SOP Exhibits
Title:Contract Growing Agreement

SOP Number : TS-ES14

Exhibit 2

CONTRACT GROWING AGREEMENT

KNOW ALL MEN BY THESE PRESENTS :

This Memorandum of Agreement is entered into this ______ day of __________________, 2000 in ______________________________ by and between :

_____________________________ (name of farmer) with postal address at _____________
_____________________________________________________ (barangay) __________________
(municipality) __________________ (province), referred to as the FARMER BENEFICIARY ;


and

The NATIONAL FOOD AUTHORITY, a government Agency created pursuant to Presidential Decree No. 4, as amended with principal office at 101 Matimyas Building, E. Rodriguez Sr. Avenue, Quezon City, duly represented herein by its Provincial Manager, ____________________________ hereinafter referred to as "NFA"
W I T N E S S E T H

WHEREAS, one of the major development agenda of the government is poverty eradication, and to address this problem, President Joseph E. Estrada issued Executive Order No. 92 which earmarked P2.5 Billion in the 1999 General Appropriations Act (GAA) for Lingap Para sa Mahihirap Program (or Lingap Fund) to be used exclusively in the delivery of the minimum basic needs of the poor communities and the disadvantaged sectors ;

WHEREAS, the Lingap Para sa Mahihirap Program of the NFA shall be implemented through its four component project which will be focused on food security and price support for rice and corn, namely : a) e-TRADE Sari-Sari Store, b) Emergency Relief Assistance Project, c) Rice Subsidy Project, and d) Farmers' Alleviation Project;

WHEREAS, the Farmers' Alleviation Project shall be implemented to help marginal farmer-beneficiaries through 1) provision of post-harvest portable sheets, 2) custom hiring of the NFA's post-harvest facilities 3) procurement of palay and corn produce of farmer-beneficiaries, and 4) local food security program.

WHEREAS, the Local Food Security Program of the NFA is implemented through contract growing scheme with farmer-beneficiary who are cultivating a farm area of 0.5 to 1.5 hectares by providing them production loan in the form of inputs and other support services;

WHEREAS, given the right amount of production inputs and support services, these farmer-beneficiaries could produce a considerably quantity of palay which the agency could produce to augment the food security stocks in their particular area and insure a ready market price for their produce;

WHEREAS, helping the farmer-beneficiaries increase their production will hopefully uplift their standard of living in fulfillment of the President's poverty eradication program;

WHEREAS, the farmer-beneficiary, being engaged in the production of palay/corn desires to participate in the Local Food Security Program of the NFA by entering into a contract growing arrangement with the NFA to be assured of production inputs amounting to but not exceeding P14,000.00 per hectare and to be paid-in-kind (PIK) two weeks after harvest in the form of palay or corn equivalent to the amount of loan;

WHEREAS, the NFA is willing to grant to the farmer-beneficiary the needed production inputs such as certified/registered seeds, commercial organic fertilizers, complete fertilizers, ammonium phosphate, urea/ammosol, zinc sulfate, insecticides, rodenticides and weedicides and payment for irrigation fee and the FB's crop insurance premium share.

NOW, THEREFORE, for and in consideration of the foregoing and to cover the coordinated activities of the parties in the granting, utilization and payment of the production inputs extended to the FARMER-BENEFICIARY by the NATIONAL FOOD AUTHORITY, the parties hereby agree as follows:

A. OBLIGATIONS OF THE FARMER-BENEFICIARY

The FARMER-BENEFICIARY shall :

1. Submit to the NFA Provincial Office (PO) an accomplished application form to participate in the program, stating his willingness to abide with its rules and regulations and attaching thereto the original or authenticated copies of documents showing that he is the owner-tiller or tenant-tiller of the farm lot;

2. Enter into a Contract Growing Agreement (CGA) with the NFA;

3. Attend the one-day briefing on the Package of Technology (POT) for Irrigated Transplanted Rice organized by the NFA and submit Schedule of Farm-Activities;

4. Agree to apply for insurance coverage of his production loan and pay the corresponding insurance premium in the amount of P ___________ as farmer's share;
B. OBLIGATIONS OF THE NFA

1. NFA PO shall evaluate/process the farmer-beneficiaries application for availment of the program, verify the authencity of the legal documents, schedule of farm activities and the certification from the Barangay Chairman that the FBs family is one of the poorest families in the barangay.

2. Upon approval of the Contract Growing Agreement, the NFA-P.O. shall conduct a one day briefing on the Package of Technology (POT) for Irrigated Transplated Rice prior to the release of production inputs;

3. Shall shoulder the corresponding lending institution share of the FB's crop insurance in the amount of _________________________________.

4. Shall remit to the Philippine Crop Insurance Corporation (PCIC) insurance premium of farmer-beneficiary and the NFA share;

5. Shall release to the farmer-beneficiary the production input in full at one time upon signing of the Contract Growing Agreement;

6. Shall extend to the farmer-beneficiary additional production inputs as recommended by the Agricultural Technician upon approval of the Provincial Manager;

7. Shall monitor the utilization of production inputs of farmer-beneficiary, particularly during sowing, transplanting and at panicle initiation stages;

8. Shall provide technical assistance, post-harvest facilities and assit in any problems encountered by the farmer-beneficiary, relative to the palay/corn contract growing agreement;

9. Shall accept payment in-kind of the farmer-beneficiary following existing procurement guidelines/policies and to liquidate the loan extended to the farmer-beneficiaries. NFA shall also buy/procure the excess rice production under the regular procurement program subject to existing NFA procurement policies.

C. SPECIAL PROVISIONS

1. This Contract Growing Agreement shall take effect upon signing hereof, and shall continue to be in full force and effect for the period of _____________ and or until the farmer-beneficiary has paid his obligations in full to the Agency;

2. The parties agree to initially adopt the implementing rules and regulations of the SOP on the Local Food Security Program in order to effectively implement the provision of the Contract Growing Agreement ;

3. Any irregularities committed by the farmer-beneficiary in the utilization of the production inputs extended to him by the NFA shall mean outright revocation of the agreement and shall require the farmer-borrower to pay in full the amount of loan availed of.

IN WITNESS WHEREOF, the parties hereunto have affixed their signature this ______ day of _________________, 2000 at ___________________ Philippines.

NATIONAL FOOD AUTHORITY FARMER-BENEFICIARY