Article 126Labor and Agrarian Laws and Social Legislation, p. 126

LABOR LAWS AND SOCIAL LEGISLATION SPECIAL LAWS AND IMPLEMENTING RULES AND REGULATIONS

Provided,

further ,

That

no

person

who

owns

any

farmholding shall be appointed as Administrator unless

such farmholding is under the leasehold system or the

system of agricultural land ownership-transfer direct to

the tiller. (Amendments to RA No. 3844 (Agricultural

Land Reform Code), Republic Act No. 6389, [September

10, 1971])

Section 102. Financing - To finance the additional credit

functions of the Agricultural Credit Administration as a

result of the land reform program laid down in this Code,

there is hereby appropriated the sum of one hundred fifty

million pesos out of funds in the National Treasury not

otherwise

appropriated

in

addition

to

existing

appropriations for the Agricultural Credit and Cooperative

Financing Administration.

Section 103. Privilege of Rediscounting - The Agricultural

Credit Administration is hereby granted the privilege of

rediscounting with the Central Bank of the Philippines,

the

Development

Bank

of

the

Philippines

and

the

Philippine

National

Bank

eligible

evidence

of

indebtedness acquired by it in carrying on its authorized

activities, at an interest rate equal to the lowest charged

by the above financing institution on any private person

or entity.

Section 104. Power to Obtain Additional Funds - Nothing

in this Section shall limit the power of the Agricultural

Credit Administration to obtain from the Central Bank of

the Philippines, the Development Bank of the Philippines,

the

Philippine

National

Bank

and

other

financing

institutions, such additional funds as may be necessary

for the effective implementation of this Act: Provided,

That such additional funds are to be utilized as loans to

farmers and/or farmers' cooperatives.

Section 105. Loaning Activities - Loaning activities of the

Agricultural Credit Administration shall be directed to

stimulate the development and operation of farmers'

cooperatives. The term "Farmers Cooperatives" shall be

taken

to

include

all

cooperatives

relating

to

the

production and marketing of agricultural products and

these formed to manage and/or own, on a cooperative

basis, agricultural farmlands, services and facilities, such

as

irrigation

and

transport

systems,

established

to

support

production

and/or

marketing

of agricultural

products.

Under such rules and regulations in accordance with

generally accepted banking practices and procedures as

may

be

promulgated

by

the

Agricultural

Credit

Administration,

Rural

Banks, Cooperative Banks, and

Development Banks may, in their respective localities, be

designated to act as agents of the Agricultural Credit

Administration in regard to its loaning activities.

Section 106 . Credit to Small Farmers and/or Tillers of the

Land . — Production loans and loans for the purchase of

work animals, tillage equipment, seeds, fertilizers, poultry,

livestock, feed and other similar items, may be extended

to small farmers as defined in Republic Act Numbered

Eight hundred twenty-one and/or tillers of the land,

based upon their paying capacity and such securities as

they can provide, and under such terms and conditions as

the

Agricultural

Credit

Administration

may

impose,

provided

the

amount

thereof does not exceed two

thousand pesos, or such amount as may be fixed by the

President at any given agricultural year: Provided , That his

total

outstanding

obligations

shall

not

exceed

five

thousand pesos, but in no case shall the amount of loan

exceed eighty per centum of the value of the collateral

pledged. In instance where credit is extended for items

which are not consumed in their use, such items may be

pledged

as

security therefor. The Agricultural Credit

Administration

shall

promulgate

such

rules

and

regulations as may be necessary in the extension of the

loans

herein

authorized

so

as

to

assure

their

repayment: Provided , That such rules and regulations shall

follow and be in accordance with generally accepted

financing practices and procedures. (Amendments to RA

No. 3844 (Agricultural Land Reform Code), Republic Act

No. 6389, [September 10, 1971])

Section 107. Security for Loans - The production of the

borrower, after deducting the lease rental and/or liens

thereon, shall be accepted as security for loans: Provided,

That said production is pledged to the Agricultural Credit

Administration with appropriate safeguards to insure

against its unauthorized disposition: Provided, further,

That the amount of loan shall not exceed sixty per

centum of the value of the estimated production.

Section 108. Loans to Cooperatives - The Agricultural

Credit Administration is hereby authorized to extend such

types of loans as it may deem necessary for the effective

implementation

of

this

Code

to

eligible

farmers'

cooperatives as herein defined, under such terms and

conditions as it may impose and with such securities as it

may require: Provided : That the said Administration is

hereby

authorized

to

extend

production

loans

to

cooperatives at not more than eight per cent interest per

calendar year and directly to the farmers at not more

than twelve per cent per calendar year: Provided, further ,

That cooperatives are hereby authorized to extend loans

directly to their members at not more than twelve per

cent per calendar year. A farmers' cooperative that has

been

registered

with

the

Agricultural

Credit

Administration

shall

be

eligible

for

loans

if,

in

the

judgment of the latter, its organization, management and

business policies are of such character as will insure the

safety and effective use of such loans. (Amendments to

RA No. 3844 (Agricultural Land Reform Code), Republic

Act No. 6389, [September 10, 1971])

Section 109. Loans for Construction or Acquisition by

Purchase of Facilities - Loans for the construction or

acquisition

by

purchase

of

facilities

of

farmers'

cooperatives may be granted by the Agricultural Credit

Administration.

Section 110. Total Charge on Loans - The total charges

including

interest,

insurance

fees

and

inspection,

notarization and other service charges on all kinds of

loans shall not be more than twelve per centum per

calendar year: Provided, That if an impairment of the

capitalization of the Agricultural Credit Administration is

imminent by reason of the limitation of the interest

herein provided, there is automatically appropriated out

of the unappropriated funds in the National Treasury

such amounts as is necessary to cover the losses of the

Agricultural Credit Administration, but not exceeding six

million pesos for any one year. (Amendments to RA No.

3844 (Agricultural Land Reform Code), Republic Act No.

6389, [September 10, 1971])

Section 111. Institution of Supervised Credit - To provide

for the effective use of credit by farmers, the Agricultural

Credit

Administration

may

institute

a

program

of

supervised credit in cooperation with the Agricultural

Productivity Commission.

Section

112.

Registration

of

and

guidance

to

Cooperatives, Associations and Organizations . — The

Agricultural Credit Administration shall have the power to

register,

finance

and

supervise

all

agricultural

cooperatives, including multi-purpose cooperatives, and

farm associations or organizations; and provide credit

guidance or assistance to all agricultural, irrigation, and

other

cooperative

associations,

multi-purpose

cooperatives, farm organizations or fund corporations:

Provided ,

That

all

cooperatives,

associations

or

organizations registered under this Section shall have

juridical

personality.

(Amendments

to

RA

No.

3844

(Agricultural Land Reform Code), Republic Act No. 6389,

[September 10, 1971])

Section 113. Auditing of Operations - For the effective

supervision of farmers' cooperatives, the head of the

Agricultural Credit Administration shall have the power to

audit their operations, records and books of account and

to issue subpoena and subpoena duces tecum to compel

the attendance of witnesses and the production of books,

documents and records in the conduct of such audit or of

any inquiry into their affairs. Any person who, without

lawful cause, fails to obey such subpoena or subpoena

duces tecum shall, upon application of the head of

© Compiled By RGL

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