or impliedly by acceptance of benefits by the
landowner, or by an act of cultivation thru the
AGRARIAN LAW
by
Barte
INTRODUCTION
A. DEFINITIONS AND TERMS
Reform – presupposes that something is defective,
hence, needs reformation and correction.
Land Reform – denotes a broad concept of conventional
and revolutionary measures intended to correct certain
defects in the relationship between landowner and tiller
regarding their rights and obligations in the cultivation
and management of landholding.
Agrarian Reform – refers not only to land reform but also
embraces a full range of measures designed to improve
the relationship between landowner and tiller, employer
and employee, corporate management and stockholders,
cooperatives and members, and other farmers’
organizations including their economic, social and
political relations with the community and the
government.
COMMENTS:
Under the Comprehensive Agrarian Reform Law of 1998
(R.A. No. 6657), Agrarian Reform is defined as the
redistribution of lands, regardless of crops or fruits
produced, to farmers and regular farmworkers who are
landless, irrespective of tenurial arrangement.
AGRARIAN STRUCTURE
Refers to that complex set of relationships within the
agricultural sector between tenure structure, production
structure and structure for supporting services.
1. Land Tenure Structure – is a concept that connotes
one or more types of land tenure system regulating the
rights to ownership and control and usages of land and
the duties accompanying such rights.
a. Agricultural Tenancy – refers to the manner of
holding agricultural lands.
b. Share Tenancy – under this system of
landholding, tillers work the land as
sharecroppers entitled to share in the produce of
the land.
c. Leasehold Tenancy – is a tenurial system which
was instituted by R.A. No. 3844 (Code of
Agrarian Reforms) characterized by lessor and
lessee relationship which is created either by
written or oral agreement between the parties
toleration of the owner.
COMMENTS:
Leasehold relationship abolished the share tenancy
system under the Rice Share Tenancy Act of 1933 as
amended, P.D. No. 27 was issued by then President
Ferdinand Marcos which aside from upholding the
leasehold relationship, likewise ordained the
emancipation of tenant-farmers from the bondage of the
soil, and considered them ipso facto owners of the lands
they till primarily devoted to rice and corn.
P.D. No. 27 (Tenants Emancipation Decree) likewise fixed
the retention limit for the landowner an area not
exceeding seven (7) hectares, provided, that such
landowner is cultivating or will now cultivate the land,
and furthermore, that he does not own other
agricultural lands of more than seven (7) hectares.
d. Amortizing Owner – a tenant-farmer whose
status had been raised automatically by
operation of law from leasehold tenant to that of
amortizing owner, who makes repayments of the
purchase price of the land he tills to the Land
Bank.
e. Full Owner or Owner-Cultivator – is an
amortizing owner (tenant-farmer) who has
completed full payment of his amortization to
the Land Bank of the Philippines, and is therefore
entitled to a certificate of title under the Torrens
System.
COMMENTS:
Under R.A. No. 3844, as amended by R.A. No. 6389,
there are three shifts in the conversion of the tenurial
status of tenant-farmer to full owner, namely: share
tenant to leaseholder to amortizing owner, and from
amortizing owner to full owner (owner-cultivator).
An amortizing owner by operation of law (P.D. No. 27) is
entitled to an Emancipation Patent which serves as a
farmholder’s provisional title of ownership to the land
upon completion of his amortization repayments to the
Land Bank, or to the Landowner in cases of farmers who
have been amortizing their lands with the landowner.
f. Owner-Cultivator – is the term applied to a
tenant – farmer who has attained the status of
full owner and qualified beneficiary under the
Agrarian Reform Law of the Philippines.
2. Production Structure – is a concept that refers to the
use of the land, nature and method of farm operation,
and the process of production.
3. Structure for Supporting Services – is an agrarian
reform measure designed to help the tenant – tiller in
the availment of credit facilities, marketing of his
products, supplying of seeds, insecticides, fertilizers,
irrigation, storage, processing and other technical
assistance / services in direct bearing to reforms of
tenure and production structures.
HISTORICAL BACKGROUND
Even before the Spaniard came into these Island, the
idea of private ownership of land was not prevalent.
Land was commonly owned by the community or
barangay, cultivated communally or individually by
members of the barangay.
When the Spaniard came in 1521, common ownership of
land slowly took the backseat, and private property
became dominant, paving the way to Encomienda
system.
The encomienda was a vehicle used to collect taxes from
Filipinos, who tilled the land and surrendered part of
their produce to the encomendero as tribute in the form
of agricultural crops, poultry, woven mats, etc. Towards
the end of the 18th century, there was a mad scramble
for wealth thru world trade. Thus, encomienda were
replaced by haciendas.
CONSTITUTIONAL MANDATES ON AGRARIAN REFORM
The state shall promote a just and dynamic social order
that will free the people from poverty through policies
adequate social services, promote full employment, a
rising standard of living, and an improve quality of life for
all.
The state shall promote a comprehensive rural
development and agrarian reform.
The State shall, by law, undertake an agrarian reform
program 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.
(Art. XIII, Social Justice and Human Rights, Sec. 4).
CONTEMPORANEOUS PRECEPTS AND MEASURES
In order to implement the 1987 Constitution, Congress
passed the Comprehensive Agrarian Reform Law of 1988.
(R.A. NO. 6657) which was signed into law by the
President of the Phillippines on June 10, 1988, and took
effect on June 15, 1988. This is the main law on agrarian
reform in the Philippines today. The CARL provides that
all other laws on agrarian reform not contrary or
inconsistent with the provisions of this Act shall have
suppletory effect.
LAND REFORM MEASURES RETRACED
Treaty of Paris (1898) – the confiscation of friar lands
and distributed among peasants by the independent
government of Malolos during the Philippine Revolution.
Philippine Bill (1902) – Limited private individual
landholdings to 16 hectares, and corporate landholdings
to 1,024 hectares.
Land Registrations Act (1902) – Landowners were
required to register their landholdings and acquire
Torrens titles to land properties.
Friar Land Act – Instituted transfer of friar lands to the
tenants to diffuse the peasant unrest.
Rice Share Tenancy Act (Public Act No. 4054) - which
provided for a 50-50 sharing of the crop, an interest rte
ceiling of 10 percent per crop year, and safeguards
against arbitrary dismissal of tenants by landlords.
Commonwealth Act.No. 278 of 1938 – to buy farms and
large estates for subletting to bonafide occupants with
an option to buy, thru the National Land Settlement
Administration (NLSA).
Sugar Cane Tenancy Contracts Act. (Act. No. 4113) –
makes it a duty of the sugar central to exhibit to the
tenant the receipts of the number of tons milled by the
landowner thereat.
Commonwealth Act. No. 103 – created the Court of
Industrial Relations (CIR) which exercised jurisdiction
over disputes arising from relationship between
agricultural workers and landowners.
Commonwealth Act. No. 213 – deals with the right to
form legitimate labor organizations and to enter into
collective bargaining agreements between management
and labor.
Commonwealth Act No. 178 – which improved the
provision of Act No. 4054 the Rice Share Tenancy Act,
giving more teeth and protection to the rights of tenants
of agricultural lands.
Republic Act. No. 34 – amended certain Sections of the
Rice Share Tenancy Act providing for a 70 – 30 crop –
sharing method.
Republic Act No. 1160 – established the National
Resettlement and Rehabilitation Administration (NARRA)
of landless dissidents and other landless farmers.
Republic Act No. 1199 (Agricultural Tenancy Act) –
infused an added boost to the tenurial rights of tenant –
tiller.
Land Reform Act (R.A. No. 1400, 1955) - guaranteed the
expropriation of all tenanted landed estates. It set a
retention limit of 300 hectares for individually – owned
estates, and 600 hectares for corporate – owned estates.
Republic Act. No. 1267 – An Act Creating the Court of
Agrarian Relations to try and decide all matters arising
from the relationship of persons in the cultivation and
use of agricultural lands.
Republic Act. No. 3844 – marked the abolition of share
tenancy and / or the system of share – cropping between
landowner and tenant, and the automatic conversion of
share tenants into leaseholders.
Republic Act No. 6389 (Code of Agrarian Reforms) – an
improvement of R.A. No. 3844, this amendatory Act
featured the creation of the Department of Agrarian
Reforms (DAR).
Agrarian Reform Special Fund Act (Rep. Act. No. 6390) –
provided for a special account and financial support for
the Agrarian Reform Program of the government.
Presidential Decree No. 2 – declaring the entire nation
as a land reform area.
Presidential Decree No. 27 – decreeing the
emancipation of the tenants, transferring to them the
ownership of the land they till.
Proclamation No. 131 – Instituting a comprehensive
agrarian reform program which covers, all public and
private agricultural lands as provided in the Constitution.
Executive Order No. 228 – Declaring full landownership
to qualified beneficiaries covered by Presidential Decree
No. 27.
Executive Order No. 229 – Providing for the mechanisms
for the implementation of the comprehensive agrarian
reform program, creating the Presidential Agrarian
Reform Council (PARC).
Executive Order No. 129-A – Modifying Executive Order
No. 129, reorganizing and strengthening the Department
of Agrarian Reform.
Republic Act No. 6657 - As primary agrarian land reform
measure in the country today, its operation covers all
public and private agricultural lands, including other
lands of the public domain suitable for agriculture.
CHAPTER I
AGRICULTURAL LEASEHOLD CONCEPT
REPUBLIC ACT No. 3844
AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM
CODE AND TO INSTITUTE LAND REFORMS IN THE
PHILIPPINES, INCLUDING THE ABOLITION OF TENANCY
AND THE CHANNELING OF CAPITAL INTO INDUSTRY,
PROVIDE FOR THE NECESSARY IMPLEMENTING
AGENCIES, APPROPRIATE FUNDS THEREFOR AND FOR
OTHER PURPOSES.
Section 1. Title - This Act shall be known as the
Agricultural Land Reform Code.
Prefatory Statements
The thrust of this legislation is the drastic abolition of
share tenancy system. It provided for the automatic
conversion of the sharecropper to the status of an
agricultural lessee, governed by the system of
agricultural leasehold which is established either:
a. by agreement of the parties, whether oral or
written, or
b. by operation of law.
The Agricultural Land Reform Code still finds application
to the following:
a. areas which have not come within the operation
and implementation of P.D. No. 27 (since PD No.
27 abolished leasehold in tenanted rice and corn
lands);
b. agricultural laborers subject to the provisions of
the Labor Code;
c. organization and operation of the Land Bank;
d. provisions on resettlements of farmers;
e. right to pre-emption and redemption, with
respect to land-owner’s retained area, should
such landowner decide to sell his
tenanted/leased retained area, the tenant has
the preferential right to purchase and/or redeem
the same in case the land is sold to a third
person without the tenant’s knowledge;
f. right of the tenant/lessee to 75% share from the
standing crops, under Sec. 34 in case of
compulsory acquisition of private agricultural
lands under RA No. 6657;
Three shifts in the mode of acquisition
 a. The automatic conversion of the status of share
tenant to leaseholder characterized by
payment of fixed rentals;
b. The second shift which is the conversion of the
leaseholder to amortizing owner, characterized
by the Land Bank purchase of the property with
a concomitant obligation imposed on the
tenant-lessee to pay Land Bank on amortization
basis the purchase price of the farmholding;
c. The third shift which converts the status of an
amortizaing owner into full owner or owner-
cultivator upon full payment of the remaining
balance of the amortization.
Declaration of Policy – It is the policy of the state:
 To establish cooperative – cultivatorship among
those who live and work on the land as tillers.
 Owner-cultivatorship and the economic family-
size farms as the basis of the Philippine
agriculture
 Divert landlord capital in agriculture to industrial
development
 To achieve a dignified existence for the small
farmers free from pernicious institutional
restraints and practices
 To create a truly viable and economic structure
in agriculture conducive to a greater productivity
and higher farm incomes through a cooperative
system of production, procession, marketing,
distribution, credit and services
 To apply all labor laws equally
 To provide a more vigorous and systematic land
resettlement program and public land
distribution
 To make small farmers more independent, self-
reliant and responsible citizens, and a source of
genuine strength in our democratic society
 To involve local governments in the
implementation
 To evolve a system of land use and classification
Section 3. Composition of Code -
1. An agricultural leasehold system to replace all
existing share tenancy systems in agriculture;
2. A system of crediting rental as amortization
payment on purchase price;
3. A declaration of rights for agricultural labor;
4. A machinery for the acquisition and equitable
distribution of agricultural land;
5. An institution to finance the acquisition and
distribution of agricultural land;
6. A machinery to extend credit and similar
assistance to agricultural lessees, amortizing
owners-cultivators, owners-cultivator and
cooperatives;
7. A machinery to provide marketing, management
and other technical assistance and/or services to
agricultural lessees, amortizing owners-
cultivators, owner-cultivator, cooperatives;
8. A machinery for cooperative development;
9. A department for formulating and implementing
projects of agrarian reform;
10. An expanded program of land
11. A judicial system to decide issues arising under
this Code.
12. A machinery to provide legal assistance to
agricultural lessees, amortizing owners-
cultivator, and owners-cultivator.
Repayment Scheme and Credit Assistance
The functions of a machinery that used to extend credit
and financial assistance to agricultural lessees,
amortizing owners-cultivator, and cooperatives are now
transferred from the Agricultural Credit Administration
(ACA) to the Land Bank of the Philippines.
The same scheme of repayments of RA No. 3844 applies
to both PD No. 27 and RA No. 6657. The difference is
that the period of amortization payments which was
staggered within the period of 15 years, in PD No. 27,
have been extended to 30 years under Section 26 of RA
No. 6657.
Jurisdiction on Agrarian Disputes
All agrarian disputes – involving compulsory arbitration
between agricultural labor and landlords, and in
connection with the relation of agricultural lessors and
lessees – are now under the cognizance of the
Department of Agrarian Reform thru the Agrarian
Reform Adjudication Board.
The Department of Agrarian Reform Adjudication Board
(DARAB) in turn delegates its functions to the respective
Regional and Provincial Adjudicators of the DAR. Any
decision, order, award or ruling of the DAR on any
agrarian dispute, may be brought to the Court of Appeals
on certiorari, within 15 days from notice.
Special Agrarian Courts
Under the present law (R.A. No. 6657) all controversies
involving the determination of just compensation and
prosecution of all criminal offenses arising from
violations of the provisions of this Act, fall under the
original and exclusive jurisdiction of Special Agrarian
Courts. The SC may designate one or more Branches of
the RTC for the purpose of trying and deciding the two
specific types of cases mentioned. The decision of the
Special Agrarian Court shall be appealable to the CA by
means of a petition for review within 15 days from notice
Sec. 26, RA No. 3844, anent the obligations of the lessee,
is impliedly repealed and/or amended by Sec. 50, RA No.
6657, which means that all matters or incidents including
relationship and obligations between the lessor and
lessee in agricultural leasehold shall be adjudicated by
the DAR thru its instrumentality, the DARAB, in the
exercise of its quasi-judicial functions, and no longer by
the regular courts of Special Agrarian Courts, whose
jurisdiction is limited to the determination of just
compensation and prosecution of all criminal offenses
arising from the violation and implementation of the
CARL.
Bureau of Agrarian Legal Assistance
They shall be responsible for the development of plans
and programs for the extension of legal information to
farmers; extension of legal services to them.
DEFINITION OF TERMS
Agricultural land – means land devoted to any growth,
including but not limited to crop lands, saltbeds,
fishponds, idle land and abandoned land.
Agricultural lessee – means a person who by himself and
with the aid available from within his immediate farm
household, cultivates the land belonging to, or possessed
by, another with the latter’s consent for purposes of
production, for a price certain in money or in produce or
both.
Agricultural lessor – means a person, natural or juridical,
who either as owner, civil law lessee, usufructuary, or
legal possessor, lets or grants to another the cultivation
and use of his land for a price certain.
Agricultural year – means the period of time required for
raising a particular agricultural product, including
preparation of the land, sowing, planting and harvesting
of crops, and when applicable, threshing of said crops.
Farm implements – means hand tools or machineries
ordinarily employed in farm enterprise.
Immediate farm household - means the members of the
family of the lessee and lessor and other persons who
are dependent upon him for support and who usually
help him in his activities.
Proven farm practices – means sound farming practices
generally accepted through usage or officially
recommended by the Agricultural Productivity
Commission for a particular type of farm.
Personal cultivation – means cultivation by the lessee or
lessor in person and/or with the aid of labor from within
his immediate household.
Work animals – means animals ordinarily employed in a
farm enterprise.
Agrarian dispute – means any controversy relating to
terms, tenure or condition of employment, or concerning
an association or representation of persons in
negotiating, maintaining, changing or seeking to arrange
terms on conditions of employment.
Agricultural owner-cultivator – means any person who,
providing capital and management, personally cultivates
his own land with the aid of his immediate family and
household.
Fair rental value – means the value not in excess of
allowable depreciation plus 6% interest per annum.
Incapacity – which is a valid cause to oust the
leaseholder from his farmholding, means any cause or
circumstance which prevents the lessee from fulfilling his
contractual and other obligations under the Code, as
physical disability or permanent illness, insanity, etc. not
occasioned by fortuitous event.
Modes of Land Tenure Allowed under R.A. No. 3844
1. Leasehold system – characterized by a tenant –
farmer personally and actually cultivating the
farmholding under a leasehold relationship
whereby the lessee pays a fixed amount of rental
whether in cash or in kind to the lessor. (PD No.
27 abolished leasehold in tenanted rice and corn
lands)
2. Share tenancy – the relationship which exists
whenever two persons agree on a joint
undertaking for agricultural production wherein
one party furnishes the land and the other labor,
with either or both contributing any one or
several of the items of production, the tenant
cultivating the land personally with the aid or
labor available from members of his immediate
farm household, and the produce thereof to be
divided between the landholder and the tenant.
(Continue to exist in any region or locality
 respecting quota-covered sugarland, fishponds,
saltbeds, and lands planted principally to citrus,
coconuts, cacao, coffee, durian and other lands
with permanent trees)
3. Owner-cultivatorship – characterized by the
tillage of the land by the owner himself with the
aid of the immediate members of his household
4. Cooperative-cultivatorship – which is a form of
agrarian relationship among members of a
cooperative who work and live on the land as
tillers in common.
5. Labor administration – which employs laborers
and workers on a daily wage basis, and engaged
in a large scale plantation farming of permanent
crops by their respective managers.
How Leasehold Relation is Established
1. by agreement of the parties
2. by operation of law – implementation of R.A. No.
3844 providing for the abolition of share tenancy.
COMMENTS:
 No particular form of contract is required in the
establishment of a leasehold relation
 The act of cultivation by the tenant-tiller of the land
does not ipso facto establish a leasehold relationship
between the parties.
 But where the landowner: (a) does not object to the
continued cultivation of the land, or (b) tolerates the
continued cultivation thereof by the agricultural
worker, and/or (c) the landholder continues to
receive benefits from the cultivation of the land,
such acts by the landowner are considered as
implied acquiescence on his part of a leasehold
relationship between him and the tenant.
Parties to Leasehold Relation
1. the landholder
2. the person who personally cultivates the land.
COMMENTS:
 The person who personally cultivates the land does
not necessarily mean that the lessee-tenant must till
the land alone by himself. For even if the tenant-
lessee is unmarried or a single-bachelor without off-
springs, he is not prevented from hiring laborers to
aid him in the actual performance of his work. It is
not uncommon especially in the countryside where
the famers help each other in cultivation of their
farmholding, either on a pakiao basis, piecemeal
basis or in bayanihan style.
 By this bayanihan system of cultivation, the farmers
do not spend any single centavo for labor, except
that the one whose field is being cultivated has the
obligation to provide meals for the workers. These
acts must be done either by the lessee himself or by
his laborers, and not by the sub-lessee who does the
actual tillage of the soil, otherwise, the latter and not
the lessee shall be considered the leasehold-tenant
under the concept of PD No. 27.
ESSENCE OF LEASEHOLD RELATION
1. It is essentially personal, in the sense that it
cannot be exercised by third persons other than
the lessor himself, and the lessee who personally
cultivates the land;
2. It has the nature of an in rem or real relationship,
because it imposes a burden upon the land
subject of the landholding and continues to exist
even by the death or incapacity of either party,
or the expiration of the agreement.
Tenurial Arrangement of Leasehold
The leasehold tenant has security of tenure until the
extinguishment of the leasehold relation by any of the
causes provided by law. It makes it a penal offense to
eject a tenant illegally from his holding except upon
approval of the court.
Doctrine on security of land tenure
Sec. 10 of RA No. 3844 provides that “the agricultural
leasehold relation under this Code, shall not be
extinguished by mere expiration of the term or period in
the leasehold contract, in case the agricultural lessor
sells, alienates of transfers the legal possession of the
landholding, the purchaser or transferee thereof shall be
subrogated to the rights and substituted to the
obligations of the agricultural lessor.”
Yolanda Cabales vs. DAR, et. al.
In order to possess the status of a de jure tenant, hence
entitled to the benefits of Sec. 10 of RA No. 3844, the
following essential requisites must concur, to wit:
1. the parties are the landowner and the tenant;
2. the subject is agricultural land;
3. there is consent;
4. the purpose is agricultural production;
5. there is personal cultivation;
6. there is sharing of harvests.
The absence of one does not make an occupant of a
parcel of land or a cultivator thereof, a de jure tenant,
hence cannot invoke the defense of security of tenure.
What then constitutes as family-size farm so as to give
rise to tenancy relationship?
Family-size farm – an area of farmland 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 needs
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.
What now is the effect of the law to cultivator-tiller of a
less than family-size farms?
Such landholder-tiller or tiller-sharer, is at most
considered as a mere caretaker before the eyes of the
law who is allowed by the owner of the land to seek
shelter thereat and enjoy the benefits of growing and
harvesting the fruits of his plant, but never as a tenant
whose primary purpose in his occupancy agricultural
production.
Should the landholding be sold or alienated to a new
owner, what happens to the rights and obligations of
the transferee and his heirs?
The transferee and his heirs are subrogated to the rights
and obligations of the former landowner. However, the
change of landowner cannot be allowed to raise the
status of a mere caretaker or tiller-sharer to that of an
agricultural tenant and leaseholder.
Causes for Extinguishment of Leasehold Relation
1. Abandonment of the landholding without the
knowledge of the lessor;
2. Voluntary surrender of the landholding by the
lessee;
3. Absence of successor or qualified heir, in case of
death or permanent incapacity of the lessee;
4. Judicial ejectment of the lessee under Sec. 36 of
the Code;
5. Acquisition by the lessee of the landholding;
6. Termination of the leasehold under Sec. 28;
7. Mutual consent of the parties;
8. Conversion of the landholding for non-
agricultural purposes.
Obligations of the Lessees
1. To cultivate and take care of the farm as a good
father of a family and perform all the work in
accordance with proven farm practices;
2. To inform the agricultural lessor any trespass
committed by third persons upon the farm;
3. To take reasonable care of the work animals and
farm implements delivered to him by the
agricultural lessor;
4. To keep his farm and growing crops attended to
during the work season. In case of unjustified
abandonment all of the expected produce, any
upon order of the court be forfeited in favor of
the agricultural lessor.
5. To notify the agricultural lessor at least three (3)
days before the date of harvesting;
6. To pay the lease rental to the agricultural lessor
when it falls due.
Section 26, R.A. No. 3844, empowers the lessee to take
direct action against any trespasser to the landholding
without waiting for the response from the lessor.
Prohibitions to Agricultural Lessee
a. To contract to work additional lanholdings
belonging to a different agricultural lessor;
b. To acquire and personally cultivate a family-size
farm without knowledge and consent of the
agricultural lessor;
c. To employ a sub-lessee.
COMMENTS:
 The prohibition apply only where the lessee has not
obtained the consent of the lessor. But if these acts
of the lessee were done with the prior or sufficient
knowledge of the agricultural lessor, and such
knowledge has been acquired personally by him or
through his agent but the latter did nothing to
caution or forbid the continuance of such acts, or
continued to tolerate such acts, his inaction amounts
to estoppel by acquiescence (estoppel in pais), and
then par. (a) and (b) do not apply.
 Par. (c) emphasizes the personal nature of a
leasehold relation. The concept of sub-lessee refers
to one who practically steps into the shoes of the
leaseholder with whom the landowner has a
standing agreement, thus making the sub-lessee look
like a usurper. Since the sub-lessee has no standing
agreement with the landowner, he is not duty bound
to fulfill the obligations that the law imposes and he
 cannot be responsible for the loss of the farm, nor
can he be compelled to pay the lease rentals.
Termination of Leasehold by the Lessee
1. Cruel, inhuman or offensive treatment of the
agricultural lessee by the agricultural lessor;
2. Non-compliance on the part of the agricultural
lessor with any of the obligations imposed;
3. Compulsion of the agricultural lessee by the
agricultural lessor to do any work not in any
way connected with farm work;
4. Commission of a crime by the agricultural lessor
against the agricultural lessee
5. Voluntary surrender due to circumstances more
advantageous to him and his family.
Rights of the Agricultural Lessor
1. To inspect and observe the extent of compliance
of their contract and the provision of this
Chapter;
2. To propose a change in the use of the
landholding to other agricultural purposes. In
case of disagreement, the same shall be settled
by the Court (now Adjudication Board);
3. To acquire the agricultural lessee, to adopt in his
proven farm practices necessary to the
conservation of the land, improvement of its
fertility and increase its productivity: That in
case of disagreement as to what proven farm
practice the lessee shall adopt, the same shall
be settled by the court (now the DARAB);
4. To mortgage expected rentals.
Obligations of the Lessor
1. To keep the lessee in peaceful possession and
cultivation of his landholding;
2. To keep intact the permanent useful
improvements existing on the landholding.
The lessee may seek relief from the nearest Regional
Agrarian Reform Adjudicators (RARAD) or the Provincial
Agrarian Reform Adjudicators (PARAD) to compel the
agricultural lessor to comply with this obligation in case
of refusal, neglect or resistance on the part of the lessor.
Prohibition to the Agricultural Lessor
1. To dispossess the agricultural lessee of his
landholding except upon authorization by the
court under Section 36. Any dispossession of
the lessee by the lessor will subject the latter
to the following liabilities: (a) to be liable for
damages, (b) to pay a fine or suffer
imprisonment or both.
2. To require the agricultural lessee to assume,
the payment of the taxes on the landholding;
3. To require the agricultural lessee to assume,
any part of the rent, or to pay to third persons
for the use of the land;
4. To deal with millers or processors without
written authorization of the lessee;
5. To discourage, the formation, maintenance or
growth of unions or organizations of
agricultural lessees in his landholding.
Ground for Disposition of Agricultural Lessee
1. When the landholding is declared by the
Department Head to be suited for residential,
commercial, industrial or some other urban
purposes;
2. Failure to comply with any of the of the terms
and conditions of the contract of lease;
3. Planting of crops or used the landholding for a
purpose other than what had been previously
agreed upon;
4. Failure to adopt proven farm practices as
determined under paragraph 3 of Section
twenty-nine;
5. When through fault or negligence of the lessee,
the land or other substantial permanent
improvement thereon is substantially damaged
or destroyed or has reasonably deteriorated;
6. Failure to pay the lease rental when it falls due;
7. Employment of a sub-lessee.
The above causes are grounds for ejectment of an
agricultural lessee only after observance of due process
and the lessee is given his day in court. It means that an
order or decision from the DAB, through its proper
Adjudication Board or Special Agrarian Court, relative to
the criminal aspect of the acts complained of where the
land lies upon proper hearing, whereby the lessee is
given opportunity to present his side, must first be
obtained before an agricultural lessee can be ejected
from the landholding.
Lessee’s Right of Pre-emption and Redemption
In case the agricultural lessor decide to sell the
landholding, the agricultural lessee shall have the
preferential right to buy the same under reasonable
terms and conditions. Each shall be entitled to said
preferential right only to the extent of the area actually
cultivated by him.
The right of pre-emption may be exercised within 180
days from notice in writing, which shall be served by the
owner on all lessees affected and the Department of
Agrarian Reform.
In order to avail of this right, the lessee should serve
notice to the office of the DAR of his desire to purchase
the property by filing a petition with the DAR from
receipt of notice.
If he agrees on the terms and conditions stated in the
offer by the landowner, then the lessee must give notice
to the lessor of his intention to exercise his right of pre-
emption within the balance of 180 days still available but
not less than 30 days, by tendering payment to the lessor
or presenting a certificate issued by the Land Bank that it
shall make payment pursuant to Sec. 80 of the Code.
If the lessor refuses to accept such tender or
presentment, the lessee may consign the purchase
money with the DAR, through the proper Regional or
Provincial Adjudicator of the place where the land lies.
Any dispute as to reasonableness of the terms and
conditions, may be brought by the lessee or by the
Department of Agrarian Reform to the Special Agrarian
Court.
Upon the filing of the petition or request, the 180 days
period shall cease to run. The court shall decide the
same within 60 days from the date of filing, otherwise
the period of 180 days shall run again.
That upon finality of the decision, the Land Bank shall
pay to the lessor the price fixed by the court within 120
days.
Lessee’s Right of Redemption
Should the third person who is the vendee of the
landholding by virtue of the sale of the land by the lessor
without the knowledge of the lessee, refuse to accept
the lessee’s offer to redeem, the lessee shall file his
petition with the DAR, through the proper Regional or
Provincial Adjudicator to compel the third person to have
the land redeemed at a reasonable price and
consideration.
Where there are two or more agricultural lessees, each
shall be entitled to said right of redemption only to the
extent of the area actually cultivated by him.
The right of redemption under this Section may be
exercised within 180 days from notice in writing which
shall be served by the Vendee on all lessees affected and
the DAR upon registration of the sale. Upon the filing of
the petition, the said period of 180 days shall cease to
run. Any petition shall be resolved within 60 days.
The Department of Agrarian Reform shall initiate, while
the Land Bank shall finance, said redemption as in the
case of pre-emption.
COMMENTS:
The right of pre-emption as distinguished from
redemption, is the right to purchase the property from
the agricultural lessor by the lessees which is exercised
before it is sold to a third person other than the lessee.
The right of redemption, on the other hand,
contemplates of a consummated sale and transfer of
ownership of the landholding to a third person.
In both cases, the reasonable value of the land shall be
agreed upon by the parties or fixed by the DAR. If they
cannot agree then the matter shall be decided in a
proper quasi-judicial proceeding before the DARAB.
Right to Self-organization
The farmworkers shall have the right to self-organization
and form, join or assist farmworkers’ organizations of
their own choosing for the purpose of collective
bargaining through representatives of their own
choosing. Provided, this right shall be exercised in a
manner as will not unduly interfere with the normal farm
operation.
Bill of Rights for Agricultural Labor:
1. Right to self – organization;
2. Right to engage in concerted activities.
3. Right to minimum wage;
4. Right to work for not more than eight hours;
5. Right to claim for damages for death or injuries
sustained while at work;
6. Right to compensation for personal injuries;
death or illness;
7. Right against suspension or lay-off.
COMMENTS:
The right to self-organization includes the right to strike
and hold picket in order to compel the management in
the case of large scale plantations and multinational
corporations to meet the demands of the farm workers
for wage increase and better working conditions.
Irrigation Facilities
Permanent irrigation system may be constructed at the
expense of the lessor:
 1. Should the lessor refuse to bear the expenses,
he should not be entitled to the increase in
rental and shall upon the termination of the
leasehold relationship, pay the lessee or his heir
the reasonable value of the improvements at the
time of the termination;
2. Should the lessor bear expenses he shall be
entitled to an increase in the rental
proportionate to the resultant increase in
production.
Management of Irrigation System
1. When constructed and operated by the
government, it may be given to the lessees
either as individuals or groups at their option
with the right to maintain, manage and operate
and to collect rentals therefrom. Lessees shall
allocate not more than 25% of their rental
collection to the government.
2. For irrigation systems installed and/or
constructed at expense of landowner or
agricultural lessor, the acquisition of such shall
be initiated by the DAR to be financed by the
Land Bank.
Lease of Ricelands and Lands Devoted to Other Crops
1. The 25% of the average normal harvest shall be
the amount of rental for ricelands and other
lands. If there has been no normal harvest, the
estimated normal harvest during the three (3)
agricultural years immediately preceding the
establishment of the leasehold after deducting
the expenses for seeds, cost of harvesting,
threshing, loading, hauling and processing;
2. The average normal harvest for three (3)
preceding years shall be the final consideration
of the lease, except when the land has been
cultivated for less than 3 years, in which case
the initial consideration shall be based on the
average normal harvest. If there is no normal
harvest, the estimated normal harvest during
the preceding years. In case of newly cultivated
land, when the harvest is a normal harvest, the
harvest of the first year.
3. Where there is no agreement as to rental, the
DAR shall fix a provisional rental until fixed
rental is determined within (30) days from
submission of the case for decision.
COMMENT:
Normal harvest as defined by law refers to that amount
of harvest or production on the land at the end of a
normal agricultural year barring fortuitous events and
natural calamities such as typhoon, floods, pests, fire and
earthquakes.
Amortization Payment for Land under Leasehold:
The rentals paid by the lessee to the lessor at the place
agreed upon by the parties shall be credited as
amortization payments for the purchase price of the
landholding titled by the lessee:
a) When the landholding is expropriated by the
government;
b) When it is redeemed.
Whatever balance remaining after crediting as
amortization the rental paid, the same may be finances
by the Land Bank in the same ratio and mode of payment
provided under Section 80 of the Code.
Default on the Part of the Lessee
Should the lessee incur default in the payment of at least
three (3) installments on the loan, the lender shall
immediately notify the Land Bank and the DAR, so that
appropriate steps shall be taken by these agencies:
a) to answer for the default in case the failure is
due to fortuitous event
b) to take over the ownership and administration of
the landholding.
Where the case of the default is attributable to the
lessee, the DAR shall endeavor to substitute the
defaulting amortization owner. In case the default is due
to fortuitous event, the Land Bank shall assume the
payment of the balance and the farmer shall be released
from his obligation.
Period of Prescription
An action to enforce any cause of action accruing under
this Code (R.A. No. 3844) shall be brought within the
period of three (3) years.
CHAPTER II
TENANTS EMANCIPATION DECREE
Presidential Decree No. 27 which took effect on
October 21, 1972
Prefatory Statement
Under PD No. 27 there is no more leasehold in tenanted
rice and corn lands. The tiller automatically becomes the
amortizing owner of the land he tills without even the
benefit of expropriation. The three shift underlines under
RA No. 3844 no longer apply.
EO No. 228 by Corazon Aquino provides that “all
qualified beneficiaries are now deemed full owners as of
October 21, 1972 of the land they acquired by virtue of
Presidential Decree No. 27.” However, if such
beneficiaries have not completed amortization on the
land, they have to continue paying the land
amortizations.
Phrases and Terms under PD No. 27
(1) Private agricultural lands primarily devoted to
rice and corn – refer to lands of private
ownership planted with rice and corn as
principal crops as of October 21, 1972, not being
part of the public domain and are under the
effective control and supervision of natural or
juridical persons.
- The controlling criterion is that the land has been
proven to be suitable for the production of rice and
corn as their principal crops, although seasonal crops
are from time to time planted thereon.
(2) Tenant farmer – farmer who actually tills the
land, whether under share tenancy or lease
tenancy. In case the share-tenant or lessee
employs sub-tenants or sub-lessees who actually
till the land, the latter shall be considered the
tenant-farmers.
(3) Irrigated Land – denotes a farmland that is
supplied with water by means of power-pump or
gravity flows system or other modes of irrigation.
(4) Non-irrigated or upland refers to a farmland
located on a higher elevation or terrain and is
not provided with water supply through any
method of irrigation and is almost rainfed.
(5) Normal crop year denotes an agricultural period
of 12 months of planting and harvesting
activities whether on a double or triple cropping
not attended by any natural calamity.
(6) Right of retention in rice and corn lands is a right
pertaining to a landowner or a landholding
devoted to rice and corn retain an area of 7
hectares for his own individual farming if such
landowner is cultivating or will now cultivate it.
COMMENT:
 The landowner could be compelled to transfer his
landholding in favor of a tenant-farmer even if the
retained area is less than 7 hectares should he be
found by the DAR to be an absentee or with sources
of income other than the retained area, EXCEPT
when the cause of his absenteeism is due to force
majeure.
Tenant Beneficiaries
 The tenant-farmer shall be deemed owner of a
portion constituting a family size of 5 hectares, if not
irrigated, and 3 hectares, if irrigated.
 A tenant beneficiary who fails to take advantage of
his right under the Decree or is guilty of
abandonment of his farmholding, may be deprived
thereof, in which case the landholding shall revert to
the government and not the landowner.
 In case the land is transferred to the tenant-farmer,
the latter shall pay the Land Bank in 15 years with
interest at 6% per annum. The value of the land to
be transferred to the tenant-farmer shall be
equivalent to two and one-half (2 ½) times the
average harvest of three normal crop years
immediately preceding the promulgation of PD No.
27.
 Should he default in the payment of his
amortizations, the farmer’s cooperative which he is
affiliated with, shall answer for the remaining
balance. (It is therefore essential that the tenant-
farmer in order to become a bona fide beneficiary
that he must be a member of a duly recognized
farmers’ cooperative, otherwise, he shall not be
entitled to the issuance of a certificate of title to his
farmholding.)
 Payment of such amortizations is guaranteed by the
government by purchasing shares of stock in GOCC
like the Land Bank and DBP.
 Title to land acquired under PD No. 27 shall not be
transferred to third persons except by hereditary
succession or in favor of government. Hereditary
succession should be limited only to intestate
succession under the Civil Code. Sec. 27 of RA No.
6657 has the effect of amending the provision of PD
No. 27. Lands acquired under these laws, may now
be transferred by (a) hereditary succession, (b) to the
government, (3) LBP, (4) other qualified beneficiaries,
and (5) even third persons after the lapse of ten
years from the issuance and registration of the
Emancipation Patent or Certificate of Land
Ownership Award.
Procedure in Case Landowner Refuses to Accept
Payment
In the event the landowner does not accept payment of
the compensation, it shall be held in trust for him by the
Trust Department of the Land Bank. The cash portions of
the compensation and such portions that mature yearly
shall be invested only in government securities fully
guaranteed by the Republic of the Philippines. All the net
earnings thereof shall be for the benefit of the
landowner, his heirs or successors in interest.
Lease rentals paid to the landowner by the farmer-
beneficiary after October 21, 1972, shall be considered
as advance payment for the land.
Effect of Failure to Pay Amortization
Failure of the farmer-beneficiary to pay 3 annual
amortizations shall be sufficient cause for the LBP to
foreclose on the mortgage.
Foreclosure proceeding shall be commenced by serving
final notice of payment to the defaulting tenant-farmer
by the LBP which shall furnish DAR with a copy of such
notice.
After the lapse of 30 days from service of final notice to
both the farmer and the DAR, the LBP shall register a
certification under oath of its intent to foreclose with the
Register of Deeds.
How Foreclosure may be Lifted
A foreclosure may be lifted by the tenant-farmer, or any
of his compulsory heirs, within the period of 2 years from
its registration, by paying the LBP all unpaid
amortizations on the land with interest thereon of 6%
per annum.
In case of failure to life the foreclosure, ownership of the
land shall be deemed transferred to the LBP.
Sale of Lands Foreclosed
The LBP, not later than 3 months after its registration of
the land, shall sell the foreclosed land to any interested
landless farmer duly certified to as bona fide landless
farmer by the DAR of the barangay or the two closest
barangays where the land is situated.
The cost of the land is the unpaid amortizations due on
the land as of the date of the sale with interest thereon
of 6% per annum.
Prior Notice of Sale
The LBP, at least 1 month prior to the sale, shall furnish
the DAR with a notice of sale and shall post similar notice
in the town hall or any suitable place frequented by the
public of the barangay.
Affidavit Required to Voluntary Dealings
No voluntary deed or instrument purporting to be any
encumbrance or conveyance of private agricultural land
principally devoted to rice and corn or any portion
thereof shall be registered unless accompanied by an
affidavit of the vendor or executor stating the land
involved is not tenanted, or if tenanted, the same is not
primarily devoted to the production of rice and corn.
Certificate of Land Transfer as Evidence of Ownership
This is immediately issued to the tenant-farmer after
identifying the farmer’s landholding, as soon as the DAR
has transferred the landholding to him and recognized as
a qualified beneficiary.
This is not yet considered as absolute evidence of
ownership but only as a provisional title of ownership
thereof while he remains as amortizing owner. It is,
however, a registrable valid evidence of ownership which
can be accepted as collateral for a loan with any
financing institution.
Mechanics on Issuance of Emancipation Patent
As soon as the tenant-farmer had fully paid his
amortization to the LBP, an Emancipation Patent is issued
to him by the DAR.
The lands covered by an Emancipation Patent have the
character of registered lands under the Torrens System.
After an entry is made of such Emancipation Patent in
the corresponding registration book, it becomes the
ministerial duty of the Register of Deeds to prepare a
corresponding certificate of title for the farmer’s
farmholding and the issuance of the owner’s duplicate
certificate of title to the grantee-beneficiary.
EO No. 228 now allows transfer of lands acquired by the
operation PD No. 27 and other agrarian reform laws,
provided such beneficiary has fully paid his remaining
amortizations to the LBP, and the transferee is a qualified
beneficiary. It can even transfer the same in favor of third
persons not a beneficiary, whether natural or juridical,
after the lapse of 10 years from the issuance and
registration of the Emancipation Patent or Certificate of
Land Ownership Award.
Chapter III
COMPREHENSIVE AGRARIAN REFORM PROGRAM
(RA. No. 6657)
Prefatory Statement
EO No. 228 was issued declaring full ownership in favor
of qualified beneficiaries covered by PD No. 27,
determining the value of remaining unvalued rice and
corn lands and providing for the manner of payment by
the farmer-beneficiaries and mode of compensation to
landowners.
Then EO No. 229 ensued providing for the mechanism
for the implementation of the comprehensive agrarian
reform program.
This was followed by Presidential Proclamation No. 131
instituting a Comprehensive Agrarian Reform Program in
the entire country.
On June 10, 1988, Pres. Aquino signed into law RA No.
6657 (Comprehensive Agrarian Reform Law of 1988). (It
took effect on June 15, 1988).
Sec. 75 thereof expressly provides that “the provisions of
RA No. 3844, as amended, PD No. 27 and 266, EO No.
228 and 229, both series of 1987, and other laws not
inconsistent with this Act shall have suppletory effect.”
The repealing clause found Sec. 76 of said law provides
that, “Sec. 35 of RA No. 3844, the last two paragraphs of
Sec. 12 of PD. No. 946, PD No. 1038 and all other laws
xxx or parts thereof inconsistent with this Act are hereby
repealed or amended accordingly.”
Thus, RA No. 3844, as amended, which institutionalized
and/or automatically converted the status of share-
tenants to leaseholder still applies in a suppletory
character to RA No. 6657, except Section 35 which
exempts “fish ponds, saltbeds, and lands principally
planted to citrus, coconuts, cacao, coffee, durian, and
other similar permanent trees,” from leasehold
operation. These lands are now subject to compulsory
acquisition and distribution.
All controversies arising from ejectment of tenants under
PD No. 27 shall no longer fall within the cognizance of
RTC, but are now under the E&O jurisdiction of the DAR,
acting through the proper Regional and Provincial
Adjudication Boards. Matters on just compensation and
prosecution of criminal offenses for violations of the
agrarian reform laws, are now within the E&O
jurisdiction of the Special Agrarian Courts.
RA No. 6657 also repealed and amended PD No. 946 and
PD No. 1038, which, in effect, subject the non-rice and
non-corn producing lands to compulsory acquisition and
distribution to qualified beneficiaries.
Doctrine on State’s exercise of police power and
eminent domain under CARP.
The confiscation of private property in the exercise of the
police power of the State as in compulsory acquisition of
privately owned lands that are identified by the DAR in
the implementation of the CARL of 1988, is not
compensable, unlike the taking of private property in the
exercise of the power of eminent domain or
expropriation proceedings, which requires the payment
of just compensation.
To the extent that the measure under challenge merely
prescribe retention limits for landowners, there is an
exercise of police power for the regulation of private
property in accordance with the Constitution. But where
to carry out such regulation, it becomes necessary to
deprive such owners of whatever lands they may own in
excess of the maximum area allowed, there is definitely a
taking under the power eminent domain for which
payment of just compensation is imperative (Association
of Small Landowners in the Philippines, Inc. vs. Secretary
of Agrarian Reform, 175 SCRA 343, GR. No. 78742, July
14, 1989).
Do lease rentals under EO No 228 considered as
advance payment for land constitute as
unconstitutional taking vested property rights and/or
compensation?
NO. Because, when PD No. 27 was promulgated on Oct.
21, 1972, the tenant-farmer of agricultural land was
deemed owner of the land and therefore the leasehold
rentals paid after that date should therefore be
considered amortization payments.
It does not constitute as unconstitutional taking of
vested property right since the 1987 Constitution itself
under Sec. 6, Art. XVIII, expressly provides that the
incumbent President shall continue to exercise legislative
powers until the first Congress is convened. Hence, EO
No. 228 which was issued on July 17, 1987 before the
first Congress was convened is a valid implementation of
the foregoing constitutional provisions.
Even the argument that the assailed measures violate
due process by arbitrarily transferring title before the
land is full paid must be rejected, because PD No. 27
which provides that a tenant-farmer is deemed full
owner of a portion he tills, also contained a safeguard
that no title to the land owned by him was to be actually
issued to him, unless and until he had become a full-
fledged member of a duly-recognized farmer’s
cooperative and proof of full payment of just
compensation.
TN: In the case of Padua vs. CA, petitioner insists that his
status in relation to the subject lot was no longer that of
a mere potential agrarian reform farmer-beneficiary but
a civil law vendor dealing directly with the LBP in the
payment of amortizations on the property.
The SC held that the view is incorrect. It said, “The
statutory mechanisms for the acquisition of land through
agrarian reform requires full payment of amortization
before a farmer-beneficiary may be issued a CLOA or EP,
which, in turn, can become the basis for issuance in his
name of an original or a transfer certificate of title. As
Padua himself admitted that he is still paying
amortization on Lot. 90 to LBP, his status in relation to
said property remains that of a mere potential farmer-
beneficiary whose eligibilities DAR may either confirm or
reject. In fact, under Section 2(d) of AO No. 06-00, DAR
has authority to issue, recall, or cancel a CLT, CBC, EP, or
CLOA, issued to potential farmer-beneficiaries but not
yet registered with the Register of Deeds.
Section 1. Title – This Act shall be known as the
Comprehensive Agrarian Reform Law of 1998.
Section 2. Declaration of Principles and Policies –
 The welfare of the landless farmers and
farmworkers will receive the highest
consideration to promote social justice and to
move the nation toward sound rural
development and industrialization, and the
establishment of owner cultivatorship of
economic-size farms as the basis of Philippine
agriculture.
 More equitable distribution and ownership of
land, with due regard to the rights of landowners
to just compensation.
 Founded on the right of farmers, who are
landless, to own directly or collectively the land
they till, or in the case of other farm workers, to
receive a just share of the fruits thereof.
 The State shall be guided by the principles that
the land has a social function and land
ownership has a social responsibility.
 Owners of agricultural lands have the obligation
to cultivate directly or through labor
administration the lands they own and thereby
make the land productive.
Definitions:
a) Agriculture, Agricultural Enterprise or
Agricultural Activity - the cultivation of the soil,
planting of crops, growing of fruits trees, [raising
of livestock, poultry] or fish, 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 person whether natural or juridical.
b) Agricultural land – land devoted to agricultural
TN: In the case of Luz Farms, Sections 3(b), 11, 13, 32 of
activity and not classified as mineral, forest,
RA No. 6657, insofar as the inclusion of the raising of
residential, commercial or industrial land.
c) Agrarian dispute – any controversy relating to
tenurial arrangements over land devoted to
agriculture. Includes disputes concerning
farmworkers’ associations or representation.
Also any controversy relating to compensation of
lands and other terms and conditions of transfer
of ownership from landowners to farmworkers.
d) Idle or Abandoned Land – any agricultural land
not cultivated, tilled or developed to produce
any crop nor devoted to any specific economic
purpose continuously for a period of 3 years
prior to the receipt of notice of acquisition by
the government.
 It does not include land that has become
permanently or regularly devoted to non-
agricultural purposes.
 Does not include land which has become
unproductive by reason of force majeure or
fortuitous event, where prior to such event,
such land was previously used for
agricultural or other economic purpose.
e) Farmer – a natural person whose primary
livelihood is cultivation of land or the production
of agricultural crops, either by himself, or
primarily with the assistance of his immediate
farm household, whether the land is owner by
him, or by another person.
f) Farmworker – a natural person who renders
service for value as an employee or laborer in an
agricultural enterprise of farm.
g) Regular farmworker – …employed on a
permanent basis…
h) Seasonal farmworker – …employed on a
recurrent, periodic or intermittent basis…
xxx
j) Cooperatives – 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.
 A juridical person may be a member of a
cooperative with the same rights and duties
as a natural person.
livestock, poultry and swine in its coverage, is declared
null and void.
SC held: “Livestock or poultry raising is not similar to
crop or tree farming. Land is not the primary resource in
this undertaking and represents no more than five
percent of the total investment of commercial livestock
and poultry raisers…The use of land is incidental to but
not the principal factor or consideration in productivity
in this industry…The transcripts of the deliberations…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…Besides, an absurd situation will result
whereby, if somebody puts up a piggery or a poultry
project and for that purpose hires farmworkers therein,
these farmworkers will automatically have the right to
own eventually…the land on which the piggery and
poultry projects were constructed.”
Scope
Shall cover, regardless of tenurial arrangement and
commodity produced, all public and private agricultural
lands, as provided in Proc. No. 131 and EO No. 229,
including other lands of the public domain suitable for
agriculture.
Specifically the following lands are covered:
(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;
(c) All other lands owned by the Government
devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for
agriculture regardless of the agricultural
products raised or that can be raised thereon.
Retention Limits
Section 6 of the CARL grants to the landowner the right
of retention from his land the area he wants to retain for
his own individual farming, provided it does not exceed 5
hectares. Each child of the landowner whether legitimate
or not shall be entitled to retain 3 hectares each,
provided he is at least 15 years of age at the time of the
effectivity of RA No. 6657, and that he is actually
cultivating or directly managing the farm with the aid of
the immediate members of his household.
Landowner’s Right to Choose
The right to choose the area to be retained which shall
be compact and contiguous, shall pertain to the
landowner except:
(1) That where the area selected by the landowner
is tenanted, the tenant have the option to
choose whether to remain therein, or to be a
beneficiary in the same or another agricultural
land belonging to the same owner with similar or
comparable features as to irrigation and
ecological factors;
(2) That should the tenant choose to remain the
area retained, he shall be considered a
leaseholder and shall lose his right to be a
beneficiary;
(3) That should the tenant choose to be a
beneficiary in another agricultural land of the
landowner, he shall lose his rights as a
leaseholder.
 The tenant must exercise his right within 1 year from
the time the landowner manifests his choice.
 Landowners whose lands are covered by the
operation of PD No. 27 shall be allowed to continue
exercising their right of retention (7 hectares, but the
children have no right).
Prohibition on S, D, L, M, T
Section 6 generally prohibits the sale, disposition, lease,
management contract or transfer or possession of
private agricultural lands by the landowners thereof in
favor of third persons except:
(a) When such SDLMT involves the retained area
executed in favor of qualified beneficiaries
whose total landholdings inclusive of the land to
be acquired do not exceed 5 hectares;
(b) When the SDLMT is executed prior to June 15,
1988, and the transaction is registered with the
Register of Deeds on or before September 13,
1988;
(c) When the SDLMT is in favor of the government,
LBP, or the DAR
Voluntary dealings of the lands shall be subject to the
right of pre-emption and redemption.
Phases of the Acquisition and Distribution Program
Phase One
(1) Rice and corn lands under PD No. 27
(2) All idle and abandoned lands
(3) All private lands voluntarily offered by the owner
for agrarian reform
(4) All lands foreclosed by government financial
institutions like DBP, SSS, GSIS
 (5) All lands acquired by the Presidential
Commission on Good Government (PCGG)
(6) All other lands owned by the government
devoted to or suitable for agricultural
Phase Two
(1) All alienable and disposable public agricultural
lands
(2) All arable public agricultural lands under agro-
forest pasture and agricultural leases already
cultivated and planted to crops in accordance
with Sec. 6, Art. XIII of the Constitution.
(3) All public agricultural lands which are open for
new development and resettlement
(4) All private agricultural lands in excess of 50
hectares
Phase Three
(1) Landholdings above 24 hectares up to 50
hectares, to begin on the 4th year from the
effectivity of the Act
(2) Landholdings from the retention limit up to 24
hectares: to begin on the 6th year
Schedule for Acquisition and Distribution of lands
leased, held or possessed by Multinational
Corporations/Associations
Schedule One: lands owned by the government or by
government-owned or controlled corporations
Schedule Two: those owned by private individuals and
private non-governmental corporations
Compulsory acquisition of lands owned by private
individuals and private non-governmental corporations
shall start immediately upon expiration of their lease,
management, growers or service contracts or not later
than August 29, 1992 whichever comes first.
Ancestral Lands
The PARC may suspend the implementation of the Act as
to ancestral lands of cultural communities in certain
autonomous regions.
Exemptions and Exclusions
a) Parks, wildlife, forest reserves, reforestation
b) Fish sanctuaries and breeding grounds
c) Watersheds and mangroves
d) National defense sites
e) School sites and campuses including experimental
farm stations operated by the school for education
purposes
f) Seeds and seedling research and pilot production
centers
g) Church sites and convents appurtenant thereto
h) Mosque sites and Islamic centers appurtenant
thereto
i) Communal burial grounds and cemeteries
j) Penal colonies and penal farms actually worked by
the inmates
k) Government and private research and quarantine
centers; and
l) All lands with eighteen percent (18%) slope and over,
except those already developed. (Sec. 10)
m) Also ancestral lands belonging to indigenous cultural
communities shall be exempted from the coverage
until their boundaries and extent of the areas
occupied by them are properly identified and
delineated (Sec. 9).
n) Private lands actually, directly and exclusively used
for prawn farms and fishponds, provided that said
prawn farms and fishponds have not been
distributed and CLOA issued to CARP beneficiaries
(RA No. 7881).
Commercial Farming
Commercial farms which are private agricultural lands
devoted to commercial livestock, poultry and swine
raising, and aquaculture including saltbeds, fishponds,
and prawn ponds, fruits farms, orchards, vegetable and
cut-flower farms, and cacao, coffee and rubber
plantations, shall be subject to immediate compulsory
acquisition and distribution (Sec. 11).
TN: Remember the ruling in Luz Farms excluding
livestock, poultry and swine. And the amendment of RA
No. 7881 excluding prawn farms.
COMPENSATION
The following factors shall be taken into account in
determining just compensation (JC):
a) Cost of acquisition of land
b) Its nature, actual use and income
c) Sworn valuation by the owner
d) Assessment made by government assessors
 e) Social and economic benefit contributed by
farmers, farmworkers and by the government
f) Taxes and loans
Procedure:
1) The landowner, the DAR, and the LBP must first
agree as to the amount.
2) In case of disagreement, the Secretary of
Agrarian Reform shall determine the JC,
according to the following procedure:
1. Written Notice of Acquisition and Offer
of Compensation shall be made by the
Secretary to the landowner for the
acquisition of the land.
2. If such WNA & OC were either ignored or
rejected by the landowner, the matter,
together with the Compulsory
Acquisition Claim Folder (CACF) and
other records, shall be transmitted to
the DAR Adjudication Board (DARAB),
within 5 days after expiration or receipt
of rejection, for summary proceedings
for final administrative determination of
JC.
3. [Summary Procedure] Upon receipt of
the CACF by the DARAB and the case is
docketed, the landowners, the LBP and
other interest parties shall be notified to
submit evidence. Upon expiration of the
15 days, the matter shall be deemed
submitted for decision.
4. Within 30 days, the DARAB shall
promulgate a decision fixing the JC. Such
decision shall be final and executory. The
DARAB shall not entertain any MOR.
5. [Notice] The copy of the decision shall
be sent to the landowner together with
the letter notifying him of his right to
choose, within 15 days, to indicate the
mode of payment he prefers.
6. If the landowner rejected the JC or has
not responded within the period, the (a)
DAR shall deposit with an accessible
bank the JC in cash or in LBP bonds and
(b) thereafter shall take immediate
possession of the land and (c) shall
request the proper Register of Deeds to
cancel the landowner’s title and issue a
TCT in the name of the Rep of the Phil.
(d) The DAR shall then proceed with the
distribution of the land to the
beneficiaries.
3) In case of final judgment on the merits made by
the DARAB, an appeal may be taken to the Court
of Appeals (CA) from such final judgment.
4) A petition may also be brought before the
Special Agrarian Court (SAC) for the
determination of JC from the decision of the
DARAB by means of certiorari on the ground of
grave abuse of discretion or lack or excess of
jurisdiction, where there is no appeal, or other
speed remedy.
5) An appeal may be taken from the decision of the
SAC by filing petition for review with the CA.
Valuation and Modes of Compensation
[Refer to the code for the features of payment based on
the area of lands]
Modes – cash, shares of stock in GOCC, LBP preferred
stocks, physical assets or other qualified investments in
accordance with rules set by the Presidential Agrarian
Reform Council (PARC), tax credits
Q – Does the mode of compensation by LBP bonds,
shares of stock, etc. under Sec 18 of RA No. 6657, aside
from Philippine currency or cash, violate the
fundamental rule requiring money equivalent for JC?
A – No. In the implementation of the CARP Law, “we do
not deal in 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
bought to be taken by the State from its owner for a
specific and perhaps local purpose. What we deal here is
revolutionary kind of expropriation which requires the
payment of not mere millions of pesos, but hundreds of
billions of pesos, for more indeed than the amount of
P50 billion initially appropriated which is already
staggering by our present standards. Besides, the records
of the Constitutional Commission that framed the 1987
Constitution contains suggestions to leave it to Congress
to determine how payment should be made…
MODES OF ACQUIRING PRIVATE AGRICULTURAL LANDS
(1) VOLUNTARY OFFER TO SELL - This mode is
entered into by and between the landowner and
the government through the DAR, the purchase
price of the land being negotiated between
them, and paid by the LBP. Under E.O. No. 229,
such transaction is exempt from payment of
capital gains tax on other taxes and fees.
TN: The mode of acquisition of under VOS may ripen into
the issuance of a Certificate of Title under the Torrens
System, similar to but requires more intricate procedure
than in the Compulsory Acquisition.
The VOS is not consummated if withdrawn by the
landowner under specified circumstances. Also, the offer
still needs to be accepted by the DAR on behalf of the
government, and JC for the land determined and paid to
the landowner. The sale is deemed consummated when
the landowner has received payment or deposit by the
DAR.
(2) VOLUNTARY LAND TRANSFER – This mode is
entered into directly by and between the
landowner and the qualified beneficiary, who
come to an agreement regarding the price of the
land to be paid by the LBP, subject to the
approval of the DAR. This scheme is not exempt
from payment of capital gains tax and other
taxes and fees.
TN: Landowners may serve notice to the DAR of their
desire to avail of this scheme within one year from the
implementation of the CARP. After the expiration of one
year, all negotiation between landowners and
beneficiaries on voluntary land transfer, shall not be
recognized by the DAR, in which case acquisition shall
follow the procedures and guidelines on compulsory
acquisition.
The agreement of the parties must be submitted to the
DAR for approval. If the DAR does not communicate its
disapproval to the farmer-beneficiary within 30 days
from the date of registration of the deed of sale, the
DAR’s approval is considered given and the transaction is
consummated.
(3) COMPULSORY ACQUISITION – This is
undertaken by the government through the DAR
in the exercise of police power of the state,
should the landowner fail to avail of the
incentives in VOS and VLT.
BENEFICIARIES
 RA No. 9700 amended RA No. 6657
 The order of priority of the beneficiaries: (1) landless
residents of the barangay, (2) agricultural lessees and
share tenants, (3) regular farmworkers, (4) seasonal
farmworkers, (5) other farmworkers, (6) actual tillers
or occupants of public lands, (7) collective or
cooperatives of the above beneficiaries, (8) others
directly working on the land.
 The children of the landowners who are qualified (at
least 15 yrs and actually tilling or directly managing)
shall be given preference in the distribution of the
land of their parents, provided that actual tenant
tillers in the land shall not be ejected or removed.
 Beneficiaries shall be awarded area not exceeding 3
hectares, which may cover a contiguous tract of land,
or several parcels of land cumulated up to the
prescribed award limits.
 A landless beneficiary is one who owns less than 3
hectares of agricultural land.
 Generally the land awarded should be in the form of
an individual title, but the beneficiaries may opt for
collective ownership for the issuance of collective
ownership.
 Now, the rights and responsibilities of the
beneficiaries shall commence and become effective
from their receipt of the duly registered
Emancipation Patent (EP) issued under PD No. 27 or
Certificate of Land Ownership Award (CLOA) issued
under the operation of RA No. 6657, and actual
possession of the awarded land.
 Now, the award of the land by the DAR shall be
completed within 180 days from the date of the
registration of the title (EP or CLOA) in the name of
the RP with the Office of Register of Deeds.
Transferability of Awarded Lands
Lands may not be sold, transferred or conveyed except
through hereditary succession, or to the government, or
to the LBP, or to other qualified beneficiaries for a period
of 10 years.
The children or the spouse of the transferor, shall have
the right to repurchase the land from the government or
LBP within the period of 2 years.
If the land has not yet been fully paid by the beneficiary.
The rights to the land may be transferred or conveyed
with prior approval of the DAR, to any heir of the
beneficiary who must cultivate the land himself. The LBP
shall reimburse the beneficiary in one lump sum for the
amount the latter has already paid.
PRIVILEGES OTHER THAN LAND TRANSFER
Corporate Landownership
Corporate landowners may voluntarily transfer
ownership over their agricultural landholdings to the RP
or to qualified beneficiaries.
But also, 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 company’s total assets.
Corporations or associations which voluntarily divest a
proportion of their capital stock, equity or participation
in favor of their workers or beneficiaries shall be deemed
to have complied with the provisions of the Act:
Provided, that the following conditions are complied
with:
a) The books shall be subject to periodic audit by
CPAs chosen by the beneficiaries
b) The beneficiaries shall be assured of at least 1
representative in the board of directors, or in a
management or execom.
c) Any shares acquired shall have the same rights
and features as all other shares.
d) Any transfer of shares of stock by the original
beneficiaries shall be void ab initio unless said
transactions is in favor of a qualified and
registered beneficiary with the same
corporation.
Production Sharing
Pending final land transfer of lands under lease or
management contract, such lands mandated to be
subject to a production-sharing plan with the
farmworkers, whereby 3% of the gross sales from the
production of such lands are distributed within 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 the
owners or operators of such lands realized gross sales in
excess of 5 million pesos per annum unless the DAR,
upon proper application, determines a lower ceiling.