of the Philippines
Congress of the Philippines
Third Regular Session
Begun and held in Metro Manila, on Monday the twenty-eighth
day of July,
nineteen hundred and ninety-seven.
[REPUBLIC ACT NO. 8435]
AN ACT PRESCRIBING URGENT RELATED MEASURES TO
MODERNIZE THE AGRICULTURE AND FISHERIES
SECTORS OF THE COUNTRY IN ORDER TO ENHANCE
THEIR PROFITABILITY, AND PREPARE SAID SECTORS
FOR THE CHALLENGES OF GLOBALIZATION THROUGH
AN ADEQUATE, FOCUSED AND RATIONAL DELIVERY
OF NECESSARY SUPPORT SERVICES, APPROPRIATING
FUNDS THEREFOR AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives
Philippines in Congress assembled.
SEC. 1. Short
Title. – This Act shall be known as the “Agriculture
and Fisheries Modernization Act of 1997.”
SEC. 2. Declaration
of Policy. – The goals of the national economy
are a more equitable distribution of opportunities, income
and wealth; a sustained increase in the amount of goods
and services produced by the nation for the benefit of the
people; and an expanding productivity as the key to raising
the quality of life for all, especially the underprivileged.
The State shall promote industrialization and full employment
based on sound agricultural development and agrarian reform,
through industries that make full and efficient use of human
and natural resources, and which are competitive in both
domestic and foreign markets. In pursuit of these goals,
all sectors of the economy and all regions of the country
shall be given optimum opportunity to develop. Private enterprises,
including corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the base of
Thus, it is hereby declared the policy of the State to
enable those who belong to the agriculture and fisheries
sectors to participate and share in the fruits of development
and growth in a manner that utilizes the nation’s
resources in the most efficient and sustainable way possible
by establishing a more equitable access to assets, income,
basic and support services and infrastructure.
The State shall promote food security, including sufficiency
in our staple food, namely rice and white corn. The production
of rice and white corn shall be optimized to meet our local
consumption and shall be given adequate support by the State.
The State shall adopt the market approach in assisting
the agriculture and fisheries sectors while recognizing
the contribution of said sectors to food security, environmental
protection, and balanced urban and rural development, without
neglecting the welfare of the consumers, especially the
lower income groups. The State shall promote market-oriented
policies in agricultural production to encourage farmers
to shift to more profitable crops.
The State shall empower the agriculture and fisheries
sectors to develop and sustain themselves. Toward this end,
the State shall ensure the development of the agriculture
and fisheries sectors in accordance with the following principles:
a) Poverty Alleviation and Social Equity – The State
shall ensure that the poorer sectors of society have equitable
access to resources, income opportunities, basic and support
services and infrastructure especially in areas where productivity
is low as a means of improving their quality of life compared
with other sectors of society;
b) Food Security – The State shall assure the availability,
adequacy, accessibility and affordability of food supplies
to all at all times;
c) Rational Use of Resources – The State shall adopt
a rational approach in the allocation of public investments
in agriculture and fisheries in order to assure efficiency
and effectiveness in the use of scarce resources and thus
obtain optimal returns on its investments;
d) Global Competitiveness – The State shall enhance
the competitiveness of the agriculture and fisheries sectors
in both domestic and foreign markets;
e) Sustainable Development – The State shall promote
development that is compatible with the preservation of
the ecosystem in areas where agriculture and fisheries activities
are carried out. The State should exert care and judicious
use of the country’s natural resources in order to
attain long-term sustainability.
f) People Empowerment – The State shall promote people
empowerment by enabling all citizens through direct participation
or through their duly elected, chosen or designated representatives
the opportunity to participate in policy formulation and
decision-making by establishing the appropriate mechanisms
and by giving them access to information; and
g) Protection from Unfair Competition – The State
shall protect small farmers and fisherfolk from unfair competition
such as monopolistic and oligopolistic practices by promoting
a policy environment that provides them priority access
to credit and strengthened cooperative-based marketing system.
Statement of Objectives. – This Act shall have
the following objectives:
a) To modernize the agriculture and fisheries sectors by
transforming these sectors from a resource-based to a technology-based
b) To enhance profits and incomes in the agriculture and
fisheries sectors, particularly the small farmers and fisherfolk,
by ensuring equitable access to assets, resources and services,
and promoting higher-value crops, value-added processing,
agribusiness activities, and agro-industrialization;
c) To ensure the accessibility, availability and stable
supply of food to all at all times;
d) To encourage horizontal and vertical integration, consolidation
and expansion of agriculture and fisheries activities, groups,
functions, and other services through the organization of
cooperatives, farmers’ and fisherfolk’s associations,
corporations, nucleus estates, and consolidated farms and
to enable these entities to benefit from economies of scale,
afford them a stronger negotiating position, pursue more
focused, efficient and appropriate research and development
efforts and enable them to hire professional managers;
e) To promote people empowerment by strengthening people’s
organizations, cooperatives and NGOs and by establishing
and improving mechanisms and processes for their participation
in government decision-making and implementation;
f) To pursue a market-driven approach to enhance the comparative
advantage to our agriculture and fisheries sectors in the
g) To induce the agriculture and fisheries sectors to ascend
continuously the value-added ladder by subjecting their
traditional or new products to further processing in order
to minimize the marketing of raw, unfinished or unprocessed
h) To adopt policies that will promote industry dispersal
and rural industrialization by providing incentives to local
and foreign investors to establish industries that have
backward linkages to the country’s agriculture and
fisheries resource base;
i) To provide social and economic adjustment measures that
increase productivity and improve market efficiency while
ensuring the protection and preservation of the environment
and equity for small farmers and fisherfolk; and
j) To improve the quality of life of all sectors.
SEC. 4. Definition
“Agrarian Reform Community” is a barangay at
the minimum or a cluster of contiguous barangays where there
is a critical mass of farmers or farm workers and which
features the main thrust of agrarian development: land tenure
improvement and effective delivery of support services.
“Agricultural Lands” refers to lands devoted
to or suitable for the cultivation of the soil, planting
of crops, growing of trees, raising of livestock, poultry,
fish or aquaculture production, including the harvesting
of such farm products, and other farm activities and practices
performed in conjunction with such farming operations by
persons whether natural or juridical and not classified
by law as mineral land, forest land, residential land, commercial
land, or industrial land.
“Agricultural Land Use Conversion” refers to
the process of changing the use of agricultural land to
“Agricultural Sector” is the sector engaged
in the cultivation of the soil, planting of crops, growing
of fruit trees, raising of livestock, poultry, or fish,
including the harvesting and marketing of such farm products,
and other farm activities and practices.
“Agricultural Mechanization” is the development,
adoption, manufacture and application of appropriate location-specific,
and cost-effective agricultural technology using human,
animal, mechanical, electrical and other non-conventional
sources of energy for agricultural production and post-harvest
operations consistent with agronomic conditions and for
efficient and economic farm management.
“Agriculture and Fisheries Modernization” is
the process of transforming the agriculture and fisheries
sectors into one that is dynamic, technologically advanced
and competitive yet centered on human development, guided
by the sound practices of sustainability and the principles
of social justice.
“Agro-Processing Activities” refers to the
processing of raw agricultural and fishery products into
semi-processed or finished products which include materials
for the manufacture of food and/or non-food products, pharmaceuticals
and other industrial products.
“Banks”, collectively used, means government
banks and private banks, rural banks and cooperative banks.
“Basic Needs Approach to Development”
involves the identification, production and marketing of
wage goods and services for consumption of rural communities.
“Communal Irrigation System (CIS)” is an irrigation
system that is managed by a bona fide Irrigators Association.
“Competitive Advantage” refers to competitive
edge in terms of product quality and/or price. It likewise
refers to the ability to produce a product with the greatest
relative efficiency in the use of resources.
“Cooperatives” refers to duly registered associations
of persons with a common bond of interest who have voluntarily
joined together to achieve a lawful common social and economic
end, making equitable contributions to the capital required
and accepting a fair share of the risks and benefits of
the undertaking in accordance with universally accepted
“Department” refers to the Department of Agriculture.
“Economic Scale” refers to the minimum quantity
or volume of goods required to be efficient.
“Economies of Scale” refers to the decrease
in unit cost as more units are produced due to the spreading
out of fixed costs over a greater number of units produced.
“Empowerment” involves providing authority,
responsibility and information to people directly engaged
in agriculture and fishery production, primarily at the
level of the farmers, fisherfolk and those engaged in food
and non-food production and processing, in order to give
them wider choices and enable them to take advantage of
the benefits of the agriculture and fishery industries.
“Extension Services” refers to the provision
of training, information, and support services by the government
and non-government organizations to the agriculture and
fisheries sectors to improve the technical, business and
social capabilities of farmers and fisherfolk.
“Farmer’s and Fisherfolk’s Organizations
or Associations” refers to farmers and fisherfolk’s
cooperatives, associations, or corporations duly registered
with appropriate government agencies and which are composed
primarily of small agricultural producers, farmers, farm
workers, agrarian reform beneficiaries, fisherfolk who voluntarily
join together to form business enterprises or non-business
organizations which they themselves own, control and patronize.
“Farm-to-Market Roads” refers to roads linking
the agriculture and fisheries production sites, coastal
landing points and post-harvest facilities to the market
and arterial roads and highways.
“Fisheries” refers to all systems or networks
of interrelated activities which include the production,
growing, harvesting, processing, marketing, developing,
conserving, and managing of all aquatic resources and fisheries
“Fisheries Sector” is the sector engaged in
the production, growing, harvesting, processing, marketing,
developing, conserving, and managing of aquatic resources
and fisheries areas.
“Fishing” refers to the application of techniques
using various gear in catching fish and other fisheries
“Fishing Grounds” refers to areas in any body
of water where fish and other aquatic resources congregate
and become target of capture.
“Food Security” refers to the policy objective,
plan and strategy of meeting the food requirements of the
present and future generations of Filipinos in substantial
quantity, ensuring the availability and affordability of
food to all, either through local production or importation,
or both, based on the country’s existing and potential
resource endowment and related production advantages, and
consistent with the overall national development objectives
and policies. However, sufficiency in rice and white corn
should be pursued.
“Fresh Agricultural and Fishery Products” refers
to agricultural and fisheries products newly taken or captured
directly from its natural state or habitat, or those newly
harvested or gathered from agricultural areas or bodies
of water used for aquaculture.
“Global Competitiveness” refers to the ability
to compete in terms of price, quality and volume of agriculture
and fishery products relative to those of other countries.
“Gross Value-Added” refers to the total value,
excluding the value of non-agricultural or fishery intermediate
inputs, of goods and services contributed by the agricultural
and fisheries sectors.
“Headworks” refers to the composite parts of
the irrigation system that divert water from natural bodies
of water such as rivers, streams, and lakes.
“Industrial Dispersal” refers to the encouragement
given to manufacturing enterprises to establish their plants
in rural areas. Such firms normally use agricultural raw
materials either in their primary or intermediate state.
“Irrigable Lands” refers to lands which display
marked characteristics justifying the operation of an irrigation
“Irrigated Lands” refers to lands serviced
by natural irrigation or irrigation facilities. These include
lands where water is not readily available as existing irrigation
facilities need rehabilitation or upgrading or where irrigation
water is not available year-round.
“Irrigation System” refers to a system of irrigation
facilities covering contiguous areas.
“Irrigators’ Association (IA)” refers
to an association of farmers within a contiguous area served
by a National Irrigation System or Communal Irrigation System.
“Land Use” refers to the manner of utilizing
the land, including its allocation, development and management.
“Land Use Plan” refers to a document embodying
a set of policies accompanied by maps and similar illustrations
which represent the community-desired pattern of population
distribution and a proposal for the future allocation of
land to the various land-using activities, in accordance
with the social and economic objectives of the people. It
identifies the location, character and extent of the area’s
land resources to be used for different purposes and includes
the process and the criteria employed in the determination
of the land use.
“Land Use Planning” refers to the act of defining
the allocation, utilization, development and management
of all lands within a given territory or jurisdiction according
to the inherent qualities of the land itself and supportive
of sustainable, economic, demographic, socio-cultural and
environmental objectives as an aid to decision-making and
“Main Canal” refers to the channel where diverted
water from a source flows to the intended area to be irrigated.
“Market Infrastructure” refers to facilities
including, but not limited to market buildings, slaughterhouses,
holding pens, warehouses, market information centers, connecting
roads, transport and communication and cold storage used
by the farmers and fisherfolk in marketing their produce.
“National Information Network (NIN)” refers
to an information network which links all offices and levels
of the Department with various research institutions and
local end-users, providing easy access to information and
marketing services related to agriculture and fisheries.
“National Irrigation System (NIS)” refers to
a major irrigation system managed by the National Irrigation
“Network of Protected Areas for Agricultural and
Agro-Industrial Development (NPAAAD)” refers to agricultural
areas identified by the Department through the Bureau of
Soils and Water Management in coordination with the National
Mapping and Resource Information Authority in order to ensure
the efficient utilization of land for agriculture and agro-industrial
development and promote sustainable growth. The NPAAAD covers
all irrigated areas, all irrigable lands already covered
by irrigation projects with firm funding commitments; all
alluvial plain land highly suitable for agriculture whether
irrigated or not; agro-industrial croplands or lands presently
planted to industrial crops that support the viability of
existing agricultural infrastructure and agro-based enterprises,
highlands, or areas located at an elevation of five hundred
(500) meters or above and have the potential for growing
semi-temperate and high-value crops; all agricultural lands
that are ecologically fragile, the conversion of which result
in serious environmental degradation, and mangrove areas
and fish sanctuaries.
“On-Farm Irrigation Facilities” refers to composite
facilities that permit entry of water to paddy areas and
consist of farm ditches and turnouts.
“Primary Processing” refers to the physical
alteration of raw agricultural or fishery products with
or without the use of mechanical facilities.
“Post-Harvest Activities” includes, but is
not limited to, threshing, drying, milling, grading, storing,
and handling of produce and such other activities as stripping,
winnowing, chipping and washing.
“Post-Harvest Facilities” includes, but is
not limited to, threshers, moisture meters, dryers, weighing
scales, milling equipment, fish ports, fish landings, ice
plants and cold storage facilities, processing plants, warehouses,
buying stations, market infrastructure and transportation
“Premature Conversion of Agricultural Land”
refers to the undertaking of any development activity, the
results of which modify or alter the physical characteristics
of the agricultural lands to render them suitable for non-agricultural
purposes, without an approved order of conversion from the
“Resource Accounting” refers to the process
of tracking changes in the environment and natural resources
biophysically and economically in monetary terms.
“Resource-based” refers to the utilization
of natural resources.
“Rural Industrialization” refers to the process
by which the economy is transformed from one that is predominantly
agricultural to one that is dominantly industrial and service-oriented.
Agriculture provides the impetus and push for industry and
services through the market that it creates, the labor that
it absorbs, and the income that it generates which is channeled
to industry and services. As development continues, with
agriculture still an important sector, industry and services
begin to generate income and markets and concomitantly increase
their share of total income.
“Strategic Agriculture and Fisheries Development
Zones (SAFDZ)” refers to the areas within the NPAAAD
identified for production, agro-processing and marketing
activities to help develop and modernize, with the support
of government, the agriculture and fisheries sectors in
an environmentally and socio-culturally sound manner.
“Secondary Canal” refers to the channel connected
to the main canal which distributes irrigation to specific
“Secondary Processing” refers to the physical
transformation of semi-processed agricultural or fishery
“Shallow Tube Well (STW)” refers to a tube
or shaft vertically set into the ground for the purpose
of bringing ground water to the soil surface from a depth
of less than 20 meters by suction lifting.
“Small Farmers and Fisherfolk” refers to natural
persons dependent on small-scale subsistence farming and
fishing activities as their primary source of income.
“Small and Medium Enterprise (SME)” refers
to any business activity or enterprise engaged in industry,
agribusiness and/or services, whether single proprietorship,
cooperative, partnership or corporation whose total assets,
inclusive of those arising from loans but exclusive of the
land on which the particular business entity’s office,
plant and equipment are situated, must have value falling
under the following categories:
Micro : not more than P1,500,000
Small : P1,500,001 to P15,000,000
Medium : P15,000,001 to P60,000,000
The Department, in consultation with the Congressional
Oversight Committee on Agricultural and Fisheries Modernization,
may adjust the above values as deemed necessary.
“Socio-Culturally Sound” means the consideration
of the social structure of the community such as leadership
pattern, distribution of roles across gender and age groups,
the diversity of religion and other spiritual beliefs, ethnicity
and cultural diversity of the population.
“Technology-based” refers to utilization of
“Zoning Ordinance” refers to a local legislation
approving the development/land use plan and providing for
the regulations and other conditions on the uses of land
including the limitation on the infrastructure that may
be placed within the territorial jurisdiction of a city