SOP Exhibits
Title:Memorandum of Agreement

SOP Number : TS-ES14

Exhibit 6

MEMORANDUM OF AGREEMENT

This Memorandum of Agreement is entered into this ______ day of _________________ at Quezon City, Philippines by and between :

The NATIONAL FOOD AUTHORITY (NFA), a government agency created pursuant to Presidential Decree No. 4, with principal office at 101 Matimyas Bldg. E. Rodriguez Sr. Avenue, Quezon City, represented herein by its Administrator, EDUARDO NONATO N. JOSON II, herein referred to as NFA.

The Philippine Crop Insurance Corporation (PCIC), a government corporation duly organized and existing under and by virtue of Presidential Decree No. 1467 as amended, with head office at VAG Bldg., Ortigas Avenue, Greenhills, San Juan, Metro Manila, represented herein by its President, BENITO ESTACIO, JR., herein after called the PCIC.

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 P 2.5 Billion in the 1999 General Appropriations Act (GAA) for Lingap Para sa Mahihirap Program (or Lingap Fund) to be used exclusively for 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 projects which will focus 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 whoa re cultivating a farm area of 0.5 to 1.5 hectares by providing them a 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 product a considerable quantity of palay which the agency could procure to augment the food security stocks in their particular area and ensure a ready and fair 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, crop insurance is one of the components of the production loan under the LFS that can be extended by NFA to fasrmer-beneficiaries to help them increase their production ;

WHEREAS, the PCIC, a government agency created for the purpose of extending crop insurance to farmers shall provide the crop insurance needs under the LFS program ;

NOW, THEREFORE, for and in consideration of the foregoing, and of the conditions hereinafter set forth, the PCIC shall insure the crops of the farmer-beneficiaries under the Local Food Security Program of the NFA, subject to the following terms and conditions to wit ;

I. OBLIGATIONS OF NFA

1. The NFA shall furnish PCIC the following data-list needed in the crop insurance process ;

a) Names and addresses of FB's under the LFS Program on a per pilot province basis.

b) Farm location, rice supply/demand situation, production and other data of the farmer-beneficiaries per pilot province basis.
II. OBLIGATIONS OF PCIC
III. COMMON UNDERTAKING