for Foreign Assisted and Special Projects
Herman Ongkiko, who acted as the team’s National Project Coordinator. The
support of DAR Regional Directors Faisar Mambuay and John Maruhom, regional
staff and the technical working group headed by Anania Tagudin and Ruel Limbo,
assisted by Amor Domingo are acknowledged.

Peter J. Batt
Antonio L. Salvador
Hector D. Soliman
Gumercindo G. Tumbali
Darryl Vhugen
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Multi-sectoral study on the Agribusiness Venture Arrangement (AVA) policy and implementation under the
Comprehensive Agrarian Reform Program
ACPC Agricultural Credit Policy Council
ADB Asian Development Bank
AFMA Agriculture and Fisheries Modernization Act
AMFCP Agro-Industry Modernization Credit and Financing Program
AO Administrative Order
APCP Agrarian Production Credit Program
ARB Agrarian reform beneficiary
ARBO Agrarian reform beneficiary organization
Art Article
ATI Agricultural Training Institute
AVA Agribusiness venture arrangement
AVATAR Agribusiness venture arrangement task force appraisal and review
BARBD Bureau of Agrarian Reform Beneficiaries Development
BOD Board of Directors
BOT Build, operate and transfer
BPI Bureau of Plant Industry
BSP Bangko Sentral ng Pilipinas
CARD Center for Agriculture and Rural Development
CARL Comprehensive Agrarian Reform Law
CARP Comprehensive Agrarian Reform Program
CBA Collective bargaining agreement
CDA Cooperative Development Authority
CFD Commercial farm deferment
CFS-RAI Committee on World Food Security-Responsible Agricultural Investments
CLOA Certificate of land ownership award
CRS Catholic Relief Services
CSO Civil society organization
DA Department of Agriculture
DAR Department of Agrarian Reform
DARAB Department of Agrarian Reform Adjudication Board
DOJ Department of Justice
DOLE Department of Labor and Employment
DTI Department of Trade and Industry
EDSA Epifanio de los Santos Avenue
EO Executive Order
FAP Foreign assisted projects
FARMCOOP Foundation for Agrarian Reform Cooperatives in Mindanao
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