Executive Summary: Given the analysis of the policy environment of VAF system in the Philippines as basis, the second objective of the policy study, which is the development of policy and institutional interventions, is being carried out together with the Local Government Unit (LGU) of Lantapan particularly the Legislative Council and the Municipal Agriculture's Office. Several meetings, discussions and planning-workshops have been initiated with Lantapan Government officials, policy-makers and local technicians regarding this. A municipal ordinance was enacted supporting the implementation of an incentive-based program to promote the adoption of sustainable farming system (SFS) in the Municipality. The SFS Investment Plan has been finalized and is now ready for implementation. The LGU has allocated budget for the program, particularly the institutional arrangements required to implement the development plan. As part of developing the appropriate institutional mechanism to implement the incentive-based policy and program, various activities will be initially implemented such as the organizational development and analysis workshop and the series of seminars related to sustainable agriculture.