Creation of Agricultural Guarantee Fund.
Section 12
SEC. 12. Creation of Agricultural Guarantee Fund.— There is hereby created an Agricultural Guarantee Fund to be administered by the Agricultural Guarantee Fund Board established under Section thirteen of this Act. The Fund shall guarantee seventy per centum of the losses for production to be extended by the rural banks, with the remaining thirty per centum of such losses to be absorbed by the rural banking system. All amounts appropriated for the Agricultural Guarantee Fund must be kept intact and invested in safe and high-yielding; securities and only the earnings thereof shall be used to absorb the guaranteed seventy per centum of the losses: Provided, however, That investments of the funds shall be such that there shall be a well-balanced portfolio between government and private securities. The shares of stocks of the National Government in the Lepanto Consolidated Mining Company, Inc., transferred in Section nine hereof shall not be sold, and only the earnings hereof shall be used to absorb guaranteed losses. All expenses for the administration and operation of this Fund shall be for the account of the Central Bank.