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Ravanera Says Farmers Should Have Say in A.V.A.

QUEZON CITY – Farmers in Agrarian Reform Beneficiary (ARB) cooperatives must have a say in the Agribusiness Ventures Agreements (AVAs) they enter into.

This was the firm stand of Cooperative Development Authority (CDA) Chairperson, Orlando Ravanera, as he delivered before the House of Representatives Committee on Agrarian Reform the position of the CDA on the AVAs.

The AVA is based on Administrative Order No. 9 issued by the Department of Agrarian Reform in December 2006 to establish “productive and collaborative ventures between the private business and the ARBs.”

The AVA aims to “mobilize private sector investments in developing agrarian reform areas” and “hasten the transformation of ARBs into farmer-entrepreneurs” and eventually realize a “globally competitive local agriculture sector and attain food security.”

When the Comprehensive Agrarian Reform Program began in the late 80s, land was redistributed to landless farmers, in the hope that the democratization of land ownership would boost agricultural production and ease festering social resentment. But many agricultural lands began to be untilled and remained so, as farmers found themselves with land, but without capital.
The AVA solves, to a large degree the deadlock, by allowing private capital to invest in agrarian reform areas.

AVA is defined as “entrepreneurial collaboration between ARBs and investors to implement an agribusiness venture involving lands distributed under CARP”

Under such an agreement, ARBs and investors form a joint venture corporation (JVC) to manage farm operations, wherein beneficiaries contribute the use of the land while the investor furnishes capital and technology for production, processing and marketing of agricultural goods.

There are several schemes in the program, as listed in the Order, such as Build-Operate-Transfer, Marketing Agreement, Production/Contract Growing, and Service Contract.  In all schemes, the private investors provide investment funds, while the ARBs provide labor and land.

RA 6657 or the Agrarian Reform Program says in Chapter 2: “The State shall provide incentives to landowners to invest (in agricultural enterprises) to promote industrialization, employment and privatization of public sector enterprises . . .”

At the hearing, Chairman Ravanera began by citing the Cooperative Code, RA 9520, which in Chapter 11 mentions the concept of ARB cooperatives, and 1987 Constitution which says it is the policy of the State to pursue an Agrarian Reform Program.

He stressed that “Agrarian Reform Beneficiaries should receive the highest consideration to promote social justice and bring the nation towards sound rural development.”

He also revealed that of the 26,000 registered cooperatives, 2,807 – more than 10% -- are agrarian reform or fisheries cooperatives.  
In the last 30 years the Agrarian Reform has been implemented, it has been found that it is difficult for farmers to obtain services if they will not organize themselves into cooperatives, he added.

He asked: “Who really is control in an AVA enterprise?  I really believe it should be the beneficiaries . . . the farmers.  Otherwise, Agrarian Reform will not succeed.”

He quoted RA 6657: “The State shall recognize the right of farmers, farmworkers and landowners, as well as cooperatives and other independent farmers' organizations, to participate in the planning, organization, and management of the program . . .”
The CDA and DAR recently inked an agreement to help ARB cooperatives.

Ravanera proposed a 60-40 Board composition in AV’s in favor of the farmers, considering the ARB co-ops provide the most valuable investment in the enterprise – the land.  

“It is recommended for DAR to provide well-defined guidelines on the rules and the interventions of the CDA for internal and intra-ARB cooperative conflicts.  A MOA should be written on this matter,” he concluded.

The NATCCO Network and the DAR are implementing the MICARAS Program, where the NATCCO Network provides technical assistance and financial infusion to 49 ARB cooperatives.


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