32-A.
1 Incentive plan for regular fishpond or prawn farmworkers or
32.7 Transitory period prior to turnover of land to beneficiaries
A transitory period, the length of which shall be determined by
the DAR, shall be established in order to forestall any disruption in the
normal operation of lands to be turned over to the farmworker-
benefeciaries.
fishpond or prawn farm worker’s organization
 Within 6 months from the effectivity of RA 7881. Execute an
incentive plan.
 Under the incentive plan, seven point five percent of their net
profit before tax from the operation of the fishpond or prawn
farms.
 Shall be subject to to periodic audit or inspection by certified
public accountants chosen by the workers.
 Shall not apply to agricultural lands subsequently converted to
fishpond or prawn farms, provided the size of the land
converted does not exceed the retention limit of the
landowner.

32.2 Gross Sales defined
Means the total annual revenue from the sale of all agricultural
products, in their raw or or original state, derived from the land or farm
owned, operated under lease, management, production, grower or
service contract, or the similar arrangement by an agricultural
enterprise.
32.4 Employees Covered
All farmworkers of covered employers, wether classified as regular,
seasonal, technical or other farmworker, but excluding managerial and
supervisory employees of covered employers, are included in the
mandated Production and Profit Sharing. Provided, that any
farmworker who renders service, regardless of duration, within a
covered period shall be entitled to this benefit. Provided, further, that
in the absence of any Presidential Agrarian Reform Council (PARC)
determination of a specific award limit, the farmer-beneficiary shall not
own more than three (3) hectares of agricultural land.
distribute additional ten percent (10%) of the net profit after tax to said
32.3 Employers covered
(1) Any enterprise owning or operating agricultural lands under
lease, management contract, production venture or other
similar arrangements, agricultural land;
(2) Multinational corporations engaged in agricultural activities;
and
(3) Commercial farms devoted to commercial livestock, poultry and
swine raising, aquaculture including saltbeds, fishponds, fruit
farms, orchards, vegetable and cut-flower farms, and cacao,
coffee and rubber plantations
32.6 Manner of sharing of gross sales and net profit
(a) When the individuals or entities owning or operating under
lease or management contract, agricultural lands realize gross
sales in excess of 5 million per annum:
i. They shall distribute 3 % of the gross sales from the production
of such lands as compensation to regular and other
farmworkers over and above the compensation they currently
receive and
ii. They shall distribute 1% of the gross sales of the entity to the
managerial, supervisory and technical group in place at the time
of the effectivity of the CARL; and
(b) When such individuals or entities realizes a profit, they shall
regular and other farm workers.

If within two (2) years from the approval of this Act, the land or stock
transfer envisioned above is not made or realized or the plan for such
stock distribution approved by the PARC within the same period, the
agricultural land of the corporate owners or corporation shall be subject
to the compulsory coverage of this Act.
In the event that the individual or entity realizes a profit, an additional
ten percent (10%) of the net profit after tax shall be distributed to said
regular and other farmworkers within ninety (90) days of the end of the
fiscal year.
To forestall any disruption in the normal operation of lands to
be turned over to the farmworker-beneficiaries mentioned above, a
transitory period, the length of which shall be determined by the DAR,
shall be established.
SECTION 32. Production-SharingPending
final land transfer, individuals or entities owning, or operating under
lease or management contract, agricultural lands are hereby mandated
to execute a production-sharing plan with their farm workers or
farmworkers' reorganization, if any, whereby three percent (3%) of the
gross sales from the production of such lands are distributed within
sixty (60) days of the end of the fiscal year as compensation to regular
and other farmworkers in such lands over and above the compensation
they currently receive: Provided, That these individuals or entities
realize gross sales in excess of five million pesos per annum unless the
DAR, upon proper application, determines a lower ceiling
During this transitory period, at least one percent (1%) of the gross
sales of the entity shall be distributed to the managerial, supervisory
and technical group in place at the time of the effectivity of this Act, as
compensation for such transitory managerial and technical functions as
it will perform, pursuant to an agreement that the farmworker-
beneficiaries and the managerial, supervisory and technical group may
conclude, subject to the approval of the DAR.
Upon certification by the DAR, corporations owning agricultural lands
may give their qualified beneficiaries the right to purchase such
proportion of the capital stock of the corporation that the agricultural
land, actually devoted to agricultural activities, bears in relation to the Corporations or associations which voluntarily divest a proportion of
company's total assets, under such terms and conditions as may be their capital stock, equity or participation in favor of their workers or
agreed upon by them. other qualified beneficiaries under this section shall be deemed to have
complied with the provisions of the Act: Provided, That the following
In no case shall the compensation received by the workers at conditions are complied with:
the time the shares of stocks are distributed be reduced. The same
principle shall be applied to associations, with respect to their equity or
participation.

a) In order to safeguard the right of beneficiaries who own shares

of stocks to dividends and other financial benefits, the books of
the corporation or association shall be subject to periodic audit
c)Any shares acquired by such workers and beneficiaries shall have the
by certified public accountants chosen by the beneficiaries;
same rights and features as all other shares.
b) Irrespective of the value of their equity in the corporation or
d) Any transfer of shares of stocks by the original beneficiaries shall be
association, the beneficiaries shall be assured of at least one (1)
void ab initio unless said transaction is in favor of a qualified and
representative in the board of directors, or in a management or
registered beneficiary within the same corporation.
executive committee, if one exists, of the corporation or association;
and
 30.2 Homelot defined
SECTION 30. Homelots and Farmlots for Members of Cooperatives.
Refers to a lot suitable for dwelling with an area of not more than three
The individual members of the cooperatives or corporations mentioned
percent (3%) of the area of the land-holding provided that it does not
in the preceding section shall be provided with homelots and small
exceed one thousand (1000) square meters and that it shall be located
farmlots for their family use, to be taken from the land owned by the
at a convenient and suitable place within the land of the landholder to
cooperative or corporation.
be designed by the latter, where the tenant shall construct his dwelling.

30.3 Where homelot is situated in retained area

SECTION 31. Corporate Landowners.
An ARB may be awarded the homelot he actually occupies if It is subject
Corporate landowners may voluntarily transfer ownership over their
of land distribution under CARP, provided said homelot does not form
agricultural landholdings to the Republic of the Philippines pursuant to
part of the retained area of the land owner
Section 20 hereof or to qualified beneficiaries, under such terms and
conditions, consistent with this Act, as they may agree upon, subject to
confirmation by the DAR.
A tenant-beneficiary who is awarded a farmlot but has his
homelot within the retained area of the landowner

The landowner may opt to request the farmworker-beneficiary

not to remove the dwelling or other improvements for the former’s
own use.
28.6 Crops not yet harvestable deemed as plantings or sowings in
good faith
Crops which are not yet harvestable and introduced by the former
landowner prior to the latter’s receipt of the corresponding notice or
advice are considered plantings or sowings in good faith
 The right to harvest Belong to the CLOA-title holders
 The planter or sower entitled to reimbursement for the cost
of plantings or sowings
 Payment thereof shall only be made after the CLOA-title
holders obtained the proceed from the initial harvest
29.1 Collective Ownership allowed under CARL
Collective ownership is permitted in two (2) provisions of the CARL.
Section 29 allows workers cooperatives or associations to collectively
own the land
Section 31 allows corporations or associations to own agricultural land
with the farmers becoming stock-holders or members
Cooperatives can be registered with the Cooperative Development
Authority (CDA) and acquire legal personality of their own.
Corporations are juridical persons under the Corporation Code of the
Philippines or Batas Pambansa Bilang 68
SECTION 29. Farms Owned or Operated by Corporations or Other
Business Associations.
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 owned collectively by the workers' cooperative
or association which will deal with the corporation or business
association.
 Until a new agreement is entered into by and between the
workers' cooperative or association and the corporation or
business association, any agreement existing at the time this
Act takes effect between the former and the previous
landowner shall be respected by both the worker’s cooperative
or association and the corporation or business association.
29.3 Total Area to be awarded to co-owners, cooperative or collective
organization
Shall not exceed the total number of its members multiplied by the
award limit of three (3) hectares, except in meritorious cases as
determined by PARC.
 SECTION 28. Standing Crops at the Time of Acquisition
The landowner shall retain his share of any standing crops unharvested
at the time the DAR shall take possession of the land under Section 16
of the Act, and shall be given a reasonable time to harvest the same.
28.2 Payment to landowner completes acquisition process
The payment to the landowner as evidenced by the Certification of
Deposit (COD) issued by the Land Bank of the Philippines (LBP) pursuant
to Sec. 16 and 24 of the CARL signals the completion of the acquisition
process over a specific landholding
28.1 Standing crop
refers to harvestable agricultural produce or a portion thereof normally
harvested for such particular crop growing on land at the time the DAR
takes possession thereof
28.4 Taking of Possession Construed
Refers to the explicit act/s of the DAR, through an ocular inspection or
any other acts by which the landowner is informed of DAR’s taking actual
and physical possession of a certain agricultural land acquired under CARP
as evidenced by a COD issued by the LBP pursuant to sec. 16 (e) and 24 of
the CARL