GUIDELINES ON

SUPPORT TO
RICE FARMING
(RICE CONTRACT FARMING SCHEME)
 Overview Presentation

• What is Contract Farming? • Product Requirement

• Objectives of the Project • Responsibilities of NIA
• Target Areas • Responsibilities of IA/FIA/ISC
• Production Site Selection • Delivery and Acceptance of
Palay from IA to NIA
• Project Beneficiaries
• Inspection of the Goods (Palay)
• Scheme of Implementation • Acceptance of Goods (Palay)
• Activities to be Conducted after inspection
• Funding, Procurement, • Drying, Processing/Milling,
Disbursement and Storage and Marketing of
Liquidation Goods (Palay)
 CONTRACT FARMING

Target Area Yield (Palay to Rice)

➢ Irrigated Area = 40,000 has.
➢ Only 85% will be recovered upon
➢ Capital per hectare = P50,000.00/ha
harvesting and drying of Palays
Budget ➢ Yield = 200,000 MT x 85% Dried
➢ Contract Farming Budget = 40,000 has x ➢ Yield = 170,000 MT of Dried Palays
P50,000.00/has
➢ Contract Farming Budget = 2 Billion
Pesos

Production (Palay) Milling Recovery

➢ 5MT/ ha of Palays ➢ Only 63% will be recovered
➢ Produce Palay = 40,000has x upon milling of Palays
5MT/ha. ➢ Milling Recovery = 170,000 MT
➢ Produce Palay = 200,000 MT of x 63%
Palay ➢ Milling Recovery = 107,100 MT
of Rice
 CONTRACT FARMING

Gross Income Farmers Incentives

➢ Price per kg of Rice = P42.00/kg ➢ Farmers Incentive =
▪ 1MT = 1,000 kg P50,000/5MT/ha
▪ 107,100 MT x 1,000 kg/MT = ➢ Out of P4.5 billion pesos gross
107,100,000 kg income, 2 billion will be
➢ Gross Income = 107,100,000 kg x allocated as incentives for
P42.00/kg farmers, resulting in a net profit
➢ Gross Income = 4,498,200,000 of P2.5 billion pesos for NIA
▪ Note: After introducing Farm ➢ Machinery and RPC will be
Mechanization, the cost to provided to the Association and
produce 1kg of Palay is Php Cooperatives
6.00 ➢ Excess in 5MT/ha will be given to
▪ Php 30,000/ha or 5tons/ha = the farmers
Php 6.00
GUIDELINES ON NIA FARMING
SUPPORT PROJECT
MC NO. 04, S. 2024
OBJECTIVES Increase productivity in
1 irrigated rice agriculture

Improve water management

2 technology application

Increase the level of adaption and

3 application of farm mechanization and
advanced production technologies

4 Reduce labor costs

OBJECTIVES Promote farmers/IAs’ access to economical
5 and efficient rice production,
transportation, processing and storage

6 Reduce losses in the value chain

Promote market access and

7 opportunities
TARGET DRY 3RD
AREAS CROP
2024
 PRODUCTION SITE SELECTION

• Sufficient year-round irrigation water supply

• The area has a proven history of two (2) rice

cropping production in a year
CRITERIA

• Availability of soil fertility test results

• With access to farm machinery

 PRODUCTION SITE SELECTION

• Compact/contiguous area is of great

advantage for farm mechanization

• Availability of post-harvest facilities

CRITERIA
• The area is not prone to flooding or has no
record of previous incidents of inundation

• Supportive Local Government Units (LGUs)

 PRODUCTION SITE INSPECTION

Composition of Production Site Inspection Team (IMO)

• Technical Staff (background on rice crop production)

• Institutional Development Officer
• Senior Water Resource Facilities Technician
• Irrigation Engineer
 PROJECT
BENEFICIARIES
(IA/FIA/ISC )

Must have an With trading or milling

outstanding, very technical know-how or
satisfactory, or at least experience are also
satisfactory rating in preferred
the functionality
survey

Access to warehouse, MRIDP cluster shall be

machinery, post- used as a reference for
harvest facilities, and IA cluster beneficiaries
logistics are preferred
 SCHEME OF IMPLEMENTATION

1
The expected rice production target is

4
Php 50,000 worth of farm
a maximum of 5 metric tons of fresh
inputs and cash for enrolled weight of palay per hectare in the Dry
beneficiary IA/FIA/ISC 3rd Crop, Wet and Dry Season
members

In the case of the production is not

The beneficiary IA/FIA/ISC member will

2 5
fully utilized, the remaining balance
may be used for the labor and any receive a compensation of Php
rental used not exceeding the amount 50,000.00 for the maximum production
of Php 50,000.00 target per the prescribed compensation

3
The IA/FIA/ISC member shall If the IA/FIA/ISC member exceeds the maximum

bear the production labor

requirement
6 production target for each cropping season,
he/she will fully own the excess production free
of any charge. The excess production shall be
at the free disposal of the IA member.
 For Dry 3rd Crop, Wet and Dry Season

• 5 metric tons per hectare, per season – Php 50,000.00 • 3.3 metric tons per hectare, per season – Php 33,000.00
• 4.9 metric tons per hectare, per season – Php 49,000.00 • 3.2 metric tons per hectare, per season – Php 32,000.00
• 4.8 metric tons per hectare, per season – Php 48,000.00 • 3.1 metric tons per hectare, per season – Php 31,000.00
• 4.7 metric tons per hectare, per season – Php 47,000.00 • 3 metric tons per hectare, per season – Php 30,000.00
• 4.6 metric tons per hectare, per season – Php 46,000.00 • 2 metric tons per hectare, per season – Php 20,000.00
• 4.5 metric tons per hectare, per season, Php 45,000.00 • 1.9 metric tons per hectare, per season, Php 19,000.00
• 4.4 metric tons per hectare, per season – Php 44,000.00 • 1.8 metric tons per hectare, per season – Php 18,000.00
• 4.3 metric tons per hectare, per season – Php 43,000.00 • 1.7 metric tons per hectare per season – Php 17,000.00
• 4.2 metric tons per hectare, per season – Php 42,000.00 • 1.6 metric tons per hectare, per season – Php 16,000.00
• 4.1. metric tons per hectare, per season – Php 41,000.00 • 1.5 metric tons per hectare, per season – Php 15,000.00
• 4 metric tons per hectare, per season – Php 40,000.00 • 1.4 metric tons per hectare, per season – Php 14,000.00
• 3.9 metric tons per hectare, per season – Php 39,000.00 • 1.3 metric tons per hectare, per season – Php 13,000.00
• 3.8 metric tons per hectare, per season – Php 38,000.00 • 1.2 metric tons per hectare, per season – Php 12,000.00
• 3.7 metric tons per hectare, per season – Php 37,000.00 • 1.1. metric ton per hectare, per season – Php 11,000.00 if
• 3.6 metric tons per hectare, per season – Php 36,000.00 affected by force majeure
• 3.5 metric tons per hectare, per season – Php 35,000.00 • 1 metric ton per hectare, per season – Php 10,000.00
• 3.4 metric tons hectare, per season – Php 34,000.00
 ACTIVITIES TO BE CONDUCTED
Identification of initial production Signing of contract/MOA by and
areas (Regions, IMOs, Beneficiary between IA/FIA/ISC and NIA
IAs/FIAs/ISCs)
Signing of contract/MOA by and
Orientation meeting with the identified between IA/FIA/ISC and individual
beneficiary IA/FIA/ISC leaders of the farmers
identified regions/IMOs/IAs/FIAs/ISCs
Implementation of the
project/contract
Contract presentation, dialogue, and
negotiations with Beneficiary IA/FIA/ISC
Leaders and Beneficiary IA/FIA/ISC Members
Monitoring and Supervision

Crafting of IA/FIA/ISC Board Resolution allowing

the IA/FIA/ISC President/Chairperson to sign for
and on behalf of the IA/FIA/ISC Members
Review and evaluation of the
contract/project implementation
 FUNDING, PROCUREMENT,
DISBURSEMENT AND LIQUIDATION

AGRICULTURAL INPUTS, LABOR AND SERVICES, AND IA COMPENSATION

The Central Office will The procurement of the

facilitate the release of agricultural inputs The RO Finance shall
funds for agricultural including other documents facilitate the release of
inputs, labor and relative to the funds to the Irrigation
services, and IA procurement should be Management Offices in
compensation to the processed in the
support of the
Regional Offices upon respective Regional and
submitted POWs for the
submission of the Irrigation Management
Offices in consideration of Contract Farming
Program of Works
the Delegated Authority
(POW).
 FUNDING, PROCUREMENT,
DISBURSEMENT AND LIQUIDATION

EQUIPMENT AND MACHINERY

The submitted
The Central Office All supporting
will be in charge of Inventory of
Equipment and documents for the
the procurement of
Machinery needed liquidation shall
the equipment and
machinery needed by the adhere to the
by the IA/FIA/ISC IA/FIA/ISC shall accounting/COA
and processing of be the basis of rules and
other documents the request for regulations
relative hereto. the procurement
 PRODUCT REQUIREMENT
Product Quality

The IA/FIA/ISC agrees to supply

exclusively the Goods produced (5
metric tons/hectare during the Dry 3rd
crop, wet and dry seasons) in the
Production Site to the National The IA/FIA/ISC agrees to deliver to
Irrigation Administration the NIA 5 metric tons of palay, per
hectare, for the Dry 3rd crop, wet and
dry seasons

The IA/FIA/ISC may sell Goods produced

more than the amount stipulated in Article
8.a.2 to a third party.
 RESPONSIBILITIES OF NIA
Provide funds or inputs such as seeds, fertilizers, Conduct an inventory of the
pesticides, insecticides, irrigation water, and others agricultural machinery available to
to ensure quality rice production
the IA/FIA/ISC

Deliver farm inputs and Provide the IA/FIA/ISC with a written delivery
receipt specifying the time, date, unit/quantity,
machinery/equipment to the
and detailed description of the inputs delivered
IAs/FIAs/ISCs

Provide the acceptance of delivered Determine the production cost

inputs through a letter of acceptance for allocation
duly signed by the IA/FIA/ISC

Provide training or technical assistance

necessary for the use of farm inputs and
machinery/equipment under the instructions
 RESPONSIBILITIES OF THE IA/FIA/ISC
Utilize NIA-delivered farm inputs and

1 machinery/equipment for land

preparation, crop maintenance,
harvesting, and other farming activities

Responsible for any loss or damage of the

2 NIA inputs from the time of delivery and

acceptance throughout their inclusion in the
production and post-production process

Responsible for the inputs and

3 cash to the farmers who did not
give their harvest/production

Apply for insurance such as crop

4 insurance, liability insurance, and

building, machinery and equipment
with assistance from NIA
DELIVERY OF INPUTS

SUBMISSION OF REPORTS

The IA/FIA/ISC, upon the execution of

agreement and completion of production
site selection and identification of
project beneficiaries stated under
paragraphs V.b. and V.d., shall submit a
formal request to the office of the
Manager of Irrigation Management
Office, for the payment/release of farm
inputs along with the following
supporting documents
 DELIVERY OF INPUTS

Agricultural Inputs
1 2
The approved Program of Work (POW) Detailed list outlining the estimated cost of the needed
agricultural inputs (seeds, fertilizer, pesticides,
providing the specific activity insecticides, irrigation water, machinery/equipment, etc.)
necessitating agricultural inputs duly certified by the IA/FIA/ISC President

3 4
The schedule of implementation List of farmer beneficiaries as
and/or expected time needed to identified and officially endorsed by
accomplish the program both NIA and IA/FIA/ISC

5
All other necessary documents that may be
required by the NIA, complying with the usual
accounting and auditing rules and regulations
 DELIVERY OF INPUTS

Cash Assistance
1 2
The approved Program of Work (POW) Estimated breakdown of anticipated
showing the specific activity that cash assistance usage, duly certified by
necessitates cash assistance the IA/FIA/ISC President

3 4
The schedule of implementation and/or List of farmer beneficiaries as
expected time needed to accomplish the identified and officially endorsed by
program both NIA and IA/FIA/ISC

5
All other necessary documents that may be
required by the NIA, complying with the usual
accounting and auditing rules and regulations
DELIVERY OF INPUTS

DELIVERY OF AGRICULTURAL INPUTS

AND CASH ASSISTANCE

The NIA, upon receipt of the formal request

with complete supporting documents, shall
provide and deliver the inputs including
the provision of associated training or
technical assistance needed for the
application and use of those inputs. The
NIA shall deliver the inputs at the time and
place specified in the agreement
 DELIVERY OF INPUTS

ISSUANCE OF PROOF RECEIPT

Upon receipt of farm inputs, the Further, within 5 days from the completion of
IA/FIA/ISC shall issue a written the distribution of farm inputs to the farmer-
acknowledgment/acknowledgment beneficiaries, the IA/FIA/ISC shall furnish NIA
receipt, and/or official receipt to NIA a general payroll, turn over documents and/or
other documents providing for the proof of
receipt, duly signed by each individual
farmer-beneficiaries (based on the supporting
documents mentioned under par. X.A.1.d and
X.A.2.d) and certified by the IA/FIA/ISC
 GRANT OF CASH COMPENSATION

The IA/FIA/ISC, upon approval of The NIA IMO, upon receipt of

the inspection and acceptance request mentioned above, shall
report, shall request from the endorse the request for payment
Manager of IMO, for the payment to its NIA Finance Section/Unit,
of the compensation based on the along with the following reports
prescribed amount per for the payment of cash
production target compensation
 GRANT OF CASH COMPENSATION

1 Copy of MOA 2 POW

MOU on Convergence with Weekly report of

3 NFA, LGU, and other 4 Production Site Inspection
relevant agencies Team

Turn over documents/Delivery

Letter of acceptance from the
5 receipts or any equivalent
6 IA/FIA/ISC duly signed by the IA
documents showing the transfer authorized representative
of ownership of farm inputs
 GRANT OF CASH COMPENSATION
List of farmer beneficiaries,
Final/Completion qualified for the grant of cash
7 report of Production 8 compensation endorsed and
approved by the Production
Site Inspection Team Site Inspection Team

Approved Inspection and Report or written document

9 evidencing the specification
Acceptance Report of 10 and details of the delivered
delivered Palays to NIA and accepted goods by NIA

The objections and

Certificate of existence of
11 resolutions made during the
12 force majeure and/or damage
implementation until the and loss report (if any)
delivery of goods (if any)
INSPECTION OF THE The NIA shall weigh
GOODS (PALAY) and inspect the
Goods delivered by
the IA/FIA/ISC to
the delivery point
The IA/FIA/ISC may be
present during the
inspection of the
Goods. The NIA shall The NIA shall
issue a written cover the costs
document evidencing associated with
the specification of the
the inspection
Goods as inspected
 ACCEPTANCE OF GOODS
(PALAY) AFTER INSPECTION

The Parties’ agreement on the

quantity and quality of the
received Goods (Palay) constitutes
acceptance of the goods (palay)

The NIA shall provide the

IA/FIA/ISC with a written receipt
specifying the time, date,
quantity, and quality of Goods
 DRYING, PROCESSING/MILLING, STORAGE
AND MARKETING OF GOODS (PALAY)
In the case that the NIA has The NIA shall The drying,
no warehouse for the
coordinate and processing/milling of
storage of goods (palay), the goods (palay) may
the IA/FIA/ISC may provide converge with the
be administered by the
their warehouse to the NIA National Food
with a corresponding IA/FIA/ISC with
Authority to access compensations form
storage/rental fee for the
goods (palay) subject to post-harvest part of their labor
negotiation by both parties facilities services

Likewise, the NIA may

The NIA provides the The NIA shall
also utilize the available
post-harvest facilities of construction of post- market/sell the
the National Government harvest facilities and goods (palay) with
Agencies, Non-
the acquisition of the
Government the NFA and other
Organizations, and other needed equipment
Private Institutions and machinery of the
institutional
subject to IA/FIA/ISC buyers
negotiationading
AMENDMENTS/MODIFICATIONS

The parties, as the need arises, and upon

mutual consent, may amend or modify this
agreement by an addendum duly signed by them
and notarized by a notary public. The Regional
Offices through the Technical Working Group
(TWG) can make supplemental guidelines to the
MC 04 s. 2024 and NIA-IA Contract Agreement.