Amending Presidential Decree Number Six Hundred Eighty-One Entitled "Creating The Farm Systems Development Corporation Prescribing Its Powers And Activities Providing Funds Therefor And For

Case Overview and Summary

Summary of Presidential Decree No. 1595

Amending Presidential Decree No. 681 on the Farm Systems Development Corporation (FSDC)

Policy and Purpose (Section 1, amending Section 2 of PD 681):
- Declares the policy of the State to pursue and foster the attainment of increasing food production and hastening rural development through the active participation of farmers.
- The FSDC shall promote and assist associations and other rural-based entities in pursuing this purpose.
- These entities shall receive support and assistance from the government, and be subject to minimal regulation.

Definitions (Sections 2-5):
- Defines "NFAC", "farmers", "association", and "service".
- Renames "irrigation associations" and "farmer-associations" to "association(s)", and "irrigation services" to "service(s)".

FSDC Authorities, Powers, and Directives (Section 6, amending Section 4 of PD 681):
- Grants the FSDC various powers, including:
    - To have a corporate existence and legal powers (Sections 6(a)-(e)).
    - To make loans to associations for facilities, equipment, and production (Sections 6(f)-(g)).
    - To receive and certify association documents (Section 6(h)).
    - To assist associations and coordinate with government agencies (Sections 6(i)-(l)).
    - To borrow funds and issue bonds (Section 6(m)).
    - To appoint officers and employees (Section 6(n)).
    - To study water resources and power generation (Sections 6(o)-(p)).
    - To enter into agreements with other organizations (Section 6(q)).
    - To acquire properties, including through eminent domain (Section 6(r)).
    - To prescribe rules and regulations (Section 6(s)).
    - To establish branch offices (Section 6(t)).
    - To invest funds (Section 6(u)).
    - To report annually to the President (Section 6(v)).
    - To perform other necessary acts (Section 6(w)).

FSDC Board of Administrators (Section 7, amending Section 5 of PD 681):
- Establishes the FSDC Board of Administrators and its composition.
- Provides for regular meetings, quorum requirements, and voting procedures.
- Board members are entitled to a per diem of up to P500 per meeting, up to P2,500 per month.

Special Annual Appropriations (Section 8, new Section 11):
- The FSDC shall receive special annual appropriations from the Social Pricing and Development Adjustment Fund to support its operating expenses.
- Non-income-producing expenses shall be supported by contributions from the National Government.

Supervision (Section 9, amending Section 15 of PD 681):
- The FSDC shall be attached to the Office of the Ministry of Public Works, Transportation and Communications for policy direction and coordination.

Associations (New Chapter III, Sections 17-35):
- Allows for the organization and registration of non-stock, non-profit associations under this Decree.
- Grants associations various powers, including legal existence, property rights, borrowing, and contracting (Section 18).
- Provides for the incorporation, articles of incorporation, by-laws, members, meetings, board of directors, and officers of associations (Sections 19-25).
- Outlines procedures for amending articles of incorporation, consolidation, merger, conversion from existing corporations, and dissolution of associations (Sections 26-32).
- Requires FSDC Board approval for consolidation, merger, conversion, or dissolution (Section 33).
- Restricts the sale or disposition of association property without member approval and consent from lenders (Section 34).
- Exempts associations from regulation by the Securities and Exchange Commission and certain securities laws (Section 35).

Renumbering of Existing Sections (Sections 10-12)

Repealing Clause and Effectivity (Sections 13-14)
- Repeals or modifies conflicting laws and orders.
- Provides for the immediate effectivity of the Decree.