Press Release
May 17, 2017


Aiming for higher agricultural productivity, Senator Richard J. Gordon is set to call for the immediate passage of a consolidated bill which aims to remove the restrictions in agricultural free patents.

Gordon, chairman of the Senate Committee on Justice and Human Rights, said the measure is expected to spur the development of the agricultural sector because it will unleash about two to three million agri-free patents, equivalent to at least P387B up to P1T worth of agricultural land.

"One of the primary reasons for the persistent poverty in the country is low agricultural productivity. One of the causes of this low productivity is insecurity of land rights and access to credit by agricultural farm owners due to the restrictions on transfers and conveyances imposed by the Public Land Act on lands covered by agricultural free patents," Gordon, author of one of the consolidated bills, pointed out.

"Due to the restrictions on agricultural free patents under the Public Land Act, the titles are non-tradable and non-bankable. Farmers are restricted from mortgaging or selling their land within five years from the issuance of the patent. Hence, they cannot use the titles as collateral to get additional capital to inject into their farms or pour into other investments," he added.

Gordon's Senate Bill No. 1260, otherwise known as the Agri-Free Patent Bill, aims to make agricultural land titles immediately tradeable and bankable, provide farmer entrepreneurs much-needed access to credit, and create capital to make investments, create jobs, increase productivity, and reduce poverty in rural areas.

The senator explained that the current situation makes for bad economics because patentees are: 1) restricted from mortgaging or selling their land within five years from the issuance of the patent, and 2) given the right to repurchase agri-free patents within five years from transfer or conveyance make for bad economics.

"These restrictions under the Public Land Act render the agricultural free patents non-tradeable and non-bankable," he added.

.During the hearing last week, resource persons who came from rural banks, concerned government agencies and other concerned organizations expressed support to the proposed removal of restrictions.

Johnson Melo, of the Rural Bankers Association of the Philippines, said the passage of this measure will encourage banks to extend loans to the farmer entrepreneurs at better rates and terms.

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