AGRARIAN REFORM LAW AND JURISPRUDENCE (A DAR-UNDP

SARDIC PUBLICATION
AGRARIAN LAW AND JURISPRUDENCE
PREFACE
This book has inauspicious beginnings. The original intent of the UNDP-
SARDIC project, which eventually bore this book, was to map out special
areas for policy reform in agrarian reform law. But as the project team
delved deeper into the subject, the long unaddressed need for an
organized and systematic presentation of agrarian law and existing
jurisprudence was again put to fore. In response to that problem, the
project team and the UNDP-SARDIC project decided to widen the scope of
the project and, thus, what came of it was not only a map of the difficult
problem areas in the law's implementation but also this book. TcHCDI
Any foray into the complicated, and often contentious, arena that is
agrarian reform law necessitates a complete and well-grounded grasp of
the basics. If anything, our study revealed that, even after decades,
agrarian reform law remains vastly misunderstood and under-appreciated
not only by stakeholders but by agrarian reform law implementors
themselves.
This is largely due to the dearth of materials on the matter. Over the
years, laws and their implementing rules have been refined and
promulgated to reflect the lessons learned and the changing times.
Simultaneously, the Supreme Court issued rulings that elucidate and
interpret the law, as well as repudiate portions thereof. The rights and
obligations of the different stakeholders have been constantly redefined
and readjusted.
Despite these exciting developments, however, there has been little
done to mesh all these pieces of knowledge into an organized whole.
This book is an effort towards that end.
In a nutshell, this book is a humble attempt in summing up years of
agrarian reform law implementation. This book intends to reach out to all
sectors and stakeholders to heighten their understanding and appreciation
of the agrarian reform in the Philippines, and hopefully help refine the terms
of the ongoing debates among them. This book hopes to appeal to both
familiar and unfamiliar on the subject. It attempts to present, in an
academic fashion, all relevant agrarian reform laws, DAR implementing
rules, and pertinent judicial declarations on the matter. Hopefully, this will
provide a holistic framework for understanding agrarian law.
Extra effort was also exerted to demonstrate agrarian reform in action
by giving concrete illustrations and discussion from an operational
perspective. Interspersed with the theoretical discussions are the various
operational issues and difficulties that DAR implementors faced or are
still facing.
The authors would like to thank
the UNDP-SARDIC project management team for providing
the financial and logistic support to see this project through.
the members of DAR's management committee who shared
with the project team their invaluable insights and experience in
agrarian reform implementation. Their contribution in making this book
complete and insightful is immeasurable.
the DAR-PPLAO support staff for providing administrative and
secretariat support; and
Antonio Ramos who served as auditor for this project.
This is but a first step. We derive inspiration from the words of T.S. Eliot:
We shall not cease from exploration

And the end of all our exploring

Will be to arrive where we started

And know the place for the first time
[From "Little Gidding"]
THE AUTHORS
CHAPTER 1
Coverage of the Comprehensive Agrarian Reform Program
The Comprehensive Agrarian Reform Program
The Comprehensive Agrarian Reform Program (CARP) is implemented
by Republic Act No. 6657 (1988) otherwise known as the "Comprehensive
Agrarian Reform Law". Prior to its enactment on 10 June 1988, President
Corazon C. Aquino issued Proclamation No. 131 (1987) instituting a
comprehensive agrarian reform program, and Executive Order No.
229 (1987) providing the mechanics for its implementation. RA 6657 took
effect on 15 June 1988.
While expressly repealing specific provisions of prior enactments on
agrarian reform, RA 6657 provides that the provisions of RA
3844 (1963), Presidential Decree No. 27 (1972) and PD 266 (1973), EO
228 (1987) and EO 229 (1987) and other laws not inconsistent with it shall
have suppletory effect.
RA 6657 was enacted pursuant to the constitutional mandate enshrined
in Section 4, Art. XIII of the 1987 Constitution, which provides:
SEC. 4. The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farmworkers, who are
landless, to own directly or collectively the lands they till or, in the case of
other farmworkers, to receive a just share of the fruits thereof. To this end,
the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits
as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations, and subject to the payment of just
compensation. In determining retention limits, the State shall respect the
right of small landowners. The State shall further provide incentives for
voluntary land-sharing.
The constitutionality of RA 6657 has been upheld in Association of
Small Landowners v. Secretary of Agrarian Reform, 175 SCRA 342
(1989) and companion cases. The Supreme Court held that the
requirement of public use has already been settled by the Constitution
itself. It noted that "[n]o less than the 1987 Charter calls for agrarian reform
which is the reason why private agricultural lands are to be taken from their
owners, subject to the prescribed retention limits." (at 378)
While RA 6657 itself has been held constitutional, the Supreme Court in
a subsequent case, Luz Farms v. Secretary of Agrarian Reform, 192 SCRA
51 (1990), declared unconstitutional Sec. 3 (b), 10 and 11 thereof in so far
as they include lands devoted to the raising of livestock, swine and poultry
within its coverage. As a result of this ruling, Congress enacted RA
7881 (1995) amending these provisions and incorporating new provisions
to existing ones. The amendments adopted the Luz doctrine by removing
livestock, swine and poultry farms from CARP coverage.
Scope of CARP
The Constitution in Sec. 4, Art. XIII, mandates the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits
that the Congress may prescribe, taking into account ecological,
developmental or equity considerations and subject to the payment of just
compensation.
Prior to RA 6657, the operative law on land distribution was PD
27 (1972). However, PD 27 is limited in scope, covering only tenanted
private agricultural lands primarily devoted to rice and corn operating under
a system of share-crop or lease tenancy, whether classified as landed
estate or not. The constitutional provision therefore expanded the scope of
agrarian reform to cover all agricultural lands.
RA 6657 operationalized this constitutional mandate and provides in
Sec. 4 thereof that the CARP shall cover, regardless of tenurial
arrangement and commodity produced, all public and private agricultural
lands, as provided in Proclamation No. 131 and EO 229 including other
lands of the public domain suitable for agriculture. More specifically, the
following lands are covered by CARP:
a) All alienable and disposable lands of the public domain
devoted to or suitable for agriculture;
b) All lands of the public domain in excess of the specific limits as
determined by Congress in Sec. 4 (a) of RA 6657;
c) All other lands owned by the government devoted to or
suitable for agriculture; and
d) All private lands devoted or suitable for agriculture regardless
of the agricultural products raised or that can be raised thereon (Rep.
Act No. 6657 [1988], Sec. 4).
Definition of agricultural land
Sec. 3 (c) of RA 6657 defines agricultural lands as follows:
(c) Agricultural Land refers to land devoted to agricultural activity as
defined in this Act and not classified as mineral, forest, residential,
commercial or industrial land.
Sec. 3 (b) of RA 6657, as amended by RA 7881 (1995), defines
"agricultural activity" as follows:
(b) Agriculture, Agriculture Enterprise or Agricultural Activity means
cultivation of soil, planting of crops, growing of fruit trees, including the
harvesting of such farm products, and other farm activities and
practices performed by a farmer in conjunction with such farming
operations done by persons whether natural or juridical.
In Natalia v. DAR, 225 SCRA 278 (1993), the Supreme Court held:
Section 4 of RA 6657 provides that the CARL "shall cover, regardless of
tenurial arrangement and commodity produced, all public and private
agricultural lands." As to what constitutes "agricultural land," it is referred to
as "land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land." The
deliberations of the Constitutional Commission confirm this limitation.
"Agricultural lands" are only those lands which are "arable and suitable
agricultural lands" and "do not include commercial and industrial lands" (at
282, 283).
Agricultural lands reclassified by local
governments into "forest conservation zones"
Agricultural lands reclassified by local government units (LGUs) into
"forest conservation zones" even prior to the effectivity ofCARL do not
become forest land under Sec. 3 (c) of RA 6657 as to be exempted from
CARP coverage.
It should be noted that under the Constitution, lands of the public
domain are classified into agricultural, forest or timber, mineral lands and
national parks (CONST., Art. XII, Sec. 3). These classifications are called
primary classifications or "classification in the first instance." The same
provision of the Constitution also provides that agricultural lands of the
public domain may be further classified according to the uses to which they
may be devoted. This further classification of agricultural land is referred to
as secondary classification. The responsibility over primary classification of
lands of the public domain is vested in the President who exercises such
power upon the recommendation of the Department of Environment and
Natural Resources (DENR) (Com. Act No. 141 [1936], Sec. 6; EO
192 [1987]). On the other hand, the authority to reclassify agricultural lands
into residential, commercial or industrial is lodged, among others, in cities
and municipalities (Rep. Act No. 7160 [1991], Sec. 20).
The group of lands referred to in Sec. 3 (c) of RA 6657 as non-
agricultural (i.e., mineral, forest, residential, commercial or industrial) is a
mix of primary and secondary classifications. Forest and mineral lands are,
under the Constitution and Commonwealth Act No. 141 (1936), primary
classifications, while the rest are secondary classifications.
Reclassification by LGUs of agricultural lands into "forest conservation
zones" does not have the effect of converting such lands into forest lands
as to be exempted from CARP. Firstly, an agricultural land is already a
primary classification and, hence, can only be subjected to secondary
classification. Secondly, LGUs have no authority or power to make primary
classifications considering that such power is the sole prerogative of the
President exercising such power upon the recommendation of the DENR.
The forest (or mineral) land referred to in Sec. 3 (c) of RA 6657 is
therefore to be understood as referring to forest (or mineral) land declared
to be such by the President/DENR and not by the LGUs. DAR
Administrative Order No. 1 (1990) makes this qualification in its definition of
"agricultural land," as follows:
. . . Agricultural land refers to those devoted to agricultural activity as
defined in R.A. 6657 and not classified as mineral or forest by the
Department of Environment and Natural Resources (DENR) and its
predecessor agencies, and not classified in town plans and zoning
ordinances as approved by the Housing and Land Use Regulatory Board
(HLURB) and its preceding competent authorities prior to 15 June 1988 for
residential, commercial or industrial use.
Agricultural lands reclassified LGUs into
residential, commercial or industrial
Taking into consideration the effectivity of the law, the secondary
classifications mentioned in Sec. 3 (c) of RA 6657 are treated according
whether they were classified as such before or after the effectivity of the
law on 15 June 1988.
If the agricultural land was classified as residential, commercial or
industrial by the LGU and approved by the Housing and Land Use
Regulatory Board (HLURB), or its predecessor agencies, prior to 15 June
1988, the land will be recognized as so classified under Sec. 3 (c) of RA
and is therefore not covered by CARP. However, an exemption clearance
from DAR is still necessary to confirm or declare its exempt status. (DAR
Adm. O. No. 6 [1994]).
This is based on Department of Justice Opinion No. 44 (1990) which
provides that with respect to the conversion of agricultural lands covered
by RA 6657 to non-agricultural uses, the authority of the DAR to approve
such conversion may be exercised from the date of its effectivity or on 15
June 1988. Thus, all lands already classified as commercial, industrial or
residential before that date no longer need any conversion clearance from
the DAR.
If an agricultural land is reclassified after 15 June 1988, the provisions
on land conversion under CARL and its implementing rules will apply (Rep.
Act No. 6657 [1988], sec. 65; DAR Adm. O. No. 1 [1999]).
Conversion prior to 15 June 1988 through presidential
proclamation binding before DAR
The reasoning in DOJ Opinion No. 44 (1990) was validated by the
Supreme Court in Natalia v. DAR, supra. This case involved the question of
whether or not lands already classified for residential, commercial or
industrial use, as approved by HLURB and its precursor agencies, prior to
15 June 1988 are covered by CARP. SDHCac

Natalia Realty, Inc. vs. Department of Agrarian Reform
225 SCRA 278 (1993)
Facts:
Petitioner Natalia Realty, Inc. is the owner of a 125.0078-ha land set
aside by Presidential Proclamation No. 1637 (1979) as townsite area
for the Lungsod Silangan Reservation. Estate Developers and
Investors Corporation (EDIC), the developer of the area, was granted
preliminary approval and locational clearances by the then Human
Settlements Regulatory Commission (HSRC) for the establishment of
the Antipolo Hills Subdivision therein. In November 1990, a Notice of
Coverage was issued by DAR on the undeveloped portion of the
landholding. The developer filed its objections and filed this case
imputing grave abuse of discretion to respondent DAR for including
the undeveloped portions of its landholding within the coverage of
CARP.
Issue:
Are lands already classified for residential, commercial or industrial
use, and approved by HLURB and its precursor agencies prior to 15
June 1988, covered by RA 6657?
Held:
Sec. 4 of RA 6657 states that the CARL covers "regardless of tenurial
arrangement and commodity produced, all public and private and
agricultural lands" and as per the transcripts of the Constitutional
Commission, "agricultural lands" covered by agrarian reform refers
only to those which are "arable and suitable lands" and "do not include
commercial, industrial and residential lands." The land subject of the
controversy has been set aside for the Lungsod Silangan Reservation
by Proclamation No. 1637 prior to the effectivity of RA 6657 and in
effect converted these lands into residential use. Since the Natalia
lands were converted prior to 15 June 1988, DAR is bound by such
conversion, and thus it was an error to include these within the
coverage of CARL.
Exemptions and Exclusions
Sec. 10 of RA 6657, as amended by RA 7881 (1995), specifically
enumerates the exemptions and exclusions from CARP, as follows:
a) Lands actually, directly or exclusively used for parks and wild-
life, forest reserves, reforestation, fish sanctuaries and breeding
grounds, watersheds and mangroves (Rep. Act No. 6657 [1988], sec.
10 [a], as amended by Rep. Act No. 7881[1995]).
b) Private lands actually, directly and exclusively used for prawn
farms and fishponds: Provided, That said prawn farms and fishponds
have not been distributed and Certificate of Land Ownership Award
(CLOA) issued to agrarian reform beneficiaries (ARBs) under CARP
(Sec. 10 [b]).
c) Lands actually, directly and exclusively used and found to be
necessary for national defense, school sites and campuses, including
experimental farm stations operated by public or private schools for
educational purposes, seeds and seedling research and pilot
production center, church sites and convents appurtenant thereto,
mosque sites and Islamic centers appurtenant thereto, communal
burial grounds and cemeteries, penal colonies and penal farms
actually worked by the inmates, government and private research and
quarantine centers and all lands with eighteen percent (18%) slope
and over, except those already developed (Sec. 10 [c]).
Lands devoted to raising of livestock, swine and poultry. The
Luz Farms Case.
Before its amendment by RA 7881, Sec. 3(b) of RA 6657 included in its
definition of agricultural activity the "raising of livestock, poultry or fish".
Likewise, the original Sec. 11 of RA 6657 on commercial farming provided
that "lands devoted to commercial livestock, poultry and swine raising shall
be subject to compulsory acquisition within ten (10) years from the
effectivity of the Act." However, the Supreme Court in Luz Farms vs.
Secretary of Agrarian Reform, supra, held that Sec. 3 (b) and Sec. 11
of RA 6657(along with Sec. 13 and 32) are unconstitutional in far as they
include the raising of livestock and swine in the coverage of CARP.

Luz Farms vs. Secretary of the Department of Agrarian
Reform
192 SCRA 51 (1990)
Facts:
Petitioner Luz Farms is a corporation engaged in livestock and poultry
business. It seeks to nullify Sec. 3 (b) and Sec. 11 of RA 6657 in so far
as they apply to livestock and poultry business.
Held:
Sec. 3 (b) and Sec. 11 of RA 6657 are unconstitutional in so far as
they include lands devoted to raising livestock, swine and poultry
within its coverage. The use of land is incidental to but not the
principal factor or consideration of productivity in this industry. The
Supreme Court held that:
The transcripts of deliberations of the Constitutional Commission of
1986 on the meaning of the word "agricultural," clearly show that it
was never the intention of the framers of the Constitution to include
livestock and poultry industry in the coverage of the constitutionally-
mandated agrarian reform program of the government.
The Committee adopted the definition of "agricultural land" as defined
under Section 166 of RA 3844, as land devoted to any growth,
including but not limited to crop lands, saltbeds, fishponds, idle and
abandoned land (Record, CONCOM, August 7, 1986, Vol. III, p. 11).
The Supreme Court noted that the intention of the Committee to limit
the application of the word "agriculture" is further shown by the
proposal of Commissioner Jamir to insert the word "arable" to
distinguish this kind of agricultural land from such lands as commercial
and industrial lands and residential properties. The proposal, however,
was not considered because the Committee contemplated that
agricultural lands are limited to arable and suitable agricultural lands
and therefore, do not include commercial, industrial and residential
lands (Record, CONCOM, 7 August 1986, Vol. III, p. 30).
Moreover, in his answer to Commissioner Regalado's interpellation,
Commissioner Tadeo clarified that the term "farmworker" was used
instead of "agricultural worker" in order to exclude therein piggery,
poultry and livestock workers (Record, CONCOM, August 2, 1986,
Vol. II, p. 621).
DAR AO 9 (1993) imposes two (2) conditions in order that these lands
may be exempted: (a) that the land or portion thereof is exclusively,
directly, or actually used for livestock, poultry and swine raising as of 15
June 1988; and (b) the farm must satisfy the ratios of land, livestock,
poultry and swine, as follows:
cattle, carabao and horse raising maximum of 1 head to 1
hectare; 21 heads for every 1.7815
hectares of infrastructure
sheep and goat raising 7 heads to 1 hectare; 147
heads for every 0.7205 hectare of
infrastructure
swine raising 21 heads of hogs for every
0.5126 hectare of infrastructure
poultry raising 500 layers for every 0.53
hectare of infrastructure or 1000
boilers for every 1.428 hectares of
infrastructure
Fishponds and prawn ponds
With the amendment of Sec. 3 (c), 10 and 11 of RA 6657 by RA 7881,
fishponds and prawnponds are also exempted from the coverage of CARP,
provided that said lands have not been distributed to ARBs and no CLOAs
have been issued.
To be exempted, the agricultural land must have been actually, directly
and exclusively used for prawn farms and fishponds as of 12 March 1995,
the date of effectivity of RA 7881. To avail of the exemption, a landowner or
his authorized representative still has to file a written application for land
exemption/exclusion with the DAR Provincial Office (DAR Adm. O. No. 3
[1995]).
In cases were the fishponds or prawn farms have been subjected to
CARP, by voluntary offer to sell, commercial farms deferment or notice of
compulsory acquisition, they can be exempt from CARP if a simple and
absolute majority of the actual regular workers or tenants consent to the
exemption within one (1) year from the effectivity of RA 7881 or on 12
March 1995. In cases where the fishponds or prawnponds have not been
subjected to CARP, the consent of the farm workers shall no longer be
necessary (Rep. Act No. 6657 [1988], sec. 10[b], as amended).
Sec. 4 of RA 7881 also amended RA 6657 by introducing a new
provision mandating the introduction of an incentive plan for employees of
all fishponds and prawn farms. Operators and entities owning or operating
fishponds and prawn farms are directed to execute within six (6) months
from its effectivity an incentive plan with their regular fishpond or prawn
farm worker's organization, if any, whereby seven point five percent (7.5%)
of net profits before tax from the operation of the fishpond or prawn farms
are distributed within sixty (60) days at the end of the fiscal year as
compensation to regular and other pond workers over and above their
current compensation. This incentive plan requirement, however, does not
apply to agricultural lands subsequently converted to fishponds or prawn
farms provided that the size of the land converted does not exceed the
retention limit of the landowner.
Lands used for academic or educational use. The CMU case.
In Central Mindanao University vs. DARAB, 215 SCRA 85 (1992), the
Supreme Court passed upon the exemption of lands directly, actually and
exclusively used and found to be necessary for school sites and campuses,
including experimental farm stations operated by public or private schools
for educational purposes provided for under Sec. 10 of RA 6657, as
amended.

Central Mindanao University vs. Department of Agrarian
Reform Adjudication Board
215 SCRA 86 (1992)
Facts:
On 16 January 1958, President Carlos Garcia issued Proclamation
No. 467 reserving for the Mindanao Agricultural College, now the
CMU, a piece of land to be used as its future campus. In 1984, CMU
embarked on a project titled "Kilusang Sariling Sikap" wherein parcels
of land were leased to its faculty members and employees. Under the
terms of the program, CMU will assist faculty members and employee
groups through the extension of technical know-how, training and
other kinds of assistance. In turn, they paid the CMU a service fee for
use of the land. The agreement explicitly provided that there will be no
tenancy relationship between the lessees and the CMU.
When the program was terminated, a case was filed by the
participants of the "Kilusang Sariling Sikap" for declaration of status as
tenants under the CARP. In its resolution, DARAB, ordered, among
others, the segregation of 400 hectares of the land for distribution
under CARP. The land was subjected to coverage on the basis of
DAR's determination that the lands do not meet the condition for
exemption, that is, it is not "actually, directly, and exclusively used" for
educational purposes.
Issue:
Is the CMU land covered by CARP? Who determines whether lands
reserved for public use by presidential proclamation is no longer
actually, directly and exclusively used and necessary for the purpose
for which they are reserved?
Held:
The land is exempted from CARP. CMU is in the best position to
resolve and answer the question of when and what lands are found
necessary for its use. The Court also chided the DARAB for resolving
this issue of exemption on the basis of "CMU's present needs." The
Court stated that the DARAB decision stating that for the land to be
exempt it must be "presently, actively exploited and utilized by the
university in carrying out its present educational program with its
present student population and academic faculty" overlooked the very
significant factor of growth of the university in the years to
come. SHECcT
The CMU case is unique as it involves land transferred by the state to
CMU through PD 467 which provided for its commitment to a specific use
and purpose. Thus, the said land was already set aside for a specific
purpose and, in effect, was taken outside the coverage of agrarian reform
by law. It is submitted that a more accurate basis for the exemption should
have been that the exclusive use of the land both present and future
has been determined by law, and not because of the determination of the
CMU of what it needs and how it intends to use it.
In ruling that the CMU is in the best position to determine the use of the
land and not DAR, the Supreme Court seems to have overlooked EO
407 (1990), as amended by EO 448 (1991), which provides that DAR is
vested with the power to determine whether lands reserved for public uses
by presidential proclamation is no longer actually, directly and exclusively
used and necessary for the purpose for which they are reserved. Said EO
provides that:
Sec. 1-A. All lands or portions thereof reserved by virtue of
Presidential proclamations for specific public uses by the government,
its agencies and instrumentalities, including government-owned or
controlled corporations suitable for agriculture and no longer actually,
directly and exclusively used or necessary for the purposes for which
they have been reserved, as determined by the Department of
Agrarian Reform in coordination with the government agency or
instrumentality concerned in whose favor the reservation was
established, shall be segregated from the reservation and transferred
to the Department of Agrarian Reform for distribution to qualified
beneficiaries under the Comprehensive Agrarian Reform Program.
Thus, DAR in coordination with the agency or department involved, can
determine whether the purpose or use for which the lands reserved
continues to exist and therefore establish if they continue to be exempt
from CARP coverage.
The Supreme Court's statement that lands of universities and academic
institutions need not be actually, directly and exclusively used for
educational or research purposes at the time of the effectivity of the RA
6657 to be exempt from CARP also fails to consider Sec. 10 of RA 6657.
Sec. 10 is explicit that only those lands that are "actually, directly, and
exclusively" used and found necessary for the uses enumerated therein are
exempt from CARP coverage. A literal interpretation of the provision
implies that the exemption applies only to those lands already committed
for the enumerated purposes at the date of the effectivity of law on 15 June
1988. Thus, agricultural land acquired by academic institutions for
academic, educational, or research purposes after 15 June 1988, or those
owned by them but not committed exclusively, actually, and directly to the
abovementioned uses before or on such date, are covered by CARP. For
its exclusion from acquisition and distribution, and for its commitment to
said purposes, the institution may file before DAR for clearance to convert
these lands into non-agricultural use.
Lands with 18% slope
Lands with 18% slope or over are exempt from CARP coverage unless
these are found to be agriculturally developed as of 15 June 1988.
This rule on exemption is based on PD 705 (1975), or the "Revised
Forestry Code of the Philippines," which provides that lands with a slope of
18% or over are generally reserved as forest lands. Sec. 15 thereof states
that "no land of the public domain eighteen per cent (18%) in slope or over
shall be classified as alienable and disposable" and that "lands eighteen
per cent (18%) in slope or over which have already been declared as
alienable and disposable shall be reverted to the classification of forest
lands by the Department Head, to form part of the forest reserves, unless
they are already covered by existing titles or approved public land
application, or actually occupied openly, continuously, adversely and
publicly for a period of not less than thirty (30) years as of the effectivity of
this Code, where the occupant is qualified for a free patent under the Public
Land Act.
If the land has 18% slope or over and is agriculturally developed as of
15 June 1988, the same shall be allocated to the qualified applicants in the
following manner:
a) If land is classified as forest land, and therefore is inalienable
and indisposable, this shall be allocated by the DENR under its
Integrated Social Forestry Program;
b) If classified as alienable and disposable, this shall be allocated
by the Land Management Bureau-DENR and DAR pursuant to the
provisions of CA 141 and the Joint DAR-DENR AO 2 (1988); and
c) If private agricultural land, this shall be acquired in accordance
with the provisions of RA 6657 (DAR Adm. O. No. 13 [1990], item E,
part II).
Effects of exemption
Sec. 10 of RA 6657 provides that exempted or excluded lands are
removed from the coverage of CARP. However, there are two (2)
contending views on whether these exempted or excluded lands are
perpetually taken out from coverage of the CARP.
The first view is that lands exempted or excluded from the law are
permanently taken out from coverage of the CARP. The basis of this
interpretation is the phraseology of Sec. 10 which states that exempted
lands are "exempt from the coverage of the law." The legal effect of this
interpretation is that the owner can use and dispose the land as he deems
fit without the need for any clearance from DAR.
The second view is that excluded and exempted lands can be covered
by CARP when the reason for their exemption ceases to exist. Thus, when
the reason for exemption ceases to exist for lands exempt under the Luz
Farms ruling or Sec. 10, as amended byRA 7881 (except lands with 18%
slope), they are removed from the exemption and are treated like any other
agricultural land.
It must be remembered that the lands subject of exemption under Sec.
10 of RA 6657 and the Luz Farms ruling are considered agricultural lands
as defined by Sec. 3 (c) of RA 6657, that is, they are in fact suitable to
agriculture and not classified as mineral, forest, residential, commercial or
industrial lands, but are exempt or excluded from CARP by reason of their
actual use and their necessity for other purposes. Thus, in the event that
these lands cease to be used or necessary for the purposes for which they
are exempted, they are removed from the application of Sec. 10 and are
then subject to CARP coverage.
The second view is anchored on the spirit and intent of the law to
cover all agricultural lands suitable to agriculture. Moreover, asRA 6657 is
a social welfare legislation the rules of exemptions and exclusions must be
interpreted restrictively and any doubts as to the applicability of the law
should be resolved in favor of inclusion.
In either case, the security of tenure of tenants enjoyed prior to 15 June
1988 shall be respected even when the lands are exempted. As to
farmworkers, the exemption of the land shall not cause the loss of the
benefits to which they are entitled under other laws. In addition, they are
granted preference in the award of other lands covered by CARP (DAR
Adm. O. No. 13 [1990], part II).
Homesteads
In Alita vs. CA, the Supreme Court stated that homesteads are exempt
from agrarian reform.

Alita vs. Court of Appeals
170 SCRA 706 (1989)
Facts:
Subject matter of the case consists of two (2) parcels of land acquired
by respondents' predecessors-in-interest through homestead patent
under the provisions of CA 141. Respondents wanted to personally
cultivate these lands, but the petitioners refused to vacate, relying on
the provisions of PD 27 and PD 316 and appurtenant regulations
issued by the then Ministry of Agrarian Reform.
Issue:
Are lands obtained through homestead patent covered under PD 27?
Held:
No. While PD 27 decreed the emancipation of tenants from the bondage of
the soil and transferring to them ownership of the land they till, the same
cannot be invoked to defeat the very purpose of the enactment of the
Public Land Act or CA 141. In Patricio v. Bayog, 112 SCRA 45, it was held
that:
The Homestead Act has been enacted for the welfare
and protection of the poor. The law gives a needy citizen a
piece of land where he may build a modest house for himself
and family and plant what is necessary for subsistence and for
the satisfaction of life's other needs. The right of the citizens to
their homes and to the things necessary for their subsistence
is as vital as the right to life itself. They have a right to live with
a certain degree of comfort as become human beings, and the
State which looks after the welfare of the people's happiness
is under a duty to safeguard the satisfaction of this vital right.
In this regard, Sec. 6 of Article XIII of the 1987 Constitution provides:
Section 6. The State shall apply the principles of
agrarian reform or stewardship, whenever applicable in
accordance with law, in the disposition or utilization of other
natural resources, including lands of public domain under
lease or concession suitable to agriculture, subject to prior
rights, homestead rights of small settlers, and the rights of
indigenous communities to their ancestral lands.
Moreover, Sec. 6 of RA 6657 contains a proviso supporting the
inapplicability of PD 27 to lands covered by homestead patents like those
of the property in question, reading:
Section 6. Retention Limits. . . . Provided further,
That original homestead grantees or their direct compulsory
heirs who still own the original homestead at the time of the
approval of this Act shall retain the same areas as long as
they continue to cultivate said homestead.
xxx xxx xxx
While homestead lots are declared exempt under PD 27, they are not
expressly declared as such under RA 6657. However, Sec. 6 of RA
6657 provides that homesteaders are allowed to retain the total homestead
lot subject to the conditions provided in the same section and as set DAR
MC 4 (1991), to wit:
a) That the original homestead grantee or his/her direct
compulsory heirs still own the land on 15 June 1988;
b) The original homestead grantee or his or her compulsory heirs
cultivate the land as of 15 June 1988 and continue to cultivate the
same.
It also provides that the tenants of lands covered by homestead patents
exempted from PD 27 or retained under RA 6657 shall not be ejected
therefrom but shall remain as leaseholders therein.
Schedule of Implementation
Sec. 7 of RA 6657 lays out the schedule of acquisition and distribution
of all agricultural lands through a period of ten (10) years from the
effectivity of the Act:
Phase Lands Covered
Schedule
I Rice and corn lands under Presidential
1988-1992
Decree No. 27;
all idle or abandoned lands;
all private lands voluntarily offered by the
owners
for agrarian reform;
all lands foreclosed by the government financial
institutions;
all lands acquired by the Presidential
Commission
on Good Government (PCGG); and
all other lands owned by the government
devoted
to or suitable for agriculture
II All alienable and disposable public agricultural
1992-1995
lands;
all arable public agricultural lands under agro-
forest, pasture and agricultural leases already
cultivated and planted to crops in accordance;
all public agricultural lands which are to be
opened
for new development and resettlement;
and all private agricultural lands in excess of
fifty (50) hectares,
III-A Landholdings above twenty-four (24)
1998-1992
hectares up to fifty hectares; and
III-B Private agricultural lands with areas above
the 1994-1998
retention limit up to 24 hectares
Though Sec. 7 of RA 6657 provides a fixed time table for the
implementation of the CARP law, this provision should be interpreted as
merely directory, rather than mandatory in character. This is the gist
of DOJ Opinion No. 9 (1997). It has been held that the difference
between a mandatory and a directory provision is often determined on
grounds of expediency. Where a provision embodies a rule of procedure
rather than one of substance, the provision as to time will be regarded
as directory only notwithstanding the mandatory nature of the language
used. Sec. 5 of RA 6657 is more procedural in nature than substantive.
The ten (10)-year period is merely a time frame given to DAR for the
acquisition and distribution of public and private agricultural lands
covered by RA 6657. It is merely a guide to DAR in setting its priorities,
and it is not, by any means, a limitation of its authority. Hence, Sec. 5
of RA 6657 should not be construed as a prescriptive period, the lapse
of which bars the DAR from covering the land under CARP.
Thus, DAR need not wait for the full coverage of those lands in the first
phase before those in the succeeding phases could be covered. DAR may
also proceed with the coverage of lands in different phases simultaneously.
In view of the passing of the ten (10)-year period in 1998, Congress
passed RA 8532 (1998) providing for the funding for land acquisitions for
another ten (10) years.
Idle or abandoned lands
Sec. 22 of Art. XVIII of the 1987 Constitution and Sec. 18 (h) of EO
229 prioritizes the immediate expropriation or acquisition of idle or
abandoned lands.
Sec 3 (e) of RA 6657 defines idle or abandoned land as "any
agricultural land not cultivated, tilled or developed to produce any crop nor
devoted to any specific economic purpose continuously for a period of
three (3) years immediately prior to the receipt of notice of acquisition by
the government as provided under RA 6657. However land that has
become permanently or regularly devoted to non-agricultural purposes is
not to be considered as idle or abandoned. Neither can it be considered as
abandoned or idle any land which has become unproductive by reason
of force majeure or any other fortuitous event, provided that prior to such
event, such land was previously used for agricultural or other economic
purpose."
Lands owned by government
To expedite the disposition of lands owned by the government,
President Corazon C. Aquino issued EO 407 (1990) directing all
government instrumentalities, government agencies, government owned
and controlled corporations or financial institutions to transfer to the
Republic of the Philippines, through the DAR, all landholdings suitable for
agriculture. Sec. 3 of EO 407 (1990) likewise provides for the redistribution
and award of fishponds, pasturelands and other lands of public domain
suitable for agriculture subject of cancelled or amended lease agreement to
the agrarian reform beneficiaries. EO 448 (1991) and EO 506 (1992)
amendedEO 407 by including all lands or portions thereof reserved by
virtue of presidential proclamations for specific public uses by the
government, its agencies and instrumentalities, and no longer actually,
directly and exclusively used or necessary for the purposes for which they
have been reserved. These also excluded national parks and other
protected areas, proposed national parks, game refuge, bird sanctuaries,
wild-life reserves, wilderness areas and other protected areas, including old
growth or virgin forests and all forests above 1,000 meters elevation or
above 50 percent slope until such time that they are segregated for
agricultural purposes or retained under the National Integrated Protected
Areas System.
Commercial farms
Sec. 11 of RA 6657 allowed the deferment of the coverage of
commercial farms. Deferred commercial farms shall be subject to
immediate compulsory acquisition and distribution after ten (10) years from
the effectivity of RA 6657 on 15 June 1988. For new farms, the ten (10)-
year deferment will begin from the first year of commercial production and
operation.
For a commercial farm to be qualified for deferment, it must have been
planted to commercial crop or devoted to commercial farming operations
before 15 June 1988. DAR AO 16 (1988) provided a 60-day period for the
filing of applications of deferment which lapsed on 2 May 1989.
DAR AO 16 (1988) explicitly allows the DAR to automatically subject the
lands to redistribution when it determines that the purpose for which
deferment is granted no longer exists as when the particular farm areas
ceases to be commercially productive. During the deferment period, the
DAR shall initiate steps to acquire the lands. Final land transfer to the
beneficiaries shall be effected at the end of the deferment period. The
acquisition and distribution of these deferred commercial farms are
governed byDAR AO 9 (1998).
Retention
Sec. 4, Art. XIII of the 1987 Constitution subjects the distribution of
agricultural lands for agrarian reform to "reasonable retention limits as
Congress may prescribe. Sec. 6 of RA 6657 operationalizes this mandate
and observes the right of persons to own, or retain, directly or indirectly
public or private agricultural land, the size of which shall vary according to
factors governing a viable family-size farm in such as commodity produced
terrain, infrastructure, and soil fertility, but in no case shall exceed five (5)
hectares.
The retention limits under Sec. 6 of RA 6657 covers all persons whether
natural or juridical. Juridical persons like corporations and partnerships are
therefore subject to the five (5)-hectare limit.
With respect to married couples, their maximum retention limit is
determined by the nature of their property relations. For marriages covered
by the New Civil Code, in the absence of an agreement for the judicial
separation of property, spouses who own only conjugal properties may
retain a total of not more than five (5) hectares of such properties.
However, if either or both of them are landowners in their own respective
rights (capital and/or paraphernal), they may retain not more than five (5)
hectares of their respective landholdings. In no case, however, shall the
total retention of such couple exceed ten (10) hectares. (DAR Adm. O. No.
5 [2000], sec. 9 [g]).
For marriages covered by the Family Code, which took effect on 3
August 1988, a husband owning capital property and/or a wife owning
paraphernal property may retain not more than five (5) hectares each
provided they executed a judicial separation of properties prior to entering
into the marriage. In the absence of such an agreement, all properties
(capital, paraphernal and conjugal) shall be considered to be held in
absolute community, i.e., the ownership relation is one, and, therefore, only
a total of five (5) hectares may be retained. (DAR Adm. O. No. 5 [2000],
sec. 9 [h]).
The five (5)-hectare retention limit applies to all lands regardless of how
acquired (i.e., by purchase, award, succession, donation) as the law does
not distinguish. Thus, a child who was awarded three (3) hectares as a
preferred beneficiary under Sec. 6 of RA 6657and subsequently acquires a
five (5)-hectare landholding of his parent by succession can retain only five
(5) hectares of the total landholding.
Landowners have the obligation to cultivate directly or through labor
administration, and thereby make productive the area he retains. He is also
prohibited from making any constructions therein or commit it to purposes
incompatible with its agricultural nature. Before a landowner can commit
the retained land to non-agricultural purposes, he must first secure a
conversion order from DAR, otherwise he can be held liable for premature
conversion (see DAR Adm. O. No. 1 [1999]).
Award to children
If a landowner has children, three (3) hectares may be awarded to each
subject to the following qualifications:
a) that he is at least fifteen (15) years old as of 15 June 1988;
and
b) that he is actually tilling the land or directly managing it (Rep.
Act No. 6657 [1988], sec. 6).
DAR MC 4 (1994) defined the term "directly managing" as the cultivation
of the land through personal supervision under the system of labor
administration. DHcESI
The award to the child is not to be taken from the retained land of the
landowner and is awarded to the child in his own right as a beneficiary.
Thus, the award is not automatic. The child is merely given a preference
over other beneficiaries.
As the right of the child is derived from his being a beneficiary, he must
not only meet the requirements of preference laid out in Sec. 6 of RA 6657,
but also all the other qualifications of a beneficiary enumerated under Sec.
22 of RA 6657. Thus, he must also be landless, a resident of the barangay
or municipality where the land is located, and must have the willingness,
aptitude and ability to cultivate and make the land as productive as
possible. Moreover, he is subject to the same liabilities, responsibilities and
limitations imposed on all agrarian reform beneficiaries.
Exceptions to the 5-hectare retention limit
The five (5)-hectare retention limit under RA 6657 does not apply to
original homestead grantees or their direct compulsory heirs at the time of
the approval of RA 6657 who continue to cultivate the same, and to those
entitled to retain seven (7) hectares under PD 27.
In the Association cases, the Supreme Court held that landowners who
failed to exercise their rights to retain under PD 27 can avail of their rights
of retention under Sec. 6 of RA 6657 and retain only five (5) hectares.
However, in the resolution of the Supreme Court on the motion for
consideration in the said case, the Court qualified that those who, prior to
the promulgation of RA 6657, complied with the requirements under Letter
of Instruction (LOI) Nos. 41, 45 and 52 regarding the registration of the
landholdings, shall be allowed to enjoy the seven (7) hectare retention limit.
All those who refused to comply with the requirements cannot, in view of
the passage of CARL, demand that their retention limit be determined
under PD 27.
Thus, the following OLT owners are still entitled to retain seven (7)
hectares even if they exercised their right of retention underPD 27 after 15
June 1988:
a) Those landowners who complied with the requirement of either LOI
41, 45 or 52;
b) Those who filed their applications before the deadline set (27
August 1985 as provided by AO. 1 [1985]) whether or not they have
complied with LOI Nos. 41, 45 or 52;
c) Those who filed their applications after the deadline but complied
with the requirements of LOI 41, 45 or 52; and
d) Heirs of a deceased landowner who manifested, while still alive, the
intention to exercise the right of retention prior to 23 August 1990 (the
finality of the Supreme Court decision in Association of Small Landowners
vs. Hon. Secretary of DAR; supra) (DAR Adm. O. No. 4 [1991]).
Exercise of right of retention
While Sec. 6 of RA 6657 acknowledges the right of the landowners to
choose the area to be retained, it requires that the area be compact and
contiguous, and shall be least prejudicial to the entire landholding and the
majority of the farmers therein (DAR Adm. O. No. 5 [2000], sec 2 [b]).
Sec. 4 of DAR AO 5 (2000) provides that under the Compulsory
Acquisition (CA) scheme, the landowner shall exercise his right of retention
within sixty (60) days from receipt of the Notice of Coverage from DAR.
Failure to exercise this right within the prescribed period means that the
landowner waives his right to choose which area to retain. Thereafter, the
Municipal Agrarian Reform Officer (MARO) shall designate the retained
area for the landowner.
Under the Voluntary Offer to Sell (VOS) scheme, the right of retention
shall be exercised at the time the land is offered for sale. The offer should
specify and segregate the portion covered by VOS and the portion applied
for retention; otherwise, the landowner shall be deemed to have waived his
right of retention over the subject property (DAR Adm. O. No. 5 [2000], sec.
4).
As a matter of policy, all rights acquired by the tenant-farmers under PD
27 and the security of tenure of the farmers or farmworkers on the land
prior to the approval of RA 6657 shall be respected (DAR Adm. O. No. 5
[2000], sec. 2 [c]).
In case the area selected by the landowner or awarded for retention by
the DAR is tenanted, the tenant has two (2) options:
a) To remain as a lessee. If he chooses to remain in the area
retained, he shall be considered a lease holder and shall lose his right
to be a beneficiary; or
b) Be a beneficiary in the same or another agricultural land with
similar or comparable features.
The tenant must exercise either option within one (1) year after the
landowner manifests his choice of the area for retention, or from the time
the MARO has chosen the area to be retained by the landowner, or from
the time an order is issued granting the retention (DAR Adm. O. No. 5
[2000], sec. 10).
Sec. 10 of DAR AO 5 (2000) further provides that in case the tenant
declines to enter into leasehold and there is no available land to transfer, or
if there is, the tenant refuses the same, he may choose to be paid
disturbance compensation by the landowner.
Where Certificates of Land Transfer (CLTs), Emancipation Patents
(EPs) or Certificates of Land Ownership Award (CLOAs) have already been
issued on the land chosen by the landowner as retention area, the DAR
shall immediately inform the agrarian reform beneficiaries (ARBs)
concerned and provide them the opportunity to contest the landowner's
claim. Moreover, the DAR shall ensure that the affected ARBs, should they
so desire, be given priority in the distribution of other lands of the
landowner or other lands identified by the DAR for redistribution, subject to
the rights of those already in the area (DAR Adm. O. No. 5 [2000], sec. 11)
Waiver of right of retention
Sec. 7 of DAR AO 5 (2000) provides that the following acts constitute
waiver on the landowner's right of retention:
a) Executing an affidavit, letter or any other document duly
attested by the MARO, Provincial Agrarian Reform Officer (PARO) or
Regional Director (RD) indicating that he is expressly waiving his
retention right over subject landholding;
b) Signing of the Landowner-Tenant Production Agreement and
Farmer's Undertaking (LTPA-FU) or Application to Purchase and
Farmer's Undertaking (APFU) covering subject property;
c) Entering into a Voluntary Land Transfer/Direct Payment
Scheme (VLT-DPS) agreement as evidenced by a Deed of Transfer
over the subject property;
d) Offering the subject landholding under VOS scheme and
failure to indicate his retained area;
e) Signing/submission of other documents indicating consent to
have the entire property covered, such as the form letter of the LBP on
the disposition of the cash and bond portions of a land transfer claim
for payment, and the Deed of Assignment, warranties and undertaking
executed in favor of the LBP;
f) Performing acts which constitute estoppel by laches; and
g) Doing such act or acts as would amount to a valid waiver in
accordance with applicable laws and jurisprudence.
Public Lands
Public lands pertain to all lands that were not acquired by private
persons or corporations either by grant or purchase. These lands are either
(a) disposable (alienable) public lands or (b) non-disposable public lands.
CA 141 (1936), otherwise known as the "Public Land Act", governs the
administration and disposition of lands of the public domain. Sec. 9 thereof
classifies alienable or disposable lands of the public domain as (a)
agricultural; (b) residential, commercial, industrial or for similar productive
purposes; (c) educational, charitable, or other similar purposes; or (d)
reservations for town sites and for public and quasi-public uses.
Non-disposable public lands or those not susceptible of private
appropriation and include the following: (a) timber lands which are
governed by PD 705 (1975) or the Revised Forestry Code; and (b) mineral
lands which are governed by RA 7942 (1995) or the Philippine Mining Act
of 1995 and other related laws.
All lands of the public domain are under the exclusive jurisdiction of the
DENR except those placed by law and/or by executive issuances under the
jurisdiction of other government agencies. Under Sec. 3 and 5 of CA 141,
the Secretary of Agriculture and Natural Resources (now the Secretary of
DENR) is the executive officer charged with carrying out the provisions of
the Public Land Act. It is empowered to prepare and issue such forms,
instructions, rules and regulations consistent with the Public Land Act. Sec.
6 of CA 141 (see also EO 192 [1987]) reserves the power to classify lands
in the public domain into either agricultural (disposable), timber or mineral
lands to the President, with the recommendation of the Secretary of DENR.
Under Sec. 4 of RA 6657, public and private agricultural lands and lands
of the public domain suitable for agriculture are covered by CARP. It
provides, among others, that all alienable and disposable lands of the
public domain devoted or suitable or devoted to agriculture (Sec 4 [a]) and
all lands of the public domain in excess of the specific limits of the public
domain as determined by Congress (Sec. 4 [b]) shall be covered by CARP.
It has also been determined that public agricultural lands that are untitled
and privately claimed are covered by CARP. In response to a query by
DAR, the Department of Justice issued Opinion No. 176 (1992)which
stated:
. . . Thus, it has been held that there should be no distinction in the
application of the law where non is indicated therein (SSS vs. City of
Bacolod, 115 SCRA 412) . . . By said rule, the term "private agricultural
lands" in the aforementioned section should be interpreted as including all
private lands, whether titled or untitled. . . .
RA 6657 has created an overlapping of jurisdictions between the DENR
and the DAR over the disposition of these lands. RA 6657mandates DAR
to acquire and distribute these public lands to agrarian beneficiaries
while CA 141 vests upon the DENR the power to control, survey,
classification, lease, sale or any other form of concession or disposition and
management of the lands of the public domain.
To resolve the overlapping mandates of the DENR and DAR in the
disposition and distribution of public lands for CARP purposes, the two
agencies issued Joint DAR-DENR MC 9 (1995) which recognizes that
lands of the public domain are under the jurisdiction of the DENR unless
placed by law and/or by executive issuances under the jurisdiction of other
government departments or entities. Under the said circular, the disposition
of non-registrable lands of the public domain is the exclusive responsibility
of the DENR under its various programs (i.e., the Integrated Social
Forestry). In this instance, the role of the DAR is to assist the DENR in
identifying and screening of farmer beneficiaries. The responsibility and
authority of DAR to distribute public lands shall be limited to the following:
a) Lands proclaimed by the President as DAR Resettlement
Projects and placed under the administration of the DAR for
distribution to qualified farmer beneficiaries under CARP;
b) Lands which are placed by law under the jurisdiction of DAR;
and
c) Lands previously proclaimed for the various government
departments, agencies and instrumentalities and subsequently turned
over to the DAR pursuant to EO 407 (1990), as amended by EO
448 and 506.
Untitled public alienable and disposable lands are still within the
exclusive jurisdiction of DENR pursuant to CA 141. However, in
accordance with DOJ Opinion No. 176 (1992), Joint DAR-DENR MC 14
(1997) provides that all untitled public alienable and disposable lands are
deemed "private" if the criteria specified in RA 6940 for the determination of
whether or not a person has already acquired a recognizable private right
over a landholding is met, namely:
a) Continuous occupancy and cultivation by oneself or through
one's predecessors-in-interest for at least thirty (30) years prior to the
effectivity of RA 6940 on 16 April 1990;
b) The land must have been classified as alienable and
disposable for at least thirty (30) years prior to the effectivity on 16
April 1990;
c) One must have paid the real estate tax thereon; and
d) There are no adverse claims on the land.
For these privately claimed public alienable and disposable lands, the
DENR first issues a Free Patent to qualified applicants for the retained area
of not more than five (5) hectares. The DAR shall then cover the excess
area and issue a CLOA or EP and distribute these to qualified
beneficiaries. TcCDIS
For untitled public alienable and disposable lands which are tenanted
and with claimants not qualified under the criteria specified inRA 6940, the
disposition shall be under the jurisdiction of the DENR. The role of the DAR
in this case is limited to the documentation and protection of the leasehold
arrangement between the public land claimant and the tenants.
If the alienable and disposable land is not tenanted but has actual farm
occupants, and the public land claimant lacks the requisite thirty (30)-year
possession, these shall be under the jurisdiction of the DENR and the
appropriate tenurial instrument shall be applied.
It is submitted, however, that these alienable and disposable lands that
are privately claimed by claimants who are not qualified under the criteria
set under RA 6940 (1990) should be turned over to DAR for distribution
under CARP. As these claimants/tenants are mere occupants and can not
be granted Free Patents by the DENR, these land should instead be
committed for agrarian purposes.
A recently issued DENR MC 22 (1999) entitled "DENR Jurisdiction over
all Alienable ad Disposable Lands of the Public Domain," seems to
abrogate or set aside Joint DAR-DENR MC 14 (1997). It directs all
Regional Executive Directors to strictly exercise DENR's jurisdiction over all
alienable and disposable lands of the public domain, including those lands
not specifically placed under the jurisdiction of other government agencies,
and prepare the same for disposition to qualified and legitimate recipients
under the People's Alliance for the Rehabilitation of Environment of the
Office of the Secretary of the DENR.
This recent issuance impliedly prohibits the turnover of alienable and
disposable lands to CARP, and thus, effectively removes remaining public
alienable and disposable lands out of the scope of CARP. While merely an
administrative order that can not overturn legislation on the matter, DENR
MC 22 (1999) poses another roadblock which if not corrected or legally
challenged in court can derail the already delayed coverage of public
agricultural lands. Sec. 7 of RA 6657 explicitly provides that alienable and
disposable public agricultural lands are among the priority lands for
distribution. Needless to say, the political implications of government's
reluctance to commit public agricultural lands for agrarian ends in the face
of its relentless expropriation of private landholdings is serious.
Ancestral Lands
Sec. 9 of RA 6657 defines ancestral lands as those lands that include,
but not limited to, lands in actual, continuous and open possession of an
indigenous cultural community and its members. Sec. 3 (b) of RA
8371 (1997) or the "Indigenous Peoples Rights Act of 1997," has a more
encompassing definition, to wit:
Sec. 3. Definition of Terms. . . .
b). Ancestral Lands Subject to Section 56 hereof, refers to lands
occupied, possessed and utilized by individuals, families, and clans
who are members of the ICCs/IPs (indigenous cultural
communities/indigenous peoples) since time immemorial, by
themselves or through their predecessors-in-interests, under claims of
individual or traditional group ownership continuously, to the present,
except when interrupted by war, force majeure or displacement by
force, deceit, stealth or as a consequence of government projects and
other voluntary dealings entered into by government and private
individuals/corporations, including, but not limited to, residential lots,
rice terraces or paddies, private forests, swidden farms and treelots;
Policy for ancestral lands under CARP
CARP ensures the protection of the right of ICCs/IPs to their ancestral
lands to ensure their economic, social and cultural well being. Systems of
land ownership, land use, and modes of settling land disputes of the
ICCs/IPs shall be recognized and respected in line with principles of self-
determination and autonomy.
The Presidential Agrarian Reform Committee (PARC), notwithstanding
any law to the contrary, has the power to suspend the implementation of
the CARP with respect to ancestral lands for the purpose of identifying and
delineating such lands. It shall also respect laws on ancestral domain
enacted by the respective legislators of autonomous regions, subject to the
provisions of the Constitution and the principles enunciated in RA 6657 and
other national laws.
However, the full protection of the rights of the ICCs/IPs to their
ancestral lands under CARP is hampered by various legal constraints. For
one, while Sec. 9 respects or protects the rights of the ICCs/IPs to their
ancestral lands as means to protect their economic, social and cultural
well-being, its definition of ancestral lands is circumscribed by the limitation
that the Torrens System shall be respected. This is a fundamental legal
setback to the rights of ICCs/IPs. It should be noted that the vested rights
of these communities to ancestral lands have been recognized to have pre-
existed the Regalian Doctrine which underlie the government's perspective
to full ownership and control over natural resources as well as the current
legal system that regulates private property rights.
CARP involves alienable and disposable lands only while ancestral
lands of ICCs/IPs encompass forest and mineral lands and other lands of
the public domain which are by definition inalienable and indisposable.
Thus, the benefit of being awarded CLOAs over ancestral lands to these
ICCs/IPs are limited to private agricultural lands and public agricultural
lands transferred to DAR.
In any case, to promote and protect the rights of the ICCs/IPs over
ancestral lands situated in inalienable and indisposable public lands, DAR
issues member/s of the ICCs who are engaged in agricultural activities over
the said lands CARP Beneficiary Certificate (CBC). Though these do not
vest title, it likewise recognizes the claim of the ICC over these lands and
allows them to access support services from DAR.
RA 8371 (1997) has a more expansive definition of ancestral domains
and ancestral lands which includes lands that are legally determined as
indisposable and inalienable public lands. RA 8371 is a clear departure
from earlier law and regulation for not only does it expand the definition of
ancestral lands but recognizes the right of the ICCs/IPs to own these lands.
National Commission on Indigenous Peoples (NCIP), a body created by RA
8371, is vested, among others with the power and issue Certificates of
Ancestral Domain/Land Titles over ancestral lands.
CHAPTER 2
Agricultural Leasehold
Agricultural Tenancy
Definition and nature of agricultural tenancy
Agricultural tenancy is defined as "the physical possession by a person
of land devoted to agriculture, belonging to or legally possessed by another
for the purpose of production through the labor of the former and of the
members of his immediate farm household in consideration of which the
former agrees to share the harvest with the latter or to pay a price certain
or ascertainable, whether in produce or in money, or both." (RA
1199 [1954], sec. 3)
In Gelos vs. CA, 208 SCRA 608 (1992), the Supreme Court held that
agricultural tenancy is not a purely factual relationship. The written
agreement of the parties is far more important as long it is complied with
and not contrary to law.

Gelos vs. Court of Appeals
208 SCRA 608 (1992)
Facts:
Rafael Gelos was employed by Ernesto Alzona and his parents as their
laborer on a 25,000-sq. m farmland. They executed a written contract
which stipulated that as hired laborer Gelos would receive a daily wage of
P5.00. Three (3) years later, Gelos was informed of the termination of his
services and was asked to vacate the property. Gelos refused and
continued working on the land. Alzona filed a complaint for illegal detainer.
The lower court found Gelos as tenant of the property and entitled to
remain thereon as such. The decision was reversed by the Court of
Appeals. DHACES
Issue:
What is the nature of the contract between Gelos and Alzona?
Held:
The parties entered into a contract of employment, not a tenancy
agreement. The agreement is a lease of services, not of the land in
dispute. . . . The petitioner would disavow the agreement, but his
protestations are less than convincing. His wife's testimony that he is
illiterate is belied by his own testimony to the contrary in another
proceeding. Her claim that they were tricked into signing the
agreement does not stand up against the testimony of Atty. Santos
Pampolina, who declared under his oath as a witness (and as an
attorney and officer of the court) that he explained the meaning of the
document to Gelos, who even read it himself before signing it. . . .
Gelos points to the specific tasks mentioned in the agreement and
suggests that they are the work of a tenant and not of a mere hired
laborer. Not so. The work specified is not peculiar to tenancy. What a
tenant may do may also be done by a hired laborer working under the
direction of the landowner, as in the case at bar. It is not the nature of
the work involved but the intention of the parties that determines the
relationship between them. As this Court has stressed in a number of
cases, "tenancy is not a purely factual relationship dependent on what
the alleged tenant does upon the land. It is also a legal relationship.
The intent of the parties, the understanding when the farmer is
installed, and as in this case, their written agreements, provided these
are complied with and are not contrary to law, are even more
important."
Classes of agricultural tenancy
Agricultural tenancy is classified into share tenancy and leasehold
tenancy (M. A. GERMAN, SHARE AND LEASEHOLD TENANCY, 13
[1995]).
Share tenancy means "the relationship which exists whenever two
persons agree on a joint undertaking for agricultural production wherein
one party furnishes the land and the other his labor, with either or both
contributing any one or several of the items of production, the tenant
cultivating the land personally with aid of labor available from members of
his immediate farm household, and the produce thereof to be divided
between the landholder and the tenant." (Rep. Act No. 3844 [1963]. Sec.
166 [25]).
With the passage of RA 3844, share tenancy has been declared to be
contrary to public policy and abolished (Rep. Act No. 3844[1963], sec. 4)
except in the case of fishponds, saltbeds, and lands principally planted to
citrus, coconuts, cacao, coffee, durian and other similar permanent trees at
the time of the approval of said Act (Rep. Act No. 3844 [1963], sec. 35).
When RA 6389 (1971) was enacted, agricultural share tenancy has been
automatically converted to leasehold but the exemptions remained. It was
only under RA 6657 when the exemptions were expressly repealed.
Leasehold tenancy exists when a person who, either personally or with
the aid of labor available from members of his immediate farm household
undertakes to cultivate a piece of agricultural land susceptible of cultivation
by a single person together with members of his immediate farm
household, belonging to or legally possessed by, another in consideration
of a fixed amount in money or in produce or in both (Rep. Act No.
1199 [1954], sec. 4).
Under RA 6657, the only agricultural tenancy relation that is recognized
is leasehold tenancy. Said law expressly repealed Sec. 35 of RA 3844,
making all tenanted agricultural lands throughout the country subject to
leasehold.
Leasehold tenancy may be established by operation of law, that is,
through the abolition of share tenancy under Sec. 4 of RA 3844; through
the exercise by the tenant of his right to elect leasehold; or by agreement of
the parties either orally or in writing, expressly or impliedly, which was the
condition before 1972 (M.A. German, supra, at 27).
Leasehold relation is instituted in retained areas with tenant(s) under RA
6657 or PD 27 who opts to choose to remain therein instead of becoming a
beneficiary in the same or another agricultural land with similar or
comparable features. The tenant must exercise his option within one (1)
year from the time the landowner manifests his choice of the area for
retention (Rep. Act No. 6657 [1988], sec. 6). Leasehold relation also exists
in all tenanted agricultural lands that are not yet covered under CARP
(DAR Adm. O. No. 5 [1993]).
The institution of leasehold in these areas ensure the protection and
improvement of the tenurial and economic status of tenant-tillers therein.
(Rep. Act No. 6657 [1988], sec. 6).
Leasehold tenancy distinguished from civil law lease
In Gabriel vs. Pangilinan, 58 SCRA 590 (1974), the Supreme Court
distinguished leasehold tenancy from civil law lease.
There are important differences between a leasehold tenancy and a
civil law lease. The subject matter of leasehold tenancy is limited to
agricultural land; that of civil law lease may be either rural or urban
property. As to attention and cultivation, the law requires the leasehold
tenant to personally attend to, and cultivate the agricultural land,
whereas the civil law lessee need not personally cultivate or work the
thing leased. As to purpose, the landholding in leasehold tenancy is
devoted to agriculture, whereas in civil law lease, the purpose may be
for any other lawful pursuits. As to the law that governs, the civil law
lease is governed by the Civil Code, whereas leasehold tenancy is
governed by special laws (at 596).
Elements of Agricultural Tenancy
The following are the essential requisites for the existence of a tenancy
relation:
a) The parties are the landholder and the tenant;
b) The subject is agricultural land;
c) There is consent by the landholder for the tenant to work on
the land, given either orally or in writing, expressly or impliedly;
d) The purpose is agricultural production;
e) There is personal cultivation or with the help of the immediate
farm household; and
f) There is compensation in terms of payment of a fixed amount
in money and/or produce. (Carag vs. CA, 151 SCRA 44
[1987]; Gabriel vs. Pangilinan, 58 SCRA 590 [1974]; Oarde vs. CA,
280 SCRA 235 [1997]; Qua vs. CA, 198 SCRA 236 [1991])
The Supreme Court emphasized in numerous cases that "(a)ll these
requisites must concur in order to create a tenancy relationship between
the parties. The absence of one does not make an occupant of a parcel of
land, or a cultivator thereof, or a planter thereon, ade jure tenant. This is so
because unless a person has established his status as a de jure tenant, he
is not entitled to security of tenure nor is he covered by the Land Reform
Program of the Government under existing tenancy laws." (Caballes v.
DAR, 168 SCRA 254 [1988])
In the case of Teodoro vs. Macaraeg, 27 SCRA 7 (1969), the Court found
all the elements of an agricultural leasehold relation contained in the
contract of lease executed by the parties.


Teodoro vs. Macaraeg
27 SCRA 7 (1969)
Facts:
Macaraeg had been the lessee of the property of Teodoro for the past
seven (7) years when he was advised by the latter to vacate the
property because it would be given to another tenant. Thereafter, a
new tenant was installed who forbade Macaraeg from working on the
riceland. On the other hand, Teodoro denied that Macaraeg was his
tenant and claimed that he had always leased all of his 39-hectare
riceland under civil lease. He further claimed that after the expiration
of his "Contract of Lease" with Macaraeg in 1961, the latter did not
anymore renew his contract.
Held:
The Contract of Lease between the parties contains the essential
elements of a leasehold tenancy agreement. The landholding in
dispute is unmistakably an agricultural land devoted to agricultural
production. More specifically, the parties stipulated that "the property
leased shall be used or utilized for agricultural enterprise only."
Furthermore, the parties also agreed that the farmland must be used
for rice production as could be inferred from the stipulation that "the
rental of nine (9) cavans of palay per hectare for one agricultural year .
. . must be of the same variety (of palay) as that produced by the
LESSEE."
The land is definitely susceptible of cultivation by a single person as it
is of an area of only four and a half (4-1/2) ha. This court has held that
even a bigger area may be cultivated personally by the tenant, singly
or with the help of the members of his immediate farm household.
From the stipulation that "the rental must be of the same variety as
that produced by the LESSEE," it can reasonably be inferred that the
intention of the parties was that Macaraeg personally work the land,
which he did as found by the Agrarian Court, thus: "In the instant
case, petitioner (Macaraeg) cultivated the landholding belonging to
said respondent (Teodoro) for the agricultural year 1960-61 in
consideration of a fixed annual rental." (italics supplied) Moreover,
there is no evidence that Macaraeg did not personally cultivate the
land in dispute. Neither did Teodoro allege, much less prove, that
Macaraeg availed of outside assistance in the cultivation of the said
riceland.
Teodoro is the registered owner of the disputed landholding and he
delivered the possession thereof to Macaraeg in consideration of a
rental certain to be paid in produce. Evidently, there was a valid
leasehold tenancy agreement. Moreover, the provision that the rental
be accounted in terms of produce 9 cavans per hectare is an
unmistakable earmark, considering the other stipulations, that the
parties did actually enter into a leasehold tenancy relation (at 16-
17;underscoring supplied).
Agricultural tenancy relation is different from farm employer-farm
employee relation. The Court clarified the difference in the case of Gelos
vs. CA, 208 SCRA 608 (1992), as follows:
On the other hand, the indications of an employer-employee
relationship are: 1) the selection and engagement of the employee; 2)
the payment of wages; 3) the power of dismissal; and 4) the power to
control the employee's conduct although the latter is the most
important element.
According to a well-known authority on the subject, tenancy
relationship is distinguished from farm employer-farm worker
relationship in that: "In farm employer-farm worker relationship, the
lease is one of labor with the agricultural laborer as the lessor of his
services and the farm employer as the lessee thereof. In tenancy
relationship, it is the landowner who is the lessor, and the tenant the
lessee of agricultural land. The agricultural worker works for the farm
employer and for his labor he receives a salary or wage regardless of
whether the employer makes a profit. On the other hand, the tenant
derives his income from the agricultural produce or harvest." (at 614)
Parties: landholder and tenant
Tenant defined.
A tenant is "a person who by himself, or with the aid available from within
his immediate household, cultivates the land belonging to or possessed by
another, with the latter's consent for purposes of production, sharing the
produce with the landholder or for a price certain or ascertainable in
produce or in money or both, under the leasehold tenancy system." (Rep.
Act No. 1199 [1954], sec. 5 (a)).
An overseer of a coconut plantation is not considered a tenant.

Zamoras vs. Su, Jr.
184 SCRA 248 (1990)
Facts:
Zamoras was hired by Su as overseer of his coconut land in Dapitan
City. Zamoras was tasked to have the land titled in Su's name. He was
also "assigning portions of the land to be worked by tenants,
supervising the cleaning, planting, care and cultivation of the land, the
harvesting of coconuts and selling of the copra." As compensation, he
was paid salary of P2,400 per month plus 1/3 of the proceeds of the
sales of the copra. Su got another 1/3 of the proceeds while the other
third went to the tenants. In 1981, Su obtained a loan from Anita
Hortellano and the latter was authorized by Su to harvest the
coconuts. Meanwhile, he informed Zamoras that he was being
temporarily laid-off until the loan is settled. Zamoras filed a case for
illegal termination and breach of contract before the Regional
Arbitration Branch of the Ministry of Labor. The Labor Arbiter held that
Zamoras' dismissal was without just cause and ordered Zamoras
reinstatement. On appeal, the National Labor Relation Commission
reversed the Labor Arbiter by holding that there is no employee-
employer relation existing between the parties but a landlord-tenant
relation hence jurisdiction rests with the agrarian court. Zamoras
assailed the decision of NLRC.
Held:
The NLRC's conclusion that a landlord-tenant relationship existed
between Su and Zamoras is not supported by the evidence which
shows that Zamoras was hired by Su not as a tenant but as overseer
of his coconut plantation. As overseer, Zamoras hired the tenants and
assigned their respective portions which they cultivated under
Zamoras' supervision. The tenants dealt directly with Zamoras and
received their one-third share of the copra produce from him. The
evidence also shows that Zamoras, aside from doing administrative
work for Su, regularly managed the sale of copra processed by the
tenants. There is no evidence that Zamoras cultivated any portion of
Su's land personally or with the aid of his immediate farm household.
The following circumstances indicate an employer-employee
relationship between them: 1. Zamoras was selected and hired by Su
as overseer of the coconut plantation. 2. His duties were specified by
Su. 3. Su controlled and supervised the performance of his duties. He
determined to whom Zamoras should sell the copra produced from the
plantation. 4. Su paid Zamoras a salary of P2,400 per month plus one-
third of the copra sales every two months as compensation for
managing the plantation."
There is no tenancy relation because the element of personal cultivation
does not exist.

Castillo vs. CA
205 SCRA 529 (1992)
Facts:
Alberto Ignacio filed a complaint for injunction against Castillo alleging
that he is the agricultural tenant of the latter. He claims that Castillo
allowed him to construct a rest house in the property and that,
thereafter, Castillo started cutting fruit-bearing trees on the land and
filled with adobe stones the area intended for vegetables. On the other
hand, Castillo denied that Ignacio was his tenant but that the latter
was only a "magsisiga" of the landholding and that he did not ask
permission from Ignacio when he constructed his rest house. The trial
court found no tenancy relationship between the parties but this was
reversed by the Court of Appeals.
Held:
The element of personal cultivation is absent in this case. The alleged
tenant "is a businessman by occupation and this is his principal source
of income. He manufactures hollow blocks. He also has a piggery and
poultry farm as well as a hardware store on the land adjoining the
subject land. To add to that, the respondent farms the riceland of one
Dr. Luis Santos. It is thus evident that the working hours of the
respondent as a businessman and his other activities do not permit
him to undertake the work and obligations of a real tenant. This is
further supported by the undisputed fact that the respondent cannot
even personally perform the work of a smudger because on 22
October 1986, the respondent hired some 20 people who are not
members of his family to cut and burn the grass in the premises of the
subject land." (at 535-536).
An owner tilling his own agricultural land is not a tenant within the
contemplation of the law (Baranda vs. Baguio, 189 SCRA 194 (1990).
In Oarde vs. CA, et al., 280 SCRA 235 (1997), certifications of
tenancy/non-tenancy issued by DAR are not conclusive.
"The certifications issued by administrative agencies or officers that a
certain person is a tenant are merely provisional and not conclusive on
courts, as ruled by this Court in Cuao vs. Court of Appeals,
citing Puertollano vs. IAC. Secondly, it is well-settled that the "findings
of or certifications issued by the Secretary of Agrarian Reform, or his
authorized representative, in a given locality concerning the presence
or absence of a tenancy relationship between the contending parties is
merely preliminary or provisional and is not binding upon the courts."
(at 246)
Landholder-lessor
A landholder-lessor is defined as "any person, natural or juridical, either
as owner, lessee, usufructuary or legal possessor of agricultural land, who
lets, leases or rents to another said property for purposes of agricultural
production and for a price certain or ascertainable either in an amount of
money or produce." (Rep. Act No. 1199 [1954], sec. 42). Thus, consent
need not be necessarily given personally by the registered owner as long
as the person giving the consent is the lawful landholder as defined by law.

Bernas vs. Court of Appeals
225 SCRA 119 (1993)
Facts:
Natividad Deita is the owner of a 5,831-sq m property which she
entrusted to her brother, Benigno, so that he could use the fruits
thereof to defray the cost of his children's education in Manila. The
property was leased by Bernas pursuant to a production sharing
arrangement executed between Bernas and Benigno. Natividad
played no part in this arrangement. In 1985, the lots were returned by
Benigno to his sister but when the owners sought to take possession,
Bernas refused to relinquish the property. Bernas was claiming that he
was an agricultural lessee entitled to security of tenure. Natividad filed
an action for recovery of possession. The trial court ruled in favor of
Bernas but this was subsequently reversed by the CA.
Issue:
Is consent by a legal possessor, even if without the consent of
landowner, sufficient to create tenancy relationship?
Held:
Yes. As legal possessor of the property, Benigno had the authority
and capacity to enter into an agricultural leasehold relation with
Bernas. "The law expressly grants him, as legal possessor, authority
and capacity to institute an agricultural leasehold lessee on the
property he legally possessed." (at 125-126)
Subject is agricultural land
For agricultural tenancy to exist, the subject of the agreement must be
an agricultural land.
RA 6657 defines the term "agricultural land" as "land devoted to
agricultural activity as defined in this Act and not classified as mineral,
forest, residential, commercial or industrial land." (see discussion on scope
of CARP, Chapter I). Under RA 3844, "agricultural land" refers to land
devoted to any growth, including but not limited to crop lands, salt beds,
fish ponds, idle land and abandoned land.
The area of agricultural land that a lessee may cultivate has no limit, but
he should cultivate the entire area leased. The three (3) hectare limit
under RA 6657 applies only to the award that may be given to the agrarian
reform beneficiary.
Consent by landholder
As discussed earlier, consent must be given by the true and lawful
landholder of the property. In Hilario vs. IAC, 148 SCRA 573 (1987), the
Supreme Court held that tenancy relation does not exist where a usurper
cultivates the land.

Hilario vs. Intermediate Appellate Court
148 SCRA 573 (1987)
Facts:
Salvador Baltazar was working on the land pursuant to a contract
executed between him and Socorro Balagtas involving a two (2)-ha
property. According to Baltazar, in 1965, he relinquished 1.5 ha to
certain individuals and what remained under his cultivation was -ha
owned by Corazon Pengzon. After Socorro's death, no new contract
was executed. Sometime in 1980, the Hilarios started cultivating a
4,000-sq m portion of the property and enjoined Baltazar from entering
the same. The Hilarios claimed that they acquired the landholding
from the Philippine National Bank after a foreclosure proceeding. On
the other hand, Corazon Pengzon explained that she did not get any
share from the produce of the land since 1964 and she would not have
accepted it knowing that she did not own the property anymore.
Held:
Baltazar is not a tenant because no consent was given by Pengzon.
As held in Tiongson v. Court of Appeals, 130 SCRA 482, tenancy
relationship can only be created with the consent of the true and lawful
landholder through lawful means and not by imposition or usurpation.
"So the mere cultivation of the land by usurper cannot confer upon him
any legal right to work the land as tenant and enjoy the protection of
security of tenure of the law (Spouses Tiongson vs. Court of Appeals,
130 SCRA 482)."
Successors-in-interest of the true and lawful landholder/owner who gave
the consent are bound to recognize the tenancy established before they
acquired the agricultural land.

Endaya vs. Court of Appeals
215 SCRA 109 (1992)
Facts:
Spouses San Diego owned a 2.0200-ha rice and corn land. The
property has been cultivated by Pedro Fideli as a tenant of the couple
under a 50-50 sharing agreement. In 1974, a lease contract was
executed between spouses San Diego and a certain Regino
Cassanova for a period of four (4) years at P400.00 per ha per annum
rental and gave him the authority to oversee the planting of crops. The
contract was subsequently renewed to last until 1980. In both cases,
Fideli signed as witness. While the contract was subsisting, Fideli
continuously worked on the property, sharing equally with Cassanova
the net produce of the harvests. In 1980, the land was sold to spouses
Endaya. Fideli continued tilling the land despite the Endaya's demand
to vacate the property. Fideli refused to leave and deposited with
Luzon Development Bank the landowner's share in the harvests. Fideli
filed a complaint praying that he be declared the agricultural tenant of
the Endayas. The trial court ruled in favor of the Endayas but the
same was subsequently reversed by the CA holding that Fideli is an
agricultural lessee entitled to security of tenure.
Held:
It is true that the Court has ruled that agricultural tenancy is not
created where the consent of the true and lawful owners is absent.
But this doctrine contemplates a situation where an untenanted farm
land is cultivated without the landowner's knowledge or against her will
or although permission to work on the farm was given, there was no
intention to constitute the worker as the agricultural lessee of the farm
land. The rule finds no application in the case at bar where the
petitioners are successors-in-interest to a tenanted land over which an
agricultural leasehold has long been established. The consent given
by the original owners to constitute private respondent as the
agricultural lessee of the subject landholding binds private
respondents who, as successors-in-interest of the Spouses San
Diego, step into the latter's shoes, acquiring not only their rights but
also their obligations. (at 118; underscoring supplied).
Purpose is agricultural production
Tenancy status arises only if an occupant of a parcel of land has been
given its possession for the primary purpose of agricultural production.

Caballes vs. Department of Agrarian Reform
168 SCRA 248 (1988)
Facts:
Spouses Caballes acquired subject land from the Millenes family. Prior
to the sale, Abajon constructed his house on a portion of the property,
paying a monthly rental to the owner. Abajon was also allowed to plant
on a portion of the land and that the produce thereof would be shared
by them on a 50-50 basis. When the new owners took over, they told
Abajon to transfer his dwelling to the southern portion of the property
because they would be building a poultry near Abajon's house. Later,
the Caballes asked Abajon to leave because they needed the
property. Abajon refused. During the trial the former landowner
testified that Abajon dutifully gave her 50% share of the produce of the
land under his cultivation.
Held:
The fact of sharing alone is not sufficient to establish a tenancy
relationship. The circumstances of this case indicate that the private
respondent's status is more of a caretaker who was allowed by the
owner out of benevolence or compassion to live in the premises and to
have a garden of some sort at its southwestern side rather than a
tenant of the said portion. Agricultural production as the primary
purpose being absent in the arrangement, it is clear that the private
respondent was never a tenant of the former owner, Andrea Millenes.
Consequently, Sec. 10 of RA 3844, as amended, does not apply.
Simply stated, the private respondent is not a tenant of the herein
petitioner.
Personal cultivation
Cultivation
Under DAR AO 5 (1993), cultivation is not limited to the plowing and
harrowing of the land, but also the husbanding of the ground to forward the
products of the earth by general industry, the taking care of the land and
fruits growing thereon, fencing of certain areas, and the clearing thereof by
gathering dried leaves and cutting of grasses. In coconut lands, cultivation
includes the clearing of the landholding, the gathering of the coconuts, their
piling, husking and handling as well as the processing thereof into copra,
although at times with the aid of hired laborers.
Meaning of "Personal Cultivation"
"Personal cultivation" exists when a person cultivates the land by
himself and with the aid available from his immediate farm household.
In Oarde vs. CA, et al., supra, the Court held that the element of
personal cultivation is essential for an agricultural leasehold. There should
be personal cultivation by the tenant or by his immediate farm household or
members of the family of the lessee or other persons who are dependent
upon him for support or who usually help him in his activities (Evangelista
vs. CA, 158 SCRA 41). The law is explicit in requiring the tenant and his
immediate family to work the land (Bonifacio vs. Dizon, 177 SCRA 294),
and the lessee cannot hire many persons to help him cultivate the land (De
Jesus vs. IAC, 175 SCRA 559). In Gabriel vs. Pangilinan, supra, the Court
held that the tenancy relation was severed when the tenant and/or his
immediate farm household ceased from personally working the fishpond
when he became ill and incapacitated.
Compensation in money and/or produce
In Matienzo v. Servidad, 107 SCRA 276 (1981), the Supreme Court held
that:
A tenant is defined under section 5(a) of Republic Act No. 1199 as a
person who, himself, and with the aid available from within his
immediate household, cultivates the land belonging to or possessed
by another, with the latter's consent for purposes of production,
sharing the produce with the landholder under the share tenancy
system, or paying to the landholder a price certain or ascertainable in
produce or in money or both, under the leasehold tenancy system.
From the above definition of a tenant, it is clear that absent a sharing
arrangement, no tenancy relationship had ever existed between the
parties. What transpired was that plaintiff was made overseer over a
7-hectare land area; he was to supervise applications for loans from
those residing therein; he was allowed to build his house thereon and
to plant specified plants without being compensated; he was free to
clear and plant the land as long as he wished; he had no sharing
arrangement between him and defendant; and he was not obligated to
pay any price certain to nor share the produce, with the
latter. CaSHAc
Security of Tenure
Under Sec. 7 of RA 1199, "the agricultural leasehold relation once
established shall confer upon the agricultural lessee the right to continue
working on the landholding until such leasehold relation is extinguished.
The agricultural lessee shall be entitled to security of tenure on his
landholding and cannot be ejected therefrom unless authorized by the
Court for causes herein provided."
The Supreme Court has consistently ruled that once a leasehold relation
has been established, the agricultural lessee is entitled to security of
tenure. The tenant has a right to continue working on the land except when
he is ejected therefrom for cause as provided by law (De Jesus vs.
IAC, 175 SCRA 559 [1989]).
Transfer of ownership or legal possession does not affect security
of tenure.
In Tanpingco vs. IAC, 207 SCRA 653 (1992), the Court upheld the
validity of donation but the donee must respect the rights of the tenant and
ordered the donee to pay the tenant disturbance compensation.

Tanpingco vs. Intermediate Appellate Court
207 SCRA 653 (1992)
Facts:
In 1985, Tanpingco filed a complaint for payment of disturbance
compensation against Benedicto Horca, Sr. Tanpingco alleged that he
is the tenant-lessee in Horca's riceland under a leasehold contract;
that he was asked to desist from working on the land because it was
already donated to the Ministry of Education, Culture and Sports; and
that he is willing to accept disturbance compensation or in the
alternative to remain as tenant-lessee of the subject land.
Issue:
Is the security of tenure of a tenant affected by the transfer of
ownership or legal possession of an agricultural land?
Held:
Under Art. 428 of the Civil Code, the owner has the right to dispose of
a thing without other limitations than those established by law. As an
incident of ownership, therefore, there is nothing to prevent a
landowner from donating his naked title to the land. However, the new
owner must respect the rights of the tenant. Sec. 7 of RA No. 3844, as
amended, gives the agricultural lessee the right to work on the
landholding once the leasehold relationship is established. It also
entitles him to security of tenure on his landholding. He can only be
ejected by the court for cause. Time and again, this Court has
guaranteed the continuity and security of tenure of a tenant even in
cases of a mere transfer of legal possession. As elucidated in the case
of Bernardo v. Court of Appeals (168 SCRA 439 [1988]), security of
tenure is a legal concession to agricultural lessees which they value
as life itself and deprivation of their landholdings is tantamount to
deprivation of their only means of livelihood. Also, under Section 10 of
the same Act, the law explicitly provides that the leasehold relation is
not extinguished by the alienation or transfer of the legal possession of
the landholding. The only instances when the agricultural leasehold
relationship is extinguished are found in Section 8, 28 and 35 of the
Code of Agrarian Reforms of the Philippines. The donation of the land
did not terminate the tenancy relationship. However, the donation itself
is valid." (at 657-658; underscoring supplied).
Constitutionality of the provision on security of tenure
The constitutionality of the provision on security of tenure has long been
settled by the Supreme Court in the case of Primero vs. Court of Agrarian
Relations, 101 Phil. 675 (1957).

Primero vs. Court of Agrarian Relations
101 Phil. 675 (1957)

Facts:
Primero owns a tenanted riceland in Cavite. Because of his desire to
let the property to one Porfirio Potente, he notified his tenant advising
the latter to vacate the land. The tenant refused. Primero filed a case
with CAR which subsequently dismissed the same. On appeal,
Primero assailed the constitutionality of Sec. 9 and 50 of RA 1199
claiming that said provisions are limitations on freedom of contract, a
denial of equal protection of law, and an impairment of, or limitation
on, property rights.
Held:
The provisions of law assailed as unconstitutional do not impair the
right of the landowner to dispose or alienate his property nor prohibit
him to make such transfer or alienation; they only provide that in case
of transfer or in case of lease, as in the instant case, the tenancy
relationship between the landowner and his tenant should be
preserved in order to insure the well-being of the tenant or protect him
from being unjustly dispossessed by the transferee or purchaser of the
land; in other words, the purpose of the law in question is to maintain
the tenants in the peaceful possession and cultivation of the land or
afford them protection against unjustified dismissal from their
landholdings. Republic Act 1199 is unquestionably a remedial
legislation promulgated pursuant to the social justice precepts of the
Constitution and in the exercise of the police power of the state to
promote the commonwealth. It is a statute relating to public subjects
within the domain of the general legislative powers of the State and
involving the public rights and public welfare of the entire community
affected by it. Republic Act 1199, like the previous tenancy laws
enacted by our lawmaking body, was passed by congress in
compliance with the constitutional mandates that "the promotion of
social justice to insure the well-being and economic security of all the
people should be the concern of the State" (Art II, sec. 5) and that "the
state shall regulate the relations between landlord and tenant in
agriculture" (Art. XIV, sec. 6). (at 680).
In Pineda vs. de Guzman, 21 SCRA 1450 (1967), the Supreme Court
also held:
Section 49 of the Agricultural Tenancy Act, Republic Act 1199, as
amended, enunciates the principle of security of tenure of the tenants,
such that it prescribes that the relationship of landholder and tenant
can only be terminated for causes provided by law. The principle is
epitomized by the axiom on land tenure that once a tenant, always a
tenant. Attacks on the constitutionality of this guarantee have centered
on the contention that it is a limitation on freedom of contract, a denial
of the equal protection of the law, and an impairment of or a limitation
on property rights. The assault is without reason. The law simply
provides that the tenancy relationship between the landholder and his
tenant should be preserved in order to insure the well-being of the
tenant and protect him from being unjustly dispossessed of the land.
Its termination can take place only for causes and reasons provided in
the law. It was established pursuant to the social justice precept of the
State to promote the common weal. (Primero vs. Court of Industrial
Relations, G.R. No. L-10594, May 29, 1957) (at 1456).
Rights and Responsibilities of the Parties
Rights and responsibilities of lessee
The lessee shall have the following rights:
a) To have possession and peaceful enjoyment of the land;
b) To manage and work on the land in a manner and method of
cultivation and harvest which conform to the proven farm practices;
c) To mechanize all or any phase of his farm work;
d) To deal with millers and processors and attend to the issuance
of quedans and warehouse receipts of the produce due him/her;
e) To continue in the exclusive possession and enjoyment of any
homelot the lessee may have occupied upon the effectivity of RA
3844;
f) To be indemnified for the costs and expenses incurred in the
cultivation and for other expenses incidental to the improvement of the
crop in case the lessee surrenders, abandons or is ejected from the
landholding;
g) To have the right of pre-emption and redemption; and
h) To be paid disturbance compensation in case the conversion
of the farmholding has been approved (Rep. Act No. 3844[1963], sec.
23, 24, 25, 11, 12, 36)
On the other hand, the lessee shall have the following responsibilities
under Sec. 26 of RA 3844:
a) Cultivate and take care of the farm, growing crops, and other
improvements on the land and perform all the work therein in
accordance with proven farm practices;
b) Inform the lessor within a reasonable time of any trespass
committed by third persons on the farm, without prejudice to his/her
direct action against the trespasser;
c) Take reasonable care of the work animals and farm
implements delivered to him/her by the lessor and see to it that they
are not used for purposes other than those intended, or used by
another without the knowledge and consent of the lessor;
d) Keep the farm and growing crops attended to during the work
season; and
e) To pay the lease rental to the lessor when it falls due.
One of the rights of a lessee is to be entitled to a homelot. But only the
tenant-lessee has this right and that members of the immediate family of
the tenants are not entitled to a homelot.

Cecilleville Realty and Service Corporation vs. Court of
Appeals
278 SCRA 819 (1997)
Facts:
Petitioner Cecilleville Realty owns a parcel of land, a portion of which
is occupied by Herminigildo Pascual. Despite repeated demands,
Herminigildo refused to vacate the property and insisted that he is
entitled to occupy the land since he is helping his mother, the
corporation's tenant, to cultivate the property.
Held:
Only a tenant is granted the right to have a home lot and the right to
construct or maintain a house thereon. And here, private respondent
does not dispute that he is not petitioner's tenant. In fact, he admits
that he is a mere member of Ana Pascual's immediate farm
household. Under the law, therefore, we find private respondent not
entitled to a homelot. Neither is he entitled to construct a house of his
own or to continue maintaining the same within the very small
landholding of petitioner. . . . Thus, if the Court were to follow private
respondent's argument and allow all the members of the tenant's
immediate farm household to construct and maintain their houses and
to be entitled to not more than one thousand (1,000) square meters
each of home lot, as what private respondent wanted this Court to
dole-out, then farms will be virtually converted into rows, if not
colonies, of houses.
In sugarcane lands, the lessee shall have the following rights to be
exercised by him personally or through a duly registered
cooperative/farmers' association of which he is a bona fide member (DAR
Adm. O. No. 5 [1993]):
a) To enter into a contract with the sugar central millers for the
milling of the sugarcane grown on the leased property;
b) To be issued a warehouse receipt (quedan) or molasses
storage certificate by the sugar central for the manufactured sugar,
molasses and other by-products;
c) To have free access to the sugar central's factory, facilities,
and laboratory for purposes of checking and/or verifying records and
procedures in the processing of sugarcane through professional
representation;
d) To be furnished a weekly statement of cane and sugar account
showing, among other things, the tonnage of the delivered cane and
analysis of the crusher juice;
e) To be given 30 days notice in writing before the sugar and
other by-products are sold through public auction; and
f) To be provided with the standard tonnage allocation by the
miller/sugar central.
Rights and responsibilities of lessor
The lessor shall have the following rights:
a) To inspect and observe the extent of compliance with the terms and
conditions of the leasehold contract;
b) To propose a change in the use of the landholding to other
agricultural purposes, or in the kind of crops planted;
c) To require the lessee, taking into consideration his/her financial
capacity and the credit facilities available to him/her, to adopt proven farm
practices necessary to the conservation of the land, improvement of the
fertility and increase in productivity; and
d) To mortgage expected rentals (Rep. Act No. 3844 [1963], sec. 29):
The lessor may propose a change in use but the change shall be
agreed upon by the landowner and the lessee. In case of disagreement,
the matter may be settled by the Provincial Agrarian Reform Adjudicator
(PARAD), or in his absence the Regional Agrarian Reform Adjudicator
(RARAD) (DAR Adm. O. No. 5 [1993])
The lessor shall have the following obligations:
a) To keep the lessee in peaceful possession and cultivation of
the land; and
b) To keep intact such permanent useful improvements existing
on the landholding at the start of the leasehold relation (Rep. Act No.
3844 [1963], sec. 30).
Sec. 31 of RA 3844 provides that the lessor is prohibited to perform any
of the following acts:
a) To dispossess the lessee of his/her landholding except upon
authorization by the Court;
b) To require the lessee to assume, directly or indirectly, the
payment of the taxes or part thereof levied by the government on the
land;
c) To require the lessee to assume, directly or indirectly, any rent
or obligation of the lessor to a third party;
d) To deal with millers or processors without written authorization
of the lessee in cases where the crop has to be sold in processed form
before payment of the lease rental;
e) To discourage, directly or indirectly, the formation,
maintenance or growth of unions or organizations of lessees in his/her
landholding; and
f) For coconut lands, indiscriminate cutting of coconut trees will
be deemed prima facie evidence to dispossess the tenant of his/her
landholding unless there is written consent of the lessee and there is
PCA certification, copy of the findings and recommendations of which
shall be furnished to affected tenants or lessees, or a resolution from
the Municipal Board allowing the cutting for valid reasons (DAR Adm.
O. No. 5 [1993] and DAR Adm. O. No. 19 [1989]).
Termination of Tenancy Relation
Causes for termination of leasehold relation
Section 8 of RA 3844 provides that agricultural leasehold relation shall
be extinguished by the following acts or omissions:
a) Abandonment of the landholding without the knowledge of the
agricultural lessor;
b) Voluntary surrender of the landholding by the agricultural
lessee, written notice of which shall be served three months in
advance; or
c) Absence of an heir to succeed the lessee in the event of
his/her death or permanent incapacity.
Conversion of the land to non-agricultural uses also extinguishes the
leasehold relation because the subject land is no longer an agricultural land
and the purpose is no longer agricultural production. However, under Sec.
16 of DAR AO 1 (1999), the tenant affected by the conversion is entitled to
disturbance compensation which must be paid within sixty (60) days from
the issuance of the order of conversion.
Abandonment
In the case of Teodoro vs. Macaraeg, supra, it was held that the word
"abandon," in its ordinary sense, means to forsake entirely, to forsake or
renounce utterly. "The emphasis is on the finality and the publicity with
which some thing or body is thus put in the control of another, and hence
the meaning of giving up absolutely, with intent never again to resume or
claim one's rights or interests." In other words, the act of abandonment
constitutes actual, absolute and irrevocable desertion of one's right or
property. . . . Likewise, failure to cultivate the land by reason of the forcible
prohibition to do so by a third party cannot also amount to abandonment,
for abandonment presupposes free will." (at 19-20; underscoring supplied).
Voluntary surrender of property
The tenant's intention to surrender landholding cannot be presumed,
much less determined by mere implication, but must be convincingly and
sufficiently proved.

Nisnisan, et al vs. Court of Appeals
294 SCRA 173 (1998)
Facts:
Spouses Gavino and Florencia Nisnisan are the owners of a 4.9774
hectare land in Davao del Sur. Policarpio, the son of Gavino, has been
cultivating one (1) ha of said land since 1961. In 1976, Gavino and
Policarpio executed a leasehold contract which stipulates a sharing
arrangement of 1/3:2/3 of the harvest. In 1978, Gavino sold two (2) ha
of the land, including the land tenanted by Policarpio, to spouses
Mancera. As a result of the sale, Policarpio and family were ousted.
They then filed an action for reinstatement of tenancy against the
Manceras. The Manceras, on the other hand, countered that spouses
Nisnisan have no cause of action because they voluntarily
surrendered their landholding.
Issue:
Is the tenant deemed to have voluntarily surrendered subject
landholding?
Held:
Other than their bare allegations, private respondents failed to present
any evidence to show that petitioners-spouses surrendered their
landholding voluntarily after the private respondents purchased the
subject property. Moreover, the filing of the complaint for
reinstatement of leasehold tenancy by petitioners-spouses against
private respondents before the CAR militates against the private
respondents' claim that petitioners-spouses voluntarily surrendered
their landholding to them. Under Sec. 8 of RA 3844, voluntary
surrender, as a mode of extinguishing agricultural leasehold tenancy
relations, must be convincingly and sufficiently proved by competent
evidence. The tenant's intention to surrender the landholding cannot
be presumed, much less determined by mere implication.
Effect of death or permanent incapacity of tenant-lessee on
leasehold relation
Under Sec. 9 of RA 3844, in case of death or permanent incapacity, the
leasehold relation continues between the lessor and the person who can
cultivate the land personally, chosen by the lessor within one month from
such death or incapacity, from among the following:
a) The surviving spouse;
b) The eldest direct descendant by consanguinity;
c) The next eldest descendant or descendants in the order of
age.
The age requirement is applied under the presumption that all
heirs/successors are qualified.
The leasehold relation is not terminated by death or permanent
incapacity of the landholder-lessor. It binds his legal heirs (Rep. Act No.
3844 [1963], sec. 9).
Also, Sec. 10 of RA 3844 provides that the mere expiration of the term
or period in a leasehold contract nor by sale, alienation or transfer of the
legal possession of the landholding does not extinguished leasehold. In
these cases, the transferee is subrogated to the rights and substituted to
the obligations of the lessor.
Dispossession of Tenants
Under Sec. 36 of RA 3844, dispossession of tenants may be authorized
by the Court in a judgment that is final and executory if after due hearing it
is shown that:
a) The lessee failed to substantially comply with the terms and
conditions of the contract or with pertinent laws unless the failure is
caused by a fortuitous event or force majeure;
b) The lessee planted crops or used the land for a purpose other
than what has been previously agreed upon;
(Note: Under DAR AO 5 [1993], the lessee is now allowed to
intercrop or plant secondary crops after the rental has been fixed,
provided the lessee shoulders the expenses.)
c) The lessee failed to adopt proven farm practices necessary to
conserve the land, improve its fertility, and increase its productivity
taking into consideration the lessee's financial capacity and the credit
facilities available to him;
d) There has been substantial damage, destruction or
unreasonable deterioration of the land or any permanent improvement
thereon due to the fault or negligence of the lessee;
e) The lessee failed to pay lease rental on time except when such
non-payment is due to crop failure to the extent of 75% as a result of a
fortuitous event;
f) The lessee employed a sub-lessee; or
g) The landholding is declared by the DAR to be suited for
residential, commercial, industrial or some other urban purposes
subject to payment of disturbance compensation to the lessee.
(Note: Under Sec. 36 [1] of RA 3844, as amended by RA 6389,
disturbance compensation is equivalent to five [5] times the average of the
gross harvest on his landholding during the last five [5] preceding calendar
years.)
In the case of Garchitorena vs. Panganiban, 6 SCRA 338 (1962), it was
held that when non-payment of lease rentals occurs for several years, said
omission has the effect of depriving the landowner of the enjoyment of the
possession and use of the land.
Under Sec. 36 (1) of RA 3844, as amended, a lessor who ejects his
tenant without the court's authorization shall be liable for:
a) fine or imprisonment;
b) damages suffered by the agricultural lessee in addition to the
fine or imprisonment for unauthorized dispossession;
c) payment of attorney's fees incurred by the lessee; and
d) the reinstatement of the lessee.
Determination of Lease Rentals
The lease rental shall not be more than the equivalent of 25% of the
average normal harvest during the three (3) agricultural years preceding
the following dates:
10 September 1971, the date of effectivity of RA 6389 for
tenanted rice and corn lands;
15 June 1988 or date the tenant opted to enter into leasehold
agreement, whichever is sooner, for tenanted sugar lands; or
15 June 1988 or date of leasehold agreement by the parties
concerned, whichever is sooner, for all other agricultural lands after
deducting the amount used for seeds and the cost of harvesting,
threshing, loading, hauling and processing whichever is applicable
(DAR Adm. O. No. 5 [1993]).
DAR AO 5 (1993) defines "normal harvest" as the usual or regular
produce obtained from the land when it is not affected by any fortuitous
event like drought, earthquake, volcanic eruption, and the like. If there had
been no normal harvest, the estimated normal harvest during the three (3)
preceding agricultural years shall be considered as the normal harvest.
"Agricultural year" refers to the period of time required for raising a
particular product, including the preparation of the land, sowing, planting
and harvesting of crops and, whenever applicable, threshing of said crops:
Provided, however, That in case of crops yielding more than one harvest
from one planting, "agricultural year" shall be the period from the
preparation of the land to the first harvest and thereafter from harvest to
harvest. In both cases, the period may be shorter or longer than a calendar
year.
The law states that only the amount used for seeds and the cost of
harvesting, threshing, loading, hauling, and processing, whichever is
applicable, are considered allowable deductions from the normal harvest in
order to determine the lease rental.
The lease rental shall cover the whole farmholding attended to by the
lessee. Computation of lease rental shall include both primary and
secondary crops existing as of 15 June 1988. Secondary crops which are
planted to an aggregate area of half a hectare or less shall not be included
in the computation of the lease rental (DAR Adm. O. No. 5 [1993]).
If the land has been cultivated for a period of less than three agricultural
years prior to 15 June 1988, the initial rental shall be based on the average
normal harvest during the preceding agricultural years when the land was
actually cultivated.
After the lapse of the first three (3) normal harvests, the final rental shall
be based on the average normal harvest during these three (3) preceding
agricultural years.
CHAPTER 3
Land Acquisition
Registration of Landholdings and Landowners
Sec. 14 of RA 6657 requires all persons, natural or juridical, and
government entities that own or claim to own agricultural lands, whether, in
their names or in the name of others, are required, to file a sworn statement
with the assessor's office, containing the following data:
a) the description and area of the property;
b) the average gross income from the property for at least three
(3) years;
c) the names of all tenants and farmworkers therein;
d) the crops planted in the property and the area covered by each
crop as of 1 June 1987;
e) the terms of mortgages, lease, and management contracts
subsisting as of 1 June 1987; and
f) the latest declared market value of the land as determined by
the city or provincial assessor.
The registration drive, denominated as Listasaka II, is governed
by Department of Finance MC 5 (1988).
Effect of failure to register
Under Sec. 4 of EO 229 (1987), which originally provided for the
compulsory registration of agricultural landholdings, if the landowner fails to
register within the prescribed period, the government shall base the
valuation of his property for landowner compensation purposes on the
City/Provincial Assessor's value.
The effects of non-registration provided in Sec. 40 of EO 229, however,
are now deemed superseded by Sec. 14 of RA 6657which does not
provide for such effects. In the Association cases, the Supreme Court
stated:
The complaint against the effects of non-registration of the land under
E.O. No. 229 does not seem to be viable any more as it appears that
Section 4 of the said Order has been superseded by Section 14 of the
CARP Law. This repeats the requisites of registration as embodied in
the earlier measure but does not provide, as the latter did, that in case
of failure or refusal to register the land, the valuation thereof shall be
that given by the provincial or city assessor for tax purposes. On the
contrary, the CARP Law says that the just compensation shall be
ascertained on the basis of the factors mentioned in its Section 17 and
in the manner provided for in Section 16.
Registration of Potential Beneficiaries
The law requires the DAR to register all potential beneficiaries and
compile a data bank containing pertinent information on them.
The registration of beneficiaries is governed by DAR AO 10 (1989). The
objectives of this activity include the validation of data reported by
landowners under the LISTASAKA program, and to provide basic data for
the planning and development of support programs.
Beneficiaries of PD 27 who have culpably sold, disposed of, or
abandoned their lands, and landowners of PD 27 beneficiaries who already
own or have already received at least three (3) hectares of land are
excluded from registration, they being disqualified to become beneficiaries
under Secs. 22 and 23 of RA 6657.
Effect of farmer's failure to register
The failure of a farmer to register does not have any effect prejudicial to
his rights as a potential farmer-beneficiary. DAR AO 10 (1989) does not
provide for any penalty against the failure of a farmer to register. He may
simply avail of the next registration period. Under this administrative order,
the registration of new qualified registrants is undertaken as a continuing
activity of the DAR.
Landholdings Covered by CARP
The schedule of acquisition and distribution of agricultural lands covered
by CARP is provided for under Sec. 7 of RA 6657. Land distribution and
acquisition covers three phases. However, this does not mean that in the
implementation of the program, a particular category should be finished first
before going to the next category. In other words, the three (3) phases as
outlined in Sec. 7 should not be interpreted as an exclusive order of priority.
Rather, what is contemplated is simultaneous over-all implementation
(Records of the Senate, Volume I, No. 101, pp. 3239-32340; Speech of
Rep. Roo, Congressional Deliberations, 6 October 1987). The guiding
principle in the implementation of the program is the readiness of the
different farmer groups to work fully without restraints on the land and make
the land productive (Sponsorship Speech of Rep. Andolana, Congressional
Deliberations, 23 September 1987).
It is within this framework that the following lands are to be acquired by
the Republic of the Philippines for ultimate distribution to the qualified
farmer-beneficiaries: rice and corn lands under PD 27/EO 228; idle or
abandoned lands; lands foreclosed by private and government financial
institutions; private agricultural lands; lands acquired by the Presidential
Commission on Good Government (PCGG), and public agricultural lands.
Rice and corn lands under PD 27 and EO 228
At the time of the deliberations on House Bill No. 400, otherwise known
as "An Act Instituting a Comprehensive Agrarian Reform Program and
Providing the Mechanism for Its Implementation," and Senate Bill No. 249,
otherwise known as "An Act Instituting a Comprehensive Agrarian Reform
Program to promote Social Justice and Industrialization, Providing the
Mechanism for its Implementation and for Other Purposes," the agrarian
reform program was already in place, albeit limited in scope. Specifically,
on 21 October 1972 then President Marcos, through PD 27, instituted the
agrarian reform program and placed all tenanted rice and corn lands under
its coverage. On 17 July 1987, President Aquino issued EO 228 which
declared full ownership by qualified farmer beneficiaries of lands they
acquired by virtue of PD 27.
During the congressional deliberations, it was noted that as of 1987 or
fourteen (14) years of implementation of PD 27, approximately 547,000
hectares involving 397,896 beneficiaries had been left untouched. The
inclusion of rice and corn lands underPD 27 and EO 228 in the CARP is to
be seen as a mere continuation of an unfinished business. (Speech of Rep.
Gillego, Congressional Deliberations, 6 October 1987).
Idle or abandoned land
The DAR is mandated to initiate the expropriation or acquisition of idle
or abandoned agricultural lands at the earliest possible time for distribution
to farmer-beneficiaries of the agrarian reform program (Const. Art. XVIII,
sec 22; EO 229, sec 18[h]). Idle or abandoned land refers to any
agricultural land not cultivated, tilted or developed to produce any crop nor
devoted to any specific economic purpose continuously for a period of
three (3) years immediately prior to the receipt of notice of acquisition by
the government as provided under this Act, but not include land that has
become permanently or regularly devoted to non-agricultural purposes. It
does not include land which has become unproductive by reason of force
majeure or any other fortuitous event, provided that prior such event, such
land was previously used for agricultural or other economic purpose (RA
6657, sec 3 [e]).
Private agricultural lands
Private agricultural lands within the context of RA 6657 refer to those
lands devoted to agricultural activity and not classified as residential,
commercial or industrial owned by persons, whether natural or juridical,
other than the government or its instrumentalities. Abandoned private
agricultural lands, commercial farms and agricultural lands subject of
mortgage or foreclosure by natural or juridical persons, private banking or
financial institutions are special classes of private agricultural lands subject
of acquisition or distribution to farmer-beneficiaries.
Agricultural lands under mortgage or foreclosure
Mortgage is an accessory contract whereby the debtor (or a third
person) guarantees the performance of the principal obligation by
subjecting real property or real rights as security in case of non-fulfillment
of said obligation within the period agreed upon. A mortgage follows the
property whoever the possessor may be and subjects it to the fulfillment of
the obligation for whose security it was constituted. (Bonnevie vs. Court of
Appeals, 125 SCRA 122, [1983]). Therefore, even if the ownership of the
mortgaged property changes, the encumbrance, unless extinguished by
any means allowed by law, subsists. The parties to such contract, the
mortgagee and the mortgagor under the law, have their respective rights
and obligations. It is the essence of the mortgage contract that when the
principal obligation becomes due, the things in which the mortgage consists
may be alienated for the payment to the creditor. (New Civil Code, Art.
2087) This remedy is referred to as foreclosure. In the foreclosure
proceedings, the mortgaged property is sold on default of the mortgagor in
satisfaction of the mortgage debt.
The nature and the legal effects of and legal relationships formed by a
contract of mortgage gives rise to an important issue: at what point may the
creditor be considered as the landowner and when may he be treated as a
mere lienholder for the purpose of placing the landholdings under CARP
coverage?
When placing mortgaged private agricultural lands under CARP, it is
important to distinguish between the status of creditor as landowner and
creditor as lien-holder/mortgagee. The significance of this distinction lies in
the rights and obligations to which the landowner and mortgagee are
entitled and subjected to as enumerated in Sec. 8 and 9 of DAR AO 1
(2000). Thus, the creditor-mortgagee shall be considered as the landowner
for the purpose of covering the properties under CARP under two (2)
circumstances: (a) when the mortgagee is the purchaser in the foreclosure
sale and the redemption period has already expired where the right of
redemption exists; or (b) when the mortgagee is the purchaser in the
foreclosure sale and said sale is confirmed by the court in cases where
only equity of redemption is provided (DAR Adm. O. No. 1 [2000], sec. 4).
On the other hand, the creditor is considered as a lien-holder or
mortgagee if as of the date the land transfer claim was received by the
Land Bank of the Philippines (LBP) from the DAR and either of the
following circumstances obtain: the mortgage debt is not yet due and
demandable; or the mortgage debt is already due and demandable but the
mortgagee has not foreclosed on the property; or the mortgage has already
been foreclosed but the period to exercise the right of redemption has not
expired or the foreclosure sale has not yet been confirmed by the court in
cases where there is only equity of redemption (DAR Adm. O. No. 1 [2000],
sec. 5)
It is likewise important to state that mortgages and other claims
registered with the register of deeds shall be assumed by the government
(when landholdings subject or mortgage or claim is acquired for CARP
purposes) up to an amount equivalent to the landowner's compensation
value as provided in Sec. 72 (b) of RA 6657. In other words, the
government shall assume the mortgage indebtedness not exceeding the
just compensation due the landowner. For instance, the debt secured by
the mortgage is P100,000.00. Assuming that when the mortgaged
landholding is placed under the CARP and acquired by the government,
the landowner's just compensation is determined to be P80,000.00. In this
case, what the government merely assumes is P80,000.00 out of the
P100,000.00 indebtedness. This amount is what the government is
obligated to pay the landowner by virtue of its acquisition under CARP. It
cannot be made to pay the balance of P20,000.00. Said amount is
collectible from the debtor/mortgagor. The obligation of the debtor to pay
the debt to the mortgagee stands although the mortgaged property to
secure the payment of said debt may have been transferred to a third
person. (Mccullough & Co. vs. Veloso, 46 Phil. 1, [1924]).
Commercial farms
Commercial farms are private agricultural lands devoted to commercial
livestock, poultry and swine raising, and aquaculture including saltbeds,
fishponds and prawn ponds, fruit farms, orchards, vegetable and cut-flower
farms, and cacao, coffee and rubber plantations. These farms are subject
to immediate compulsory acquisition and distribution after ten (10) years
from the effectivity ofRA 6657 or 15 June 1988. In the case of new farms,
the ten (10)-year period begins from the first year of commercial production
and operation as determined by DAR (Rep. Act No. 6657 [1988], sec. 11).
Upon the expiration of the ten (10)-year deferment period on 15 June 1998,
the DAR issued AO 9 (1998), otherwise known as "Rules and Regulations
on the Acquisition, Valuation, Compensation and Distribution of Deferred
Commercial Farms." All commercial farms whose deferment expired as of
15 June 1998 shall be subject to immediate acquisition and distribution
under the CARP. Those whose deferments have yet to expire will be
acquired and distributed only upon expiration of their respective deferment
periods as originally determined by the DAR or earlier if the DAR
determines that the purpose for which it was deferred no longer exists and
revokes its deferment (DAR Adm. O. No. 9 [1998], sec. 2 [a]). All
infrastructure facilities and improvements including buildings, roads,
machineries, receptacles, instruments or implements permanently attached
to the land which are necessary and beneficial to the operations of the farm
as determined by the DAR, and shall be subject to acquisition upon the
recommendation of the ARBs (DAR Adm. O. No. 9 [1998], sec. 2 [d]).
Commercial farms with expired deferment period shall be acquired
through VOS, CA or direct payment scheme. The acquisition of facilities
and improvements as a general rule, shall be encouraged through the
direct payment scheme (DAR Adm. O. No. 9 [1998], sec. 24).
Corporate farms
Corporate farms are those owned or operated by corporations or other
business associations (Rep. Act No. 6657 [1988], sec. 29). Corporate
farms may be acquired through voluntary land transfer, VOS, CA and
voluntary stock distribution plan (Rep. Act No. 6657[1988], sec. 31). It must
be noted that corporate farm owners cannot avail of the ten-year deferment
period under DAR AO 9 (1998). Only commercial farms are subject of
deferment. (Rep. Act No. 6657 [1988], sec. 11; DAR Adm. O. No. 9 [1998]).
Lands owned by the State in proprietary capacity
Under Sec. 1 of EO 407 (1990), all government instrumentalities were
directed to transfer to the Republic of the Philippines through the DAR all
landholdings suitable for agriculture. The government instrumentalities
directed to do so included government agencies, government owned and
controlled corporations or financial institutions such as the Development
Bank of the Philippines, Philippine National Bank, Republic Planters Bank,
Asset Privatization Trust, Presidential Commission on Good Government,
Department of Agriculture, State Colleges and Universities, Department of
National Defense and others.
Modes of Acquisition of Private Agricultural Lands
CARP is founded on the right of landless farmers and regular farmers to
own directly or collectively the lands they till through the just distribution of
all agricultural lands. To achieve this end, a mechanism is provided in the
law for the identification, acquisition, distribution of agricultural lands. As
earlier discussed, CARP covers both private and public agricultural lands.
Since the State owns the latter, they just need to be identified and
distributed to the beneficiaries. Private agricultural lands, upon the other
hand, generally have to go through the acquisition process before their
ultimate distribution to the farmers.
In order for the acquisition process to be completed, several requisites
must be satisfied. First, the land should be privately owned and found
suitable for agriculture. Second, there are beneficiaries willing to take over
the ownership of the land and make it more productive. Third, the
landowner is paid just compensation or deposit in cash or LBP bonds is
made in his name if the value is contested. Finally, title to the land is
transferred in the name of the Republic of the Philippines.
It must be clarified, however, that full payment of just compensation is
not necessarily required in Voluntary Land Transfer (VLT)/Direct Payment
Scheme (DPS) because the terms of payment of just compensation are
governed by the mutual agreement of the parties, i.e., the farmer-
beneficiary and the landowner. Likewise, under EO 407, the payment of
just compensation to the government instrumentality as landowner may
come even after land distribution, that is, thirty (30) days from the
registration of the ownership documents by the Register of Deeds in favor
of the Department of Agrarian Reform (Exec. Order No. 407 [1990], sec. 1,
par. 4).
In the same manner that full payment of just compensation is not always
necessary to complete acquisition, transfer of title to the Republic of the
Philippines is not necessary in VLT/DPS since the landholding is directly
transferred from the landowner to the beneficiary.
The modes by which private agricultural lands may be acquired are as
follows: Operation Land Transfer (OLT), Voluntary Offer to Sell (VOS),
Voluntary Land Transfer/ Direct Payment Scheme (VLT/DPS), Compulsory
Acquisition (CA), and Voluntary Stock Distribution in the case of corporate
farms.
Operation Land Transfer
Operation Land Transfer (OLT) is a mechanism established for the
implementation of PD 27 (1972) and EO 228 (1987). It is a mode by which
ownership of tenanted rice and corn lands is transferred to tenant-
beneficiaries. It must be stressed that for lands to come under OLT
pursuant to PD 27, there must be first showing that they are tenanted
lands. (Castro vs. CA, 99 SCRA 722 [1980])
LOI 227 (1974) was issued by then President Marcos directing the
immediate extension of the OLT to the landholdings of over seven (7)
hectares. Subsequently, LOI 474 (1976) was issued placing all tenanted
rice and corn lands with areas of seven (7) ha or less belonging to
landowners who own other agricultural lands exceeding seven (7) ha or
lands used for residential, commercial, industrial, or other urban purposes
from which they derive adequate income to support themselves and their
families.
LOI 474 was subjected to constitutional scrutiny in the case of Zurbano
vs. Estrella, 137 SCRA 333 (1989). In this case, petitioners who are owners
of 56.14 ha of coconut lands and 1.86 ha of ricelands, assailed the
constitutionality of LOI 474, arguing that it is a class legislation and
therefore a violation of the equal protection clause. Furthermore, petitioners
averred that said issuance is violative of the due process clause as it would
be, as applied to them, a taking of private property without just
compensation. The Supreme Court in upholding its constitutionality held
that:
. . . there is no legal basis for declaring LOI No. 474 void on its face on
equal protection, due process and taking of property without just
compensation grounds. The Constitution decrees no less than the
emancipation of tenants, and there are safeguards therein to assure
that there are no arbitrariness or injustice in its enforcement. There
are, moreover, built-in safeguards to preclude any unlawful taking of
the property. There is no merit to the contention that LOI 474 denies
equal protection. To condemn as class legislation an executive act
intended to promote the welfare of tenants is to ignore not only the
letter of the Constitution incidentally cited in the petition itself
requiring the formulation and implementation of an agrarian reform
program aimed at emancipating the tenant from the bondage of the
soil, but also the nation's history. . . . The attack on due process
ground is unavailing as on the face of the challenged measure
fairness and justice may easily be discerned. Nothing in its language
lend support to the contention that consequences so harsh and drastic
would attend its implementation. In language, scheme and framework,
this Letter of Instruction reveals the plan and purpose to attain the goal
envisioned by the Constitution but with due regard to the land owners
affected. . . . Neither is there any merit on the contention that there
would be a taking of private property for public use without just
compensation. The Constitution itself imposes the duty of the State to
emancipate the tenants from the bondage of the soil. What is more,
even a month before its adoption by the 1971-1972 Constitutional
Convention, P.D. No. 27 was issued. Its validity, to repeat, was
unanimously sustained by this Tribunal. No other conclusion could
have been reached, conforming as it did to what the fundamental law
ordained.
In the case of Locsin vs. Valenzuela, 194 SCRA 195 (1991), the
Supreme Court explained the legal effect of land being placed under OLT
as vesting ownership in the tenant. However, in a subsequent
case, Vinzons-Magana vs. Estrella, 201 SCRA 536 [1991], the High
Tribunal, citing Pagtalunan vs. Tamayo which predated the Locsin case,
ruled that the mere issuance of a certificate of land transfer does not vest
ownership in the farmer/grantee. There seems to be an inconsistency
regarding the treatment of the legal effect of the placing of the property
under the Operation Land Transfer. This is because the issuance of a
Certificate of Land Transfer (CLT) over a landholding presupposes that the
property has already been covered under the OLT. Therefore, if indeed, as
the Locsin doctrine enunciated, ownership of the land is transferred to the
farmer at the time the property is placed under OLT, then, it necessarily
follows the CLT, being an instrument issued subsequent to the coverage of
the land under OLT, is evidence of ownership. However, the latter case
of Vinzons-Magana disputes this conclusion.
In the case of Locsin vs. Valenzuela, 194 SCRA 195 (1991), the
petitioners are owners of a landholding which was subject to the lifetime
usufructuary of private respondent. The subject landholding was placed
under the Operation Land Transfer. Petitioners filed a collection suit against
the private respondent claiming that the payments made by the tenants in
the subject properties should be considered as amortization payments for
the price of land and as such should belong to the landowners and not to
the usufructuary. The Court, upholding the petitioners contention, by
construing PD No. 27 in relation to PD No. 57, Department Circular No. 8,
dated 1 April 1975 and EO No. 228 dated 17 July 1987, ruled that
under PD No. 27, the tenant-farmer became owner of the land as of 21
October 1972.
. . . Reading the foregoing provisions together, we observe that under
Presidential Decree No. 27, the basic statute, the tenant-farmer
became owner of a family-size farm of five (5) hectares or, if the land
was irrigated, three (3) hectares, and that the tenant-owner had to pay
for the cost of the land within fifteen (15) years by paying fifteen (15)
equal annual amortization payments. Thus, it appears clear that
ownership over lands (like Lot No. 2-C-A-3) subjected to Operation
Land Transfer moved from the registered owner (the old landowner) to
the tenants (the new landowners). The fifteen (15) annual
amortizations to be paid by the tenants-owners were intended to
replace the landholdings which the old landowners gave up in favor of
the new landowners, the tenants-owners. It follows that in respect of
land subjected to Operation Land Transfer, the tenants-farmers
became owners of the land they tilled as of the effective date of
Presidential Decree No. 27, i.e., 21 October 1972. Pending full
payment of the cost of the land to the old landowner by the Land Bank
of the Philippines, the leasehold system was "provisionally maintained"
but the "lease rentals" paid by the tenants-farmers prior to such full
payment by the Land Bank to the old landowner, would be credited no
longer as rentals but rather as "amortization payments" of the price of
the land, the unamortized portion being payable by the Land Bank. In
respect of lands brought within the coverage of Operation Land
Transfer, the leasehold system was legally and effectively terminated
immediately on 21 October 1972 (notwithstanding the curious
statement in Department Circular No. 8 that it was "provisionally
maintained"). It was in respect of lands not yet subjected to the terms
and effects of Operation Land Transfer that the leasehold system did
continue to govern the relationship between the "landowner and his
tenant-tillers".
The exemption of the old landowner from the capital gains tax on the
amortization payments made to him by the tenants-purchasers, under
Presidential Decree No. 57 (supra), underscores the fact, referred to
above, that ownership or dominion over the land moved immediately
from landowner to tenant-farmer, rather than upon completion of
payment of the price of the land. In general, capital gains are realized
only when the owner disposes of his property. . . .
In the case of Pagtalunan vs. Tamayo, 183 SCRA 252 (1990), petitioner
sought to intervene in the expropriation proceedings filed by the Republic of
the Philippines over the subject parcel of land. Petitioner argues that he,
being a bona fide tenant of and holder of Certificate of Land Transfer
covering the subject properties, is entitled to the proceeds of the
expropriation. The Supreme Court, in rejecting petitioner's contention, ruled
that the petitioner, being merely a CLT holder is not the owner of the
subject property and thus, not entitled to just compensation. In explaining
the nature of the CLT, the Court stated that:
. . . However, a careful study of the provisions of Pres. Decree No. 27,
and the certificate of land transfer issued to qualified farmers, will
reveal that the transfer of ownership over these lands is subject to
particular terms and conditions the compliance with which is
necessary in order that the grantees can claim the right of absolute
ownership over them.
Under Pres. Decree No. 266 which specifies the procedure for the
registration of title to lands acquired under Pres. Decree No. 27, full
compliance by the grantee with the abovementioned undertakings is
required for a grant of title under the Tenant Emancipation Decree and
the subsequent issuance of an emancipation patent in favor of the
farmer/grantee [Section 2, Pres. Decree No. 226]. It is the
emancipation patent which constitutes conclusive authority for the
issuance of an Original Certificate of Transfer, or a Transfer Certificate
of Title, in the name of the grantee.
The mere issuance of the certificate of land transfer does not vest in
the farmer/grantee ownership of the land described therein. The
certificate simply evidences the government's recognition of the
grantee as the party qualified to avail of the statutory mechanisms for
the acquisition of ownership of the land tilled by him as provided under
Pres. Decree No. 27. Neither is this recognition permanent nor
irrevocable. Failure on the part of the farmer/grantee to comply with
his obligation to pay his lease rentals or amortization payments when
they fall due for a period of two (2) years to the landowner or
agricultural lessor is a ground for forfeiture of his certificate of land
transfer [Section 2, Pres. Decree No. 816].
Clearly, it is only after compliance with the above conditions which
entitle a farmer/grantee to an emancipation patent that he acquires the
vested right of absolute ownership in the landholding a right which
has become fixed and established, and is no longer open to doubt or
controversy . . . . At best, the farmer/grantee, prior to compliance with
these conditions, merely possesses a contingent or expectant right of
ownership over the landholding. . . .
The Pagtalunan doctrine was reiterated in the case of Vinzons-Magana
vs. Estrella, 201 SCRA 536 (1991). In this case, the petitioner assailed the
constitutionality of LOI No. 474 and its implementing guideline, DAR
Memorandum Circular No. 78-1978 . Moreover, petitioner prayed for the
cancellation of the CLT over the subject landholding arguing that the
issuance of the CLT in favor of the tenant without first expropriating the
property to pay the petitioner landowner the full market value thereof before
ceding and transferring the land to the tenant is unconstitutional as it is
confiscatory and violative of the due process clause. The Supreme Court,
brushing aside the petitioner's theory, held that the issue of the
constitutionality of the taking of private property under the CARP law has
already been settled by the Court. Moreover, citing the Pagtalunan case,
the Court explained the nature of the CLT, stating that it does not vest in
the farmer/grantee ownership of the land described therein. Therefore,
there is no taking of property without payment of just compensation.
It is noted that in all three cases, the facts from which the controversy
arose occurred prior to the issuance of EO 228 of then President Aquino
which declared that full ownership to qualified beneficiaries of the lands
covered by PD No. 27 as of 21 October 1972. Likewise, all cases were
promulgated after the issuance of EO No. 228 in 1987. Therefore, it cannot
be said that the reason behind the Locsin ruling declaring the effect of OLT
as vesting ownership in the tenant is the fact that EO 228, which
categorically clarified the legal effect of PD No. 27, was factored in the
discussion of the case. Why then was EO No. 228 not considered in the
subsequent case of Vinzons-Magana when it was already in effect then?
The ponente instead referred to the pre-Locsin case ofPagtalunan vs.
Tamayo. In so doing, it ignored altogether the legal implications of
the Locsin doctrine.
Voluntary Offer to Sell
Voluntary Offer to Sell (VOS) is a scheme whereby the landowners
voluntarily offer their agricultural lands for coverage regardless of phasing.
It does not, however, mean that landholdings voluntarily offered for sale are
automatically accepted by DAR. A VOS may be rejected if the landholding
is not suitable for agriculture, or has a slope of more than eighteen percent
(18%) and is undeveloped. Likewise, said offer may be refused if there are
no takers or persons willing to be agrarian reform beneficiaries and, lastly,
the only identified ARBs are the qualified children of the landowner. [DAR
A. O. No. 06 (1997)]
As a general rule, withdrawal of VOS shall no longer be allowed after
the receipt by the DAR of the letter offer for VOS, i.e., CARP Form No. 1.
(DAR A.O. No. 06 [1997], II [A]). However, DAR may allow the withdrawal
of voluntary offers to sell if the withdrawal of VOS is for the purpose of
acquisition and compensation through the Voluntary Land Transfer/ Direct
Payment Scheme (VLT/DPS), provided, that the claim folder has not yet
been forwarded to the LBP for the computation of the land value. (DAR
A.O. No. 06 [1997] II [A] 2nd par.). DAR may also allow the withdrawal of
VOS if the subject landholding is determined by DAR to be more suitable
for a townsite, resettlement site or individual site needed to address a
matter of national interest or concern in calamity situation (DAR A.O. No.
06 [1997], II [C]).
In case lands voluntarily offered for sale are subsequently found to be
outside the coverage of CARP, such lands shall be reconveyed to the
original transferors. The manner of reconveyance is governed by A.O. No.
09, Series of 1997.
In the case of commercial farms, the offer to sell must have been
submitted before the expiration of the deferment period in order that their
acquisition through VOS may be allowed, otherwise the property shall be
placed under compulsory acquisition (Section 8 [a] DAR A. O. No. 02-
1998).
Landowners who voluntarily offer their lands for sale shall be entitled to
an additional five percent (5%) cash payment. It must be noted, however,
that banks and other financial institutions are not covered by said incentive.
(Rep. Act No. 6657, [1988 ], Sec. 19)
Voluntary Land Transfer/ Direct Payment Scheme
Voluntary Land Transfer or Direct Payment Scheme (VLT/DPS) is a
mode of acquisition whereby the landowner and the beneficiary enter into a
voluntary arrangement for the direct transfer of the lands to the latter. Not
all private agricultural lands may be subject of voluntary land transfer. For
instance, lands mortgaged with banking and/or financial institutions cannot
be the subject of VLT/DPS.
All notices for voluntary land transfer must be submitted to the DAR
within the first year of the implementation of the CARP. Negotiations
between the landowners and qualified beneficiaries covering any voluntary
land transfer which remain unresolved after one (1) year shall not be
recognized and such land shall instead be acquired by the government and
transferred pursuant to the Comprehensive Agrarian Reform Law. [Rep.
Act No. 6657 (1988), sec. 20.] It must be stressed that this should not be
construed to mean that VLT/DPS is no longer allowed after one year from
the effectivity of R.A. 6657. It is submitted that VLT/DPS may be entered
into even beyond 15 June 1989, or one year after the effectivity of R.A. No.
6657. It is argued that that the exact moment when the one-year period
under Section 20, par (a) of R.A. No. 6657 within which notices of VLT/DPS
may be filed commences from the date when the land subject of the
VLT/DPS is scheduled for acquisition and distribution according to the
various phases of implementation described under Section 7 and 11 and
the landowner is served a notice of acquisition of his landholding.
If the law intended that the one year period be reckoned from the
approval or effectivity of RA 6657, it would have expressly said so, as it did
in the provisions on priorities (Sec. 7), commercial farms (Sec. 11), and
stock transfer option (Sec. 31). Instead, the law used the phrase "within the
first year of implementation of the CARP" which is at the time Section 16 is
implemented relative to specific and distinct classes of agricultural lands.
[Memorandum of Asst. Sec. Peaflor for the Secretary, August 23, 1999, p.
6.]
Section 20 (b) of R.A. No. 6657 provides that the terms and conditions
of the transfer under this mode shall not be less favorable to the transferee
than those of the government's standing offer to purchase from the
landowner and to resell to the beneficiaries, if such offers have been made
and are fully known to both parties.(Sec. 20 (b)) However this does not
mean that existence of "a standing government offer" is not essential to the
consummation of a VLT/DPS. The restriction imposed under Section 20 (b)
relative to the government's standing offer, is not absolute. The law itself
subjects its application only in instances where there is a prior offer by the
government and that the same is known to both the landowner and the
qualified beneficiaries. [Memorandum of Asst. Sec. Peaflor for the
Secretary, August 23, 1999, p. 6.]
The terms and conditions of VLT/DPS should include the immediate
transfer of possession and ownership of the land in favor of the identified
beneficiaries. Certificates of Land Ownership Award (CLOAs) shall be
issued to the ARBs with proper annotations. [DAR A.O. No. 08,
1997 (Section II (E).]. The voluntary agreement shall include sanctions for
non-compliance by either party and shall be duly recorded and its
implementation monitored by the DAR. [Rep. Act No. 6657 (1988), sec. 20.]
Direct payments in cash or in kind may be made by the farmer-
beneficiary to the landowner under terms to be mutually agreed upon by
both parties, which shall be binding upon them, upon registration with the
approval by the DAR. Said approval should be received by the farmer-
beneficiary within thirty (30) days from the date of registration. In the event
they cannot agree on the price of land, the procedure for compulsory
acquisition as provided in Section 16 shall apply. The LBP shall extend
financing to the beneficiaries for purposes of acquiring the land. [Rep. Act
No. 6657 (1988), sec. 21.]
A pressing issue respecting VLT/DPS is its application to commercial
farms. One school of thought espouses the theory that VLT/DPS cannot
apply to commercial farms as Section 11 of R.A. No. 6657 specifically
requires their ". . . immediate compulsory acquisition and distribution . . ."
beginning 15 June 1998. Hence, it is argued that commercial farms may be
acquired only through compulsory acquisition.
It is submitted that commercial farms may be acquired not only through
compulsory acquisition but through VLT/DPS as well.
There is no dispute that commercial farms whose deferments have
expired as of 15 June 1998 are subject to immediate compulsory
acquisition and distribution as provided in Section 11 of R.A. No. 6657. It
should be stressed, however, that all acquisitions under R.A. No. 6657 are
compulsory in nature, in the sense that the landowners whose agricultural
lands are covered by CARP have really no choice except to submit to the
program.
The procedures for acquisition of private lands are provided for under
Chapter V, Section 16 (a) to (f). The procedure for land acquisition are
further elaborated by Chapter VI, Section 17 through Section 21. These
provisions prescribe specific rules for valuation and payment which include,
among others, Section 20 on voluntary land transfer and Section 21 on
direct payment of beneficiaries. Thus, even as the process of compulsory
acquisition under Section 16 is already in motion, the option available
under Sections 20 and 21 may still be exercised. The foregoing framework
of acquisition is the context within which the phrase "immediate compulsory
acquisition," as used in Section 11 should be understood.
The situation now is that before commercial farms could be compulsorily
acquired and distributed pursuant to Section 16, the preliminary steps for
their acquisition have to be continued or pursued, to wit: identification of
beneficiaries, inspection or technical survey and valuation. During this
period, the landowners and the qualified beneficiaries may, by reason of
the options available under Section 20 and 21, manifest their intent to
voluntarily arrange for direct transfer and payment of the property. In short,
the phrase "immediate compulsory acquisition" under Section 11 of R.A.
No. 6657, when taken in the context of the procedures for acquiring lands
under CARP, still includes VLT/DPS as an option for valuation and
payment of commercial farms subject of acquisition. [Memorandum of Asst.
Sec. Peaflor for the Secretary, August 23, 1999, pp. 2-5]
DPS involving commercial farms may be availed of any time during the
acquisition process, after the preparation of the master list but prior to the
transmittal of the claim folder to the LBP. If the notice of acquisition is
served by the parties upon to the DAR prior to the preparation of the
master list, the notice shall be validated by the MARO with identified ARBs
included in the master list, in a referendum to be held for this purpose.
Acquisition under DPS of lands with liens and encumbrances may be
allowed provided that the amount corresponding to the mortgage over the
subject landholding shall be deducted from the total value of the land to be
paid by the ARBs. Provided further that said agreement shall be upon
mutual consent of both the ARBs and the landowner, duly concurred with
by the mortgagee or lienholder. In case of delinquent real estate taxes, the
ARBs may be allowed to assume such liability to be deducted from the total
value of the land. Upon mutual consent of the ARBs and the landowner,
duly concurred with by the mortgagor or the lienholder, the ARBs may
assume the mortgage, provided that such obligation shall not exceed the
annual amortization otherwise due to the land pursuant to Section 26 of RA
6657, if the subject landholding was acquired under VOS or CA [DAR A. O.
No. 09 (1998), Section 9 (b)].
Compulsory Acquisition
Compulsory acquisition is a mode whereby the land is expropriated by
the State in accordance with the procedure outlined in Section 16 of R.A.
No. 6657.
All private agricultural lands which have become due under the phase of
implementation as provided in Section 7 of R.A. No. 6657are subject to
compulsory acquisition. However, where the landowner opts for other
modes of acquisition such as voluntary offer to sell or voluntary land
transfer, compulsory acquisition is suspended. In these cases, if
negotiations fail, CA is resumed. Likewise, all idle or abandoned
agricultural lands regardless of size are subject to compulsory acquisition.
Lands subjected to Compulsory Acquisition may be allowed to shift to
Voluntary Land Transfer/Direct Payment Scheme or Voluntary Offer to Sell
provided that the claim folder had not yet been forwarded to the LBP for the
computation of land value. [DAR A. O. 06, (1997) II (D).]
Voluntary stock distribution of corporate farms
Voluntary stock distribution is an alternative arrangement to the physical
distribution of lands wherein corporate owners voluntarily divest a portion of
their capital stock, equity or participation in favor of their workers or other
qualified beneficiaries. Stock ownership is based on the capital stocks of
the corporation and is equivalent to the agricultural land actually devoted to
agricultural activities valued in relation to the total assets of the corporation.
(Rep. Act No. 6657 [1988], sec. 31 as implemented by DAR Adm. O. No.
10 [1988] and DAR Adm. O. No. 1 [1991])
To safeguard the rights of farmer-beneficiaries, corporate farms with a
voluntary stock distribution plan must comply with the following conditions:
1) The books of the corporation or association shall be subject to
periodic audit by certified public accountants chosen by the
beneficiaries;
2) Irrespective of the value of their equity in the corporation or
association, the beneficiaries shall be assured of at least one (1)
representative in the board of directors, or in a management or
executive committee, if one exists, of the corporation or association;
and
3) Any shares acquired by such workers and beneficiaries shall
have the same rights and features as all other shares. Moreover, any
transfer of shares of stock by the original beneficiaries shall be void
unless said transaction is in favor of a qualified and registered
beneficiary within the same corporation. (Rep. Act No. 6657 [1988],
sec. 31 as implemented by DAR Adm. O. No. 10 [1988]).
However, corporate farm owners cannot avail of voluntary stock
distribution at present. Section 31 of RA 6657 states that "if within two (2)
years from the effectivity of CARP, the land or stock transfer has not been
made or the plan for such stock distribution has not been approved by the
Presidential Agrarian Reform Council (PARC) within the same period, the
agricultural land of the corporate owners or corporation shall be subject to
compulsory acquisition under existing DAR rules and regulations.
The Case of Hacienda Luisita
Hacienda Luisita, Inc. is a corporate farm owning a total of 4,916
hectares planted to sugarcane located in Tarlac. In May 1988, it applied to
avail of the stock distribution plan under CARP. The application was
approved in November 1988. The farm has a total of 355,531,462 shares of
stocks with a par value of P1.00 per share. One-third of these shares is
subject for distribution to the farmworker-beneficiaries (FBs) under the
stock distribution plan. The shares for the FBs are to be distributed in a
span of 30 years. At the time of application for stock distribution, there were
about 6,000 FBs within the farm. Under its stock distribution plan, FBs are
supposed to receive cash dividends accruing to their respective shares,
homelots, representation in the Board of Directors, production based
incentives, and other fringe benefits.
Procedure for Acquisition of Private Agricultural Lands
The procedure for the acquisition of private agricultural lands as
provided for in Sec. 16, RA 6657 are as follows:
a) After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to the
owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay
hall of the place where the property is located. Said notice shall
contain the offer of the DAR to pay a corresponding value in
accordance with the valuation set forth in Sections 17 and 18, and
other pertinent provisions hereof.
DAR identifies the land to be covered by CARP as well as the
landowners and beneficiaries thereof on the basis of a master list or
inventory of landholdings prepared by the field offices pursuant to the Land
Acquisition and Distribution Tracing System (LADTRACKS) and the CARP
Scope Validation Project. Said master list in turn is obtained from the
LISTASAKA statements as verified or complemented by the records of the
Register of Deeds and Assessor's Offices, review of town plan and zoning
ordinances, field surveys, interviews and community consultations and
general knowledge of the land ownership pattern in the barangays or
municipalities. The identification of lands is done by the DAR Municipal
Office (DARMO) which gathers documents such as OCT/TCT, tax
declaration, copy of the approved survey plan of the property and prepares
the claim folder of the landowner. Thereafter, the DARMO conducts
preliminary ocular inspection to determine initially whether or not the
property may be covered under CARP.
If the property is coverable under CARP, the process of acquisition
continues. DARMO sends the landowner the Notice of Coverage and Field
Inspection with a copy of the Pre-OCI Report by personal delivery with
proof of service or by registered mail with return card. However, in the case
of deferred commercial farms, the Order of Deferment previously issued
over the landholding shall serve, upon expiration of the deferment period of
the subject commercial farm, as the Notice of Coverage, supported by the
Compliance Work Program and Summary of Exceptions originally
submitted with the approved deferment application. However, for record
purposes, the landowner shall be served a Notice of Expiration of
Deferment which shall contain a reminder of his right to retention should he
wish to exercise the same. [Section 9 (a) (1), DAR A.O. No. 02-1998]. The
landowner is invited to join the field investigation to select his retention area
and to submit his statement of production and income. If the landowner
cannot be contacted or refuses to accept said Notice, the notice shall be
effected by publication in a newspaper of national circulation. Likewise, a
notice on the schedule of the field investigation shall be sent to the BARC,
DENR, DA, LBP and prospective beneficiaries. The DARMO then shall
post a copy of the notice of coverage and field inspection for seven working
days in the bulletin board of the barangay and municipal halls where the
property is located and issues Certification of Posting Compliance.
Thereafter, the DARMO shall conduct joint field investigation of the
property with the LBP, DENR, DA BARC, landowner and prospective
ARBs. Jointly with the LBP and BARC, the DARMO shall prepare the Field
Investigation Report and the Land Use Map. The DARMO shall
screen/select qualified ARBs and cause the signing of the Application
Purchase and Farmer's Undertaking (APFU).The DARMO shall forward the
claim folder to DARPO for review and completion of documents. The land
is then surveyed. The claim folder is sent to the Land Bank for valuation. At
this stage, the DARPO sends the Notice of Land Valuation and Acquisition
to the Landowner (DAR A. O. No. 02 (1996)as amended by DAR A.O. No.
1 (1998).]
In the preliminary stage of the acquisition process, notice to the
landowner is vital to the validity of coverage and acquisition of the
landholding. The Supreme Court had occasion to discuss and stress the
importance of these notices in the case of Roxas & Co. vs. CA, G.R. No.
127876, December 17, 1999. In this case, petitioner Roxas and Co., a
domestic corporation owns three haciendas. Notices of acquisition
informing the landowner that two of the haciendas were being compulsorily
acquired were sent by the DAR and served on the administrator in his
address in the hacienda. The administrator participated in the acquisition
proceedings as representative of the owner. Subject landholdings were
acquired by the DAR and subsequently distributed to the beneficiaries. The
petitioner assailed the validity of the acquisition proceedings on the ground,
among others, that it was denied due process as no notice of acquisition
was ever served on it. The Supreme Court held that:
. . . the procedure in sending notices is important to comply with the
requisites of due process especially when the owner is a juridical
entity.
. . . The Notice of Acquisition in Section 16 of the CARL is required to
be sent to the landowner by personal delivery or registered mail.
Whether the landowner be a natural or juridical person to whose
address the Notice may be sent by personal delivery or registered
mail, the law does not distinguish. The DAR administrative orders also
do not distinguish. In the proceedings before the DAR the distinction
between natural and juridical persons in the sending of notices may be
found in the Revised Rules of Procedure of the DARAB. Service of
pleadings before the DARAB is governed by Section 6, Rule V of the
DARAB Revised Rules of Procedure. Notices and Pleadings are
served on private domestic corporations or partnerships in the
following manner:
"Section 6. Service Upon Private Domestic or Partnership. If
defendant is a corporation organized under the laws of the Philippines
or a partnership duly registered service may be made on the
president, manager, secretary, cashier, agent or any of its directors or
partners"
Similarly, the Revised Rules of Court of the Philippines, in Section 13,
Rule 14 provides:
"Section 13. Service upon private domestic corporation or
partnership. If the defendant is a corporation organized under the
laws of the Philippines or a partnership duly registered, service may
be made on the president, manager, secretary, cashier, agent or any
of its directors."
Summonses, pleadings and notices in cases against private domestic
corporation before the DARAB and the regular courts are served on
the president, manager, secretary, cashier, agent or any of its
directors. These persons are those through whom the private
domestic corporation or partnership is capable of action.
Jaime Pimentel (the administrator) is not the president, manager,
secretary, cashier, agent or any of its director of the landowner
corporation. Is he, the administrator of the two Haciendas, considered
an agent of the corporation?
The purpose of all rules for the service of process on a corporation is
to make it reasonably certain that the corporation will receive prompt
notice in an action against it. Service must be made on a
representative so integrated with the corporation as to make it a priori
supposable that he will realize his responsibilities and know what he
should do with any legal papers served on him, and bring home to the
corporation notice of the filing of the action. The DAR's evidence does
not indicate whether the administrator's duties is so integrated with the
corporation that he would immediately realize his responsibilities and
know what he should do with any legal papers served on him. . . ."
It is submitted that the DARAB Rules and Procedure and the Rules of
Court were improperly applied to the aforecited case. The rules on service
of summons provided in the Rules Court should have not been applied
since what is involved in this case is acquisition proceedings which is
administrative in nature. Moreover, it must be emphasized that the DAR, in
adjudicating agrarian reform matters, is not bound by technical rules of
procedure. (Sec. 50, R.A. 6657). What is important in administrative
adjudication is the right to be heard. Said requirement was substantially
complied with in this case considering that the administrator, who takes
charge of the daily operations of the subject properties, participated in the
acquisition proceedings. Therefore, it cannot be argued that there was
denial of due process. Finally, the application of the DARAB Rules of
Procedure is erroneous. This is so since the matter of service of notice of
acquisition does not fall within the jurisdiction of the DARAB.
b) Within thirty (30) days from the date of receipt of written notice
by personal delivery or registered mail, the landowner, his
administrator or representative shall inform the DAR of his acceptance
or rejection of the offer.
c) If the landowner accepts the offer of the DAR, the Land Bank
of the Philippines (LBP) shall pay the landowner the purchase price of
the land within thirty (30) days after he executes and delivers a deed
of transfer in favor of the government and surrenders the Certificate of
Title and other muniments of title.
d) In case of rejection or failure to reply, the DAR shall conduct
summary administrative proceedings to determine the compensation
for the land requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land,
within fifteen (15) days from the receipt of the notice. After the
expiration of the above period, the matter is deemed submitted for
decision. The DAR shall decide the case within thirty (30) days after it
is submitted for decision.
The constitutionality of the aforementioned provision was upheld by the
Supreme Court in the case of Association of Small Land Owners in the
Philippines, Inc., vs. Secretary of Agrarian Reform, 175 SCRA 343 (1989):
Objection is raised, however, to the manner of fixing the just
compensation, which it is claimed is entrusted to the administrative
authorities in violation of judicial prerogatives. Specific reference is
made to Section 16(d), which provides that in case of the rejection or
disregard by the owner of the offer of the government to buy his land. .
.
To be sure, the determination of just compensation is a function
addressed to the courts of justice and may not be usurped by any
other branch or official of the government. . . .
A reading of the aforecited Section 16(d) will readily show that it does
not suffer from the arbitrariness that rendered the challenged decrees
constitutionally objectionable. Although the proceedings are described
as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real
value of the property. But more importantly, the determination of the
just compensation by the DAR is not by any means final and
conclusive upon the landowner or any other interested party, for
Section 16(f) clearly provides: Any party who disagrees with the
decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation. The determination made by the
DAR is only preliminary unless accepted by all parties concerned.
Otherwise, the courts of justice will still have the right to review with
finality the said determination in the exercise of what is admittedly a
judicial function."
Said ruling was reiterated in the case of Vinzons-Magana vs. Estrella,
201 SCRA 538 (1991).
The factors to be considered in the determination of just compensation
as enumerated in Section 17 of R.A. No. 6657 are not exclusive. The DAR
and LBP are not confined in their determination of just compensation to the
factors/criteria set forth in said provision. Notably, Section 17 does not
provide hard and fast rules which must be strictly adhered to by DAR and
LBP in the determination of just compensation. While said section provides
that the factors/criteria mentioned therein" shall be considered" it does not
expressly state that only these factors/criteria and no other shall be
considered. The factors/criteria set forth in Sections 17, 18 and other
pertinent provisions for that matter should be deemed as mere standards to
guide the proper officials in the determining just compensation, but in no
case shall control or limit such determination, the ultimate consideration
being that the compensation be the full and fair equivalent of the property
taken from its owner by the expropriator. [DOJ Opinion No. 109 (1991),
July 25, 1991).]
In the case of Land Bank of the Philippines vs. CA and Pascual, G. R.
No. 128557, December 29, 1999, the Supreme Court ruled that in the
determination of just compensation pursuant to Section 18 of R.A. No.
6657, consent of the farmer-beneficiary is not needed. Furthermore, the
Court ruled that once the Land Bank agreed to the valuation, it is its duty to
pay the landowner said amount. In this case, private respondent's
properties were subjected to Operation Land Transfer. Consequently, the
PARO issued a valuation of the land which was rejected by the private
respondent who filed a case before the PARAD seeking to annul the
PARO's valuation. The PARAD, ruled in favor of private respondent, came
up with its own valuation, and directed the petitioner LBP to pay private
respondent said amount. Petitioner refused to pay the value of the land as
determined by the PARAD arguing among others that since it merely
guarantees or finances the payment of the value of the land, the farmer-
beneficiary's consent, is indispensable and that the only time the petitioner
becomes legally bound to finance the transaction is when the farmer-
beneficiary approves the appraised value of the land. In other words,
petitioner asserts that the landowner, the DAR, the Land Bank and the
farmer-beneficiary must all agree to the value of the land as determined by
them. The Court, brushing aside petitioner's contention, stated:
A perusal of the law however shows that the consent of the farmer-
beneficiary is not required in establishing the vinculum juris for the
proper compensation of the landowner. Section 18 of R. A. No. 6657
states
Sec. 18. Valuation and Mode of Compensation.
The LBP shall compensate the landowner in such amount as
may be agreed upon by the landowner and the DAR and the
LBP in accordance with the criteria provided for in Sections 16
and 17 and other pertinent provisions hereof, or as may be
finally determined by the court as just compensation for the
land.
As may be gleaned from the aforementioned section, the landowner,
the DAR and the Land Bank are the only parties involved. The law
does not mention the participation of the farmer beneficiary.
. . . Once the Land Bank agrees with the appraisal of the DAR, which
bears the approval of the landowner, it becomes its legal duty to
finance the transaction. In the instant case, petitioner participated in
the valuation proceedings held in the Office of the PARAD through its
counsel . . .
e) Upon receipt by the landowner of the corresponding payment
or, in case of rejection or no response from the landowner, upon the
deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act, the
DAR shall take immediate possession of the land and shall request
the proper Register of Deeds to issue a Transfer Certificate of Title
(TCT) in the name of the Republic of the Philippines. The DAR shall
thereafter proceed with the redistribution of the land to the qualified
beneficiaries.
The CARP Law conditions the transfer of possession and ownership of
the land to the government on the receipt by the landowner of the
corresponding payment or the deposit by the DAR of the compensation in
cash or LBP bonds with an accessible bank. Until then, title remains with
the landowner. No outright change of ownership is contemplated either.
(Association of Small Land Owners in the Philippines vs. Secretary of
Agrarian Reform), 175 SCRA 343 (1989.)
It must be noted, however, that the opening of a trust account and
issuance of a certification from Land Bank that a certain sum has been
earmarked for the landowner does not constitute substantial compliance
with Section 16(e) of R.A. No. 6657. In the case ofLBP vs. CA [248 SCRA
149 (1995)] respondent landowners assailed the acquisition of their
properties on the ground that there was a taking without just compensation.
They averred that the "earmarking," "reservation" and "deposit in trust"
made by the DAR and the Land Bank pursuant to DAR A. O. No. 09-
1990 is not equivalent to just compensation under R.A. No. 6657. The
Court nullified DAR A.O. No. 09-1990, ruling as follows:
. . . It is very explicit from Section 16 (e) that the deposit must be made
only in "cash" or in "LBP bonds." Nowhere does it appear nor can it be
inferred that the deposit can be made in any other form. If it were the
intention to include a "trust account" among the valid modes of
deposit, that should have been made express, or at least, qualifying
words ought to have appeared from which it can be fairly deduced that
a "trust account" is allowed. In sum, there is no ambiguity in Section
16 (e) of R. A. No. 6657 to warrant an expanded construction of the
term "deposit." . . .
. . . The ruling in the Association of Small Landowners case [that
payment of the just compensation is not always required to made fully
in money] merely recognized the extraordinary nature of the
expropriation to be undertaken under R. A. No. 6657 thereby allowing
a deviation from the traditional mode of payment other than in cash. It
did not, however, dispense with the settled rule that there must be full
payment of just compensation before title to the expropriated property
is transferred. . . .
What the Supreme Court nullified was merely the form in which the
deposit was made, i.e., the deposit in trust and not the deposit per se as
payment to the landowners for the expropriated lands. Thus, in effect, the
Court in making such pronouncement, upheld the validity of deposit per se
as payment of just compensation.
f) Any party who disagrees with the decision may bring the matter
to the court of proper jurisdiction for final determination.
In the case of Association of Small Landowners, the Supreme Court
explained that the determination of just compensation is a function
addressed to the courts of justice. [175 SCRA 343 (1989)].
The operating procedures for the acquisition of private agricultural lands
are outlined in the following administrative issuances:
DAR A. O. No. 2, Series of 1996 entitled "Revised Rules
Governing the Acquisition of Agricultural Lands Subject of Voluntary
Offer to Sell (VOS) and Compulsory Acquisition (CA) Pursuant to R. A.
6657" as amended by DAR A. O. No. 2-98;
DAR A. O. No. 09, Series of 1998 entitled "Rules and
Regulations on the Acquisition, Valuation, Compensation and
Distribution of Deferred Commercial Farms";
DAR A. O. No. 08, Series of 1997 entitled "Revised Rules on
the Acquisition and Distribution of Compensable Agricultural Lands
Under VLT/DPS";
DAR A. O. No. 12, Series of 1990 entitled "Policy Guidelines
and Operating Procedures in the Identification and Acquisition of Idle
and Abandoned Lands".
Reconstitution of Lost or Damaged Title
A pressing operational problem besetting agrarian reform implementors
is the delay in the acquisition and distribution of agricultural lands with lost
or destroyed titles. To address this concern, DAR Memorandum Circular
No. 05, Series of 1994 was issued outlining the procedures on the
reconstitution of lost or destroyed titles.
Reconstitution of a certificate of title denotes restoration of the
instrument which is supposed to have been lost or destroyed in its original
form and condition. The purpose of the reconstitution of title or any
document is to have the same reproduced, after proper proceedings, in the
same form they were when the loss or destruction occurred. (Heirs of
Pedro Pinote vs. Dulay 198 SCRA 12 [1990])
There are two types of reconstitution of titles: judicial and administrative.
Judicial reconstitution partakes of a land registration proceeding and is
perforce a proceeding in rem. (Republic vs. Intermediate Appellate Court,
157 SCRA 62 [1988]). Judicial reconstitution is governed by Republic Act
No. 26 in relation to Section 110 of P. D. No. 1529. Administrative
reconstitution of title is likewise governed by Republic Act No. 26, as
amended by Republic Act No. 6732. Under DAR Memorandum Circular No.
5 (1994), the Department of Agrarian Reform (DAR), through the duly
authorized DAR lawyer, may file a petition for administrative or judicial
reconstitution when the notice of coverage over landholdings whose titles
were lost or destroyed has already been issued.
As a general rule, the remedy for the reconstitution of lost or destroyed
original copies of certificates of titles in the offices of the Register of Deeds
is the filing of a petition for judicial reconstitution of title. However,
administrative reconstitution of lost or destroyed original copies of
certificates of title may be availed of in case of substantial loss or
destruction of land titles due to fire, flood or other force majeure where the
number of certificates lost or damaged is at least ten (10) percent of the
total number of titles in the custody of the Register of Deeds but in no case
shall the number of titles lost or damaged be less than five hundred (500)
as determined by the Administrator of the Land Registration Authority.
(Section 1, R.A. No. 6732 [1989]).
Detailed discussion of the procedures for the filing of petition for
reconstitution are provided for in R.A. No. 6732 as implemented by LRA
Circular dated 26 July 1989, R.A. No. 26 as amended, LRA Circular No. 35
dated 13 June 1983 and DAR Memorandum Circular No. 05, Series of
1994.
CHAPTER 4
Just Compensation
Definition
Just compensation means the equivalent for the value of the property at
the time of its taking. It means a fair and full equivalentfor the loss
sustained. All the facts as to the condition of the property and its
surroundings, its improvements and capabilities should be considered.
(Export Processing Zone Authority vs. Dulay, 149 SCRA 305 [1987]).
In the case of Association of Small Landowners in the Philippines, Inc.
vs. Secretary of Agrarian Reform, supra, the Supreme Court further
explained the meaning of "just compensation". It said:
Just compensation is defined as the full and fair equivalent of the
property taken from its owner by the expropriator. It has been
repeatedly stressed by this Court that the measure is not the taker's
gain but the owner's loss. The word "just" is used to intensify the
meaning of the word "compensation" to convey the idea that the
equivalent to be rendered for the property to be taken shall be real,
substantial, full, ample.
As held in Republic of the Philippines v. Castellvi, there is
compensable taking when the following conditions concur: (1) the
expropriator must enter a private property; (2) the entry must be for
more than a momentary period; (3) the entry must be under warrant or
color of authority; (4) the property must be devoted to public use or
otherwise informally appropriated or injuriously affected; and (5) the
utilization of the property for public use must be in such a way as to
oust the owner and deprive him of beneficial enjoyment of the
property. All these are envisioned in the measures before us (at 378,
379).
(T)he content and manner of the just compensation provided for in the
afore-quoted Section 18 of the CARP Law is not violative of the
Constitution. We do not mind admitting that a certain degree of
pragmatism has influenced our decision on this issue, but after all this
Court is not a cloistered institution removed from the realities and
demands of society or oblivious to the need for its enhancement. The
Court is as acutely anxious as the rest of our people to see the goal of
agrarian reform achieved at last after the frustrations and deprivations
of our peasant masses during all these disappointing decades. We are
aware that invalidation of the said section will result in the nullification
of the entire program, killing the farmer's hopes even as they approach
realization and resurrecting the spectre of discontent and dissent in
the restless countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today" (at 388).
Determination of Just Compensation
Under Sec. 17 of RA 6657, the factors considered in the determination
of just compensation are:
a) cost of acquisition;
b) current value of like properties;
c) nature of land;
d) actual use;
e) income;
f) sworn valuation by the landowner;
g) tax declaration;
h) assessment by government assessors;
i) social and economic benefits contributed by farmers and
farmworkers and by the government; and
j) non-payment of taxes or loans secured from government
financing institutions on land.
The provisions of RA 6657 on just compensation do not provide hard-
and-fast rules which must be strictly adhered to by DAR and the LBP in
determining just compensation.
Notably, while Section 17 provides that the factors/criteria mentioned
therein "shall be considered" in determining just compensation, it does
not expressly state that only these factors/criteria, and no others, shall
be considered.
. . . The factors/criteria set forth in Section 17, and in Section 18 and
other pertinent provisions for that matter, should be deemed as mere
standards to guide the proper officials in determining just
compensation, but should in no case control or limit such
determination, the ultimate consideration being that the compensation
be the "full and fair equivalent of the property taken from its owner by
the expropriator".
. . . In every case, what should control is the "just-ness" of the
proposal taking into account the "revolutionary" nature of the
expropriation under the CARL. (DOJ Opinion No. 109 (1991))."
Valuation or Computation
General formula
The basic formula for the valuation of lands covered by Voluntary Offer
to Sell and Compulsory Acquisition is:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where : LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula is used if all the three (3) factors are present,
relevant, and applicable (DAR Admin. O. No. 5 [1998]). In any case, the
resulting figure in the equation is always multiplied to the number of area
or hectarage of land valued for just compensation.
To illustrate the formula wherein all of the factors above mentioned are
present:
Area : 3 hectares Capitalized Net Income :
P24,900
Market Value : P10,000 Comparable Sales : P 5,000
The land value is : LV = (24,900 x 0.6) + (5,000 x 0.3) +
(10,000 x 0.1)
= (14,940) + (1,500) + (1,000)
= (17,440) x (3 hectares)
= P 52,320
Computation of land value
Whenever one of the factors in the general formula is not available, the
computation of land value will be any of the three (3) computations or
formulae:
LV = (CNI x 0.9) + (MV x 0.1)
[if the comparable sales factor is
missing]
LV = (CS x 0.9 ) + (MV x 0.1)
[if the capitalized net income is
unavailable]
LV = MV x 2
[if only the market value factor is
available]
In case the comparable sales factor (CS) is relevant or applicable, the
land value is computed in accordance with the general formula where MV
is based on the lowest productivity classification of the land.
In every case, the value of idle land using the formula MV x 2 should not
exceed the lowest value of land within the same estate under consideration
or within the same barangay or municipality (in that order) approved by
LBP within one (1) year from receipt of claimfolder (DAR Admin. O. No. 5
[1998]).
Computation of land value under certain conditions
Valuation of lands planted to permanent but not yet fruit-bearing crops
There are times when the land being valued is planted to permanent
crops which are not yet productive or not yet fruit-bearing at the time of the
Field Investigation (FI) of the land. The land value is equivalent to the value
of the land plus the cumulative development cost (CDC) of the crop from
land preparation up to the time of FI. In equation form, the land value can
be computed as:
LV = (MV x 2) + CDC
Where:
a) The market value (MV) to be used is the applicable unit market
value (UMV) classification of idle land.
b) The cumulative development cost (CDC) is grossed-up from
the date of FI up to the date of LBP Claim Folder (CF) receipt for
processing but in no case should the grossed-up CDC exceed the
current CDC data based on industry.
In case the CDC data provided by the landowner could not be verified,
DAR and LBP should secure the said data from concerned agency/ies or,
in the absence thereof, should establish the same.
However, the resulting land value should not exceed the value of
productive land similar in terms of crop and plant density within the estate
under consideration or within the same barangay or municipality (in that
order) approved by LBP within one (1) year from receipt of CF (DAR
Admin. O. No. 5 [1998]).
Lands with permanent but not yet productive crops introduced by
farmer-beneficiaries
When the permanent but not yet fruit-bearing crops are introduced by
the farmer-beneficiaries, the land valuation formula used is the same as if
only the MV is available provided the MV used is the applicable UMV
classification of idle land. In equation form:
LV = MV x 2
In any case, the resulting land value should not exceed the value of
productive land similar in terms of crop and plant density within the estate
under consideration or within the same barangay or municipality (in that
order) approved by LBP within one (1) year from receipt of CF. And in case
the CS is relevant or applicable, the land value is computed in accordance
with the general formula where MV is based on the applicable classification
of the land (DAR Admin. O. No. 5 [1998]).
Use of Salvage Value on valuation of lands planted to permanent
but no longer productive or ready for cutting crops
When lands being valued are planted to permanent but no longer
productive or the crops are ready for cutting, the computation considers the
applicable UMV classification of idle land plus the salvage value of the
standing trees at the time of the FI. In equation form:
LV = (MV x 2) + Salvage Value
But the resulting land value should not exceed the value of productive
land similar in terms of crop and plant density within the estate under
consideration or within the same barangay or municipality (in that order)
approved by LBP within one (1) year from receipt of CF. In case where CS
is relevant or applicable, the land value is computed in accordance with the
general formula where MV is based on the lowest productivity classification
of the land (DAR Admin. O. No. 5 [1998]).
Land value under Voluntary Offer to Sell
In VOS, the computed value using the applicable formula should not
exceed the landowner's offer. The landowner's offer is grossed up from the
date of the offer up to the date of receipt of CF by LBP from DAR for
processing. The date of receipt of CF by LBP from DAR means the date
when the CF is determined by the LBP-LVLCO to be complete with all the
required documents and valuation inputs duly verified and validated, and
ready for final computation/processing.
Factors of Land Value
Computation of Capitalized Net Income
Capitalized Net Income refers to the difference between the product of
the gross sales and selling prices (AGP x SP) and total cost of operations
(CO) capitalized at 12%.
Expressed in equation form:
(AGP x SP) - CO
CNI =
0.12
Where: CNI = Capitalized Net Income
AGP = Annual Gross Production corresponding to the latest available
12-months' gross production immediately preceding the date of FI.
SP = (selling prices) The average of the latest available 12-months'
selling prices prior to the date of receipt of the CF by LBP for
processing, such prices to be secured from the Department of
Agriculture (DA) and other appropriate regulatory bodies or, in their
absence, from the Bureau of Agricultural Statistics. If possible, SP
data is gathered from the barangay or municipality where the property
is located. In the absence thereof, selling prices may be secured
within the province or region.
CO = Cost of Operations
Whenever the cost of operations could not be obtained or verified, an
assumed net income rate (NIR) of 20% is used. Landholdings planted to
coconut which are productive at the time of FI will continue to use the
assumed NIR of 70%. DAR and LBP will continue to conduct joint industry
studies to establish the applicable NIR for each crop covered under CARP.
0.12 = Capitalization Rate
(DAR Admin. O. No. 5 [1998])
To illustrate the computation of capitalized net income:
Number of coconut trees : 95 trees/hectare
Selling Prices : P6.74/kg.
Hence:
AGP = 95 trees/ha. x 30 nuts/tree 4.5 nuts/kg. = 633.33 kg.
CNI = 633.33 kg. x 6.74/kg. x 70% NIR for
coconut land

12 %
= P24,900.56/hectare
Comparable Sales
Comparable sales refers to any one or the average of all the applicable
sub-factors, namely sales transactions (ST), acquisition cost (AC) and
market value based on mortgage (MVM):
Where: ST = (Peso Value of Sales Transactions)
The criteria in the selection of the comparable sales transaction (ST)
shall be as follows:
a) When the required number of STs is not available at the
barangay level, additional STs may be secured from the municipality
where the land being offered/covered is situated to complete the
required three comparable STs. In case there are more STs available
than what is required at the municipal level, the most recent
transactions shall be considered. The same rule applies at the
provincial level when no STs are available at the municipal level. In all
cases, the combination of STs sourced from the barangay,
municipality and province should not exceed three transactions.
b) The land subject of acquisition as well as those subject of
comparable sales transactions should be similar in topography, land
use, i.e., planted to the same crop. Furthermore, in case of permanent
crops, the subject properties should be more or less comparable in
terms of their stages of productivity and plant density.
c) The comparable sales transactions should have been
executed within the period 1 January 1985 to 15 June 988, and
registered within the period 1 January 1985 to 13 September 1988.
d) STs are grossed up from the date of registration up to the date
of receipt of CF by LBP from DAR for processing.
AC or Acquisition Cost is deemed relevant when the property subject of
acquisition was acquired through purchase or exchange with another
property within the period 1 January 1985 to 15 June 1988 and registered
within the period 1 January 1985 to 13 September 1988, and the condition
of said property is still substantially similar from the date of purchase or
exchange to the date of FI.
AC is grossed up from the date of registration of the deed of
sale/exchange up to the date of receipt of CF by LBP from DAR for
processing.
MVM or Market Value Based on Mortgage. For MVM to be relevant or
applicable, the property subject of acquisition should have been mortgaged
as of 15 June 1988 and the condition of the property is still substantially
similar up to the date of FI. MVM refers to the latest available appraised
value of the property (DAR Admin. O. No. 5 [1998]).
Market Value
MV or Market Value per Tax Declaration is the latest Tax Declaration
(TD) and Schedule of Unit Market Value (SUMV) issued prior to receipt of
CF by LBP. The Unit Market Value (UMV) is grossed-up from the date of its
effectivity up to the date of receipt of CF by LBP from DAR processing.
Formula in Grossing-Up of Valuation Inputs
The basic formula in the grossing-up of valuation inputs such as LO's
Offer, Sales Transaction (ST), Acquisition Cost (AC), Market Value Based
on Mortgage (MVM) and Market Value per Tax Declaration (MV) is:
Grossed-up
Valuation Input = Valuation Input x Regional Consumer
Price Index (RCPI) Adjustment Factor
The various valuation inputs are multiplied with the RCPI
Adjustment Factor. The RCPI Adjustment Factor refers to the ratio of the
most recent available RCPI for the month issued by the National
Statistics Office as of the date when the CF was received by LBP from
DAR for processing and the RCPI for the month as of the
date/effectivity/registration of the valuation input. Expressed in equation
form:
Most Recent RCPI for the Month
as of the Date
of Receipt of CF by LBP from DAR
RCPI Adjustment Factor =

RCPI for the Month Issued as of
the Date/
Effectivity/Registration of the
Valuation Input
(DAR Admin. O. No. 5 [1998])
Valuation of deferred commercial farms
The formulae provided under DAR AO 5 (1998) are used in the
computation of valuation for deferred commercial farms (DAR Adm. O. No.
9 [1998]).
Valuation of lands of corporate farms
Agricultural lands owned by corporate farms are valued by considering
the following factors:
a) factors for the determination of just compensation; and
b) factors needed to stimulate the growth of cooperatives and
participation of worker-beneficiaries (Rep. Act No. 6657[1988], sec. 17
in relation to DAR Adm. O. No. 5 [1998])
Valuation of lands planted to sugarcane
There is a different computation for valuation of lands planted to
sugarcane because of the so-called "ratooning". In the valuation of lands
planted to sugar, the effects of ratooning are considered. Ratooning is the
cutting of the straw close to the ground at harvesting time after all the
standing water has been drained out to allow the young tillers to sprout out
of the rootstocks and develop into mature normal bearing plants in three or
four months with the aid of fertilizer, manure or compost (Rep. Act No.
1199 [1954], sec. 5, par. [g-2]).
The method of ratooning affects land valuation of the property. Majority
of sugar planters practice at least up to two (2) ratoons. This method
reduces the cost of production for sugar planters. Hence, the computation
of the land value is adjusted.
The applicable guideline in the valuation of lands planted to sugarcane
is the Joint DAR-LBP MC 15 (1999).
Valuation of rubber plantations
Valuation of rubber plantations are governed by Joint DAR-LBP MC
7 and 8 (1999).
Under the old rubber land valuation guideline or the Land Valuation
Guidelines No. 6 (1990), the recognized income of rubber plantations is
based on processed crumb rubber. Under one of the latest guidelines, the
standard income approach to valuation, measures the net income or
productivity of the land based on the farm produce (in their raw forms) and
not on the entire agri-business income enhanced by the added value of
farm products due to processing. It appropriately determines the
Capitalized Net Income of rubber plantations based on the actual yield and
farm gate prices of raw products (field latex and cuplump) and the
corresponding cost of production.
Furthermore, the growing market for old rubber trees which was not
considered in the old LVG is now considered.
There are also other several situations which are considered in the
computation of just compensation for rubber plantations. There are rubber
claims pending with the Department of Agrarian Reform Adjudication Board
(DARAB) for reasons such as landowner's rejection of the valuation but the
plantation remains under the management of the landowner. Due to the
time gap between the original date of FI and the date of DARAB's order to
recompute the property (during which period, the age and productivity of
the trees change), the valuation should be made on the basis of the age
and productivity of the trees at the time of recomputation (Joint DAR-LBP
Memo. Circ. No. 8, [1999]).
Compensation for Mt. Pinatubo areas
Under Joint DAR-LBP AO 3 (1994), agricultural lands affected by the
Mt. Pinatubo eruptions have been classified into three categories based on
the NEDA Region III Geographic Information System Database, to wit:
Under the Category I, are those areas actually affected by the lahar and
pyroclastic deposits, including those areas which have become silted,
eroded or continuously flooded for an indefinite period of time.
Under the Category II, are those areas not yet affected but have the
possibility of being actually affected.
Under the Category III, are those areas actually covered or affected by
ashfall but which remain productive.
The general rule is, lands under Category III shall be acquired and
landowners shall be compensated. While compensation of lands under
Categories I and II shall be effected under the following conditions:
a) Claims have been approved by the LBP and:
Landowner has executed a Deed of Assignment,
Warranty and Undertaking on or before the issuance of the Joint
DAR-LBP Administrative Order No. 3, Series of 1994; or
Transfer Certificate of Title was already registered in the
name of RP on or before the issuance of the same administrative
order; or
Partial payment was already effected.
b) Emancipation Patents/Certificates of Land Ownership Award
have been registered on or before 12 June 1991 regardless of
whether or not the claimfolder is with the LBP.
Summary Administrative Proceedings
Land Bank of the Philippines
The Land Bank of the Philippines is primarily responsible for the
determination of the land valuation and compensation for all private lands
suitable for agriculture under either the voluntary offer to sell or compulsory
acquisition arrangement as governed byRA 6657. The DAR makes use of
the determination of the land valuation and compensation by the LBP, in
the performance of its functions (Exec. Order. No. 405 [1990], sec. 1).
Public participation
There are several provisions of laws which encourage public
participation in the determination of land valuation, namely:
a) Sec. 3 of EO 129-A states:
. . . partnership between government and organization of farmers and
farmworkers in agrarian reform policy formulation, program implementation
and evaluation shall be institutionalized . . .
b) Sec. 18 of RA 6657 provides:
The LBP shall compensate the landowners in such amount as may be
agreed upon by the landowner and the DAR and the LBP . . .
c) DAR AO 14 (1990) emphasizes Sec. 47 of
RA 6657 on BARC's assistance in the initial
determination of the value of the land.
Preliminary determination of just compensation cases
The summary administrative proceeding is conducted before the
Provincial Agrarian Reform Adjudicator if the compensation offered does
not exceed two (2) million pesos; or before the Regional Agrarian Reform
Adjudicator if the government's offer is more than two (2) million pesos but
does not exceed five (5) million pesos; or before the Department of
Agrarian reform Adjudication Board if the offer is more than five (5) million
pesos (DAR Adm. Order No. 8 [1993]).
Under DAR MC 1 (1995), valuation cases involving PD 27 lands are
cognizable only by the Secretary of DAR (reiterating Sec. 12 of PD
946 [1976]). But in the recent case of Land Bank of the Phils. vs. CA, G.R.
No. 128557, 29 December 1999, the Supreme Court declared that it was
an error for the Secretary of Agrarian Reform to issue DAR MC 1
(1995) directing the DARAB to refrain from hearing valuation cases
involving PD 27 lands. It is the DARAB which has the authority to
determine the initial valuation of lands involving agrarian reform pursuant to
Sec 1 (b), Rule II, 1994 Revised Rule of the DARAB although such
valuation may only be considered preliminary as the final determination of
just compensation is vested in the courts.
The PARAD's, RARAD's, or DARAB's summary administrative
proceeding is merely a preliminary determination of the just compensation
due to the landowner. The landowner has the right to question such
preliminary determination of the Adjudication Board before the Special
Agrarian Courts.
"The determination made by the DAR is only preliminary unless
accepted by all parties concerned. Otherwise, the courts of justice will still
have the right to review with finality the said determination in the exercise
of what is admittedly a judicial function" (Association of Small Landowners
in the Philippines, Inc. vs. Secretary of Agrarian Reform, 175 SCRA 345
[1989], at p. 382).
The Regional Trial Courts have not been completely divested of jurisdiction
over agrarian reform matters. Section 56 of RA 6657, on the other hand,
confers "special jurisdiction" on "Special Agrarian Courts", which are
Regional Trial Courts designated by the Supreme Court at least one (1)
branch within each province to act as such. These Regional Trial
Courtsqua Special Agrarian Courts have, according to Section 57 of the
same law, original and exclusive jurisdiction over: 1) "all petitions for the
determination of just compensation to land-owners," and 2) "the
prosecution of all criminal offenses under . . . (the) Act (at 890).Vda. de
Tangub vs. CA, 191 SCRA 885 (1990)
Although the proceedings are described as summary, the landowner and
other interested parties are nevertheless allowed an opportunity to submit
evidence on the real value of the property. But more importantly, such
determination of just compensation by the DAR, as earlier stated is by no
means final and conclusive upon the landowner or any other interested
party for Section 16 (f) clearly provides: "Any party who disagrees with the
decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation" Magana vs. Estrella, 201 SCRA 536
(1991).
In Phil. Veterans Bank vs. Court of Appeals, G.R. No. 132767, 18
January 2000, petitioner Bank argued that the DAR Adjudicators have no
jurisdiction to determine just compensation for the taking of lands under
CARP because such jurisdiction is vested in Regional Trial Courts
designated as Special Agrarian Courts. Hence, Petitioner could file its
petition with the RTC beyond the 15-day period of appeal from the decision
of the DAR Adjudicator. The RTC dismissed the petition of Petitioner for
being filed beyond the 15-day period for appeal. The Supreme Court
reiterated its ruling in Republic vs. Court of Appeals, supra, and said:
. . . this rule is an acknowledgment by the DARAB that the power to decide
just compensation cases for the taking of lands under R.A. No. 6657 is
vested in the courts. It is error to think that, because of Rule XIII, S 11, the
original and exclusive jurisdiction given to the courts to decide petitions for
determination of just compensation has already been transformed into an
appellate jurisdiction. It only means that, in accordance with settled
principles of administrative law, primary jurisdiction is vested in the DAR as
an administrative agency to determine in a preliminary manner the
reasonable compensation to be paid for the lands taken under the
Comprehensive Agrarian Reform Program, but such determination is
subject to challenge in the courts.
The jurisdiction of the Regional Trial Courts is not any less "original and
exclusive" because the question is first passed upon by the DAR, as the
judicial proceedings are not a continuation of the administrative
determination. For the matter, the law may provide that the decision of the
DAR is final and unappealable. Nevertheless, resort to courts cannot be
foreclosed on the theory that courts are the guarantors of the legality of
administrative action.
Valuation of PD 27 Lands
Under Sec. 2 of EO 228, land valuation shall be based on the Average
Gross Production (AGP) as determined by the Barangay Committee on
Land Production (BCLP). The formula is:
Rice Lands LV = AGP x 2.5 x P 35 *
Corn Lands LV = AGP x 2.5 x P 31**
* government support price for one cavan of 50 kilos of palay on
October 21, 1972
** government support price for one cavan of 50 kilos of corn on
October 21, 1972
Lease rentals paid to the landowner by the farmer-beneficiary after 21
October 1972 shall be considered as advance payment for the land.
The factor of government support price provided under EO 228 does not
undervalue PD 27 lands. Under DAR AO 13 (1994), an increment of 6%
yearly interest compounded annually on lands covered by PD 27 and EO
228 is granted. The formula is:
(Computed land value using the original formula) x (1.06)n
where : n = number of years from date of tenancy up to
effectivity date
The landowners qualified to receive the compensation based on the
increment formula are:
a) Those whose lands are actually tenanted as of October 21,
1972 or thereafter and Operation Land Transfer (OLT) covered;
b) Those who opted for government financing thru LBP as the
mode of compensation; and
c) Those who have not yet been paid for the value of the land.
For those who were partially paid, the yearly increment of 6%
compounded annually shall only be applied to the unpaid balance.
According to the above mentioned administrative issuance, the said grant
of increment is reckoned from the effectivity date of PD 27or date when the
land was actually tenanted up to the effectivity date of DAR AO 13 (1994)
or up to 27 October 1994 only. It seems the grant of increment cannot be
applied after this effectivity date even if the actual payment can be had
after 27 October 1994.
In the case of Benosa vs. CA, G.R. No. 122231, 27 November 1995, on
the issue of granting interest to the landowner, it was held:
It is settled that the landowners are entitled to legal interest on the
amount payable from the time the property was taken until full
payment is made (National Power Corporation vs. Angas, 208 SCRA
542; Commissioner of Public Highways vs. Burgos, supra; Ortula vs.
Republic, 22 SCRA 477; Republic vs. Delente, supra). DAR
Administrative Order No. 13, series of 1994 which grants increment of
6% yearly interest compounded annually on lands covered by P.D.
No. 27 and E.O. No. 228, squarely recognizes the above rule and thus
applies to the private respondents.
In LBP vs. CA, supra, the Supreme Court decided not to apply the 6%
increment to the valuation because the Court of Appeals affirmed the
PARAD's use of the 1992 Gross Selling Price in the valuation of the private
respondent's land (following the ruling in the Court of Appeals case
of Galeon vs. Pastoral, CA-G.R. No. 23168; Rollo, p. 36)
Mode of Compensation
Landowners may be paid in cash or in kind. Payment in kind is justified
in the case of Association of Small Landowners of the Philippines, Inc. vs.
Secretary of Agrarian Reform, 175 SCRA 343 (1989) as follows:
It cannot be denied from these cases that the traditional medium for
the payment of just compensation is money and no other. And so,
conformably, has just compensation been paid in the past solely in
that medium. However, we do not deal here with the traditional
exercise of the power of eminent domain. This is not an ordinary
expropriation where only a specific property of relatively limited area is
sought to be taken by the State from its owner for a specific and
perhaps local purpose. What we deal with here is a revolutionary kind
of expropriation.
The expropriation before us affects all private agricultural lands
wherever found and of whatever kind as long as they are in excess of
the maximum retention limits allowed their owners. This kind of
expropriation is intended for the benefit not only of a particular
community or of a small segment of the population but of the entire
Filipino nation, from all levels of our society, from the impoverished
farmer to the land-glutted owner. Its purpose does not cover only the
whole territory of this country but goes beyond in time to the
foreseeable future, which it hopes to secure and edify with the vision
and the sacrifice of the present generation of Filipinos. Generations
yet to come are as involved in this program as we are today, . . . .
Accepting the theory that payment of the just compensation is not
always required to be made fully in money, we find further that the
proportion of cash payment to the other things of value constituting the
total payment, as determined on the basis of the areas of the lands
expropriated, is not unduly oppressive upon the landowner. It is noted
that the smaller the land, the bigger the payment in money, primarily
because the small landowner will be needing it more than the big
landowners, who can afford a bigger balance in bonds and other
things of value. No less importantly, the government financial
instruments making up the balance of the payment are "negotiable at
any time". The other modes, which are likewise available to the
landowner at his option, are also not unreasonable because payment
is made in shares of stock, LBP bonds, other properties or assets, tax
credits, and other things of value equivalent to the amount of just
compensation.
The recognized rule indeed, is that title to the property expropriated
shall pass from the owner to the expropriator only upon full payment of
the just compensation. Jurisprudence on this settled principle is
consistent both here and in other democratic jurisdictions" (at 386, 388
and 389).
Cash Payment
Under Sec. 18 of RA 6657, the proportion of payment in cash,
dependent on the area/hectarage of the land valued is subject to the
following:
a) above 50 hectares, insofar as the excess hectarage is
concerned = 25% cash
b) above 24 hectares and up to 50 hectares = 30% cash
c) 24 hectares and below = 35% cash
For voluntary offer to sell, the cash portion is increased by 5%.
Payment in kind
Landowners may be paid with:
a) Shares of stock in government owned or controlled
corporation, LBP preferred shares, physical assets or other qualified
investments.
b) Tax credits; or
c) LBP bonds
Features of LBP bonds
The new ten (10)-year LBP bonds have attractive features which are
more acceptable and marketable than the other investment instruments. As
provided under Sec. 18 of RA 6657, these features are:
1) Its market interest rates are aligned with 91-day treasury bill
rates, net of applicable final withholding tax, payable twice a year
six months from date of issue and every six months thereafter.
2) One-tenth of the bond's face value matures every year from
date of issue up to the tenth year.
3) The bond is fully guaranteed by the national government.
4) The bond is non-denominated. Upon request, it can be split
according to amounts desired by the bondholder.
5) The bonds are highly transferable and negotiable. Such LBP
bonds may be used by the landowner, his successors in interest or his
assigns, up to the amount of their face value, for any of the following:
a) Acquisition of land or other real properties of the government,
including assets under the Asset Privatization Program and other
assets foreclosed by government financial institutions in the same
province or region where the lands for which the bonds were paid are
situated;
b) Acquisition of shares of stock of government-owned or
controlled corporations or shares of stock owned by the government in
private corporations;
c) Substitution for surety or bail bonds for the provisional release
of accused persons, or performance bonds;
d) Security for loans with any government financial institution,
provided the proceeds of the loans shall be invested in an economic
enterprise, preferably in a small-and medium-scale industry, in the
same province or region as the land for which the bonds are paid;
e) Payment for various taxes and fees to government; Provided,
That the use of these bonds for these purposes will be limited to a
certain percentage of the outstanding balance of the financial
instruments: Provided, further, That the PARC shall determine the
percentage mentioned above;
f) Payment for tuition fees of the immediate family of the original
bondholder in government universities, colleges, trade schools, and
other institutions;
g) Payment for fees of the immediate family of the original
bondholder in government hospitals; and
h) Such other uses as the PARC may from time to time allow.
The 100% face value and negotiability of LBP bonds are well described
in the case of Gonzales vs. GSIS, 107 SCRA 492 (1981). Petitioner filed a
petition for mandamus to compel the respondent Government Service
Insurance System (GSIS) to accept 6% interest-bearing bonds issued by
the Land Bank of the Philippines at their par or face value as payment for
petitioners' outstanding housing loan. The act of the GSIS in discounting
the LBP bonds was found invalid. The Court ruled:
Land Bank bonds are certificates of indebtedness, approved by the
Monetary Board of the Central Bank, fully tax-exempt both as to
principal and income, and bear interest at the rate of 6% per annum
redeemable at the option of the Land Bank at or before maturity, which
in no case shall exceed 25 years. They are fully negotiable and
unconditionally guaranteed by the Government of the Republic of the
Philippines. These bonds are deemed contracts and the obligations
resulting therefrom fall within the purview of the non-impairment
clause of the Constitution, and any impairment thereof may take any
encroachment in any respect upon the obligation and cannot be
permitted. Thus, the value of these bonds cannot be diminished by
any direct or indirect act, particularly, since said bonds are fully
guaranteed by the Government of the Republic of the Philippines.
They are issued not in the open market nor for the captive market of
landowners and to facilitate the speedy transfer of lands to the tenant-
farmers in support of the land reform program of the Government.
They are not ordinary commercial paper in that sense subject to
discounting (at 498, 499 and 502).
Mode of Payment for PD 27 Landowners
The landowners shall be paid in any of the following modes, at their
option (Exec. Order No. 228 [1987], sec. 3):
a) Bond payment over ten (10) years, with ten percent (10%) of
the value of the land payable immediately in cash, and the balance in
the form of LBP bonds bearing market rates of interest that are aligned
with 90-day treasury bills rates, net of applicable final withholding tax.
One-tenth of the face value of the bonds shall mature every year from
the date of issuance until the tenth year.
The LBP bonds issued hereunder shall be eligible for the purchase
of government assets to be privatized.
b) Direct payment in cash or in kind by the farmer-beneficiaries
with the terms to be mutually agreed upon by the beneficiaries and
landowners and subject to the approval of the DAR; and
c) Other modes of payment as may be prescribed or approved by
the PARC.
Under Sec. 9 of EO 229, landowners who voluntarily offer to sell their
lands are given the same incentive given to PD 27landowners under EO
228, which is the exemption from the payment of capital gains tax and
other taxes and fees.
CHAPTER 5
Land Redistribution
Qualified Agrarian Reform Beneficiaries Under CARP
Section 22 of RA 6657 enumerates the groups of farmers and tillers who
are qualified to become beneficiaries of the Comprehensive Agrarian
Reform Program. They are the following:
(a) Children of landowners, who qualify under Section 6 of R.A.
6657;
(b) Agricultural lessees and share tenants;
(c) Regular farmworkers;
(d) Seasonal farmworkers;
(e) Other farmworkers;
(f) Actual tillers or occupants of public lands;
(g) Collectives or cooperatives of the above beneficiaries; and
(h) Others directly working on the land.
Section 22 also provides that "[t]he lands covered by the CARP shall be
distributed as much as possible to landless residents of the same
barangay, or in the absence thereof, landless residents of the same
municipality", following the order of priority quoted above.
Qualifications of Agrarian Reform Beneficiary
According to Section 22 of RA 6657, to qualify as an agrarian reform
beneficiary, one must:
(a) be landless;
(b) be at least 15 years old or head of a family at the time the
property was transferred in the name of the Republic of the
Philippines; and
(c) have the willingness, ability, and aptitude to cultivate the land
and make it as productive as possible.
The requirements enumerated in Section 22 are the minimum or basic
qualifications for a farmer to become a beneficiary of land under the
agrarian reform program.
Qualifications of landowner's children as preferred beneficiaries
As provided in Section 6, three (3) hectares of agricultural land may be
awarded to each child of the landowner, on the condition that he is at least
15 years of age at the time of the award, and that he is actually tilling the
land or directly managing the farm. "Directly managing the farm" refers to
the cultivation of the land through personal supervision under the system of
labor administration.
Children of landowners are classified as preferred beneficiaries, and the
land awarded to them does not form part of the retention right of the parent-
landowners. The transfer of the land to them is effected by the issuance of
CLOAs.
The rules on payment for the value of the land by the Land Bank and
the payment of amortizations by the beneficiary do not apply in the case of
preferred beneficiaries, unless there has been a tenancy relationship
between the parent-landowners and the children. In the latter case, the
Land Bank shall finance the acquisition of the property.
The rights and obligations of landowners' children as preferred
beneficiaries are governed by Memorandum Circular No. 4, Series of 1994.
"Landless Persons" Under CARL
Section 25 of RA 6657 provides that a landless person is one who owns
less than three (3) hectares of agricultural land. Section 7 also provides
that an owner-tiller may still be awarded another parcel of agricultural land
under the program, provided that he is actually cultivating that land, and
only to the extent of the difference between the area of the land he owns
and the award ceiling of three (3) hectares. A tenant who owns one hectare
of agricultural land may still qualify as a beneficiary for two more hectares.
Persons Disqualified as Agrarian Reform Beneficiaries
The following persons are disqualified from becoming agrarian reform
beneficiaries:
a) Those who are not included in the enumeration in Section 22;
b) Those who fail to meet the qualifications prescribed under
Section 22;
c) Those who have culpably sold, disposed of, or abandoned
their land received under CARP or P.D. 27;
d) Those whose land has been foreclosed by the Land Bank, or
repossessed by the landowner in case of Voluntary Land
Transfer/Direct Payment Scheme, for non-payment of an aggregate of
three annual amortizations;
e) Those who have converted their land to non-agricultural use
without prior approval by DAR; and
f) Those guilty of negligence or misuse of the land or any support
extended to him (Sec. 22).
Grounds for disqualification of beneficiary
Under DAR Memorandum Circular No. 19 (1996), the following violations
will result in the disqualification of a farmer from being a beneficiary or from
continuing as such under the agrarian reform program:
(a) Misuse or diversion of financial and support services extended
to the beneficiary;
(b) Misuse of the land;
(c) Material misrepresentation of the beneficiary's basic
qualifications as provided under Section 22 of R.A. No. 6657, P.D. No.
27, and other agrarian reform laws;
(d) Sale, transfer, lease, or other forms of conveyance by the
beneficiary of rights over the land, in circumvention or R.A. No.
6657, P.D. No. 27, and other agrarian reform laws;
(e) Continuous neglect or abandonment of the awarded land over
a period of two calendar years as determined by the Secretary or his
authorized representative;
(f) Failure to pay an aggregate of three (3) consecutive
amortizations to the Land Bank or to the landowner, except in cases of
fortuitous events;
(g) Illegal conversion of the land by the beneficiary;
(h) Waiver of rights to awarded lands;
(i) Beneficiary's surrender of awarded land to landowner or other
non-beneficiary; and
(j) Other acts or omissions that circumvent laws related to the
implementation of the agrarian reform program.
A separate chapter on prohibited acts, supra., discusses these
violations in detail.
Squatters disqualified to become CARP beneficiaries
In the case Central Mindanao University vs. DARAB, G.R. No. 100091,
October 22, 1992, the university entered into a contract with members of
the faculty and staff for an experimental rice project, under which the latter
were given tracts of land for cultivation. It was expressly stipulated in the
contract that no landlord-tenant relationship arose between the parties.
After the term of the project has expired, the university served notices to
vacate on the occupants of the land. The occupants refused to vacate the
land, claiming that they are now entitled to be awarded the land they are
tilling pursuant to the land reform program.
The Supreme Court held that squatters are disqualified from becoming
CARP beneficiaries because they are "guilty of committing prohibited acts
of forcible entry or illegal detainer, [and therefore] do not qualify as
beneficiaries of and may not avail themselves of the rights and benefits of
agrarian reform".
The Supreme Court also ruled that "a person entering upon the lands of
another, not claiming in good faith the right to do so by virtue of any title of
his own, or by virtue of some agreement with the owner or with one whom
he believes holds title to the land, is a squatter. Squatters cannot enter the
land of another surreptitiously or by stealth, and under the umbrella of the
CARP, claim rights to said property as landless peasants." (Emphasis
supplied.)
Selection of Beneficiaries
The Municipal Agrarian Reform Officer or the Agrarian Reform Program
Technologist, with the participation of the BARC, screens the beneficiaries.
A farmer who claims priority over those who have been identified by the
MARO as beneficiaries should file a written protest with the MARO or the
PARO who is processing the claim folder. Once the protest is filed, the
MARO/PARO shall comment on the protest and submit the same to the
Regional Director who shall rule on the protest. If the parties disagree with
the RD's decision, they can file a written motion for reconsideration. If the
motion is denied, the farmers can appeal to the Secretary.
Landowner not entitled to select beneficiaries
It is not the landowner who distributes his land, so he does not have the
right to select who the transferees. Land acquisition and land distribution
are two different transactions. It is the government which buys the land
from the landowner and then sells it to the beneficiaries. It is not a direct
transaction between the landowner and the beneficiaries.
This rule also applies to voluntary land transfer/direct payment scheme.
Even under this scheme, it is not the landowner who determines who will
be the beneficiaries. The beneficiaries must qualify under the law, and it is
still the MARO and the BARC who do the screening.
Farmworker defined
A farmworker is defined by Section 3 (g), R.A. 6657 as a natural person
who renders service for value as an employee or laborer in an agricultural
enterprise or farm regardless of whether his/her companion is paid on a
daily, weekly, monthly, or "pakyaw" basis. The term includes an individual
whose work has ceased because of a pending agrarian dispute and who
has not obtained a substantially equivalent and regular farm employment.
Special qualifications for farmworkers in commercial farms
Aside from the minimum qualifications in Section 22 of R.A. 6657,
Section 4 of Administrative Order No. 9, Series of 1998, provides for
special qualifications for farmworkers in commercial farms, which are as
follows:
(a) they must be at least 18 years old upon filing of application as
agrarian reform beneficiary;
(b) they must have the willingness, aptitude, and ability to cultivate
and make the land productive; and
(c) they must have been employed in the commercial farm
between June 15, 1988 and June 15, 1998 or upon expiration or
termination of the deferment.
Farmworkers who have worked longest on the land continuously shall
be given priority.
Specific disqualifications for commercial farmworkers
Section 5 of Administrative Order No. 9, Series of 1998, provides that the
following shall be grounds for the disqualification of potential beneficiaries:
a) Mandatory retirement;
b) Optional retirement or resignation, provided that the
farmworker has not filed any case questioning such retirement or
resignation;
c) Dismissal for cause by final judgment;
d) Waiver or refusal to be a beneficiary; and
e) Violation of agrarian reform laws and regulations as
determined with finality by the proper tribunal or agency.
Questions have been raised on whether dismissal for cause
distinguishes between just and authorized causes as these two categories
are defined in Presidential Decree No. 442, otherwise known as the Labor
Code of the Philippines.
"Just cause" may consist in serious misconduct, willful disobedience of
reasonable and lawful orders of the employer, gross neglect and
abandonment of duties, dishonesty and loss of confidence of the employer
in the employee, commission of crime or offense by the employee against
the person or immediate family of the employer, and analogous cases
(see LABOR CODE, Article 282).
"Authorized cause", on the other hand, may be one of the following:
introduction of labor-saving devices, redundancy, retrenchment due to
legitimate business losses, closure of business, and ailment or disease of
the employee (see LABOR CODE, Article 283).
Just cause is distinguished from authorized cause in the Labor
Code because while just causes have something to do with the moral
depravity and fault of the employee, termination for authorized causes is
due to circumstances beyond the control of the employee.
It is evident from the history of the provision of the administrative
issuances on qualified farmworkers that the intention is to distinguish
between just and authorized causes. For one, the list of qualifications in
Section 4, Administrative Order No. 9, Series of 1998 provides that the
potential beneficiary "must have been employed in the commercial farm
between June 15, 1988 and June 15, 1998 or upon expiration or
termination of the deferment". This new provision makes the qualifications
encompass even those whose services have been terminated by the
commercial farm as of the time the deferment period expires.
Secondly, the original rules governing the acquisition of commercial
farms, Administrative Order No. 6, Series of 1998, in item (b), no. 2, letter
M, Part IV thereof, provides for dismissal from service for cause as a
ground for disqualification. Retrenchment as a ground for disqualification is
listed as a separate item, namely, item (d). This shows that item (b) refers
only to dismissal for just causes, and does not include dismissal for
authorized causes.
Administrative Order No. 6, Series of 1998 was eventually superseded
by Administrative Order No. 9, Series of 1998. The latter administrative
order removed retrenchment as a ground for disqualification. Only
dismissal for cause (meaning just cause) has been retained.
Thirdly, Administrative Order No. 9, Series of 1998, item (h), Section 6,
Article II, which provides for the prioritization of beneficiaries, still includes
retrenched workers among the potential beneficiaries. The provision states:
The Beneficiary Screening Committee shall prioritize the potential
ARBs pursuant to Section 22 of R.A. 6657. They shall be ranked according
to the length of their continuous service in the commercial farm reckoned
from June 15, 1988 up to the expiration of the deferment period; residency,
i.e. whether residing in the same barangay or municipality; whether they
have been validly retrenched, i.e. with approval of the Dept. of Labor and
Employment; the nature of their work, i.e. whether directly related to farm
activities, and such other factors as the Committee may deem appropriate.
(Underscoring supplied.)
Different Categories of Farmworkers
Section 3, R.A. 6657 identifies these categories as follows:
(a) Regular farmworker is a natural person who is employed on a
permanent basis by an agricultural enterprise or farm.
(b) Seasonal farmworker is a natural person who is employed on a
recurrent, periodic, or intermittent basis by an agricultural enterprise or
farm, whether as a permanent or a non-permanent laborer, such as
"dumaan" and "sacada".
(c) Other farmworker is a farmworker who is neither a regular nor a
seasonal farmworker, such as a farmworker who performs farm
activities but is not paid for his or her labor.
DAR A.O. No. 9, Series of 1998, on the other hand, identifies two more
categories:
(a) Technical farmworker is a natural person employed by an
agricultural enterprise or farm, who is highly educated and trained and
performs functions in scientific, engineering, medical, teaching, and other
fields, but who is not vested with managerial or supervisory functions, such
as chemists, agronomists, veterinarians, and soil analysts.
(b) Managerial or supervisory farmworker is a natural person who is
employed by an agricultural enterprise or farm vested with powers and
prerogatives (1) to lay down and execute management policies; (2) to hire,
transfer, suspend, layoff, recall, discharge, assign, or discipline employees;
and/or (3) to effectively recommend such managerial actions.
Categories of farmworkers qualified to become beneficiaries under
CARP
Farmworkers who are directly working on the land at the time DAR
conducts actual investigation and documentation of the agricultural
enterprise, whether as regular, seasonal, or other farmworkers are qualified
beneficiaries. Under A.O. No. 9, Series of 1998, however, other
farmworkers who are directly employed by the agri-business enterprise or
corporation may be considered as beneficiaries, provided they meet the
basic qualifications prescribed in Section 22.
Selection of Beneficiaries of Commercial Farms
Under A.O. No. 9, Series of 1998, there is a Beneficiary Screening
Committee responsible for the qualification, identification, and selection of
agrarian reform beneficiaries for acquired commercial farms. The
Committee is composed of the following:
(1) The Provincial Agrarian Reform Officer, as Chairman;
(2) The Municipal Agrarian Reform Officer;
(3) The Provincial Agrarian Reform Coordinating Committee
(PARCCOM) Chairman or his duly authorized representative;
(4) The Barangay Agrarian Reform Council (BARC) Chairman or
his duly authorized representative from each of the barangays where
the subject commercial farm is situated; and
(5) The Barangay Chairman or his duly-authorized representative,
from each of the barangays where the subject commercial plantation
is situated; as members.
The Committee comes up with a master list of qualified beneficiaries,
and a waiting list of those who possess the minimum qualifications and
none of the disqualifications, but who could not otherwise be
accommodated in the updated master list.
Remedy of farmworker excluded from master list
A farmworker who is excluded from the masterlist may file a written
protest with the Beneficiary Screening Committee. The Committee
Chairman shall furnish a copy of the protest to the beneficiaries whose
inclusion in the list is being questioned. The protestees shall file their
answer or comment on the protest, and the Chairman shall transmit the
records to the Regional Director for the latter's decision. The Regional
Director shall resolve the protest based on substantial evidence showing
the qualification or disqualification of the beneficiary subject of the protest.
No motion for reconsideration of the decision of the Regional Director shall
be allowed, but such decision may be appealed to the Office of the
Undersecretary for Field Operations and Support Services, whose decision
shall be final and executory. Notwithstanding the appeal, the decision of the
Regional Director shall not be stayed.
Managerial and supervisory farmworkers
Managerial and supervisory farmworkers may qualify as CARP
beneficiaries provided that they have been identified as qualified
beneficiaries prior to their promotion, and that they give up their managerial
or supervisory positions (see A.O. No. 9, Series of 1998). In the case,
however, of supervisory or managerial employees whose responsibilities
do not actually conform to the definition of supervisory or managerial
farmworkers, there are two views on the matter. One holds that supervisory
and managerial employees of commercial farms are disqualified from
becoming beneficiaries since the laws and regulations specify the rank and
not the job description. The other view is that they are qualified so long as
they are directly working on the land, and possess all the qualifications and
none of the disqualifications for becoming an agrarian reform beneficiary.
It is our opinion that these so called "supervisory or managerial"
employees can qualify as beneficiaries. The definition of supervisory or
managerial farmworkers in A.O. No. 9, Series of 1998, provides that to be
considered a supervisor or a manager, the farmworker must be vested with
the power to formulate and implement management policies; to hire, fire,
assign, and discipline employees; and/or to effectively recommend such
managerial actions.
Jurisprudence supports the view that this power is essential before an
employee may be considered as supervisory or managerial. InFranklin
Baker Company vs. Trajano, G.R. No. 75039, January 28, 1988, it was
held:
To make one a supervisor, the power to recommend must not be
merely routinary or clerical in nature but requires the use of
independent judgment. In other words, the recommendation is (1)
discretionary or judgmental, not clerical; (2) independent, not a
dictation of someone else; and (3) effectively considered in the
management decision. If these qualities are lacking or, worse, if the
power to recommend is absent, then the person is not really a
supervisor but a rank-and-file employee.
There are instances when the position of a farmworker is denominated
"managerial" or "supervisory" even when he is not performing the
functions enumerated in the definition. Hence, it is our view that the
functions performed, rather than the rank, should be determinative of
the status of the farmworker. They should still qualify as beneficiaries,
provided they meet all the qualifications and possess none of the
disqualifications, subject to the rules on prioritization set down under
the law.
Seasonal farmworkers
Section 22 includes seasonal farmworkers among the beneficiaries
qualified to receive land under R.A. 6657, following the order of priority set
forth in the law.
There is a view that seasonal farmworkers are entitled "only to a just
share of the fruits of the land", but not to own land. This view finds support
in Fortich vs. Corona, G.R. No. 131457, August 19, 1999, wherein the
Supreme Court said:
Again, as expressed in the opinion of Mr. Martin, intervenors, who are
admittedly not regular but seasonal farmworkers, have no legal or
actual and substantive interest over the subject land inasmuch as they
have no right to own land. Rather, their right is limited only to a just
share of the fruits of the land.
The Court based its observation on Article XIII, Section 4 of
the Constitution, which provides:
The State shall, by law, undertake an agrarian reform program
founded on the rights of farmers and regular farmworkers, who are
landless, to own directly or collectively the lands they till or, in the case
of other farmworkers, to receive a just share of the fruits thereof.
It is our view, however, that the fact that seasonal farmworkers may not
have been given a constitutional right does not mean that they do not have
a statutory right. Congress, in interpreting and implementing Article XIII,
Section 4 of the Constitution enacted Section 22 of RA 6657 which
explicitly includes seasonal farmworkers among the qualified beneficiaries.
Moreover, the observation made by the Supreme Court is only an obiter
dictum and cannot be made the basis for the loss or acquisition of legal
rights. Moreover, even a collective or cooperative of, among others,
"seasonal farmworkers" and "other farmworkers" may be awarded lands
under the agrarian reform program.
Collectives or Cooperatives as Qualified Beneficiaries
A collective or cooperative composed of the beneficiaries listed in Sec.
22 (a) to (e) of R.A. 6657, to wit: agricultural lessees and share tenants,
regular farmworkers, seasonal farmworkers, other farmworkers, and actual
tillers or occupants of public lands, can, by itself, be an awardee of land
under CARP. Sec. 25 of R.A. 6657, in fact, provides that "(t)he
beneficiaries may opt for collective ownership, such as co-ownership or
farmers cooperative or some other form of collective organization".
Cooperatives refer to "organizations composed primarily of small
agricultural producers, farmers, farmworkers, or other agrarian reform
beneficiaries who voluntarily organize themselves for the purpose of
pooling land, human, technological, financial, or other economic resources,
and operated on the principle of one member, one vote. A juridical person
may be a member of a cooperative, with the same rights and duties as a
natural person." (Section 3 [k] of R.A 6657).
The aggregate size of land that may be awarded to an association or a
cooperative shall not exceed the total number of members multiplied by the
award ceiling of three hectares, except where the Presidential Agrarian
Reform Council (PARC) approves the award of an area exceeding this
limit. Thus, a cooperative composed of 25 members, for instance, can
receive a maximum award of 75 hectares. (see Sec. 25, R.A 6657)
Inclusion of names of members of collective or cooperative not
mandatory
Memorandum Circular No. 24, Series of 1996, Memorandum Circular
No. 14, Series of 1994, and Administrative Order No. 3, Series of 1993,
governing the issuance of collective CLOAs, expressly require the listing of
the names of all members in the CLOA issued to a collective or
cooperative. The purpose of this requirement is to "protect a farmer-
member from possible summary and unjust separation by the cooperative
or association" (Part IV-A-1).
It is our view that inclusion in the CLOA of the names of all the
members of a collective or cooperative is not necessary in all cases. Where
the CLOA is under co-ownership, the names of all the co-owners (i.e.
individual farmer-beneficiaries) should be listed in the collective CLOA.
However, where the CLOA is awarded in the name of the association or
cooperative, there is no need to include the names of the individual
members thereof in the collective CLOA. Sec. 25 of R.A. 6657, in fact,
provides that "(t)itle to the property shall be issued in the name of the co-
owners or the cooperative or collective organization as the case may be."
(Underscoring supplied)
Women as Beneficiaries under CARP
Women are qualified to become agrarian reform beneficiaries in their
own right, not only as spouses of agrarian reform beneficiaries. For as long
as a female farmer's rights have vested and have been established
separately from her husband's or her father's, she is entitled to receive land
under the program.
The term "vested right" has been defined in the case of Balboa vs.
Farrales, G.R. No. 27059, February 14, 1928, as some right or interest in
property which has become fixed and established and is no longer open to
doubt or controversy". The Supreme Court, citing American cases,
explained that "rights are vested when the right to enjoyment, present or
prospective, has become the property of some particular person or persons
as a present interest".
Involved in the Balboa case was an application for homestead patent.
During the pendency of his application, however, the law granting him the
right to such patent was repealed. The Supreme Court upheld his claim,
stating that at the time the law was repealed, the applicant has complied
with all the requirements for the issuance of a patent, hence, his right to the
patent has vested. "At least on that date," said the Court, "his right to the
land, as owner, ripened into a vested right. It was no longer expectant as
depending on some events or the performance of some conditions."
Other rights as beneficiaries have been granted to women through other
DAR administrative issuances. Under Memorandum Circular No. 10, Series
of 1986, support services in terms of loan assistance in an amount not to
exceed three thousand pesos (P3,000.00) has been guaranteed for
qualified rural women's pre-cooperative groups. Under Memorandum
Circular No. 4, Series of 1992, a budget has been allocated for support
services that will empower women beneficiaries.
Under Part II.D of Administrative Order No. 2, Series of 1993,
farmworkers who are husband and wife may be separately entitled to three
(3) hectares each provided that their vested rights to the land have been
duly established. Each of the spouses shall be issued a separate CLOA.
Requirement for separate cultivation by spouses of beneficiaries
Under Memorandum Circular No. 18, Series of 1996, women who are
spouses of agrarian reform beneficiaries are required to also cultivate the
land, aside from the cultivation undertaken by her husband. We are of the
opinion that separate cultivation must be required of women only where
they are recipients of land in their own right, and should no longer be
required of women whose spouses receive land under the program.
To require separate cultivation by spouses of male agrarian reform
beneficiaries would work against, rather than protect, the interests of
women. This requirement fails to recognize the role of women in the rural
household, particularly in agrarian areas. Women are usually given
reproductive tasks, such as upbringing of children, household chores, and
other work having to do with the maintenance of the home. An additional
burden of cultivating the land would be harshly onerous upon women who
are spouses of beneficiaries.
The Civil Code and the Family Code recognize that the role of women
in traditional families is the maintenance of the household. In both Codes,
maintenance of the home is recognized as the wife's contribution to the
conjugal partnership of gains or to the absolute community of property as to
entitle her to one-half share of the marital partnership property. As long as
the wife works in the home, all properties received or acquired during the
subsistence of the marriage is considered part of the conjugal partnership
of gains or of the absolute community of property. There is no reason
for R.A. 6657 to be given a different interpretation as regards the rights of
women to land awarded to their spouses under the Comprehensive
Agrarian Reform Program.
Modes of Distribution: Individual vs. Collective Ownership
It is the policy of the CARP to establish owner-cultivatorship of
economic-sized farms as basis of Philippine agriculture. In line with this is
the award of three hectares to the individual beneficiaries as the distribution
limit. With a view of equitable land distribution and ownership, DAR is
mandated to distribute agricultural lands to as many tenants and
farmworkers as possible. Furthermore, the distribution of land shall be
made directly to individual beneficiaries.
In general, lands shall be distributed directly to the individual worker
beneficiaries. In case it is not economically feasible and sound to divide the
land then it shall be collectively owned by the worker beneficiaries who
shall form into a worker cooperative or association which will deal with the
corporation or business association. [Rep. Act No. 6657 (1988) Sec.
29; DAR A.O. No. 10 (1990), II (B)]
The beneficiaries may opt for collective ownership such as co-
ownership or farmer's cooperative or some other form of collective
organization. The total area that may be awarded under a collective CLOA
shall not exceed the total number of co-owners or members of the
cooperative or collective organization multiplied by the award limit of three
hectares except in meritorious cases as determined by the PARC, pursuant
to Section 25 of R.A. No. 6657. Collective co-ownership CLOAs may be
issued to cover any CARPable lands whether private lands or public lands
within proclaimed DAR settlement projects or public lands turned over to
the DAR by other government agencies and institutions pursuant to E.O.
No. 407 as amended. [Rep. Act No. 6657 (1988), sec. 25.]
Lands covered by collective CLOAs on a co-ownership basis shall be
subdivided in accordance with the actual occupancy of the ARBs, provided
it does not exceed three (3) hectares. Landholding covered by CLOAs in
the name of cooperative or farmer's organization, may, at the option of the
organization, also be subdivided based on the share of each member
provided that the subdivision as determined by the DAR shall be
economically feasible. [DAR A. O. No. 03 (1993), III (E).] Subdivision of
lands under collective CLOA is governed by A.O. No. 03, Series of 1993.
Factors Considered in Land Distribution
In the equitable distribution of lands subject of CARP, actual occupancy
of a tenant shall be the basis of the award, provided it does not exceed
three hectares. For untenanted lands, all the farmworkers therein shall be
considered as potential beneficiaries in the estate; provided that the
proportional share of each will not exceed three (3) hectares; otherwise,
additional ARBS, shall be considered. For unoccupied lands, each
identified ARB may be allowed the award ceiling of three hectares,
provided that there are enough lands for distribution under CARP in the
barangay to accommodate others who are equally qualified but who may
not have been considered as awardees in such land under acquisition. In
all cases, the aggregate award to an ARB shall not exceed the limit of three
hectares and his total land ownership as a result of the award shall not
exceed three (3) hectares. (DAR A.O. No. 10 [1990], II [D])
Distribution Procedure
The MARO, upon completion of land acquisition, validates the list of
qualified beneficiaries who were identified during the acquisition phase who
are still present and qualified to receive the land. Through a letter or CARP
Beneficiary Certificate (CBC), the identified ARBs are formally notified by
the MARO that they have qualified to receive the land. The ARBs are
consulted by the MARO as to their preferred mode of distribution .
Thereafter the Land Distribution Folders are prepared and based on the
ARBs preference and submitted to the PARO.
Upon transmittal, the PARO reviews all documents and generates the
Certificates of Land Ownership Award (CLOAs). If the ARBs prefer
individual parcels, the PARO requests the DENR to conduct subdivision
survey. The PARO then submits the CLOAs to the DAR Regional Office
which causes them to be signed by the Secretary. Lastly, the PARO
registers the CLOAs with the Register of Deeds and forwards the same to
the MARO for distribution. (DAR A.O. No. 19 [1990]).
A compelling issue in respect to land distribution is the matter of
physical possession by DAR as a necessary prerequisite to its distribution
to the ARBs. It is submitted that physical possession is not necessary for
land to be distributed. Nothing in R.A. No. 6657requires DAR to take
physical possession as a precondition for redistributing lands subject of
acquisition. What is required is "immediate possession" under Section 16
or "actual possession" under Section 24. Actual possession of the land
consists in the manifestation of acts of dominion over it of such a nature as
a party would naturally exercise over his own property. (Ramos vs. Dir. of
Lands [39 Phil 175 [1918]). In issuing the CLOA, the Republic of the
Philippines, which became the registered owner of subject property, acting
through DAR, exercised an act of dominion over the landholding as
redistribution involves disposition or alienation. Having manifested its
dominion over the land, the Republic of the Philippines through DAR, is
deemed to be, for all legal intents and purposes, in actual possession
thereof. Redistribution is not limited to the installation of farmers in the
landholding. The generation and distribution of CLOAs is embraced within
the concept of redistribution.
Distribution of Homelots
A homelot refers to a parcel of agricultural land used by the ARB as the
site of his permanent dwelling including the area utilized for raising
vegetables, poultry, pigs and other animals and engaging in minor
industries. The area of the homelot may not exceed 1,000 square meters. It
is an integral part of the farm and an indispensable factor in farm
operations. The procedure for the acquisition and distribution of farmlots
likewise apply to homelots. If the homelot of a tenant-beneficiary falls within
the retained area of the landowner, the beneficiary may be made to transfer
his dwelling to his farmlot or other area to be designated for his homelot
which shall be mutually agreed upon by the parties. Provided that the
landowner shoulders the cost of the transfer of his dwelling and the agreed
cost of other improvements introduced by the tenant-beneficiary on said
homelot. [DAR A.O. No. 12 [1991], II [C])
Distribution of Commercial Farms and Facilities
Commercial farms may be distributed collectively or individually.
Qualified beneficiaries shall be awarded a maximum of three (3) hectares
or a minimum of one (1) hectare each in case the land is not sufficient to
accommodate them.
To expedite the acquisition, the commercial farms shall be initially
distributed collectively or under co-ownership. In the case the beneficiaries
desire to partition the land, DAR shall first determine whether it is
economically feasible to divide the land, in coordination with the
Department of Agriculture and other concerned agencies. Thereafter, the
beneficiaries may, by majority vote, decide whether to proceed with the
partition or not. In the event the beneficiaries decide to partition, the land
shall be allocated to the individual beneficiaries by drawing lots in the
presence of DAR Representatives. (Section 17 DAR A.O. No. 2-1998)
Facilities and improvements acquired shall be distributed collectively,
through a Deed of Transfer which shall specify the names of the ARBs and
duly annotated in the CLOAs generated over the subject landholding where
said facilities and improvements are found. Areas where the facilities and
landholdings are found are deemed common areas and shall not be
partitioned individually. (Section 28DAR A.O. No. 02-98)
Collective CLOAS shall be generated within thirty (30) days upon receipt
by the PARO of the certified copy of the certificate of title in the name of the
Republic of the Philippines.
In individual CLOAs shall be generated within thirty (30) days upon
receipt of the approved Segregation Plan (ASP). However in the case of
individual distribution and considering the time and financial constraints
particularly in the conduct of individual surveys, a collective CLOA may be
generated in the interim over the subject landholding (Section 18, DAR
A.O. No. 02-1998)
CLOAs shall be registered immediately upon generation. (Section
20 DAR A.O. No. 02-98)
Distribution of Corporate Farms
The general rule is that corporate farms are distributed directly to the
individual worker-beneficiaries. However, in case it is not economically
feasible and sound to divide the land, corporate farms shall be owned
collectively by the worker-beneficiaries who shall form a cooperative or
association which will deal with the corporation or business association. In
the latter case, the individual members of the cooperatives or corporations
shall have homelots and small farmlots for family use, to be taken from the
land owned by the cooperative or corporation. (Rep. Act No. 6657 [1988],
sec. 29).
Corporate farms owning or operating under lease or management contract
Pending final land transfer, corporate farms that own or operate under
lease or management contract and realize gross sales in excess of P5
million are mandated to execute a production and profit sharing (PPS) plan
provided under DAR AO No. 8 (1988). The PPS plan is imposed in order to
allow the farmworkers in corporate farms to realize an improvement in their
farm income pending final transfer of the farm.
All farmworkers in a corporate farm, whether classified as regular,
seasonal, technical or other farmworkers are entitled to PPS. On the other
hand, managerial and supervisory employees are excluded from
entitlement to PPS. (DAR Adm. O. No. 8 [1988])
PPS are distributed to farmworkers, over and above the compensation
they are currently receiving, based on the following schedules:
1. Three (3%) of Annual Gross Sales from 15 June 1988 until
final land or corporate stock transfer to the farmworker-beneficiaries is
effected, provided that the employer is not obligated to pay more than
100% of the regular annual compensation of the farmworker-
beneficiaries;
2. In addition, 10% of net profit after tax, provided that in cases
where the retention right is allowed, the amount to be distributed shall
be reduced by an amount equivalent to the proportion of the retained
area to the total land area. (DAR Adm. O. No. [1988])
To ensure that corporate farm employers comply with the PPS
provisions, the Secretary of DAR or his authorized representatives shall
have the power to order and administer compliance with the PPS
provisions and to require submission of reports, compel the production of
books and documents, compel answers to interrogatories, issue subpoena
and subpoena duces tecum, and enforce its writs through Sheriffs or other
duly deputized officers. Moreover, Sections 73 and 74 of RA
6657 regarding prohibited acts and omissions and the penalties therefor,
are applicable to any person or entity found to be violating any PPS
provision. (DAR Adm. O. No. 8 [1988])
Proof of Ownership of Awarded Lands
The Certificate of Land Ownership Award evidences the ARB's
ownership in respect to private agricultural lands covered underR.A. No.
6657 (Rep. Act No. 6657 [1988], sec. 24). Ownership of public lands, upon
the other hand, are evidenced by Free Patents. Emancipation Patents is
the ARBs proof of ownership of lands awarded under Operation Land
Transfer. Discussing the nature of an Emancipation Patent, the Supreme
Court ruled in the case of Vinzons-Magana vs. Estrella (201 SCRA 536
[1991]) that it is only compliance with the prescribed conditions which
entitles the farmer/grantee to an emancipation patent by which he acquires
the vested right of absolute ownership in the landholding a right which
has become fixed and established and is no longer open to doubt and
controversy.
The pronouncement of the court respecting the impregnable character
of an Emancipation Patent should be qualified. The mere issuance of an
Emancipation Patent does not put the ownership of the ARB beyond attack
and scrutiny. It must be noted that P.D. No. 946 vests the Court of Agrarian
Relations (now the DAR Adjudication Board) jurisdiction over cases
involving the cancellation of emancipation patents issued under P.D. No.
266 (Pres. Decree [1976], sec. 12 [g]). This only goes to show that
ownership of awarded lands covered by Emancipation Patents may be
challenged. The aforecited Supreme Court ruling presupposes that the
issuance of emancipation patents to the ARB is not tainted with any
irregularity such that it acquires the character of indefeasiblity.
The Vinzons- Magana ruling must be appreciated in this context.
Rights and Obligations of Beneficiaries
Once a Certificate of Land Ownership Award has been issued to a
beneficiary and registered in his name, it serves as an evidence of title to
the land, entitling the beneficiary to occupy the land, cultivate it, and
maintain possession of the same. cSIADH
An agrarian reform beneficiary is obliged to exercise the diligence of a
good father of a family in the use, cultivation, and preservation of the land
and the improvements thereon. His rights to the land, as well as to support
services to which he may be entitled as a beneficiary shall be forfeited in
the event that he neglects, abandons, misuses, or sells the land.
The beneficiary is also obliged to keep the land awarded to him intact,
and he may not subdivide the land in favor of his children or heirs. The
three hectares have been identified as an economic-sized family farm
which must be preserved as a single operating unit to promote the farm's
economic viability. Even if the beneficiary dies, his heirs are not allowed to
divide the land into smaller units.
However, such heirs are entitled to receive the land by way of hereditary
succession. This means that the land may be transferred either to the
spouse of the beneficiary, or in his or her absence or incapacity, to the
eldest child who meets the qualifications to be a CARP beneficiary,
particularly the requirement of willingness, aptitude, and ability to cultivate
the land and make it productive. The heir who succeeds to the land is
under obligation to pay the other heirs their legal shares in the property of
the deceased beneficiary. In the absence of qualified heirs or children, he
land shall revert to the DAR, which shall identify a new beneficiary the land.
A beneficiary is likewise obliged to comply with the provisions of R.A.
6657. Memorandum Circular No. 19, Series of 1996,supra., provides for the
grounds for perpetual disqualification of agrarian reform beneficiaries. The
grounds enumerated in this Memorandum Circular are violations of various
provisions of R.A. 6657 and administrative rules and regulations issued
pursuant to this law.
Protection of Rights of Member-Beneficiaries
The protection of rights of member-beneficiaries may be ensured in the
articles of incorporation and in the by-laws of the organization, which the
member-beneficiaries themselves enact and approve. Restrictions in the
transfer of shares or membership rights, by providing that such transfer
shall be valid only if made in favor of another qualified beneficiary, may be
adopted. The contract of membership may likewise contain provisions
ensuring that the rights of member-beneficiaries to ownership or other
privileges as members are protected.
The interests of farmer-members may also be adequately protected
according to the exit provisions in Republic Act No. 6938, otherwise known
as the Cooperative Code. Articles 31 and 32 of the Code provides:
Art. 31. Termination of Membership. (1) A member of a
cooperative may, for any reason, withdraw his membership from the
cooperative by giving a sixty (60)-day notice to the board of directors.
The withdrawing member shall be entitled to a refund of his share
capital contribution and all other interests in the cooperative: Provided,
That such refund shall not be made if upon such payment the value of
the assets of the cooperative would be less than the aggregate
amount of its debts and liabilities exclusive of his share capital
contribution.
(2) The death, insanity, insolvency or dissolution of a member shall
be considered an automatic termination of membership.
(3) A member may be terminated by a vote of the majority of all the
members of the board of directors for any of the following causes:
(a) When a member has not patronized the
services of the cooperative for an unreasonable
period of time as may be fixed by the board of
directors;
(b) When a member has continuously failed to
comply with his obligations;
(c) When a member has acted in violation of the
by-laws and the rules of the cooperative; and
(d) For any act or omission injurious or prejudicial
to the interest or the welfare of the cooperative.
A member whose membership the board of directors may wish to
terminate shall be informed of such intended action in writing and shall
be given an opportunity to be heard before the said board makes its
decision. The decision of the board shall be in writing and shall be
communicated in person or by registered mail to the member and shall
be appealable, within thirty (30) days after the decision is
promulgated, to the general assembly whose decision therein,
whether in a general or special session, shall be final. Pending a
decision by the general assembly, the membership remains in force.
Art. 32. Refund of Interests. All sums computed in accordance
with the bylaws to be due from a cooperative to a former member shall
be paid to him either by the cooperative or by the approved transferee,
as the case may be, in accordance with this Code.
Transferability of Awarded Lands
Section 27 prohibits the sale, transfer, or conveyance of lands acquired
by beneficiaries under R.A. 6657 within ten (10) years from the date of
award. This restriction on the transferability of the land is annotated on the
certificate of title in the Register of Deeds. Lands awarded pursuant to E.O.
228 and P.D. No. 27 may be alienated only upon full payment of
amortizations on the purchase price.
However, the lands acquired under CARP may be alienated through
hereditary succession, or in favor of the government, the Land Bank, or
other qualified beneficiaries even before the expiration of the ten-year
period. This provision presumes that the land to be alienated has been fully
paid for by the beneficiaries.
If the land has not yet been fully paid for, only the rights to the land may
be sold, transferred, or conveyed, and with prior approval of the DAR, and
only to the heirs of the beneficiary or to another beneficiary.
The buyer of agricultural land alienated under this section is still subject
to the aggregate ownership ceiling of five (5) hectares.
Mortgage of awarded land not equivalent to sale, disposition, or
conveyance
Mortgage is a land transaction allowed by the law, and hence is not a
sale, disposition, or conveyance contemplated by the prohibition. The
governing administrative issuance on land transactions is DAR
Administrative Order No. 1, Series of 1989. Section II.3.d provides:
The following are not prohibited transactions and may be registered by
the Register of Deeds without prior clearance from DAR:
d. Deed of real estate mortgage executed by the . . . beneficiary.
Since mortgage is not a prohibited transaction, it follows that it is not
tantamount to selling, disposing of, or conveying the awarded land, which
are prohibited transactions. Moreover, the framers of the law, in not
expressly prohibiting mortgage, may have anticipated circumstances in
which the farmer-beneficiary is left with no alternative but to mortgage his
land in order to respond to emergency situations such as sickness in the
family (see Torres vs. Ventura, 187 SCRA 96, at 103).
Farmer-beneficiary may alienate even without complete payment
of amortizations
The second paragraph of Section 27 of R.A. 6657 allows a farmer-
beneficiary to transfer or convey his rights to the land, provided that prior
approval of the DAR has been obtained, to any qualified heir of the
beneficiary or to any other beneficiary. An essential condition of such
transfer or conveyance is that the transferee shall cultivate the land himself
and maintain its productivity as agricultural land. The failure to comply with
this condition shall result in the availability of the land for distribution to
another qualified agrarian reform beneficiary.
Disqualification of beneficiary who sold or transferred right to
awarded land
Section 73 (f) provides that the sale, transfer, or conveyance by a
farmer-beneficiary of the right to use or any usufructuary right over the land
must be made "in order to circumvent the provisions" of R.A. 6657. This
must be harmonized with Section 27, which allows the farmer-beneficiary to
transfer or convey the land or his rights to the land, provided that it is with
the prior approval of DAR. Administrative Order No. 8, Series of 1995,
governs the procedure for obtaining this consent.
Administrative Order No. 10, Series of 1989 provides that beneficiaries
who have sold the land they received under R.A. 6657 orP.D. 27 are no
longer qualified to receive land under R.A. 6657, without any qualification
on the manner of disposition.
We believe, however, that the law intends to preserve the land in the
hands of the beneficiary and to make him benefit from the land for as long
a time as feasible. The administrative issuances regarding the obtention of
consent to convey the land merely exempt the vendor from criminal
prosecution for circumventing R.A. 6657, and cannot be construed to give
the farmer-beneficiary license to convey the land without forfeiting his right
to become a beneficiary again.
Manner of Payment by Beneficiaries
For lands acquired by DAR through the compulsory acquisition scheme
or through voluntary offer to sell, Section 26 provides that lands awarded to
beneficiaries shall be paid for by the farmers in thirty (30) annual
amortizations at six per cent (6%) interest per annum. These are regular
annual amortizations, payable to the Land Bank of the Philippines.
For lands acquired under the VLT/DPS scheme, Section 21 provides
that payment shall be made directly by the farmer-beneficiaries to the
landowner under the terms and conditions mutually agreed upon by the
parties. Such terms and conditions shall be subject to the approval by the
DAR.
Pursuant to Section 20, the DAR is mandated to ensure that these
terms and conditions are not less favorable to the farmer-beneficiary than
those which would have prevailed had the DAR acquired the land under the
compulsory acquisition scheme.
If the landowner and the farmer cannot agree on the price of the land,
Section 21 provides that the land shall be subject to compulsory
acquisition, following the procedure under Section 16.
Payment by the beneficiaries, in any case, shall start one year from the
date of the registration of the CLOA with the Register of Deeds. Joint DAR-
LBP Memorandum Circular No. 30, Series of 1997 states that in case
occupancy of the land occurred before the date the CLOA is registered,
then the basis for the amortization schedule would be the date of CLOA
registration. If the occupancy date occurred after the date of CLOA
registration, then the occupancy date would be the basis for the
amortization schedule.
Computation of amount of amortizations
Under Administrative Order No. 2, Series of 1998, the basis of
computation shall be the cost of the land and the permanent improvements
thereon.
Pursuant to the mandate of the law that the payments shall be made
affordable to the beneficiaries, however, Administrative Order No. 2, Series
of 1998 provides that the amortizations may be reduced to:
(1) 2.5% of annual gross production (AGP) for the first three years
(2) 5% of the AGP for the fourth and fifth years
(3) 10% of the AGP for the sixth to thirtieth years, if this
amortization ceiling is lower than the regular amortization.
The annual gross production is defined as the peso value of the annual
yield/produce per hectare of the land awarded to farmer-beneficiaries,
which is reflected in the valuation portion of the Claim Valuation and
Processing Form.
In the case of VLT/DPS, for the purposes of computing the regular
amortization, the AGP shall be that agreed upon by the parties during the
proceedings for the determination of just compensation, and shall not be
changed throughout the period for payment of the value of the land.
The ceiling on the payments for lands voluntarily offered or compulsorily
acquired shall be the same. This is pursuant to the provision that, although
the terms and conditions of the VLT/DPS shall be mutually agreed upon by
the landowners and the farmer-beneficiaries, these should not be less
favorable to the ARB that those that would prevail had the land been
acquired by the government compulsorily (see Section 20 [b], R.A. 6657).
Effect of default in payment by beneficiary
In the case of land acquired under the VLT/DPS scheme, the land may
be repossessed in case the beneficiary fails to pay an aggregate of three
(3) consecutive annual amortizations from the date of receipt of the
amortization schedule, except if loss of crops occurs due to fortuitous event
or force majeure. Section 19 (c) provides that the voluntary agreement
entered into by the landowners and the beneficiaries under VLT/DPS shall
include sanctions for non-compliance by either party, subject to the
approval by the DAR.
In the case of land voluntarily offered for sale or compulsorily acquired,
the failure of the beneficiary to pay at least three (3) annual amortizations
to the Land Bank gives the bank the right to foreclose the land, with the
exception of loss of crops due to force majeure. In both cases, the
beneficiary shall be permanently disqualified from becoming a beneficiary
again.
Failure to pay due to fortuitous event
If the default is occasioned by natural calamity and/or force majeure, or
any other instance when the failure to produce is not due to the fault of the
farmer, the scheduled amortization payment is limited to the maximum
amount of 10% of the annual gross production (see Section IV, A.O. No. 2,
Series of 1992). The default due to fortuitous event shall not result in the
permanent disqualification of the beneficiary.
Effect of higher valuation
The amount of regular annual amortization is not affected in case the
landowner is granted by the courts a higher valuation than that pegged by
the DAR/LBP/BARC during the valuation process. The only effect of this
change is to increase government assistance or subsidy.
Repossessed land does not revert to former landowner
In case awarded land is repossessed by the government, the DAR shall
cancel the CLOA issued to the beneficiary, and transfer the land to either of
the following:
a) A qualified heir of the beneficiary who shall assume the
balance of the value of the land; or
b) In the absence of a qualified heir, a new qualified beneficiary
who, as a condition for such transfer, is willing to abide by the terms of
the existing VLT/DPS agreement, and who will pay for the entire value
of the land.
Beneficiary in default will not forfeit payments
If the land is sold to a new beneficiary other than an heir of the former
beneficiary, the landowner shall refund the payments to the latter, in one
lump sum or in installments, and shall pay for the improvements made by
the former beneficiary, less the lease rentals for the duration of his use of
the land and other charges allowed by law.
Assistance to farmer-beneficiaries in making payments
Administrative Order No. 2, Series of 1998 defines "assistance to
farmers" as follows:
(a) The difference between the regular annual amortization (based
on the amount paid or approved for payment to the landowner) and
the affordable amount during the first five (5) years after the award of
the land to the ARBs where the affordable amount is lower that the
regular amortization;
(b) The difference between the regular annual amortization and
ten percent (10%) of the AGP during the 6th to 30th year, whenever
such 10% AGP is lower that the regular amortization; and
(c) Rebate of 2% of interest in case the beneficiary makes an early
payment.
Production and Profit Sharing
Under Sections 13 and 32 of RA 6657, individuals or entities owning
agricultural lands and operating under lease or management contract are
required to execute production and profit-sharing plan with their
farmworkers or farmworkers' organization, pending final distribution of the
land or implementation of the stock distribution scheme. The provisions
under AO 8 (1988) governs production and profit sharing plan under RA
6657.
A production and profit-sharing plan is required in order to improve the
income of farmworkers pending final land transfer or stock distribution or
full control in the case of deferred commercial farms and lease-back
arrangements.
The following employers are required to execute production and profit-
sharing plan provided that their annual gross sales exceed P5 million:
1) Any enterprise owning or operating agricultural lands under
lease, management contract, production venture or other similar
arrangement;
2) Multinational corporations engaged in agricultural activities; and
3) Commercial farms devoted to aquaculture including salt beds,
fishponds and prawn ponds, fruit farms, orchards, vegetable and cut-
flower farms, and cacao, coffee and rubber plantation.
All farmworkers of covered employers, regardless of duration, who are
directly working on the land of the corporation or other entities, whether
classified as regular, seasonal, technical or other farmworkers are covered
in the mandated production and profit-sharing plan. To qualify, however,
said employees must not own more than three (3) hectares of agricultural
land.
Covered employers are required to pay the following, over and above
the compensation currently received by the farmworkers:
1) Three (3%) of Annual Gross Sales from 15 June 1988 until final
land or corporate stock transfer to the farmworker-beneficiaries is
effected, provided that the employer is not obligated to pay more than
100% of the regular annual compensation of the farmworker-
beneficiaries.
2) In addition, 10% of net profit after tax, provided that in cases
where the retention right is allowed, the amount to be distributed shall
be reduced by an amount equivalent to the proportion of the retained
area to the total land area. [AO 8 (1988)]
Existing production and profit-sharing granted prior to the effectivity of
CARP shall be credited as compliance with the mandated production and
profit-sharing plan. However, where the benefits received are less than
what is provided under RA 6657, covered employers shall pay the
difference to the farmworkers.
Non-compliance with the provisions on production and profit-sharing is a
violation covered by the provisions on prohibited acts and omissions and
the penalties therein under Sections 73 and 74 of RA 6657.
The enforce the above mandate, DAR through its Secretary or
authorized representatives has the following powers:
1) To order and administer compliance with the Production and
Profit-Sharing provisions of RA 6657;
2) To require covered employers to submit report on the
distributed production and profit shares;
3) To compel the production of books and other relevant
documents of covered employers;
4) To compel answers to questions needing clarifications to shed
light on problems encountered in the implementation of the plan;
5) To issue subpoena; and
6) To enforce its writs through sheriffs or other duly deputized
officers.
Tax Exemption
Transfers of ownership under R.A. No. 6657 are tax exempt as provided
in Section 66 thereof, as follows:
Transactions under this Act involving transfer of ownership, whether
from natural or juridical person, shall be exempted from taxes arising form
capital gains. These transactions shall also be exempted from the payment
of registration fees, and all other taxes and fees for the conveyance or
transfer thereof; Provided, That all arrearages in real property taxes,
without penalty or interest, shall be deductible from the compensation to
which the owner may be entitled.
It is submitted that tax-exempt transactions contemplated in the above-
quoted provision only involve lands placed under the coverage of the
CARP and acquired through any of the modes of acquisition provided
under the law, i.e., compulsory acquisition, voluntary offer to sell, voluntary
land transfer or direct payment scheme for the purposes of transferring
these to the beneficiaries. Hence, transfer of homelots to farmers as
disturbance compensation in the case of lands already exempted from
CARP coverage is taxable. This is so since the farmer-transferees in this
case did not acquire the land as agrarian reform beneficiaries within the
context of R.A. No. 6657. It must be emphasized that tax exemptions are to
be strictly construed against the taxpayer. Therefore, any transaction not
expressly enumerated in Section 66 of R.A. No. 6657 should be construed
as not included in the tax-exempt provision of the law. (Memorandum of
Asst. Sec. Peaflor for the Secretary, 06 April 2000)
Standing Crops
Section 28 provides that the landowner is entitled to retain his or her
share in the standing crops unharvested at the time the DAR shall take
possession of the land under the compulsory acquisition scheme, and shall
be given reasonable time to harvest the same to the extent of the share
pertaining to him/her.
Standing crops refer only to those crops existing at the time DAR takes
possession of the land.
In the case of sugarlands, the term shall include the original crop only,
excluding future harvests from ratoons, if what is existing at the time the
DAR takes possession of the land is the original crop. If what is existing at
the time of possession is already the first or second crop, the landowner
shall be entitled to harvest his/her share in that ratoon crop.
Support Services
Agrarian reform involves not only land redistribution, but also the totality
of factors and support services designed to uplift the economic status of the
beneficiaries and all other arrangements which will allow the beneficiaries
to receive a just share of the fruits of the lands they work. (Section 3
(a) R.A. No. 6657). To address the latter, the Office of Support Services
was created to provide general support and coordinative services in the
implementation of the program. (Section 35, R.A. No. 6657).
Notwithstanding the enactment of R.A. No. 7905 otherwise known as "An
Act to Strengthen the Implementation of the Comprehensive Agrarian
Program and for other Purposes" support services by the government
remained limited because of fiscal constraints. Only 370,000 beneficiaries
within the Agrarian Reform Communities (ARCs) out of 3.34 million as of
1998 are reached by such services. (CARP Annual Report, 1998, PARC
Secretariat). Thus, the Department saw the need to mobilize the private
sector to ensure adequate support services. It is within this framework that
Joint Economic Enterprises was conceived. Joint Economic Enterprises
refer to partnerships or arrangements between beneficiaries and investors
to implement an agribusiness enterprise in agrarian reform areas. The
arrangement finds legal basis in Section 35 and 44 of R.A. No. 6657, as
amended by R.A. No 7905, as follows:
There is hereby created the Office of Support Services under the DAR
to be headed by an Undersecretary. . . . This Office shall provide
general support and coordinative services in the implementation of the
program. Particularly in carrying out the provisions of the following
services to farmer beneficiaries and affected landowners: . . . (2)
Infrastructure development and public works projects in areas and
settlements that come under agrarian reform . . . . For the purpose of
providing the aforecited infrastructure and facilities, the DAR is
authorized to enter into contracts with interested private parties on
long term basis or through joint venture agreements or build-operate-
transfer schemes, . . . (10) Assistance in the identification of ready
markets for agricultural produce and training in other various aspects
of marketing . . .
The PARCCOM shall coordinate and monitor the implementation of
the CARP in the province . . ., in addition, it shall recommend to the
PARC the following: . . . 3) continuous processing of applications for
lease back agreements, joint venture agreements and other schemes
that will optimize the operating size for agricultural production and also
promote both security of income to farmer beneficiaries; Provided that
lease back arrangements should be the last resort. (Underscoring
supplied)
Joint Economic Enterprises
The parties to a joint economic enterprise are the agrarian reform
beneficiaries and investors who may either be private individuals,
partnerships or corporations; non-government organizations; cooperatives
or associations of beneficiaries; government-owned or controlled
corporations and other entities (Section 6 DAR A. O. No. 2-1999) It must be
noted that the beneficiaries referred to include holders of Emancipation
Patents (EPs) of Certificates of Land Ownership Awards (CLOAs).
Qualified beneficiaries of agricultural lands for distribution under the
agrarian reform program may also avail of the same provided that the land
is distributed to the beneficiaries before an agribusiness agreement is
executed. Small landowners may engage in joint economic enterprises
involving their retained areas. (Section 4, DAR A.O. No. 2-1999)
In a joint economic enterprise, ownership of land remains with the
beneficiaries. Only the use thereof, where necessary, is conveyed. The
purposes for which a joint economic enterprise is to be established are
production, processing and marketing of products, or introduction,
maintenance, rehabilitation or upgrading of agricultural capital assets,
infrastructure or facilities, or provision of management expertise,
technology, equipment and other services to beneficiaries. The equity and
interest of the parties to a joint economic enterprise depend on the nature
of enterprise and extent of participation. Parties hall exercise shared
responsibility and co-determination on matters affecting the viability of land
and income of beneficiaries. The parties shall agree on the period and
cause the annotation of the agreement on the titles of the properties.
(Section 6, DAR A.O. No. 2-99)
Types of Joint Economic Enterprises
Joint Venture
In a joint venture, the beneficiaries contribute use of the land together
with the facilities and improvement while the investor provides capital and
technology for production, processing and marketing of goods, or for
construction, rehabilitation, upgrading of agricultural capital assets,
infrastructure and facilities. The joint venture has a personality separate
and distinct from the parties. The equity of beneficiaries in a joint venture
depends on the value of use of land and improvements at the minimum,
equal to lease rental. The equity of the beneficiaries is not subject to
dilution. The joint venture is to be managed jointly by the investors and the
ARBs. The beneficiaries are given a fixed number of seats in its board of
directors corresponding to their equity interest. The beneficiaries and/or
their dependents are to be given preference for employment in the joint
venture.
Production, Processing and Marketing Agreement
In a production, processing and marketing agreement, the beneficiaries
engage in production and processing of agricultural products and directly
sell them to the investor who provides loans and technology. Incorporated
in said agreement is a price review mechanism taking into consideration
industry practice, prevailing market prices and other appropriate factors.
Build Operate Transfer Scheme
In a build-operate-transfer scheme, the investor builds or rehabilitates
facilities and improvements necessary to make the lands productive and
directly operates the same for a certain period. The facilities and
improvements are constructed at the investor's own expense, and he shall
not be allowed to access, for this purpose, government funds that would,
otherwise be available as financing or capital for beneficiaries. In said
scheme, the beneficiaries receive reasonable rent for the use of land. Upon
expiration of the agreed period, ownership of the facilities and other
improvements is consolidated in the name of the beneficiaries.
Management Contract
In a management contract beneficiaries hire the services of a contractor
with managerial skills and capability to manage and operate the farm in
exchange for a fixed wage and/or commission. The beneficiaries, in turn
provide labor. All income from the operation of the farm accrue exclusively
to the ARBs. In this arrangement, a human resource development program
for the members of the cooperative, association or federation is to be
implemented to facilitate transfer of technology and management
techniques to enable them to directly manage and operate the farm.
Service Contract
In a service contract, beneficiaries engage for a fee the services of a
contractor for mechanized land preparation, cultivation, harvesting, post-
harvest operations and other activities. The service contractors may include
other ARBs with necessary equipment and facilities for mechanized farm
operations. Beneficiaries who wish to engage in service contracting but
with limited financial capability may avail of loan facilities or credits
pursuant to Section 35 of R.A. No. 6657 as amended.
Lease Contract
In a lease contract, beneficiaries bind themselves to give investor
enjoyment or use of their land for a price certain and for a definite period. In
this arrangement, the investor provides capital to operate the farm,
construct facilities and other improvements, process and market
agricultural products. The lessee may either be a former landowner or other
investors. However, under Section 44 of R.A. No. 6657, as amended
by R.A. No. 7905, leaseback arrangements should be the last resort. This
means that the ARBs and the investor (former landowner) must first
consider other types of agribusiness arrangements before deciding on a
lease. The lessee/investor is to give priority to qualified and willing ARBs
and their dependents for employment in the enterprise. In such cases, the
ARBs are to be treated as employees of the lessee/investor and are
entitled to the mandated minimum wage and other economic benefits
granted under the Labor Code and other existing laws.
Combinations or Phased Arrangements
Combinations or phased arrangements combine the features of any or
all of the preceding forms of agribusiness enterprises, or provide for a
phased implementation thereof. For instance, production and processing of
agricultural corps may be covered by contract growing, while marketing
may be under a joint venture. Small growers may engage production, while
a corporation may undertake processing and marketing. Initially, the
arrangement may provide for leaseback, followed by a contract growing,
and finally, joint venture.
Other Schemes
Other schemes refer to other agribusiness arrangements or schemes
that optimize the operating size of distributed lands for agricultural
production consistent with existing laws and regulations. (Section 7, DAR
A.O. No. 2-99)
CHAPTER 6
Adjudication of Agrarian Reform Matters
Jurisdiction of DAR
Sec. 50 of RA 6657 provides that the DAR is vested with primary
jurisdiction to determine and adjudicate agrarian reform matters and shall
have exclusive jurisdiction over all matters involving the implementation of
agrarian reform, except those falling under the exclusive jurisdiction of the
DA and the DENR. In the exercise of its jurisdiction, DAR shall not be
bound by technical rules of procedure and evidence but shall proceed to
hear and decide all cases, disputes or controversies in a more expeditious
manner, employing all reasonable means to ascertain the facts of every
case in accordance with justice and equity and the merits of the case.
Adjudication of agrarian reform matters involves the exercise by the
DAR Secretary of its exclusive jurisdiction over agrarian law
implementation (ALI) cases or the exercise by the DAR Adjudication Board
(DARAB) of its jurisdiction under the 1994 DARAB Revised Rules of
Procedure. Petitions for the determination of just compensation to
landowners and the prosecution of all criminal offenses under RA 6657 falls
within the original and exclusive jurisdiction of the Special Agrarian Courts
(SACs).
Restraining orders or injunctions issued by regular courts
Any restraining order or injunction issued by courts against DAR
pursuant to the implementation of CARP is null and void as it violates the
express provisions of Sec. 55 and 68 of RA 6657. Sec. 55 provides that no
court in the Philippines shall have jurisdiction to issue any restraining order
or writ of preliminary injunction against the PARC or any of its duly
authorized or designated agencies in any case, dispute or controversy
arising from, necessary to, or in connection with the application,
implementation, enforcement, or interpretation of agrarian laws. On the
other hand, Sec. 68 states that no injunction, restraining order, prohibition
or mandamus shall be issued by the lower courts against DAR, DA, DENR
and DOJ in their implementation of CARP.
ALI Cases
Under DAR AO 6 (2000), ALI cases refer to those agrarian cases falling
under the exclusive jurisdiction of the DAR Secretary. These cases strictly
involve the administrative implementation of RA 6657 and other agrarian
laws, rules and regulations. These cases include the following:
a) Classification and identification of landholdings for coverage
under CARP, including protests or oppositions thereto and petitions for
lifting of coverage;
b) Identification, qualification or disqualification of potential
farmer-beneficiaries;
c) Subdivision surveys of lands under CARP;
d) Issuance, recall or cancellation of Certificates of Land Transfer
(CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the
purview of PD 816, including the issuance, recall or cancellation of
EPs or CLOAs not yet registered with the Register of Deeds;
e) Exercise of the right of retention by the landowner;
f) Application for exemption under Section 10 of RA 6657 as
implemented by DAR AO 13 (1990);
g) Application for exemption pursuant to DOJ Opinion No. 44
(1990) as implemented by DAR AO 6 (1994);
h) Application for exemption under DAR AO No. 9 (1993);
i) Application for exemption under Section 1 of RA 7881 as
implemented by DAR AO 3 (1995);
j) Issuance of certificate of exemption for lands subject of VOS
and CA found unsuitable for agricultural purposes pursuant to DAR
MC 34 (1997);
k) Application for conversion of agricultural lands to residential,
commercial, industrial or other non-agricultural uses including protests
or opposition thereto;
l) Right of the ARBs to homelots;
m) Disposition of excess area of the FBs landholdings;
n) Transfer, surrender or abandonment by the FBs of his
farmholding and its disposition;
o) Increase of awarded area awarded by the farmer-beneficiary;
p) Conflict of claims in landed estates and settlements; and
q) Such other matters not mentioned above but strictly involving
the administrative implementation of RA 6657 and other agrarian laws,
rules and regulations as determined by the Secretary. (DAR Adm. O.
No. 6 [2000], sec. 2).
In the adjudication of ALI cases, the Secretary or his authorized
representative may exercise quasi-judicial powers granted under Section
50 of RA 6657. He or his authorized representative shall have the power to
summon witnesses, administer oaths, take testimony, require submission
of reports, compel the production of books and documents and answers to
interrogatories and issue subpoena, and subpoena duces tecum and to
enforce its writs through sheriffs or other duly deputized officers. He or his
authorized representative shall likewise have the power to punish direct
and indirect contempts in the same manner and subject to the same
penalties as provided in the Rules of Court.
Likewise, the Regional Director or the DAR official having jurisdiction
over the case, shall, motu propio or at the instance of a party, have the
authority to issue a Cease and Desist Order or Status Quo Order pending
the resolution of the case in the following instances:
a) where grave or irreparable damage will result to the parties;
b) where the doing or continuance of certain acts will render the
case moot and academic; or
c) where there is a need to maintain peace and order and prevent
injury or loss of life or property.
In this regard, the issuing authority may request the assistance of law
enforcement agencies to implement the order. (Sec. 17, DAR Adm. O. 6
[2000])
Moreover, the DAR shall not take cognizance of any agrarian
controversy unless a certification from the BARC has been submitted
stating that the dispute underwent mediation and conciliation without any
success of settlement. However, if no certification is issued by the BARC
within thirty (30) days after a matter or issue is submitted to it for mediation
or conciliation the case or dispute may be brought before the PARC. (Rep.
Act No. 6657 [1988], sec. 53)
Jurisdiction over ALI Cases
The Secretary shall have exclusive original jurisdiction over all ALI
cases. However, this jurisdiction may be delegated to certain DAR officials
in accordance with existing rules and regulations (DAR Adm. O. No. 6
[2000], sec. 6).
Protest/Petition for Lifting of Notice of Coverage/Application for
Exemption or Exclusion
Under Sec. 7 of DAR AO 6 (2000), the Regional Director shall exercise
primary jurisdiction over protests or petitions for lifting of notice of
coverage.
The Secretary shall exercise exclusive jurisdiction for application for the
issuance of exemption clearance under DAR AO 6 (1994) involving lands
with an area of more than five (5) hectares. For lands with an area of five
(5) hectares and below, the issuance of such clearance is delegated to the
Regional Directors (DAR Adm. O. No. 6 [2000], sec. 8 [a]).
Applications for exemption or exclusion under DAR AO 13 (1990), DAR
AO 9 (1993), DAR AO 3 (1995) and DAR MC 34 (1997) and other pertinent
rules and regulations, shall be under the jurisdiction of the concerned DAR
officials identified therein, except those involving lands five (5) hectares and
below situated within the provinces of Cavite, Laguna, Batangas, Rizal and
Quezon (CALABARZON) which are now delegated to the concerned
Regional Director. 1
Conversion
Jurisdiction over applications for conversion shall pertain to the DAR
officials authorized to approve or disapprove applications for conversion of
agricultural lands to non-agricultural uses pursuant to Sec. 22 of DAR AO 1
(1999) (DAR Adm. O. No. 6 [2000], sec. 9).
Other ALI Cases
The jurisdiction over other ALI cases shall generally pertain to the
Regional Directors, except those cases specifically delegated to other DAR
officials under existing rules and regulations, or those that may
subsequently be promulgated by the Secretary (DAR Adm. O. No. 6 [2000],
sec. 11).
Flashpoint Cases
Flashpoint cases are ALI cases which fall within the jurisdiction of the
Regional Director or the Director of the Bureau of Agrarian Legal
Assistance (BALA) and determined or certified by the Secretary or the
Head Executive Assistant which (a) threatens to disrupt the status quo in a
particular area and endanger life and limb as a result of the use of force
from either the landowners' side or farmer-beneficiaries' side or other
parties; (b) are the subject of massive pickets or which may immediately
result in concerted mass actions either in the DAR Central Office or in the
field offices or at the site of the conflict; or (c) are of such nature that the
Secretary may assign for immediate resolution. (DAR Memo. Circ. No. 13
[1997])
The following are the procedure in the resolution of flashpoint cases:
a) Once a case has been certified as a flashpoint case by the
HEA or the Secretary, the Director of the Special Concerns Staff
(SCS) shall issue an Order directing the Head of Office/Unit
concerned where the case is pending to transmit the entire case
records, together with his comments or recommendations, to the
Office of the SCS Director within 48 hours from notice of the directive.
b) Within 24 hours from receipt of the case records, the SCS
Director shall issue a directive to all concerned parties to submit their
respective position papers and such other documentary evidence
within ten (10) days from notice. A clarificatory hearing,
dialogue/conciliation/mediation or ocular inspection may be conducted
when appropriate.
c) Within five (5) working days from the conclusion of the
investigation/review/evaluation, the SCS Director shall rule on the
case or submit his recommendation for the resolution of the case.
d) An aggrieved party may file a notice of appeal, together with
the appeal memorandum, to the Assistant Secretary for Policy,
Planning and Legal Affairs Office (PPLAO). The latter office shall
forward the records, together with the evaluation on appeal made and
proposed resolution, to the Office of the Secretary.
e) The Secretary shall have five (5) working days to decide on
the appeal. The decision rendered by the Secretary shall be
immediately executory notwithstanding any duly perfected appeal.
(DAR Memo. Circ. No. 13 [1997])
However, a certification that a case is considered flashpoint shall merely
serve to accord utmost priority to the resolution thereof but shall not divest
the concerned DAR official of the authority to resolve such cases, unless
specifically directed in the national interest, or the Secretary himself has
assumed jurisdiction over the case. (Adm. O. No. 6 [2000], sec. 11)
Resolution of Disputes in Joint Economic Enterprises (JEE)
The following are the hierarchy of dispute resolution methods involving
joint economic enterprises:
1) voluntary methods;
2) mediation or conciliation by trained mediators or conciliators;
3) arbitration; and
4) To any of the following depending on the principal cause of
action:
a) DAR Adjudication Board (DARAB) if it involves
interpretation of an agribusiness agreement or an agrarian
dispute as defined in Sec. 3 (d) of RA 6657;
b) Securities and Exchange Commission (SEC) if it involves
an intra-corporate dispute;
c) Cooperative Development Authority (CDA) if it involves an
intra-cooperative dispute; or
d) National Labor Relations Commission (NLRC) if it
involves employer-employee relations. (DAR Adm. O. No. 2
[1999])
In this regard, the Secretary may issue such writs or orders, as may be
appropriate, to maintain the status quo and preserve peace and order in
the farm subject of a JEE, in the following cases:
a) where there is clear and imminent threat to life or
property;
b) where the dispute will cause serious and irreparable
damage to either party or to the agribusiness enterprise; or
c) where, in his judgment, there is an urgent need to protect
the national interest. (DAR Adm. O. No. 2 [1999])
Sec. 14 of DAR AO 6 (2000) provides that the filing of an application for
exemption, exclusion, conversion, retention or protest against coverage
shall have the following effects in so far as land acquisition and distribution
are concerned:
a) If the application or petition is filed before the issuance of the
notice of coverage, the notice of coverage shall not be issued until the
application or petition is finally resolved;
b) If the application, protest or petition is filed after issuance of
the notice of coverage, the DAR may proceed with the processing of
the claimfolder notwithstanding the pendency of the application,
protest or petition in accordance with the activities outlined under DAR
AO 2 (1996), as amended. The processing of the claimfolder may be
suspended by the PARO if upon proper review and evaluation of the
Field Investigation Report (FIR) submitted by the MARO, and upon
personal verification of the allegations in the application, protest or
petition, it is determined that the subject landholding is in fact
exempted or excluded from CARP coverage. Otherwise, the PARO
may forward the claimfolder to the LBP for further processing.
c) In case the application, protest or petition is filed while the
claimfolder is pending with LBP, or where the claimfolder has been
forwarded by the PARO notwithstanding such application, protest or
petition, the LBP shall continue with the processing of the land
compensation claim, except that the Certification of Deposit (COD)
shall not be issued to the PARO until the application, protest or
petition is finally resolved.
Period in filing actions
Under Sec. 13 of DAR AO 6 (2000), petitions for lifting of notice of
coverage shall be filed within thirty (30) days from receipt of the Notice of
Coverage by the affected party. Failure by the affected party to file the
protest or petition within the prescribed period shall be deemed a waiver of
his right thereto. If the action is filed after the expiration of the thirty (30)-
day period, the protest or petition shall no longer be entertained or shall be
summarily dismissed by the MARO or the PARO, except in the following
instances:
a) the protest or petition is based on allegations that subject
landholding is exempted from CARP coverage under DAR AO 6
(1994); or
b) upon evaluation of pertinent documents and based on the
physical conditions obtaining in the property, it is determined by DAR
that the subject landholding is exempted from CARP coverage
pursuant to DAR AO 13 (1990), DAR AO 9 (1993),DAR AO 3
(1995) and DAR MC 34 (1997) notwithstanding the issuance of the
Notice of Coverage.
DARAB Cases
DAR Adjudication Board (DARAB)
The creation of DARAB was mandated under EO 129-A (1987) which
aims at reorganizing and strengthening the DAR. The DARAB was created
under the Office of the Secretary of the DAR and is given the powers and
functions to adjudicate specific agrarian reform cases.
Before the creation of the DARAB, the Courts of Agrarian Relations
(CAR) had the original and exclusive jurisdiction over agrarian reform
matters. PD 946 (1976) entitled "Reorganizing the Courts of Agrarian
Relations, Streamlining their Procedures and for Other Purposes," gave the
CARs original and exclusive jurisdiction over agrarian reform matters,
except those that fall under the jurisdiction of the Secretary of the DAR.
With the passage of BP 129 (1980) or the Judiciary Reorganization Act, the
CARs were integrated into the RTCs and the jurisdiction of the former was
vested in the latter courts. However, with the promulgation of EO
229(1987), entitled "Providing the Mechanisms for the Implementation of
the Comprehensive Agrarian Reform Program (CARP)," the RTCs were
divested of their special jurisdiction to try agrarian reform matters.
Under EO 229 (1987), the DAR is vested with primary jurisdiction to
determine and adjudicate agrarian reform matters and has the exclusive
jurisdiction over all matters involving the implementation of agrarian reform,
except those that fall under the exclusive jurisdiction of the DA and the
DENR. This is also clearly provided in Sec. 50 of RA 6657.
In Machete vs. Court of Appeals 250 SCRA 176 (1995), private
respondent Celestino Villalon filed a complaint for collection of back rentals
and damages before the Regional Trial Court against the petitioners. The
complaint alleged that the parties entered into a leasehold agreement with
respect to the private respondent's landholdings in Bohol. Petitioners
moved to dismiss the complaint on the ground of lack of jurisdiction of RTC
over the subject matter. Petitioners alleged that the subject matter of the
complaint falls squarely within the jurisdiction of the DAR in the exercise of
its quasi-judicial powers. The Supreme Court declared the dispute to be
agrarian in nature and therefore outside the jurisdiction of the RTC. The
Supreme Court held that:
Section 17 of EO 229 vested the DAR with quasi-judicial powers to
determine and adjudicate agrarian reform matters as well as exclusive
original jurisdiction over all matters involving implementation of agrarian
reform except those falling under the exclusive original jurisdiction of the
Department of Agriculture and the Department of Environment and Natural
Resources in accordance with law. Executive Order 129-A, while in the
process of reorganizing and strengthening the DAR, created the
Department of Agrarian Reform Adjudication Board (DARAB) to assume
the powers and functions with respect to the adjudication of agrarian reform
cases" (at 179, 180).
In an earlier case, Quismundo vs. CA, 201 SCRA 609 (1991), the Supreme
Court explained in detail the purpose for the creation of the quasi-judicial
body, to wit:
Executive Order No. 229, which provides for the mechanism for the
implementation of the Comprehensive Agrarian Reform Program
instituted by Proclamation No. 131, dated July 22, 1987, vests in the
Department of Agrarian Reform quasi-judicial powers to determine
and adjudicate agrarian reform matters.
However, with the enactment of Executive Order No. 229, which took
effect on August 29, 1987, fifteen (15) days after its release for
publication in the Official Gazette, the regional trial courts were
divested of their general jurisdiction to try agrarian reform matters. The
said jurisdiction is now vested in the Department of Agrarian Reform.
The foregoing holding is further sustained by the passage of Republic
Act No. 6657, the Comprehensive Agrarian Reform Law, which took
effect on June 15, 1988. The said law contains provisions which
evince and support the intention of the legislature to vest in the
Department of Agrarian Reform exclusive jurisdiction over all agrarian
reform matters.
The resolution by the DAR is to the best advantage of the parties
since it is in a better position to resolve agrarian disputes, being the
administrative agency presumably possessing the necessary expertise
on the matter. Further, the proceedings therein are summary in nature
and the department is not bound by the technical rules of procedure
and evidence, to the end that agrarian reform disputes and other
issues will be adjudicated in a just, expeditious and inexpensive
proceeding" (at 613, 614, 615).
Powers and Functions of DARAB
DARAB is composed of seven (7) members with the DAR Secretary as
its Chairman. The members are: two (2) Undersecretaries designated by
the Secretary, the Assistant Secretary for Legal Affairs, and three (3)
Assistant Secretaries appointed by the President upon the
recommendation of the Secretary. A Secretariat is also constituted to
support the Board (Exec. Order No. 129-A [1987], sec. 13).
Under Sec. 13 of EO 129-A (1987), the Board is empowered to delegate
its powers and functions to the regional offices of the Department in
accordance with the rules and regulations it has promulgated. With the
implementing authority of the Secretary under Sec. 34 of the same EO and
Sec. 49 of RA 6657, the Board promulgated the present Rules and
Procedures of DARAB whereby adjudicators are specifically designated to
adjudicate agrarian reform cases in the regions and provinces.
As earlier noted, the DARAB was created under the Office of the
Secretary of the Department (Exec. Order No. 129-A [1987], sec. 13). It
was established to strengthen the Department (Exec. Order No.
229 [1987]). However, DARAB has no jurisdiction on matters which strictly
involve the administrative implementation of RA 6657 and other agrarian
laws. Those are within the exclusive jurisdiction of the Secretary of DAR.
Under DAR MC 13 (1997), the DAR Secretary has the authority to certify
as flashpoint or urgent case, only ALI cases but not cases within the
jurisdiction of DARAB.
With respect to the regular courts, Supreme Court Administrative
Circular No. 3 (1992) provides:
The Court reiterates to all court judges the need for a careful
consideration of the proper application of the CARL (RA 6657) to
avoid conflict of jurisdiction with the DARAB. The trial court judges are
directed to take note of the rulings in Vda. de Tangub vs. CA, 191
SCRA 885 and Quismundo vs. CA, 201 SCRA 609.
In Ualat vs. Judge Ramos, 265 SCRA 345 (1996), the respondent judge
of MTC was fined P20,000.00 with stern warning from the Supreme Court
for gross ignorance of law for taking cognizance of an ejectment case
despite allegations of tenancy between the parties.

Ualat vs. Judge Ramos
265 SCRA 345 (1996)
Facts:
Complainants filed an administrative case against respondent Judge
Ramos for taking cognizance of the illegal detainer case filed by their
landowner against them. It was shown that the respondent judge had
knowledge of a previously filed DARAB case and the fact that the
illegal detainer case falls within the exclusive jurisdiction of the DAR.
Despite the separate affidavits of the complainants containing
allegation of landlord-tenant relationship, the respondent judge took
cognizance of the illegal detainer case.
Issue:
Was the action of Judge Ramos proper?
Held:
The Supreme Court in finding the respondent Judge liable for
ignorance of the law opined: "As can be readily seen from the answer
filed by complainants Sabio and Ualat in the civil case, they alleged
the existence of an agrarian tenancy relationship between themselves
and the landowner. Additionally, in the proceedings before respondent
Judge, complainants were even represented by a lawyer from the
DAR. These matters should have been sufficient to put respondent
Judge on notice that complainants were claiming protection under our
agrarian laws. At that point, he ought to have realized that there
existed a genuine issue involving agricultural tenancy among the
parties with respect to the subject property. Knowledge of existing
agrarian legislation and prevailing jurisprudence on the subject,
together with an ordinary degree of prudence would have prompted
respondent Judge to refer the case to the DAR for preliminary
determination of the real nature of the parties' relationship, as required
by law" (at 357).
However, DARAB has no jurisdiction with respect to agrarian matters
involving the prosecution of all criminal offenses under RA 6657 and the
determination of just compensation for landowners (Rep. Act No.
6657 [1988], sec. 57). Jurisdiction over said matters are lodged with the
Special Agrarian Courts (SACs). The Court of Appeals and Supreme Court
maintain their appellate jurisdiction over agrarian cases decided by
DARAB.
In this regard, the Supreme Court in the case of Vda. de Tangub vs. CA,
191 SCRA 885 (1990) held that:
The Regional Trial Courts have not, however, been completely
divested of jurisdiction over agrarian reform matters. Section 56 of RA
6657, on the other hand, confers "special jurisdiction" on "Special
Agrarian Courts", which are Regional Trial Courts designated by the
Supreme Court at least one (1) branch within each province to
act as such. These Regional Trial Courts quaSpecial Agrarian Courts
have, according to Section 57 of the same law, original and exclusive
jurisdiction over: 1) "all petitions for the determination of just
compensation to land-owners," and 2) "the prosecution of all criminal
offenses under . . . (the) Act" (at 890).
Barangay Agrarian Reform Committee (BARC)
This is originally the Barangay Agrarian Reform Council created
under EO 229 (1987). RA 6657 changed the nomenclature of BARC from
"council" to "committee" and expanded its scope of functions. It is through
the organization of the BARCs that the implementation of CARP is
envisioned to be truly community based where the public can participate in
decision-making and resolution of agrarian reform disputes.
This committee is composed of the following:
a) Representative/s of farmer and farmworker beneficiaries;
b) Representative/s of farmer and farmworker non-beneficiaries;
c) Representative/s of agricultural cooperatives;
d) Representative/s of other farmer organizations;
e) Representative/s of the Barangay Council;
f) Representative/s of non-government organizations (NGOs);
g) Representative/s of Landowners;
h) DA Official assigned to the area;
i) DENR Official assigned to the area;
j) DAR Agrarian Reform Technologist assigned to the area who
shall act as the Secretary; and
k) Land Bank of the Philippines representative (Exec. Order No.
229 [1987], sec. 19).
Sec. 46 and 47 of RA 6657 defined the BARC functions in addition to
those provided under Sec. 19 of EO 229. DAR AO 14 (1990) provides for
the guidelines in the formation, organization and strengthening of the
BARCs.
Primary and Exclusive Original and Appellate Jurisdiction of
DARAB
Sec. 1, Rule II of the DARAB Revised Rules and Procedures provides
that the Board has primary and exclusive jurisdiction, both original and
appellate, to determine and adjudicate all agrarian cases including but not
limited to the following:
a) All agrarian disputes involving the implementation of the CARP
under RA 6657, EOs 228, 229, and 129-A, RA 3844 as amended
by RA 6389, PD 27 and other agrarian laws and their implementing
rules and regulations;
b) Cases involving rights and obligations of persons, whether
natural or juridical, engaged in the management, cultivation and use of
all agricultural lands covered by the CARP and other agrarian laws;
c) Cases involving the valuation of land, and the preliminary
determination and payment of just compensation, fixing and collection
of lease rentals, disturbance compensation, amortization payments
and similar disputes concerning the functions of the LBP;
d) Cases involving the annulment or cancellation of lease
contracts or deeds of sale or their amendments involving lands under
the administration and disposition of the DAR or LBP;
e) Cases arising from or connected with membership or
representation in compact farms, farmers' cooperative and other
registered farmers' associations or organizations, related to lands
covered by the CARP and other agrarian laws;
f) Cases involving the sale, alienation, mortgage, foreclosure,
preemption and redemption of agricultural lands under the coverage of
the CARP or other agrarian laws;
g) Cases involving the issuance, correction and cancellation of
Certificates of Landownership Award (CLOAs) and Emancipation
Patents (EPs) which are registered with the Land Registration
Authority;
h) Cases previously falling under the original and exclusive
jurisdiction of the defunct Court of Agrarian Relations under Section 12
of PD 946, except sub-paragraph (Q) thereof and PD 815;
i) And such other agrarian cases, disputes, matters or concerns
referred to it by the Secretary of the DAR.
DARAB's Jurisdiction over Agrarian Disputes
The Supreme Court, in several cases, had the occasion to explain what
is an agrarian dispute case for DARAB to try and adjudicate.
In the case of Machete vs. CA, 250 SCRA 176 (1995), the private
respondents asked for collection of back rentals and damages before the
RTC while the petitioners moved for the dismissal of the case because of
lack of jurisdiction. The Court ordered the transmittal of the case to DARAB
and ruled that:
Section 3, par. (d), of RA 6657 defines the term "agrarian dispute" as
referring to any controversy relating to tenurial arrangements, whether
leasehold, tenancy, stewardship or otherwise, over lands devoted to
agriculture, including disputes concerning farm workers' associations or
representation of persons in negotiating, fixing, maintaining, changing or
seeking to arrange terms or conditions of such tenurial arrangements (at
182).
In the case of Central Mindanao University vs. DARAB, 215 SCRA 86
(1992), on the issue of jurisdiction of the DARAB in ordering the petitioner
to segregate its 400 hectares land and including it under the CARP for
distribution to qualified beneficiaries, the Court opined:
Under Section 4 and Section 10 of RA 6657, it is crystal clear that the
jurisdiction of the DARAB is limited only to matters involving the
implementation of CARP. More specifically, it is restricted to agrarian
cases and controversies involving lands falling within the coverage of
the aforementioned program. It does not include those which are
actually, directly and exclusively used and found to be necessary for,
among such purposes, school sites and campuses for setting up
experimental farm stations, research and pilot production centers, etc.
(at 99). Sec. 17 of EO 129-A is merely a repetition of Sec. 50 of RA
6657. There is no doubt that the DARAB has jurisdiction to try and
decide any agrarian dispute in the implementation of the CARP. An
agrarian dispute is defined by the same law as any controversy
relating to tenurial rights whether leasehold, tenancy, stewardship or
otherwise over lands devoted to agriculture (at 100).
In Isidro vs. CA, 228 SCRA 503, one of the issues raised is the
jurisdiction of the MTC in taking cognizance of a case involving an
agricultural land. The petitioner refused to vacate the land despite the
demand of the private respondent. The Supreme Court held that there
exists no tenurial relations between the parties, to wit:
An agrarian dispute refers to any controversy relating to tenurial
arrangements, whether leasehold, tenancy, stewardship or otherwise,
over lands devoted to agriculture, including disputes concerning
farmworkers associations or representation of persons in negotiating,
fixing, maintaining, changing or seeking to arrange terms or conditions
of such tenurial arrangements. It includes any controversy relating to
compensation of lands acquired under RA 6657 and other terms and
conditions of transfer of ownership from landowners to farmworkers,
tenants and other agrarian reform beneficiaries, whether the
disputants stand in the proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee (at 510).
Cases under the Court of Agrarian Relations
DARAB has jurisdiction over cases previously falling under the original
and exclusive jurisdiction of the defunct Court of Agrarian Relations
under PD 946 (1976), except sub-paragraph (Q) thereof and PD
815 (1975). The sub-paragraph (Q) exception under this cited provision
refers only to cases involving violations of the penal provisions of RA 1199,
as amended. Hence, the other provisions of RA 1199, as amended, still fall
within the jurisdiction of DARAB. Included in DARAB's jurisdiction is
Section 21 ofRA 1199, as amended, which provides that:
Section 21. Ejectment; Violation; Jurisdiction. All cases involving
the dispossession of a tenant by the landholder or by a third party . . . .
The 'third party' mentioned in the said sec. 21 should be construed to
mean a person who is neither landholder or tenant, but who acts for,
openly, secretly, or factually for the landholder. For instance, a sheriff
enforcing an execution sale against the landholder; or a purchaser or
transferee of the land, or a mere dummy of the landowner (De Luna v. CA,
221 SCRA 703 [1993]).
Jurisdiction of the Regional Adjudicator (RARAD) and the
Provincial Adjudicator (PARAD)
Sec. 2, Rule II of the DARAB Revised Rules and Procedures provides
that the RARAD and the PARAD has concurrent original jurisdiction with
the Board to hear, determine and adjudicate all agrarian cases and
disputes, and incidents in connection therewith, arising with their assigned
territorial jurisdiction.
The RARAD is the Executive Adjudicator in his/her region directly
responsible to the Board. He/she shall:
1) Direct supervision over the PARADs;
2) Recommend to the Board the territorial assignments and the
disciplinary measures appropriate to the PARADs;
3) Adjudicate agrarian disputes and land valuation cases;
4) Hear and handle other cases which cannot be handled by the
PARADs:
a) by reason of PARADs disqualification or inhibition;
b) PARADs cannot handle the case properly;
c) because of the complexity and sensitivity of the case;
d) delegated just compensation cases;
e) and those assigned by the Board.
The RARAD has concurrent original jurisdiction with the PARAD.
Appellate Jurisdiction of the Board
Under Sec. 5, Rule II of the DARAB Revised Rules and Procedures, the
Board has the jurisdiction to review all the decisions of the Adjudicators.
However, under DAR MC 7 (1991), reiterating Sec. 1, par. (c) of the
Revised DARAB Rules and Procedures, it is emphasized that DARAB has
no jurisdiction over cases involving annulment or cancellation of orders and
decisions of the Secretary.
Not all decisions or orders of the PARAD and RARAD are reviewable by
the Board. Under DAR AO 8 (1993), the PARADs, RARADs and DARAB
has original and exclusive jurisdiction in the preliminary determination of
just compensation cases which are appealable only to the Special Agrarian
Courts.
Mediation/Conciliation at Barangay Level
The BARC does not function as an adjudicator at the barangay level.
The BARC is mandated to mediate and conciliate agrarian disputes at the
barangay level. In a mediation/conciliation, BARC's objective is to persuade
the contending parties to settle their dispute amicably. The BARC does not
act as an adjudicator.
It is the responsibility of the BARC to promote a speedy and cost-free
administration of justice, prevent a dispute from going out of the barangay
level to DARAB level, and help the landowners and farmer-beneficiaries
commit themselves in complying with their agreements. This in turn is
envisioned to help in the efficient and successful implementation of the
CARP.
Where the land in dispute straddles two (2) or more barangays or the
parties involved reside in different barangays, the BARC of the barangay
where the biggest portion of the property lies, shall have the authority to
conduct the mediation or conciliation proceedings, unless for convenience
and accessibility and upon agreement of parties such proceedings should
be held in another barangay within the municipality or adjacent municipality
where the land in dispute is located (DARAB Revised Rules and
Procedures[1994] Rule III, sec. 3)
Under the DARAB Revised Rules and Procedures, DARAB can take
cognizance of an agrarian dispute even without the BARC Certification if:
1) The dispute does not involve any of the following:
a) Valuation lands to determine just compensation for
landowners;
b) One of the parties is a public or private corporation,
partnership, association or juridical person, or a public
officer/employee wherein the dispute relates to the performance
of his official functions;
c) Issue involved is an administrative implementation of
agrarian laws and policies; and
d) Cases determined by the Secretary as beyond the ambit
mediation/conciliation or compromise.
2) The required certification cannot be complied with for valid
reasons like the non-existence or non-organization of the BARC or the
impossibility of convening it. The PARO shall conduct mediation and
conciliation proceedings and issue a certification to that effect.
3) It involves resolving and disposing of preliminary incidents
related to the case, such as motion for the issuance of status quo
orders, temporary restraining orders, preliminary injunctions and such
similar motions necessitating immediate action (DARAB Revised
Rules and Procedures [1994], Rule III, secs. 1 and 2).
The lack of a BARC certification is not a ground for dismissal of an
action. A complainant is given every opportunity to secure said certification.
Powers and Duties of DARAB
Under the DARAB Revised Rules and Procedures, the powers and
duties of the Adjudicators include but are not limited to the following:
a) Personally conduct a hearing, take control of the proceedings,
employ reasonable means to ascertain the facts of the case,
determine the real parties in interest, define and simplify the issues of
the case, and thresh out preliminary matters.
b) To subpoena, summon witnesses, examine witnesses, may
limit the right of parties/counsels to ask questions to clarify the points
of law at issue or of facts involved, may limit the presentation of
evidence to matters relevant to the issues, and endeavor to settle the
case amicably/approve compromise agreements.
c) To hold a party in contempt, to issue writs and interlocutory
orders, and may award actual, compensatory, exemplary and moral
damages and attorney's fees.
Special Agrarian Courts (SACs)
Special agrarian courts are Regional Trial Courts within each province
designated by the Supreme Court to exercise special jurisdiction in addition
to its regular jurisdiction. The Supreme Court may designate more
branches to constitute such additional SACs as may be necessary to cope
with the number of agrarian cases in each province. (Rep. Act No.
6657 [1988], sec. 56)
Sec. 57 of RA 6657 provides that the SACs shall have original and
exclusive jurisdiction over all petitions for the determination of just
compensation to landowners and the prosecution of all criminal offenses
under RA 6657.
In Republic vs. Court of Appeals, 758 SCRA 263 (1996), the Supreme
Court held that "any effort to transfer the original and exclusive jurisdiction
to the DAR adjudicators and to convert the original jurisdiction of the RTCs
into appellate jurisdiction would be contrary to Section 57 of RA 6657 and
therefore would be void."
Judicial Review
Orders or Decisions of DAR Secretary
The decisions of the DAR Secretary in ALI cases may be appealed to
the Office of the President or the Court of Appeals, at the option of the
appellant.
Sec. 54 of RA 6657 states that any decision, order, award or ruling of
the DAR on any agrarian dispute or on any matter pertaining to the
application, implementation, enforcement, or interpretation of this Act and
other pertinent laws on agrarian reform may be brought to the Court of
Appeals by certiorari. On the other hand, Sec. 15 and 20, Book VII of EO
292 (1987) or the Administrative Code of 1987, as implemented by DAR
MC 3 (1994) provides that an appeal from the decision/order issued by
DAR shall be perfected within fifteen (15) days after receipt of a copy of the
decision/order complained of by the party adversely affected. Said appeal
shall be perfected by filing with the DAR a notice of appeal, serving copies
thereof upon the prevailing party and the Office of the President and paying
the required fees. The DAR shall upon perfection of the appeal transmit the
records of the case to the Office of the President.
DARAB Decisions
Any decision, order, resolution, award or ruling of DARAB on any
agrarian dispute or on any matter pertaining to the application,
implementation, enforcement, interpretation of agrarian reform laws or rules
and regulations promulgated thereunder, may be brought within fifteen (15)
days from receipt of a copy thereof, to the Court of Appeals by certiorari.
(Rep. Act No. 6657 [1988], sec. 54; Revised DARAB Rules [1994], Rule
XIV, sec. 1)
Notwithstanding an appeal to the Court of Appeals, the decision of DAR
shall be immediately executory. (Rep. Act No. 6657[1988], sec.
50; Revised DARAB Rules [1994], Rule XIV, sec. 1)
Decisions of Special Agrarian Courts
An appeal may be taken from the decision of the Special Agrarian
Courts by filing a petition for review with the Court of Appeals within fifteen
(15) days from receipt of notice of the decision. (Rep. Act No. 6657 [1988],
sec. 60)
Note:
1. The transfer of jurisdiction over applications for
CALABARZON areas from the Center for Land Use Policy,
Planning and Implementation (CLUPPI) 2 to the Regional
Director shall take effect upon implementation of the DAR
reorganization, or as directed by the Secretary (DAR Admin. O.
No. 6 [2000], sec. 36)
CHAPTER 7
Land Use Conversion
Definition
DAR AO 1 (1999), entitled "Revised Rules and Regulations on the
Conversion of Agricultural Lands to Non-agricultural Uses," defines "land
use conversion" as "the act or process of changing the current use of a
piece of agricultural land into some other use as approved by DAR." (Sec.
2(k)). Pursuant to the Memorandum of the President dated 16 April 1999,
this administrative order serves as the primary guidelines on the conversion
of agricultural lands to non-agricultural uses.
RA 8435 (1997), also known as the "Agriculture and Fisheries
Modernization Act of 1997," provides for a similar definition: "agricultural
land use conversion refers to the process of changing the use of
agricultural land to non-agricultural uses." (Sec. 4).
Conversion versus Reclassification
DAR's conversion authority is most often seen as synonymous with the
power of local government units (LGUs) to reclassify lands within their
territorial jurisdiction. This misconception has resulted in a lot of conflicts
and confusion not only between the two agencies but among other
concerned sectors.
"Reclassification" refers to the "act of specifying how agricultural lands
shall be utilized for non-agricultural uses such as residential, industrial,
commercial, as embodied in the land use plan, subject to the requirements
and procedures for conversion. It also includes the reversion of non-
agricultural lands to agricultural use." (Joint HLURB, DAR, DA, DILG
Memo. Circular Prescribing the Guidelines to Implement MC 54, [1995],
sec. 2[2.3]). On the other hand, conversion is defined by the same
Memorandum Circular as the "act of changing the current use of a piece of
agricultural land into some other use." [Id., sec. 2[2.2])
Under section 20 of RA 7160 (1991) or the "Local Government Code of
1991," a city or municipality may authorize the reclassification of
agricultural lands and provide for the manner of their utilization or
disposition under the following circumstances:
a) when the land ceases to be economically feasible and sound
for agricultural purposes as determined by the DA; or
b) where the land shall have substantially greater economic value
for residential, commercial, or industrial purposes, as determined by
the sanggunian concerned.
Said Act mandates that the reclassification should be made after
conducting public hearing and that it shall be limited to the following
percentage of the total agricultural land area at the time of the passage of
the ordinance: (a) for highly urbanized and independent component cities,
fifteen percent (15%); (b) for component cities and third class
municipalities, ten percent (10%); and (c) for fourth to sixth class
municipalities, five percent (5%): Provided, further, that agricultural lands
distributed to agrarian reform beneficiaries pursuant to RA 6657 shall not
be affected by the said reclassification and the conversion of such lands
into other purposes shall be governed by Section 65 of said Act. This
percentage ceiling on the land area which the LGUs can reclassify is not
absolute. The President may, when public interest so requires and upon
recommendation of the National Economic and Development Authority
(NEDA), authorize a city or municipality to reclassify lands in excess of the
limits cited above (Rep. Act No. 7160 [1991], sec. 20 [b]).
Also, LGUs are mandated to exercise such authority in accordance
with MC 54 (1993) of the Office of the President entitled "Prescribing the
Guidelines Governing Section 20 of RA 7160, otherwise known as the
Local Government Code of 1991, Authorizing Cities and Municipalities to
Reclassify Agricultural Lands Into Non-agricultural Uses." Under these
Guidelines, the following types of agricultural lands shall not be covered:
a) Agricultural lands distributed to agrarian reform beneficiaries
subject to Sec. 65 of RA 6657;
b) Agricultural lands already issued a notice of coverage or
voluntarily offered for coverage under CARP;
c) Agricultural lands identified under AO 20 (1992), as non-
negotiable for conversion.
On the other hand, the power of the DAR to approve or disapprove land
use conversion applications is exclusive (Exec. Order No. 129-A [1982],
sec. 5[e]; see OP Memorandum Circular No. 54, Sec. 4, [1993] Book IV,
Title XI, Chapter 1, sec. 3 [13]; RA 6657[1988[, sec. 65). It is distinct from
the power of LGUs to reclassify agricultural land under Section 20 of
the Local Government Code.
This is evident in Sec. 20 (e) of RA 7160 which provides: "Nothing in this
Section shall be construed as repealing, amending or modifying in any
manner the provisions of RA 6657." In his commentary, Sen. Aquilino Q.
Pimentel, principal author of the Local Government Code of 1991, stated as
follows:
Sanggunian Power to Reclassify Not to Convert. This is one section of
the Code which evoked a lot of discussion among the members of the
Conference Committee. The proposal to allow local governments to
reclassify land and provide for the manner of their utilization or
disposition was made by Congressman Pablo Garcia of Cebu, who
argued that the central government has no business dictating to the
local governments how to classify land within their jurisdiction. Some
legislators, however, felt that to allow local governments to reclassify
land may open the door to a nationwide frustration of the goals of the
agrarian reform law.
Congressman Garcia disputed the argument by pointing out that the
power he had sought to invest the local governments with was not to
convert land for any purpose contrary to the provisions of the
Comprehensive Agrarian Reform Law but merely to "reclassify" land.
(A.Q. Pimentel, Jr., The Local Government Code of 1991, The Key to
National Development 111).
DAR's role in the reclassification process is the issuance of a
certification that the lands sought to be reclassified are not distributed or
not covered by a notice of coverage or not voluntarily offered for coverage
under CARP. This certification must be secured by the sanggunian
concerned prior to the enactment of an ordinance reclassifying the
agricultural land (OP Memorandum Circular No. 54, [1993], sec. 2 (b) (2)).
After the reclassification by the LGU, a DAR conversion clearance shall
still be required prior to actual change of use of the land as explicitly
provided in OP Memorandum Circular No. 54 (1993), to wit:
"actions on applications for land use conversion shall remain
as the responsibility of DAR". (Sec. 4; Underscoring
supplied.)
The case of Fortich, et al. v. Corona, et al., G.R. No. 131457 (19 August
1999) illustrates the confusion between reclassification and conversion. In
said case, a statement was made that LGUs have authority to convert or
reclassify agricultural lands without DAR approval. The Supreme Court
resolved two (2) separate motions for reconsideration filed by respondents
and intervenors of the Court's resolution dated 17 November 1998 as well
as their motion to refer the case to the Court en banc. The Supreme Court
stated that "(t)he crux of the controversy is the validity of the "Win-Win"
Resolution dated 7 November 1997 of the Office of the President which is
"void and of no legal effect considering that the March 29, 1996 decision of
the Office of the President had already become final and executory even
prior to the filing of the motion for reconsideration which became the basis
of the said "Win-Win" Resolution." (at 5).
The DAR clarified its position on this issue through a Memorandum of
the DAR Secretary dated 13 October 1999, to wit:
It should be stressed that the motions in Fortich were denied on the
ground that the "win-win" resolution is void and has no legal effect
because the decision approving the conversion has already become
final and executory. This is the ratio decidendi or reason of the
decision. The statement that LGUs have authority to convert or
reclassify agricultural lands without DAR approval is merely a dictum
or expression of the individual views of the ponente or writer of the
Resolution of August 19, 1999. It does not embody the Court's
determination and is not binding.
Expropriated Lands Not Subject to DAR Conversion Clearance
Agricultural lands expropriated by LGUs pursuant to the power of
eminent domain need not be subject of DAR conversion clearance prior to
change in use. This was the Court's pronouncement in Province of
Camarines Sur vs. CA, 222 SCRA 173 (1993).


Province of Camarines Sur vs. Court of Appeals
222 SCRA 173 (1993)


Facts:
The Governor of Camarines Sur filed two (2) separate cases for
expropriation against Ernesto and Efren San Joaquin pursuant to
Sangguniang Panlalawigan Resolution No. 129 authorizing the
Governor to purchase or expropriate properties owned by the San
Joaquins for the establishment of a pilot farm for non-food and non-
traditional agricultural crops and a housing project for provincial
government employees. The San Joaquins moved to dismiss the
complaints on the ground of inadequacy of the price offered. The
motion was denied and a writ of possession was issued in favor of the
province. On appeal with the CA, the San Joaquins asked the
appellate court to, among others, nullify the resolution issued by the
Sanggunian. The CA asked the Office of the Solicitor General to
comment to the petition. The Solicitor General stated that the approval
of the Office of the President is not needed but the province must first
secure the approval of the DAR of the plan to expropriate the lands of
petitioners. The CA set aside the order of the trial court allowing the
province to take possession and ordered the suspension of the
expropriation proceedings until after the submission of the DAR
approval to convert the property.
Issue:
Is DAR approval still necessary before an LGU can expropriate
agricultural lands for conversion to non-agricultural use?
Held:
It is true that local government units have no inherent power of
eminent domain and can exercise it only when expressly authorized
by the legislature (City of Cincinnati v. Vester, 281 US 439, 74 L.ed.
950, 50 S Ct. 360). It is also true that in delegating the power to
expropriate, the legislature may retain certain control or impose certain
restraints on the exercise thereof by the local governments (Joslin
Mfg. Co. v. Providence, 262 US 668 67 L. ed. 1167, 43 S Ct. 684).
While such delegated power may be a limited authority, it is complete
within its limits. Moreover, the limitations on the exercise of the
delegated power must be clearly expressed, either in the law
conferring the power or in other legislation.
Resolution No. 129 [1988] was promulgated pursuant to Section 9 of
B.P. Blg. 337, the Local Government Code, which provides: . . .
Section 9 of B.P. Blg. 337 does not intimate in the least that local
government units must first secure the approval of the Department of
Land Reform for the conversion of lands from agricultural to non-
agricultural use, before they can institute the necessary expropriation
proceedings. Likewise, there is no provision in the Comprehensive
Agrarian Reform Law which expressly subjects the expropriation of
agricultural lands by local government units to the control of the
Department of Agrarian Reform. The closest provision of law that the
Court of Appeal could cite to justify the intervention of the Department
of Agrarian Reform in expropriation matters is Section 65 of the
Comprehensive Agrarian Reform Law, which reads: . . .
The opening, adverbial phrase of the provision sends signals that it
applies to lands previously placed under the agrarian reform program
as it speaks of "the lapse of five (5) years from its award."
The rules on conversion of agricultural lands found in Section 4 (k)
and 5(l) of Executive Order No. 129-A, Series of 1987, cannot be the
source of the authority of the Department of Agrarian Reform to
determine the suitability of a parcel of agricultural land for the purpose
to which it would be devoted by the expropriating authority. While
those rules vest on the Department of Agrarian Reform the exclusive
authority to approve or disapprove conversions of agricultural lands for
residential, commercial or industrial uses, such authority is limited to
the applications for reclassifications submitted by the land owners or
tenant beneficiaries..
Statutes conferring the power of eminent domain to political
subdivisions cannot be broadened or constricted by implication
(Schulman v. People, 10 N.Y. 2d. 249, 176 N.E. 2d. 817, 219 NYS 2d.
41).
To sustain the Court of Appeals would mean that the local government
units can no longer expropriate agricultural lands needed for the
construction of roads, bridges, schools, hospitals, etc., without first
applying for conversion of the use of the lands with the Department of
Agrarian Reform, because all of these projects would naturally involve
a change in the land use. In effect, it would then be the Department of
Agrarian Reform to scrutinize whether the expropriation is for a public
purpose or public use. (at 179-181; underscoring supplied).
Authority to Approve/Disapprove Conversion
Under Sec. 4 and 5 of EO 129-A (1987), the DAR is mandated to
"approve or disapprove the conversion, restructuring or readjustment of
agricultural lands into non-agricultural uses." It authorizes DAR to "have
exclusive authority to approve or disapprove conversion of agricultural land
for residential, commercial, industrial, and other land uses as may be
provided for by law." Also, Sec. 4 of OP MC 54 (1993), provides that
"action on application for land use conversion on individual landholdings
shall remain as the responsibility of the DAR, . . . , pursuant to RA No.
6657 and EO 129-A."
Moreover, RA 6657 provides:
Section 65. Conversion of Lands. After the lapse of five (5) years
from its award, when the land ceases to be economically feasible and
sound for agricultural purposes, if the locality has become urbanized
and the land will have greater economic value for residential,
commercial or industrial purposes, the DAR upon application of the
beneficiary or the landowner, with due notice to the affected parties,
and subject to existing laws, may authorized the reclassification or
conversion of the land and its disposition; Provided, That the
beneficiary shall have fully paid his obligations.
In the case of Roxas v. CA, G.R. No. 127876, 16 December 1999, the
authority of the DAR to approve or disapprove conversion was reiterated by
the Court:
Respondent DAR's failure to observe due process in the acquisition of
petitioner's landholdings does not ipso facto give this Court the power
to adjudicate over petitioner's application for conversion of its
haciendas from agricultural to non-agricultural. The agency charged
with the mandate of approving or disapproving applications for
conversion is the DAR." (at 45-46;underscoring supplied). The Court
further stated that, "(t)he DAR's mandate over applications for
conversion was first laid down in Section 4 (j) and Section 5 (l) of
Executive Order No. 129-A, Series of 1987 and reiterated in the CARL
and Memorandum Circular No. 54, Series of 1993 of the Office of the
President. (at 46).
DAR's authority to allow conversion is not limited only to lands awarded
under CARP. As stated in DOJ Opinion No. 44 (1990):
Being vested with exclusive original jurisdiction over all matters
involving the implementation of agrarian reform, it is believed to be the
agrarian reform law's intention that any conversion of a private
agricultural land to non-agricultural uses should be cleared before
hand by the DAR. True, the DAR's express power over land use
conversion is limited to cases in which agricultural lands already
awarded have, after five years, ceased to be economically feasible
and sound for agricultural purposes, or the locality has become
urbanized and the land will have a greater economic value for
residential, commercial or industrial purposes. But to suggest that
these are the only instances when the DAR can require conversion
clearances would open a loophole in R.A. No. 6657, which every
landowner may use to evade compliance with the agrarian reform
program. Hence, it should logically follow from the said department's
express duty and function to execute and enforce the said statute that
any commercial or industrial property should first be cleared by the
DAR.
xxx xxx xxx
Based on the foregoing premises, we reiterate the view that with
respect to conversions of agricultural lands covered by RA No. 6657 to
non-agricultural uses, the authority of DAR to approve such
conversion may be exercised from the date of the law's effectivity on
June 15, 1988.This conclusion is based on a liberal interpretation of
R.A. No. 6657 in the light of DAR's mandate and the extensive
coverage of the agrarian reform program. (Underscoring supplied.)
DAR Officials Authorized to Issue Conversion Orders
Under Sec. 22 (a) of DAR AO 1 (1999), the following DAR officials shall
approve or disapprove applications for land use conversion:
a) The Regional Director for areas of not more than five (5)
hectares;
b) The duly authorized Undersecretary for areas above five (5)
hectares but not more than fifty (50) hectares;
c) The Secretary for areas of more than fifty (50) hectares, except
for those highly restricted from conversion which shall be subject to his
approval regardless of the area.
For purposes of determining the appropriate approving authority, the
total area for conversion shall refer to the aggregate area of all applications
regardless of the number of applications and the nature of the proposed
project where (a) the properties are owned by the same person or entity or
the owners of which are represented by the same person or entity; and (b)
the properties are located in the same barangay or adjacent barangays
within the same municipality/ies or city/ies. In case the subject land is
adjacent to an area previously issued with conversion order, the foregoing
test shall be applied to determine the appropriate approving authority (DAR
Adm. O. No. 1 [1999], sec. 22 [b] and [c]).
Scope of Land Use Conversion
Under DAR AO 1 (1999), the following agricultural lands are subject to
DAR's conversion authority:
a) Those to be converted to residential, commercial, industrial,
institutional and other non-agricultural purposes;
b) Those to be devoted to another type of agricultural activity
such as livestock, poultry, and fishpond the effect of which is to
exempt the land from CARP coverage;
c) Those to be converted to non-agricultural use other than that
previously authorized; and
d) Those reclassified to residential, commercial, industrial, or
other non-agricultural uses on or after the effectivity of RA 6657 on
June 15, 1988 pursuant to the Local Government Code.
Sec. 3 (b) of DAR AO 1 (1999) states that the change in use of land
from one agricultural activity to another use which would exempt the land
from CARP coverage under Sec. 10 of RA 6657 and DOJ Opinion No. 44
[1990] requires conversion clearance. Hence, landowners of agricultural
lands devoted to coconuts must first secure a conversion clearance from
DAR if they want to convert the same to poultry farm or fishpond.
Also, DAR AO 1 (1990) requires landowners to secure another
conversion clearance if the change that will be undertaken is not what has
been authorized in a previous conversion order. In short, if DAR issues a
conversion order authorizing the landowner to change the use of the
property from agricultural use, e.g. coconut plantation to a memorial park,
the owner cannot develop the property into a residential subdivision without
getting another conversion clearance specifically allowing the residential
use of the land.
Agricultural lands outside DAR's conversion authority
The following lands do not require DAR conversion clearance or are not
subject to conversion:
a) Agricultural lands reclassified to non-agricultural uses prior to
15 June 1988 (DAR Adm. O. No. 1 [1999], sec. 3 (d) andDOJ Opinion
No. 44, [1990]). (These lands are subject to DAR exemption
clearance);
b) Agricultural lands considered non-negotiable for conversion
(DAR Adm. O. No. 1 [1999], sec. 4);
c) Lands within the Strategic Agriculture and Fisheries
Development Zones (SAFDZs) which are subject to the five (5) year
moratorium period beginning 10 February 1998 up to 9 February 2003
(Rep. Act No. 8435 [1997], sec. 9; DA Adm. O. No. 6 [1998], rule 9).
(Except as to 5% thereof).
Areas highly restricted from conversion
Under Sec. 2 (b) and 5 of DAR AO 1 (1999), areas highly restricted from
conversion refer to the following:
a) Irrigable lands not covered by irrigation projects with firm
funding commitment;
b) Agro-industrial croplands, or lands presently planted to
industrial crops that support the economic viability of existing
agricultural infrastructure and agro-based enterprises;
c) Highlands or areas located in elevations of 500 meters or
above and have the potential for growing semi-temperate and usually
high-value crops;
d) Lands issued with notice of land valuation and acquisition, or
subject of a perfected agreement between the landowner and the
beneficiaries under the voluntary land transfer/direct payment scheme;
e) Environmentally critical areas as determined by the DENR in
accordance with law.
The conversion of these areas, if at all, shall undergo a more stringent
process and the applicant must clearly show that conversion is far more
beneficial to the community and the public at large. Applications involving
areas highly restricted from conversion are deliberated upon by the PARC
Land Use Technical Committee and subject to the Secretary's approval
regardless of the area. The applicant is also required to submit the
following additional requirements: (a) a project feasibility study; and (b)
environmental compliance certificate, if within environmentally critical area.
Lands non-negotiable for conversion
Under Sec. 4 of DAR AO 1 (1999), areas non-negotiable for conversion
are not eligible for conversion. Applications for conversion involving these
areas shall not be given due course, regardless of whether all or some
portions thereof are within areas highly restricted from conversion or within
priority development areas for conversion. These lands include the
following:
a) Agricultural lands within protected areas designated as such
under the National Integrated Protected Areas System including
watershed and recharged acquifers, as determined by the DENR;
b) All irrigated lands, as delineated by the DA and/or NIA, where
water is available to support rice and other crop production;
c) All irrigated lands where water is not available for rice and
other crop production but are within areas programmed for irrigation
facility rehabilitation by the DA and/or NIA; and
d) All agricultural lands with irrigation facilities operated by private
organizations.
Conversion moratorium under RA 8435
Under RA 8435, the following lands within the SAFDZs are not eligible
for conversion for a period of five (5) years starting on 10 February 1998
until 9 February 2003:
a) All irrigated lands;
b) Irrigable lands already covered by irrigation projects with firm
funding commitments; and
c) Lands with existing or having the potential for growing high-
value crops.
The 5-year conversion moratorium is not absolute. Five percent (5%) of
said lands within SAFDZs may be converted upon compliance with existing
laws, rules and regulations. DAR and DA, upon the recommendation of the
Regional and National SAFDZ Committees, shall jointly determine the
maximum 5% equivalent to the total area of land eligible for conversion.
(DAR Adm. O. No. 1 [1999], sec. 7 (b), (c ); DA Adm. O. No. 6, [1998], rule
9.5.2).
Upon expiration of the moratorium, conversion may be allowed, if at all,
on a case to case basis, subject to existing laws, rules and regulations on
land use conversion (DAR Adm. O. No. 1 [1999], sec. 7 [d]).
Lands within SAFDZs
SAFDZs refer to Strategic Agriculture and Fisheries Development
Zones. They are areas within the Network of Protected Areas for
Agricultural and Agro-industrial Development (NPAAAD) identified for
production, agro-processing and marketing activities to help develop and
modernize, with the support of the government, the agriculture and
fisheries sectors in an environmentally and socio-culturally sound manner
(Rep. Act No. 8435 [1997], sec. 4). Lands within SAFDZs shall be identified
by the DA on the basis of the criteria prescribed in RA 8435.
Priority development areas for conversion
Under Sec. 6 of DAR AO 1 (1999), the following are priority
development areas for conversion:
a) Specific sites in regional agri-industrial centers/regional
industrial centers identified by the Department of Trade and Industry
and the DA;
b) Tourism development areas identified by the Department of
Tourism as indicated in the current Medium Term Philippine
Development Plan;
c) Sites identified and proposed to be developed by LGUs into
socialized housing projects which are presently used for agricultural
purposes;
d) Sites intended for socialized housing projects under EO 184,
series of 1994;
e) Agricultural areas intended for ECOZONE projects pursuant
to RA 7916.
Conversion of agricultural lands within priority development areas
requires DAR clearance. However, the period within which to process and
evaluate applications involving lands within these areas is shorter.
Processing of applications is conducted within 13 days from submission of
complete set of documentary requirements. Also, an environmental
compliance certificate is not a pre-condition to the approval of the
conversion application; instead, it forms part of the conditions of the order
of conversion where applicable.
SHOPC
Under present guidelines, socialized housing projects are considered
priority development areas. (DAR Memo. Circular No. 9 [1999], sec. 1
[1.6].)
Under DAR AO 2 (2000), Mass Housing Desks shall be created at the
CLUPPI which shall be responsible for the receipt, processing and
disposition of all applications for conversion for socialized and low-cost
housing projects.
Applicants for conversion involving socialized and low-cost housing
projects are exempt from the posting of cash bond, submission of
Certification of Eligibility for Conversion from DA and Environmental
Compliance Certificate from DENR. (DAR Adm. O. No. 2 [2000], sec. 3)
Likewise, applications for conversion involving socialized and low-cost
housing projects shall be processed for a period of thirteen (13) working
days upon receipt of the completed application pursuant to Sec. 1 of EO
258 (2000). (DAR Adm. O. No. 2 [2000], sec. 4)
Criteria for Conversion
Under Sec. 8 of DAR AO 1 (1999), the following criteria shall guide the
resolution of applications for conversion:
1) Conversion may be allowed if the land subject of application is
not among those considered non-negotiable for conversion;
2) Conversion may be allowed under the following cases, in
accordance with Section 65 of RA 6657:
a) when the land has ceased to be economically feasible
and sound for agricultural purposes; or
b) the locality has become urbanized and the land will have
greater economic value for residential, commercial, industrial or
other non-agricultural purposes.
3) Conversion of lands within SAFDZs shall take into
consideration the following factors:
a) The conversion is consistent with the natural expansion of
the municipality or locality, as contained in the approved physical
framework and land use plan;
b) The area to be converted is not the only remaining food
production area of the community;
c) The conversion shall not hamper the availability of
irrigation to nearby farmlands;
d) Areas with low productivity will be accorded priority for
conversion; and
e) Sufficient disturbance compensation shall be given to the
farmers whose livelihoods are negatively affected by the
conversion.
4) Conversion may be allowed when the environmental impact
assessment or initial environmental examination, as may be
appropriate, shall have determined that it shall not adversely affect air
and water quality and the ecological stability of the area.
Under the previous guidelines, conversion may be allowed if the land
has been reclassified by the LGUs to non-agricultural uses, but said
criterion has been deleted under the present guidelines. That the land has
been reclassified to non-agricultural use as per zoning certification remains
one of the factors to consider in resolving whether to approve or disapprove
an application for conversion. It is not an indispensable condition, however,
for the approval of the application. Thus, conversion may be allowed even if
the property has not yet been reclassified to non-agricultural use if the
conditions under RA 6657 or RA 8435 warrant the same.
It is evident that the thrust of DAR conversion guidelines is to give the
department sole and exclusive prerogative to decide on conversion
applications. Certifications issued by other agencies are given persuasive
effect but the final determination belongs to the DAR.
Bonds and Disturbance Compensation
Under the present guidelines, applicants are required to post two (2)
kinds of bonds: cash bond and performance bond. They are also required
to pay disturbance compensation in appropriate cases.
Cash Bond
Cash bond is posted by the applicant upon filing of the application
equivalent to two point five percent (2.5%) of the total zonal value of the
land. It is refundable upon issuance of the order of conversion or
convertible into performance bond at the option of the applicant (DAR Adm.
O. No. 1 [1999], sec. 15).
The cash bond is forfeited in favor of the government in the event actual
conversion activities are undertaken by the applicant prior to approval of
the application for conversion (DAR Adm. O. No. 1 [1999], sec. 15).
Performance Bond
Performance bond is posted in favor of DAR to guarantee the payment
of the amount of security as penalty in the event it is established that the
applicant/developer is in default of their obligations under the order of
conversion. It shall be effective for the duration of the project approved
under the conversion order. The performance bond shall be in the form of
either of the following:
a) Cash, manager's check, cashier's check, irrevocable letter of
credit, bank draft equivalent to 2.5% of the total zonal value of the
land; or
b) Bank guarantee equivalent to 5% of the total zonal value of the
land; or
c) Surety equivalent to 15% of the total zonal value of the land
(DAR Adm. O. No. 1 [1999], sec. 15 [c).
The performance bond shall be forfeited in favor of the government in
case of violation of the conditions of the conversion order such as non-
payment of disturbance compensation, failure to develop or complete the
project within the period prescribed, etc. (DAR Adm. O. No. 1 [1999], sec.
15, last par.)
Disturbance Compensation
Under RA 3844, disturbance compensation is given only to de
jure tenants. However, under the present conversion guidelines, tenants,
farmworkers, or bona fide occupants who will be affected by the conversion
of the property to non-agricultural uses are all entitled to disturbance
compensation (DAR Adm. O. No. 1 [1999], sec. 15 [a]).
Disturbance compensation, in cash or in kind or both, shall be paid by
the landowner or developer, as may be appropriate, in such amounts or
under such terms as may be mutually agreed upon between the affected
tenants, farmworkers or occupants and the landowner or developer but it
should not be less than five (5) times the average of the gross harvests on
their landholding during the last five (5) preceding calendar years. Any
agreement for the payment between them shall be subject to DAR's
approval and compliance monitoring (DAR Adm. O. No. 1 [1999], sec. 15
(a)).
Payment of disturbance compensation or compliance with the terms and
conditions of the approved agreement must be made within sixty (60) days
from the date of approval of the application for conversion (DAR Adm. O.
No. 1 [1999], sec. 15 [b]).
In case of disagreement between the parties, the issue on disturbance
compensation may be brought by either of them before the DAR
Adjudication Board for resolution (DAR Adm. O. No. 1 [1999], sec. 15 [c]).
Protests and Oppositions
Sec. 21 of DAR AO 1 (1999) states that the DAR admits protest or
opposition against any application for conversion which is resolved by the
approving authority simultaneously with the application. It may be filed by
any person who will be displaced or directly affected by the proposed land
use conversion such as occupants, tenants, farmworkers, identified
beneficiaries, bona fideresidents of adjoining properties or communities
against the application with the DAR Regional Office or Central Office, as
appropriate (DAR Adm. O. No. 1 [1999], sec. 18 and 19).
The protest must be in writing and filed within fifteen (15) days from the
date of posting of the Notice of Application. However, if the oppositor is an
identified beneficiary under the agrarian reform program of the land applied
for and who failed to file a written protest within the said period due to
fraud, accident, mistake or excusable neglect, he shall have the right to
intervene at any time during the pendency of the application.
Protests or oppositions may be filed on the following grounds:
a) The area applied for is non-negotiable for conversion;
b) The adverse effects or the displacement to be caused by the
proposed conversion far outweigh the social and economic benefits to
the affected communities;
c) Misrepresentation or concealment of material facts;
d) Illegal/premature conversion;
e) Existence of proof that conversion was resorted to as a means
to evade CARP coverage and to dispossess the tenant farmers of the
land tilled by them. (DAR Adm. O. No. 1 [1999], sec. 20)
Effects of Approval of Conversion Application
An order of conversion is generally subject to the following conditions:
a) Payment of disturbance compensation within 60 days from
issuance of the order;
b) Posting of a notice of conversion in a conspicuous place;
c) Development of the land within a specific period;
d) Withdrawal or cancellation of the order for misrepresentation of
facts integral to its issuance or for violation of the rules and regulations
on land use conversion.
Sec. 23 of DAR AO 1 (1999) also provides for the following effects:
First, the conversion of an agricultural land to non-agricultural uses is
limited to the specific use of the land authorized in the order. In case the
landowner decides to use the land for purposes other than that authorized,
a new application must be filed which must go through the process of
conversion again. Otherwise, he may be charged for unauthorized
conversion (DAR Adm. O. No. 1 [1999], sec. 40 (d) and 2 [y]).
Second, all conversion orders are subject to the schedule indicated in
the detailed site development plan and work and financial plan submitted
by the applicant. The rules, however, require that the period of
development should not extend beyond five (5) years from the issuance of
the order except as authorized by the Secretary or the approving official on
meritorious grounds.
Third, the conditions of the order are binding not only upon the applicant
but also upon successors-in-interest of the property.
Fourth, duly authorized representatives of DAR should be allowed free
and unhampered access to the property subject of the conversion order for
compliance monitoring purposes.
Fifth, the use authorized in the order of conversion shall be annotated
on the title of the subject property.
Sixth, the order is without prejudice to ancestral domain claims of
indigenous peoples pursuant to RA 8371.
Effect on tenants, farmworkers or occupants of property
Upon payment of disturbance compensation or compliance with the
terms and conditions of the agreement for disturbance compensation, the
tenants, farmworkers or occupants are expected to give up all their rights
over the land such as possession, tenancy, etc., in favor of the landowner
or developer.
In Gonzales v. CA, 174 SCRA 398, it was held that an agricultural
leasehold cannot be established on land which has been converted to
residential use.
Grounds for Revocation/Withdrawal/Cancellation of Conversion Order
Under Sec. 35 of DAR AO 1 (1999), a petition for
cancellation/revocation/withdrawal of the order of conversion may be filed
at the instance of DAR or any aggrieved party on the following grounds:
a) Misrepresentation or concealment of facts or circumstances
material to the grant of conversion;
b) Non-compliance with the conditions of the order of conversion;
c) Lack of jurisdiction of the approving authority;
d) Non-compliance with the agreement on disturbance
compensation;
e) Conversion to use other than that authorized in the conversion
order; and/or
f) Any other violation of relevant rules and regulations of DAR.
The period within which to file the petition varies depending on the
ground raised by the petitioner:
a) The petition must be filed before the approving authority within
90 days from discovery of facts which would warrant such cancellation
but not more than one year from issuance of the order if the basis is
misrepresentation or concealment, or non-compliance with the
agreement on disturbance compensation;
b) The petition must be filed with 90 days from discovery of such
facts but not beyond the period for development stipulated in the order
if the basis is non-compliance with the conditions of the order,
conversion to use other than that authorized, or any other violation of
relevant rules and regulations of DAR;
c) Where the ground is lack of jurisdiction, the petition shall be
filed with the Secretary at any time.
In the event the conversion order is cancelled or withdrawn, the land
subject thereof shall revert to the status of agricultural lands and shall be
subject to CARP coverage as circumstances may warrant. (Sec. 37, AO 1
(1999)).
CHAPTER 8
Prohibited Acts and Omissions
Preliminary Considerations
RA 6657, RA 8435 and RA 3844 are the primary sources of prohibited
acts and omissions under the agrarian reform program which are criminal
in nature and punishable with fine and imprisonment, or both. As a rule, the
prosecution of these acts does not preclude the DAR from pursuing
administrative cases against the offenders for the same acts or on the
basis of the same facts.
Other acts and omissions in violation of agrarian laws are also
administratively sanctioned. As the principal agency tasked with the
implementation of CARP, the DAR is vested with the power to establish
and promulgate operational policies, rules and regulations for agrarian
reform implementation (see Exec. Order No. 129-A (1987), sec. 4 [c]).
Moreover, Sec. 50 of RA 6657 vests DAR with the primary jurisdiction to
determine and adjudicate agrarian reform matters and exclusive original
jurisdiction over all matters involving the implementation of agrarian reform.
Prohibited Acts and Omissions by Landowners under RA 6657
Sec. 73 of RA 6657 enumerates acts and omissions which are criminally
punishable. Other provisions of RA 6657 proscribing certain acts and
omissions not included in Sec. 73 are subject to administrative regulation or
sanctions.
1. Ownership and Possession of Land Beyond Allowable Limits
Sec. 73 (a) of RA 6657 prohibits "The ownership or possession, for the
purpose of circumventing the provisions of this Act, of agricultural lands in
excess of the total retention limits or award ceilings by any person, natural
or juridical, except those under collective ownership by farmer-
beneficiaries."
Elements:
a) Offender is any person, natural or juridical;
b) Person owns or possess agricultural lands in excess of
retention limit or award ceilings, except in the case of collective
ownership by farmer beneficiaries; and
c) The purpose of ownership or possession is to circumvent
the provisions of RA 6657;
2) Prohibited Sale, Transfer, Conveyance or Change in the Nature
of the Land
Sec. 73(e) of RA 6657 also prohibits "The sale, transfer, conveyance or
change of the nature of lands outside urban centers and city limits either in
whole or in part after the effectivity of this Act. The date of the registration
of the deed of conveyance in the Register of Deeds with respect to titled
lands and the date of the issuance of the tax declaration to the transferee
of the property with respect to unregistered lands, as the case may be,
shall be conclusive for the purpose of this Act." CIHTac
Elements:
a) The offender is any person;
b) The person either effects the
i. sale, transfer or conveyance of the land; or
ii. change the nature of the land.
c) The land must be outside of urban centers and city limits;
d) The transaction or the change of the nature of the land may be
of the whole or a portion of the land; and
e) The transaction or the change of the nature of the land was
effected after 15 June 1988.
DAR AO 1 (1989) provides for administrative sanctions for the sale,
transfer, conveyance of lands outside urban centers. The elements of the
administrative offense is similar to that defined under Sec. 73 (e). Sec. 6
of RA 6657 also provides that the sale, disposition, lease, management
contract or transfer of possession of private lands executed by the original
owner in violation of RA 6657 shall be null and void. The sale or
disposition, however, is not totally void. Part I (B) of DAR AO
(1989) provides that the sale or disposition of agricultural land is valid to the
extent that the total landholding of the transferee as a result of the said
acquisition does not exceed the landholding ceiling.
3. Illegal/Premature/Unauthorized Conversions
Illegal Conversion
Sec. 73 (c) of RA 6657 penalizes "The conversion by any
landowner of his agricultural land into any non-agricultural use with
intent to avoid the application of this Act to his landholdings and to
dispossess his tenant farmers of the land tilled by them."
Elements:
a) The land is agricultural land;
b) The offender is the landowner;
c) There are acts committed converting the use of the land into
non-agricultural use; and
d) The intent is to:
i. avoid the application of RA 6657; and
ii. to dispossess tenant farmers tilling the land.
DAR AO 1 (1999) provides a more expansive definition of
illegal conversion. Sec. 2 (g) of DAR AO 1 (1999)defines illegal
conversion as "the conversion by any landowner of his agricultural
land into any non-agricultural use with intent to avoid the application
of RA 6657 to his landholding and to dispossess his tenant farmers
of the land tilled by them; or the change of the nature of lands
outside urban centers and city limits either in whole or in part after
the effectivity of RA 6657, as provided in Sec. 73 (c) and (e)
respectively, of the said Act." Thus, under the administrative rule,
there are two (2) ways of committing illegal conversion.
Elements of the First Type:
a) Offender is the land owner;
b) He/she converts his/her agricultural land into any non-
agricultural use without authority or DAR clearance;
c) The intention of the conversion is to
i. avoid the application of RA 6657; and
ii. to dispossess the farmers of the land tilled by them;
Elements of the Second Type:
a) Offender is the landowner or any other person;
b) He/she changes the nature of the agricultural land, in
whole or in part;
c) Land is located outside urban centers and city limits; and
d) Act was committed after 15 June 1988.
Premature Conversion
Sec. 11 of RA 8435 penalizes ". . . the undertaking of any development
activity, the results of which modify or alter the physical characteristics of
the agricultural lands to render them suitable for non-agricultural purposes
without an approved order of conversion from the DAR."
Elements:
a) The land is agricultural land;
b) The offender may be any person;
c) Actual development activity is undertaken on the land;
d) The development activity modifies or alters the physical
characteristics of the land;
e) The land development renders the land suitable for non-
agricultural purposes; and
f) There is no approved order of conversion from the DAR.
Unauthorized conversion
Unlike illegal and premature conversions, unauthorized conversion is
not a criminal act but is merely administratively sanctioned.
Sec. 2 (w) of DAR AO 1 (1999) defines unauthorized conversion as "the
act of changing the current use of the land from agricultural (e.g. riceland)
to another agricultural use (e.g. livestock) without an order of conversion
from DAR, or changing the use of the land other than that allowed under
the order of conversion issued by DAR." There are, thus, two (2) ways to
commit unauthorized conversion.
Elements of the First Type:
a) Offender is any person, i.e., landowner, developer or any
other person;
b) The person changes the current use of an agricultural
land into another agricultural purpose; and
c) The change of use was done without an order of
conversion from DAR.
Elements of the Second Type:
a) Offender is any person, i.e., landowner, developer, or any
other person;
b) The subject land is granted an order of conversion for its
commitment to non-agricultural purposes; and
c) The person commits the land to a purpose other than that
allowed under the order of conversion.
In addition to the foregoing, Sec. 35 of DAR AO 1 (1999) also provides
for administrative sanctions against certain acts in connection with the
grant of conversion application by landowners or their duly authorized
representatives. These include the following:
a) Misrepresentation or concealment of material facts in
conversion application;
b) Non-compliance with the conditions set forth in the
conversion order; and
c) Non-compliance with the agreement on disturbance
compensation.
Prohibited Acts and Omissions by Beneficiaries under RA 6657
1. Sale, Transfer, Conveyance of Rights Acquired as a Beneficiary
Sec. 73 (f) of RA 6657 prohibits "The sale, transfer or conveyance by a
beneficiary of the right to use or any other usufructuary right over the land
he acquired by virtue of being a beneficiary, in order to circumvent the
provisions of this Act."
Elements:
a) The offender is an agrarian reform beneficiary;
b) Offender sells, transfers or conveys the right to use or any
other usufructuary right over his land;
c) The subject land was acquired by him/her by virtue of
being a beneficiary; and
d) The act is motivated by the design to circumvent the
provisions of R.A. 6657.
Relatedly, Part I (4) of DAR MC 19 (1996) provides that the "[s]ale,
transfer, lease and other forms of conveyance by beneficiary of the rights to
use or any other usufructuary right over the land acquired by virtue of
being a beneficiary, in circumvention of the provisions of Sec. 73 of RA
6657, PD 27 and other agrarian law" is a prohibited act. However, if the
lands has been acquired underPD 27/EO 228, ownership may be
transferred upon full payment of amortization by the beneficiary.
Elements:
a) The offender is an agrarian reform beneficiary;
b) He/she sells, transfers or conveys the right to use or any
other usufructuary right over his land without legal basis;
c) The subject land was acquired by him/her by virtue of
being a beneficiary under RA 6657 or PD 27/EO 228; Provided
that lands acquired under PD 27/EO 228 can be transferred upon
full payment of amortizations. In the case of lands awarded under
CARP, the land can be transferred ten (10) years after the
registration of the CLOA; and
d) The act is motivated by the design to circumvent the
provisions of RA 6657, PD 27 and other agrarian laws.
2. Misuse or Diversion of Financial Aid and Support Services
Sec. 37 of RA 6657 provides that the "misuse or diversion of the
financial and support services provided the beneficiary shall result in
sanction against the beneficiary guilty thereof, including the forfeiture of the
land transferred to him or lesser sanctions as may be provided by the
PARC without prejudice to criminal prosecution." This is reflected in Item A,
No. 1 of DAR MC 19 (1996).
Elements:
a) The beneficiary was granted financial aid and other support
services;
b) The beneficiary either:
i. misuses the financial aid and support services; or
ii. diverts such aid or services for other purposes.
3. Misuse of the Land
Par. 4, Sec. 22 of RA 6657 provides that any beneficiary guilty of
negligence or misuse of the land or any support extended to him shall
forfeit his right to continue as such beneficiary. Misuse of the land is
administratively sanctioned under DAR MC 19 (1996).
Part III, Item (A) of DAR AO 2 (1994) defines misuse of the land as "any
act causing substantial and unreasonable damage on the land, and
causing the deterioration and depletion of the soil fertility and
improvements thereon. It also includes the act of knowingly planting,
growing, raising of any plant which is the source of a dangerous drug, as
defined under PD 1683 (1980)." Under the definition, there are two ways of
committing this offense.
Elements of the First Type:
a) Offender is a grantee of land awarded through CLOA or EP;
b) Offender commits acts which cause substantial and
unreasonable damage to the land; and
c) Such act causes the deterioration and depletion of the soil
fertility and improvements thereon.
Elements of the Second Type:
a) Offender is a grantee of land awarded through a CLOA or EP;
and
b) He knowingly plants, grows or raises any plant which is the
source of dangerous drug as defined in PD 1683.
4. Continuous Neglect or Abandonment of Awarded Lands
Sec. 22 of RA 6657 provides that any beneficiary who is guilty of
negligence of the land extended to him shall forfeit his right to continue as
such beneficiary. Part I, A (5) of DAR MC 19 (1996) provides that
"continuous neglect or abandonment of the awarded lands over a period of
two (2) years as determined by the Secretary or his authorized
representative" is subject to administrative sanctions.
Part III, Item (B) of DAR AO 2 (1994) defines neglect or abandonment
as the "willful failure of the ARB, together with his farm household, to
cultivate, till, or develop his land to produce any crop, or to use the land for
any specific economic purpose continuously for a period of two calendar
years."
Elements:
a) The offender is an agrarian reform beneficiary;
b) The beneficiary willfully fails or refuses to cultivate, till or
develop to produce any crop the land awarded him; and
c) Such failure or refusal continue for a period of two (2) calendar
years.
5. Material Misrepresentation of Qualifications
The material misrepresentation of qualifications provided under Sec. 22
of RA 6657 and other agrarian reform laws is administratively sanctioned
under Item A (3), Part I of DAR MC 19 (1996).
Elements:
a) The offender is a beneficiary;
b) Offender intentionally made false statements respecting a
matter of fact in his application for qualification as an ARB under RA
6657 or any other agrarian laws; and
c) The misrepresented fact was material to the determination of
his qualification to become a beneficiary.
6. Default and Failure in the Payment of Amortization to Landowner
Part I, item A(1) of DAR MC 19 (1996) provides that "default in the
obligation of the ARBs to pay the aggregate of three (3) consecutive
amortizations to the landowner in the case of awarded lands under
voluntary land transfer/direct payment scheme, except in cases of
fortuitous events and force majeure" is administratively sanctioned. The
administrative rule is based on Sec. 26, RA 6657which states that a
beneficiary whose land has been foreclosed shall thereafter be
permanently disqualified from becoming a beneficiary.
Elements:
a) Offender is an ARB;
b) The beneficiary acquired the land by virtue of Voluntary Land
Transfer or Direct Payment Scheme;
c) The beneficiary fails to pay the landowner amortization for
three (3) consecutive months; and
d) Failure is due to reasons other than force majeure or fortuitous
events.
7. Failure to Pay Amortizations to LBP
Similarly, the failure to pay amortizations to LBP is penalized under DAR
MC 19 (1996) which states that "[f]ailure of the ARBs to pay at least three
(3) annual amortizations to the LBP in the case of awarded lands under the
Compulsory Acquisition (CA) or Voluntary Offer to Sell (VOS), except in the
case of fortuitous events and force majeure."
Elements:
a) The beneficiary is an awardee of a land acquired through the
Compulsory Acquisition or Voluntary Offer to Sell;
b) The beneficiary fails to pay the LBP at least three (3) annual
amortization; and
c) Failure is due to reasons other than force majeure or fortuitous
events.
8. Waiver of Rights to Awarded Lands
Part I, item A, no. 9 of MC 19 (1996) treats the waiver of rights to
awarded lands by a beneficiary as an administrative offense.
Elements:
a) Offender is a beneficiary; and
b) The beneficiary has expressly or impliedly waived his rights
over the land.
9. FB's Surrender of Awarded Lands to Landowner or Other Non
ARBs.
The surrender by a beneficiary of his awarded lands to landowner or
other non-ARBs is penalized under part I, item A (10) of MC 19 (1996).
Elements:
a) Offender is a beneficiary;
b) Offender surrenders land awarded him to the landowner or
other non-beneficiaries; and
c) Such surrender is without legal authority or clearance from
DAR.
Prohibited Acts and Omissions by Other Persons under RA 6657
1. Forcible Entry and Unlawful Detainer
Sec. 73 (b) of RA 6657 provides that "The forcible entry or illegal
detainer by persons who are not qualified beneficiaries under this Act to
avail themselves of the rights and benefits of the Agrarian Reform
Program" is a prohibited act that is criminally punishable.
Elements:
a) Offender is any person who is not qualified to become an
agrarian reform beneficiaries;
b) He/she deprives the owner, or legal representatives or any
assigns of the said owner, the right of possession thereof either
through the following acts:
i. by entering the land of another by force, intimidation,
threat, strategy, or stealth; or
ii. unlawfully refusing to vacate the land after the right to hold
possession thereof has expired;
c) The intention of the acts is to avail themselves of the rights and
benefits of the Agrarian Reform Program.
2. Obstruction and Prevention of CARP Implementation
Sec. 73 (d) of RA 6657 penalized the "[w]illful prevention or obstruction
by any association or entity of the implementation of the CARP."
Elements:
a) Offender may be a landowner, beneficiary or any other person,
natural or juridical; and
b) The person commits acts to prevent or obstructs the
implementation of the CARP.
Prohibited Acts by Agricultural Lessees and Lessor under RA 3844
RA 3844 enumerates the criminal acts and omissions by agricultural
lessees and lessors.
By Agricultural Lessor
1. Unlawful Recording of Sale in the Registry of Property Subject
to Right of Redemption
Sec. 13 of RA 3844 states that "[n]o deed of sale of agricultural land
under cultivation by an agricultural lessee or lessees shall be recorded in
the Registry of Property unless accompanied by an affidavit of the vendor
that he has given the written notice required in Section eleven of this
Chapter or that the land is not worked by an agricultural lessee." Failure to
comply with this provision is criminally punishable under Sec. 167(1) of RA
3844.
Elements:
a) The offender is the landowner or agricultural lessor, or in case
of juridical persons, the manager or person who has charge of the
management or management of the property or in his default, the
person acting in his stead;
b) He effects the recording of the sale of the land subject of an
agricultural lease; and
c) Such recording was effected without the necessary Affidavit by
vendor that he has given prior written notice of the sale to the
agricultural lessor as required by Sec. 7 of RA 3844.
2. Unlawful Disposition of Lessee
Sec. 31(1) of RA 3844 provides that it shall be unlawful for the
agricultural lessor to "dispossess the agricultural lessee of his landholding
except upon authorization by the Court under Section thirty-six. Should the
agricultural lessee be dispossessed of his landholding without authorization
from the Court, the agricultural lessor shall be liable for damages suffered
by the agricultural lessee in addition to the fine or imprisonment prescribed
in this Code for unauthorized dispossession." Sec. 167(1) of RA
3844penalizes the commission by an agricultural lessor of the act defined
under Sec. 31 of RA 3844.
Elements:
a) Offender is an agricultural lessor;
b) Offender dispossess the agricultural lessee of his landholding;
and
c) Dispossession is without authorization from the Court.
3. Inducement to Execute or Enter into a Share Tenancy Contract
Sec. 167(2) of RA 3844 provides that "Any person, natural or juridical,
who induces another, as tenant, to execute or enter into a share tenancy
contract with himself or with another in violation of this Code shall be
punished by a fine not exceeding five thousand pesos with subsidiary
imprisonment in accordance with the Revised Penal Code: Provided, That
the execution of a share tenancy contract shall be considered prima facie
evidence of such inducement as to the owner, civil law lessee, usufructuary
or legal possessor. In case of juridical persons, the manager or the person
who has charge of the management or administration of the property or, in
his default, the person acting in his stead, shall be liable under this
Section."
Elements:
a) Offender is any person, natural or juridical. In case of juridical
persons, the manager or the person who has charge of the
management or administration of the property, or in his default, the
person acting in his stead shall be liable; and
b) Offender induces another person, as tenant, to execute or
enter into a share tenancy contract with himself or another in violation
of RA 3844.
4. Making Untruthful Statements in Affidavit Required under Sec.
13, RA 3844
Sec. 167(2) of RA 3844 provides "Any person who executes an affidavit
as required by Section thirteen of Chapter I, knowing the contents thereof
to be false, shall be punished by a fine not exceeding one thousand pesos
or imprisonment of not more than one year, or both, in the discretion of the
court."
Sec. 13 of RA 3844 requires that prior to the registration of the sale or
transfer of land in the Registry of Property, the landowner must execute an
affidavit that written notice of the sale or transfer was made to the
agricultural lessor as required under Sec. 7 of RA 3844.
Elements:
a) Offender is the landowner, agricultural lessor or any person;
and
b) He/she knowingly makes untruthful statements on a material
matter in an affidavit required for the registration of a sale of land
subject to right of pre-emption as required under Sec. 13 of RA 3844.
5. Acts Violating Farmworker's Rights to Self-Organization and to
Engage in Other Concerted Activities
Sec. 167 (4) of RA 3844 penalizes "Any person who willfully violates the
provisions of Sections forty and forty-one of this Code shall be punished by
a fine of not less than one hundred pesos nor more than one thousand
pesos or by imprisonment of not less than one month nor more than one
year, or both such fine and imprisonment, in the discretion of the court. If
any violation of Sections forty and forty-one of this Code is committed by a
corporation, partnership or association, the manager or, in his default, the
person acting as such when the violation took place shall be criminally
responsible."
Sec. 40 of RA 3844 recognizes the farmworkers' right to self-
organization, and provides that "the farm workers shall have the right to
self-organization and to form, join or assist farm workers' organizations of
their own choosing for the purpose of collective bargaining through
representatives of their own choosing: Provided, That this right shall be
exercised in a manner as will not unduly interfere with the normal farm
operations. Individuals employed as supervisors shall not be eligible for
membership in farm workers' organizations under their supervision but may
form separate organizations of their own."
Sec. 41 of RA 3844 likewise recognizes the right of farmworkers to
engage in concerted activities, to wit: "The farm workers shall also have the
right to engage in concerted activities for the purpose of collective
bargaining and other mutual aid or protection. For the purpose of this and
the preceding Section, it shall be the duty of the farm employer or manager
to allow the farm workers, labor leaders, organizers, advisers and helpers
complete freedom to enter and leave the farm, plantation or compound at
the portion of same where said farm workers live or stay permanently or
temporarily."
Elements:
a) Offender is the landowner, agricultural lessor or any person;
b) Offender commits acts which impair or prevent the exercise of
i. the right of farmworkers to self-organization under Sec. 40
of RA 3844; or
ii. the right to engage in concerted activities as defined under
Sec. 41 of RA 3844.
6. Acts Violative of the Right of Farmworkers to a Minimum Wage
Sec. 167 (5) of RA 3844 provides "Any person who willfully violates the
provisions of Section forty-two of this Code shall, upon conviction thereof,
be subject to a fine of not more than two thousand pesos, or upon second
conviction, to imprisonment of not more than one year or both such fine
and imprisonment, in the discretion of the court. If any violation of the
provisions of Section forty-two of this Code is committed by a corporation,
partnership or association, the manager or, in his default, the person acting
as such when the violation took place shall be criminally responsible."
Sec. 42 of RA 3844 protects the farmworkers right to a minimum wage
and provides that "[n]otwithstanding any provision of law or contract to the
contrary, farm workers in farm enterprises shall be entitled to at least P3.50
a day for eight hours' work: Provided, That this wage may, however, be
increased by the Minimum Wage Board as provided for in Republic Act
Numbered Six hundred and two."
Elements:
a) Offender is a landowner or any other person; and
b) Offender fails or refuses to pay the farmworker the minimum
daily wage as set in Sec. 43, RA 3844 or determined by the Minimum
Wage Board.
By Agricultural Lessees
1. Cultivation of Another Farmland without Consent of Lessor
Sec. 167 (1) of RA 3844 penalizes the commission by agricultural
lessees of the prohibited acts under Sec. 27 of RA 3844.
Sec. 27 (1) of RA 3844 provides that it shall be unlawful for an
agricultural lessee "[t]o contract to work additional landholdings belonging
to a different agricultural lessor or to acquire and personally cultivate an
economic family-size farm, without the knowledge and consent of the
agricultural lessor with whom he had first entered into household, if the first
landholding is of sufficient size to make him and the members of his
immediate farm household fully occupied in its cultivation."
Elements:
a) Offender is an agricultural lessee;
b) The land leased by him is of sufficient size to make him and
the members of his immediate farm household fully occupied in its
production;
c) He contracts to work another landholdings belonging to a
different agricultural lessor or acquires and personally cultivate an
economic family-size farm; and
d) The cultivation of the other landholding is without the consent
of his first lessor.
2. Unlawful Sublease of Leased Land by Lessor
Sec. 27 (b) of RA 3844 declares that it shall be unlawful for an
agricultural lessee "[t]o employ a sub-lessee on his landholding: Provided,
however, That in the case of illness or temporary incapacity, he may
employ laborers whose services on his landholdings shall be on his
account." This prohibition is reiterated in Item B(1), part VI of DAR AO 5
(1997).
Elements:
a) Offender is an agricultural lessee;
b) That he employs as sublessee on his landholdings; and
c) The reason for the sub-contracting is other than illness or
temporary incapacity.
Penalties for Violation
The penalties for the prohibited acts and omissions which are criminal in
nature are as follows:
Act or Omission Penalty
Prohibited Acts or Omissions Imprisonment of not less than one
(1) month to not
under RA 6657 more than three (3) years or a fine
of not less than one
thousand pesos (1,000.00) and not
more than fifteen
thousand pesos (P15,000.00), or
both, at the discretion
of the court. (Sec. 74, RA 6657)
Premature Conversion Imprisonment of two (2) to six (6)
years, or a fine
under RA 8435 equivalent to one hundred percent
(100%) of the
government's investment cost, or
both, at the
discretion of the court, and an
accessory penalty of
forfeiture of the land and any
improvement thereof.
(Sec. 11, RA 8435)
Violation of Sec. 13, Sec. 27, Fine not exceeding one thousand
pesos or
and 31 (1) of RA 3844 imprisonment not exceeding one
year or both in the
discretion of the court (RA 3844,
Sec. 167 (1).)
Inducement to Execute Fine not exceeding five thousand
pesos with
or Enter into a Share subsidiary imprisonment in
accordance with the
Tenancy Contract Revised Penal Code (Sec. 167 [2],
RA 3844)
(Sec. 167 [2], RA 3844)
Making untruthful statements Fine not exceeding one thousand
pesos or
in affidavit required under imprisonment of not more than one
year, or both, in
Sec. 13, RA 3844 the discretion of the Court (Sec.
167 (3), RA 3844)
(Sec. 167 (3), RA 3844)
Acts Violating Farmworker's Fine of not less than one hundred
pesos nor more than
Rights to Self-organization one thousand pesos or by
imprisonment of not less
and to Engage in Other than one month nor more than one
year, or both such
Concerted Activities fine and imprisonment, in the
discretion of the court
(Sec. 167[4], RA 6657) (Sec. 167 [4], RA 6657).
Acts Violative of the Right Fine of not more than two thousand
pesos, or upon
of Farmworkers to a second conviction, to imprisonment
of not more than
Minimum Wage (Sec. one year or both such fine and
imprisonment, in the
167[5], RA 3844) discretion of the court (Sec. 167 [5],
RA 3844).
Upon the other hand, the penalties for prohibited acts and omissions
which are administrative in nature are as follows:
Acts or Omissions
Administrative Sanction
Under MC 19 (1996) Cancellation of EPs/CLOAs and
perpetual disqualification of Agrarian Reform Beneficiaries (see MC 19
s. 1996, Part I).
Under AO 1 (1999) 1. Cancellation or withdrawal of
the authorization for the land use
conversion;
2. Blacklisting of the applicant,
developer, or representative;
3. Automatic disapproval of
pending subsequent conversion applications that the offender may file
with the DAR;
4. Issuance of cease and desist
order (CDO); and/or
5. Forfeiture of cash bond in
accordance with Sec. 16 hereof. (A.O. 1 s. 1999, Sec. 49)
Jurisdiction Over Violation of Agrarian Laws
The power and duty to hear and try cases involving the criminal acts
enumerated under RA 6657, RA 8435 and RA 3844 and other relevant
agrarian laws belongs to the Special Agrarian Courts. HcaATE
With respect to administrative offenses, the DAR shall have jurisdiction
over the same by virtue of its express primary jurisdiction to determine and
adjudicate agrarian reform matters and exclusive original jurisdiction over
all matters involving the implementation of agrarian reform.

ACKNOWLEDGMENT
BARIE would like to thank the following offices for their valuable inputs:
Legal Affairs Office, Bureau of Land Acquisition and Distribution, Special
Concerns Office, Policy and Strategic Research Service, and the Land Use
Conversion Committee. Likewise, BARIE would like to thank Mr. Gil R.
Tuparan for writing portions of the initial draft.
FOREWORD
The Department of Agrarian Reform is cognizant of the role that various
DAR Frontliners, like the MAROs and ARPTs play in the implementation of
the Comprehensive Agrarian Reform Program at the grassroots level. As
frontliners, they are the first contact of the program's various clientele. It is
from them that the agrarian reform beneficiaries, the landowners, and the
general public get their first impressions of DAR as a social development
agency.
In the course of implementing the program, these field implementors are
often faced with issues and problems due to varied understanding and
interpretation of the CARP law and its implementing guidelines and
issuances.
To address this, BARIE, in coordination with other DAR units, produced
in 1993 the first edition of the Handbook for CARP Implementors. This
resource material which was distributed to all MAROs and other field
personnel was developed to enhance the knowledge, attitude and
commitment of DAR frontliners in implementing the program.
Since last year, however, new implementing guidelines as well as
amendments to the existing Administrative Orders were issued. This
prompted BARIE to produce the Second Edition of the Handbook for DAR
Frontliners to ensure that the resource material is well updated and
responsive to the needs of the field implementors. The Handbook which is
also presented in a question-and-answer format, contains an updated
discussion of the various provisions of the program and its implementing
mechanisms, procedures and guidelines.
It is hoped that this Handbook will be a valuable reference tool in
transforming our field personnel into successful and multi-faceted
implementors of the agrarian reform program.
(SGD.) ERNESTO D. GARILAO
Secretary
HANDBOOK FOR CARP IMPLEMENTORS
TABLE OF CONTENTS
Chapter 1 : AGRARIAN REFORM CONCEPTS AND PRINCIPLES
1.1 Meaning of Agrarian Reform
1.2 Agrarian Reform Issues:
Land Tenure Improvements vs. Support Services
1.3 Big Farms vs. Small Farms
1.4 Public vs. Private Lands
1.5 Agrarian Reform: Counter-Insurgency Tool?
Chapter 2 : COMPREHENSIVE AGRARIAN REFORM
PROGRAM
Chapter 3 : CARP COVERAGE
3.1 CARP Scope
3.2 Implementation Schedule
Chapter 4 : EXEMPTIONS AND EXCLUSIONS
4.1 Exclusions
4.1.1. Poultry, Livestock and Swine Raising
4.2 Exemptions
4.3 Procedures Governing Exemption of Lands
Under Sec. 10, RA 6657
4.4 Procedures for Issuance of Exemption Clearance
Based on DOJ Opinion No. 44
Chapter 5 : LAND ACQUISITION
5.1 Requisities in Land Acquisition
5.2 Modes of Acquisition
5.2.1 Compulsory Acquisition
5.2.2 Voluntary Offer to Sell
5.2.3 Voluntary Land Transfer/Direct Payment Scheme
5.3 Executive Order No. 407 As Amended
5.4 Procedures in Land Acquisition
5.5 Prioritization of Lands for Coverage
5.6 Reconstitution of Title
5.7 Untitled Private Properties
5.8 Field Investigation
Chapter 6 : AGRARIAN REFORM BENEFICIARIES
6.1 Qualification of Beneficiaries
6.2 Order of Priority
6.3 Farmworker Beneficiaries
6.4 Screening of Beneficiaries
Chapter 7 : LANDOWNER'S RETENTION AND AWARD
TO CHILDREN
7.1 Retention Limit
7.2 Land Ownership Ceiling
7.3 Qualifications for the Exercise of the Right of Retention
7.4 Award to Landowner's Children
7.5 Selection of Retained Area
7.6 Procedures for the Exercise of the Right of Retention and
Award to Qualified Children
7.7 When to Exercise the Right of Retention
7.8 Obligations of Landowners and Limits to the Disposition of
the Retained Areas
7.9 Tenants in Retained Areas
7.10 Retention Under PD 27
7.11 Homestead Lands
Chapter 8 : LAND SURVEY
Chapter 9 : LAND VALUATION AND
LANDOWNER'S COMPENSATION
9.1 Just Compensation
9.2 Land Valuation Factors
9.3 New Land Valuation Formula
9.4 Summary Administrative Proceedings
9.5 Concerned Parties' Involvement in the Land Valuation
Process
9.6 Modes of Compensation
9.7 Land Bank Bonds
9.8 PD 27 Lands
9.9 EO 407 Lands
9.10 Mt. Pinatubo-Affected Areas
Chapter 10 : LAND DISTRIBUTION
10.1 Basic Principles in Land Distribution
10.2 Award Ceiling
10.3 Land Distribution Process
10.4 Individual vs. Collective Distribution
10.5 Rights and Obligations of Beneficiaries
Chapter 11 : PAYMENT BY BENEFICIARIES
11.1 Payment Under RA 6657
11.2 Payment in OLT Lands
11.3 Payment Under VLT/DPS
11.4 Payment in Lahar-Affected Areas
Chapter 12 : SUPPORT SERVICES
12.1 Support Services to Landowners
12.2 Support Services to Agrarian Reform Beneficiaries
Chapter 13 : AGRICULTURAL LEASEHOLD
13.1 Laws and Issuances on Leasehold
13.2 Tenancy Relationship
13.3 Rights and Responsibilities of Lessee
13.4 Rights and Responsibilities of Lessor
13.5 Lease Rental
13.6 Fixing the Lease Rental
13.7 Other Related Laws and Issuances
Chapter 14 : PRODUCTION AND PROFIT SHARING
14.1 Coverage
14.2 DAR's Authority
14.3 Main Features
14.4 Role of the MARO
Chapter 15 : COMMERCIAL FARM DEFERMENT
15.1 Meaning of Commercial Farms and Commercial
Farm Deferment
15.2 Rationale for Deferment
15.3 Requirements
15.4 Deferment Period
15.5 DAR's Role During Deferment Period
Chapter 16 : LAND USE CONVERSION
16.1 Definition
16.2 DAR's Stand on Conversion
16.3 DAR's Legal Mandate
16.4 DAR's Role in Conversion
16.5 Mechanics of Land Use Conversion Application, Approval
and Monitoring
16.6 LGU's Authority to Reclassify
Chapter 17 : LAND TRANSACTION
17.1 Laws and Issuances Governing Agricultural Land
Transaction
17.2 Land Transactions Involving Ago-Tourism Development
17.3 Land Transactions After 15 June 1988
17.4 Right of Pre-emption
17.5 Right of Redemption
17.6 Valid Transactions
17.7 Invalid Transactions
Chapter 18 : PUBLIC LANDS
18.1 Public Alienable and Disposable Lands
18.2 Integrated Social Forestry Program
18.3 Settlement Areas
18.4 Public Agricultural Lands Turned Over by the
National Livelihood Support Fund
18.5 Lands of the Public Domain Covered by Cancelled or
Expired Pasture Lease Agreements and Timber License Agreements
Per EO 407
18.6 Lands of the Public Domain Covered by Cancelled or
Expired Fishpond Lease Agreements
Chapter 19 : LANDED ESTATES
Chapter 20 : BARANGAY AGRARIAN REFORM COMMITTEE
(BARC)
20.1 Laws and Issuances on BARC
20.2 Functions of the BARC
20.3 BARC Composition
20.4 BARC Officers
20.5 Formation of BARC
20.6 Mediation and Conciliation
Chapter 21 : DAR ADJUDICATION BOARD (DARAB)
21.1 DARAB Jurisdiction

HANDBOOK FOR CARP IMPLEMENTORS
CHAPTER 1
AGRARIAN REFORM CONCEPTS AND PRINCIPLES
1.1 MEANING OF AGRARIAN REFORM
What is Agrarian Reform?
Section 3 of RA 6657 has defined agrarian reform as:
"the redistribution of lands, regardless of crops or
fruits produced, to farmers and regular
farmworkers who are landless, irrespective of
tenurial arrangement,
to include the totality of factors and support
services designed to lift the economic status of
the beneficiaries,
and all other arrangements alternative to the
physical redistribution of lands, such as
production or profit-sharing, labor administration
and the distribution of shares of stock, which will
allow beneficiaries to receive a just share of the
fruits of the land they work." (Section 3, RA
6657)
Basically, agrarian reform is land reform the transfer of control and
ownership of agricultural land to the actual tillers plus a package of
support services: economic and physical infrastructure support services
(ECOPISS), (e.g., credit, extension, irrigation, roads and bridges, marketing
facilities), and human resource and institutional development or social
infrastructure building and strengthening (SIBS).
What is being "Reformed" in Agrarian Reform?
Agrarian reform seeks to correct numerous defects in the country's
agrarian structure. Foremost among these is the concentration of land
ownership in only a few people, such that the huge majority of the
population does not have access to land.
According to the 1980 Census of Agriculture, farms less than three
hectares in size predominate in the Philippines, representing nearly 70% of
the 3.4 million total number of farms. However, they cover only 30% of the
country's 9.7 million hectares total farm area. In contrast, farms with areas
of more than 10 hectares are very few, constituting only 3.5% of the
number of farms. Yet they cover 26% of the farm area.
So what's wrong with that?
The concentration of the ownership of lands in the hands of a very few
means that the majority is deprived of the opportunity to use land as a
basic production resource. The failure to access land results in
unemployment, low incomes, low productivity, poor purchasing power, and
sluggish rural economies.

A more equitable distribution of land ownership, on the other hand,
promotes a more equitable distribution of income which, in turn, promotes
greater economic activity. More producers and income earners, require
more services and goods which other sectors of the economy produce. The
increase in domestic demand and production results in broadbased,
sustainable economic growth. And that's only the economic side of it.
With improved standards of living, greater people participation in the
community's affairs is expected. This will lead to a more dynamic and
genuine democracy.
1.2 AGRARIAN REFORM ISSUES: LAND TENURE
IMPROVEMENT vs. SUPPORT SERVICES DELIVERY
Land redistribution is so costly, why don't we just use the money for
credit, extension, infrastructure, post harvest facilities, etc., for greater
productivity?
Such a strategy would benefit those who own or control the land. It is
not surprising, therefore, that more often than not, it is a strategy
propounded by those who already own land.
For the benefits of agricultural investments to seep down and reach the
lower economic strata, inequitable land ownership structure will have to be
dismantled first. Broadening the land ownership base makes agricultural
development more quickly and easily felt by the majority.
1.3 AGRARIAN REFORM ISSUES: BIG FARMS vs. SMALL
FARMS
Aren't small farms less efficient and less productive? Instead of breaking
up the lands, shouldn't we consolidate them into plantations to achieve
economies of scale?
The argument that large farms are more efficient than small farms is
usually invoked by those who own export and cash crop plantations as an
excuse to exclude their landholdings from agrarian reform. The issue can
be answered by examining whether economies of scale do exist. A study
made on coconut and other tree crops did not show any increasing yield
per hectare as farm size increases. In the case of sugar, another study has
shown that average production cost per hectare, in fact, tends to be higher
for larger farms. (Adriano, Quisumbing, and Hayami, Toward an Alternative
Land Reform Paradigm, 1990).

Furthermore, if breaking up the lands would not be economically viable,
then this need not be done. Agrarian reform can be undertaken by breaking
up the land ownership pattern but farming can be done collectively.
1.4 AGRARIAN REFORM ISSUES: PUBLIC vs. PRIVATE
LANDS
Why don't we just distribute public and government-owned lands? Why
are we covering the private farms which are productive?
Productive private lands are covered under agrarian reform for various
reasons. These include:
a. Public and government-owned lands already have occupants
and claimants. The sheer extent of landlessness makes coverage of
private lands inevitable;
b. One of the pillars of agrarian reform is the principle that the
tiller of the land has the primacy of the right to own it;
c. It is in productive private lands, particularly where the
necessary investments have been made, where the beneficiary has
greatest chances of success.
1.5 AGRARIAN REFORM: COUNTER-INSURGENCY TOOL?
Will agrarian reform cure all of the country's ills?

No, although it is a step in the right direction. The country has too many
problems. But attempts to solve them will not yield sustainable results
unless the root cause is addressed inequitable distribution of resources.
Since the Philippines is basically an agricultural country, land is the most
important resource. By addressing the problem of inequitable distribution of
the land, agrarian reform is a major step towards resolving the country's
problems.
Is agrarian reform an anti-insurgency tool?
No, agrarian reform is not being carried out to solve the insurgency
problem. However, agrarian reform answers the clamor for social justice
and the upliftment of the socio-economic status of the landless. It provides
a peaceful means for radical social change and liberation from poverty.
CHAPTER 2
COMPREHENSIVE AGRARIAN REFORM PROGRAM
What is the constitutional mandate for agrarian reform?
Agrarian reform derives its mandate from basic principles enshrined in
the Constitution. The Philippine Constitutions of 1935, 1973 and 1987 all
attest to this.
The 1935 Constitution mandated a policy of social justice to insure the
well-being and economic security of the people.
The 1973 Constitution provided that "The State shall formulate and
implement an agrarian reform program aimed at emancipating the tenant
from the bondage of the soil."
The 1987 Constitution contains more specific provisions on agrarian
reform.
Article II, Declaration of Principles and State Policies, Section 21
"The State shall promote comprehensive rural development and agrarian
reform."
Article XII, National Economy and Patrimony, Section 21 "The State
shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, . . ."

Article XIII, Social Justice and Human Rights, Section 4 "The State
shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers, who are landless, to own directly or
collectively the lands they till or in the case of other farmworkers, to receive
a just share of the fruits thereof ."
"The State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits
as the Congress may prescribe, taking into account ecological,
development or equity considerations, and subject to the payment of just
compensation.
"In determining the retention limits, the State shall respect the right of
small landowners. The State shall further provide incentives for voluntary
landsharing."
Article XIII, Section 6 "The State shall apply the principles of agrarian
reform, whenever applicable in accordance with law."
What presidential issuances and legislations provide the legal
mandate for the Comprehensive Agrarian Reform Program?
Various administrations, from the Commonwealth to the Philippine Republic
have issued decrees and passed legislations on agrarian reform.
Under the previous administration, Proclamation No. 131 and Executive
Order No. 229, both dated 22 July 1987 were issued when then President
Corazon C. Aquino still exercised legislative powers. These instituted the
Comprehensive Agrarian Reform Program (CARP) and provided the
mechanism for its implementation.
Republic Act No. 6657: An Act Instituting a Comprehensive Agrarian
Reform Program to Promote Social Justice and Industrialization, Providing
the Mechanisms for its Implementation and/or other Purposes, was
subsequently passed by Congress, signed into law on 10 June 1988 and
became effective on 15 June 1988. This is now known as the
Comprehensive Agrarian Reform Law (CARL) of 1988. (By tradition, the
anniversary of CARP is commemorated on this date).
CHAPTER 3
CARP COVERAGE
3.1 CARP SCOPE
What is the scope of CARP?
The ownership or control of about 10.3 million hectares
1
of agricultural
land, representing about one-third of the total land area of the Philippines
shall be transferred over a ten-year period to an estimated 3.9 million
beneficiaries.

What lands are covered by CARP?
The CARP covers, regardless of tenurial arrangement and commodity
produced, all public and private lands devoted to or suitable for agriculture
and not classified as mineral, forest, residential, commercial or industrial'
land.
The two criteria for coverage, therefore, are (1) suitability of the land for
agriculture; and (2) its classification.
Specifically, the following lands are covered by CARP:
a. all alienable and disposable lands of the public domain
devoted to or suitable to agriculture;
b. all lands of the public domain in excess of the specific limits as
determined by Congress;
c. all other lands owned by the government devoted to or suitable
to agriculture; and
d. all private lands devoted to or suitable to agriculture regardless
of the agricultural products raised or that can be raised therein.
(Section 4 RA 6657)
Other major issuances on CARP are:
Executive Order No. 228 dated 17 July 1987 declared full land
ownership to qualified farmer-beneficiaries covered byPresidential Decree
No. 27 determined the value of remaining unvalued rice and corn lands
subject to PD 27, and provided for the manner of payment by the farmer-
beneficiaries and the mode of compensation to the landowners.
Executive Order No. 129-A dated 26 July 1987 provided for the
strengthening of the Department of Agrarian Reform as the lead agency
responsible for the implementation of CARP.
3.2 IMPLEMENTATION SCHEDULE
When are these lands covered?
All lands within the scope of CARP have been covered by the program
beginning 15 June 1988, the date of CARP's effectivity.
However, in consideration of the capacity of the Government to
implement the program, the acquisition and distribution of agricultural lands
covered by the program have been prioritized as follows:

Phase I This started immediately upon effectivity of the law and is
programmed to be completed within four years (1988-1992)
* rice and corn lands which are covered by PD 27;
* idle or abandoned;
* voluntarily offered;
* foreclosed by government financial institutions (GFIs);
* acquired by the Presidential Commission on Good Government
(PCGG); and
* owned by the Government
Phase II This also started in 1988 and is programmed to be
completed in four years (1988-1992).
* all public agricultural lands which are to be opened for new
development and resettlement; and
* private agricultural lands with areas above 50 hectares in so far as
the excess over 50 hectares is concerned
Phase III-A This started on the fourth year and is programmed
completed within three years (1992-1995)
* private agricultural lands with areas from 24 to 50 hectares, in
so far as the excess over the retention limit.
Phase III-B This is programmed to start on the sixth year and to be
completed within four years (1994-1998)
* private agricultural lands with areas above the retention limit up
to 24 hectares
Public lands and other lands owned by the government and
government-owned or controlled corporations which are leased and
operated by multinational corporations or associations were programmed
for immediate acquisition and distribution right after the effectivity of the law
for completion within three years (1988-1991). (Sections 6 and 8, RA 6657)
Does the order of priority mean that all areas under Phase II must first
be acquired and distributed before those in Phase III can be covered?
Strictly speaking, no. Starting 15 June 1994, Phase III-B lands can
already be acquired and distributed even if not all Phase II lands have been
covered. However, given DAR's backlog in covering even those private
agricultural lands 50 hectares and above, and the backlog in voluntary offer
to sell, for practical purposes, priority should be given to the completion of
backlog in the earlier phases.
Given such phasing, how many hectares can now (1994) be acquired if
a landowner's property has an area of?
a. 40 has > 40 less 5 35 has.
b. 70 has > 70 less 5 65 has.
c. 20 has > 20 less 5 15 has. *
* if there is a backlog, unless voluntarily offered, it is advised that
this land not be covered yet. Instead, give priority to the completion of the
backlog.
This example considers only the landowner's retention right but does
not take into account the award to qualified children.
The opinion of some that in the case of (a) in the example, only 16
hectares can be compulsorily acquired (40 less 24 has.) has been taken by
DAR to have no legal basis. This has been clarified under Memorandum
Circular No. 4, Series of 1993.
CHAPTER 4
EXEMPTIONS AND EXCLUSIONS
4.1. EXCLUSIONS
What lands are not covered by CARP?
The following lands are not covered by CARP:
a. those which are not suitable for agriculture, and
those which are classified as mineral, forest, residential,
commercial or industrial land;
b. those which have been classified and approved as
non-agricultural prior to 15 June 1988 as ruled
underDepartment of Justice Opinion No. 44, Series of 1990;
c. those which are exempt pursuant to Sec. 10, RA
6657;
d. those which are devoted to poultry, swine, or
livestock raising as of June 15, 1988 pursuant to the
Supreme Court ruling on Luz Farms vs. The Honorable
Secretary of Agrarian Reform (G.R. No. 86889, 4 December
1990); and
e. those which are retained by the landowner (not
covered insofar as land acquisition and distribution but
covered with respect to other provisions, particularly
leasehold).
4.1.1 POULTRY, LIVESTOCK AND SWINE RAISING
What was the basis of the Supreme Court in ruling that poultry,
swine and livestock farms are not covered by CARP?
The Supreme Court checked the intent of the framers of the
Constitution and determined that poultry, swine, and livestock farms are
not included in the scope of the agrarian reform program constitutionally
mandated to be implemented.

Are all agricultural lands devoted to livestock, poultry and swine
raising now automatically excluded from CARP coverage?
No. To qualify for exclusion, the following requirements must be
met:
1. The land or portions thereof must have been
exclusively, directly and actually used for livestock, poultry
and swine raising as of 15 June 1988.
2. The farm devoted to the above purposes must satisfy
the animal/land ratio, as well as animal/infrastructure ratio as
provided for in Section III-B of Administrative Order No. 09,
Series of 1993 entitled "Rules and Regulations Governing
the Exclusion of Agricultural Lands Used for Livestock,
Poultry and Swine Raising from the Coverage of CARP".
Can a landowner now convert his crop land to a poultry farm and
then apply for exclusion from CARP?
No, as stated in AO 03-93, the land must already be devoted to
livestock, poultry and swine raising as of 15 June 1988. Nevertheless,
the landowner who wishes to convert his crop land for this purpose must
apply for conversion, the processing of which shall be governed by AO
Nos. 1 and 2, Series of 1990. Among other requirements, there should
be:
1. the consent of agrarian reform beneficiaries and/or
their waiver of rights; and,
2. certification from the Regional Director of the
Department of Agriculture that the poultry, livestock or swine
project is of greater economic value than the present
agricultural use.
Conversion of the crop land without the benefit of conversion
approval will be construed as an intent to avoid application of RA
6657 and shall be considered as invalid and illegal. The land will be
covered under CARP without prejudice to the filing of charges against
the landowner.
Suppose a landowner has been granted exclusion from CARP for
his landholding devoted to livestock raising but subsequently, he/she
stopped its operations and went into crop production, can the land still
be subject to CARP?
Yes, the area or portion no longer used for livestock raising
purpose shall automatically revert to the category of agricultural land
and shall be covered by CARP.
What are the procedures in applying for exclusion of a landholding
devoted to livestock, poultry and swine raising?
1. Landowner files the application for exclusion with the
DAR Provincial Agrarian Reform Office, together with the
documentary requirements;
2. The PARO, with the assistance of the BARC, the
MARO, the Municipal Livestock Inspector, and a
livestock/poultry and swine specialist of the DA shall conduct
a field investigation, and prepare report of findings and
recommendations for submission to the Regional Director.
3. Regional Director undertakes final review and
evaluation of the application and issues the Order of
Exclusion or Denial.
4.2 EXEMPTIONS
What lands are exempted from CARP coverage?
The following are exempted from the coverage of CARP:
a. Lands actually, directly, and exclusively used and
found to be necessary for parks, wildlife, forest reserves,
reforestation, fish sanctuaries and breeding grounds,
watersheds and mangroves, national defense, school sites
and campuses including experimental farm stations
operated by public or private schools for educational
purposes, seeds and seedlings research and pilot
production centers, church sites and convents appurtenant
thereto, mosque sites and Islamic centers appurtenant
thereto, communal burial grounds and cemeteries, penal
colonies and penal farms actually worked by the inmates,
and government and private research and quarantine
centers; and
b. Lands with eighteen percent (18%) slope and over,
except those already developed as of 15 June 1988. (Sec.
10, RA 6657)
What is the scope of the exemption that may be granted?
The exemption means that the subject parcel of land will not be
acquired and distributed under the CARP for as long as the reasons for
the exemption continue to exist. However, the other components of the
program, e.g., leasehold and the Integrated Social Forestry Program
may be implemented where applicable.
A state college claims that although part of its property is
cultivated by farmers, that area cannot be covered under CARP
because it is reserved for the future expansion of the campus. Is that
parcel exempted?
The area reserved for future expansion appears not to be actually
and directly used for a campus. Unfortunately, in the case of the Central
Mindanao University vs. DARAB (CA-G.R. No. 19174 dated 23 August
1990), the Supreme Court ruled that the University has the prerogative
to determine whether a particular part of the school property is
necessary for educational purposes. Therefore, in this case, that parcel
is exempted.
A landowner claims that his agricultural land is exempted because
he has recently developed it into a pilot production center for hybrid
seeds. Is the landholding exempted?
No. The four conditions must have been all present as of 15 June
1988.

A landowner was granted exemption because his agricultural land
was found to be a qualified private research center for corn breeding.
Subsequently, he gave up his breeding operations and went into
commercial production of feed grains. May the landholding be covered?
Yes. For the exemption to continue, the reason for which the
exemption was granted must continue to exist.
A parcel of land cultivated by farmers is found to be within a forest
reserve. May it be immediately covered by DAR under CARP?
No. Coverage while possible, will have to wait until Congress,
taking into account ecological, developmental and equity considerations,
shall have determined by law the specific limits of the public domain.
Thereafter, a reclassification of the said areas as alienable and
disposable land will also have to be done. (Sec. 4, RA 6657)
Why are lands with 18% slope and undeveloped exempt from
CARP coverage?
The exemption is specifically mentioned in Section 10, RA
6657 and is based on the Forestry Code which provides that such lands
should not be disposed of and developed for agriculture because this
type of land is highly susceptible to soil erosion. The principle is debated
in the light of cultural practices which could make the preservation of the
ecological balance in such areas feasible. However, until and unless the
laws are changed, such lands are not covered by CARP.

Since lands 18% slope or over if developed are not exempt from
CARP, can DAR subject these lands to acquisition and distribution?
Such lands can be allocated to qualified occupants but the manner
of acquisition and distribution depends on the following:
1. If classified as forest land, they shall be allocated by
the DENR under the Integrated Social Forestry Program;
2. If classified as alienable and disposable, they shall
be allocated by DENR and DAR pursuant to the provisions
of the Public Land Act and the Joint DAR-DENR AO No. 2,
Series of 1988; and
3. If private agricultural land, then, they shall be
acquired in accordance with the provisions of RA 6657.
What Administrative Orders govern the exemption of lands from
CARP?
1. DAR Administrative Order No. 10, Series of 1994,
"Amending AO No. 13, Series of 1990 entitled Rules and
Procedures Governing Exemption of Lands from CARP
Coverage under Section 10 of RA No. 6657, to Authorize all
Regional Directors to Hear and Decide Applications for
Exemption for All Land Sizes"
2. DAR Administrative Order No. 06, Series of 1994,
"Guidelines for the Issuance of Exemption Clearances based
on Sec. 3 (c) RA 6657 and the department of Justice (DOJ)
Opinion No. 44 Series of 1990"
4.3 PROCEDURES GOVERNING EXEMPTION OF LANDS
UNDER SEC. 10, RA 6657
What are the procedures followed in securing exemption of lands
under Sec. 10 of RA 6657 from CARP coverage?
The person/s or representative/s owning, administering or
managing the landholdings may file for exemption of the lands from
CARP coverage at the Municipal Agrarian Reform Office.

1. The MARO shall prepare an Application for Land
Exemption Folder (ALEF) which contains the following
documents:
* written application
* ownership documents and other muniments of
title
* evidence to support application
* copy of proclamation, topographic map, sketch
map, area development plan, affidavit, certification
from government agency, etc.
2. MARO conducts investigation of the land with the
assistance of the BARC and prepares report of findings and
recommendations and forwards them together with the
ALEF to the Provincial Agrarian Reform Officer.
3. The PARO reviews and evaluates the ALEF and
prepares comments, findings and recommendations. If all
documents are in order, forwards them to the Regional
Director.
4. The RD reviews and evaluates the ALEF and the
findings and recommendations of the PARO and the MARO.
If documents are in order, issues an Order of Approval or
Order of Denial. This applies to applications for exemption
for all land sizes.
5. The RD forwards the Order to the PARO for
distribution to the contending parties and counsel, if any,
copy furnished the Office of the Secretary, Undersecretary
for Field Operations, Legal Affairs Office and the
Management Information Service within 15 days from the
release of the Order. The Order becomes final 15 days from
receipt of the same, unless an appeal is made to the DAR
Secretary.
6. In case of denial of the application, DAR shall cause
the acquisition and distribution of the property.
What is the recourse of a party who disagrees with the decision of
the Regional Director?
Any party who disagrees with the RD's decision may file a written
motion for reconsideration within 15 days from receipt of the Order. The
RD shall then rule on the motion for reconsideration. Should the motion
for reconsideration be deemed, the aggrieved party could appeal to the
DAR Secretary within the balance of the 15 day period. The Secretary
shall render a decision within 30 days after receipt of the appeal.
4.4 PROCEDURES FOR ISSUANCE OF EXEMPTION
CLEARANCE BASED ON DOJ OPINION NO. 44
What are the procedures for the issuance of exemption clearances
based on DOJ Opinion No. 44?
1. The landowner or his duly authorized representative
files the application for exemption with the Regional Office of
the DAR where the land is located. The application should
be accompanied by the following documents:
a. duly notarized Special Power of Attorney, if the
applicant is not the landowner himself;
b. certified true copies of the list of the land which
is the subject of the application;
c. current tax declaration covering the property;
d. location or vicinity map;
e. certification from the Deputized Zoning
Administration that the land has been reclassified to
residential, industrial or commercial use prior to 15
June 1988;
f. certification from the HLRB that the pertinent
zoning ordinance has been approved by the Board
prior to 15 June 1988;
g. certification from the National Irrigation
Administration that the land is not covered by AO No.
20, Series of 1992, i.e., that the area is not irrigated,
nor scheduled for irrigation rehabilitation nor irrigable
with firm funding commitment, and
h. proof of payment of disturbance compensation,
if the area is presently being occupied by farmers, or
waiver/undertaking by the occupants that they will
vacate the area whenever required.
2. The Regional Office conducts joint investigation with
the duly authorized representatives of the DAR provincial
and municipal offices that have jurisdiction over the property,
and a report prepared within thirty (30) days from the filing of
completed application.
The joint investigation report shall contain information
on:
a. presence of potential beneficiaries;
b. payment of disturbance compensation;
c. initial activities related to coverage;
d. certification from the MARO on whether or not
the land has been placed under PD 27 or whether a
CLOA or EP has been issued over said property.
3. The investigation report is submitted to the Regional
Director who prepared the Order for Denial or Grant of the
Exemption Clearance not later than fifteen (15) days from
the receipt of the report. IaEScC
4. The exemption folder, together with the draft order is
forwarded to the Legal Affairs Office of the DAR Central
Office which shall review the same and upon proper review
forwards the folder to the Office of the Secretary not later
than fifteen (15) days from receipt of the folder.
5. The Secretary signs the Order for Denial or Grant
and a copy of the order is furnished to the Land Use
Conversion Committee for purposes of monitoring and
statistical information.
CHAPTER 5
LAND ACQUISITION
5.1 REQUISITES IN LAND ACQUISITION
What lands are acquired under CARP?
Only the private lands devoted to or suitable for agriculture,
regardless of the agricultural products raised or can be raised therein,
are subject of land acquisition. The lands of the public domain suitable
for agriculture already belong to the State and are just distributed
through either Free Patents for Alienable and Disposable (A&D) lands or
Certificates of Land Ownership Awards (CLOAs) for resettlement sites.
In addition, stewardship contracts are awarded for public lands covered
by the Integrated Social Forestry Program (ISFP).
It must be noted that the private agricultural lands include those
owned by private entities and those owned or held by government
agencies, corporations, and instrumentalities.
Specifically, the following lands may be acquired under CARP:
a. rice and corn lands under PD 27/EO 228;
b. idle or abandoned lands;
c. lands foreclosed by private and government financial
institutions;
d. private agricultural lands
e. public lands suitable for agriculture;
f. lands acquired by PCGG;
g. lands used by multinational corporations

What are the requisites in land acquisition?
The following requirements must be met for land acquisition to be
completed:
a. That the land is privately owned and found suitable
for agriculture;
b. That there are beneficiaries willing to take over the
ownership of the land and make it productive;
c. That the landowner is paid just compensation; or a
trust deposit is made in his/her name if the value is
contested; and
d. That title to the land is transferred in the name of the
Republic of the Philippines.
However, full payment of just compensation and transfer of title to
the Republic of the Philippines are not requisites in VLT/DPS. Moreover,
under EO 407, the payment of just compensation to the government
instrumentality as landowner may come even after land distribution.
5.2 MODES OF ACQUISITION
What are the modes of acquiring lands for distribution under
CARP?
Private agricultural lands covered by CARP are acquired through
any of the following modes:
a. Compulsory Acquisition (CA);
b. Voluntary Offer to Sell (VOS);
c. Voluntary Land Transfer/Direct Payment Scheme
(VLT/DPS);
d. Operation Land Transfer (OLT) under PD 27 and EO
228; and
e. Executive Order No. 407, as amended by EO
448 and EO 506
What are the basic differences among these modes?
a. OLT is governed by PD 27 and EO 228 and has
been in operation since 1972. It follows a different set of
procedures, particularly in land valuation.
b. Land acquisition under OLT and CA is done through
the mandate of the law whether or not the landowner
disagrees to part with his property.
c. CA follows the schedule of CARP implementation
based on the area of the landowner's landholdings. In
contrast VOS may be done even for lands not yet scheduled
by law to be acquired.
d. EO 407 as amended pertains only to government
agencies as landowners in a propriety capacity, or to public
A & D lands under their administration by virtue of
presidential proclamation.
e. VLT/DPS, on the other hand, is a voluntary
arrangement entered into by a landowner and a qualified
farmer-beneficiary to directly transfer the land to the
beneficiary under terms and conditions mutually agreed by
them but with payment terms not less favorable to the farmer
than if it were the government purchasing the land and
transferring it to the beneficiary.
5.2.1 COMPULSORY ACQUISITION
What are the existing administrative orders on compulsory
acquisition of lands?

These Administrative Orders are:
a. Administrative Order No. 11, Series of 1994
Revising the Rules and Regulations Covering the Valuation
of Lands Voluntarily Offered or Compulsorily Acquired as
Embodied in Administrative Order No. 06, Series of 1992;
b. Administrative Order No. 01, Series of 1993 An
Order Amending Certain Provisions of Administrative Order
No. 09, Series of 1990, entitled "Revised Rules Governing
the Acquisition of Agricultural Lands subject to Voluntary
Offer to Sell and Compulsory Acquisition Pursuant to RA
6657"
[This AO supersedes AO No. 12, Series of 1989, AO No. 09,
Series of 1990, and AO No. 10, Series of 1991]
c. Administrative Order No. 12, Series of 1990 Policy
Guidelines and Operating Procedures in the Identification
and Acquisition of Idle and Abandoned Lands.
What lands are covered by compulsory acquisition?
Except in the case of tenanted rice and corn lands under PD 27,
which are acquired following a different set of rules, compulsory
acquisition (CA) is done for all private agricultural lands which become
due for coverage following the phasing of implementation earlier
discussed. However, CA is suspended in those cases where the
landowners opt for other modes of compliance, e.g., voluntary land
transfer or stock distribution option. CA is resumed once the
negotiations in these other modes fail.
Compulsory acquisition is also done in idle and abandoned lands
regardless of their size and phasing, and in lands whose commercial
farm deferment is revoked.
What are idle or abandoned lands?
Idle or abandoned lands refer to agricultural lands not cultivated,
tilled or developed to produce any crop nor devoted to any specific
economic purpose continuously for a period of three (3) years
immediately prior to the receipt of notice of acquisition by government as
provided under RA 6657. They do not, however, include the following:
a. those that have become permanently or regularly
devoted to non-agricultural purposes;
b. those that have become unproductive by reason of
force majeure or any other fortuitous event, provided that
prior to such event, such land was previously used for
agricultural or other economic purpose. (Section 3,RA 6657)
Can the DAR compulsorily acquire a landholding whose ownership
is under litigation or judicial proceedings?
Yes, if it is clear that no matter what the outcome of the litigation
may be, the land is still covered under CARP. In such case, the DAR
shall select the retained area and the compensation for the land shall be
held in trust pending the resolution of the disputes.
However, if one or both of the parties to the case are groups of
individuals, the hectarage involved in the possible exercise of the right of
retention should be considered in the acquisition of the land.
However, in the case of PCGG/APT acquired assets whose
ownership is contested in court, the DAR and the PCGG have an
understanding that a proper motion will be filed in court to allow DAR to
acquire such property, even pending litigation.
What if the person who is declared by the court as the lawful
owner subsequently disagrees with the area chosen by DAR for
retention? What if he has exercised retention in another property?
The CLOA could be amended by the DAR or the landowner filing a
petition with the DARAB. However, if the landowner is no longer entitled
to retention, then the area previously set aside for retention may also be
covered.
A couple owning only 30 hectares died in January 1988 leaving as
heirs six children with ages ranging 25-40. No partition of the property
has been done and the children do not own other agricultural lands.
How many hectares may be compulsorily acquired?
None. Even if the title is still in the name of the couple, ownership
automatically transferred to the children upon their parent's death. The
six children are already the owners. Thus, at five hectare retention per
landowner, the entire 30 hectares may be retained.
AO-01, Series of 1989 allows the registration of a deed of extra-
judicial partition of the property of a deceased who died prior to 15 June
1988.
Note, however, that if the parents died after 15 June 1988, the
land may be entirely acquired and distributed if the children are neither
actual tillers or direct farm managers. If they are, they will each be
entitled to an award of three (3) hectares. Otherwise, they will only be
entitled to the compensation for the land. But the land will be acquired
and distributed under CARP. Moreover, the DAR and the ROD will no
longer allow the partition of the property except in favor of the qualified
farmer-beneficiaries. This is in line with the fact that as of 15 June 1988,
by operation of the law, all lands in excess of the retention limit are
already covered by CARP.
If in the course of CARP coverage, the owner alleges that the land
is exempted under Sec. 10, RA 6657, what should you do?
Exception under Section 10 of RA 6657 is not automatic.
Under AO-13, Series of 1990, persons or representatives of persons
owning, administering or managing lands believed to be actually, directly
and exclusively used and are necessary for any of the purposes under
Section 10 should file a written application with DAR. This application
should be approved by the Regional Director.
The MARO should, therefore, check if an application has been
filed and if the application has been duly approved. Otherwise, the
MARO should treat the matter as a CARP protest and let the Regional
Director rule on the matter. (AO-09, series of 1994).
If in the course of coverage, the owner alleges that the property is
already reclassified as residential since 1986, what should you do?
The MARO should determine if the property is covered by DOJ
Opinion No. 44 and whether an application for exemption has been filed
by the landowner. He should also investigate the actual land use and
whether the land is irrigated, irrigable or is programmed for irrigation. He
should also check the zoning plan or municipal/city ordinance approved
by the HLURB. Only if it is clear that the said landholding does not fall
within any of the above, should the MARO proceed with the acquisition
of the property.
If in the course of coverage, the owner alleges that about one year
before the notice of acquisition, he has filed an application for
conversion, what should you do?
The MARO should check the allegation, i.e., whether there really
was an application for conversion filed a year ago. If there is none,
conversion is not possible because the notice of acquisition has already
been issued. If there is, the issue of conversion should first be resolved.
5.2.2 VOLUNTARY OFFER TO SELL (VOS)
What is the VOS scheme?
VOS is a scheme wherein landowners come forward and
voluntarily offer their agricultural lands for coverage regardless of the
phasing. The DAR encourages this mode because VOS generally
ensures the cooperation of the landowners.


What are the existing policy guidelines governing VOS?
The implementing policy guidelines on VOS are:
a. Administrative Order No. 11, Series of 1994
Revising the Rules and Regulations Covering the Valuation
of Lands Voluntarily Offered or Compulsorily Acquired as
Embodied in Administrative Order No. 06 Series of 1992;
b. Administrative Order No. 01, Series of 1993 An
Order Amending Certain Provisions of Administrative Order
No. 09, Series of 1990 Entitled "Revised Rules Governing
the Acquisition of Agricultural Lands Subject to Voluntary
Offer to Sell and Compulsory Acquisition Pursuant to RA
6657";
[This AO supersedes AO No. 03, Series of 1989, AO No. 14-
A and AO No. 19, Series of 1989, AO No. 09, Series of
1990, and AO No. 10, Series of 1991]
c. Administrative Order No. 05, Series of 1992
Clarificatory Guidelines and Amendments to AO No. 09,
Series of 1990.
Where should the landowner file the application for VOS?
Application for VOS can be filed either at the Central Office, or at
any field office of DAR. However, the receiving office should forward the
application to the MARO of the municipality where the land is located.
What incentives are given to landowners who offer their lands
under VOS?
The cash portion of the compensation to the landowner is
increased by five percent (5%), while the LBP bond portion is
correspondingly decreased by five percent. However, this incentive is
not available to banks and other financial institutions.
It should be noted that the total compensation is not increased,
only the proportion of the cash component.
May an agricultural land which has been mortgaged also be
voluntarily offered under CARP?
Yes. In this case, the MARO should secure a statement of account
from the creditor and recommend the settlement of the obligation
through payment in LBP bonds.
Can government financial institutions voluntarily offer foreclosed
but redeemable properties which are not yet transferred to them?
No. The GFIs have to wait for the expiration of the redemption
period.
Are landowners allowed to withdraw lands offered under the VOS
scheme?
No. The exceptions are the instances provided in Administrative
Order No. 05, Series of 1992, namely:
a. If the subject landholding is part of the landowner's
retained area, provided the landowner has not yet received
any payment;
b. If the landowner wants to shift the mode of
acquisition from VOS to VLT/DPS;
c. If the offered land is to be covered in 1994 and the
landowner wants to wait for the compulsory coverage under
Phase III-B. If the Notice of Valuation has been served,
however, the withdrawal may no longer be allowed.
d. If the DAR determines the landholding to be more
suitable for a town site, resettlement or institutional siteto
address a calamity situation. It should be noted that this
case is limited to calamity situations. Further, the approval of
the withdrawal of the VOS does not automatically authorize
the land use conversion of the land. The owner must still
apply for conversion.
What are the instances in which the DAR may reject a VOS
application?
The DAR may reject a voluntary offer to sell in the following
instances:
a. If the land is not suitable for agriculture, or has more
than 18% slope and is underdeveloped;
b. If there are no takers or beneficiaries of the land for
valid reasons (e.g., peace and order situation) without
prejudice to future coverage of the area under CARP; and
c. If the only identified agrarian reform beneficiaries
(ARBs) are the qualified children of the landowner.
5.2.3 VOLUNTARY LAND TRANSFER/DIRECT PAYMENT
SCHEME (VLT/DPS)
What is the VLT/DPS mode?
VLT/DPS is a scheme wherein a landowner of an agricultural land
covered by CARP and the qualified beneficiaries of such land agree to
the direct transfer of the ownership of the land, as provided for under
Sections 20 and 21 of RA 6657. The area to be transferred should not,
however, be less than the area which the government through
compulsory acquisition would otherwise acquire. Administrative Order
No. 13, Series of 1991, embodies the rules and procedures governing
VLT/DPS.

May a landowner unilaterally decide to distribute his land through
the VLT/DPS scheme?
No. An agreement between the landowner and the qualified ARBs
as approved by the DAR is necessary.
What is the basic requirement in VLT/DPS?
It is imperative that the ARBs give their informed consent to the
landowner's VLT/DPS proposal. Specifically, this means that the ARBs
should be made aware of their rights and options under the law,
particularly, the terms and conditions of land transfer under the "regular"
compulsory acquisition mode.
Among others, the field implementor (Municipal Agrarian Reform
Officer or Agrarian Reform Program Technologist MARO or
SARPT/ARPT) must explain to the ARBs: (1) that the land will sooner or
later be acquired under CA subject to the phasing; and (2) about how
much they will have to pay under the CA mode.
VLT/DPS is a scheme favorable to the Government for two
reasons. First, Government does not have to pay for the land. Second,
the agreement between the two parties facilitates land acquisition and
distribution. The DAR, however, ought to ensure that the beneficiaries
know what they are entering into and that terms and conditions of the
VLT/DPS are not disadvantageous to the ARBs.
Who are the qualified beneficiaries under VLT/DPS?
The qualified beneficiaries are the same as those who would be
beneficiaries if the land were to be covered under compulsory
acquisition or voluntary offer to sell. (See Sec. 22, RA 6657).
What is the prescribed period for the completion of VLT/DPS
negotiations?
Negotiations for VLT/DPS between the landowner and the
beneficiaries must be completed and the agreement arrived at must be
submitted within one (1) year from the time the DAR receives the notice
of application for VLT/DPS.
What if negotiations for VLT/DPS are not resolved after one year?
If VLT/DPS negotiations remain unresolved after one year, the
land shall be covered under compulsory acquisition.
When should the transfer of possession and land ownership of the
land be done?
The transfer of possession and ownership should be done
immediately after the submitted VLT/DPS agreement is approved by the
DAR. Certificates of Land Ownership Award (CLOA) with the proper
annotations to protect the landowner shall be issued to the beneficiaries.
May an agricultural land mortgaged to a bank be the subject of a
VLT/DPS?
No. Land titles with existing liens and encumbrances shall not be
covered under the VLT/DPS scheme. This is a ruling made by DAR to
simplify VLT/DPS transactions, particularly to facilitate the immediate
transfer of title to the ARBs.
5.3 EXECUTIVE ORDER NO. 407 AS AMENDED
What is the significance of EO 407?
Executive Order No. 407 dated 14 June 1990, entitled
"Accelerating the Acquisition and Distribution of Agricultural Lands,
Pasture Lands, Fishponds, Agro-Forestry Lands and Other Lands of the
Public Domain Suitable for Agriculture" directs all government
instrumentalities, including government financial institutions (GFIs) and
government-owned or controlled corporations (GOCCs) to immediately
transfer to DAR all their landholdings suitable for agriculture for
immediate distribution to qualified beneficiaries under CARP.
EO 407 is a concrete act of the Government to divest itself of its
agricultural landholdings as an example for private landowners to follow.
Moreover, inasmuch as the landowners involved are also Government
agencies, EO 407 has facilitated the acquisition by the DAR of
thousands of hectares of agricultural lands for distribution under CARP.
What lands may be acquired for distribution pursuant to EO 407 as
amended by EO 448 Series of 1991 and EO 506 Series of 1992?
EO 407 covers the following:
* all agricultural lands owned or controlled by
government departments, agencies or instrumentalities,
including lands foreclosed by government financing
institutions;
* lands covered by cancelled or expired Timber
License Agreements (TLAs) and Pasture Lease Agreements
(PLAs) for redistribution by the DENR, in coordination with
the DAR, to qualified ARBs identified by the DAR; and
* lands covered by cancelled or expired Fishpond
Lease Agreements (FLAs) for redistribution by the
Department of Agriculture (DA), in coordination with the DAR
to qualified ARBs identified by the DAR.
EO 448 included within the coverage of EO 407 all reservations or
portions thereof, which are suitable for agriculture and are no longer
needed for the purpose for which they were established.
EO 506, however, further amended EO 407 to exclude:
* all existing and proposed national parks, game
refuge, bird sanctuaries wildlife reserves, wilderness areas
and other protected areas, including old growth or virgin
forests and all forests above 1,000 meters elevation or
above 50 percent slope until such time that they are
segregated for agricultural purposes or retained under the
National Integrated Protected Areas System (NIPAS) of
DENR.
5.4 PROCEDURES IN LAND ACQUISITION
What are the basic steps in land acquisition?

a. Identification and documentation of the landholdings,
landowners and beneficiaries;
b. Land survey;
c. Review and completion of data/documents;
d. Land valuation and compensation; and
e. Transfer of title from the landowner to the Republic of
the Philippines.
What are the changes in procedures for land acquisition contained
in AO-01, Series of 1993?
a. The number of steps has been reduced by
transferring from the DAR Regional Office to the Provincial
Office the review and completion of documents before
submission of the claim folder to the Land Bank of the
Philippines.
b. The conduct of the field investigation can proceed
even if the LBP representative is unavailable. This was
made possible by dividing the Field Investigation Report into
two parts. Part I contains data on the landholding and its
suitability to agriculture. Part II, on the other hand, provides
data inputs for the determination of the land valuation. Part I
can be accomplished even without the presence of the LBP
representative although the data are subject to review by
LBP.
c. The conduct of public hearing was deleted. In lieu
thereof, the Notice of Coverage, Field Investigation Report
and the Notice of Land Acquisition and Valuation shall be
posted for a period of one week on the bulletin boards of the
barangay/municipal/provincial halls where the property is
located.
d. CARP forms were simplified and reduced in number.
e. The acquisition process has been facilitated by
requiring the LBP to immediately open a trust account in the
name of the landowner, whether the landowner accepts or
rejects the land valuation. Actual release, however, shall be
effected only after the landowner's compliance of all the
requirements.
What is the first step in land acquisition?
Land acquisition, regardless of the mode, begins with the
identification of landowners, landholdings and beneficiaries covered by
CARP.
Under the Land Acquisition and Distribution Tracking System
(LADTRACKS) and the CARP Scope Validation project, field offices
have been tasked to prepare a master list or inventory of landholdings in
their area of coverage. This inventory is derived from the LISTASAKA
statements, as verified or complemented by the records of the Register
of Deeds and Assessor's Offices, review of the municipal town plan and
zoning ordinances, field surveys, interview and community
consultations, and general knowledge of the land ownership pattern in
the barangays or municipalities.
With these basic tools, the landowners who own agricultural lands
in excess of the retention limit may be easily determined and their lands
classified according to the implementation phase or order of priority of
CARP.
5.5 PRIORITIZATION OF LANDS FOR COVERAGE
What are the criteria for prioritizing the coverage of landholdings in
the master list?
Quality land distribution cannot be overemphasized. More than
just meeting the targets, land distribution should be done with the end in
mind of uplifting the farmer beneficiaries' living condition. Priority should,
therefore, be given to areas where success of beneficiaries
development is paramount. The following should be the basic
considerations in the prioritization of covered areas:
a. Barangays covered by identified ARCs;
b. Level of organization of the farmers Consistent
with the people-centered development thrust of the DAR, the
higher the level of organization of farmers, the greater
should be the priority. This will not only facilitate the land
acquisition and distribution process but also hasten the
development of viable agrarian reform communities in the
area;
c. Incidence of agrarian unrest The greater the
incidence of unrest, the higher should be the priority to
promote the resolution of the agrarian disputes. Utmost care
should however, be made to ensure that the landholding is
indeed covered by CARP;
d. Number of farmers to be benefitted The higher the
number, the greater should be the priority, again in line with
people-centered development;
e. Size of the landholding Inasmuch as nearly the
same efforts will have to be expended for either big or small
landholdings, it makes sense to put higher priority on the
larger landholding;
f. Presence of support factors Areas with
cooperative landowners, supportive community leaders and
local government executives, active BARCs and POs/NGOs,
etc. should receive higher priority because it is in these
areas where agrarian reform implementation will have
greater chances of success;
g. Presence of a title over the property Titled
properties are easier to acquire because, as it is the norm
under our Torren's Title System, the title is the strongest
proof of the land ownership. Untitled properties require much
more difficult documentation to ensure that the land actually
exists and that the current landowner is being addressed.
Thus, all other considerations being equal, titled properties
should receive higher priority.
5.6 RECONSTITUTION OF TITLE
What can be done in case the original title of the land got lost or
was destroyed due to fire, flood or force majeure in the register of
deeds?
In general, lost or destroyed original copies of certificates of title
are reconstituted through judicial proceedingspursuant to Section 110 of
the Property Registration Decree (PD No. 1529). The procedure is
prescribed in Republic Act No. 26 and implemented in LRA Circular No.
35 dated 13 June 1983.
However, RA 6732 as implemented by LRA Circular No. 13 dated
26 July 1989, allows for administrative reconstitutionwhen the original
copies of the certificates of title in the Office of the Register of Deeds are
destroyed due to fire, flood, or other force majeure as determined by the
LRA administrator, where the destroyed records constitute at least ten
percent (10%) of the total number of titles but in no case shall these be
less than 500. Thus, administrative reconstitution is allowed in Batangas
City, Malolos, Bulacan, and in the provinces of Eastern Samar,
Camarines Sur, Isabela, and Oriental Mindoro where the Offices of the
Register of Deeds were destroyed by fire.
The law also covers administrative reconstitution of copies of
original certificates of title destroyed by fire, flood or other force majeure
which occurred fifteen years before its effectivity in 1989.
What if it is the owner's duplicate copy which is lost while the
original is still on file?
Then a petition for the issuance of a new owner's duplicate copy
shall be filed with the Regional Trial Court. (Sec. 109,PD 1529)
Who should file the petition for reconstitution of title?
LRA Circular No. 35, Series of 1983 provides that the landowner
or an interested party should file a petition for reconstitution with the
Clerk of Court of the Regional Trial Court having jurisdiction of said
property, in case of judicial reconstitution; or with the Register of Deeds
concerned, in the case of administrative reconstitution.
However, in order not to delay acquisition and distribution, the
DAR issued Memorandum Circular No. 05, Series of 1994 which
provides that the duly authorized DAR lawyer can file the petition in the
Regional Trial Court in case of judicial reconstitution, or with the
Register of Deeds concerned in case of administrative reconstitution,
provided that a Notice of Coverage has already been issued covering
the property. However, the DAR shall endeavor to secure a written
permission from the registered owner/s of lost or destroyed titles.
What are the procedures for judicial reconstitution?
1. The petition is filed with the Clerk of Court of the
Regional Trial Court which has jurisdiction over the property.
Such petition is accompanied by a plan and technical
description of the subject land, and a certification from the
ROD that the original copy of the title was burned, lost,
mutilated, etc. Photocopies of the Notice of Coverage shall
also be submitted if the DAR is the petitioner.
2. The Office of the Solicitor General, Office of the
Prosecutor for the City or Province, DENR-LMB, LRA, and
ROD concerned are furnished with copies of the petition.
3. Publication (twice) in the Official Gazette and posting
in the bulletin boards of the respective municipality of the
notice of initial hearing. Adjoining owners and interested
parties are also furnished copies of the notice.
4. Processing in the Land Registration Authority.
5. Court proceedings and court decision.
6. Surrender of the owner's duplicate Certificate of Title
to the ROD.
7. Reconstitution proper of a new Original and Owner's
Duplicate Certificate of Title by the ROD.
What are the procedures for administrative reconstitution?
1. The petition accompanied by three (3) photocopies
of the owner's authenticated duplicate certificate of title;
latest tax declaration and Notice of Coverage (if DAR is the
petitioner) and an affidavit regarding circumstances of the
property are filed with the ROD concerned;
2. Publication and posting requirements;
3. Processing by the Reconstituting Officer designated
by the LRA Administrator;
4. Issuance of Order to Reconstitute by the
Reconstituting Officer;
5. Review by the LRA Administrator of the Order of
Reconstitution and affirmation thereof, if proper;
6. Surrender of the Owner's or Co-Owner's duplicate
Certificate of Title to the ROD; and
7. Issuance of reconstituted title and delivery of owner's
or co-owner's duplicate Certificate of Title by the ROD
concerned to the landowners or to DAR.
Who will shoulder the cost of the reconstitution proceedings?
Administrative reconstitution normally does not cost anything,
except for incidental costs like photocopies. However, judicial
reconstitution requires publication which could be substantial (around
P1,500 at 1993 prices). If the petition was filed by DAR, then it shall
shoulder this cost chargeable against CARP funds. Otherwise, it will
have to be borne by the farmer-beneficiary or the cooperative or farmers
association.
5.7 UNTITLED PRIVATE PROPERTIES
Can untitled private properties be placed under CARP?
DAR's petition on the issue of placing untitled or unregistered
private agricultural lands under CARP is that if there is no adverse
claimant over the subject landholding (e.g., there is no court case), then
submission of documentary and/or testimonial evidence shall be
conclusive proof of ownership. The landholding may be acquired under
CARP and the landowner entitled to payment in accordance with
pertinent laws and DAR rules and regulations as resolved under DOJ
Opinion No. 176, Series of 1992.
What if there are two or more claimants and there is a pending
court case, to whom shall payment be made?
If there are two or more claimants and there is a pending court
case, coverage of the land under CARP should proceed and the
processing of claim folder should continue without interruption. But
payment of said property shall only be effected to the claimant who has
been declared by the Court as the lawful owner.
What safeguards have been instituted to ensure that untitled and
unregistered private agricultural lands being covered by the program are
properly supported by adequate documents?
Under Administrative Order No. 01, Series of 1993, seven items
are listed as documentary requirements for processing claim folders of
untitled properties. These are:
1. Survey plan of the property duly approved by the
Land Management Bureau, and if not available, a sketch
plan certified to by said office, and technical description
thereof;
2. Certified copy of the present Tax Declaration in the
name of claimant with correct lot number/s and area per
approved plan;
3. Instruments of acquisition covering the subject
property, such as Deed of Sale, Donation, Transfer, etc. in
favor of claimant and those of his/her predecessor/s interest;
4. Certification of the Assessor concerned showing the
Tax Declaration issued, the declarant/s, the area covered,
and the basis for the issuances and cancellations thereof
pertaining to the property/ies from the first declaration up to
the tax declaration issued in the name of the claimant;
5. Certification from the Clerk of Court concerned
whether or not the property/ies identified in the plan is/are
covered by land registration proceedings or civil case, and if
the same is used as bond or bail in other court actions;
6. Certificates of the DENR-LMS stating the year the
property/ies identified in the plan may already be considered
as private agricultural land, and the persons having the best
claim of ownership thereof; and
7. Certification from the Office of the Register of Deeds
and Assessor concerned to the effect that as per their
records, the property/ies as appearing in the approved
survey plan is/are free from all liens and encumbrances.
5.8 FIELD INVESTIGATION

How will the landowner know that his or her land is being covered
by CARP?
A landowner who has been identified should be notified by the
MARO that his or her landholding is now covered by issuing a Notice of
Coverage personally delivered or sent by registered mail. In that Notice,
the landowner is also informed of his or her right to select the retained
area and of the field investigation which will be conducted on the
landholding.
A copy of the Notice shall also be posted for at least one week on
the bulletin board of the municipal and barangay halls where the land is
located.
After identifying and documenting the ownership of the land, what
must be done next?
The suitability of the land covered under CARP should next be
established. This is done primarily by undertaking the field investigation
of the property to ascertain its suitability, productivity, and tenurial
characteristics.
Who are involved in the field investigation?
Aside from the MARO or ARPT and the landowner concerned,
representatives from the Department of Environment and Natural
Resources (DENR), Department of Agriculture (DA) and Land Bank of
the Philippines (LBP), as well as the BARC and prospective agrarian
reform beneficiaries should be invited to participate in the conduct of the
field investigation.
What if the invited representatives are not available?
The field investigation can proceed provided they were given due
notice of the time and date of the investigation to be conducted, i.e.,
they were sent copies of Notice of Conduct of Field Investigation. If it is
the LBP representative who is not available, the DAR field
implementor(s), together with the other parties shall conduct the field
investigation and accomplish Part I of the Field Investigation Report.
Such report shall be forwarded to the LBP representative for validation.
What if there is a difference in the findings of the DAR and the
LBP?
In the event that there is a difference or variance in the findings of
the DAR and the LBP as to the propriety of coverings the land under
CARP, whether in whole or in part, on the issue of suitability to
agriculture, degree of development or slope, and on the issue affecting
idle lands, the conflict shall be resolved by a composite team composed
of DAR, DA, DENR, and LBP representatives which shall jointly conduct
further investigation thereon. The team shall submit its written report of
findings within five days from the conclusion of the inspection. Such
findings shall be binding to both DAR and LBP pursuant to the Joint
Memorandum Circular of the DAR, LBP, DENR, and DA dated 27
January 1992. If the issue involved is on the suitability to agriculture and
its development, the chairperson shall be the DA representative. If it is
on the percentage slope, the DENR representative shall be the
chairperson of the team.
Why must the BARC and prospective ARBs be involved in the field
investigation?
It is important to involve not only the other concerned CARP
implementing agencies but also the BARC and the prospective
beneficiaries because the people from the locality have a wealth of
information on the physical, agricultural and tenurial characteristics of
the land. It is also wise to involve them from the beginning to generate
their support and encourage their crucial participation in the
development process.
CHAPTER 6
AGRARIAN REFORM BENEFICIARIES
6.1 QUALIFICATIONS OF BENEFICIARIES
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What are the qualifications of an agrarian reform beneficiary?
To be an agrarian reform beneficiary, one must:
a. be landless;
b. be at least 15 years old or head of the family at the
time the property was transferred in the name of the
Republic of the Philippines; and
c. have the willingness, ability and aptitude to cultivate
the land and make it as productive as possible. (Section
23, Republic Act No. 6657)
Items (b) and (c) above are meant to ensure that the recipients of
the land will judiciously use it and make it a productive agricultural land.
What is the definition of landless?
A landless person is defined by Section 25, RA 6657 as one who
owns less than three (3) hectares of agricultural land. Section 7, RA
6657 also provides that an owner-tiller may still be a beneficiary of
another land he or she does not own but is actually cultivating to the
extent of the difference between the area of the land he/she owns and
the award ceiling of three hectares.
Thus, a tenant who owns one hectare of agricultural land may still
qualify as a beneficiary for two hectares of land.
Who are disqualified from becoming beneficiaries?
a. Those who fail to meet the qualifications as provided
for under Section 22 of RA 6657.
b. Beneficiaries who have culpably sold, disposed or
abandoned their lands.
c. Beneficiaries whose lands have been foreclosed by
the LBP or repossessed by the landowner (in the case of
VLT/DPS) for non-payment of an aggregate of three annual
amortizations.
d. Beneficiaries who have converted their land to non-
agricultural use without prior approval by DAR.
6.2 ORDER OF PRIORITY
What is the order of priority among the possible beneficiaries?
Section 22 of RA 6657 provides that lands covered by CARP shall
be distributed as much as possible to landless residents of the same
barangay or, in the absence thereof, landless residents of the same
municipality.
The order of priority then starts with:
a. Qualified children. The qualified children of the
landowner are the first group entitled to be beneficiaries of
the land. They are entitled to receive three hectares each.
b. Tenants and Lessees. The next group is composed
of the agricultural lessees and share tenants. These farmers
are entitled to receive the area of their tillage but not to
exceed three (3) hectares, he or she may be awarded an
additional area representing the difference, subject to the
availability of land.
c. The order of priority then goes down as follows:
* regular farmworkers;
* seasonal farmworkers;
* other farmworkers;
* actual tillers or occupants of public lands;
* collectives or cooperatives of the beneficiaries;
and
* others directly working on the land.
Given such order of priority, must all farmers in a class be
allocated three hectares each before anyone in the next class can be
identified as also a beneficiary of the land? For example, all regular
farmworkers must first be allocated three hectares before any seasonal
farmworker can be identified?
Strictly speaking, that would be a correct interpretation.
The CARP, however, seeks to help as many farmers as possible
and make them beneficiaries of the program. Thus, a more liberal
interpretation is often better, provided the economic viability of the
award is not sacrificed. In this regard, a series of mediation conferences
among the possible beneficiaries may be conducted to allow the
participatory determination of how many beneficiaries there ought to be
and what each beneficiary will receive.
6.3 FARMWORKER BENEFICIARIES
Who is considered a farmworker?
Farmworker is defined as a natural person who renders service for
value as an employee or laborer in an agricultural enterprise or farm
regardless of whether his/her compensation is paid on a daily, weekly,
monthly or "pakyaw" basis.

What are the different categories of farmworkers?
Regular farmworker is a natural person who is employed on a
permanent basis by an agricultural enterprise or farm.
Seasonal farmworker is a natural person who is employed on a
recurrent, periodic or intermittent basis by an agricultural enterprise or
farm, whether as a permanent or a non-permanent laborer, such as
"dumaan", "sacada" and the like.
Other farmworker is a farmworker who is neither a regular nor a
seasonal farmworker. Example is a farmworker who does several farm
activities but is not paid for his/her labor.
Technical farmworker is a natural person employed by an
agricultural enterprise or farm, who is highly educated and trained and
performs functions in scientific, engineering, medical, teaching and other
fields, but who is not vested with managerial or supervisory functions
(e.g., chemists, agronomists, veterinarians, soil analysts).
Managerial or Supervisory farmworker is a natural person who is
employed by an agricultural enterprise or farm vested with powers or
prerogatives: (1) to lay down and execute management policies; (2) to
hire, transfer, suspend, layoff, recall, discharge, assign or discipline
employees; and/or (3) to effectively recommend such managerial
actions.
Who among these farmworkers can qualify as beneficiaries?
They are those found to be directly working on the land, whether
as regular, seasonal or other farmworkers at the time the field
implementors conduct actual investigation and documentation.
However, other workers (such as technical farmworkers) who are
directly employed by the agri-business enterprise or corporation, except
those holding managerial or supervisory positions may be considered as
beneficiaries provided they meet the basic qualifications in Section
22, RA 6657.
Even a farmworkers who has ceased to work as a result of
pending agrarian or labor dispute but is willing to be an awardee of the
agricultural land may be considered a beneficiary provided he/she has
filed an appeal for reinstatement and has not yet obtained a
substantially equivalent and regular farm employment. (AO-02, Series of
1993).
What if a farmworker who has already been identified as qualified
beneficiary gets promoted to managerial or supervisory position prior to
land transfer?
The farmworker may still qualify as awardee of the land provided
he/she gives up the managerial or supervisory position. (AO-02, Series
of 1993)
What is meant by an agrarian or labor dispute?
It refers to any controversy relating to tenurial arrangements,
whether leasehold, tenancy, stewardship, or otherwise, over land
devoted to agriculture, including disputes concerning farmworkers,
associations or representation of persons in negotiation, fixing,
maintaining, changing or seeking to arrange terms and conditions of
such tenurial arrangements.
It also includes controversy relating to compensation of lands
acquired under RA 6657 and other terms and conditions of transfer of
ownership from landowners to farmworkers, tenants and other ARBs,
whether the disputants stand in proximate relation of farm operator and
beneficiary, landowner and tenant, or lessor and lessee.
Can farmworkers who are husband and wife each receive three
hectares?
Yes, they may be entitled to three hectares each provided that
their vested rights to the land have been duly established, in which case,
they shall be issued separate CLOAs. (AO-02, Series of 1993)
6.4 SCREENING OF BENEFICIARIES
Is it the landowner who selects the beneficiaries of his/her
landholding?
No. The landowner does not have the right to select who the
beneficiaries should be. Except in the case of Voluntary Land Transfer
or Direct Payment Scheme, land acquisition and distribution involves
two separate transactions. First, the government buys the land from the
landowner and then sells it to the farmer-beneficiaries. It is not the
landowner, therefore, who is selling the landholding to the farmer-
beneficiaries.
It is the Municipal Agrarian Reform Officer (or the Agrarian Reform
Program Technologist), together with the BARC who screens the
beneficiaries.
Even in the case of VLT/DPS, the landowner cannot just select a
beneficiary. The beneficiary must qualify and it is still the MARO and the
BARC who will do the screening.
What is the recourse of farmers who claim they have a priority
over those who have been identified by the MARO as the beneficiaries
of the land?
The farmers can file a protest with the MARO or the PARO who is
currently processing the claim folder. Once a written protest is filed, the
MARO or PARO shall comment on the said protest and submit the same
to the Regional Director who shall rule on the protest. If the parties
disagree with the RD's decision, they can file a written motion for
reconsideration. If the motion is denied, the farmers can file an appeal to
the DAR Secretary. (AO-09, Series of 1994)
What can be done in case the tenants or tillers refuse to be
interviewed and identified as beneficiaries?
The MARO and the BARC should advise the potential ARBs about
the consequences of their refusal. If they still refuse, the MARO and
BARC should execute a certification to this effect and post it in
conspicuous places for 30 days. Thereafter, new ARBs may be
instituted. The MARO should, however, exercise great care under this
situation. Refusal to be identified as beneficiaries can be due to several
reasons, such as lack of assurance of support services which used to be
provided by the landowner, fear of the landowner especially if the
farmers are unorganized. That is why, MAROs should not overlook the
importance of social preparation activities prior to land distribution.
What can be done in case the occupants of an idle and
abandoned agricultural land are found to have prematurely entered the
landholding?
Premature entry is strongly discouraged. Should it happen,
however, the first consideration should be whether the occupants are
the qualified beneficiaries of the land, or some other persons have
superior rights to receive the land. In the latter case, the occupants
should be ejected from the land and disqualified to be beneficiaries
thereof.
The second consideration is whether or not the landowner
consents or has no objections to the occupancy and under what terms
and conditions. The landowner and the occupants may agree on a lease
arrangement in the meantime that acquisition of the land under CARP
has not been completed.
On the other hand, what can be done if no one is willing to be a
beneficiary of the land?
The DAR cannot yet acquire the agricultural land if it has no
takers. The DAR must distribute all lands it acquires and is not in the
business of warehousing land. What can be done is note such lands
with no takers and offer it to those who may later on be interested or
those who could not be accommodated in the distribution of other areas.
What can be done if FBs have been erroneously identified but still
their names have been entered and registered in the CLOAs?
If the CLOA is already registered with the ROD, then an
appropriate exclusion proceeding could be filed with the DARAB. (AO-
02, Series of 1994)
CHAPTER 7
LANDOWNERS' RETENTION AND AWARD TO CHILDREN
7.1 RETENTION LIMIT
What is the retention right of landowners under the CARP?
No less than the Constitution grants landowners the right to retain
a portion of their lands covered by agrarian reform. Under the CARP,
this retention right is limited to a maximum of five hectares per
landowner. The only exceptions are as follows:
a. Landowners whose lands have been covered by PD
27 are allowed to keep the area they originally retained
thereunder. Thus, if a landowner retained seven hectares
under OLT, he/she is allowed under CARP to keep the said
area.
b. Original homestead grantees or their direct
compulsory heirs who still own the original homestead as of
15 June 1988 are allowed to retain the same areas as long
as they continue to cultivate the same homestead. Thus, a
landowner may, for example, continue to keep his/her 12-
hectare homestead.
7.2 LAND OWNERSHIP CEILING
What is the land ownership ceiling?
The land ownership ceiling is likewise five hectares. A person who
does not own agricultural land may not buy more than five hectares. A
person who already owns two hectares of agricultural land may buy only
up to three hectares more. This is in line with the State's objective of
controlling and democratizing the ownership of land as a natural
resource.
7.3 QUALIFICATIONS FOR THE EXERCISE OF THE RIGHT OF
RETENTION
Who may apply for retention?
All owners of private agricultural lands with a total area of more
than five hectares, except those who have already been granted full
retention (7 hectares) under PD 27.
May a corporation also retain five hectares?
Yes. The law grants both natural and juridical persons the right of
retention. Note that juridical persons include corporations, partnerships,
cooperatives, or other bodies with separate legal personality.
Note also that a corporation is a person separate and distinct from
its stockholders and incorporators. Thus, a corporation may retain only
five hectares and not five hectares for each incorporator.
Are co-owners allowed to retain five hectares only?
Persons owning an agricultural land under a co-ownership may
retain five hectares each. This is because the co-owners remain as
separate persons each entitled to retain five hectares.
Thus, in the earlier case of a 30-hectare property owned by a
couple who died before 15 June 1988, the six children were the co-
owners of the land upon the effectivity of RA 6657. Even if the title has
not been transferred to their names, the six children are entitled to retain
the 30 hectares at five hectares each.
A married couple claims that as husband/wife they are entitled to
five hectares each. Should the claim be granted?
It depends.
The criterion is the property relations between the husband and
wife. If the property relations are governed by the system of complete
separation of property as evidenced by a valid ante nuptial marriage
settlement then the spouses are separate landowners and may,
therefore, retain five hectares each from their respective properties.
The spouses should submit evidence that they are entitled to
retain more than five hectares. On the part of the DAR, it is important to
note the date of the marriage. If the marriage was solemnized before 03
August 1988, then it is governed by the Civil Code. In the absence of an
agreement for the separation of property, spouses who own only
conjugal properties may retain a total of not more than five hectares
from such properties. However, if either or both of them are landowners
in their own respective rights (whether capital or paraphernal), they may
retain not more than five hectares each from their respective
landholdings.
On the other hand, if the marriage was contracted on or after 03
August 1988, or under the New Family Code, a husband owning capital
property and/or a wife owning paraphernal property may retain five
hectares each, if they executed a judicial separation of properties prior
to the marriage. In the absence of such contract/agreement, all
properties, whether capital, paraphernal, and conjugal shall be
considered to be held in absolute community, i.e., the ownership
relationship is one. Therefore, only a total of five hectares may be
retained. (AO-11, Series of 1990)
In no case, however, shall the total retention of the couple exceed
ten hectares.
7.4 AWARD TO LANDOWNERS' CHILDREN
Is the award to children part of the landowner's retention?
No. The landowner is entitled to retain only five hectares. Any
award to the qualified children is a result of the children being qualified
beneficiaries of the program.

Is the award to children automatic?
No. The law only grants the children a preferential right to be
awarded the land of their parents. They must still qualify as
beneficiaries.
What qualifications must the child of a landowner meet in order to
qualify for a three-hectare award?
To qualify, the child of a landowner must be:
a. At least fifteen years old as of 15 June 1988, the
effectivity of RA 6657; and
b. Actually tilling the land or directly managing the farm
from 15 June 1988 up to the time of land acquisition.
What is the meaning of the phrase "directly managing the farm"?
"Directly managing" refers to the cultivation of the land through
personal supervision under the system of labor administration. (DAR
Memo Circular No. 04-1994) It should be interpreted along the lines of
farm management as an actual major activity being performed by the
landowner's child from which he or she derives income. Farm
management should likewise be the child's primary occupation.

If the land is tenanted, can a landowner's child qualify for an award
on the basis of a claim that he is directly managing the farm?
As of 15 June 1988, tenants on the land should have become
lessees. As lessees, they have the obligation to pay the lease rental but
they have the right to directly manage the land. The child cannot,
therefore, claim that he is managing the land. Hence, he cannot qualify
for an award.
What if the child meets the qualifications above but already owns
ten hectares? Must he or she still be awarded three hectares?
As earlier said, the child is to be awarded land not because he or
she is a child of the landowner but because he or she is a qualified
beneficiary. (However, the preference comes from his or her being a
child of the landowner.) Therefore, in addition to the qualifications
above, the child must meet all other requirements to be a beneficiary.
Not being landless, he or she does not qualify for an award.
If a landowner's child qualifies as preferred beneficiary, will Land
Bank pay the landowner for the area to be awarded to the child? In turn,
will the child amortize the property?
No, the rules on landowner's compensation and amortization by
beneficiaries will not apply, except if the child awardee is a tenant in
his/her own right. In which case, the Land Bank will finance the
acquisition. However, tenancy between the landowner and the child
must have already been established prior to 15 June 1988. (Memo
Circular No. 04, Series of 1994)
7.5 SELECTION OF RETAINED AREA
What are the criteria in the selection of the retained area?
The area chosen for retention should be compact and contiguous.
It should also be least prejudicial to the entire landholding and the
majority of the farmers thereon. (Sec. 6, RA 6657 and AO 11, Series of
1990)
Can a landowner who owns properties in different locations
choose separate areas totaling five hectares from among the said
properties?
No. The law provides that the area to be retained should be
compact and contiguous.
7.6 PROCEDURES FOR THE EXERCISE OF THE RIGHT OF
RETENTION AND AWARD TO QUALIFIED CHILDREN
Where should the landowner file the application for retention and
award to qualified children?
The landowner should file the application using DAR's Retention
Form No. 1 in any DAR office, whether at the Central, Regional,
Provincial or Municipal Office. If filed in an office other than the MARO
where the landholding is located, the receiving office should forward the
application to the MARO concerned.
What are the requirements in applying for retention or award to
children?
The landowner should execute an affidavit as to the total area of
his/her landholding. If applying for award to qualified children, the
landowner should submit a list of his/her children who were at least
fifteen (15) years old as of 15 June 1988 and who have been actually
cultivating or directly managing the farm.
What happens after the MARO receives the application for
retention or award?
The MARO, with the assistance of the BARC shall conduct a field
verification and investigation to:
1. determine total landholding in relation to the retention
and award applied for;
2. in the case of homestead, to determine whether the
original homestead grantee or the direct compulsory heirs
still own and actually cultivate the homestead;
3. determine qualifications of the applicants and their
children applying for retention and/or award; and
4. identify affected tenants and determine whether they
opt to become lessees in the retained area or to become
land transfer beneficiaries in another landholding.
The MARO then prepares the Retention Folder containing the
documentation of the field investigation and the findings and
recommendations. The folder is then submitted to the PARO for review.
Who approves the application?
The Regional Director approves or disapproves the application
after reviewing and evaluating the report and recommendations
submitted by the Provincial Agrarian Reform Officer (PARO).
What happens after the Regional Director has approved the
application for retention?
1. If the application for retention is approved, the
Regional Director shall issue Certificate of Retention
(Retention Form No. 3) and forward this, together with the
retention folder to the PARO.
2. The PARO, in coordination with the Land
Management Bureau of the DENR, shall segregate the
appropriate retained area.
3. The DENR shall furnish the DAR Regional Office four
copies of the approved segregation plan and technical
description.
4. On the basis of the owner's duplicate copy of the
title, the approved segregation plan and technical
description, the PARO shall request the Register of Deeds to
prepare two separate titles all in the name of the landowner:
a. for the landholding covered by compulsory
acquisition, voluntary offer to sell or voluntary land
transfer/direct payment scheme; and
b. the landowner's retained area
What is the recourse of the landowner whose application for
retention is disapproved?
The landowner should make an appeal to the DAR Secretary
within fifteen (15) days upon receipt of the decision. Otherwise, the
decision by the Regional Director disapproving the application for
retention becomes final.
7.7 WHEN TO EXERCISE THE RIGHT OF RETENTION
When may the right of retention be exercised?
A landowner whose agricultural land is covered by CARP may
exercise his or her right of retention anytime before the land is
compulsorily acquired.
If the land is already the subject of compulsory acquisition, the
landowner must apply for retention within sixty (60) days from the date
of receipt of the Notice of Coverage. If the landowner does not respond
despite due notice, he or she will be deemed to have waived the right to
choose the retained area and the DAR shall be the one to choose.
Note that the waiver is on the right to choose; the landowner still
has the right to retain.
If the land is voluntarily offered for sale, the landowner may
exercise right of retention at the time of the voluntary offer.
When may qualified children apply for an award of not more than
three hectares each?
The application must be filed within a period of thirty (30) days
from date of receipt by the landowner of the Notice of Coverage or from
the date of the Voluntary Offer to Sell.
However, for those areas for which notices of coverage have
already been sent to the landowners, qualified children have at least one
(1) year to file an application reckoned from 31 March 1994 (date of
effectivity of DAR Memo Circular No. 04, Series of 1994). In case of
failure of the children to file their application within the specific period,
the property shall be distributed to qualified beneficiaries pursuant to
Section 22 of RA 6657.
7.8 OBLIGATIONS OF LANDOWNERS AND LIMITS TO THE
DISPOSITION OF THE RETAINED AREAS
What is the obligation of the landowner with respect to his or her
retained area?
The landowner has the obligation to cultivate the retained area
directly or through labor administration in order to make it productive.
This is in line with the CARP principle that land has a social function and
land ownership has a social responsibility. (AO No. 11, Series of 1990)
What are the limits to the disposition of the retained area?
1. A landowner may sell the land even to one not
qualified to be a beneficiary, provided that after the sale, the
buyer will not own more than five hectares of agricultural
land.
2. The landowner may not eject the tenants in the
retained area. The retained area is not covered by the land
acquisition components of CARP but may still be covered by
the leasehold provisions.
3. The landowner may not convert the use of the land
from agricultural to non-agricultural use without the approval
of the DAR.
7.9 TENANTS IN RETAINED AREAS
What options are available to a tenant in the retained area?

The tenant may choose to remain in the retained area as a lessee,
in which case, he or she waives the right to be awarded land under the
CARP. The tenant may alternatively opt to be a beneficiary in other
lands that may be available for distribution. The tenant must decide
within one year from the time the landowner manifests his or her choice
of the area for retention. (Sec. 6, RA 6657)
If the tenant chooses the first option, his or her security of tenure
shall be respected and he or she may not be ejected from the land.
7.10 RETENTION UNDER PD 27
Who among the OLT landowners are not entitled to retain seven
hectares?
1. Those who as of 21 October 1972 owned more than
24 hectares tenanted rice or corn lands; or
2. Those who as of the above date, owned less than 24
hectares of tenanted rice or corn lands but additionally
owned the following:
a. more than seven (7) hectares of other
agricultural lands, whether tenanted or not, whether
cultivated or not; or
b. lands used for residential, commercial,
industrial or other urban purposes.
In both cases, the landowner should derive
adequate income to support his/her family. This was
provided for under Letter of Instruction No. 474 whose
constitutionality and validity was upheld as decided in
the case of Zurbano vs. Estrella (137 SCRA 334).
Guidelines were further clarified in MAR Memo
Circular No. 18 dated 29 December 1981.
3. Those who filed their applications for retention after
27 August 1985 (the deadline set by AO-01, Series of 1985)
and did not comply with the requirements.
The above landowners shall only be entitled to a maximum of five
hectares as retention area. (AO No. 04, Series of 1991)
Who among the OLT landowners are still entitled to the seven-
hectare retention?
1. Landowners who complied with the requirements of
either LOI 41, 45 or 52.
2. Those who filed their applications before the
deadline set (27 August 1985), whether or not they complied
with Letter of Instruction (LOI) Nos. 41, 45, and 52.
3. Those who filed their applications after the deadline
but complied with the requirements of the LOI cited above.
4. Heirs of a deceased landowner who manifested
while still alive the intention to exercise the right of retention
prior to 23 August 1990 (the finality of the Supreme Court
decision on the Association of Small Landowners vs. The
Honorable Secretary of DAR). Heirs must show proof of the
original landowner's intention. (AO No. 04, Series of 1991)
A landowner who retained seven hectares of rice land under PD
27 now wants to retain an additional five hectares of coconut land
under RA 6657. Should the landowner's claim be granted?
No. The landowner may not retain a total of twelve (12) hectares.
He/she may, however, voluntarily offer the seven-hectare rice land and
apply for the retention of five hectares of coconut land. Following the
decision on the Association of Small Landowners case, the landowner
shall keep the seven hectares originally retained in PD 27 while the five-
hectare coconut land shall be covered under CARP.
Note also that if a landowner retained only two (2) hectares of rice
land under PD 27, he/she may still retain three hectares under RA 6657.
When is landowner deemed to have waived his/her right of
retention under PD 27?
As provided in DAR Administrative Order No. 04, Series of 1991,
the performance of any of the following acts signifies waiver:
1. signing of the Landowner-Tenant Production
Agreement and Farmer's Undertaking (LTPA-FU) covering
the subject property;
2. entering into a direct payment scheme agreement as
evidenced by a Deed of Transfer over the subject property;
and
3. signing/submission of other documents indicating
consent to have the subject property covered, such as the
form-letter of the Land Bank on the disposition of the cash
and bond portions of a land transfer claim for payment, the
Deed of Assignment, Warranties and Undertaking executed
in favor of the LBP.
Other similar acts may likewise be construed as waiver. The
above list is not exclusive.
7.11 HOMESTEAD LANDS
What is DAR's policy in the case of homestead lands?
Under Section 6, RA 6657, agricultural lands covered by
Homestead Patents shall not be covered under CARP if the following
conditions are present:
1. The original homestead grantee or his/her direct
compulsory heirs still own the land on 15 June 1988; and
2. The original homestead grantee or his/her direct
compulsory heirs cultivate the land as of 15 June 1988 and
continue to cultivate the same.
In the absence of these conditions, the homestead land will not be
exempted from OLT or CARP coverage. However, the grantee or the
heirs can retain seven or five hectares, as the case may be The excess
areas shall be covered by CARP. The Alita Case, notwithstanding, it is
the mandate of the law that in all cases, the security of tenure of the
farmers and farmworkers on the land shall be respected.
CHAPTER 8
LAND SURVEY
What should be done in the case of titles/landholdings covered by
CARP but with defective technical descriptions or no available survey
records?
The Provincial Agrarian Reform Officers (PAROs) should turn over
to their counterpart Provincial Environment and Natural Resources
Officers (PENROs) of DENR, all titles/landholdings covered by CARP
with defective technical descriptions or where no available survey
records could be found. This is an agreement reached between the DAR
and DENR last 23 July 1992.

PAROs should immediately conduct an inventory of these records.
If in spite of previous exhaustive research conducted, the defect could
not be remedied, then they should turnover the records (xerox copies of
titles, survey plans, sketch plans, etc.). The PENROs are under
instructions to check these records with the existing records available at
the Land Management Bureau, the National Archives, or the Land
Registration Authority.
If, however, after another exhaustive research, the correct
technical description cannot be recovered, then a resurvey of the
subject landholding will have to be executed as provided for in the Joint
DAR-DENR Circular No. 06, Series of 1991.
What sort of defects are covered by this agreement?
The defects may fall under any of the following categories:
1. Polygon does not close;
2. Titled but title is not available;
3. Title available but without technical description;
4. Surveyed untitled private property but survey plan or
technical description is not available;
5. Awarded to survey contractor but not submitted due
to non-payment of contractor;
6. Surveyed by administration but not submitted in spite
of request to submit the survey; and
7. Other defects.
CHAPTER 9
LAND VALUATION AND LANDOWNERS' COMPENSATION
What is the basic requirement in the acquisition of private
agricultural lands?
The Constitution itself provides landowners two basic rights the
right to retention and the right to be paid just compensation. Payment of
just compensation is required before a title can be transferred from the
landowner to the Republic of the Philippines.

9.1 JUST COMPENSATION
What is just compensation?
In various Supreme Court rulings, just compensation in general
has been defined as "fair market value". It is the price which a buyer will
pay without coercion and a seller will accept without compulsion.
There are those who argue that since agrarian reform is a social
justice program, it is not correct to interpret just compensation as the
price which the land will bring in the open market. If two contracting
parties with unequal powers are allowed to determine and agree on the
value of the land in the open market, the party with less power would
tend to be on the losing end.
For properties covered by CARP, however, just compensation
cannot be an absolute amount disregarding particularities of
productivity, distance to the market place, etc. Hence, land valuation is
not an exact science but an exercise fraught with inexact estimates. This
requires integrity, conscientiousness and prudence on the part of those
responsible for determining its value. What is important ultimately is that
the land value approximates as closely as possible, what is broadly
considered by the community to be just. (AO 06, Series of 1992)
Does full payment mean payment in cash directly to the
landowner?
No. Full payment need not all be in cash directly to the landowner.
Payment can be partly in cash and partly in bonds. Also for those cases
where the landowner contests the valuation of the property, Section
16, RA 6657 and AO 01-93 provide that full payment of just
compensation may be considered achieved upon the Land Bank's
deposit of the value of the land in a trust account in the name of the
landowner. Once this deposit is made, the title can be transferred in the
name of the Republic of the Philippines.
9.2 LAND VALUATION FACTORS
What does the law provide as the factors to be considered in the
valuation of lands under CARP?
Section 17, RA 6657 enumerates ten (10) factors to be considered
in the determination of just compensation:
a. cost of acquisition
b. current value of like properties
c. nature of the land
d. actual use
e. income
f. sworn valuation by the landowner
g. tax declaration
h. assessment made by government assessors
i. the social and economic benefits contributed by the
farmers and farmworkers and by the government
j. non-payment of taxes or loans secured from any
government financing institution on the land.
9.3 NEW LAND VALUATION FORMULA
What Administrative Orders govern land valuation under CARP?
AO No. 11, Series of 1994, "Revising the Rules and Regulations
Covering the Valuation of Lands Voluntarily Offered or Compulsorily
Acquired as Embodied in AO No. 06, Series of 1992"; and
AO No. 06, Series of 1992, "Rules and Regulations Amending the
Valuation of Lands Voluntarily Offered and Compulsorily Acquired as
Provided for Under AO 17, Series of 1989 as Amended, Issued
Pursuant to RA 6657".
AO 06-92 supersedes AO No. 05, Series of 1988; AO No. 06,
Series of 1989, AO No. 17, Series of 1989, and AO No. 03, Series of
1991.
What can be considered as a major improvement in the latest
Administrative Orders on land valuation?
By giving more weight on the net income from the land in the
formula, AO No. 06-92 has substantially raised the land value.
Furthermore, AO No. 11-94 has dropped the landowner's LISTASAKA
declaration from the formula. These are expected to lessen landowners'
rejection of the offered price and facilitate the acquisition of the land.
What is now the basic formula for the valuation of lands covered
by VOS and CA?
The basic formulation for the valuation of lands covered by VOS
and CA regardless of the date of offer or coverage of the claim is:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
where:
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
Capitalized Net Income refers to the difference between the gross
sales (AGP x SP) and the cost of operations (CO) capitalized at 12%. In
equation form, this is expressed as:
CNI = (AGP x SP) - CO
__________________
12
where:
AGP = latest available 12 month's gross production immediately
preceding the date of offer in case of VOS or date of notice of coverage
in case of CA.
SP = the average of the latest available 12-month's selling prices
prior to the date of receipt of the claim folder by LBP for processing,
such prices to be secured from the Department of Agriculture (DA) and
other appropriate regulatory bodies or, in their absence, from the Bureau
of Agricultural Statistics. If possible, SP data shall be gathered from the
barangay or municipality where the property is located. In the absence
thereof, SP may be secured within the province or region.
CO = Cost of Operations
When the cost of operations could not be obtained or verified, an
assumed new income rate (NIR) of 20% shall be used. Landholdings
planted to coconut which are productive at the time of offer/coverage
shall continue to use the 70% NIR.
This formula shall be used if all three factors are present, relevant
and applicable.
When the CS factor is not present and CNI and MV are applicable,
the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
When the CNI factor is not present, and CS and MV are
applicable, the formula shall be:
LV = (CS x 0.9) + (MV x 0.1)
When both the CS and CNI are not present and only MV is
applicable, the formula shall be:
LV = MV x 2
In no case shall the value of idle land using the above formula
exceed the lowest value of a land within the same estate under
consideration or within the same barangay or municipality (in that order)
approved by LBP within one (1) year from receipt of claim folder.
In case of VOS, however, the land value which will be adopted will
be whichever is lower of the computed value using the formula and the
landowner's offer. The LO's offer, however, shall be grossed up from the
date of the offer up to the date of receipt of claim folder by LBP from
DAR for processing.
The date of receipt of claim folder by LBP from DAR shall mean
the date when the claim folder is determined by LBP to be completed
with all the required documents and valuation inputs duly verified and
validated, and is ready for final computation/processing.
Why are there only three factors in the formula when the law
states ten factors to be considered in determining just compensation?
Although the formula contains only three factors, a study of the
formula would show that all ten factors are actually considered in its
application.
Who is responsible for computing land values?
Executive Order No. 405 dated 14 June 1990 transferred the
responsibility for land valuation from the DAR to the Land Bank of the
Philippines.

9.4 SUMMARY ADMINISTRATIVE PROCEEDINGS
Is the land valuation done by Land Bank final?
The final determination of just compensation is a judicial function.
The Land Bank merely conducts administrative valuation which may be
contested in the court of proper jurisdiction. (Magana vs. Paitan, G.R.
No. 60269 dated 13 September 1990)
If the landowner accepts the value offered by Government, then
the administrative valuation is final and serves as the basis of the
landowner's compensation. However, if the landowner rejects or does
not respond to the Government's offer, the DAR itself will advise the
DAR Adjudication Board, through the Provincial Adjudicator, to conduct
summary administrative proceedings to determine the value of the land.
The value determined in these proceedings are then re-offered to the
landowner. The landowner may still reject or not respond to this offer
and instead file a case before the Special Agrarian Courts.
In the meantime that the landowner is contesting the valuation of
the land or is not responding to the Government's offer, the Government
may proceed to distribute the property upon deposit in a trust account of
the initial value offered.
Where will the summary administrative proceedings be
conducted? Will a landowner residing in Mindanao be required to go to
the central office?
Not necessarily. It would depend on the total amount of
compensation in question. If the government's offer does not exceed two
million pesos (P2,000,000), the proceedings shall be conducted by the
Provincial Agrarian Reform Adjudicator concerned. If the compensation
offered is more than two million pesos but does not exceed five million
(P5,000,000) then the case will be handled by the Regional Agrarian
Reform Adjudicator (RARAD). But if the amount in question exceeds five
million pesos, then the proceedings shall be conducted by the DAR
Adjudication Board (DARAB). (AO No. 08, Series of 1993)
Is the Adjudication Board's decision final and executory?
Although the final determination of the value of the land is a
judicial function, unless the landowner or any party-in-interest files a
case with the Special Agrarian Court within fifteen (15) days from receipt
of the decision, then the decision of the adjudicator/s becomes final and
executory.
9.5 CONCERNED PARTIES' INVOLVEMENT IN THE LAND
VALUATION PROCESS
Are landowners and agrarian reform beneficiaries involved in the
process of valuation?
Yes. The process of land valuation must involve the agrarian
reform beneficiaries, their organizations, the BARC, and the landowner
concerned. Their involvement is ensured in various provisions of the
law.
Section 3, EO 129-A declares that . . . "partnership between
government and organization of farmers and farmworkers in agrarian
reform policy formulation, program implementation and evaluation shall
be institutionalized. . . . "
Section 47, RA 6657 specifies that the BARC shall, among other
things, "assist in initial determination of the value of the land".
Section 18, RA 6657 further states that "The LBP shall
compensate the landowners in such amount as may be agreed upon by
the landowner and the DAR and the LBE. . . "
9.6 MODES OF COMPENSATION
How will landowners be compensated?
Under Voluntary Land Transfer, the landowner will be paid directly
in cash or in kind by the farmer-beneficiary under terms mutually agreed
upon by them subject to DAR approval.
Under Compulsory Acquisition, the Land Bank of the Philippines
shall compensate the landowner in the following mode:
a. Cash payment which shall vary according to land
size;
b. LBP bonds or other government financial
instruments.
Under Voluntary Offer to Sell, the landowner will be paid under the
same mode as CA except that the cash portion is higher by five percent
(5%).
What proportion of the total compensation is in cash?
Cash portion shall vary according to the size of the landholdings.
The larger the landholding, the smaller the cash portion. The underlying
principle is that small landowners are presumed to have greater need for
cash to aid them in their bid to shift their capital from agriculture to
industry.
Payment shall be under the following terms and conditions:
a. Lands above 50 has. 25% cash; 75% bonds
b. Lands above 24-50 has. 30% cash; 70% bonds
c. Lands 24 has. & below 35% cash; 65% bonds
Cash portion is increased by 5% for VOS.
Why not pay the landowners the full amount in cash?
The compensation package under CARP is already much
improved compared to the compensation schemes of past land reform
programs. This is so, precisely to make the program more acceptable to
landowners and facilitate the shift of their capital from agriculture to
industry.
Full payment in cash is not feasible. This will tremendously
increase the current funding requirements for CARP which the
government can ill afford at present. Furthermore, this will infuse a large
amount of money into the economy which could result in inflation.
9.7 LAND BANK BONDS
What are the features of the new LBP-bonds?
Compared with previous LBP bonds, the present bonds are
definitely more attractive.
a. Past LBP bonds have a maturity of 25 years. This
means, bond holders can only get the principal at the end of
25 years. On the other hand, the new LBP bonds mature in
ten years, and one-tenth of the face value of the new bonds
matures every year from the date of issue until the tenth
year.
b. The new LBP bonds also bear market rates of
interest the same as those of 91-day treasury bills. Old LBP
bonds have a fixed six percent (6%) interest rate.
c. Finally, these bonds have alternative uses. They may
be used by the landowner, his successors in interest, or his
assignees, for any of the following:
* acquisition of land or other real properties of the
government, including assets under the Asset
Privatization Trust, and other assets foreclosed by
government financial institutions;
* acquisition of shares of stock of government
owned or controlled corporations, or shares of stocks
owned by the government in private corporations;
* substitution for surety or bail bonds for the
provisional release of accused persons, or for
performance bonds;
* security for loans with some government
financial institutions, provided the proceeds are
invested in an economic enterprise, preferably in a
small-and-medium scale industry;
* payment for various taxes and fees to
government, up to a certain percentage of the
outstanding balance of the financial instrument, and
provided further that the PARC shall have determined
the allowable percentage mentioned;
* payment for tuition fees of the immediate family
of the original landholder in government universities,
colleges, trade schools, and other institutions;
* payment of bills in public hospitals; and
* other uses as the PARC may allow from time to
time.
9.8 PD 27 LANDS
Are PD 27 lands also covered by this valuation formula?
No, they are governed by Executive Order No. 228. Under this
EO, the valuation formula under PD 27 is retained. Valuation shall be
based on the Average Gross Production (AGP) determined by the
Barangay Committee on Land Production (BCLP). Land value is
computed using the following formula:
Rice Lands LV = AGP x 2.5 x P35 *
Corn Lands LV = AGP x 2.5 x P31 **
* government support price for one cavan of 50 kilos of
palay on 21 October 1972
** government support price for one cavan of 50 kilos of
corn on 21 October 1972
Lease rentals paid to the landowner by the farmer-beneficiary after
21 October 1972 shall be considered as advance payment for the land
and shall, therefore, be deducted from the cost.
Aren't PD 27 lands grossly undervalued since 1972 support prices
are still being used?
The Presidential Agrarian Reform Council (PARC) has recognized
this problem. Many of the landowners covered by PD 27 have not yet
been paid. Had these landowners been paid at the time of the taking of
their lands and the proceeds of the compensation deposited in a bank,
the money would have earned the same interest rate compounded
annually as authorized under the banking laws, rules and regulations.
To address these problems, the PARC in its resolution dated 25
October 1994, approved the grant of an increment of six percent (6%)
yearly interest compounded annually based on the land value as
determined under existing valuation formula, instead of revising the
formula itself.
Guidelines for this have been issued under Administrative Order
No. 13, Series of 1994, "Rules and Regulations Governing the Grant of
Increment of Six Percent (6%) Yearly Interest Compounded Annually on
Lands Covered by Presidential Decree No. 27 and Executive Order No.
228".
Under these guidelines, owners of OLT lands shall be
compensated based on the following:
(Computed land value using the original formula) x (1.06) n
where n = number of years from date of tenancy up to effectivity
date.
Who are the landowners qualified to receive compensation based
on this increment formula?
1. Landowners whose lands are actually tenanted as of
21 October 1972 or thereafter and covered by OLT;
2. Landowners who opted for Government financing
through Land Bank of the Philippines as the mode of
compensation; and
3. Landowners who have not yet been paid for the
value of their land.
In the case of landowners who were partially paid, the yearly
interest of six percent (6%) compounded annually shall be applied to the
unpaid balance.
What is the reckoning date in computing the interest?
For lands tenanted as of 21 October 1972 and covered under
OLT, the date shall be reckoned from 21 October 1972 up to the date of
effectivity of AO 13-94.
For lands tenanted after 21 October 1972 and covered under OLT,
the date shall be reckoned from the date when the land was actually
tenanted up to the effectivity date of AO 13-94.
What will happen to the claims of landowner-payees which were
previously approved for payment by Land Bank?
The landowners shall still be entitled to the difference.
What happens to the 25-years LBP bonds under PD 27?
All outstanding LBP bonds that are retained by the original
landowner-payee, or by his heir, shall be paid by the Bank to the extent
of their matured portion. One-twenty fifth (1/25) of their face value times
the number of years from their date of issue to July 17, 1988 (date of EO
228) are deemed to have matured.
How can the original landowner-payee claim payment for the
matured portion of his/her bond holding?
He/she should surrender the old LBP bonds to Land Bank which
pays cash for the matured portion and convert the unmatured portion to
10-year LBP bonds.
Are outstanding old LBP bonds in the hands of bondholders other
than the original landowner-payee entitled to the same right?
No. Old LBP bonds in the hands of bondholders other than the
original landowner-payee are not entitled to the same right.
9.9 EO 407 LANDS
What are EO 407 lands?
These refer to lands suitable to agriculture owned by all
government instrumentalities, including but not limited to government
agencies, government owned and controlled corporations or financial
institutions which have been ordered to be surrendered to the
Department of Agrarian Reform under Executive Order No. 407 issued
on 14 June 1990 by then President Corazon C. Aquino.
Will these lands be covered by the same valuation guidelines as
the private lands covered under CARP?
No, separate valuation guidelines for properties covered by EO
407 have been issued applicable to claims of government financial
institutions which have signed jointly with LBP a Memorandum of
Agreement dated 28 August 1992.
9.10 MT. PINATUBO AFFECTED AREAS
Will landowners in lahar affected areas whose landholdings were
originally subject of acquisition and distribution be compensated?
Joint DAR-LBP Administrative Order No. 03, Series of
1994 provided the policy guidelines governing the acquisition and
distribution of agricultural lands affected by the Mt. Pinatubo eruptions.

Under this guideline, agricultural lands affected by Mt. Pinatubo
eruptions have been classified into three based on the NEDA Region III
Geographic Information System database. These are:
Category I (actually affected)
These are agricultural lands actually covered with lahar and
pyroclastic deposits, including those areas which have become silted,
eroded or continuously flooded for an indefinite period of time.
Category II (not yet affected)
These are agricultural lands not falling under Category I but have
the possibility of being actually affected.
Category III (lands covered by ashfall)
These are agricultural lands actually covered or affected by ashfall
but which remain to be productive.
As a general rule, lands under Category III shall be acquired and
landowners compensated. Compensation of lands under Category I and
II shall be effected under the following conditions:
1. Claims have been approved by LBP and:
a. Landowner has executed a Deed of
Assignment, Warranty and Undertaking on or before
the issuance of the Joint DAR-LBP AO 03-94; or,
b. Transfer Certificate of Title was already
registered in the name of RP on or before the issuance
of the same AO; or
c. Partial payment was already effected.
2. Emancipation Patents/Certificates of Land
Ownership Award have been registered on or before 12
June 1991 regardless of whether or not the claim folder is
with the LBP.
CHAPTER 10
LAND DISTRIBUTION
10.1 BASIC PRINCIPLES IN LAND DISTRIBUTION
What are the basic principles in land distribution?
Land distribution is governed by the following basic principles and
policies:
a. The CARP seeks to promote the establishment of
owner-cultivatorship of economic-size farms as the basis of
Philippine agriculture;

b. DAR's primary mandate is to distribute agricultural
lands to as many tenants and farmworkers as possible. If the
agricultural land is untenanted or does not have
farmworkers, it is the responsibility of the DAR to locate
qualified beneficiaries pursuant to Section 22 and Section 7
of RA 6657;
c. In general, lands shall be distributed directly to the
individual beneficiaries;
d. The award of three hectares to the beneficiaries is in
line with the objective of forming and maintaining economic-
size family farms.
What Administrative Orders govern land distribution?
a. Administrative Order No. 10, Series of 1990 entitled,
"Rules and Procedures in the Distribution of Private
Agricultural Lands Agrarian Reform Beneficiaries under RA
6657"; and
b. Administrative Order No. 02, Series of 1992 entitled,
"Supplemental Guidelines on AO No. 10, Series of 1990,
and Other Issuances the Rights of Farmworkers".
When does land acquisition end and when does land distribution
begin?
The cut-off point in the land acquisition process is the transfer of
title from the landowner to the Republic of the Philippines as evidenced
by the Transfer Certificate of Title (TCT) issued by the ROD.
Immediately upon receipt of the TCT, the DAR shall take possession of
the land and proceed with land distribution.
May distribution occur before the end of acquisition?
Yes. The cut-off point above is for compulsory acquisition cases
where landowner refuses to cooperate. Operationally, distribution can
begin earlier, particularly if the landowner is cooperative and is willing to
let the identified beneficiaries cultivate the land.
What proof of land ownership is given to beneficiaries?
Beneficiaries receive the following titles:
a. Emancipation Patents (EPs) for OLT lands;
b. Certificates of Land Ownership Award (CLOAs) for
CA, VOS, and 407 lands, resettlement areas and landed
estates; and
c. Free Patents for public lands.
Beneficiaries of the Integrated Social Forestry Program covering
agro-forestry public lands whose ownership cannot be transferred,
received Certificates of Stewardship Contract (CSCs) which are good for
25 years, renewable for another 25 years.
Is a Certificate of Land Transfer (CLT) an evidence of ownership
of the land?
No. In the case of Magana vs. Paitan (G.R. No. 60269, 13
September 1990), it was held that the mere issuance of CLT does not
vest in the farmer-grantee, ownership of the land described therein. It
merely provides evidence of the government's recognition of the grantee
as the part qualified to avail of the statutory requirements for acquisition
under PD 27. Failure of the farmer-beneficiary to comply with the
requirements will result in the cancellation of the said CLT. Thus, failure
on the part of a farmer/grantee to pay lease/amortization payment to the
landowner or agricultural lessor when they fall due for a period of two
years shall be a ground for forfeiture of the CLT.
10.2 AWARD CEILING
How many hectares of land can an awardee get?
Individual beneficiaries may each receive the following maximum
hectarages:

a. Three hectares under RA 6657 acquisition modes
(CA, VOS, VLT/DPS, EO 407);
b. Three hectares for irrigated and five hectares for
unirrigated rice and corn lands covered under the OLT
program of PD 27; and
c. Three hectares for awardees in settlement areas and
landed estates.
Potential beneficiaries who own less than three hectares of
agricultural land may still receive land under CARP but only to the extent
of the difference between the award limit of three hectares and their
present land ownership. For example:
Award Ceiling 3.0
has.
ARB owns 1.2
has.


Total Area that may be awarded to ARB 1.8
has.
Total Land ownership after the award 3.0
has.
In all cases, the aggregate award and the total land ownership of
the ARB as a result of the award shall not exceed three hectares.
Suppose the area actually occupied by a tenant slightly exceeds
the three hectare award ceiling and there is no other tenant in the
landholding, how will the excess area be disposed?
Since there is no guideline governing the allocation of excess area
over the allowable three-hectare ceiling under RA 6657, the pertinent
provision of the Ministry of Agrarian Reform Administrative Order No.
03-85, Series of 1985 can be applied. This states that "The economic
family size farm to be transferred to a bonafide farmer beneficiary
pursuant to PD 27 shall include a tolerable limit of not more than ten
percent (10%) or 3.3 hectares if irrigated and 5.5 hectares if unirrigated."
Hence, if the excess area is within the 10% tolerable limit (or 3.3
hectares under RA 6657), then the total aggregate area may be
awarded to the qualified farmer-beneficiary.
10.3 LAND DISTRIBUTION PROCEDURES
What are the basic steps in the redistribution of lands under VOS,
CA, and EO 407?
MARO
a. Upon completion of land acquisition, the first activity
done is the validation of the list of qualified ARBs. This is to
ensure that those who were identified during the acquisition
phase are still present and qualified to receive the land.
b. Through a letter or through the CARP Beneficiary
Certificate (CBC), the identified ARBs are formally notified
that they have been qualified to receive the land. The notice
also grants the ARBs the usufructuary rights and privileges
and obliges them the duties and responsibilities over the
land.
c. The ARBs are consulted as to their preferred mode
of distribution, i.e., individual, collective or co-ownership.
Then, Land Distribution Folders are prepared based on the
ARBs' preference and submitted to the PARO.
PARO
a. Reviews all documents and generates the
Certificates of Land Ownership Awards (CLOAs).
b. If ARBs prefer individual parcels, then the PARO
requests the DENR to conduct subdivision survey.
c. Submits the CLOAs to the DAR Regional Office
(DARRO) who causes them to be signed by the Secretary.
d. Registers the CLOAs with the ROD and forwards
them to the MARO for distribution.
e. The ARBs are allowed to take possession of the land
and use it for production.
10.4 INDIVIDUAL VS. COLLECTIVE DISTRIBUTION
Is individual distribution always required?
No. According to Section 25, RA 6657, the beneficiaries may opt
for collective ownership, such as co-ownership or farmers cooperative or
some other form of collective organization. However, the total area that
may be awarded shall not exceed the total number of beneficiaries
multiplied by three hectares, except in meritorious cases approved by
the PARC. Thus, nine ARBs under a co-ownership may receive not
more than 27 hectares.
Further, in case it is not economically feasible and sound to divide
the land as determined by the DAR, then it shall be owned collectively
by the worker beneficiaries.
Finally, to expedite land distribution, lands may be initially awarded
collectively and later distributed individually after completion of the
subdivision surveys.
This arrangement may be done for any CARP able land whether
private land or public land within proclaimed DAR settlement projects or
public land turned over to the DAR by other government agencies and
institutions pursuant to EO No. 407, as amended by EO 448.
How can the individual beneficiaries be assured of their share in
the collectively held landholding?
DAR shall ensure that the name of the cooperative or the
association and their individual members are properly annotated at the
back of the collective CLOA to protect the farmer-member from possible
summary and unjust separation by the cooperative or association, and
that the fractional share of each ARB shall be specified opposite their
names.
How will lands covered by collective CLOAs be subdivided?
Guidelines have been provided under AO No. 03, Series of 1993,
"Rules and Procedures Governing the Issuance of Individual Titles to
Co-Owners", should the ARBs decide to subdivide lands held
collectively.
If held on a co-ownership basis, lands covered by collective CLOA
shall be subdivided in accordance with the actual occupancy of the
ARBs, provided the share of each shall not exceed three hectares.
For landholdings in the name of cooperative or farmers
association, subdivision shall be based on the shares of each member
under the same condition that this shall not exceed three hectares and
provided that the subdivision is determined by DAR to be economically
feasible.
DAR may issue individual CLOAs in the name of the ARBs based
on their request and the approved subdivision plan of the landholding
and supported by a Deed of Partition executed by all co-owners named
in the collective CLOA. Individual CLOAs generated by DAR under this
subdivision shall be on Transfer Certificate of Title (TCT) CLOA forms to
be registered with the ROD.
However, if the ten-year period reckoned from the date of the
issuance of the collective CLOA has already elapsed, issuance of
individual certificates of title shall already be subject to the procedures
and requirements of the Land Registration Authority (LRA) pursuant to
the Land Registration Decree (PD 1529).
What are the procedures for subdividing landholdings previously
covered by collective CLOAs on co-ownership basis?
PARO
a. Any of the co-owners shall submit to the PARO,
through channel, a written request for the subdivision of the
land.
b. The PARO shall endorse the request for subdivision
to the DARRO for bidding and award to private contractors
or the DAR itself may instead execute the subdivision survey
of the target landholdings.
DARRO
a. The DARRO shall bid and award the survey to
private contractors or cause the conduct of the survey by
DAR survey teams if available.
b. The survey returns shall be submitted to the DENR
for verification and approval.
c. The approved subdivision plan shall be submitted to
the PARO.
PARO
a. Prepare a Deed of Partition for the signature of all
the co-owners, specifying the lot number and the exact
parcel intended for the co-owner concerned, based on the
approved subdivision plan. The Deed of Partition shall be
duly notarized.
b. Retrieve the owner's duplicate certificate of title of
the collective CLOA from the ARBs for cancellation by the
ROD.
c. Generate individual TCT-CLOAs for each co-owner
based on the approved subdivision plan and the duly
notarized Deed of Partition.
d. Transmit the CLOAs, the Deed of Partition, and
approved subdivision plan to the Register of Deeds
concerned for the registration. The owner's duplicate
certificate of title of the collective CLOA shall be surrendered
to the ROD for cancellation.
e. Record the registered CLOAs and transmit the same
to the MARO for redistribution to the individual co-owners.
How will this generation of CLOAs be treated in reporting
accomplishment?
Landholdings covered by collective CLOAs already reported as
accomplishment by the DAR field office concerned and subsequently
subdivided and issued individual TCT-CLOAs to the owners shall be
reported and monitored separately in the monthly reporting of the field
offices. However, the area covered by collective CLOA should not be
reported again as hectarage covered upon the issuance of the individual
CLOAs.
Such activities shall be included in the program of the field office
concerned for proper funding.
10.5 RIGHTS AND OBLIGATIONS OF BENEFICIARIES
What are the obligations of the beneficiary?
All ARBs shall exercise the diligence of a good father of the family
in the use, cultivation, and maintenance of the land including the
improvements thereon. Negligence, misuse, or unauthorized sale of the
land, or any support extended to the ARB shall be a ground for the
forfeiture of his or her rights as a beneficiary.

May CARP beneficiaries sell the land awarded to them?
Section 27, RA 6657 provides that lands awarded to the ARBs
may not be sold, transferred or conveyed for a period of ten (10) years
from the award. This may be seen as a means to encourage the ARBs
to cultivate the land and make it productive over a long term.
The exceptions to this rule are if the transfer is through:
a. hereditary succession;
b. to the Government;
c. to the Land Bank; or
d. to other qualified beneficiaries.
If the land has been transferred to the government or to LBP, the
children of spouse of the ARB shall still have the right to repurchase the
land within two years.
Ownership of lands awarded under PD 27 or EO 228, however,
may be transferred after full payment of amortization by the beneficiary.
(Section 6, EO 228) But there are guidelines now being formulated
which will determine where the ten-year prohibition period under Section
27 may be applicable, and will also provide for additional safeguards to
prevent abuse in the selling of PD 27 lands.
Does this mean that after ten years, under the CARP, the ARB
may sell to anybody provided he or she has fully paid for the land and
the buyer will not have more than five hectares after the transaction?
Yes, the ARB may sell the land provided that the total
landholdings of the buyer after the purchase does not exceed five
hectares.
What if the ARB no longer wants to farm?
The ARB has the option to transfer or convey the rights to the land
to any of his or her qualified heirs or to any other beneficiary, even if the
land has not yet been fully paid. The conditions are that the transfer has
the prior approval of the DAR and that the transferee will personally
cultivate the land.
What happens if the new ARBs fail to cultivate the land
themselves?
Then the land shall be transferred to the LBP which shall give
notice of availability of the land to the BARC. The BARC in turn, shall
notify the Provincial Agrarian Reform Coordinating Committee
(PARCCOM).
Under such instances, the LBP shall reimburse the original ARB
one lump sum for the amount of amortizations made including payments
for the value of the improvements on the land. The new ARB will have to
start amortizing anew.
Can an agrarian reform beneficiary subdivide in favor of his or her
children the three hectares of land awarded under CARP?
Strictly speaking, no. The three hectares, as the identified
economic-sized family farm, should be preserved as a single operating
unit to promote the farm's economic viability.
Should the beneficiary die or be incapacitated, succession to the
farmholding shall be governed by the pertinent provisions of the Civil
Code, subject to the condition that the land shall not be fragmented.
This means that the land shall be transferred to the spouse of the ARB
or in the absence or incapacity of the spouse, to the eldest child who
meets the qualifications to be a CARP beneficiary, particularly the
requirement of willingness, aptitude and ability to cultivate the land and
make it productive. The heir who succeeds on the land shall pay the
other heirs their corresponding legal shares. In the absence of such
children, e.g., if all the children are less than 15 years old, the land shall
be transferred to the DAR which shall look for a new beneficiary on the
land.
Aside from those already mentioned, what are the grounds for the
cancellation of Emancipation Patents (EPs) or Certificates of Land
Ownership Award (CLOA)?
Violations of agrarian laws, rules and regulations are grounds for
the cancellation of registered EPs or CLOAs. These include but are not
limited to the following:
1. Misuse or diversion of financial and support services
extended to the ARB; (Section 37 of RA 6657).
2. Misuse of the land; (Section 22, RA 6657) This refers
to any act causing substantial and unreasonable damage on
the land, and causing the deterioration and depletion of the
soil fertility and improvements thereon. It also includes the
act of knowingly planting, growing, raising, or permitting the
planting, growing, raising of any plant which is the source of
a dangerous drug, as defined in PD No. 1683, as amended.
(AO No. 02-94).
3. Material misrepresentation of the ARB's basic
qualifications as provided under Sec. 22 of RA 6657, PD
27 and other agrarian laws;
4. Illegal conversion by the ARB's;
5. Sale, transfer, lease or other forms of conveyance by
a beneficiary of the right to use or any other usufructuary
right over the land acquired by virtue of being a beneficiary
in order to circumvent the provisions of the different agrarian
laws. (Lands awarded under PD 27/EO 228, however, may
be transferred after full payment of amortization).
6. Default in the obligation to pay an aggregate of three
(3) consecutive amortizations in case of VLT/DPS, except in
cases of fortuitous events and force majeure;
7. Failure of the ARBs to pay for at least three (3)
annual amortizations to the LBP, except in cases of
fortuitous events and force majeure;
8. Neglect or abandonment of the awarded land
continuously for a period of two (2) calendar years as
determined by the Secretary or his authorized representative
(Section 22, RA 6657);
9. The land is found to be exempted/excluded from PD
27/EO 228 or CARP coverage or to be part of the
landowner's retained area as determined by the Secretary or
his authorized representative;
10. Other grounds that will circumvent laws related to the
implementation of the agrarian reform program (seeAO No.
02, Series of 1994).
Who can order the cancellation of a registered EP/CLOA?
The Provincial or Regional Adjudicator which has jurisdiction over
the property may order the cancellation of a registered EP/CLOA in
accordance with the DARAB Rules and Regulations.
Aside from cancellation, the PARAD/RARAD may decide to
include other sanctions for violations of agrarian laws such as forfeiture
of amortization, ejectment of ARB, reallocation of the land to qualified
beneficiary, perpetual disqualification to become an ARB.
What will happen to a tenant who became a beneficiary under PD
27 but whose EP is now being cancelled on the ground that the area
awarded is part of the landowner's retained area?
The farmer will revert to being an agricultural lessee. He/she,
however, will have security of tenure and cannot be ejected from the
land. Amortization payments will be credited as lease rentals and
excess payments shall be reimbursed.
Who has the authority to correct an error in the CLOA such as the
omission of the name of the spouse, typing error in the name of the
beneficiary or in the technical description of the property?
It is still the PARAD or the RARAD having jurisdiction over the
property who can order the correction of the title.
CHAPTER 11
PAYMENT BY BENEFICIARIES
11.1 PAYMENT UNDER RA 6657
Must the landowner first agree to the land valuation before the
beneficiaries can receive the land?
No. Learning from the lessons in the previous agrarian reform
programs the CARP now separates acquisition from distribution. These
are now two separate transactions. The former is a transaction between
the government and the landowner, while the latter is a transaction
between the government and the agrarian reform beneficiaries. The
landowner may still be contesting the land valuation but title to the land
may already be transferred first to the Republic of the Philippines then to
the beneficiaries.
Will the beneficiaries have to pay the government the same
amount that government paid to the landowner?
No. DAR Administrative Order No. 6, Series of 1993 entitled,
"Revised Implementing Guidelines and Procedures Governing Payment
of Land Amortization by Agrarian Reform Beneficiaries" provides the
operating guidelines for Section 12 of EO 229 and Section 26 of RA
6657. This AO revised DAR Administrative Order No. 3, Series of
1992 entitled, "Implementing Guidelines and Procedures Governing
Payment of Land Amortization by Farmer-Beneficiaries Pursuant to
Section 26 of RA 6657".

Under AO No. 06-93, lands awarded pursuant to EO 229, RA
6657 and lands acquired under EO 407 shall be repaid by the ARBs to
Land Bank in 30 annual amortizations at six percent (6%) interest per
annum based on the cost of the land and permanent improvements.
These are the regular annual amortizations.
However, to make payments affordable, amortization shall be
reduced to:
* 2.5% of AGP for the first three years;
* 5.0% of AGP on the fourth and fifth year; and to
* 10.0% of AGP from the sixth to the thirtieth year if this
amortization ceiling is lower than the regular amortization.
Simulation:
Annual Gross Production (AGP) established
during land valuation (AO-06-
92): P15,000.00
Cost of Awarded land covered by
VOS/CA: P22,706.38
Capital Recovery Factor of 6% for 30
years: 0.07265
Annual Regular Amortization: P 22,706.38 x 0.07265
= P1,849.57
Annual Amortization Ceiling:
1st - 3rd Year : P15,000 x
.025 = P375.00
4th - 5th Year : P15,000 x
.050 = P750.00
6th - 30th Year : P15,000 x
.100 = P1,500.00
Compare annual regular amortization (P1,849) with the schedule
of amortization ceiling shown earlier. Since the ceiling is lower than the
annual regular amortization, the ARB will pay based only on the ceiling.
The difference represents the government's subsidy.
What is the "assistance" to farmers?
Assistance to farmers refers to:
a. the difference between the regular annual
amortization (based on the amount paid or approved for
payment to the landowner) and the affordable amount during
the first five years after the award of the land to the ARBs;
and
b. the difference between the regular amortization and
ten percent (10%) of the AGP during the 6th to the 30th year
whenever such 10% of AGP is lower than the regular
amortization.
After making payments for 30 years, the beneficiary stops paying.
The difference between what the Government paid to the landowner and
what it was able to collect from the ARB is the Government subsidy or
the assistance to farmers.
It may be noted that aside from the difference in the total amounts,
there is also a huge difference in the present value of the total amount
including market rate of interest that the Government will pay the
landowner and what it will receive from the ARB annually for 30 years.
Will the average gross production have to be computed annually?
No. In the case of already productive lands, the AGP shall be
computed once, during the valuation process, based on the peso value
of the annual yield/produce per hectare of the land awarded to farmer-
beneficiaries as established jointly by the DAR and the LBP which is
reflected in the valuation portion of the Claims Valuation and Processing
Form.
If only for this reason, it is imperative to involve the BARC and the
beneficiaries as early as possible to inform them about the data
gathered on the AGP of the land and get their comments and reactions.
How about in newly cultivated lands?
In the case of newly cultivated lands without established AGP, the
terms of repayment shall be as follows:
1. For lands planted to either perennial or short term
(seasonal) crops, the initial annual repayments by the ARBs
shall be equivalent to 2.5% based on the cost of the land or
2.5% of the imputed AGP, whichever is lower, until such time
that the AGP has been established or determined.
Imputed AGP shall be determined using industry
data obtained from government/private entities in the
barangay. In the absence thereof, AGP for the municipality,
province or region in that order, shall be considered.
2. For idle and abandoned lands, initial annual
repayments shall be equivalent to 2.5% based on the cost of
the land until such time that the AGP has been
established/determined.
In both cases, the average of the first three (3) years production
shall be the basis in establishing the permanent AGP. The first three (3)
years amortization and all subsequent amortizations shall be adjusted
and based on the permanent AGP established.
What if the ARB later on increases his or her production?
The computed annual payments will not change. The benefits of
increased production should all go to the beneficiary's pocket as his or
her incentive.

What if a typhoon or other natural calamity reduces the
beneficiary's production?
The LBP shall formulate guidelines to assist ARBs affected by
natural calamity or force majeure which may include, among others,
suspension of payment, deferment of payment or restructuring of
account.
What if the courts grant the landowner a higher valuation?
Under AO No. 06-92, this will hardly have an effect on the amount
to be paid by the beneficiaries in view of the assistance to farmers. The
government's subsidy will increase but the ARBs' amortization will not
change.
When will the ARB start paying the amortization?
The ARB shall start paying one year after the land has been
awarded to him/her, i.e., the date of registration of the CLOA.
What happens if the ARB defaults in his or her payments?
Although the land has been titled in the name of the beneficiary,
the Land Bank has a lien by way of mortgage on the land. This
mortgage may be foreclosed by the LBP if the ARB does not pay a total
of three annual amortizations, except where the cause of such failure to
pay is brought about by natural calamity or force majeure.
Should LBP foreclose on any awarded land, it shall advise DAR of
such proceedings and the DAR shall subsequently award the land to
other qualified beneficiaries. A beneficiary whose land has been
foreclosed shall thereafter be permanently disqualified from being a
recipient of land under CARP.
11.2 PAYMENT IN OLT LANDS
Will beneficiaries of OLT lands pay under the same amortization
scheme?
No. Payment by OLT beneficiaries is governed by Section 6 of EO
228. This section provides that the beneficiaries shall pay for the total
cost of the land including six percent (6%) interest per annum with a two
percent (2%) interest rebate for prompt payments. Payment shall be
made by the farmer-beneficiary or his heirs to the Land Bank over a
period of 20 years in 20 equal annual amortizations, where:
Annual Amortization = Land Value x 0.087185 *
* Capital Recovery Factor at 6% per annum for 20
years
How about in lands already valued and financed by LBP for which
beneficiaries have started amortizing? Under PD 27, the period of
repayment is 15 years.
LBP shall extend the period of payment to twenty years.
How will the grant of increment of six percent (6%) yearly interest
compounded annually on OLT lands affect the amortization payment by
OLT beneficiaries?
Although this grant effectively raises compensation to owners of
OLT lands, agrarian reform beneficiaries will not be affected. They shall
continue to amortize the land on the basis of the original land value.
PD 27 provides that lease rental payments made by the farmer-
beneficiary to the landowner after 21 October 1972 shall be considered
as advance payment for the land. What documents are required to serve
as evidence of payment?
Allegations of lease rental payment on the sole basis of affidavits
("pagpapatotoo") executed by the farmer-beneficiaries concerned shall
not be sufficient. DAR Memorandum Circular No. 11, Series of
1994 provides that such affidavits must be supported by additional
evidence. The Memo Circular states that the FB's affidavit must be
confirmed by the landowner and that there should be other corroborative
evidence to substantiate the allegation that payment of lease rental had
been paid to the landowner (e.g., affidavit of BARC members/farmers).
What are the procedures for determining sufficiency of lease rental
payments as advance amortization and consequently, the issuance of
certificate of full payment to the farmer-beneficiary?
1. MARO shall serve a copy of the FB's affidavit to the
landowner through either:
* personal delivery
* registered mail with return card
In either case, there should be proof of service.
2. Simultaneous to the delivery of the affidavit to the
landowner, the MARO shall also post the affidavit for fifteen
(15) days in the barangay hall, and other conspicuous
places where the property is situated.
3. MARO shall verify from the records whether or not
lease rentals paid by the FB are sufficient to cover the land
value. The MARO shall likewise validate the veracity of the
landowner's objection if any and submit a report and
recommendation to the PARO within ten-days from the date
service is completed.
4. PARO issues Certificate of Full Payment if it is found
that rentals paid sufficiently cover the cost of the land and
furnishes photocopies to landowner and FB not later than
ten (10) days from receipt of the MARO's report.
5. Landowner may file an appeal to the Regional
Director within ten (10) days from receipt of the photocopy.
In turn, the RD decides within ten (10) days from receipt of
the appeal. The RD's decision is final in so far as the DAR is
concerned.
6. The ROD registers the Emancipation Patent (EP) on
the basis of the PARO's Certificates of Full Payment and the
RD's Order (in case of appeal).
11.3 PAYMENT UNDER VLT/DPS
Is there also a ceiling on payments under VLT/DPS?
Yes, in effect there is a ceiling since the law provides that although
the terms and conditions of the VLT/DPS shall be mutually agreed upon
by the landowner and the ARB, these should not be less favorable to the
ARB than those that would prevail if it were the government acquiring
the land from the landowner and selling it to the beneficiary.
Can lands transferred under VLT/DPS be repossessed if the
agrarian reform beneficiary defaults in his/her payment?
Yes. The VLT/DPS agreement shall contain sanctions for non-
compliance by either party and such shall be duly recorded and its
implementation monitored by the DAR.
Should the beneficiary, for reason other than those brought about
by force majeure or fortuitous events default in his/her obligations for
three (3) consecutive installments to pay the land amortization, he/she
shall be replaced as beneficiary and be permanently disqualified from
being a beneficiary under CARP. DAR shall cancel the CLOA which had
been issued and transfer the land to either:
a. Qualified heir of the beneficiary who shall assume
the balance of the value of the land; or
b. In the absence of a qualified heir, a new qualified
beneficiary who, as a condition for such transfer, is willing to
abide by the terms of the existing VLT/DPS agreement and
who will pay for the entire value of the land.
What will happen to the payments made by the previous
beneficiary who has defaulted?
In case of (b) above, the landowner shall refund the previous
beneficiary in one lump sum or on installment basis for the amounts
already paid and for the improvements made by the latter, less the
computed lease rental for the duration of the previous beneficiary's use
of the land and other charges provided by law.
11.4 PAYMENT IN LAHAR AFFECTED AREAS
Are the farmer-beneficiaries in lands affected by the Mt. Pinatubo
eruptions required to continue paying their amortization?
The Joint DAR-LBP Administrative Order No. 03, Series of
1994 provides the policy guidelines and procedures to be followed under
this situation.
Payment of amortization shall be deferred if subject landholding
falls under Category I actually affected areas (see Page 78 ) until
such time that the land becomes productive again, without prejudice to
the farmer's voluntary payment of amortization. The farmer, however,
should first notify the Land Bank in writing of his/her intention of
deferring payment and this must be approved by Land Bank.
If the landholding falls either under Category II not yet affected
or Category III lands covered by ashfall, the farmer shall continue to
pay the amortization.
Will payment also be deferred if the land is under Category I but
acquisition was through voluntary land transfer or direct payment
scheme?
Yes, but instead of notifying the Land Bank, the farmer-beneficiary
concerned shall notify the landowner in writing with the assistance of
DAR of his/her intention to defer payment.
CHAPTER 12
SUPPORT SERVICES
12.1 SUPPORT SERVICES TO LANDOWNERS
What support services shall be provided to the affected
landowners?
The support services provided to landowners are:
a. investment information, financial and counseling
assistance;
b. facilities, programs and arrangements for exchange
and marketing of LBP bonds; and
c. other services intended to assist landowners in
productively utilizing the proceeds of the sales of the land for
rural industrialization.
What specific investment incentives are offered to landowners?
If they invest in rural industries, they will be entitled to incentives
granted to a registered enterprise engaged in a pioneer or preferred
area of investment as provided for in the Omnibus Investment Code of
1987, or to other incentives which may be provided by PARC, LBP, or
other government financial institution.
If the landowners invest the proceeds in a Board of Investment
(BOI) registered company or in any agri-business or agri-industrial
enterprise in the region, the LBP shall redeem the LBP bonds up to
thirty percent (30%) of their face value. (Section 38, RA 6657)

What specific action has been done by DAR to facilitate
assistance to landowners?
Special Order No. 172, Series of 1993 mandated the creation of a
Landowner's Desk in every DAR provincial office. This desk will be
handled by one full-time staff with the position of at least a Supervising
Agrarian Reform Program (SUARPO). This LO's Desk shall handle
exclusively and specifically landowners' problems, issues and concerns.
The LO's Desk Officer shall have the following responsibilities:
1. Answer landowners' queries and receive complaints
and other concerns brought by the landowners to the
attention of DAR;
2. Refer these concerns to appropriate DAR units or to
the LBP-Land Valuation Office, or other government
agencies for resolution;
3. Monitor the action taken on the referrals; and
4. Assist landowners in close coordination with LBP,
with investment requirements, especially in recycling land
transfer payments back to the countryside.
12.2 SUPPORT SERVICES TO AGRARIAN REFORM
BENEFICIARIES
What are the support services provided to the agrarian reform
beneficiaries?
Appropriate support services should be provided to the ARBs.
These services include:

a. land surveys and titling;
b. liberalized terms on credit facilities and production
loans;
c. education and extension services,
d. institutional development;
e. marketing and management assistance and support
to cooperatives and farmers organizations; and
f. infrastructures
CHAPTER 13
AGRICULTURAL LEASEHOLD
13.1 LAWS AND ISSUANCES ON LEASEHOLD
What are the laws governing leasehold relationship between
landowners and lessees?
Various laws have been passed governing leasehold tenancy. A
review of such laws would reveal a progression from one of election and
limited operation to one of compulsion and comprehensive application.

a. RA 1199 (An Act to Govern the Relations
Between Landholders and Tenants of Agricultural lands.)
(Leasehold and Share Tenancy) 30 August 1954. Under this
law, the tenant was given the right to choose a leasehold
tenancy arrangement.
b. RA 3844 An Act known as Agricultural Land
Reform Code Instituting Land Reform in the Philippines,
including the Abolition of Tenancy and the Channeling of
Capital Into Industry, 08 August 1963. This law declared
agricultural share tenancy to be contrary to public policy and
was, thereby, abolished.
c. RA 6389 An Act Amending RA 3844, otherwise
Known as the Agricultural Land Reform Code, and for Other
Purposes, 10 September 1971. This provided for the
automatic conversion of agricultural share tenancy to
agricultural leasehold but with Section 35 of RA
3844 retained. This section allowed the exemption of certain
landholdings from leasehold fishponds, salt beds and
lands principally planted to citrus, coconut, cacao, coffee
and other similar permanent trees.
d. RA 6657 (Section 12) mandated the DAR to
determine and fix immediately the lease rentals in
accordance with Section 34 of RA 3844, but expressly
repealed Section 35 of RA 3844. This, therefore, abolished
the exemptions and made all tenanted agricultural lands
subject to leasehold.
What are the significant implications of these changes in the laws?
The significant implications are as follows:
a. abolition of share tenancy and conversion to
agricultural leasehold now covers all agricultural lands
without exception;
b. leasehold is no longer just an option, it exists by
operation of the law; and
c. leasehold can be a preliminary step to land
ownership.
All share crop tenants were therefore, automatically converted into
agricultural lessees as of 15 June 1988 whether or not a leasehold
agreement has been executed.
WHAT ADMINISTRATIVE ORDER COVERS LEASEHOLD
IMPLEMENTATION?
DAR Administrative Order No. 05, Series of 1993, "Rules and
Procedures Governing Agricultural Leasehold and the Determination of
Lease Rental for Tenanted Lands".
This AO supersedes the following AOs:
AO No. 04, Series of 1989, "Rules and Procedures
Governing Agricultural Leasehold and the Determination of
Lease Rental for Tenanted Lands";
AO No. 09, Series of 1991, "Rules and Procedures on
Leasehold Operations in Tenanted Coconut Lands; and
AO No. 04, Series of 1992, "Rules and Procedures on
Leasehold Operations on Tenanted Sugarcane Lands"
Why is there a need to institute leasehold in the retained areas of
landowners?
The DAR should institute leasehold to protect and improve the
tenurial and economic status of tenant-tillers in agricultural lands within
the retained areas and in areas not yet covered.
Leasehold would improve the hold of the tenant on the land
because the lessee shall have physical possession and enjoyment, as
well as management of the land. Furthermore, with the fixing of the
lease rental, the lessee would get more for his or her labor and other
inputs.
13.2 TENANCY RELATIONSHIP
What are the conditions set for a tenancy relationship to exist?
All the following conditions must be present for tenancy
relationship to exist:
a. That the parties are the landholder and the tenant;
b. That the subject is agricultural land;
c. That there is consent by the landowner for tenant to
work on the land, given either orally or in writing, expressly
or impliedly;
d. That the purpose is agricultural production;
e. That there is personal cultivation or with the help of
the immediate farm household; and
f. That there is compensation in terms of payment of a
fixed amount in money and/or produce
What is meant by personal cultivation?
There is personal cultivation if the tenant cultivates the land
himself/herself or with the aid of the immediate farm household.
Immediate farm household refers to the members of the family of the
lessee and other persons who are dependent upon him/her for support
and who usually help him/her in the activities.
Why should there be leasehold even in coconut lands or other
permanent crops when there is practically no "cultivation" involved?
Cultivation has been defined in separate court rulings as:
"not limited to the plowing and harrowing of the land,
but also husbanding of the ground to forward the products of
the earth by general industry, the taking care of the land and
fruits growing thereon, fencing of certain areas, and the
clearing thereof by gathering dried leaves and cuffing of
grasses. In coconut lands, cultivation includes the clearing of
the landholding, the gather of coconuts, their piling, husking
and handling, as well as the processing thereof into copra,
although at times with the aid of hired laborers" (Coconut
Cooperative Marketing Association, Inc. vs. Court of
Appeals, Nos. L-4681-83, August 19, 1988, 164 SCRA 568;
Wenceslao Hernandez vs. Hon. Intermediate Appellate
Court et al, G.R. No. 74323, September 21, 1990, 189
SCRA 758).
Clearly, there is cultivation involved in coconut lands.
Does a tenancy relationship exist in cases where squatters are
allowed by the landowner to cultivate the land for free?
No, agricultural tenancy does not exist in this case since there is
no expressed or implied agreement to undertake the cultivation of the
land belonging to the landholder. No agreement exists in terms of share
in harvest or payment in a fixed amount. It is, however possible for the
parties to subsequently enter into a leasehold relationship.
When shall a tenancy relationship cease to exist?
The agricultural leasehold relation is extinguished by any of the
following:
a. abandonment of the landholding without the
knowledge of the agricultural lessor;
b. voluntary surrender of the landholding by the tenant-
lessee after giving notice to the lessor three months in
advance (Sec. 8, RA 3844); or
c. absence of an heir to succeed the lessee in the event
of his/her death or permanent incapacity. (RA 3844, as
amended, Sec. 7 and 8)
The leasehold relation is likewise extinguished when the lessee's
dispossession of the land is authorized by the DAR Adjudication Board
or by the proper court in a judgment that is final and executory, for
violations of the leasehold agreement or pertinent provisions of agrarian
laws on leasehold.
On what grounds may a tenant-lessee be dispossessed of his/her
tillage?
An agricultural lessee may be dispossessed of his/her tillage on
the following grounds:
a. He/she failed to substantially comply with the terms
and conditions of the leasehold contract or with laws
governing leasehold relations, unless the failure is caused
by a fortuitous event or force majeure;
b. He/she planted crops or used the land for a purpose
other than what had been previously agreed upon.AO No.
05-93, however, now allows the lessee to intercrop or plant
secondary crops after the rental has been fixed, provided
he/she shoulders the expenses;
c. He/she failed to adopt proven farm practices
necessary to conserve the land, improve its fertility, and
increase its productivity (with due consideration of his/her
financial capacity and the credit facilities available to
him/her);
d. His/her fault or negligence resulted in the substantial
damage, destruction, or unreasonable deterioration of the
land or any permanent improvement thereon;
e. He/she does not pay the lease rental when it falls
due except when such non-payment is due to crop failure to
the extent of 75 percent as a result of a fortuitous event; or
f. He/she employed a sublessee. (Section 36, RA
3844, as amended)
The dispossession shall be by a final and executory judgment.
What if a lessee employed hired labor but religiously pays the
lease rental to the landowner?
The lessee can only employ hired labor if he/she is temporarily
incapacitated and has no immediate family household who will do the
cultivation.
Is the agricultural leasehold relation extinguished by the death or
permanent incapacity of any of the parties?
No. In case the tenant-lessee dies or is permanently incapacitated,
the leasehold relation shall continue between the agricultural lessor and
the member of the lessee's immediate farm household who can
personally cultivate the land. Such person shall be chosen by the lessor
within one month from such death or permanent incapacity from among
the following:
a. the surviving spouse;
b. the eldest direct descendant by consanguinity; or
c. the next eldest descendent or descendants in the
order of their age.
If the death or personal incapacity of the lessee occurs during the
agricultural year, the choice by the lessor shall be done at the end of
that agricultural year. If the lessor fails to exercise his choice within the
prescribed period, the above mentioned order of priority shall be
followed. In case of death or permanent incapacity of the lessor, the
leasehold relation shall bind his/her legal heirs.
What is the effect of transfer of legal ownership of the land?
Leasehold is not extinguished with the transfer of legal ownership
of the land from one landowner to another. Section 10 of RA 3844, as
amended, provides that the purchaser or transferee shall be subrogated
to the rights and substituted to the obligations of the agricultural lessor.
13.3 RIGHTS AND RESPONSIBILITIES OF LESSEE
What are the rights of the lessee?
a. To have possession and peaceful enjoyment of the
land;
b. To manage and work on the land in a manner and
method of cultivation and harvest which conform to proven
farm practices;
c. To mechanize all or any phase of his farm work;
d. To deal with millers and processors and attend to the
issuance of quedans and warehouse receipts of the produce
due him/her;
e. To continue in the exclusive possession and
enjoyment of any homelot the lessee may have occupied
upon the effectivity of RA 3844;
f. To be indemnified for the costs and expenses
incurred in the cultivation and for other expenses incidental
to the improvement of the crop in case the lessee
surrenders, abandons or is ejected from the landholding;
g. To have the right of pre-emption and redemption;
and
h. To be paid disturbance compensation in case the
conversion of the farmholding has been approved.
What are the duties and responsibilities of the lessee?
The lessee shall at all times perform the following pursuant to
Section 26 of RA 3844, as amended:

a. Cultivate and take care of the farm, growing crops,
and other improvements on the land and perform all the
work therein in accordance with proven farm practices;
b. Inform the lessor within a reasonable time of any
trespass committed by third persons on the farm, without
prejudice to his/her direct action against the trespasser;
c. Take reasonable care of the work animals and farm
implements delivered to him/her by the lessor and see to it
that they are not used for purposes other than those
intended, or used by another without the knowledge and
consent of the lessor;
If any of such work animals or farm implements get
lost or damaged due to the lessee's negligence, he/she shall
pay the lessor the equivalent value of the work animals or
farm implements at the time of the loss or damage;
d. Keep the farm and growing crops attended to during
the work season. In case of unjustified abandonment or
neglect of his/her farm, any or all of the expected produce
may, upon order of the appropriate body or court, be
forfeited in favor of the lessor to the extent of the damage
caused thereby; and
e. To pay the lease rental to the lessor when it falls
due.
Under RA 3844, as amended, the lessee has also the
responsibility to notify the lessor at least three days before the date of
harvesting, or whenever applicable, the date of threshing. As decided in
a Supreme Court ruling, however, this is no longer required from the
lessee.
Is there a limit in the area a lessee under CARP may cultivate?
No. Since RA 6657 only speaks of the three (3) hectare limit with
respect to the award that may be given to the ARB, this ceiling does not
apply under the leasehold system. The tenant, however, must render
personal cultivation on the entire area leased.
Can a lessee be a tenant in a separate landholding?
Section 27 of RA 3844 includes as one of the prohibited acts of an
agricultural lessee, entering into a contract to work additional
landholdings belonging to a different agricultural lessor to acquire and
personally cultivate an economic family size farm without the knowledge
and consent of the lessor with whom he/she had first entered into
leasehold, if the first landholding is of sufficient size to make him/her and
the members of the immediate farm household fully occupied in its
cultivation.
Based on this provision, it is still possible for a lessee to be a
tenant in another landholding. The prohibition applies if the land
presently cultivated is already of sufficient size to fully occupy the lessee
or his/her immediate household in the cultivation. Even if the size is
already sufficient, cultivation of other landholdings is still possible if there
is consent of the original lessor.
What is meant by "economic family size" farm?

RA 3844 has defined economic family size farm as an area of farm
land that permits efficient use of labor and capital resources of the farm
family and will produce an income sufficient to provide a modest
standard of living to meet a farm family's need for food, clothing, shelter
and education with possible allowance for payment of yearly
installments on the land, and reasonable reserves to absorb yearly
fluctuations in income.
Is the lessee compelled to pay additional rent for the secondary
crops raised by his/her after the execution of the contract?
No, after the rental has been fixed, such rental shall serve as
payment for the use of the land. The lessee may diversify and/or plant
secondary crops without paying additional rent, provided that all
expenses are shouldered by him/her.
What are the specific rights of the lessees in sugarcane lands
which should be part of the leasehold agreement?
The lessees in sugar cane lands shall have rights which can be
exercised by them personally or through a duly registered cooperative or
farmers' association of which they are members. These are to:
1. enter into a contract with the sugar central or millers
for the milling of sugar cane grown on the leased property;
2. be issued a warehouse receipt (quedan) or molasses
storage certificate by the sugar central for the manufactured
sugar, molasses and other by-products.
3. have free access to the sugar central's factory,
facilities and laboratory for purposes of checking and/or
verifying records and procedures;
4. be furnished a weekly statement of cane and sugar
account showing, among other things, the tonnage of the
delivered cane and analysis of the crusher juice;
5. be given thirty (30) days notice in writing before the
sugar and other by products are sold through public auction;
and
6. be provided with the standard tonnage allocation by
the miller/sugar central.
What if the sugar central/miller refuses to recognize the rights of
the lessee?
In cases of such refusal by the sugar/miller, then the lessee with
the assistance of DAR and/or the cooperative of which he/she is a
member of, should file a petition with the DARAB.
What if the land under lease is subject of an approved land use
conversion applications?
The lessee may be dispossessed of his/her tillage if such land is
subject of an approved land use conversion application, provided the
lessee is given a disturbance compensation equivalent to five (5) times
the average of the gross harvests on his/her land during the last five (5)
preceding calendar years, and such other benefits he/she is entitled to
as provided for by law.
13.4 RIGHTS AND RESPONSIBILITIES OF LESSOR
What are the rights of the lessor?
Section 29 of RA 3844 provides that it shall be the right of the
lessor to:
a. Inspect and observe the extent of compliance with
the terms and conditions of the leasehold contract;
b. Propose a change in the use of the landholding to
other agricultural purposes, or in the kind of crops planted;
c. Require the lessee, taking into consideration his/her
financial capacity and the credit facilities available to
him/her, to adopt proven farm practices necessary to the
conservation of the land, improvement of the fertility and
increase in productivity; and
d. Mortgage expected rentals.
What are the duties and responsibilities of a lessor?
The lessor shall, at all times, keep the agricultural lessee in
peaceful possession and cultivation of his/her landholding. In addition,
he/she shall keep intact useful improvements existing on the landholding
at the start of the leasehold relationship such as irrigation and drainage
systems and marketing allotments, which in the case of sugar quotas
shall refer both to domestic and export quotas, provisions of existing
laws to the contrary notwithstanding.
What are the prohibition on the lessor?

a. To dispossess the lessee of his/her landholding
except upon authorization by the Court under Section 36,RA
3844;
b. To require the lessee to assume, directly or
indirectly, the payment of the taxes or part thereof levied by
the government on the landholding;
c. To require the lessee to assume, directly or indirectly
any rent or obligation of the lessor to a third party;
d. To deal with millers or processors without written
authorization of the lessee in cases where the crop has to be
sold in processed form before payment of the lease rental;
e. To discourage, directly or indirectly, the formation,
maintenance or growth of unions or organizations of lessees
in his/her landholding;
f. For coconut lands, indiscriminate cutting of coconut
trees will be deemed a prima facie evidence to dispossess
the tenant of his/her landholding unless there is written
consent of the lessee and there is certification by the
Philippine Coconut Authority (PCA), copy of the findings and
recommendations of which shall be furnished to affected
tenants or lessees, or a resolution from the Municipal Board
allowing the cutting for valid reasons. (AO-05, Series of
1993 and AO 16, Series of 1989)
Is indiscriminate cutting of coconut trees prohibited only in
tenanted coconut lands?
No, even in lands cultivated by farmworkers.
Should the landowner execute two (2) separate leasehold
contracts with the same lessee, one for the principal crop and the other
for the secondary crop?
No. As a general rule, the landowner and lessee shall only
execute one contract for their leasehold relation. The execution of two
contracts is no longer necessary since the lease rental shall cover the
whole farmholding cultivated by the lessee. Hence, secondary crops
shall form part of the leasehold contract.
There are, however, certain qualifications: the secondary crop
must have already been planted as of 15 June 1988 and the area
covered is more than half a hectare.
What if there are two or more tenants?
If there are two or more tenants on the same lot, each producing a
different crop, they may decide to have a joint leasehold agreements,
whichever is feasible.
What are the liabilities of a lessor if he/she ejects his/her tenant-
lessee without the court's authorization?
A lessor shall be liable for:
a. fine or imprisonment;
b. damages suffered by the agricultural lessee in
addition to the fine or imprisonment for unauthorized
dispossession;
c. payment of attorney's fees incurred by the lessee;
and
d. the reinstatement of the lessee.
Can the lessor order the lessee to change crops?
No. Section 29 of RA 3844 provides that the lessor may propose a
change in the use of the landholding to other agricultural purposes, or in
the kind of crops to be planted. The change, however, shall be agreed
upon by both the landowner and the lessee. In case of disagreement,
the matter shall be settled by the Provincial Agrarian Reform Adjudicator
(PARAD) or in his/her absence, the Regional Agrarian Reform
Adjudicator (RARAD) according to the best interest of the parties
concerned.
13.5 LEASE RENTAL
How much lease rental should the lessees pay?
The lease rental to be paid by all agricultural lessees shall not be
more than the equivalent of twenty-five percent (25%) of the average
normal harvest during the three (3) agricultural years immediately
preceding the following dates:
* 10 September 1971 the date of effectivity of RA
6389 for tenanted rice and corn lands;
* date the tenant opted to enter into leasehold
agreement or as of 15 June 1988, whichever is sooner, for
tenanted sugar lands; or
* date of leasehold agreement by the parties
concerned or 15 June 1988, whichever is sooner, for all
other agricultural lands after deducting the amount used for
seeds and the cost of harvesting, threshing, loading, hauling
and processing whichever is applicable.
For example, in coconut, the deductible items would depend on
the final product. If the final product is green nuts, then there is no cost
of processing included. If the final product is copra, then the deductible
items would include cost of harvesting, loading and hauling, and the cost
of husking, splitting, scooping and drying.
Can fertilizer be included in the list of allowable deductions for any
particular crop?
No, only those enumerated under Section 34 of RA 3844 as cited
above can be included as a deductible item. However, DAR shall study
the effect of the use of fertilizer and other related expenses as a cost of
production and its impact on the rental structure. This shall be taken into
account in the periodic review and adjustment of the rental structure.
How do you compute for the lease rental of newly cultivated land?
In the case of newly cultivated land or land cultivated for a period
less than three years the initial rental shall be based on the harvest of
the first agricultural year, if such harvest is normal, or on the average
harvest during the preceding agricultural years. If there had been no
normal harvest, then the estimated normal harvest when the land was
actually cultivated shall be used. cCAaHD
Once the three normal harvest have been established, the final
rental shall be based on the average normal harvest of these three
preceding agricultural years.
Why is the lessor given only 25% while the lessee retains 75% of
the net produce from the land?
These percentages were provided for under RA 3844 on the
premise that the lessee largely contributes to the production of crops or
fruits; while the lessor's only contribution is the land.

What is the normal harvest?
The normal harvest is the usual or regular produce obtained from
the land when it is not affected by any fortuitous event or force majeure
such as typhoon, flood, drought, earthquake, volcanic eruption, and the
like.
What is an agricultural year?
This is the period of time required for raising a particular
agricultural product, including land preparation, sowing, planting and
harvest of crops, and whenever applicable, threshing of said crops.
In case of crops yielding more than one harvest from one planting
(e.g., sugar cane), the agricultural year shall be the period from the
preparation of the land to the first harvest and thereafter from harvest to
harvest. For sugar cane, ratooning (from thrash burning to harvesting)
shall likewise be considered as one agricultural year. An agricultural
year, therefore, may be shorter or longer than a calendar year. (AO 05-
93).
If there is already an existing leasehold agreement, is there a need
to negotiate another one?
No, the existing leasehold agreement will be respected provided
that the agreed lease rental does not exceed the maximum rental
allowed by law. Furthermore, this agreement shall be subject to the
periodic review of the MARO for purposes of determining compliance.
Can the landowner demand for an increase in the agreed or fixed
rental on the ground that there is an increase in yield or production?
The landowner can only demand for an increase in the fixed or
agreed lease rental if he/she introduced capital improvements on the
farm. In such a case, the rental shall be increased proportionately to the
resulting increase in production due to said improvements. The cost of
capital improvement, including the interest thereon, will be determined,
and the number of years shall be fixed within which the increase in
rental shall be paid.
What is capital improvement?
Capital improvement refers to any permanent and tangible
improvement on the land that will result to increased productivity. If done
with the consent of the lessee, then the lease rental shall be increased
proportionately.
What will happen if there is a decrease in production as a result of
large scale replanting in coconut lands? Can the lease rental be
reduced?
Yes, if the lessor initiates large scale replanting and the normal
coconut production is affected, a new lease rental may be computed
proportionate to the decrease in production.
What happens to the lease rental should the tenant-lessee suffer
crop failure due to a fortuitous event or force majeure?
The lessee may defer payment of the lease rental due for the
agricultural year affected by a fortuitous event or force majeure causing
crop failure to the extent of 75 percent. The lease rental shall be paid on
a staggered basis subject to the agreement of both parties.
Normally, such rental is paid in installments every harvest time
beginning the next agricultural year and to continue until the lessee is
fully paid.
13.6 FIXING THE LEASE RENTAL
What is the role of the MARO in the implementation of agricultural
leasehold?
With the assistance of the Barangay Agrarian Reform Committee
(BARC) and the POs/NGOs present in the area, the MARO shall:
1. Identify all landholdings still under share tenancy and
list the landowner and share-tenants thereon;
2. Together with the PARO, undertake massive
information dissemination on leasehold;
3. Prioritize areas for leasehold implementation taking
into account presence of strong people's organizations
and/or voluntary application by any lessor or lessee;
4. Require submission by parties concerned of
documents on production data, normal harvest, and cost of
deductible items during the three immediately preceding
agricultural years. If these are not available, gather
production data released by the proper government agency;
5. Conduct mediation conference (with the assistance
of the Barangay Council, if there is no BARC) between the
landowner and the lessee for the purpose of fixing the lease
rental.
If any party fails to attend the conference despite
notice, mail notice at the last known address of the parties
and post two successive notices at seven days apart at the
municipal, barangay halls and the place where the land is
located. The MARO shall proceed with the computation of
the lease rental. The second notice should be posted at
least ten days prior to the scheduled conference;
6. In case of disagreement, accomplish the prescribed
leasehold form in five copies in the language or dialect
known to the lessees, explain the contents and have it
signed or thumb marked by the parties or duly authorized
representative before two witnesses;
7. Register the Leasehold Agreement with the
Municipal Treasurer and furnish each party a copy of the
registered agreement. The PARO, on the other hand, will
have the leasehold agreement annotated at the back of the
Transfer Certificate of Title on file with the Register of
Deeds.
What if there is no agreement reached during the mediation
conference?
If no agreement is reached despite the mediation conferences, the
MARO shall fix the provisional lease rental and prepare the Leasehold
Documentation Folder. Copies of the Order for Provisional Lease Rental
shall be sent to the landowner, lessee and the PARO. The Leasehold
Documentation Folder shall then be transmitted to the PARAD.
The PARAD shall review the provisional lease rental within 30
days from the receipt of the documentation folder and issue the order of
lease rental.
Pending the review of the provisional lease rental, the PARAD
upon motion of the landowner shall order the lessee to deposit the
provisional lease rental with the nearest LBP Office in a trust account in
the name of the landowner, if the payment is in cash, or in a designated
bonded warehouse if the payment is in kind and give a written notice to
the MARO and the landowner.
What if either or both the parties concerned disagree with the
order of lease rental made by the PARAD?
Any party who disagrees with the Order of Lease Rental issued by
the PARAD may bring the matter to the DARAB within 15 days from
receipt thereof. Otherwise, the Order shall become final and executory.
3.7 OTHER RELATED LAWS AND ISSUANCES
1. Presidential Decree (PD) No. 152, promulgated on 31
March 1973, prohibited the employment or use of share-
tenants in complying with the requirements of the law
regarding entry, occupation, improvement and cultivation of
public lands.
2. PD No. 583, promulgated on 10 November 1974,
prescribed penalty for the unlawful ejectment, exclusion,
removal or ouster of tenant farmers from their landholdings.
3. PD No. 816 promulgated on 21 October 1975,
penalized any agricultural lessee of rice and corn lands
under PD 27 who deliberately refuses or continues to refuse
to pay rentals or amortization payments when they are due
and remain unpaid within a period of two years.
4. PD No. 1425, promulgated on 10 June 1978,
strengthened the prohibition against the practice of share
tenancy and provided penalties thereof. Under this Decree,
any tenant who refuses to enter into leasehold contract may
be prosecuted before the Court of Agrarian Relations.
5. PD No. 1040 promulgated on 21 October 1976,
prohibited and penalized the contracting of share-tenants in
all agricultural lands covered by PD 27.
CHAPTER 14
PRODUCTION AND PROFIT SHARING
14.1 COVERAGE
What is production and profit sharing?
This is a mandate under Section 16 of EO 229 and Sections 13
and 32 of RA 6657 which requires individuals or entities owning or
operating under lease or management contract, agricultural lands to
execute production and profit sharing plan with their farmworkers or
farmworkers' organization, pending final distribution of the land or
implementation of the stock distribution scheme.

What are the existing Administrative Orders governing production
and profit sharing?
a. Administrative Order No. 08, Series of 1988,
"Guidelines and Procedures Implementing Production and
Profit Sharing Under RA 6657"
b. Administrative Order No. 09, Series of 1988,
"Guidelines and Procedures Implementing Production
Sharing Under EO 229"
It will be observed that EO 229 mandated only production sharing
while RA 6657 included profit sharing on top of the production sharing.
Who are required to execute production and profit sharing plan?
The following employers are required to execute Production and
Profit Sharing Plan with their farmworkers if their annual gross sales
exceed Five Million Pesos (P5M):
a. Any enterprise owning or operating agricultural lands
under lease, management contract, production venture or
other similar arrangement;
b. Multinational Corporations engaged in agricultural
activities; and
c. Commercial farms devoted to aquaculture including
salt beds, fishponds and prawn ponds, fruit farms, orchards,
vegetable and cut flower farms, and cacao, coffee and
rubber plantation.
Why are these employers required to execute production and
profit sharing plan with their farmworkers?
Section 2 of RA 6657 declared that agrarian reform program is
founded on the right of the farmers and regular farmworkers, who are
landless, to own directly or collectively the lands they till, or in the case
of other farmworkers, to receive a just share of the fruits thereof.
This mandated production and profit sharing plan is in pursuit of
this avowed principle of agrarian reform. While awaiting for final land or
stock distribution until the end of the deferment period in the case of
commercial farms, or full control of the land in the case of lease back
arrangements, farmworkers can realize an improvement in their farm
income.
Who are the employees covered?
All farmworkers of covered employers, regardless of duration, who
are directly working on the land of the corporation or other entities,
whether classified as regular, seasonal, technical or other farmworkers
are covered in the mandated Production and Profit Sharing Plan. They
should not, however, own more than three (3) hectares of agricultural
land.
14.2 DAR's AUTHORITY
What is the power given to the DAR in the implementation of
production and profit sharing plan under the CARP?

The DAR through its Secretary or authorized representatives has
the following powers:
1. To order and administer compliance with the
Production Sharing provisions of EO 229 and
Production/Profit Sharing provisions of RA 6657;
2. To require covered employers to submit report on the
distributed production/profit shares;
3. To compel the production of books and documents of
covered employers;
4. To compel answers to questions needing
clarifications to shed light on problems encountered in the
implementation;
5. To issue subpoena; and
6. To enforce its writs through sheriffs or other duly
deputized officers.
14.3 MAIN FEATURES
What are the main features of the mandated plan?
EO 229
Under EO 229 and its implementing guideline, AO No. 09, Series
of 1988, covered employers who realize a gross sales in excess of five
million pesos per annum, shall prepare and execute a Production
Sharing Plan whereby at least 2.5 percent of the gross sales from the
production/cultivation of the agricultural lands are distributed as
compensation to their farmworkers over and above the compensation
they currently receive. The employers are not, however, compelled to
pay more than one hundred percent of the regular annual compensation
of the farmworkers.
Regular annual compensation includes all cash remunerations or
earnings regularly paid to an employee by an employer for services
rendered within a year, such as salaries, wages, 13th month pay, bonus,
allowances, commissions and paid leaves, and other income of similar
nature, whether mandated by law or provided by collective bargaining
agreement or established company practices, but excludes payment
arising from the Production and Profit Sharing provided under EO
229and RA 6657.
The Plan should cover the period from 29 August 1987 (date of
effectivity of EO 229) and 14 June 1988 (date prior to the effectivity
of RA 6657).
Fifty percent (50%) of the Production Share should have been
paid not later than 12 February 1989 and the balance on or before 2
April 1989.
RA 6657
They are required to pay the following Production and Profit
Shares to be given over and above the compensation currently received
by their farmworkers, which shall be distributed based on the following
schedules:
Amount of Production Share:
Three percent (3.0%) of Annual Gross Sales from 15 June 1988,
until final land or corporate stock transfer to the farmworker-beneficiaries
is effected, provided that the employer is not obligated to pay more than
one hundred percent (100%) of the regular annual compensation of the
farmworker-beneficiaries.
* Fifty percent (50%) of the estimated Production
Share (based on unaudited financial statements) shall be
distributed within sixty (60) days at the end of the accounting
year, with the balance (based on audited financial
statement) payable not more than sixty (60) days thereafter.
Amount of Profit Share:
Ten Percent (10%) of net profit after tax, provided that in cases
where the retention right is allowed, the amount to be distributed shall
be reduced by an amount equivalent to the proportion of the retained
area to the total land area.
* Fifty (50%) of estimated Profit Share (based on
unaudited financial statements) shall be distributed within 90
days at the end of the accounting year, with the balance
based on audited financial statements payable not more
than 60 days thereafter.
For lands to be turned over to the farmworker-beneficiaries, a
transitory period whose length shall be determined by DAR, shall be
established. During this period, farmworkers will be trained to manage
the enterprise. The managerial and supervisory group in place during
this transitory period shall receive at least one percent (1%) of the gross
sales of the entity based on the agreement concluded by the
farmworker-beneficiaries and this group, subject to the approval of DAR.
What is the effect on existing production/profit sharing granted by
employer prior to the promulgation of EO 229 andRA 6657?
It shall be credited as compliance with the mandated production
and profit sharing plan. Provided, however, that where the benefit under
the existing Production and Profit Sharing Plan is less than the
applicable amount required in Administrative Order Nos. 08 and 09,
Series of 1988, the employer shall pay the difference.
What is the DAR's policy on undistributed and unclaimed
production and profit sharing?
All undistributed or unclaimed Production and Profit Shares shall
be deposited by the employer with the nearest Land Bank of the
Philippines branch in the name of the Secretary of Agrarian Reform for
payment to the workers to whom they are due. The employer shall
immediately report such deposits to the nearest DAR Office and sends
notices to the farmworker-beneficiaries. If the money remains
undistributed or unclaimed after two years from the date of deposit, the
same shall be considered forfeited and shall be turned over to the
Agrarian Reform Fund pursuant to Administrative Order, No. 08, Series
of 1988.
Who are required to submit a report on the distributed production
and profit sharing?
All covered employers are required to submit a report on the
Production and Profit Shares distributed, including the special payrolls,
under oath signed by the employer or his duly authorized representative,
not later than 30 days after completion of the distribution of the workers'
shares.
14.4 ROLE OF THE MARO
Can the MARO compel covered employers to execute production
and profit sharing plan?
Yes, as long as they realize gross sales in excess of five million
pesos and a net profit after the tax.
In case a covered employer who was granted a deferment refuse
to execute a production and profit sharing plan, what sanction can the
MARO enforce?
A report should immediately be submitted by the MARO to the
PARO. Non-compliance with the provisions on production and profit
sharing is a violation covered by the provisions on Prohibited Acts and
Omissions, and Penalties (Sections 73 and 74 of RA 6657,
respectively).
Violation of the provisions on production and profit sharing is
punishable by imprisonment of not less than one month to not more than
three years or a fine of not less than one thousand pesos (P1,000.00)
and not more than fifteen thousand pesos (P15,000.00), or both, at the
discretion of the court.
The MARO may also initiate the cancellation of the Order of
Deferment issued by the DAR Regional Director and subject his land to
compulsory acquisition.
What should the MARO do in case of disputes arising from
production and profit sharing?
The MARO, together with the BARC should mediate and
conciliate. They should convince both parties to settle the dispute
voluntarily. In case there is no success in settling the dispute, this shall
be forwarded to the PARO and if still unsolved, it shall be submitted to
the PARAD for adjudication.
CHAPTER 15
COMMERCIAL FARM DEFERMENT
15.1 MEANING OF COMMERCIAL FARMS AND COMMERCIAL
FARM DEFERMENT
What are commercial farms?

Commercial farms are private agricultural lands over five hectares
in size devoted to commercial aqua culture including salt beds,
fishponds and prawn ponds fruit farms, orchards, vegetable and cut
flower farms, and cacao, coffee, and rubber plantations.
It should be noted that the definition is limited to these
commodities produced. Thus, other farms although commercial in
nature are not covered by the definition.
Further, Section 11, RA 6657 actually includes in the list lands
devoted to commercial livestock, poultry and swine raising. The
Supreme Court decision in Luz Farms vs. the Secretary of Agrarian
Reform (128 SCRA 568), however, has removed these farms from the
coverage of CARP.
What is commercial farm deferment?
Section 11, RA 6657 as implemented by AO 16-88 provides that
the acquisition and distribution of qualified commercial farms shall be
deferred for ten (10) years from 15 June 1988. In case of new farms, the
ten year deferment period shall begin from the first year of commercial
production and operation, as determined by DAR.
15.2 RATIONALE FOR DEFERMENT
Why is coverage of these farms deferred?
The CARP provides for the deferment of the coverage of the farms
mentioned earlier, to allow them to recover their investments and
insulate them from possible disruptions in operations and productivity
during land acquisition and distribution. The commercial farm deferment
provision of RA 6657, which runs counter to the general rule of
immediate land transfer, particularly of large estates, reflects the
numerous compromises that had to be forged by the legislators in the
crafting of the law.
15.3 REQUIREMENTS
Is the deferment automatic?
No. The farm should already be planted to commercial crops or
devoted to commercial farming operations before 15 June 1988. It
should likewise be applied for deferment with the DAR, which shall
approve the application based on whether or not the farm meets the
requirements enumerated in Annex A of AO 16-88. These criteria are on
the density of planting (number of plants or trees per hectare) and
infrastructure and facilities of the farm.
When is the deadline for filing of applications for commercial farm
deferment?
The extended deadline for applying deferment was 02 May 1989.
Deadline for application was originally set on 20 March 1989 but was
extended.
A total of 4,620 commercial farms applied as of November 30,
1994. The applications of 1,546 farms have been approved, covering
54,837 hectares. The rest are still being evaluated and processed.
15.4 DEFERMENT PERIOD
When is the start of the ten-year deferment period?
For farms already in commercial production as of 15 June 1988,
the deferment period began as of that date.
For farms already established before 15 June 1988 but were not
yet in commercial production as of that date, the deferment starts from
the first year of commercial production and operations, or at the end of
the gestation period provided inAO 16-88 based on the crop planted or
commodity produced. This is to give the landowner the chance to
recover and profit from his or her investments.
How about for farms with one crop of varying ages?

For farms divided into two or more area planted to a crop, the
deferment period of each area has to be determined, following the same
rules above. Thus, deferment of those areas which were already in
commercial production as of the effectivity of RA 6657 began as of 15
June 1988. Deferment of those areas not yet in commercial production
as of 15 June 1988 began or will begin at the end of the gestation period
of the crop.
On the other hand, for farms with commercial crops intercropped
with other commercial crops, the start of the deferment is based on the
status of the main crop.
What is the gestation period?
The gestation period is the period beginning from the time the crop
or commodity is first planted or raised until the time the crop bears fruit
or the produce are harvested. The end of the gestation period is the
start of commercial production.
The gestation periods listed in Annex A of AO 16-88 were
recommended by the Department of Agriculture.
15.5 DAR's ROLE DURING DEFERMENT PERIOD
Is a farm granted deferment completely out of CARP coverage for
ten years?
No, for two basic reasons: First, the deferment may be lifted and
the farm subjected to immediate redistribution of the DAR determines
that the purposes for which the deferment is granted no longer exist.
The reason for deferment must be continuously present for the farm to
be continuously deferred. Thus, a deferred vegetable farm may be
compulsorily acquired if the landowner decides to devote the area to
sugar cane production, instead.
The other reason is that a farm granted commercial farm
deferment is required to pay production and profit shares (PPS), if it
realizes gross sales exceeding five million pesos. This is to allow the
farmworkers to receive a just share of the fruits of the farm during the
deferment. The production and profit shares shall be paid upon the start
of the deferment period.
What shall the DAR do during the deferment period?
Aside from monitoring the farm as to compliance with the CFD and
PPS regulations, the DAR shall undertake the necessary steps towards
the acquisition and distribution of the property. These include valuation
of the land, and, more importantly, facilitating the organization of the
farmers by partner NGOs/POs in the area. Organizing the farmers
during the deferment period will smoothen the transfer of land ownership
and prevent disruption of operation.
May a landowner with an approved commercial farm deferment
application change his or her commercial crop?
Yes, provided the total deferment period reckoned from the date of
first approval is not extended.
What happens if a farm which has been granted commercial farm
deferment suffers from a calamity or force majeure? If the crops were
destroyed, will the farm be immediately covered under compulsory
acquisition?
In cases where the crop planted or commodity raised in the area is
destroyed by force majeure and the farm owner wants to replenish the
crop or commodity, the DAR may continue to grant the deferment
provided the following conditions are present:
a. The landowner can immediately resume commercial
operations;
b. The employment of the workers or beneficiaries is
not affected; and
c. The ten-year deferment period is not extended.
Who will monitor compliance by landowner with the rules and
regulations on commercial farm deferment?
The DAR Regional Office shall maintain records of the
landowner's operations to monitor compliance with the rules and
regulations on deferment. It is also the Regional Director who signs the
Order of Deferment.
For these purposes, the landowner shall make available to DAR
the farm's premises for ocular inspection, the personnel for interview
and the records for examination during normal business hours.
CHAPTER 16
LAND USE CONVERSION
16.1 DEFINITION
WHAT IS LAND USE CONVERSION?

Conversion the act of changing the current use of a piece of land
into some other use. Specifically for the DAR, land use conversion
refers to the change from agricultural to non-agricultural land use
(residential, commercial, industrial, etc.). From a more technical
perspective, conversion is defined as the act of authorizing the change
of the current use of a piece of land into some other use.
16.2 DAR's STAND ON CONVERSION
Is the DAR against land use conversion?
No. The DAR recognizes that land use conversion is necessary,
even inevitable in the country's march to progress. Many agricultural
lands will have to be given up in favor of industrial estates, commercial
centers, residential subdivisions, etc. Moreover, CARP is not the only
program of Government. Other important programs on tourism, housing,
and industrialization, among others, are being pursued and these all
require land. What the DAR is against is indiscriminate and wasteful
land use conversion. What the DAR wants is to direct land use
conversion such that the productive agricultural lands are preserved for
agriculture and the other programs are implemented in the marginal
agricultural areas.
It should be noted that agriculture can be carried out only in
certain types of land. Thus, prime agricultural lands should rightfully be
considered a finite natural resource, further depletion of which would
threaten national food security. In contrast, housing and industrialization,
for example, require land merely for space and may therefore be
implemented in lands marginal for agriculture.
When conversion of agricultural lands coincides with the
objectives of the Comprehensive Agrarian Reform Law to promote
social justice, industrialization, and the optimum use of land as a
national resource for public welfare, it shall be pursued in a speedy and
judicial manner.
16.3 DAR's LEGAL MANDATE
What is the DAR's legal mandate in land use conversion?
Executive Order No. 129-A, Section 4 mandates the DAR to
"approve or disapprove the conversion, restructuring or readjustment of
agricultural lands into non-agricultural uses".
Section 5 of the same EO authorizes the DAR to "have exclusive
authority to approve or disapprove conversion of agricultural land for
residential, commercial, industrial, and other land uses as may be
provided for by law".
Section 65 of RA 6657 likewise empowers the DAR to authorize
under certain conditions, the reclassification or conversion and the
disposition of lands awarded to agrarian reform beneficiaries.
Finally, Section 4 of Memorandum Circular No. 54, Series of
1993 of the Office of the President, provides that "action on application
for land use conversion on individual landholdings shall remain as the
responsibility of the DAR, which shall utilize as its primary reference,
documents on the comprehensive land use plans and accompanying
ordinances passed upon and approved by the local government units
concerned, together with the National Land Use Policy, pursuant to RA
No. 6657 and EO-129-A."
What is the Department of Justice Opinion No. 44 and how does
this affect DAR's authority to approve or disapprove conversions?
Under the Department of Justice Opinion No. 44, Series of 1990, a
parcel of land is considered non-agricultural and, therefore, beyond
the coverage of CARP if it has been classified as residential,
commercial, or industrial in the City or Municipality Land Use Plan or
Zoning Ordinance approved by the Housing and Land Use Regulatory
Board (HLURB) before 15 June 1988, the date of effectivity of CARL.
Under this Opinion, a parcel of land which is planted to coconut
cannot be covered by CARP if it has been reclassified into the town's
industrial zone prior to 15 June 1988.
If a parcel of land is covered by this DOJ opinion, must its
landowner still file an application for conversion with the DAR?
No. All lands falling under this category, i.e., those lands already
classified as commercial, industrial or residential before 15 June 1988
no longer need any conversion clearance. What the landowner or his
duly authorized representative needs is an exemption clearance from
the DAR. Application for such clearance should be filed with the
Regional Office of the DAR where the land is located. (The procedures
and requirements are detailed in AO No. 06, Series of 1994).
What policy guidelines govern land use conversion?
To operationalize the provisions of various laws, the Department
of Agrarian Reform has issued several policy guidelines to regulate land
use conversion. The latest, Administrative Order No. 12, Series of 1994,
"Consolidated and Revised Rules and Procedures Governing
Conversion of Agricultural Lands to Non-Agricultural Uses", now
consolidates and revises all existing implementing guidelines issued by
the DAR, taking into consideration other Presidential Issuances and
national policies related to land use conversion.
Thus, AO No. 12-94 repeals AO Nos. 8 and 15, Series of 1990
and 1988, General Order No. 01, Series of 1989, AO Nos. 15, 16,
and 18, Series of 1989, AO No. 07, Series of 1992 and amends AO
Nos. 1 and 2, Series of 1990.
The provisions of this latest Administrative Order, shall however,
be applicable only to all application filed on or after its date of effectivity
on 10 November 1994. All other applications filed previous to this AO
shall be governed by the pertinent administrative orders or issuances in
force at the time of the filing of the applications, and shall be processed
accordingly.
On the other hand, conversion for selected Regional Agro-
Industrial Centers, Tourism Development Area and sites for socialized
housing shall be processed under Joint NEDA-DAR Memorandum
Circular No. 01, Series of 1993 issued pursuant to Executive Order No.
124, Series of 1993 of the Office of the President.
16.4 DAR's ROLE IN CONVERSION
Operationally, what is the DAR's role in land use conversion?

Aside from being the final approving authority, the DAR basically
performs the following functions:
a. Evaluate the documents submitted for completeness
and veracity;
b. Determines whether or not the subject land is
covered by CARP;
c. Determines whether or not the application should be
approved based on the criteria set for land use conversion;
d. Ensures that the potential agrarian reform
beneficiaries are consulted on the proposed land use
conversion and are properly given their disturbance
compensation and other benefits;
e. Monitors approved application for compliance with
the requirements;
f. Together with the DOJ, monitors illegal conversions
and recommends and files criminal cases against
landowners and developers who undertake illegal
conversions.
16.5 MECHANICS OF LAND USE CONVERSION: APPLICATION,
APPROVAL, MONITORING
Who may apply for land use conversion?
The following may apply for conversion:
a. Owners of private agricultural lands or other persons
duly authorized by the landowner;
b. Farmer beneficiaries of the Agrarian Reform Program
after the lapse of five (5) years from award, reckoned from
the date of registration of their landholdings, and who have
fully paid their obligations and are qualified, or persons duly
authorized by them.
c. Government agencies, including government-owned
or controlled corporations.
When may an application for conversion be granted?
Conversion may be allowed under the following situation:
1. If at the time of the application, the lands are
reclassified as commercial, industrial and residential in the
new or revised town plans promulgated by the Local
Government Unit (LGU) and approved by the HLRB or by
the Sangguniang Panlalawigan (SP) after 15 June 1988, in
accordance with Section 20 of RA 7160 (The New
Government Code), as implemented by Malacaang
Memorandum Circular No. 54, Executive Order No. 72,
Series of 1993.
2. If at the time of the application, the land still falls
within the agricultural zones but:
a. the land has ceased to be economically
feasible and sound for agricultural purposes, as
certified by the Regional Director of the Department of
Agriculture (DA); or
b. the locality has become highly urbanized and
the land will have a greater economic value for
residential, commercial or industrial purposes, as
certified by the local government unit.
3. If the city/municipality does not have a
comprehensive development plan and zoning ordinance duly
approved by HLRB/SP but the dominant use of the area
surrounding the land subject of the application for
conversion is no longer agricultural, or if the proposed land
use is similar to; or compatible with the dominant use of the
surrounding areas as determined by the DAR.
In all cases, conversion shall be allowed only if the DENR issues a
certification that the conversion is ecologically sound.
May conversion be granted for lands covered by a notice of
acquisition?
No. No application for conversion shall be given due course if the
subject land has been covered by any of the following:
a. Notice of Acquisition under compulsory acquisition or
voluntary offer to sell;
b. Application for stock distribution duly received by
DAR; or
c. Perfected VLT/DPS agreement between the
landowner and the beneficiaries.
What other lands are non-negotiable for conversion?
Pursuant to Administrative Order No. 20, Series of 1992 (Interim
Guidelines on Agricultural Land Use Conversion andMemo Circular No.
54, Series of 1993 both of the Office of the President, the following are
non-negotiable for conversion.
1. All irrigated lands where water is available to support
rice and other crop production.
2. All irrigated lands where water is not available for rice
and other crop production but within areas programmed for
irrigation facility rehabilitation by the Department of
Agriculture (DA) and the National Irrigation Administration
(NIA).
3. All irrigable lands already covered by irrigation
projects with firm funding commitments at the time of the
application for land use conversion or reclassification.
May conversion be granted for lands with qualified beneficiaries?
Yes. However, for the application for conversion to be approved,
the beneficiaries must first be paid a disturbance compensation which
should not be less than five (5) times the average of the annual gross
value of the harvest on their actual landholdings during the last five (5)
preceding calendar years.
In addition to ensuring that the ARBs are properly paid the
disturbance compensation, the DAR shall exert all efforts to see to it that
free homelots and assured employment for displaced beneficiaries are
provided by the applicant/developer.
Are farmworkers also entitled to disturbance compensation?
Yes. The DAR rules in AO 01-90 that payment of disturbance
compensation is not limited to tenant who will be displaced but also
includes farmworkers.

What shall the DAR do in case the ARBs are asking for a
disturbance compensation above the level prescribed by law?
The DAR's principal responsibility in such case is to explain the
provisions of the law to the farmers. The DAR may try to persuade the
parties, particularly the landowner, to a compromise but any increase
beyond the legal requirement is at the discretion of the landowner.
May conversion be granted for any proposed project?
No. To prevent circumvention of coverage under the CARP,
conversion shall be granted only upon evidence that the project to be
established therein is viable and beneficial to the community affected.
How fast should the project be implemented?
Again to prevent circumvention of CARP, the land development
phase of the project should be completed within one year from the
issuance of the Order of Conversion where the area is five hectares or
less. Should the area exceed five hectares, an additional year shall be
allowed for every five hectares or a fraction thereof but in no case shall
the completion of development extend beyond five years from the
issuance of the Order of Conversion. Thus, a twelve (12) hectare area
may be developed within three years, but a 50-hectare landholding
should be developed within five (5) years.
May the DAR cancel or withdraw its approval for land use
conversion?
Yes. The DAR may cancel or withdraw authorization for land use
conversion, based on the following grounds:
a. Misrepresentation or concealment of material facts in
the application, e.g. capacity of the developer to undertake
the project;
b. Failure to implement and complete the land
development of the area within the specified time; and
c. Any other violation of the rules and regulations which
are material to the grant of the conversion order.
What will happen to the lands covered by disapproved petitions for
conversion or cancelled or withdrawn conversion order?
Lands covered by a petition for conversion which had been
disapproved or those covered by a conversion order which had been
cancelled or withdrawn shall be placed under CARP compulsory
coverage, in accordance with the schedule of implementation prescribed
in Section 7 of RA 6657 and be distributed to all qualified beneficiaries.
Where should the application for conversion be filed and what are
the procedures to be followed?
Under the new guidelines, while forms can be obtained from any
of the field offices, filing should be done at the Regional Office with the
DAR Regional Center for Land Use Policy, Planning and Implementation
(RCLUPPI). The application should contain the documentary
requirements enumerated in Section 7 of AO-12, Series of 1994.
Application with incomplete documents will not be acted upon and the
applicant will be informed accordingly.
There are also new procedures to be followed which clearly
distinguish the role of various offices.
1. The Regional Center for Land Use Policy, Planning
and Implementation (RCLUPPI):
* receives the application and reviews the
required documents for completeness and compliance
with all the requisites;
* sends Notice of Land Use Conversion to the
DAR Municipal Office (DARMO) for posting;
* conducts field investigation and dialogues with
affected parties and validates information in the
documents;
* prepares findings and recommendations;
* prepares land use conversion folder for every
application attaching all the required documents
submitted by the applicant and endorse it to the Center
for Land Use Policy, Planning and Implementation
(CLUPPI) through the Regional Director, except:
applications for conversion involving five (5)
hectares or less of land that are within the non-
agricultural zone per Land Use Plan approved by the
HLRB/Sangguniang Bayan which shall be submitted to
the Regional Director.
Subsequent applications by the same landowners or his
representative, however, on a portion of the same shall be
forwarded to CLUPPI for resolution.
2. DAR Regional Director
* Approves or disapproves applications covering
lands within the non-agricultural zones with areas of
five (5) hectares or less on an aggregate or project
basis;
* Forwards applications already acted upon to
the RCLUPPI for proper disposition;
* Submits monthly report on approved or
disapproved applications, including pending
applications to the CLUPPI, copy furnished the
DARPO and DARMO.
3. Center for Land Use Policy, Planning and
Implementation (CLUPPI)
* reviews and evaluates all land use conversion
folders received from RCLUPPI;
* whenever necessary, conducts field
investigation on the area and holds dialogues with
government officials and entities, accredited NGOs
and affected farmers and farmworkers with the
assistance of the MARO;
* for lands fifty (50) hectares or less, prepares
the draft order recommending approval or denial and
forwards the same to the Undersecretary for Policy
and Planning who shall act on it within 45 working
days from the date of receipt of folder from the
RCLUPPI;
* for areas above 50 hectares, prepares fact
sheet and accomplishes the findings and
recommendations and forwards these to the PARC
Land Use Technical Committee (PLUTC) for further
review within ten (10) days from receipt of the folder
from RCLUPPI;
* submits quarterly report on the status of all
applications to the Secretary, through the
Undersecretary for PPO, copy furnished the PARC
Secretariat.
4. Undersecretary for Policies and Planning:
* reviews and approves or disapproves
application for conversion of lands not exceeding fifty
(50) hectares within five (5) working days from receipt
of the folder from CLUPPI;
* forwards the signed Order to CLUPPI.
5. PARC Land Use Technical Committee (PLUTC):
* reviews completeness and consistency of all
folders received from CLUPPI, requires submission of
additional documents or information and conducts field
investigation (if necessary);
* recommends approval or disapproval of
applications for conversion of lands above fifty (50)
hectares and forwards the same to the Secretary for
his consideration.
6. DAR Secretary:
* approves or disapproves land use conversion
applications involving above 50 hectares within five (5)
working days from receipt of folder; and
* forwards the signed order to CLUPPI.
What is the recourse of an applicant or any aggrieved party who
does not agree with the Regional Director's decision?
A motion for reconsideration of the decision of the Regional
Director can be filed within fifteen (15) days from receipt of the order or
decision. DCIEac
Running of the period is suspended once the motion is filed. If the
motion is denied, the aggrieved party can still make an appeal to the
DAR Secretary.
An appeal to the Secretary shall be made in the form of a
memorandum and upon payment of P500.00 as appeal fee.
On the other hand, appeal from the decision of the Undersecretary
shall be made to the Secretary, and from the Secretary to the Office of
the President or the Court of Appeals, as the case may be. The mode of
appeal/motion for reconsiderations, and the appeal fee, from the
Undersecretary to the Office of the Secretary shall be the same as that
of the Regional Director to the Office of the Secretary.
Are there mechanisms installed to ensure that the terms and
conditions of the approved conversion are complied with?
Yes, there will be monitoring of compliance. The RCLUPPI shall
monitor compliance by the applicant/developer based on the terms and
conditions stipulated under AO No. 12-94, including the required posting
of the approved order in a conspicuous place of the project area. The
AO provides that failure to post such notice in the project area shall be a
ground for the suspension of the development of the area and for
possible cancellation of the conversion order. The RCLUPPI shall
submit monthly reports to the Undersecretary for Policy and Planning
through the CLUPPI of all land use conversion transactions, copy
furnished the DARPO and the DARMO.
In turn, the CLUPPI shall evaluate the reports submitted by the
RCLUPPI and render quarterly reports on the status of all land use
conversion to the Secretary, copy furnished the PARC Secretariat.
16.6 LGU's AUTHORITY TO RECLASSIFY
Does RA 7160, otherwise known as the Local Government Code
of 1991 give the cities and municipalities the authority to convert
agricultural lands to non-agricultural uses?
No, what the Code provides is the authority of cities and
municipalities to reclassify lands into uses within their jurisdiction subject
to certain limitations and conditions.
How does reclassification differ from land use conversion?
Reclassification is the act of specifying how agricultural lands shall
be utilized for non-agricultural uses such as residential, industrial,
commercial, as embodied in the land use plan. It also includes the
reversion of non-agricultural lands to agricultural use. On the other
hand, land use conversion is the actual change of agricultural land to
non-agricultural uses.
Although reclassification and conversion are similar in that they
both determine whether a parcel of land should be used for agricultural
or other purposes, they are different in approach reclassification is
done through the town planning process taking into account the needs
of the inhabitants for space for housing, industrial, commercial and other
non-agricultural uses, while conversion goes through the DAR's
evaluation process which takes into account the tenants and
farmworkers, if any, on the landholding, the ascertainment of
disturbance compensation, and on who will pay said disturbance
compensation. Furthermore, although land reclassification can be
indicative of which agricultural areas can be converted to non-
agricultural uses, it does not involve an actual change in land use.
What agencies are involved in land reclassification?
Land reclassification is a power exercised by municipal or city
governments through the town planning process, subject to review and
approval by the Provincial Sanggunian through the Provincial Land Use
Council (PLUC). DAR's participation is in the issuance of a certification
that lands for reclassification are either not distributed, not covered by a
Notice of Coverage, or not voluntarily offered for coverage under CARP.
What does the Local Government Code provide with respect to
land reclassification?
Section 20 of RA 7160 and Malacaang Memo Circular No. 54
dated 08 June 1993 prescribing the guidelines governing Section 20,
state that a city or municipality may, through an ordinance passed by the
Sanggunian after conducting public hearings, authorize the
reclassification of agricultural lands and provide for the manner of their
utilization or disposition in the following case:
a. when the land ceases to be economically feasible
and sound for agriculture as certified by the DA; or
b. where the land shall have substantially greater
economic value for residential, commercial, or industrial
purposes.
The reclassification shall be based on the following percentage of
the total agricultural land area at the time of the approval of the Code:
o for highly urbanized and independent component
cities 15%
o for component cities and first to third class
municipalities 10%
o for fourth to sixth class
municipalities 5%
In addition, the following types of agricultural lands shall not be
covered by the said reclassification:
a. agricultural lands distributed to agrarian reform
beneficiaries subject to Section 65 of RA 6657;
b. agricultural lands already issued a notice of coverage
or voluntarily offered for coverage under CARP;
c. agricultural lands identified under Malacaang AO
No. 20-92 and MC 54 as non-negotiable for conversion:
1. All irrigated lands where water is available to
support rice and other crop production;
2. All irrigated lands where water is not available
for rice and other crop production but within areas
programmed for irrigation facility rehabilitation by the
Department of Agriculture (DA) and the National
Irrigation Administration (NIA).
3. All irrigable lands already covered by irrigation
projects with firm funding commitments at the time of
the application for land use conversion or
reclassification.
Is the percentage ceiling on the land area which the LGUs can
reclassify absolute?
No, the President may, when public interest so requires and upon
recommendation of the National Economic and Development Authority
(NEDA) authorize a city or municipality to reclassify lands in excess of
the limits as cited above.
What are the requirements and procedures for reclassification?
a. The city or municipal development council shall
recommend to the Sangguniang Panglunsod or
Sangguniang Bayan, as the case may be, the
reclassification of agricultural lands within its jurisdiction.
b. Before enacting the ordinance reclassifying
agricultural lands, the Sanggunian concerned must first
secure the following certificates:
1. Certification from DA indicating the total area of
existing agricultural lands in the city or municipality,
that such lands are not classified as non-negotiable for
conversion or reclassification; and that the land has
ceased to be economically feasible and sound for
agricultural purposes.
2. Certification from DAR indicating that such
lands are not distributed, or not covered by a notice of
coverage or not voluntarily offered for coverage under
CARP.
c. The application shall be submitted to the HLRB
which upon receipt shall conduct initial review to determine
if:
1. the city or municipality has an existing
comprehensive land use plan reviewed and approved
in accordance with Executive Order No. 72 (1993); and
2. the proposed reclassification complies with the
limitations prescribed under Section 1 of Memo
Circular No. 54.
d. The Sanggunian shall conduct public hearings for the
purpose.
e. Upon receipt of the required certification from the
government agencies, the Sanggunian concerned may now
enact an ordinance authorizing the reclassification of
agricultural lands and providing for the manner of their
utilization or disposition.
After the enactment of the ordinance reclassifying the land, does
this mean the agricultural land can now be converted for non-agricultural
uses?
No. Approval of applications for land use conversions remains the
responsibility of DAR. Hence, individual landholders of the affected
areas should still file an application for conversion. DAR shall utilize as
its primary reference in deciding on the application, the comprehensive
land use plans, and the ordinance passed upon and approved by the
Sanggunian, together with the National Land Use Policy.
CHAPTER 17
LAND TRANSACTION
17.1 LAWS AND ISSUANCES GOVERNING AGRICULTURAL
LAND TRANSACTIONS
What are the laws governing land transaction?
17.1.1 RA 6657 contains several specific provisions on land
transactions. They are the following:
a. Section 6 provides that upon effectivity of the law,
any sale, disposition, lease, management contract or
transfer of possession of private lands executed by the
original landowner in violation of the Comprehensive
Agrarian Reform Law (CARL) shall be null and void.
However, those transactions executed prior to the
enactment of the law shall be valid if registered with the
Register of Deeds within a period of three (3) months after
the effectivity of the law, or on 13 September 1988;
b. Section 70 allows the sale or disposition of
agricultural lands retained by a landowner provided that the
total landholding, including the land being acquired by the
buyer/transferee shall not exceed the landholding ceiling of
five (5) hectares, subject, however, to the right of pre-
emption and/or redemption of tenant/lessee under Sections
11 and 12 of RA 3844, as amended

c. Section 73 prohibits the sales, transfer, conveyance
or change of the nature of lands outside of urban centers
and city limits either in whole or in part after the effectivity
of RA 6657;
The same section also prohibits the sale, transfer or
conveyance by a beneficiary of the right to use or any other
usufructuary right over the land he/she acquired by virtue of
being a beneficiary, in order to circumvent the provisions
of CARL;
d. Section 27 of RA 6657 further provides that the lands
acquired by beneficiaries may not be sold, transferred or
conveyed except through hereditary succession or to the
government or to other qualified beneficiaries for a period of
ten years. Provided, however, that the children or the
spouse of the transferor shall have a right to repurchase the
land from the government or LBP within a period of two (2)
years; and
e. Presidential Decree No. 27 originally prohibited the
transfer of title to land acquired pursuant to this Decree
except by hereditary succession or to the government in
accordance with the provisions of PD 27, the Code of
Agrarian Reform and other existing laws and regulations.
However, Section 6 of Executive Order No. 228 now
allows the transfer of ownership of lands acquired by farmer-
beneficiaries after full payment of amortization.
What are the relevant AOs on land transaction?
a. Administrative Order No. 01, Series of 1989 entitled
"Rules and Procedures Governing Land Transactions"
provided the implementing guidelines for RA 6657's
provisions on land transaction.
b. Administrative Order No. 04, Series of 1994 entitled
"Guidelines on the Development of Agro-Tourism Areas in
Accordance with the Tourism Master Plan".
Under this new AO, DAR allows in meritorious cases, the lease or
joint venture arrangement of lands acquired by agrarian reform
beneficiaries under CARP for agro-tourism development purposes. This
is in line with the general objective of agrarian reform in terms of uplifting
the quality of life of the ARBs. Guidelines and safeguards should,
however, be adhered to strictly.
17.2 LAND TRANSACTIONS INVOLVING AGRO-TOURISM
DEVELOPMENT
What are the conditions which must be present to allow lease or
joint venture arrangements for agro-tourism development involving lands
distributed under CARP?
The following conditions must be present:
1. The area has been identified by government as
priority development area under the Medium Term Philippine
Development Plan, or certified by the Department of Tourism
as a priority area for tourism development;
2. The dominant use of the area should still be
agricultural such that the area to be developed for tourism
shall be less than 50% of the total area subject to CARP.
Irrigated or irrigable lands are further ineligible for these
purposes;
3. The agricultural area of the project shall be
continuously maintained by the ARBs who shall supply the
tourism project with agricultural products;
4. The ARBs or their direct descendants shall be given
preference in employment in the tourism project;
5. All improvements related to tourism shall accrue to
the ARBs or their association at the expiry of the lease
period;
6. Profit-sharing and other benefits may be negotiated
by DAR in behalf of the ARBs, depending on the exigencies
of the situation;
7. The lease agreement shall specify the time frame for
development of the subject property but not to exceed five
(5) years reckoned from the date of approval of the lease or
joint venture agreement;
8. The agreements shall contain provisions for the
violations of the agreements, including cancellations,
penalties/sanctions and the like within the ten-year period
pursuant to Section 27 of RA 6657. (AO 04, Series of 1994).
What kind of arrangements can be entered into by the ARBs if the
above conditions are fulfilled?
1. Direct lease to the investor/developer under RA
7652;
2. Lease to a responsible government entity, who in
turn may sublease the property to the investor/developer;
3. Lease back to the former landowner, who in turn will
develop the area for tourism purposes; or
4. Joint venture agreement whereby ARB's lease rights
shall be exchanged for shares of stocks, provided the ARBs
shall organize into a farmers cooperative.
17.3 LAND TRANSACTIONS AFTER 15 JUNE 1988
A vendee bought a parcel of agricultural land consisting of fifty
(50) hectares prior to 15 June 1988. However, the deed of sale was not
registered within the three-month period as provided for in Section 6
of RA 6657. The vendee now wants to have the transaction registered
and is willing to have the land covered by CARP. Should the ROD
register the transaction?
Yes, the transaction should be registered even if beyond the
prescribed period. Anyway, the vendee is willing to have it covered
under CARP. To disallow registration and rescind the contract will result
in a legal nightmare to the prejudice of the vendee/transferee. DAR can
give clearance for the registration. (DOJ Opinion No. 41, Series of
1992).
Can agricultural lands be mortgaged to guarantee any loan
obligation secured to develop or to improve such lands?
Yes, there are lands that may be the subject of mortgage, lien or
encumbrance. These are the following:
a. Lands not yet acquired by DAR in accordance with
the schedule of acquisition mentioned in Section 7 ofRA
6657.
b. Those lands chosen by the landowners as their
retention areas; and
c. Lands already awarded/allocated to the agrarian
reform beneficiaries.
Can banks and other financial institutions acquire title to
agricultural lands subject of a mortgage right or interest?
Banks and other financial institutions allowed by law to hold
mortgage right or security interest in agricultural lands may acquire title
to those mortgaged properties, regardless of areas, subject to existing
laws on compulsory transfer of foreclosed assets and acquisition as
prescribed under Section 16 of RA 6657.
Can government financing institutions and government-owned or
controlled corporations sell or dispose their lands which are suitable for
agriculture directly to private individuals?
No. Executive Order No. 360, Series of 1989 enjoins them to grant
the DAR the right of first refusal in the sale or disposition of their lands
which are suitable for agriculture. This was further amended by EO
407 which mandates all government instrumentalities to surrender to the
DAR all landholdings suitable for agriculture including all pertinent
documents in their custody. In certain instances, they may avail of the
VLT mode of transferring ownership of agricultural lands to qualified
beneficiaries subject to the review and approval of DAR.
17.4 RIGHT OF PRE-EMPTION
What is the right of pre-emption?
Under Section 11 of RA 3844, in case the landowner/lessor
decides to sell his tenanted/leased land, he/she must first offer to sell
the landholding to the tenant or lessee thereof who has the preferential
right to buy the same under reasonable terms and conditions imposed
therein.
If the land has two or more agricultural tenants or lessees in the
same landholding, how will they exercise their right of pre-emption?
Section 11 of RA 3844 provides that if there are two or more
agricultural tenants or lessees, each shall be entitled to said preferential
right only to the extent of the area actually cultivated by him/her.
What is the prescribed period imposed by law in the exercise of
the right of pre-emption?
The right of pre-emption may be exercised within one hundred
eighty (180) days from notice in writing, which shall be served by the
owner to all tenants or lessees affected.
17.5 RIGHT OF REDEMPTION
What is the right of redemption?
Under Section 12 of RA 3844, in case the landholding is sold to a
third person without the knowledge of the tenant or agricultural lessee,
the latter shall have the right to repurchase said landholding at a
reasonable price and consideration.
If there are two or more tenants or agricultural lessees in the same
landholding, how will they exercise their right of redemption?
If there are two or more tenants or agricultural lessees in the same
landholding, each shall be entitled to said right of redemption only to the
extent of the area actually cultivated by him/her.
What is the prescriptive period imposed by law in order to avail of
the right of redemption?
The right of redemption may be availed of within one hundred
eighty (180) days from notice in writing which shall be served by the
buyer on all tenants/lessees affected and the DAR upon the registration
of the sale, and shall have priority over any other right of legal
redemption.
17.6 VALID TRANSACTIONS
What are the valid transactions under the CARP?
The following transactions are valid:
a. Those executed by the original landowner in favor of
a qualified beneficiary from among those certified by DAR;
b. Those in favor of the government, DAR or the LBP;
c. Those covering lands retained by the landowner
under Section 6 of RA 6657, executed in favor of the
transferee whose total landholdings inclusive of the land to
be acquired do not exceed five hectares, subject, however,
to the right of pre-emption and/or redemption of
tenant/lessee under Sections 11 and 12 of RA 3844, as
amended;
d. Those executed by ARBs covering lands acquired
under any agrarian law in favor of the government, DAR,
LBP or other qualified beneficiaries certified by DAR; and
e. Those executed after ten (10) years from the
issuance and registration of the Emancipation Patent (EP) or
Certificate of Land Ownership Award (CLOA).
17.7 INVALID TRANSACTIONS
What are the invalid transactions under CARP?
The following transactions are not valid:
a. Sale, disposition, lease, management contract or
transfer of possession of private lands executed by the
original landowner prior to 15 June 1988, which are not
registered on or before 13 September 1988, or those
executed after 15 June 1988 covering an area in excess of
the five (5) hectare retention limit in violation of RA 6657;
b. Those covering lands acquired by the beneficiary
under RA 6657 and executed within ten (10) years from the
issuance and registration of the Emancipation Patent (EP) or
Certificate of Land Ownership Award (CLOA) except through
hereditary succession, to the DAR, LBP or to other qualified
beneficiaries;
c. Those executed in favor of a person or persons not
qualified to acquire land under Section 22 of RA 6657;
d. Sale, transfer, conveyance or change of nature of
land outside of urban centers and city limits either in whole
or in part after 15 June 1988, except as provided for under
the rules on land conversion; and
e. Sales, transfer or conveyance by an ARB of the right
to use or any other usufructuary right over the land he
acquired by virtue of being a beneficiary in order to
circumvent the law.
What are the transactions that may be registered with the Register
of Deeds without clearance from the DAR?
The following are the transactions that can be registered without
clearance from the DAR:
a. Deed of extra-judicial partition of the property of a
deceased who died before 15 June 1988;
b. Deed of partition of property owned in common by
co-owners prior to 15 June 1988;
c. Subdivision of title without change of ownership; and
d. Deed of Real Estate Mortgage executed by the
original landowner or beneficiary.
CHAPTER 18
PUBLIC LANDS
18.1 PUBLIC ALIENABLE AND DISPOSABLE LANDS
How are public alienable and disposable lands to be distributed?
In general, all alienable and disposable public lands suitable to
agriculture shall be distributed by the DENR to qualified citizens of the
Philippines. Agrarian reform beneficiaries may be considered by the
DENR provided that they are certified by DAR and DENR as still
qualified to acquire public lands pursuant to the Joint DAR-DENR
Administrative Order No. 07, Series of 1991.
Areas subject to adverse claims by persons other than the
applicant-tillers cannot be distributed until such claims are settled.
Who are the qualified applicants?
The following are generally qualified to apply for patents to public
lands which are suitable to agricultural purposes and who satisfy
additional existing requirements as prescribed by the Public Land Law
(CA 141, as amended):
1. a Filipino citizen;
2. occupant-tiller of the land;
3. does not own other landholdings, the aggregate area
of which does not exceed the limits allowed for the particular
type of public land application;
4. is not an illegal entrant/occupant
What are the procedures followed in the distribution of public A &
D lands to qualified applicants?
1. Filing of public land application shall be done at the
Community Environment and Natural Resources Office
(CENRO) having jurisdiction over the subject land. (Note:
only lands covered by approved surveys may be the subject
of a public land application).
2. Processing of the application, including verification of
qualifications and compliance with all the requirements of
residence, cultivation, payment of required fees, etc., are
done at the CENRO and the Provincial Environment and
Natural Resources Office (PENRO) levels.
3. Signing of the land patent by the PENRO (up to five
hectares for homestead and free patents), and by the
Regional Environment Director (RED) (up to ten hectares)
and by the DENR Secretary, if in excess of ten hectares.
18.2 INTEGRATED SOCIAL FORESTRY PROGRAM
Are forest lands suitable for agro-forestry also covered by CARP?
Yes, but only under the non-land transfer component of CARP
called the "Integrated Social Forestry Program (ISFP)". Forest lands
suitable for agro-forestry may be allocated to forest occupants under the
principle of stewardship. They cannot be distributed for titling to agrarian
reform beneficiaries in order to protect the forest.

ISFP involves the issuance of long-term tenurial agreements
through Certificates of Stewardship Contracts or Community Forest
Stewardship Agreements effective for twenty (25) years renewable for
another 25 years and the provision of technical, social, material and
other support services to individual forest occupants and forest
communities. With these support services, the DENR hopes to reforest
denuded lands to improve the socio-economic conditions of the
occupants.
What is the maximum land size which can be availed of by
qualified applicants under ISFP?
Seven (7) hectares shall be the maximum size of land that can be
availed of under ISFP.
18.3 SETTLEMENT AREAS
Do the guidelines for public A & D lands suitable to agriculture
apply to DAR settlement areas?
No. All DAR Settlement Projects covered by a Presidential
Proclamation issued before the effectivity of RA 6657 are deemed to
have been classified as alienable and disposable under the powers of
the Chief Executive to classify lands of the public domain and by virtue
of the expressed provisions in the proclamation authorizing the DAR to
dispose of the lands described in such proclamation.
What rules govern the manner and mode of disposition and titling
of lots in the DAR settlement projects?
a. Administrative Order No. 09, Series of 1989 entitled
"Rules and Procedures Governing Titling and Distribution of
Lots in DAR Settlement Projects"; and
b. Administrative Order No. 01, Series of 1992 entitled
"Revised Rules and Procedures Governing the Disposition
of Homelots and Other Lots in Barangay Sites and
Residential, Commercial and Industrial Lots in Town Sites
Within DAR Settlement Projects and Similar Other Areas
Under DAR Jurisdiction".
How much should the ARBs pay for lands distributed in DAR
settlement areas?
None. All lots (agricultural or non-agricultural) shall be distributed
free of cost. No survey fees or other costs relative to the distribution of
the land shall be charged to the beneficiary.
What are the functions of the MARO under these procedures?
1. Conduct a physical inventory and perform the
following:
a. Review and evaluate the list of allocatees and
conduct lot verification to determine whether the ARB
allocatees still occupy and till the lots covered by the
Certificates of Allocation;
b. Require the occupant/tiller to accomplish the
Farmer Beneficiary Application Form (SP Form No.
01);
2. Evaluate application forms and recommend
appropriate action. Recommendation shall be based on the
following guides:
For applicant with Certificate of Allocation (CA):
a. If applicant is living and is the actual
cultivator/occupants: Issue CLOA
b. If deceased but the heirs are actual
cultivators/occupants: Issue CLOA to qualified heirs
c. If not an actual cultivator: Cancel CA and Issue
CLOA to qualified beneficiary
d. If occupying the wrong lot: Issue CLOA for lot
actually occupied and cancel CA for the corresponding
lot
e. If absentee CA holder: Consider land covered
by CA abandoned and apply procedures for
cancellation of allocation
If applicant has no CA but is a qualified actual
occupant/transferee: Issue CLOA for not more than three
hectares of his/her own choice and preference. Area in
excess shall be distributed with preference to his/her
qualified children.
3. Consolidate SP Form No. 1 and prepare Summary
FB Data Sheet (SP Form No. 02) for those applicants
recommended for issuance of CLOA. This shall constitute
the Land Distribution Folder.
4. Endorse the LDF to PARO for review and CLOA
preparation.
5. Prepare a summary list of vacant and unallocated
lots and lots with certificates of allocation recommended for
cancellation.
What are the grounds for cancellation of allocation?
1. Absence of the settler/allocatee from the settlement
for more than six (6) months without written permission of
the DAR;
2. Transfer of rights by transferor without written
consent and approval of the DAR Regional Director
concerned;
3. Voluntary renunciation or waiver of rights in writing;
4. Failure to cultivate the lot for a period of more than
six (6) consecutive months from the date of allocation of said
lot; and
5. Death of settler/allocatee if he/she has no qualified
heir.
What is the award ceiling for qualified beneficiaries?
The award ceiling shall not be more than three hectares. However,
qualified beneficiaries who have occupied and cultivated the land and
established their vested rights prior to 15 June 1988, in accordance with
the Public Land Law and other existing laws, shall be awarded the legal
limits allowed by said laws.
Who are the qualified beneficiaries?
1. landless;
2. Filipino citizen;
3. Actual occupant/tiller who is at least 18 years of age
or head of the family at the time of filing of application; and
4. Has the willingness, ability and aptitude to cultivate
and make the land productive.
Preferential assistance shall be given to:
1. Qualified women members of the agricultural labor
force;
2. War veterans and veterans of military campaign;
3. Retirees of AFP and INP;
4. Returnees/surrenderees; and
5. Graduates of agricultural school
What other types of lots can be distributed in the settlement
areas?

Homelot refers to a parcel of land which is intended for farm
residence in a barangay site.
Residential Lot refers to a parcel of land which is intended for
residence in a town site.
Town Site Lot refers to a parcel of land in the town site of a
settlement which is intended either for residential, commercial, or
industrial use.
Industrial Lot refers to a parcel of land in the town site intended as
a site for processing of products and for other industrial purposes.
Who are qualified applicants for these lands?
1. Filipino citizen;
2. At least 15 years of age or head of the family at the
time of filing of application; and
3. Applicant or his/her spouse is not the owner-awardee
or allocatee of another homelot, residential, commercial or
industrial lot.
What is the award ceiling for such types of lands within settlement
areas?
A qualified applicant is entitled to acquire only one homelot or one
residential/commercial or industrial lot with an area not more than one
thousand (1,000) square meters. However, an awardee or allocatee of a
homelot or residential lot may still be allowed to acquire one commercial
or industrial lot following the provisions of AO No. 01, Series of 1992.
What are the modes of disposition of homelots and other types of
lots?
1. Homelots and residential, commercial and industrial
lots shall be disposed of by direct sale to qualified actual
occupants. If the occupant is not qualified, the lot may be
sold to the qualified members of the family. If there is none,
then the lot shall be considered vacant and shall be
disposed of.
2. Vacant homelots in barangay sites shall be disposed
of through public raffle to qualified applicants.
3. Vacant residential, commercial and industrial lots
shall be disposed of through public bidding, to the highest
qualified bidder. However, no bid should be less than the
appraised value of the lot.
4. Lots allotted to or intended for public use, whether
within barangay sites or town sites shall be turned over by
the DAR to the particular government entity or agency
concerned.
5. An allocatee occupying the lot allocated or awarded
to him/her before the effectivity of said AO 01-92shall be
issued a CLOA upon payment of the cost of the land.
6. An allocatee or awardee occupying a different lot
allocated or awarded to him/her before effectivity of the
above mentioned AO shall be awarded the correct lot and
issued a CLOA upon full payment the lot.
7. Awards/allocations of absentee beneficiaries shall be
cancelled and the lot shall be awarded and titled to the
actual occupants.
How much is the cost of these lots?
For homelots, the cost should not be less than three pesos (P3.00)
per square meter; for residential, ten pesos (P10) per square meter; and
fifteen pesos (P15) for industrial and commercial lots allocated or
awarded prior to AO No. 01-92.

18.4 PUBLIC AGRICULTURAL LANDS TURNED OVER BY THE
NATIONAL LIVELIHOOD AND SUPPORT FUND
What rules govern public agricultural lands turned over by the
National Livelihood and Support Fund (NSLF) to the Department of
Agrarian Reform for distribution under CARP?
These are governed by Memorandum Circular No. 07, Series of
1993 entitled "Implementing Guidelines on the Distribution and Titling of
the Public Agricultural Lands Turned Over by the National Livelihood
and Support Fund to the Department of Agrarian Reform for Distribution
Under the CARP Pursuant to EO 407, Series of 1990, as Amended by
EO 448, Series of 1991 and as Clarified under Memorandum Order No.
107 of the President of the Philippines dated 23 March 1993"
Under MO 107, the DAR and the DENR were directed to jointly
determine which areas were classified as alienable and disposable
agricultural lands previous to the effectivity of Proclamation No. 2282 for
disposition by the DAR through the issuance of CLOAs to qualified
beneficiaries. DaScHC
Who are the qualified beneficiaries?
1. In general, the farmer-tiller or actual occupant shall
be given preference in the distribution of the lands occupied
by him/her provided that the area will not exceed three
hectares per farmer-beneficiary. Areas in excess, if any, may
be distributed to the qualified children or relatives of the ARB
designated by him/her.
2. Farmers organization may also be issued collective
CLOAs, the total hectarage covered, however, shall not
exceed the number of co-owners or members of the farmers
organization multiplied by three, except in meritorious cases
approved by the PARC.
3. Cultural communities or indigenous tribal groups
located within the A & D areas with no adverse claims shall
be issued collective CLOA in the name of the community or
the tribe concerned, represented by the acknowledged
leader. In case the total hectarage will exceed the three
hectare award ceiling per member, the approval of the
PARC shall be secured.
What portions shall not be covered?
1. Lands with adverse claims until the adverse claims
are resolved administratively or judicially.
2. Parcels or lots already titled, except when their area
exceeds the five hectare retention limit, in which case they
shall be covered following the schedule of priorities.
3. Parcels or lots covered by public land applications
filed with the DENR or the DA. The applicant concerned
shall be allowed to pursue the application with the DENR.
Applicants who wish to instead acquire their lots through
CARP may be allowed to do so provided that they present
proof that they have already requested the DENR to cancel
or reject their applications and that they possess all the
qualifications of an ARB.
4. Lands which have been proclaimed as reservations
in favor of other government agencies or instrumentalities.
Portions which are not being used for the purpose of the
reservation or not needed by the agency or instrumentality
concerned may be acquired under separate negotiations
initiated by the DAR.
5. Poblacions, town sites, barangay sites, and similar
sites actually used for residential or non-agricultural
purposes. Their titling shall be pursued under other
government programs under the responsibility of other
government agencies.
6. All lands utilized as government sites in addition to
those lands specified in Section 10 of RA 6657 (on
exemptions).
7. Lands intended for or devoted to public use such as
highways, roads, railroads, foreshores, public right of way
and other similar uses, as well as lands under bodies of
water such as rivers, creeks, lakes, bays, natural springs,
irrigation canals, reservoirs, and similar areas under water.
8. Lands where the actual occupant or claimant may
already be entitled to a free patent under RA
6940(continuous occupation and cultivation by himself or
through his predecessors-in-interest for at least thirty (30)
years prior to 16 April 1990, among other requirements). The
claimant may be allowed to perfect his/her rights through the
DENR. However, occupants or claimants who prefer to
become ARBs instead shall be included in the CARP if
qualified.
9. All lands that are unclassified or classified as
Timberland or Forest Land, National Parks or Mineral Lands,
even if occupied and fully cultivated. Instead, the occupants
shall be referred to the DENR for possible inclusion in the
ISFP program.
Will these lands be paid for by the beneficiaries?
No, except for the payment of the proportionate cadastral survey
costs as determined by the DENR. If such survey cost is not paid by the
ARB at the time of the CLOA issuance, this shall be annotated as a lien
on the title.
18.5 LANDS OF THE PUBLIC DOMAIN COVERED BY
CANCELLED OR EXPIRED PASTURE LEASE AGREEMENTS
(PLAs) AND TIMBER LICENSE AGREEMENTS (TLAs) PER EO
407
What rules govern the CARP coverage of lands of the public
domain covered by expired PLAs and TLAs?
Joint DAR-DENR Administrative Order No. 02, Series of
1992 provided the rules and procedures on the disposition of lands of
the public domain covered by cancelled or expired Pasture Lease
Agreements (PLAs) and Timber License Agreements (TLAs), following
the provisions of Executive Order No. 407 dated 14 June 1990.

Are these lands acquired by the DAR?
No, under the Joint Administrative Order, the role of the DAR in
lands covered by expired or cancelled PLAs and TLAs is to screen and
identify the ARBs. It is the DENR which, in coordination with DAR,
distributes the land under the ISF program.
How will these lands be allocated to ARBs?
These shall be distributed by the DENR in collaboration with the
DAR, either individually or collectively to ARBs who are duly verified and
screened by the DAR.
What are the procedures in the distribution of lands covered by the
expired and cancelled PLAs and TLAs? What are the roles of the DAR
and DENR?
1. DENR Secretary identifies and declares that certain
expired/cancelled leases are available for CARP.
2. DAR verifies if the actual occupants-cultivators within
the subject area have been registered as prospective and
qualified beneficiaries pursuant to DAR Administrative Order
No. 10, Series of 1989. If not, it conducts an inventory of the
occupants/cultivators.
3. If there are registered prospective and qualified
beneficiaries, the DAR reviews the register and in
coordination with DENR, verifies who among them are actual
occupants and prioritizes the allocation giving preference to
actual occupants/cultivators;
4. The DENR conducts a survey of the parcels
allocated to applicant/beneficiaries;
5. The applicant, assisted by DAR files the application
for Certificate of Stewardship (CS) in the prescribed form,
together with the certification of the Municipal Agrarian
Reform Officer (MARO) at the DENR/CENRO Office
concerned where the area applied for is located; and
6. The CENRO issues Certificate of Stewardship (CS)
for areas up to three (3) hectares.
Are lands under cancelled or expired PLAs and TLAs subjected to
titling under CARP?
No, public lands classified as forest lands are inalienable and are
distributed only for stewardship and not for titling through the DENR-
Forest Management Sector (FMS).
What proof of award to agrarian reform beneficiaries will be issued
under expired and cancelled PLAs and TLAs covered by the public
domain?
The DENR issues the Certificate of Stewardship Contract (CSC)
after a Stewardship Agreement is signed between the beneficiary and
the DENR.
Can ARBs acquire title to lands under cancelled or expired PLAs
and TLAs?
No. Under the law, these types of lands are inalienable or non-
registrable and therefore cannot be titled to the agrarian reform
beneficiaries. They are however, covered by a long term twenty-five (25)
year lease contract which is renewable for another 25 years.
Can the DENR through the Forest Management Sector (FMS)
refuse to allocate portions of cancelled or expired PLAs and TLAs which
are unoccupied and uncultivated to DAR's selected ARBs?
Yes. The DENR, through the FMS may refuse to allocate,
because RA 6657, Section 7, provides that only pastures and
agricultural leases already cultivated and planted to crops shall be
covered. This is consistent with the inalienable nature of forest lands.
Can occupant-cultivators within expired or cancelled PLAs and
TLAs that are under the ISF program who are not registered as potential
ARBs be displaced, ejected or removed?
No. Under the law, actual occupant-tillers are given preferential
rights in the distribution of lands of the public domain. They shall not be
displaced or removed from the land they till as long as they are directly
working and making their land productive. Qualified occupant-cultivators
of public lands, though unregistered, shall be given priority in the
distribution thereof.
In case conflict arises between the rules of DAR and the DENR on
the allocation and disposition of ISF lands, which rules will be followed?
The DENR Forest Management Bureau rules will be followed.
However, DAR's rules on the screening and selection of ARBs shall be
followed.
18.6 LANDS OF THE PUBLIC DOMAIN COVERED BY
CANCELLED OR EXPIRED FISHPOND LEASE AGREEMENTS
(FLAs) PER EO 407
What rules govern the allocation of cancelled or expired Fishpond
Lease Agreement (FLAs)?
Executive Order No. 407 as amended by EO 448 and as
implemented by a Joint DAR-DA AO No. 05, Series of 1991govern the
acquisition of cancelled or expired Fishpond Lease Agreement for
distribution to agrarian reform beneficiaries, either individually or
collectively; and Presidential Decree No. 704 (Fisheries Decree of
1975).

What are the main roles of the DAR and DA in the allocation of
cancelled or expired FLAs?
The DAR is responsible for the screening and identification of the
ARBs. The DA verifies and identifies through BFAR, fishpond areas
covered by FLAs which are already expired or subject to cancellation.
The DA also subsequently processes the applications of ARBs identified
by the DAR and issues the fishpond lease agreements.
What is the order of priority in the determination of ARBs on lands
covered by cancelled or expired FLAs?
The ARBs are chosen according to the following order of priority
specified in Section 22 of RA 6657:
1. agricultural lessees and share-tenants;
2. regular farmworkers;
3. seasonal farmworkers;
4. other farmworkers;
5. actual tiller or occupant of public lands;
6. collective or cooperative of the above beneficiaries;
and
7. others directly working on the land.
Why is the allocation of cancelled or expired FLAs being done by
DA-BFAR and not by DAR?
Section 3 of EO 407 specifically provided that the DA and the
DENR, in coordination with the DAR shall redistribute and award
fishponds, pasture lands and other lands of the public domain suitable
for agriculture, subject of cancelled or amended lease agreements, to
qualified agrarian reform beneficiaries identified by the DAR pursuant to
Sections 18 and 22 of RA 6657.
Are lands under expired or cancelled FLAs subjected to titling
under CARP?
Public lands suitable to agriculture are not subject to titling after 9
November 1972 per Sections 23 and 24 of PD No. 704 because they
are disposable only through lease by the DA-BFAR after that date.
CHAPTER 19
LANDED ESTATES
What are landed estates?
Landed Estates are former haciendas or landholdings of private
individuals or corporations which have been acquired by the
Government under different laws, for redistribution and resale to
deserving tenants and landless farmers.

What improvements have been made in the procedures for
distribution and/or titling of lots, in agricultural landed estates?
Administrative Order No. 03, Series of 1990, entitled "Revised
Rules and Procedures Governing Distribution and/or Titling of Lots in
Landed Estates Administered by DAR" was issued to revise the tedious
process which has resulted in unnecessary delay in the distribution and
titling of landed estates to qualified beneficiaries.
Under this AO, a CLOA shall immediately be issued to the
qualified beneficiary, including those with Deeds of Sale still pending
with the DAR, provided that all outstanding accounts of an awardee
shall be annotated at the back of the CLOA and duly registered with the
ROD.
Outstanding accounts include amortization payments for the land,
farm implements and machineries, if these are not covered by separate
contracts, other loan assistance and accrued interests on overdue
amortization payments and unpaid rentals from 01 January 1988.
What are the terms of payment for the account balances
annotated at the back of the CLOA?
Beneficiaries/allocatees whose amortization payments and unpaid
rentals do not exceed one thousand pesos (P1,000) have three (3)
years starting from the registration of titles to pay their balances.
Those whose obligations exceed one thousand pesos (P1,000)
have five (5) years to pay such obligations.
What will happen if the beneficiaries/allocatees fail to pay such
balances?
Failure to pay the obligations annotated at the back of the CLOA
shall lead to the forfeiture of the lots in favor of the government for
distribution to other qualified beneficiaries/allocatees.
What are the functions of the MARO under these revised
procedures?
1. Conduct a physical inventory and perform the
following:
a. Identify areas with approved, incomplete,
erroneous and without subdivision surveys.
Recommend to the PARO, the completion/correction
of subdivision surveys within a period not to exceed
one year from the issuance of AO No. 03, Series of
1990 (date of effectivity 22 June 1990);
b. Review and evaluate the list of
allocatees/awardees and conduct lot verification to
determine whether said awardees/allocatees are still
occupying and tilling the lots. Prepare a master list of
occupants/claimants with corresponding lot numbers,
to be posted simultaneously for a period of 15 days at
the barangay hall, MARO Office and the Municipal
Building;
c. Assist all actual occupants/tillers who have not
been issued either an Order of Award (OA), Deed of
Sale or Certificate of Land Transfer (CLT) in
accomplishing the FB Application Form;
d. Undertake the computation of all the
obligations to be paid by the beneficiary.
2. Evaluate Application Forms and recommend
appropriate action. Recommendation shall be based on the
following guide:
For applicant with OA/CLT:
a. If applicant is living and is the actual
cultivator/occupant: Issue CLOA;
b. If deceased but the heirs are actual
cultivators/occupants: Issue CLOA to the estate of the
deceased or to one of the qualified heirs upon the
agreement of the others;
c. If not actual cultivator/occupant and employs
tenants prior to full payment of the cost of the
land:Cancel OA/CLT and issue CLOA to qualified
actual cultivator/occupant;
d. If permanently incapacitated: Issue CLOA
provided that cultivator/occupant has immediate
members of the farm household who could assist him
in farming;
e. If applicant mortgaged or sold his/her right and
left the area: Cancel OA/CLT and issue CLOA to
qualified actual occupant/tiller;
f. If occupying the wrong lot: Issue CLOA for lot
actually occupied and cancel OA/CLT ;
g. If absentee OA/CLT holder: Cancel OA/CLT
and issue CLOA to qualified actual occupant/tiller.
If actual occupant has no OA/CLT:
a. and has no other supporting documents: Issue
CLOA provided occupant is qualified and there is no
adverse claimant to the subject lot;
b. with transfer document (waiver of rights of
previous awardee): Issue CLOA if with DAR approval;
and if without DAR approval, still, issue CLOA
provided occupant is qualified and there is no adverse
claimant;
3. Prepare Land Distribution Folder for Landed Estates
for applicants recommended for issuance of CLOA.
4. Endorse the LDF to PARO for review and approval
as a basis for CLOA preparation.
5. Prepare a list of vacant and unawarded lots and lots
with awards recommended for cancellation.
6. Post the list of vacant and unallocated lots and lots
with awards recommended for cancellation for 15 days at
the MARO office and other conspicuous places within the
landed estate.
7. Identify and prioritize the list of farmer-beneficiaries
in close coordination with the BARC for consideration in the
distribution of available lots.
8. Prepare separate Land Distribution Folders for new
beneficiaries; and
9. Endorse LDF to PARO for review and consolidation.
What are the grounds for cancellation of orders of award?
1. Absence of the awardee from the landed estate for
more than six (6) months without doing any effort to make
the land productive;
2. Willful transfer of rights and is no longer occupying
the lot;
3. Voluntary renunciation or waiver of rights in
writing; IHcTDA
4. Failure to cultivate the lot for a period of six (6)
consecutive months from the date subject lot was awarded;
and
5. Death of awardee if he/she has no qualified heir.
(A.O. No. 3, Series of 1990)
What is the award ceiling for qualified beneficiaries?
The award ceiling shall not be more than three hectares. However,
qualified beneficiaries who have occupied and cultivated the land and
established their vested rights prior to 15 June 1988 in accordance with
then existing laws shall be awarded the legal limits allowed by said laws.
In the case of homelots, the award ceiling shall be 1,000 square
meters.
Who are the qualified beneficiaries?
1. Landless;
2. Filipino citizen;
3. Actual occupant/tiller who is at least 15 years of age
or head of the family at the time of filing of applicant; and
4. Has the willingness, ability and aptitude to cultivate
and make the land productive.
CHAPTER 20
BARANGAY AGRARIAN REFORM COMMITTEE (BARC)
20.1 LAWS AND ISSUANCES ON BARC
What is BARC ?

BARC or Barangay Agrarian Reform Committee is a CARP
implementing unit at the barangay level. Its organization was first
mandated by Executive Order No. 229 in 1987 and in 1988 by RA 6657.
Through the organization of the BARCs, the implementation of the
CARP will become truly community based where people at all levels
participate in decision making because they are in a better position to
know and understand the realities in the community.
What are the laws governing the organization of BARC ?
Section 19 of EO 229 which enumerated the composition and
functions of the BARC; and
Sections 46 and 47 of RA 6657 which further defined BARC
functions in addition to those provided in EO 229.
What guidelines provide the procedures for the formation,
organization and strengthening of the BARCs?
Administrative Order No. 14, Series of 1990 entitled, "Revised
Implementing Guidelines in the Formation, Organization and Operation
of the Barangay Agrarian Reform Committee".
This Administrative Order amended AO 05-89 to provide detailed
set of implementing rules for the formation, organization, and
operationalization of the BARC.
20.2 FUNCTIONS OF THE BARC
What are the functions of the BARC ?
The BARC is intended to facilitate the land transfer program in the
community. It also provides a convenient forum for resolving agrarian
issues, and allows the local farmer organizations the opportunity to
propose policies and coordinate the efficient delivery of support
services.
Under EO 229, the BARC is tasked to perform the following
functions:
1. Participate and give support to the implementation of
programs on agrarian reform;
2. Mediate, conciliate or arbitrate agrarian conflicts and
issues that are brought to it for resolution; and
3. Perform such other functions that the Presidential
Agrarian Reform Council (PARC), its Executive Committee,
or the DAR Secretary may delegate from time to time.
In addition, RA 6657 further delineated these functions as:
1. Assist in the identification of qualified beneficiaries
and landowners within the barangay;
2. Attest to the accuracy of the initial parcellary
mapping of the beneficiary's tillage,
3. Assist in the initial determination of the value of the
land;
4. Coordinate the delivery of support services to
beneficiaries;
5. Assist qualified beneficiaries in obtaining credit from
lending institutions;
6. Assist the DAR representative in the preparation of
periodic reports on CARP implementation for submission to
the DAR.
20.3 BARC COMPOSITION
Who compose the BARC ?
AO No. 14-90 revised the composition of the BARC, following the
rule of proportionate sectoral representation based on the land-to-the-
tiller principle. Hence, sectors are defined on the basis of one's access
or lack of access to the land. The BARC is now composed of 13
members who are representatives of sectors and organizations, as well
as government agencies.
Membership is divided into two groups: seven regular voting
members and six ex-officio non-voting members.
Regular Voting Members
1. farmer and farmworker
beneficiaries (4)
2. non-beneficiary farmers and
farmworkers (1)
3. agricultural cooperatives and other farmer
organizations (1)
4. landowners
(1)
It should be noted that the voting members are all residents of the
barangay. This residency requirement ensures that agrarian reform
implementation will indeed be community based. Regular activities of
the BARC can be better ensured when majority of its members are
residents of the community.
Ex-Officio Non-Voting Members:
5. municipal or provincial based non-government
organizations (1)
6. barangay
council (1)
7. Land Bank of the
Philippines (1)
8. Department of Agriculture official assigned in the
area (1)
9. Department of Environment and Natural Resources

official assigned in the
area (1)
10. DAR Agrarian Reform Program Technologist
assigned in the
area (1)
What is meant by "proportionate" sectoral representation and why
should this principle be followed in the composition of the BARC ?
Proportionate sectoral representation means bigger sectors shall
have bigger representation. This ensures democratic participation of the
intended beneficiaries of the CARP and wider participation of farmers in
planning, organization and management of agrarian reform activities.
Who comprise the farmer and farmworker beneficiaries sector?
This sector is composed of the following:
landless workers;
share tenants;
agricultural lessees, including ISF beneficiaries; and
amortizing owners.
Who compose the non-beneficiary farmer and farmworkers
sector?
The non-beneficiary farmers and farmworkers sector is composed
of the small owner-cultivators who own and till not more than five (5)
hectares of agricultural lands, either by personal cultivation or with the
help of the immediate household.
Since membership in the BARC is based on sectoral
representation, i.e., land tenure classification, what sector shall be
represented by a farmer leader who is a leaseholder and farmworker at
the same time, or a farmer-beneficiary who is also a member of a farmer
organization?
A farmer with mixed tenure shall represent a sector where he/she
primarily derives his/her regular income. This consideration is based on
the experience that one cannot compel any individual or a group into
action if he/they are not directly affected by the issues or problems being
raised.
20.4 BARC OFFICERS
Who are the BARC officers and how are they elected?
There are three elected positions in the BARC. These are the
Chairperson, Vice Chairperson, and an Assistant Secretary (The BARC
Secretary is automatically the DAR ARPT).
These three officers are elected by the sectoral representatives
the regular voting members. Hence, all BARC officers are residents of
the barangay.
The thirteen-member BARC shall form different committees based
on need and priority activities. They shall select the committee heads
deemed as appropriate.

Can a barangay chairperson be an officer of the BARC even if he
is not a beneficiary of the CARP?
Yes. A barangay chairperson may be elected as regular officer
(with voting power) of the BARC if he/she represents any of the four
sectors composing the BARC (e.g., ARBs, non-ARBs, farmer
organization or cooperative, or landowners), provided, however that he
is not appointed ex-officio member representing the barangay council.
What is the length of tenure of BARC member official?
The elected BARC representatives will serve a maximum of two
(2) years while the BARC officers will serve at the pleasure of the
committee.
When can a BARC member/official be terminated?
A BARC member may be removed by a simple majority vote or
upon serving a maximum period of two years.
Who replaces a terminated BARC member?
A BARC member who is unable to complete his/her term of office
for some reasons is replaced by an alternate member who will serve the
remaining tenure of the original member.
20.5 FORMATION OF BARC
Should BARCs be organized in all the barangays nationwide?
No. They should be organized where they are needed. The
MARO/ARPT together with partner POs/NGOs should jointly identify
and prioritize where BARCs should be organized and/or strengthened.
The BARC Manual established the following criteria:
1. High farmers discontent and desire for agrarian
reform;
2. Wide hectarage covered by CARP;
3. Large number of actual and potential beneficiaries;
and
4. Willingness of the ARBs in the community to
organize/strengthen the BARC.
These criteria are very similar to the criteria set for ARC selection.
Given the ARC development thrust of the Department, priority should
therefore be given to ARC areas.
When should BARCs be organized?
BARCs are organized or should be reorganized if the community
is fully aware of and feels the need for it. BARCs are formed out of the
people's willingness to address agrarian reform issues and problems. Its
formation cannot be forced, otherwise, the spirit of volunteerism will not
be present. If its formation is forced, the people will perceive it as a
burden and members will expect DAR to financially support them as
compensation for their work.
Should a BARC be organized even if there are no farmer
organizations, associations or cooperatives in the barangay?
Initial efforts of DAR and partner NGOs should be focused on
encouraging the organization of ARBs instead of the formation of a
BARC.
What are the processes involved in the organization of the
BARC ?

There are four stages in the organization of the BARC. These are:
1. Pre-Organization Stage. This is the process by which
the MARO prepares the sectors concerned in the
organization of BARC. He/she performs the following
functions:
a. coordinates with the FOs and/or NGOs;
b. briefs the FOs and/or NGOs about BARC;
c. identifies the areas where the BARC will be
organized in coordination with the FOs/NGOs; and
d. identifies together with the FO/NGO the
respective responsibilities of each sector.
In areas where there is no existing FO/NGO, the MARO
takes a more active role in the formation of base groups.
2. BARC Organization. When the sectors are fully
aware of the need to organize BARC, the MARO, together
with the FOs and/or NGOs, convene the representatives of
the sectors concerned to discuss with them the CARL, the
functions of the BARC, the schedule of the first meeting and
the schedule of election of officers. After discussing the
intent of the committee, the election of the BARC officers
and the planning workshop are conducted.
3. BARC Operation and Management. After the BARC
is formally organized, the committee prepares plans and
mechanisms for the performance of its duties.
4. Alliance Building. The BARC coordinates with other
entities within and outside the community for its identified
needs. Simultaneously, it establishes a network to sustain
itself as a people's organization.
20.6 MEDIATION AND CONCILIATION
Is BARC a quasi-judicial body?
No, the BARC is only mandated to mediate and conciliate agrarian
disputes at the barangay level. Mediation and conciliation refers to the
process whereby the contending parties are persuaded by the BARC to
settle their disputes amicably. The BARC does not render a decision.
(See page 48)
What does settlement of disputes at the lowest possible level
mean?
The capability of the BARC and the community must be harnessed
to resolve local agrarian conflicts at the barangay level and avoid as
much as possible passing this responsibility to outside entities or to
higher levels. This will promote the speedy and cost-free administration
of justice; alleviate the congestion of court and DARAB dockets, and
develop a sense of commitment among landowner and farmer-
beneficiaries to comply with their agreements, thus ensuring the
successful implementation of CARP.
As the first structure for conflict management, at what levels will
agrarian disputes be resolved?
Agrarian conflicts settlement could be done at the following levels:
1. BARC chairperson or his/her duly authorized
representative;
2. BARC panel; and
3. BARC en banc.
Who decides on the mechanism to be followed in the settlement of
disputes?
The BARC Chairman after evaluating the case may decide at
which level settlement will be initiated.
Who shall compose the panel of mediators/conciliators/arbitrators?
The panel shall be composed of three (3) BARC members
designated by the BARC Chairperson.
Who selects the members of the panel of
mediators/conciliators/arbitrators?
Members of the panel of mediators/conciliators/arbitrators are
designated by the BARC chairperson upon recommendation of other
members.
What happens if a member of the panel fails to attend the
mediation/conciliation conference?
The presence of two members in any panel constitutes a quorum
to do business. The chairperson may also replace any member who is
absent or incapacitated.
What are the procedures to be followed in the settlement of
disputes by the BARC ?
Administrative Order No. 08, Series of 1994 spelled out the
procedures for the settlement of agrarian disputes.
1. A written or verbal complaint shall be lodged with the
BARC. Written complaints shall be in Mediation and
Conciliation M/C Form 1 while verbal complaint shall be
reduced in writing by the BARC Chairperson or Secretary.
2. The BARC Chairperson interviews the complainant
regarding vital information.
3. The BARC Chairperson issues a Notice of Meeting to
both the complainant and defendant.
4. The BARC en banc, panel or the Chairperson then
endeavors to have the contending parties agree to an
amicable settlement. All agreements are written down and
signed by the contending parties.
How long will the BARC resolve disputes lodged with them?
The BARC shall endeavor to mediate, conciliate and settle
agrarian disputes lodged before it within thirty (30) days from the time it
takes cognizance of the dispute.
What will happen if the BARC fails to resolve agrarian disputes
within thirty days?
If the BARC fails to settle the dispute within thirty days, it shall
issue a certification that the dispute has not been settled, together with a
copy of the proceedings and furnish a copy to the concerned parties
within seven (7) days after the expiration of the 30 day period. This
certification must be attested by the BARC Chairperson and endorsed
by the MARO to the PARAD or to the PARO for appropriate action.
Is the MARO allowed to resolve disputes or problems presented
before him/her without the presence of the BARC chairman and
members?
Yes. The MARO can immediately resolve disputes or problems
presented before him/her even in the absence of the BARC Chairperson
and its members. Although the BARC would be the ideal forum for the
resolution of disputes and problems, this must not limit or prevent the
MARO from performing his/her duties. Delays in the resolution of cases
may result in further complications.
Does the BARC have any jurisdiction over criminal offenses
under RA 6657?
No. Only the Special Agrarian Court (a branch of the Regional
Trial Court) has the original and exclusive jurisdiction of all criminal
offenses under RA 6657 (including petitions for determination of just
compensation for landowners).
CHAPTER 21
DAR ADJUDICATION BOARD
21.1 DARAB JURISDICTION
What is the jurisdiction of the DARAB?
The DARAB has primary and exclusive jurisdiction, both original
and appellate, to determine and adjudicate all agrarian disputes
involving the implementation of the CARP under RA 6657, EO Nos.
228, 229, and 129-A, RA 3844 as amended by RA 6389, PD 27 and
other agrarian laws and their implementing rules and regulations.
Specifically, such jurisdiction shall include but not limited to cases
involving the following:

1. Cases involving the rights and obligations of persons
engaged in the management, cultivation and use of all
agricultural lands covered by the CARP and other agrarian
laws;
2. Cases involving the valuation of land and preliminary
determination and payment of just compensation, fixing and
collection of lease rentals, disturbance compensation,
amortization payments and similar disputes concerning the
functions of the Land Bank of the Philippines (LBP);
3. Cases involving the annulment or cancellation of
lease contracts or deeds of sale or their amendments
involving lands under the administration and disposition of
the DAR or LBP;
4. Cases arising from, or connected with membership
or representation in compact farms, farmers' cooperatives
and other registered farmers' associations or organizations,
related to lands covered by the CARP and other agrarian
laws;
5. Cases involving the sale, alienation, mortgage,
foreclosure, pre-emption and redemption of agricultural
lands under the coverage of the CARP or other agrarian
laws;
6. Cases involving the issuance, correction and
cancellation of Certificates of Landownership Award
(CLOAs) and Emancipation Patents (EPs) which are
registered with the Land Registration Authority;
7. Cases previously falling under the original and
exclusive jurisdiction of the defunct Court of Agrarian
Relations under Section 12 of Presidential Decree No. 946,
except sub-paragraph (2) thereof and Presidential Decree
No. 815; and
8. Such other agrarian cases, disputes, matters or
concerns referred to it by the DAR Secretary.
However, matters involving strictly the administrative
implementation of the CARP and agrarian laws and regulations, shall be
the exclusive prerogative of and cognizable by the DAR Secretary.
Is the rule that the DARAB cannot take cognizance of any agrarian
dispute unless there is a certification of the BARC where the land is
located that the dispute has not been successfully settled absolute?
No. Rule III of the DARAB Revised Rules of Procedure allows the
DARAB to take cognizance of an agrarian dispute even without the
BARC certification if:
1. The dispute does not fall under any of the exceptions
enumerated;
2. The required certification cannot be complied with for
valid reasons like the non-existence or non-organization of
the BARC or the impossibility of convening it. The PARO
shall conduct mediation and conciliation proceedings and
issue a certification to that effect;
3. It involves resolving and disposing of preliminary
incidents related to the case, such as motion for the
issuance of status quo orders, temporary restraining orders,
preliminary injunctions and such similar motions
necessitating immediate action.
However, the lack of the required certification cannot be made a
ground for the dismissal of the action. Every opportunity will be given the
complainant to secure the certification.
What are the exceptions referred to in No. 1 above?
BARC certification shall not be required in the following cases:
1. Where the issue involves the valuation of land to
determine just compensation for its acquisition;
2. Where one party is a public or private corporation,
partnership, association or juridical person, or a public officer
or employee and the dispute relates to the performance of
his official functions;
3. Where the matter at issue involves merely the
administrative implementation of agrarian reform law, rule,
guideline, or policy; and
4. Such other cases where the Secretary of Agrarian
Reform may determine that the matter at issue is beyond the
pale of mediation, conciliation or compromise.