RA 6675 As Amended by RA 9700report1-8rev1

RA 6675 as amended by RA 9700: COMPREHENSIVE AGRARIAN REFORM LAW of 1988
Chapter 1: Preliminary Chapter (Sections 1-3)

SECTION 1: TITLE This act shall be known as Comprehensive Agrarian Reform Law of 1988. COMPREHENSIVE AGRARIAN REFORM PROGRAM as mandated by the COMPREHENSIVE AGRARIAN REFORM LAW State policy that ensures and promotes welfare of landless farmers and farm workers, as well as elevation of social justice and equity among rural areas. a social justice and poverty alleviation program which seeks to empower the lives of agrarian reform beneficiaries (ARBs) through equitable distribution and ownership of the land based on the principle of land to the tiller. It likewise provides opportunities for a dignified and improved quality of life of the ARBs through the provision of adequate support services for sound rural development and the establishment of economic-size farms as the basis of Philippine agriculture (www.dar.gov.ph) mandated by Republic Act No. 6657, as amended by Republic Act 9700 DAR is the lead implementing agency of CARP
History
Pre-Spanish period: No owner-cultivators. Only communal land owned by the barangay Spanish Regime: distributed the land (haciendas) to the Spanish military and the clergy or established encomiendas (administrative districts). 1935 Constitution and other reforms: addressed the issue of foreign access to land by providing restrictions but only few were really followed in practice. Magsasay and Macapagal Administation: RA 1400 - Land Reform Act of 1955 PD 27 - (during martial law) Other (RA 3844, RA 6389)
Despite these land reforms, these were not effective in addressing over-concentration of wealth problem and rural poverty due to many exemptions allowed and the lack in support systems and resources. Cory Aquino Administration On June 19, 1988, CARP was created through RA 6657 which aims for a more equitable distribution and ownership of land GMA Administration RA 9700 amended RA 6657 SECTION 2. DECLARATION OF PRINCIPLES AND POLICIES. It is the policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP). 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" Basic General Principles of RA 6657 as amended by RA 9700 1. The land must be distributed to the tenants or tillers of the soil 2. That the state shall promote industrialization and full employment 3. Conversion of agricultural lands into other uses to take into account the tillers rights and national food security. 4. Recognition of the limitations of availability of agricultural lands 5. Intended to enhance the quality of life of the farmer beneficiary Industrialization and full employment is a principal component of Agrarian Reform (Refer to Paragraph 1 and 2, Section 2 of RA 6657 as amended by RA 9700) What is the significance of the amendment under RA 9700 declaring that the Stat recognizes that there is not enough land to be distributed to each farmer and regular farmworker? This emphasizes the importance of keeping the agrarian reform program realistic and practical. The Philippines has only about 10 million hectares of arable land
Juicy Compilation. Agrarian Law & Social Legislation. Reports. AY 2013-2014. 2A/2D
Not enough since current population is 90 million This is recognition that there are non-redistributive alternatives included in the definition of agrarian reform under Section 3 which may be more effective and practical for achieving CARPs ends.
The implementation of the program shall be community-based. The farmers shall have greater control of farmgate prices, and easier access to credit. Farm products must have price support. Farm products must be protected from foreign competition. State shall recognize the right of farmers, farmworkers and landowners, as well as cooperatives and other independent farmers organizations, to participate in the planning, organization, and management of the program. Rights of the farmers such as enabling farmers to continue their work as stewards and innovators of agricultural biodiversity, and about recognizing and rewarding them for their contribution to the global pool of genetic resources. State shall provide support to agriculture through appropriate technology and research, and adequate financial, production, marketing and other support services. Industrial inputs like fertilizers, insectides, hybrid seeds, irrigation sytems, tractors, and diesel fuel. State shall recognize and enforce the rights of rural women to own and control land, taking into consideration the substantive equality between men and women as qualified beneficiaries. Equality supported by the Philippine Constitution, Article 2, Section 14 which states that The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men. "The State shall apply the principles of agrarian reform, or stewardship in the disposition or utilization of other natural resources State may resettle landless farmers and farm workers in its own agricultural estates, which shall be distributed to them in the manner provided by law. Ones rights under the agrarian reform program cannot be sold, transferred or conveyed. However, in the case of Corpuz v Grospe, the Supreme Court held that the transfer or conveyance to the Samahang Nayon is valid because such action is legally permissible conveyance in favor of the government. After the surrender or waiver of the said land reform rights, the Department of Agrarian Reform took the control of the property and then validly awarded it to private respondents. State shall encourage the formation and maintenance of economic-size family farms to be constituted by individual beneficiaries and small landowners by means of incentives. Incentives like "The LBP shall redeem a landowner's agrarian reform bonds at face value as an incentive: Provided, That at least fifty percent (50%) of the proceeds thereof shall be invested in a Board of Investments (BOI)-registered company or in any agri-business or agro-industrial enterprise in the region where the CARP-covered landholding is located. An additional incentive of two percent (2%) in cash shall be paid to a landowner who maintains his/her enterprise as a going concern for five (5) years or keeps his/her investments in a BOI- registered firm for the same period: Provided, further, That the rights of the agrarian reform beneficiaries are not, in any way, prejudiced or impaired thereby. State shall protect the rights of subsistence fishermen to the preferential use of communal marine and fishing resources, both inland and offshore. Provide support through appropriate technology and research, adequate financial, production and marketing assistance Agriculture and Fisheries Modernization Act of 1997 (RA 8435) "An act prescribing urgent related measures to modernize the agriculture a nd fisheries sectors of the country... Under the administration of Bureau of Fisheries and Aquatic Resources(BFAR) Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources. These are based from the 1987 Philippine Constitution, Article 13, section 7.
State shall be guided by the principles that land has a social function and land ownership has a social responsibility. Owners of agricultural land have the obligation to cultivate directly or through labor administration the lands they own and make the land productive The tenants are considered to have abandoned his land if: 1. There is a clear and absolute intention to pronounce a right or claim or to desert a right or property 2. There must be an external act by which that intention is expressed or carried into effect.
State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to promote industrialization, employment and privatization of public sector enterprises. The State may lease undeveloped lands of the public domain to qualified entities for the development of capitalintensive farms, and traditional and pioneering crops. Private corporations cannot acquire ownership of alienable agricultural lands of the public domain. Under Article 12, section 3 of 1987 Philippine Constitution, Private corporation may hold the lands only through lease for a period not exceeding twenty-five years, renewable for not more than twenty-five years and not to exceed one thousand hectares.
SECTION 3. DEFINITIONS. For the purpose of this Act, unless the context indicates otherwise: (a) Agrarian Reform means the redistribution of lands, regardless of crops or fruits produced, to farmers and regular farm workers 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 lands they work. With regards to the question if the labor administration in the sugar, banana and pineapple, etc industry, constitute agrarian reformThe answer is yes, the Comprehensive Agrarian Reform Law (CARL) recognizes other alternative and lawful modes of agrarian reform such as labor administration as provided in Sec. 3 (a). Agrarian Reform does not only consist of physical redistribution of lands but also includes other alternative modes such as labor administration which is defined as a system where all farming operations are carried out by hired agricultural workers (regular and seasonal) or profit-sharing which is a system in which employees receive a share of the net profits of the business.
(b) Agriculture, Agricultural Enterprise or Agricultural Activity means the cultivation of the soil, planting of crops, growing of fruit 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 persons whether natural of juridical. As amended by R. A. 7881, which removed the bracket [raising of livestock, poultry or fish]. The inclusion of raising of livestock, poultry and swine in the abovementioned section (b), also sections 11,13 and 32 of RA 6657, were declared as null and void by the Supreme Court (SC) for being unconstitutional. The SC ruled in the case of Luz Farms vs. The Honorable Secretary of Department of Agrarian Reform that: The transcripts of the 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 R.A. 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 intention of the Committee is to limit the application of the word "agriculture." It is evident from the foregoing discussion that Section II of R.A. 6657 which includes "private agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of "commercial farms" is invalid, to the extent that the aforecited agro-industrial activities are made to be covered by the agrarian reform program of the State. There is simply no reason to include livestock and poultry lands in the coverage of agrarian reform. (Rollo, p. 21). In order to shed more light into the matter and remove all questions that it may give rise thereto, the following factual observation was provided by the SC: 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 (5%) of the total investment of commercialIn Vda. de Tangub v. Court of Appeals, we held that the jurisdiction of the Department of Agrarian Reforms is limited to the following: 1. adjudication of all matters involving implementation of agrarian reform; 2. resolution of agrarian conflicts and land-tenure related problems; and 3. approval and disapproval of the conversion, restructuring or readjustment of agricultural lands into residential, commercial, industrial, and other non-agricultural uses.
The main factor that determines whether a tenancy relationship exists is intent. Also, such determination by the trial court as to the existence of a tenancy relationship is appealable by substantial evidence and shall be final and conclusive. In case of failure to prove all these requisites of tenancy, the occupant, cultivator or planter will not be (1) considered as a de jure tenant meaning: (a) he shall not be entitled to a security of tenure; and (b) he shall not be a farmerbeneficiary entitled to land ownership under the agrarian reform program. Another consequence is that: (2) DAR Adjudication Board will not have jurisdiction over the controversy.
In the case Hon. Antonio M. Nuesa v. Hon. Court of Appeals, the SC revered the Court of Appeals and struck down all proceedings before the DARAB for being null and void: In the case at bar, petitioner and private respondent had no tenurial, leasehold, or any agrarian relations whatsoever that could have brought this controversy between them within the ambit of the abovecited provision. Consequently, the DARAB had no jurisdiction over the controversy and should not have taken cognizance of private respondents petition in the first place. Also, in Almuete v. Andres the SC held that the suit between contending awardees of the same property is not an agrarian dispute, and is a matter properly cognizable by the regular courts, and not DARAB considering that both parties are awardees of the same property. It was thus a controversy relating to ownership of the farmland, which is beyond the ambit of the phrase agrarian dispute. However, failure to question the exercise of jurisdiction by the DARAB over a matter not falling within the DARABs jurisdiction may give rise to 2 different consequences: (1) active participation of the parties in the proceedings does not vest jurisdiction on the DARAB, as jurisdiction is conferred only by law and without which would render a decision a total nullity; (2) the party could be held guilty of estoppel by laches, on the grounds of equity and justice. Jurisdiction cannot be impugned for the first time before the SC, after the case had been pending before DARAB and the CA for a long time. Furthermore, the Court does not lose jurisdiction merely because the issue of agrarian relations is raised as a defense in an ejectment case. A person claiming to be a tenant cannot be evicted or ousted from the land as long as he has a claim of tenancy pending before the DARAB. This is so even if he loses in the land registration case because a tenant is entitled to security of tenure.
(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. (d) 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 this Act 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. (e) Idle or Abandoned Land refers to 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 this Act, but does 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 to such event, such land was previously used for agricultural or other economic purposes. Emphasis is given that in order that there is abandonment, it should be done continuously for a period of three years. The Supreme Court held in Corpus vs Grospe that abandonment requires: 1. A clear and absolute intention to renounce a right or claim or to desert a right or property; and 2. An external act by which that intention is expressed or carried into effect. An interruption in the running of the prescribed three years does not, therefore, constitute abandonment because there was no intention of such. The intention to abandon implies a departure, with the avowed intent of never returning, resuming or claiming the right and the interest that have been abandoned.
(f)
Farmer refers to 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 owned by him, or by another person under a leasehold or share tenancy agreement or arrangement with the owner thereof.
(g) Farmworker is a natural person who renders service for value as an employee or laborer in an agricultural enterprise or farm regardless of whether his compensation is paid on a daily, weekly, monthly or "pakyaw" basis. The term includes an individual whose work has ceased as a consequence of, or in connection with, a pending agrarian dispute who has not obtained a substantially equivalent and regular farm employment. (h) Regular Farmworker is a natural person who is employed on a permanent basis by an agricultural enterprise or farm. (i) 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 does not fall under paragraphs (g), (h) and (i).
(j)
(k) Cooperatives shall refer to organizations composed primarily of small agricultural producers, farmers, farm workers, 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.
Chapter 2: Coverage (Sections 4-11)

SECTION 4: SCOPE The Comprehensive Agrarian Reform Law of 1989 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture: Provided, that landholdings of landowners with a total area of five (5) hectares and below shall not be covered for acquisition and distribution to qualified beneficiaries.
More specifically the following lands are covered by the CARP: 1. All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until congress taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain; 2. All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph; 3. All other lands owned by the Government devoted to or suitable for agriculture; and 4. All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon. A comprehensive inventory system in consonance with the national land use plan shall be instituted by the Department of Agrarian Reform (DAR), in accordance with the Local Government Code, for the purpose of properly identifying and classifying farmlands within one (1) year from effectivity of this Act, without prejudice to the implementation of the land acquisition and distribution.
How is the scope or coverage of CARP defined by DAR? By outlining in its Statement of Policies in its Administrative Order No. 02 of 2009 the topic on Notice of Coverage which shows the following pertinent details regarding the coverage of CARP. The acquisition and distribution of agricultural lands under CARP shall be completed by June 30, 2014. However, landholdings which were issued Notice of Coverages on or before June 30, 2013 shall continue even after June 30, 2014 until the lands have been awarded to qualified beneficiaries. All landholdings of landowners owning more than 24 hectares which have been issued NOCs as of December 10, 2008 shall be subject to immediate acquisition and shall be completed by June 30, 2012. The landholdings of landowners owning more than 50 hectares shall be prioritized for coverage within this same period
All private agricultural lands voluntarily offered before July 1, 2009 by the landowner for agrarian reform shall be subjected to immediate acquisition and distribution under voluntary offer to sell (VOS) and shall be completed by June 30, 2012 Lands under voluntary land transfer (VLT) received by DAR before July, 1, 2009 shall be subjected to immediate acquisition and distribution and shall be completed by June 30, 2012 All landholdings of landowners owning more than 24 hectares but have not been issued with NOC as of December 10, 2008 shall be subject to land acquisition and distribution (LAD) by July 1, 2012 and completed by June 30, 2013. All landholdings of landowners owning more than 10 hectares up to 24 hectares in so far as the excess hectare above 10 hectares is concerned shall be covered under land acquisition and distribution starting July 1, 2012 and be completed by June 30, 2013 All landholdings of landowners owning more than 5 hectares up to 10 hectares shall be covered under land acquisition and distribution starting July 1, 2013 and be completed by June 30, 2014. Notwithstanding this schedule, coverage of more than 5 hectares up to 10 hectares may commence when the LAD balance of the concerned province, reckoned as of January 1, 2009 is already 90% complete, as certified to by the Provincial Agrarian Reform Coordination Committee (PARCCOM) under existing guidelines of the Presidential Agrarian Reform Council (PARC) For provinces declared by the PARC as priority land reform areas, the acquisition and distribution of private agricultural lands therein under advanced phases may be implemented ahead of the above schedules on the condition that prior phases in these provinces have completed pursuant to the PARC implementing rules and regulations on the matter.
Landholdings subject of expropriation or acquisition by the Local Government Units (LGUs) or any portions thereof not actually, directly and exclusively used for non-agricultural purposes are subject to CARP coverage if one or more of the following conditions apply: 1. There is agricultural activity 2. The land is suitable for agriculture or 3. The land is presently occupied and tilled by farmers The following type of lands shall likewise be subject of immediate acquisition and distribution under CARP and shall be completed by June 30, 2012: 1. Rice and corn lands under P.D No. 27 2. All idle and abandoned lands 3. All lands foreclosed by government financial institutions 4. All lands acquired by the PCGG 5. All other lands owned by the government
SECTION 5: SCHEDULE OF IMPLEMENTATION: The distribution of all lands covered by this Act shall be implemented immediately and completed within 10 years from the effectivity thereof. May it be argued that distribution of all lands covered by this Act shall be implemented and covered within the original 10 year period rather than the extended period? YES, because section 5 and section 7 of the CARL are clearly mandatory. The following authorities support the view that sections 5 and 7 are mandatory: statutes or rules prescribing the time for litigants to take certain actions or to appeal from an adverse decision is generally mandatory. where a statute provides for the doing of some act which is required by justice or public duty or where it invests a public body, municipality, or officer with power and authority to take some action which concerns the public interest or rights of individuals, though the language of the statute be merely permissive in form, yet it will be construed as mandatory, and the execution of the power may be insisted upon as a duty. Moreover, the word "shall" in the phrase "shall be acquired and distributed" is also mandatory. In common or ordinary parlance and in its ordinary significance, the term "shall" is a word of command, and one which has always and which must be given a compulsory meaning, and it is generally imperative or mandatory. Public policy favors an imperative or mandatory construction. Public interest is also involved, and there are beneficiaries of agrarian reform with rights which ought to be exercised or enforced and no contrary intent appears or will justify a different meaning. Where a statute provides for the doing of some act which is required by justice or public duty or where it invests a public body, municipality, or officer with power and authority to take some action which concerns the public interest or rights of individuals, though the language of the statute be merely permissive in form, yet it will be construed as mandatory, and the execution of the power may be insisted upon as a duty. In section 5 and 7 of the CARL, time is of the essence. The designation of time is a limitation of the power and authority to act of the DAR. And the phrase "to be completed within a period of not more than four years" are negative words. Authorities consider provisions worded thus as mandatory. Statutes Regulating Time of Official Action:
When a statute specifies the time at or within which an act is to be done by a public officer or body, it is generally held to be directory only as to the time, and not mandatory, unless time is of the essence of the thing to be done, or the language of the statute contains negative words, or shows that the designation of the time was intended as a limitation of power, authority, or right. SECTION 6: RETENTION LIMITS Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-size farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm: provided, that landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the areas originally retained by them thereunder: 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. The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner: provided, however, that in case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or comparable features.n case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act.n case the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise this option within a period of one (1) year from the time the landowner manifests his choice of the area for retention. In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be respected. Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of private lands executed by the original landowner in violation of the Act shall be null and void: provided, however, that those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the Department of Agrarian Reform (DAR) within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares.
SECTION 6-A EXCEPTION TO RETENTION LIMITS SECTION 6-B REVIEW OF LIMITS OF LAND SIZE Retention rights of Landowners: In no case shall retention by the landowner exceed 5 hectares. All landholdings 5 hectares and below shall not be subject to CARP coverage except for landholdings submitted for voluntary offer to sell before July 1, 2009 wherein the retention right has been waived. Landowners who own lands 5 hectares or less may file a request for the issuance of Certification of Retention
3 hectares may be awarded to each child of the landowner, provided: 1. He is at least 15 years old; and 2. He is actually tilling the land or directly managing the farm. For landholdings under compulsory acquisition, the landowner shall choose his retained area within 30 days from receipt of Notice of Coverage or its publication. Failure to exercise the right will give DAR through Municipal Agrarian Reform Officer (MARO) to choose for the landowner his area.
The following are the factors in choosing their retention area in case of waiver: 1. Commodity produced; 2. Terrain; 3. Infrastructure available; 4. Soil fertility.
In case the Certificate of Land Transfer has been issued, it is discovered that the landowner has been illegally denied his right of retention; the said certificate may be cancelled by the Secretary of Agrarian Reform.6 In the absence of an agreement for the judicial separation of property, spouses who own only conjugal properties may retain of not more than 5 hectares from such properties. If either or both of them are landowners in their own rights they may retain not more than 5 hectares from their respective landholdings.
HOMESTEAD: The house, outbuildings, and adjoining land owned and occupied by a person or family as a residence.7 It may be classified into business homestead, constitutional homestead and probate homestead. A homestead shall not be subject to compulsory coverage if the following conditions are present, to wit: 1. The original homestead grantee or his direct compulsory heir still owns the original homestead at the time of the effectivity of the CARL; 2. The original homestead grantee or his direct compulsory heir(s) was cultivating the homestead as of the effectivity of the CARL on June 18, 19898 In case the retained land is tenanted, the tenant shall have the following options: 1. Remain in the area and be considered as leaseholder and shall lose the right to be a beneficiary; 2. Be a beneficiary in another agricultural land. Requisites: 1. Actual tiller of land; 2. Tenant/lessee or regular farm worker. The law requires a legal relationship to exist between the landowner and the tiller.
Elements of a tenancy relationship: (Jeremias v. Estate of Mariano, G.R. No. 174649, September 26, 2008) 1. That the parties are the landowner and the tenant; 2. The subject matter of the relationship is an agricultural land; 3. There is consent between the parties; 4. The purpose is to bring agricultural production; 5. There is personal cultivation on the part of the tenant; and 6. The harvest is shared between them. Giving the land to all landless tillers or potential tillers would violate Article XIII, Section 4 of the 1987 Philippine Constitution which specifies the benefit for each category of qualified beneficiary. In all cases, the security of tenure of the farmers on the retained land shall be respected. Personal cultivation is not mandatory condition for retention. The landowner does not have to cultivate the retained and exempted areas, unless the tenants, as agricultural lessees, would voluntarily relinquish the task of cultivation and vacate and surrender the said areas to the landowner. Hence, personal cultivation by the landowner is not a mandatory precondition for them to be entitled to their retention right.9
SECTION 6-A Exception Local Government Units acquiring private agricultural lands by expropriation or other modes shall not be subject to the 5 hectares retention limit.
DOUBLE EXPROPRIATION; process: 1. Land will be subject to CARP coverage and acquired by the national government, through DAR; 2. Title will transfer to the national government upon just compensation to the landowner; 3. It will be distributed to agrarian reform beneficiaries; 4. Land will now be expropriated by the LGU by just compensation to the beneficiaries.
SECTION 7: PRIORITIES Lands shall be acquired and distributed as follows: 1. Phase One: July 1, 2009 June 30, 2012 a. All lands above 50 hectares;
b. c. d. 2.
All lands in excess of 50 hectares already issued Notice of Coverage on or before December 31, 2008; All rice and corn lands PCGG, GOCC and Government Financial Institutions acquired lands.
Phase two: a. Lands above 24 up to 50 hectares issued notice of coverage to be completed by June 30, 2012. b. All remaining private agricultural lands with aggregate area in excess of 24 hectares to be completed by June 30, 2013. Phase three: a. Lands in excess of 10 hectares up to 24 hectares to be completed by June 30, 2013. b. Lands in excess of retention limit up to 10 hectares to be completed by June 30, 2014.
3.
Only farmers and regular farm workers actually tilling the lands as certified under oath by the Barangay Agrarian Reform Council and attested by the landowner shall be qualified as beneficiaries. Land Acquisition and Distribution to be completed on a province-by-province basis to be completed by June 30, 2014. Succeeding phase of LAD to commence only upon completion of at least 90% of the immediately preceding phase.
SECTION 8: MULTINATIONAL CORPORATIONS All lands of the public domain leased, held or possessed by multinational corporations or associations, and other lands owned by the government or by government-owned or controlled corporations, associations, institutions, or entities, devoted to existing and operational agri-business or agro industrial enterprises, operated by multinational corporations and associations, shall be programmed for acquisition and distribution immediately upon the effectivity of this Act, with the implementation to be completed within three (3) years. Lands covered by the paragraph immediately preceding, under lease, management, grower or service contracts, and the like, shall be disposed of as follows: Lease, management, grower or service contracts covering such lands covering an aggregate area in excess of 1,000 hectares, leased or held by foreign individuals in excess of 500 hectares are deemed amended to conform with the limits set forth in Section 3 of Article XII of the Constitution. Contracts covering areas not in excess of 1,000 hectares in the case of such corporations and associations, and 500 hectares, in the case of such individuals, shall be allowed to continue under their original terms and conditions but not beyond August 29, 1992, or their valid termination, whichever comes sooner, after which, such agreements shall continue only when confirmed by the appropriate government agency. Such contracts shall likewise continue even after the lands has been transferred to beneficiaries or awardees thereof, which transfer shall be immediately commenced and implemented and completed within the period of three (3) years mentioned in the first paragraph hereof. In no case will such leases and other agreements now being implemented extend beyond August 29, 1992, when all lands subject hereof shall have been distributed completely to qualified beneficiaries or awardees.
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Such agreements can continue thereafter only under a new contract between the government or qualified beneficiaries or awardees, on the one hand, and said enterprises, on the other. Lands leased, held or possessed by multinational corporations owned by private individuals and private nongovernmental corporations, associations, institutions and entities, citizens of the Philippines, shall be subject to immediate compulsory acquisition and distribution upon the expiration of the applicable lease, management, grower or service contract in effect as of August 29, 1987, or otherwise, upon its valid termination, whichever comes sooner, but not later than after ten (10) years following the effectivity of the Act. However, during the said period of effectivity, the government shall take steps to acquire these lands for immediate distribution thereafter. 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 they shall form a workers' cooperative or association which will deal with the corporation or business association or any other proper party, for the purpose of entering into a lease or growers agreement and for all other legitimate purposes. Until a new agreement is entered into by and between the workers' cooperative or association and the corporation or business association or any other proper party, any agreement existing at the time this Act takes effect between the former and the previous landowner shall be respected by both the workers cooperative or association and the corporation, business association or such other proper party. In no case shall the implementation or application of this Act justify or result in the reduction of status or diminution of any benefits
received or enjoyed by the worker-beneficiaries, or in which they may have a vested right, at the time this Act becomes effective. The provision of Section 32 of this Act, with regard to production and income-sharing shall apply to farms operated by multinational corporations. During the transition period, the new owners shall be assisted in their efforts to learn modern technology in production. Enterprises which show a willingness and commitment and good faith efforts to impart voluntarily such advance technology will be given preferential treatment where feasible. In no case shall a foreign corporation, association, entity or individual enjoy any right or privileges better than those enjoyed by a domestic corporation, association, entity or individual.
What is Multinational Corporation? An international or transnational corporation with headquarters in one country but has branch offices in a wide range of both developed and developing countries. ( Section 1, Administrative Order No. 11) Any foreign business entity formed, organized and existing under any laws other than those of the Philippines whose purpose, as expressed in its organizational documents or by resolution of its Board of Directors, or its equivalent, is to supervise, superintend, inspect or coordinate its own affiliates, subsidiaries or branches in the AsiaPacific Region may establish a regional or area headquarters in the Philippines, after securing a license therefore from the Securities and Exchange Commission upon favorable recommendation of the Board of Investments. ( Article 80, Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987)
What is an Agribusiness? It is the sum total of all operations involved in the manufacture and distribution of farm supplies, production activities on the farm; and the storage, processing, and distribution of farm commodities and items made from them. It, therefore, includes all activities involved in growing agricultural produce and making them readily usable by consumers.10
What are Agro-industrial enterprises? It cover enterprises that process farm products into final consumer goods (such as food and clothing) and into industrial raw materials.
Implementation to be completed within three (3) years. All lands of the public domain leased, held or possessed by multinational corporations or associations, and other lands owned by the government or by government-owned or controlled corporations, associations, institutions, or entities, devoted to existing and operational agri-business or agro-industrial enterprises, operated by multinational corporations and associations, shall be programmed for acquisition and distribution immediately upon the effectivity of the Act on June 15, 1988, with the implementation to be completed within three (3) years.
Implementation not later than ten (10) years Lands leased, held or possessed by multinational corporations, owned, by private individuals and private nongovernmental corporations, associations, institutions and entities, and Filipino citizens shall be subject to immediate compulsory acquisition and distribution upon the expiration of the applicable lease, management, grower or service contract in effect as of August 29, 1987, or otherwise, upon its valid termination, whichever come sooner, but not later than 10 years following the effectivity of the Act. However, during the said period of effectivity, the government shall take steps to acquire those lands immediate distribution thereafter. for
Distribution; formation of workers cooperative or association 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 they shall form a workers cooperative or association which will deal with the corporation or business association or any other proper party for the purpose of entering into a lease or growers agreement and for all other legitimate purposes.
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Until a new agreement is entered into by and between the workers cooperative or association and the corporation or business association or any other proper party, any agreement existing at the time the Act takes effect between the former and the previous landowner shall be respected by both the workers cooperative or association and the corporation and the corporation, business association or such other proper party. In no case, however, shall the implementation or application of the Act justify or result in the reduction of status or diminution of any benefits received or enjoyed by the worker-beneficiaries, or in which they may have a vested right, at the time the Act becomes effective.
Production and income-sharing The provisions of Section 32 of the Act, with regard to production and income sharing shall apply to farms operated by multinational corporations. Section 32. Production-Sharing. Pending 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. 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. 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.
Modern technology in production During the transition period, the new owners shall be assisted in their efforts to learn modern technology in production. Enterprises which show a willingness and commitment and good faith efforts to impart voluntarily such advanced technology will be given preferential treatment where feasible. In no case shall a foreign corporation, association, entity or individual enjoy any rights or privileges better than those enjoyed by a domestic corporation, association, entity or individual.17
SECTION 9: ANCESTRAL LANDS For purposes of this Act, ancestral lands of each indigenous cultural community shall include, but not be limited to, lands in the actual, continuous and open possession and occupation of the community and its members: Provided that the Torrens System shall be respected. The right of these communities to their ancestral lands shall be protected to ensure their economic, social and cultural well-being. In line with the other principles of self-determination and autonomy, the systems of land ownership, land use, and the modes of settling land disputes of all these communities must be recognized and respected. Any provision of law to the contrary notwithstanding, the PARC may suspend the implementation of this Act with respect to ancestral lands for the purpose of identifying and delineating such lands: Provided, That in the autonomous regions, the respective legislatures may enact their own laws on ancestral domain subject to the provisions of the Constitution and the principles enunciated in this Act and other national laws.
What is an Ancestral Land?
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Ancestral lands, as defined in the Indigenous Peoples Rights Act (IPRA) is the occupied, possessed and utilized by individuals, families and clans who are members of the Indigenous Cultural Communities (ICCs)/Indigenous Peoples (IPs) since time immemorial, by themselves or through their predecessors-in-interest, 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 tree lots. For ancestral lands, in particular, IPs have the right to transfer land/property rights to/among members of the same ICCs/IPs and the right to redeem the property in case of transfers that raise questions on consent given by IPs and transfers made with unjust considerations and/or prices.
How to claim lands? IPs in the Philippines can claim ownership in three ways: 1. 2. by virtue of a native title; getting formal recognition of ownership by acquiring a certificate of ancestral domain title (CADT) or certificate of ancestral land title (CALT) from the National Commission on Indigenous Peoples (NCIP)-Ancestral Domains Office (ADO); or by securing a certificate of title by virtue of Commonwealth Act 141, as amended, or the Land Registration Act 496.19
3.
What is a Native title? A native title, according to RA No. 8371, refers to pre-conquest rights to land and domains, which , as far back as memory reaches, have been held under a claim of private ownership by ICCs/IPs, have never been public lands and are thus indisputably presumed to have been held that way since before the Spanish Conquest.
What is a CALT or CADT? A Certificate of Ancestral Lands Title (CALT) or Certificate of Ancestral Domain Title (CADT) is granted by the government and is provided for by law to those IPs who wish to obtain these titles. The IPRA, specifically Section 12, also states that IPs have the option to acquire certificates of title under the provisions of the amended Commonwealth Act No. 141. This Act follows the Torrens System of land registration5 and titles issued under this system are called Torrens titles. SECTION 12 - Option to Secure Certificate of Title under Commonwealth Act 141, as amended, or the Land Registration Act 496. Individual members of cultural communities, with respect to their individually-owned ancestral lands who, by themselves or through their predecessors-in-interest, have been in continuous possession and occupation of the same in the concept of owner since time immemorial or for a period of not less than thirty (30) years immediately preceding the approval of this Act and uncontested by the members of the same ICCs/IPs shall have the option to secure title to their ancestral lands under the provisions of Commonwealth Act 141, as amended, or the Land Registration Act 496. Jurisdiction over the Ancestral Lands of the Indigenous Communities It is the Department of Natural Resources (DENR) that is tasked with prescribing the rules and regulations, as provided under section 13 of RA7586, which reads: SECTION 13. Ancestral Lands and Rights over Them. Ancestral lands and customary rights and interest arising therefrom shall be accorded due recognition. The DENR shall prescribe rules and regulations to govern ancestral lands within protected areas: Provided, that the DENR shall have no power to evict indigenous communities from their present occupancy nor resettle them to another area without their consent: Provided, however, that all rules and regulations, whether adversely affecting said communities or not, shall be subjected to notice and hearing to be participated in by members of concerned indigenous community. Protection of rights of indigenous cultural communities The right of these communities to their ancestral lands shall be protected to ensure their economic, social and cultural well-being. In line with the principles of self-determination and autonomy, the systems of land ownership, land use, and the modes of settling land disputes of all these communities must be recognized and respected. However, the Torrens System shall be respected.
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Suspension of implementation Any provision of law to the contrary notwithstanding, the PARC may suspend the implementation of the Act with respect to ancestral lands for the purpose of identifying and delineating such lands.
Enactment of regional laws In the autonomous regions, the respective legislatures may enact their own laws on ancestral domain subject to the provisions of the Constitution and the principles enunciated in the Act and other national laws.
SECTION 10: EXEMPTIONS AND EXCLUSIONS 1. Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves shall be exempt from the coverage of this Act. Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt fromthem coverage of this Act: Provided, That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued under the Agrarian Reform Program. In cases where the fishponds or prawn farms have been subjected to the Comprehensive Agrarian Reform Law, by voluntary offer to sell, or commercial farms deferment or notices of compulsory acquisition, a simple and absolute majority of the actual regular workers or tenants must consent to the exemption within one (1) year from the effectivity of this Act. When the workers or tenants do not agree to this exemption, the fishponds or prawn farms shall be distributed collectively to the worker-beneficiaries or tenants who shall form cooperative or association to manage the same. In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian Reform Law, the consent of the farm workers shall no longer be necessary; however, the provision of Section 32-A hereof on incentives shall apply. 3. 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 seedlings 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, shall be exempt from the coverage of this Act.(As amended by R. A. 7881) In addition to the exclusion provided for in section 10, it has been held that also Lands devoted to raising of livestock, swine and poultry are excluded from the coverage of CARP. 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 6657on 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.
2.
LUZ FARMS CASE Facts: Petitioner Luz Farms is a corporation engaged in livestock and poultry business. It seeks to nullify Sec. 3 (b) and Sec. 11 of RA6657 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)
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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 lands24.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
DAR Administrative Order No. 9 (1993)
Imposes two (2) conditions in order that these lands may be exempted: 1. 2. That the land or portion thereof is exclusively, directly, or actually used for livestock, poultry and swine raising as of 15 June 1988; and The farm must satisfy the ratios of land, livestock, poultry and swine
As for paragraph B of section 10, Fishponds and prawn ponds With the amendment of Sec. 3 (c), 10 and 11 of RA 6657 by RA 7881,fishponds and prawn ponds are also exempted from the coverage of CARP, provided that said lands have not been distributed to ARBs and no CLOA shave 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 where 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 7881or on 12 March 1995. In cases where the fishponds or prawn ponds have not been subjected to CARP, the consent of the farm workers shall no longer be necessary.
Sec. 4 of RA 7881 also amended RA 6657 It introduced 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.
As for paragraph C of section 10 May a state college claim that part of its property being cultivated by farmers cannot be covered under CARP because it is reserved for the future expansion of the campus?
Yes, that area being cultivated by farmers can still be exempted from the CARP coverage. It has been held in Central Mindanao University vs. DARAB, the university has the prerogative to determine whether a particular part of the school property is necessary for educational purposes.
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
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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. Is application of exemption the same as an application for retention? No, there are different in the sense that they have different requisites. In the case of DAEZ vs. CA27, it stated that under PD 27, which implemented that operation land transfer program covers tenanted rice or corn lands. The requisites for coverage under OLT are: 1) land must be a system of share crop or lease tenancy obtaining therein. If either requisite is absent, a landowner may apply for exemption. If either of these requisite, the land is not covered under OLT. Hence, a landowner need not apply for retention where his ownership over the entire landholding is intact and undisturbed. PD 27 grants each tenant of covered land 5 hectares lot or in case the land is irrigated, a 3 hectare lot constituting a family size farm, however, said law allows a covered landowner to retain not more than 7 hectares of his land if his aggregate landholding does not exceed 24 hectares. Otherwise, his entire landholding is covered without him being entitled to any retention right. On the other hand, the requisites for the exercise by the landowner of his right of retention are: 1. 2. The land must de voted to rice or corn crops. There must be a system of share crop or lease tenancy obtaining therein; and The size of the landholding must not exceed 24 hectares or it could be more than 24 hectares provided that at least 7 hectares thereof are covered lands and more than 7 hectares of it consists of other agricultural lands
SECTION 11: COMMERCIAL FARMING Commercial farms which are private agricultural lands devoted to salt beds, fruit farms, orchards, vegetable and cut-flower farms, and cacao, coffee and rubber plantations, shall be subject to immediate compulsory acquisition and distribution after ten (10) years from the effectivity of this Act. In the case of new farms, the ten-year period shall begin from the first year of commercial production and operation, as determined by the DAR. During the ten-year period, the Government shall initiate steps necessary to acquire these lands, upon payment of just compensation for the land and the improvements thereon, preferably in favor of organized cooperatives or associations, which shall thereafter manage the said lands for the workers-beneficiaries.(As amended by R.A.7881) This definition excludes private agricultural lands devoted to commercial livestock, poultry, and swine raising. Such lands are not covered by the agrarian reform law28. There are alternative methods available to commercial farms other than distributions of land most commercial farms are the most modern mechanized farms with processing plants. Such farms pay the highest wages. Hence, the workers themselves prefer to remain as employees as it would be uneconomic to dismantle the farming operation. Thus, the DAR, under its AO No.9 series of 1998, allows commercial farms certain options subject to approval by DAR and workers. Such as: 1. joint venture 2. lease-back growership arrangements and 3. direct payment scheme. These are aside from the usual voluntary offer sale and compulsory coverage. In general, therefore, the DAR encourages the workers or farmer-beneficiaries to keep intact the commercial farm by organizing themselves into cooperatives which will hold the collective CLOA to the land. Further, it will finance and operate the commercial farm. However, if it is economically viable or feasible as determined by DAR/DA, they will allow partition of the commercial farm if a majority of the workers prefer physical partition. In case of portion, the DAR requires a minimum of 1 hectare and maximum of 3 hectares for each worker.
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ADMISTRATIVE POLICIES COVERING EXPIRATION OF DEFERMENTS OF COMMERCIAL FARMS All commercial farms whose deferment expired last June 15, 1998 are subject to immediate acquisition and distribution under the CARP. Deferments have yet to expire will be acquired and distributed only upon expiration of their respective deferment periods.
GENERAL RULE: Acquired commercial farms shall be distributed to qualified beneficiaries based on the order of priority prescribed under section 22 of RA 6657. Those who have worked longest on the land shall be given preference. Landowner, whether individual or corporate, shall have the right to retention pursuant to section 6 of RA 6657. all infrastructure facilities and improvements including buildings, roads, machinery 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, shall be subject to acquisition upon the recommendation of the agrarian reform beneficiaries. Portion of lands devoted to livestock covered by DARs compulsory acquisition are not included in the definition of agricultural lands. In the case of DAR vs. SUTTON29, it was held that the constitutionality of DAR AO No.9, series of 1993, which prescribes a maximum retention limit for owners of land devoted to livestock rising, was raised. Pursuant to such AO, DAR exempted 1,200 hectares for grazing and a maximum of 102, 5635 hectares for infrastructures while the rest was subject to compulsory acquisition. The Supreme Court said that DAR has no power to regulate livestock farms which have been exempted by the constitution from the coverage of agrarian reform. Moreover, lands devoted to livestock, poultry and swine have been classified as industrial and not agricultural lands and thus exempt from agrarian reform.
MODES ACQUISITION OF COMMERCIAL FARMS 1. Voluntary offer to sell-in order that acquisition of deferred commercial farm through voluntary offer to sell may be allowed, the offer to sell must have been submitted before the expiration of the deferment period, otherwise, the property shall be placed under compulsory acquisition. Compulsory Acquisition Direct Payment Scheme-upon mutual agreement of both the land owner and the majority of all qualified agrarian reform beneficiaries and approved by the DAR direct payment of deferred commercial farms placed under CARP coverage may be allowed.
2. 3.
Likewise, the area of the land to be transferred to the beneficiaries shall not be less than the area which the government would otherwise acquire for redistribution through CA or VOS. The terms and conditions of the DPS shall include the immediate transfer of possession and ownership of the land in favor of the identified beneficiaries. The CLOAs shall be issued to the individual ARBs, or their cooperative or association, as may be appropriate, with proper annotations.
TYPES OF AGRIBUSINESS VENTURES ALLOWED BY DAR 1. Joint Venture Arrangement Agribusiness venture whereby a company is organized and co-owned by an investor and the agrarian reform beneficiaries through their cooperatives through their associations. The investor may provide the management and marketing skills, technology infrastructure and capital while the ARBs contribution/participation in the joint venture includes labor, the usufructuary rights to the land, and capital infusion, if available. Lease Arrangement Agribusiness scheme whereby the ARBs through their cooperatives of farmworkers association, enter into a contract of lease with the landowner/investor. The lessee shall have farm control and operations within an agreed period of time but not to exceed 10 years, subject to extension upon mutual agreement of both parties. The lease rental shall not be less than the amortization to be paid by the ARBs to the Land Bank of the Philippines pursuant to DAR AO No.6, series of 1998, and other pertinent laws, rules and regulation. Contract Growing/Growership Arrangement
2.
3.
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ARBs own the land and commit, either collectively through their cooperative or individually, to produce certain crops for an investor or agribusiness firm that contract to buy the produce at pre-arranged terms.
4.
Management Contract Arrangement whereby the ARBs, or their cooperative/organization, hire the services of the landowner or an investor to manage an doperate the farm in exchange for fixed wages and commission. Build-Operate-Transfer Scheme Contractual agreement entered into pursuant to RA No. 6957, as amended, whereby the project proponent undertakes the construction, including financing of a given infrastructure facility and the operation and maintenance thereof for an agreed period of time but not to exceed 25 years, subject to extension. Qualified ARBs or their cooperative/association may also opt for the combination of two or more of the above schemes they may choose in collaboration with the proposed investor. Lease arrangement shall be the least preferred scheme. ELEMENTS OF AGRIBUSINESS VENTURE ARRANGEMENTS
5.
ESSENTIAL
Only qualified ARBs who have been awarded title to distribute area subject of the agribusiness venture arrangement. Any qualified investor or former landowner may enter into an agribusiness venture provided, that they are able to prove their financial and technical capacity to meet ties and obligations under the proposed arrangement as evidenced by the relevant financial and income statements and further that the former landowner of the commercial farm shall be given priority. Qualified investor may be any individual, partnership, or corporation with established financial and technical capabilities duly registered with the SEC. In joint ventures, the contract shall provide only for the usufructuary rights on the land but not the transfer of ownership of the land itself, valued at the prevailing market rates, but not lower than the amortization cost thereof.
FORMULAS FOR JOINT VENTURES, LEASE BACK AND CONTRACT GROWERSHIP ARRANGEMENTS Joint Venture agreement scheme must be approved by the DAR and by the majority farmer-beneficiaries. In this case, it is required that the title be ultimately be transferred to the workers.35 Lease-back arrangements shall be approved only when after the issuance of the CLOAs to the workers either individually or collectively to a cooperative. Lease may not exceed 10 years subject to extension by mutual agreement and rental should not be less than the amortization to be paid by the workers.36 Contract Growership shall be approved after the issuance of the CLOAs and the workers farm the land and agree to pre-sell their produce, individually or collectively to any party including the former landowner who may have all the equipment and processing plant.37 In direct payment scheme, DAR allows the landowner and workers to negotiate the sale of the land and/or equipment. The contract must be approved by the DAR and majority of its workers. Also, DAR requires that the CLOAs be issued collectively.
Chapter 3: Improvement of Tenurial and Labor Relations (Sections 12 & 13)

SECTION 12: DETERMINATION OF LEASE RENTALS In order to protect and improve the tenurial and economic status of the farmers in tenanted lands under the retention limit and lands not yet acquired under this act, the DAR is mandated to determine and fix immediately the lease rentals thereof in accordance with Section 34 of RA 3844 , as amended: Provided, that the DAR shall immediately and periodically review and adjust the rental structure for different crops, including rice and corn, or different regions in order to improve progressively the condition of the farmer, tenant and lessee. Section 12 decrees that the DAR is mandated to determine and fix immediately the lease rentals in accordance with Section 34 of RA 3844 as amended. Section 34 of RA3844 states that: Consideration for the Lease of Riceland and Lands Devoted to Other Crops - The consideration for the lease of riceland and lands devoted to other crops shall not be more than the equivalent of twenty-five per centum of the average normal harvest during the three agricultural years
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immediately preceding the date the leasehold was established after deducting the amount used for seeds and the cost of harvesting, threshing, loading, hauling and processing, whichever are applicable: Provided, That if the land has been cultivated for a period of less than three years, the initial consideration shall be based on the average normal harvest during the preceding years when the land was actually cultivated, or on the harvest of the first year in the case of newly-cultivated lands, if that harvest is normal: Provided, further, That after the lapse of the first three normal harvests, the final consideration shall be based on the average normal harvest during these three preceding agricultural years: Provided, furthermore, That in the absence of any agreement between the parties as to the rental, the maximum allowed herein shall apply: Provided, finally, That if capital improvements are introduced on the farm not by the lessee to increase its productivity, the rental shall be increased proportionately to the consequent increase in production due to said improvements. In case of disagreement, the Court shall determine the reasonable increase in rental. Section 34 thus gives the following rules: 1. The lease of rice lands and lands devoted to other crops shall not be more than the equivalent of 25% of the average normal harvest during the 3 agricultural years immediately preceding the date the leasehold was established after deducting the amount used for seeds and the cost of harvesting, threshing, loading, hauling and processing. 2. That after the lapse of the first three normal harvests, the final consideration shall be based on the average normal harvest during these three preceding agricultural years. In the absence of any agreement between the parties as to the rental, the maximum allowed herein shall apply If capital improvements are introduced on the farm not by the lessee to increase its productivity, the rental shall be increased proportionately to the consequent increase in production due to said improvements. In case of disagreement, the Court shall determine the reasonable increase in rental.
3.
4.
5.
Given such rules which Section 12 as provided for by RA 6657 through the adaptation of Section 34 of RA 3844 is bound the Department of Agrarian Reform thus promulgate several laws to enact the duties found under Section 12 which leads to the DAR Administrative Order 02-06 with the subject of Revised Rules and Procedures Governing Leasehold Implementations in Tenanted Agricultural Lands. The DAR Administrative Order 02-06 is Pursuant to the DAR's mandate to protect the rights and improve the tenurial and economic status of farmers in tenanted lands, and its efforts to provide for an effective mechanism that shall implement leasehold and improve the method for determining and fixing lease rentals, as well as deal with external factors such as the prevailing practice and stance of landowners to deny the existence of tenancy relations whenever possible. The rules and procedures governing agricultural leasehold tenancy and leasehold implementation are hereby modified and amended by the DAR Administrative Order 02-06 which gives the following modifications:
Governing Policies and Principles: 1. Agricultural leasehold shall be based on a tenancy relationship. The following are essential elements of agricultural tenancy: a. The parties are the landholder and the tenant; b. The object of the relationship is an agricultural land; c. There is consent freely given either orally or in writing, express or implied; d. The purpose of the relationship is agricultural production; e. There is personal cultivation; f. There is consideration given to the lessor either in a form of share of the harvest or payment of fixed amount in money or produce to or both. 2. Agricultural leasehold relation shall not be extinguished by mere expiration of the term of period in a leasehold contract nor by the sale, alienation or transfer of the legal possession of the land. In case the agricultural lessor sells, alienates or transfers the legal possession of the landholding, purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor as provided for under Sec. 10, R.A. 3844, as amended. Cultivation is not limited to the plowing and harrowing of the land, but also the advancing of the ground to forward the products of the earth by general industry, taking care of the land and fruits growing thereon, fencing of certain areas, and the cleaning thereof by gathering of coconuts, their pilings, husking, and harvesting as well as the proceeding thereof go into copra, although at times with the aid of hired laborers.
3.
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The consideration for the lease shall not be more than the equivalent of 25% of the average normal harvest (ANH) during the three (3) agricultural years immediately preceding the date the lease was established. If the land has been cultivated for less than 3 years, the initial consideration shall be based on the average normal harvest of the preceding year/s when the land was actually cultivated. a. If the land has been cultivated for a period of less than three (3) years, the initial consideration shall be based on the average normal harvest during the preceding years when the land was actually cultivated, or on the harvest of the first year in the case of newly cultivated lands, if that harvest is normal (R.A. No. 3844, Section 34, 1st proviso). b. For auxiliary crops, the lease shall not be more than the equivalent of 20% following the principles provided for principal crops on the use of average normal harvest provided that all expenses shall be born by the tenant pursuant to Sec. 30, R.A. 1199, as amended c. After the lapse of the first three (3) normal harvests, the final consideration shall be based on the average normal harvest during these three (3) preceding agricultural years (R.A. No. 3844, Section 34, 2nd proviso). The lease rental shall cover the whole farmholding attended to by the lessee. Computation of lease rental shall include principal and/or auxiliary crops existing in the area as of the time the leasehold was established. Where the rental has been fixed, whether in cash or in kind, such rental shall constitute the consideration for the use of the land and the lessee may diversify and/or plant auxiliary crops. The right to diversify shall be provided in the leasehold contract. In the homelot, where the tenant may raise vegetables, poultry, pigs, other animals, or engage in minor industries, the products shall accrue to the tenant exclusively. The tenant's dwelling shall not be removed from the lot already assigned to him by the landholder unless there is severance of tenancy relationship between them as provided under Section 9 of R.A. No. 1199 or unless the tenant is ejected for cause, and only after the expiration of forty-five (45) days following such severance of relationship or dismissal for cause. (R.A. No. 2263, Section 5). As a general rule, tenancy is indivisible and dual tenancy/co-tenancy is not allowed. This rule is however subject to the following exceptions: a. As among the heirs of a deceased tenant-farmer, the landowner has recognized the children as the tenant's successor to the tenancy of the landholding. b. A common law wife is recognized as a co-tenant by the landowner and is entitled to cultivation of the same after the common-law husband had left the landholding. c. When co-tenancy exists with the consent of the landowners. Where there are two tenants on the same lot (when divisibility of tenancy is allowed), each producing a different crop, they may decide to have a joint leasehold agreements with the landholder, whichever is feasible. This provision applies only to tenancy relationship existing as of the effectivity of this Order and shall not be countenanced prospectively.
5.
6.
7.
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10. An agricultural lessee shall continue the enjoyment and possession of his landholding except when his dispossession has been authorized by the proper tribunal in a judgment that is final and executory for causes provided by law (R.A. No. 3844, Section 36(6)). To avoid compounded rents, it shall be the duty of the Municipal Agrarian Reform Officer (MARO) to encourage farmers to avail of the crop insurance program of the government. 11. In case a prospective agricultural lessee is under serious threat of eviction as a consequence of the leasehold coverage implementation (not as a consequence of execution of a lawful order), the matter shall be immediately reported, with the assistance of the MARO, to the nearest police or law enforcement agency for documentation. Such report may later be necessary in guiding the DAR in resolving questions pertaining to existence or non-existence of tenancy relationship. 12. If capital improvements are introduced on the farm by the landholder to increase its productivity, the rental shall be increased proportionately to the consequent increase in production due to said improvements. The cost of the capital improvement, including interest thereon, will be determined, and the number of years shall be fixed within which the increase in rental shall be paid. In case of disagreement, the Adjudicator shall determine the reasonable increase in rental. (R.A. No. 3844, Section 34, 4th proviso). 13. The lease rental determined by the MARO in accordance with law and existing policies of the DAR shall be binding and immediately executory upon execution of the leasehold contract by both the lessor and the lessee and affirmation by the MARO. 14. Leasehold agreements under this Order shall be in writing, using the prescribed leasehold contract, duly notarized and registered with the Municipal Treasurer's Office. Refusal of the landholder to sign a leasehold contract shall not affect the tenant's status as lessee.
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15. Existing leasehold agreements shall be respected provided that the agreed lease rentals do not exceed the maximum provided by law and the other stipulations therein are not contrary to law. For the purpose of determining compliance with the terms and conditions written therein, these agreements shall be subject to the MARO's periodic review. 16. All issues related to the implementation of this Administrative Order and the Leasehold Contract shall, as much as possible, be resolved within the level of the MARO and/or the PARO, if still necessary, pursuant to the rule on exhaustion of administrative remedies. 17. If the landowner refuse to accept the Provisional Lease Rental (PLR), the lessee shall deposit the contested lease rental with the nearest Land Bank of the Philippines (LBP) Office, or any duly authorized banking institution in the locality, in a trust account in the name of the landholder if the payment is in cash or in a bonded warehouse if the payment is in kind. The lessee shall notify the MARO and the landholder on the payment made. The same rule shall apply to landholdings covered by leasehold contracts where the landowner refuses to accept the lease rental. 18. In case of disagreement over the issue on the fixing of lease rentals, the PLR issued by the MARO shall be reviewed and affirmed by the PARO. If no action is taken by the PARO after the lapse of fifteen (15) days from receipt of a copy thereof, the PLR shall be deemed approved and shall govern the leasehold relation. 19. Any party who disagrees with the MAROs decision must submit within 15-day period an original complaint before the Provincial Agrarian Reform Adjudicator (PARAD). Notwithstanding the filing of the case before the PARAD, the MARO's decision shaft be provisionally observed as provided in the preceding paragraph until and unless the PARAD rules otherwise after adjudicating the lease rental on the merits. 20. The Adjudicator shall decide the case within thirty (30) days from the last day of the filing date of the last responsive pleading, pursuant to the first sentence of Section 51 R.A. No. 6657. 21. In case of disagreement over the issue of existence of tenancy relationship and the MARO's finding is in favor of its existence, and later a party files a case before the Adjudicator, the distribution of the proceeds from the intervening harvest shall be as follows: a. Release 50% to the party claiming to be tenant: b. Release 25% to the landholder; c. Deposit the cash equivalent of the remaining 25% in a bank account in the name of the Department of Agrarian Reform in trust for the parties concerned. The preceding sections are the ruling policies and principles in accordance with the DAR Administrative Order 02-06 governing the prescribed actions to be taken in the course of the relationship. A. 1. 2. 3. 4. 5. 6. RIGHTS AND OBLIGATIONS Rights of Agricultural Lessees. It shall be the right of the agricultural lessee to: Have possession and peaceful enjoyment of the land; Manage and work on the land in a manner and method of cultivation and harvest which conform to proven farm practices; Mechanize all or any phase of his farm work; Deal with millers and processors and attend to the issuance of quedans and warehouse receipts for the produce due him; To be afforded and/or continue the exclusive possession and enjoyment of a homelot; Be indemnified for the cost and expenses incurred in the cultivation, planting or harvesting and other expenses incidental to the improvement of his crop in case he surrenders or abandons his landholding for just cause or ejected therefrom. In addition, he has the right to be indemnified for one-half of the necessary and useful improvements made by him on the landholding. Provided, That these improvements are tangible an have not yet lost their utility at the time of surrender and/or abandonment of the landholding, at which time their value shall determined for the purpose of the indemnity for improvements; Terminate the leasehold during the agricultural year for any of the following causes: a. Cruel, inhuman or offensive, treatment of the agricultural lessee or nay member of his immediate farm household by the agricultural lessor or his representative with the knowledge and consent of the lessor; b. Non-compliance on the part of the agricultural lessor with any of the obligations imposed upon him by the provisions of R.A. No. 3844 or by his contact with the agricultural lessee; c. Compulsion of the agricultural lessee or any member of his immediate farm household by the agricultural lessor to do any work or render any service not, in any way connected with farm work or even without compulsion if no compensation is paid; d. Commission of a crime by the agricultural lessor or his representative against the agricultural lessee or any member of his immediate farm household; or e. Voluntary surrender due to circumstances more advantageous to him and his family. Have the preferential right to buy the agricultural landholding under reasonable terms and conditions in case the
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agricultural lessor decides to sell the same (Sec. 11 R.A. No. 3844). Redeem the landholding at a reasonable price and consideration in case the agricultural lessor sold the same to a third person without the agricultural lessee's knowledge pursuant to Section 12 of R.A. No. 3844. Obligations of Agricultural Lessee. It shall be the obligation of the agricultural lessee to: Cultivate and take care of the farm, growing crops, and other improvements on the landholding as a good father of a family and perform all the work therein in accordance with proven farm practices; Inform the agricultural lessor within a reasonable time of any trespass committed by third persons upon the farm, without prejudice to his direct action against the trespasser; Take reasonable care of the work animals and farm implements delivered to him by the agricultural lessor and see that they are not used for purposes other than those intended or used by another without the knowledge and consent of the agricultural lessor: Provided, however, That if said work animals get lost or die, or said farm implements get lost or are destroyed, through the negligence of the agricultural lessee, he shall be held responsible and made answerable therefore to the extent of the value of the work animal and/or farm implements at the time of the loss, death or destruction; Keep his farm and growing crops attended to during the work season in case of unjustified abandonment or neglect of hi farm, any or all of his expected produce may, upon order of the Court, be forfeited in favor of the agricultural lessor to the extent of the damage caused thereby; Pay the lease rental to the agricultural lessor when it falls due. Provided, that the non-payment of the rental due to crop failure to the extent of 75% as a result of a fortuitous event shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished.
B. 1. 2. 3.
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C.
Prohibitions on Agricultural Lessees. It shall be unlawful for the agricultural lessee to: 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 entered first into leasehold, if the first landholding is of sufficient size to make him and the members of his immediate farm household fully occupied in its cultivation; or 2. Employ a sub-lessee on his landholding: Provided, however, That in case of illness or temporary incapacity, he may employ laborers whose services on hi landholding shall be on his account. 1.
SPECIFIC POLICIES FOR LANDS PRIMARILY DEVOTED TO SUGARCANE AND COCONUT A. SUGARCANE LANDS In the implementation of the leasehold system, particularly in sugarcane lands, the following policies shall apply: 1. In order to progressively improve the condition of the lessee, and as part of the leasehold arrangement, 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 bonafide member: a. To enter into a contract with the sugar central millers for the milling of the sugarcane grown on the leased property. Any milling contract existing between the landholder and the sugar millers shall be deemed to have been amended, with the lessee/s assuming all the rights of the landholder in such contract, until the lessee/s and the miller shall have entered into a new milling agreement under the reasonable terms and conditions. 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. CEDHTa e. To be given thirty (30) days notice in writing before the sugar and other by-products are sold through public auction. These rights shall bind the DAR Sheriff or person designated by the Adjudicator to have custody of the unliquidated harvest to observe the process of public auction and shall not be allowed a negotiated sale of the sugar and other byproducts. f. To be provided with the standard tonnage allocation by the miller/sugar central. 2. The lease rental for sugarcane lands shall be not more than twenty five percent (25%) of average normal harvest less the value of the cost of seeds/cane points, harvesting (cutting), loading, hauling, and/or trucking fee, and cost of processing, pursuant to Section 34 of R.A. No. 3844. (See Annex "A" on sample computation) 3. The determination of the average normal harvest to be used in computing the lease rental in sugarcane lands shall be based on the following: a. If the leasehold relationship existed before 15 June 1988, the effectivity of R.A. No. 6657, the average normal harvests of the three (3) agricultural years immediately before the date of the leasehold relationship was established shall be used. b. If the leasehold relationship was established on 16 June 1988 by operation of R.A. No. 6657, the average normal harvest of the three (3) agricultural years immediately preceding the said date shall be used. c. If the land has been cultivated for less than three (3) years prior to the ate the leasehold was established, the estimated normal harvest during the three (3) agricultural years immediately preceding the said date shall be considered as a normal harvest.
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4.
An agricultural year for sugarcane shall be understood to mean the period from land preparation to harvesting. Ratooning (from trash burning to harvesting) shall likewise be considered as one agricultural year. 5. The leasehold agreement shall include both the sugarcane products (sugar) and by products (molasses). 6. The lease rental of the land shall be paid in an amount certain, in money or in produce, or both, as may be agreed upon by the parties. Such rental shall be paid after the exact produce shall have been determined using the Certificate of Quedan and molasses storage certificate issued by the sugar central/miller, unless otherwise agreed upon by the parties under reasonable terms and conditions. CHcTIA 7. The agricultural lessees shall not be required to assume, directly or indirectly, any part of the rent, or other considerations which the agricultural lessor is under obligation to pay third persons for the use of the land (R.A. No. 3844, Section 31). 8. Any contract by which the agricultural lessee is required to accept a loan or to make payment(s) in kind shall be contrary to law, moral or public policy (R.A. No. 3844, Section 15). 9. The agricultural lessor may mortgage expected rentals (R.A. No. 3844, Section 29) 10. Notwithstanding the above provisions of the law and any contract of mortgage existing between the landholderplanter and financial institutions to the contrary, it is unlawful for the landholder-planter to mortgage to any entity (such as banks or financial institutions) that part of produce which is due to the agricultural lessee. 11. If the landholder incurred loans from a bank or any financial institution, such bank can only attach the fixed lease rental due to the landholder. It is unlawful for the bank or any financial institution to withhold the quedan covering the portion of the crop due to the lessee. 12. The DAR shall encourage sugarcane farmer-lessees to establish associations or cooperatives which shall assist them or directly deal with the millers, processors, transport operators, and financial and banking institutions. The DAR shall likewise assist farmer-lessees in securing milling accommodations or membership in sugar planters associations. B. COCONUT LANDS In the implementation of the leasehold system, particularly in coconut lands, the following policies shall apply: 1. The indiscriminate or substantial cutting of coconut trees by the landholder or his assigns is prima facie evidence of dispossession of the tenant-lessee from his farmholding. The following documents may, however, rebut the presumption: a. Written consent of the lessee; and b. A permit to cut coconut trees from the Philippine Coconut Authority, in accordance with R.A. No. 8048 (Coconut Preservation Act of 1995) and its implementing rules and regulations. 2. Consistent with the state policy to provide for the growth of the coconut industry through a sustainable replanting program, as enunciated in R.A. No. 8048, and in consonance with the preceding paragraph, it shall be the duty of the MARO assigned in the area to encourage replanting of coconut trees and the maximization of the landholding especially the area in between the coconut trees. He/She shall assist the parties in coordinating with proper government agencies and institutions. The application of the allowable deductible items in coconut shall depend on the final product as defined in this AO. If the final product is copra, the deductible items are the: a. cost of harvesting, which shall include picking and piling; (3.11) and b. cost of processing, which shall include husking, splitting, scooping, and drying. (3.12) If the final product is green nuts, the deductible items above shall be used except for the cost of processing. The final product is husked nuts, the cost in items 3.1.1 and the cost of husking in 3.1.2 shall be deducted. The lease rental for the coconut lands shall not be more than twenty-five percent (25%) of the average normal harvest for a specific area for the preceding three (3) calendar years less the value of production cost. (See Annex "B" on sample computation) In case there is large-scale replanting in the coconut area initiated by the lessor which may affect the normal coconut production in particular and the leasehold arrangement in general, a new lease rental may be computed proportionate to the decrease in production. In the computation of lease rentals, principal crops already existing within the homelot when the same was established shall be considered as included in the leasehold.
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OPERATING PROCEDURES The following are the procedures in the implementation and fixing of the lease rentals as provided under DAR Administrative Order O2-06 A. Identification Phase The MARO shall, motu propio, or at the instance of either the landholder or the tenant, identify all landholdings still under the tenancy as of the effectivity of R.A. No. 6657, and list the landowner and the tenants thereon, with the assistance of the Barangay Agrarian Reform Committee (BARC), and people's organization/non-government organization (POs/NGOs) that are present in the area. The MARO shall then prepare the list of identified landholdings subject of agricultural leasehold and prepare the individual profile of the landholdings with its corresponding landholders and tenants. This activity, however, shall be considered independent from the determination and fixing of lease rental as it is
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assumed to be a regular function of the MARO. B. Notice of Conference After identification of all tenanted agricultural .lands in the community/ barangay, the MARO shall: 1. Send an invitation letter, through personal service or registered mail, to the tenant and to the landholder, or his administrator or overseer for the farm, for a mediation conference, copy furnished the BARC and the Barangay Captain/Council. Priority shall be given to those represented by peasant's organization. The voluntary application by any lessor for the fixing of the rental shall likewise be immediately acted upon. The invitation letter shall indicate the date or schedule of the conference, between the parties and require them to submit the necessary documents, within fifteen (15) days upon receipt thereof, such as: production data, cost of production, type or kind of crops planted (principal and auxiliary), any evidence as proof of the average normal harvest, including the cost of deductible item(s), during the three (3) agricultural years immediately preceding and other relevant information, i.e., receipt of payments, affidavit or any proof from disinterested persons/parties attesting to the existence of leasehold relationship between the landholder and his/her tenants. 2. Review and evaluate the documents or pieces of evidence submitted by the parties, including, if any, report of threat or eviction of prospective lessees. C. Meeting and Mediation Conference The MARO, with the assistance of the BARC or in the absence thereof, the Barangay Council concerned, shall jointly conduct the mediation conference on the scheduled date between the landowner(s) and the lessee(s) for the purpose of fixing the lease rental. The MARO shall explain in local dialect to the parties concerned the salient features of the leasehold system, particularly on the following: 1.1 security of tenure; 1.2 rights and obligations; 1.3 grounds for dispossession; 1.4 prohibitions and limitations; 1.5 terms and conditions; and 1.6 other related information. The Minutes of the Mediation/Meeting shall be signed by the parties concerned. In the event any party fails to appear during the scheduled conference despite notice, the MARO, in addition to mailing the notice at the last known address of the parties, shall cause the posting of the notice within seven (7) days at any conspicuous place in the barangay/municipality where the property is located. Compliance with these requirements is sufficient for the MARO to fix the Provisional Lease Rental (PLR) based on data presented by the other party and those gathered by him/her. D. Determination and fixing of Rental On the basis of the documents and/or evidence presented or as gathered, the MARO with the assistance of the BARC, shall proceed with the computation of the lease rental applying the formula prescribed under these Rules. SaHIEA 1. In case of agreement, the MARO shall: 1.1 assist the parties in executing the agricultural leasehold contract which shall become immediately binding and executory upon signing thereof. The rental to be paid as consideration for the lease of the land shall be embodied in the prescribed leasehold agreement from which shall be drawn up in five (5) copies in the language or dialect known to the parties or their duly authorized representatives before two witnesses; 1.2 affirm the agreements stipulated in the leasehold contract and require the parties to cause the notarization of the affirmed LHC by the DAR commissioned notary public or in his absence, any notary public within the area; 1.3 register the leasehold agreement with the Municipal Treasurer and furnish each party a copy of the registered Leasehold Agreement/Contract; 1.4 prepare a Leasehold Documentation Folder (LDF) that would contain the contract and all relevant evidence and document gathered by the MARO or submitted by the parties for the purpose. 1.5 transmit the LDF to the PARO for monitoring and proper annotation of the Leasehold Contract at the back of the LOs' title. The annotation shall not hinder the execution of the leasehold contract. 2 In case of disagreement as to the issue of existence of tenancy and fixing of lease rental. 2.1.1 The MARO shall gather additional evidence and complete the corresponding LDF which shall contain all information/data pertaining to the disputed matter. On the basis of the documents submitted and gathered, determine if there exist a tenancy relationship and compute for the lease rental and thereafter issue a Provisional Lease Rental (PLR) within seven (7) days upon manifestation of disagreement by any of the parties. For this purpose, the PLR and the corresponding LDF shall be submitted immediately to the PARO for automatic review, whenever warranted, and affirmation. Simultaneously, copies of the PLR shall be sent to the tenant and the landholder. 2.2. The PARO shall act on the PLR within fifteen (15) days upon receipt thereof. If no action is taken by the PARO within the 15-day period, said PLR is deemed approved and executory and shall, henceforth, govern the tenancy relation until and unless ordered otherwise by a court of competent jurisdiction after due hearing on the merits. Any party may challenge the PLR by filing an original action before the Adjudicator where the landholding is situated within fifteen (15) days upon receipt of a copy thereof. Provided, that where the PLR was determined by the
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MARO in a situation where the landholder failed to appear at the mediation conference, the latter shall be deemed to have waived the right to adduce evidence on the existence of tenancy relation and production data, as the case may be. The filing or pendency of an action before the adjudicator, shall not affect the implementation of the PLR unless and until the PARAD rules otherwise after due hearing on the merits. The PARAD may not enjoin the implementation of the PLR and shall not subject the same to injunction or Temporary Restraining Order. 2.3 In case the MARO's finding and determination denies the existence of tenancy relationship, no PLR shall be issued and the only legal remedy available to the party alleging existence of tenancy relationship is an original action before the Adjudicator. The annotation of the leasehold arrangement at back of the Original Copy of Certificate of Title on file with the Register of Deeds (ROD) shall be required for landholdings where existence of tenancy is not questioned SECTION. 13. PRODUCTION-SHARING PLAN Any enterprise adopting the scheme provided for in Section 32 or operating under a production venture, lease, management contract or other similar arrangement and any farm covered by Sections 8 and 11 hereof is hereby mandated to execute within ninety (90) days from the effectivity of this Act, a production-sharing plan under guidelines prescribed by the appropriate government agency. Nothing herein shall be construed to sanction the diminution of any benefits such as salaries, bonuses, leaves and working conditions granted to the employee-beneficiaries under existing laws, agreements, and voluntary practice by the enterprise, nor shall the enterprise and its employee-beneficiaries be prevented from entering into any agreement with terms more favorable to the latter.
Chapter 4: Registration (Sections 14 & 15)

Definition of Terms: Registration - the entry of instruments or deeds in a book of public registry. It is the entry made in the registry which records solemnly and permanently the right of ownership and other real rights. Landowner - Agrorum possessor, estate owner, freeholder, holder of legal title, landed proprietor, landholder, landlord, owner of an estate in land, owner of land, owner of real estate, owner of real property, owner of the fee, property holder, property owner, proprietor, real property holder, real property owner, titleholder. Beneficiary - a broad definition for any person or entity (like a charity) who is to receive assets or profits from an estate, a trust, an insurance policy or any instrument in which there is distribution. Agricultural Lessees - a person who cultivates the land belonging to or lawfully possessed by another, wit h the latters consent for purposes of agricultural production. Farm workers - a natural person who renders service for value as an employee or laborer in an agricultural enterprise of farm regardless of whether his or her compensation is paid on daily, monthly or " pakyaw" basis. Tenant - a person who, 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, 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. DAR- Department of Agriculture CLOA- Certificate of Land Ownership Award EP- Emancipation Patent DARAB- Department of Agrarian Reform Adjudication Board PARAD- Provincial Agrarian Reform Adjudicators RARAD- Regional Agrarian Reform Adjudicators REGISTRATION It is the entry of instruments or deeds in a book of public registry which records solemnly and permanently the right of ownership and other real rights. Registration is considered a constructive notice to the whole world. The main principle of registration is to make registered titles indefeasible. Upon presentation in court of an application for registration of the title to lands, all occupants, adjoining
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owners, adverse claimants, and all other interested persons are notified of the proceedings, and have the right to appear in opposition to such application. Registration is not a mode of acquiring ownership but is merely a procedure to establish the evidence of title over realty. It is a means of confirming the fact of its existence with notice to the world at large. The title, once registered, is a notice to the world. All persons must take notice thereof. No one can plead ignorance of the registration. The act of registration transfers ownership. It is well-settled that in case of a piece of land titled under the Torrens system, it is the act of registration that transfers the ownership of the land sold (Sec. 50, Land Registration Act, Act No. 496, now Sec. 51, Property Registration Decree, P.D. No. 1529).
REGISTRATION OF LANDOWNERS Landowner is the agrorum possessor, estate owner, freeholder, holder of legal title, landed proprietor, landholder, landlord, owner of an estate in land, owner of land, owner of real estate, owner of real property, owner of the fee, property holder, property owner, proprietor, real property holder, real property owner, titleholder. Section 14. Registration of Landowners. Within one hundred eighty (180) days from the effectivity of this Act, all persons, natural or juridical, including government entities, that own or claim to own agricultural lands, whether in their names or in the name of others, except those who have already registered pursuant to Executive Order No. 229, who shall be entitled to such incentives as may be provided for the PARC, shall file a sworn statement in the proper assessor's office in the form to be prescribed by the DAR stating the following information: (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 farm workers therein; (d) The crops planted in the property and the area covered by each crop as of June 1, 1987; (e) The terms of mortgages, lease, and management contracts subsisting as of June 1, 1987 ; and (f) The latest declared market value of the land as determined by the city or provincial assessor.
REGISTRATION OF BENEFICIARIES Section 15. Registration of Beneficiaries. The DAR in coordination with the Barangay Agrarian Reform Committee (BARC) as organized in this Act, shall register all agricultural lessees, tenants and farmworkers who are qualified to be beneficiaries of the CARP. These potential beneficiaries with the assistance of the BARC and the DAR shall provide the following data: (a) Names and members of their immediate farm household; (b) Owners or administrators of the lands they work on and the length of tenurial relationship; (c) Location and area of the land they work; (d) Crops planted; and (e) Their share in the harvest or amount of rental paid or wages received.
A. Publication/ Objective of Registration Once the said beneficiaries have been registered, their names will be added to the copy of list of qualified beneficiaries which will be posted in conspicuous places such as the Barangay hall, school or other public buildings. The objectives/reasons behind the provision requiring registration are: To develop a databank of potential and qualified beneficiaries of the CARP; and To identify the actual farmer-beneficiaries for the effective implementation of the program.
1. 2.
Fortich vs. Corona G.R. No. 131457. August 19, 1999. Facts: The alleged farmer-beneficiaries strikers protested the March 29, 1996 decision of the Office of the President (OP), which approved the conversion of a 144-hectare land from agricultural to agro-industrial institutional area. This led the OP, through then Deputy Executive Secretary Renato C. Corona, to issue the so-called "Win-Win" Resolution on November 7, 1997, substantially modifying its earlier decision after it had already become final and executory. The said Resolution modified the approval of the land conversion only to the extent of 44 hectares, and ordered the remaining 100 hectares to be distributed to qualified farmer-beneficiaries. Issues: 1. Whether or not seasonal farm workers have the right to own subject lands. 2. What is the legal effect of the "Win-Win" Resolution issued by the OP on its earlier decision involving the same subject matter, which had already become final and executory?
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Held: Seasonal farm workers have only the right to a just share of fruits of the land. The win-win resolution states that the qualified beneficiaries have yet to be carefully determined by DAR. Absent any findings with DAR they cannot be vested with interest over the property. The issuance of the CLOA to them does not grant them the requisite standing in view of the nullity of the Win-Win Resolution. No legal rights can emanate from a resolution that is null and void. B. ID System Aside from the registration and posting the then DAR Secretary Ernesto Garilao issued AO No. 4 series of 1998 directing the issuance of identification to Agrarian Reform Beneficiaries (ARBs) as evidence of their being bona fide beneficiaries. These IDs served as proof not only as a identification of a beneficiary but also as a way of securing credit assistance and other support services of the government
C. Grounds for the Cancellation of EPs/CLOAs and the Perpetual Disqualification of Agrarian Reform Beneficiaries (ARBs) 1. 2. 3. Misuse or diversion of financial and support services extended to the ARB. (Section 37 of RA No. 6657) Misuse of the land. (Section 22 of RA No. 6657) Material misrepresentation of the ARB's basic qualifications as provided under Section 22 of RA No. 6657, PD No. 27 and other agrarian reform laws. 4. Sale, transfer, lease, or 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 Section 73 of RA No. 6657, PD No. 27 and other agrarian laws. However, if the land has been acquired under PD No. 27/EO No. 228, ownership may be transferred upon full payment of amortization by the beneficiary. (Section 6 of EO No. 228 as implemented by AO No. 8, Series of 1995) 5. Continuous neglect or abandonment of the awarded land over a period of two (2) calendar years as determined by the Secretary or his authorized representative. (Section 22 of RA No. 6657) 6. Default in the obligation of the ARBs to pay an 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. 7. Failure of the ARBs to pay at least three (3) annual amortizations to the LBP in the case of awarded lands under Compulsory Acquisition (CA) or Voluntary Offer to Sell (VOS), except in cases of fortuitous events and force majeure. (Section 26 of RA No. 6657) 8. Illegal conversion of the land by the ARB. (Cf. Section 73, Paragraph C and E of RA No. 6657) 9. Waiver of rights to awarded lands. 10. FB's surrender of awarded lands to landowner or other non-ARBs. 11. Other acts or omissions that circumvent laws related to the implementation of the agrarian reform program. D. Violations Beneficiaries who have found to have violated the provisions of agrarian laws shall suffer the following consequences: 1.) Delisted from the master list; 2.) Their Ids shall be administratively cancelled by the DAR through the (PARO) Provincial Agrarian Reform Officer; 3.) Their Emancipation Patent (EPs)/ Certificate of Land Ownership Award (CLOA) shall be cancelled by the Department of Agrarian Reform Adjudication Board.
E. Jurisdiction Over Violations The body who has the authority or jurisdiction over cancellations of titles, IDs, leasehold titles and disqualifications of ARBs will be the Department of Agrarian Reform Adjudication Board. Furthermore, the decision of the said department and the Provincial Agrarian Reform Adjudicators (PARAD) and Regional Agrarian Reform Adjudicators (RARAD) will be final and executory and the copies of their decisions will be furnished to DAR.
Chapter 5: Land Acquisition (Section 16)

SECTION 16: PROCEDURE FOR ACQUISITION OF PRIVATE LANDS. RULES AND PROCEDURES (AO no. 2 series 2009) Coverage
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Pursuant to Section 3 of R.A. No. 9700, the landholdings of Los owning a total of five (5) hectares or less shall not be subject of acquisition and distribution under CARP. Landholdings distributed by the DENR under R.A. No. 6657, as amended shall no longer be acquired and distributed by the DAR.
Compulsory Acquisition All private agricultural lands which become due for coverage following the phasing of implementation based on the area of the landowners landholdings. It is also done in idle and abandoned lands regardless of their size and phasing, and in lands whose commercial farm deferment is revoked. Covers landholdings above five (5) hectares which were offered under voluntary land transfer (VLT) and not approved by the DAR Voluntary Offer to Sell 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. Landowners (Los) may voluntarily offer their private agricultural lands for coverage Upon its acceptance by the DAR, the Letter-Offer for coverage under Voluntary Offer to Sell (VOS) can no longer be withdrawn. In any case, the DAR can immediately subject such landholding to coverage under compulsory acquisition and distribution under CARP notwithstanding the schedule of prioritized phasing under R.A. No. 9700. The acceptance letter for VOS shall stipulate that upon offer under VOS, the schedule of coverage under R.A. No. 9700 is deemed waived. Landowners who received NOCs for their landholdings under Compulsory Acquisition (CA) may be allowed to shift to Voluntary Offer to Sell (VOS), provided, that the claim folder (CF) for the subject landholding has not yet been received by the Claims Processing, Valuation and Payment Division (CPVPD) ofthe Land Bank of the Philippines (LBP) for valuation. Disqualified Agrarian Reform Beneficiaries Landowners who have voluntarily offered their landholdings for coverage under CARP and those who have previously waived their rights to retain. The LOs voluntary offer or his previous waiver is construed to be his inability and/or unwillingness to cultivate the land and make it productive. Likewise, children of the same landowners who were not nominated as preferred beneficiaries are disqualified from becoming an ARB in another landholding.
Tenanted Lands/ Under Lease ARBs shall continue to pay their lease rentals as tena nts/lessees based on their leasehold contracts until such time that the LBP issues a Certification of Deposit (COD). Private Lands General Rule: untitled public alienable and disposable (A & D) lands are within the jurisdiction of the Department of Environment and Natural Resources (DENR) pursuant to Commonwealth Act (C.A.) No. 141 (Public Land Act). Exception: requisites under R.A. No. 6940, as amended by R.A. No. 9176 have already been acquired based on the following: 1. Continuous occupancy and cultivation by oneself or through ones predecessors -in-interest for at least thirty (30) years prior to the effectivity of R.A. No. 9176 on December 4, 2002 (i.e., December 1972); 2. land must have been classified as alienable and disposable for at least thirty (30) years prior to the effectivity of R.A. No. 9176; 3. One must have paid the real estate tax thereon; and 4. There are no adverse claims on the land. CARP Volume Maintained by LRA-CARP personnel under supervision of the ROD. Consists of the current list of all lands covered by NOCs and all remaining unacquired and undistributed landholdings (in the process of or acquired by schedule) covered under CARP submitted by the DARPO to the ROD concerned for segregation of the corresponding original copy of the Certificates of Title of all these lands from the regular volume or files of the Registry. Any title contained in the CARP Volume shall only be returned to the general/regular file upon proof that the property covered by said title is exempted, excluded or ascertained to be outside CARP coverage. Such proof may be in the form of a Court Order or DAR Order which has become final and executor.
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Register of Deeds Shall issue a Transfer Certificate of Title (for titled properties) and an Original Certificate of Title (for untitled properties) in the name of the Republic of the Philippines (RP title) upon receipt of a copy of the LBPs Certification of Deposit (COD) from the DARPO. Validation Landholdings subject of acquisition shall be validated based on ownership documents and on the projection by the DAR on DENR land classification maps to determine whether or not the areas are alienable and disposable. Projections undertaken by DARPO Survey based on the cadastral map of the DENR: Shall be confirmed or validated by the DENR-Community Environment and Natural Resources Office (CENRO) or Provincial Environment and Natural Resources Office (PENRO) as to the land classification status of said lands. Survey based on the Private Survey (Psu) Plan of the LRA: Shall be confirmed or validated by the LRA on whether these lands do not overlap with other titled or decreed property. Titles Issued Prior 1921 (Act no. 2874) Need not be validated or confirmed by the DENR-CENRO/PENRO as to their land classification status. However, the DARPO shall: 1. Undertake the projection as to land classification status; and 2. Obtain a certification from the Land Registration Authority (LRA) that the property does not overlap with a titled or decreed property. Such certification shall include, among others, the Judicial Decree number, date of issuance of Decree, name of owner, location and area. Such properties that partially overlap with other titled or decreed properties shall be segregated accordingly during the conduct of survey by the landholdings subject of acquisition. The acquisition and distribution of such landholdings that either partially or fully overlap with decreed properties shall continue regardless in whose name the decree is. SURVEY General Rule: Determination of land use, segregation of coverable and not coverable area, and subdivision survey shall be undertaken prior to field investigation (FI). The PARO shall ensure that all field survey activities shall be completed before the conduct of field investigation (FI). Except: In the event that the finalization of the master list of ARBs will necessitate resolution of petitions for inclusion and exclusion of ARBs in the master list, the PARO shall inform the Land Bank of the Philippines (LBP) regarding the matter. Survey will now come after the FI or upon finalization of the master list of ARBs Land Use Management and Development LUMD fund shall be released and utilized only for CARP covered lands with Requisition Survey Services (RSS) approved by the DARs Bureau of Land Development (BLD), pursuant to existing guidelines on requisition, approval and monitoring of survey services. Foreclosed Agricultural Land Landowner-mortgagor with expired two-year right of redemption and land is subsequently to be covered under CARP, cannot qualify as an ARB on the foreclosed land notwithstanding his/her being in actual possession and cultivation thereof. The DAR shall be responsible for taking possession of the land by negotiating or filing of the appropriate case, if necessary, and to successfully install the qualified ARB/s. The practice of the DAR of disregarding the execution of a Deed of Transfer or Conveyance and what it implicates The Dept. of Agrarian reform simply distributes land titles without a deed of transfer or conveyance. It cannot be executed without consideration Reason: The price of the land is still undetermined by the proper judicial authorities. Exception: If there is an agreement made with the landowner. Without a purchase price (consideration), there can be no schedule of payment of amortizations Reason: There is no amount to be amortized. Effect: 1. The DAR or Land Bank can collect neither amortizations nor rentals from the beneficiaries because the former do not own the land. 2. Beneficiaries stopped paying rentals to the registered owners Reason: The land distributed to them by the DAR made them believe that they are now the owners of the land notwithstanding the absence of a deed of conveyance or transfer of the land to them. The beneficiaries were required to pay the Land Bank, not to the landowner (as provided by Memo Circular No.
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6; 1978) The DAR and the Land Bank of the Philippines ignored the settled ruled prescribed by the SC in the Yap Case:
There must be full payment of just compensation before the title to the expropriated property is transferred to the expropriator. How Section 16 should be read and interpreted for such to be deemed in accordance with the Constitutional guarantee of just compensation In order to assure that the landowners rights (especially his constitutional right to just compensation) are not prejudged and prejudiced, Sec. 16 should be interpreted as: If the land owner accepts the offer of the DAR, or in case he rejects such, after final determination of the appropriateness of the taking of the land and the just compensation, the landowner shall execute and deliver a deed of transfer in favour of the government which shall take effect upon payment by the Land Bank of the Philippines of the purchase price upon receipt of the payment, the landowner shall surrender the Certificate of title and other muniments of title. The practice of DAR to deposit compensation and cancel title Process: Once the DAR requests and the Land Bank makes a deposit, the former already requests the Register of Deeds to cancel the title of the landowner and transfers it to the name of the Republic of the Philippines. The DAR therefore , the initial Land Bank valuation is the compensation, the deposit of which that will authorize DAR to take immediate possession of the land and request the Register of Deeds to cancel the landowners title. Even if the landowner protests the valuation by going to the Special Agrarian Court, the distribution of land to the beneficiaries named will proceed. Even if the persons named by the DAR as beneficiaries, they are already issued titles or Certificates of Landowners Award. NOTE: The aforementioned interpretation is not in accordance with the ruling in the case of Association of Small Landowners v. Hon. Secretary of Agrarian Reform (175 SCRA 343) stating: Title can only transfer to the State upon the payment of FULL compensation. It is only the court which could cancel a title under the Torrens System against consent or will of the landowner. What should really happen: In eminent domain cases, a courts judgment is required in order to cancel a landowners title. In lieu of this, whether in voluntary or involuntary dealings, the owners original copy of the certificate of title should be surrendered to the Register of Deeds. The reason for this is that there cannot be two subsisting titles over the same land. The act of cancellation without the knowledge of the owner strikes at the very heart of the Torrens System
Issue regarding whether or not the DAR can cancel the landowners titles and issue CLOAs unilaterally upon acquisition The DAR through its Secretary can issue Emancipation Patents and Certificates of Landowners Award and select beneficiaries, exemplifying how far the DAR has infringed on landowners rights. Such actions are almost simultaneously with the cancellation of the title of the landowner in favour of the State. A.O. 10 (1990) specifically provides for the authorization of issuing certificates of landowners award immediately upon land acquisition. Rejection of compensation offered to a landowner In the Yap case, it was held by the Supreme Court that to exercise such a right should not be punished or result in undue hardships to the landowner or else, such a right becomes illusory. In the aforementioned case, the landowner is allowed to withdraw the cash and bonds while rejecting the offered compensation. The DAR may still proceed to take the land even if the landowner has rejected the offer so long as it makes the deposit of cash and bonds as payments. Title and ownership remains with the landowner until full payment of just compensation (Association of Small Landowners v. Hon. Secretary of Agrarian Reform; 175 SCRA 343). The DAR gravely abuses its discretion or if the taking and fixing of just compensation was arbitrary, confiscatory, or violative of constitutional rights, the landowner herein has grounds to oppose the cancellation of his title and the transfer of possession. Situations of the taking and fixing of just compensation was arbitrary, confiscatory, or violative of constitutional rights: 1. No notice and hearing was given to the landowner;
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2. 3. 4. 5. 6. 7. 8.
The landowner was not present when the DAR unilaterally determined who the FBs will be; The landowner was not given the opportunity to question the qualifications of the FBs; The landowner was not given the opportunity to show what portions of his property should be exempt whether as a watershed or an irrigation containment pond, or a poultry or a piggery, or a road or right of way. The landowner was not given the chance to show that the land is covered by the local zoning laws declaring them as residential, industrial or commercial; The landowners was not given the information how the amount of compensation was computed by the DAR; The landowner was not given the opportunity to prove to prove the value of his land or those of neighbouring lands valued by the DAR; Or the landowner questions the authority of the Land Bank to fix just compensation;
Jurisprudence on the condemnation of the taking of a land prior to payment: Fortune Securities, Inc. v. Secretary Garilao (CA-G.R. SP No. 30243): Such was illegal because in the language of the court, the unrepentant DAR recklessly disregarded the procedural safeguards mandated by law. Santos v. LBP (G.R. No. 137431): 22 titles issued by the DAR were cancelled because such were issued prior to the determination and payment of just compensation and because the certificates of landowners award were issued to the State and then to the FB. Fortich v. Executive Secretary (312 SCRA 751): seasonal workers were not entitled to certificates of landowners award. Moreover, the lands covered werent ricelands but agro -industrial. Roxas & Co., Inc. v. CA (G.R. No. 127876): Though the DAR failed to comply with due process due to no notice nor payment of just compensation before the issuance of certificates of landowners awards, the Supre Court didnt cancel such but instead gave the DAR the chance to correct it procedural lapses. EO 228 provides that lease rentals paid for lands from October 21, 1972 shall be considered as advance payment for PD 27 lands. However, the exact value or just compensation of the land is to be determined with certainty before land titles are transferred to the beneficiaries. (Hernandez, Alba, Hernandez; 2011) The case of Paris v. Alfeche (G.R. No. 139083, August 30, 2001) discusses this in detail: 1. Before land titles are transferred to the beneficiaries, the exact value or just compensation of the land must be determined and paid. The exact value of the land should be ascertained, the lease rentals or advance payments deducted therefrom and the balance be paid to the landowner in full. Until then, ownership remains with the landowner. 2. In the absence of the determination of the value of the cost of the parcels of land, the Supreme Court cannot rule that just compensation has already been fully paid. 3. The exact value or the just compensation to be given to the landowner cannot just be assumed- it must be determined with certainty before the land titles are transferred. 4. The total lease rentals paid from October 21, 1972 shall be considered as advance payment, not full payment.
The term private agricultural land includes all lands, whether titled or untitled. (DOJ, Opinion No. 176, series of 1992)
A proper title is not an indispensable requisite before the owner could be paid by the Land Bank of the Philippines. While it would seem from section 16 and section 14 that the Land Bank is only auth orized to pay the purchase price of the land to the landowner after he shall have surrendered his Certificate of Title, such could not have been the intention of the lawmakers, for if it were so, the implementation of the CARL could be 4avour4led. (Hernandez, Alba, Hernandez; 2011)
Notices of compulsory acquisition should be sent to the landowner, and if a corporation or partnership, to its president, manager, secretary, cashier, agent, or any of its directors or partners. Service upon an administrator who is not shown to be authorized toreceive notices or act on behalf of the corporation in relation to the compulsory acquisition is not valid. The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by personal delivery or registered mail. Summonses, pleadings, and notices in cases against a private domestic corporation before the DARAB and the regular courts are served on the president, manager, secretary, cashier, agent or any of its directors
Two modes of acquisition of private land: 1. compulsory and 2. voluntary. Section 16 of RA 6657 must be followed: The landholding, the landowners, and the farmer beneficiaries must first be identified; A. The DAR shall send a Notice of Acquisition to the landowner, by personal delivery or registered mail; B. It must be posted in a conspicuous place in the municipal building and barangay hall of the place where the property is located;
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C.
Within 30 days from receipt of the Notice, the landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of the offer; D. If the landowner accepts, he executes and delivers a deed of transfer in favour of the government and surrenders the certificate of title; E. Within 30 days from the execution of the deed of transfer, the LBP pays the owner the purchase price; F. If the landowner rejects the DARs offer or fails to make a reply, the DAR conducts summary administrative proceedings to determine just compensation for the land; G. The landowner, the LBP representative and other interested parties may submit evidence on just compensation within 15 days from notice; H. Within 30 days from submission, the DAR shall decide the case and inform the owner of its decision and the amount of just compensation; I. Upon receipt by the owner of the corresponding payment or in case of rejection or lack of response from the latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank; J. The DAR shall immediately take possession of the land and cause the issuance of a transfer certificate of title in the name of the Republic of the Philippines; K. The land shall then be redistributed to the farmer beneficiaries; L. Any party may question the decision of the DAR in the regular courts for final determination of just compensation. (Roxas & Co., Inc. v. The Honorable Court of Appeals, G.R. No. 127876, December 17, 1999 The Constitutional Issues Arising from the Current Practices of the DAR The current practices of the DAR faced constitutional issues in giving notices of coverage and Efs or CLOAs before payment. This practice is tantamount in violation of the Constitution which is, taking of property without just compensation and in line with Section 1, Article III which states that no person shall be deprived of his life, liberty or property without due process of law. This can be gleaned from the rampant abuses of DAR specially with respect to rice and corn lands by just simply taking the rice lands and declare the tenants as owners of the land by issuing EPs; canceling the Land Owners titles and several years later after the taking, unilaterally fixing a very low just compensation. Hence, the prices were confiscatory, not just compensation. During Martial Law in 1972 until 1987, about 750,000 hectares of rice and corn were taken by the DAR and Land Bank of the Philippines. According to the case of Association of Small Landowners vs. Secretary of Agrarian Reform, the Supreme Court held that considering the vast areas of land subject to expropriation under the laws before us, we estimate that hundreds of billions of pesos will be needed, far more indeed than the amount of P50 billion pesos initially appropriated, which is already staggering as it is by our present standards. Such amount is in fact not even fully available in cash at this time. In effect, according to a former undersecretary of the DAR, they were able to do this because the tenants by the nature of the system of cultivation were in possession of ricelands and the Landowners were not united in bringing the proper cases to court. After the decision of the Supreme Court in the case of Small Landowners vs. Secretary of Agrarian Reform, no would like to file their cases to the court of law, for the reason that the Supreme Court justified the power of eminent domain as an implement of the police power even in the absence of just compensation. These illegal procedures brought several problems. According to the authors of the book Land Owners Rights, the following problems occurred due to these illegal acts: 1. The taking of ricelands is being applied even when there are no tenants and where the farmworkers are in fact employees; 2. Non-tillers of the soil who are outsiders but supported by non-government organizations and the military are approved as FBs even without the required hearing on the qualification; 3. The just compensation is unilaterally fixed at a very low confiscatory price; and 4. The outsiders or the FBs moved to the farm with the help of the military often results in violence with the existing employees of Landowners. Moreover, the authors reiterated that such methods are illegal because the Landowner was not heard when the FBs or outsiders were qualified, when the land was surveyed and when the compensation was fixed. Besides the existing employees cannot be dismissed or terminated by the Landowner in favor of the outsiders. And as for the military, it is not their function or mandate to be engaged in land acquisition and distribution. This lead to the acceptance of the DAR that in the past that they have illegally acquired and distributed private lands because of this illegal method. The Illegally Acquired and Distributed Private Lands Constitution which is the taking of the property without due process of law. However, as explained by the DAR, after the promulgation by the Supreme Court of its decision in the Small Landowners case which required the payment of Just Compensation, they have discontinued this practice under the so-called Operation Land Transfer under the deemed owner concept. In order to implement due process, Section 16 of the CARL requires the identification of land prior to actual acquisition. Importance of Land Identification To acquire private agricultural lands for distribution is justified under the power of eminent domain. According to Isagani Cruz in his book Constitutional Law, where private property is needed for conversion for some public use, the first thing obviously that the government should do is to offer to buy it. If the owner is willing to sell and the parties can agree on the price and the other conditions of the sale, a voluntary transaction can then be concluded and the
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transfer effected without the necessity of judicial action. But if the owner of the private property is unwilling to part with it, or being willing, cannot agree to the conditions of the transfer, then it will be necessary for the government to use its coercive authority. By its power of eminent domain, it can then, upon payment of just compensation, forcibly acquire the needed property in order to devote it to the intended public use. As it happens, however, it is expressly provided in Article III, Section 9, that private property shall not be taken for public use without just compensation. This provision is not a grant but indeed a limitation o f the power as its negative and restrictive language clearly suggests. However, this limitation was in fact violated by the DAR when it submitted position paper to the Senate Committee on the issue of unpaid landowners compensation on acquired and distrib uted lands in connection with the CARP extension under R.A. 7900. The DAR categorically stated that it recognizes that one of its pressing problems is the documentation of those landholdings which have been distributed or already covered by Emancipation Patent. It is clear from this situation that there is no systematic method as to the records of the numbers of lands acquired and the lands that were already distributed. These records should have been the basis to measure the efficacy of CARP. Another form of illegal acquisition of private lands is what the DAR calls under the deemed owner concept of PD 27. In this case, the DAR explained that the rice and corn lands and its ownership thereof were considered transferred to the ARBs such that with or without landowners participation nor payment of just compensation, the land were simply acquired and distributed. This is a clear violation of Section 1, Article III of the Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the land subject to land reform be first identified. Based on the case of Roxas & Co., Inc. vs. The Honorable Court of Appeals, the following are the importance of land identification prior to actual acquisition: 1. To give idea to the landowner which portion of his estate are subject to compulsory acquisition, which portions it can rightfully retain, whether this retained portions are compact or contiguous, and which portion are excluded from CARP. 2. To notify the Landowner of any ocular inspection and investigation to be conducted by the DAR. 3. To give the Landowner the opportunity to at least choose and identify its retention area in those portions to be acquired compulsory. However, this is subject to limitation on the right of retention a Landowner may retain not more than five hectares out of the total area of his agricultural land subject to CARP. Wherefore, to prevent the illegal practices incurred by the DAR in the past, Section 16 of the CARP formulated specific measures and rules which constitute the due process before the acquisition of the private lands and in determination of just compensation. It added the right of the Land owner to file a case in the proper court if there would be some disagreements in the just compensation of the subject lands decided by the DAR. Through these procedures, both the interests of the government as well as the Landowners are indeed protected. The Supreme Court laid down these procedures in the case of Roxas & Co., Inc. vs. The Honorable Court of Appeals.
Procedure in the Compulsory Acquisition of Private Lands Under the CARL, there are two modes of acquisition of private land; compulsory and voluntary. The procedure set forth in Section 16 of RA 6657 must be followed; otherwise the acquisition would be illegal. In the compulsory acquisition of private lands, the following procedures must be followed: 1. The landholding, the landowner and the farmer beneficiaries must first be identified; 2. After identification, the DAR shall send a Notice of Acquisition to the land owner, by personal delivery or registered mail, and post it in conspicuous place in the municipal building and barangay hall of the place where the property is located; 3. Within thirty days from receipt of the Notice of Acquisition, the landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes and delivers a deed of transfer in favor of the government and surrender the certificate of title. Within thirty days from the execution of the deed of transfer, the LBP pays the owner the purchase price. 4. If the landowner rejects the DARs offer or fails to make a reply, the DAR conducts summar y administrative proceedings to determine just compensation for the land. The landowner, the LBP representatives and other interested parties may submit evidence on just compensation within fifteen days from notice; 5. Within thirty days from submission, the DAR shall decide the case and inform the owner of its decision and the amount of just compensation; 6. Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack of response from the latter, the DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank; 7. The DAR shall immediately take possession of the land and cause the issuance of a transfer certificate of title in the name of the Republic of the Philippines; 8. The land shall then be redistributed to the farmer beneficiaries. 9. Any party may question the decision of DAR in the regular courts for final determination of just compensation. Under Section 16 of the CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the beneficiaries. However, the law is silent on how the identification process must be made. Thus, the DAR created Administrative Order No. 9, Series of 1990 and was amended by DAR Administrative Order NO. 1, Series of 1993.
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Identification Process 1. The Notice of Coverage is sent to the landowner before the conduct of field investigation and the sending must comply with specific requirements ; 2. Representatives of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by personal delivery with proof of service, or by registered mail with return card informing him that his property is under CARP coverage and that if he desires to avail of his right of retention, he may choose which area he shall retain; 3. The Notice of Coverage shall also invite the landowner to attend the field investigation to be scheduled at least two weeks from notice. The field investigation is for the purpose of identifying the landholding and determining its suitability for agriculture and its productivity; 4. A copy of the Notice of Coverage shall be posted for at least one week on the bulletin board of the municipal and barangay halls where the property is located; 5. The date of the field investigation shall also be sent by the DAR municipal Office to the representatives of the LBP, BARC, DENR and prospective farmer beneficiaries; 6. The field investigation shall be conducted on the date set with the participation of the landowner and the various representatives; 7. If the landowner and other representatives are absent, the field investigation shall proceed, provided that they were duly notified thereof; 8. Should there be a variance between the findings of the DAR and the LBP as to whether the land be placed under agrarian reform, the lands suitability to agriculture, the degree or development of the slope, the conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which shall jointly conduct further investigation. The teams findings shall be binding on both DAR and LBP; 9. After the field investigation, the DAR Municipal Office shall prepare the Field Investigation Report and Land Use Map, a copy of which will be furnished the landowner by personal delivery with proof of service or registered mail with return card. Another copy of the Report Map shall likewise be posted for at least one week in the municipal or barangay halls where the property is located. The purpose of the Notice of Coverage does not merely notify the landowner that his property shall be placed under CARP and that he is entitled to exercise his retention right; it also notifies him, that a public hearing shall be conducted where he and representatives of the concerned sectors of society may attend to discuss the results of the investigation, the land valuation and other pertinent matters.
Chapter 6: Just Compensation (Sections 17-21)

What is Just Compensation? The Supreme Court defined just compensation as, the fair and just market value of the property taking into account its present and potential use In the case of APO Fruits Corp. vs. The Honorable Court of Appeals , Just Compensation was defined as, the full and fair equivalent of the property taken from its owner by the expropriator , and that the gauge for computation is not the takers gain but the owners loss. In order for the payment to be just, it must be real, substantial, full and ample. Under Art III, Sec 9 of the 1987 Constitution, the Constitution provides: the private property shall not be taken for public use without payment of just compensation. Traditionally, just compensation is paid in cash. However, the Court ruled that just compensation could also be paid in cash and through Land Bank Bonds. SECTION 17. DETERMINATION OF JUST COMPENSATION Under Section 17 of RA 6657, it provides for the determination of Just Compensation: 1. The cost of acquisition of the land, 2. The current value of the like properties 3. Its nature, actual use and income, the sworn valuation by the owner, 4. The tax declarations, and 5. The assessment made by government assessors shall be considered. The social and economic benefits contributed by the farmers and the farm workers and by the Government to the property as well as the non-payment of taxes or loans secured from any government financing institution on the said land shall be considered as additional factors to determine its valuation. SECTION 18. VALUATION AND MODE OF COMPENSATION Section 18 of the same Law provides for the Valuation and Mode of Compensation. The LBP shall compensate the landowner in such amounts as may be agreed upon by the landowner and the DAR and the
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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 the just compensation for the land. The compensation shall be paid on one of the following modes, at the option of the landowner: (1) Cash payment, under the following terms and conditions; (a) For lands above fifty (50) hectares insofar as the excess hectarage is concerned. Twenty-five percent (25%) cash, the balance to be paid in government financial instruments negotiable at any time. (b) For lands above twenty-four (24) hectares and up to fifty (50) hectares. Thirty percent (30%) cash, the balance to be paid in government financial instruments negotiable at any time. (c) For lands twenty-four (24) hectares and below. -Thirty-five percent (35%) cash, the balance to be paid in government financial instruments negotiable at any time. (2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other qualified investments in accordance with guidelines set by the PARC; (3) Tax credits which can be used against any tax liability; (4) LBP bonds, which shall have the following features: (a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of the bonds shall mature every year from the date of issuance until the tenth (10th) year: provided, that should the landowner choose to forego the cash portion, whether in full or in part, he shall be paid correspondingly in LBP bonds; (b) Transferability and negotiability. 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: (i) 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; (ii) Acquisition of shares of stock of government-owned or -controlled corporations or shares of stocks owned by the government in private corporations; (iii) Substitution for surety or bail bonds for the provisional release of accused persons, or performance bonds; (iv) 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; (v) 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; (vi) Payment for tuition fees of the immediate family of the original bondholder in government universities, colleges, trade schools, and other institutions; (vii) Payment for fees of the immediate family of the original bondholder in government hospitals; and (viii) Such other uses as the PARC may from time to time allow. In case of extraordinary inflation, the PARC shall take appropriate measures to protect the economy. How to compute for land valuation and landowners compensation? GR Formula: LV = (CNI x0.06) + (CS x 0.30) + (MV x 0.10) Where: LV= Land Value CNI = Capitalized Net Income CS= Comparable Sales MV= Market Value Other FORMULA: 1. LV = (CNI x 0.60) + (CS x 0.30) + (MV x0.10) 2. LV = (CS x 0.90) + (MV x0.10) 3. LV = MV x 2 VALUATION OF LAND: 1. Land Valuation of previously acquired land shall be under RA 6657 (sec 17) 2. Tenanted rice and corn lands shall be under RA 6657 3. Landholdings (RA 9700) However in case of rejection, landowners may withdraw the original value of the landholdings as determined by DAR ad LBP per Memorandum of Valuation and to be deposited in their names, subject to their submission of the requirements for payment. Landowners, who voluntarily offer their land for sale, shall be entitled additional 5% cash payment. In determining the Annual Gross Production, Selling Price and Cost of Operation to be used in the land valuation, the audited FS filed with the BIR shall be obtained by DARMO from the LO 15 days prior to the date f filed investigation.
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Failure of submission, the DAR and LBP may adopt applicable industry data or conduct and industry study on specific crop. Components to the Formula: Comparable Sales It carries the weight of 30%. Absence of CS, the CNI and MV will increase. It is used only if there were 3 land sale transactions in the same area where one was no less than 10% of the land being covered. The purpose of which is to prevent scandal. However in case that Comparable Sales cannot be used, Cost of Acquisition will apply. It will be used if the property was acquired thru purchase or exchange in between 1985 and June 15, 1988, in which the condition f the property is substantially similar from the last transfer of ownership to the time of acquisition by the government. Also, Comparable Sale cannot be applied when bank holds a mortgage to a land. At the time it was given, the loan value will be divided by 0.07 then grossed up for inflation using NEDAs official rate of inflation. Capital Net Income It is worth 40% however; in case that CS is not applicable then it will be increased to 55%. Land bank will determine the gross revenue out of the cultivation of land by multiplying production by the average selling price during the last 12 months. Cost of operation is then deducted to arrive at the net income, which will be multiplied by 5. As a general rule: net income is assumed to be 20% of the gross revenue. If it exceeds, the landowner must prove it. Market Value per Tax Declaration It is worth 30% in case of CS is not applicable it will increase to 45%. In determining for the tax declaration, the Supreme Court ruled that private landowners had no participation in the preparation of tax declaration; tax values can serve merely as guides but not an absolute substitute for just compensation.
Additional factors in determining Just Compensation: Under RA 9700, 70% of the zonal valuation of the BIR of the land and the value of standing crop shall be considered. The zonal valuation is the basis of taxation when one sells the property or when estate taxes are imposed. History of compulsory acquisition and payment of just compensation It is a long settled rule that title to private lands taken by the government in the exercise of the power of eminent domain cannot be transferred to the government before payment in full of just compensation as mandated to the Malolos Constitution and on 1935 Constitution of the Philippines. As stated in the Bill of Rights of 1973 and 1987 Constitution, private property shall not be taken for public use without just compensation. In the case of Land Bank v. CA, Pedro Yap et al, landowners must be paid just compensation without which there would be a violation of the constitution in taking of private property without payment of just compensation. Subsequently, landowners may file cases for the return of properties taken without just compensation. Also, payment of the land must be within reasonable time from its taking. In another case, the court ruled that seizure of the land did not take place on the date when PD 27 took effect but on the date of payment of just compensation. In that case, the agrarian process is still incomplete as the just compensation has not been completed or paid. Just compensation should be determined under R.A 6657, which is the applicable law while PD 27 is suppletory, that it would be inequitable to determine just compensation based on the guideline provided by PD27 and EO 228 considering the length of time that the landowners were deprived of their property. Under PD 27, it is for tenant farmers the computation for the value of land will be: VL= 2 x average harvest of 3 normal crop years to be paid by the tenant for 15 years. Factors to be considered in evaluation of property expropriated In the case of Republic v. Lichauco in evaluating the property in the case at bar, the following factors were considered properly taken into account by the commissioners: 1. The prices of similar lands in adjacent areas as shown by sales made in the neighborhood of the year of expropriation; 2. The soil condition of the lands taken, together with their accessibility, improvements and climate; and 3. The deeds of sale and the testimonial evidence submitted by both parties. In assessing the property expropriated in the case at bar, it is improper to consider as basis the following factors: 1. The value of other properties, which in their nature are not similar to or are located far away from the property taken; 2. The buying power of the tenants in whose favor the expropriation is made or the fact that the transaction would be exempt from income tax; or
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The price offered by the owners for the property by way of compromise to avoid protracted and expensive litigation and subject to the condition that the owners be allowed to retain a certain portion for their use, which offer was not accepted. In addition, under RA 7900, 70% of the zonal valuation of the land and value of the standing crop shall now be considered together with the other factors. In any event, it is the courts determination of just compensat ion that is final because they are vested with the exclusive and original jurisdiction to determine the same.
3.
Is the consent of the tenant necessary to the valuation or just compensation of lands expropriated under the Agrarian Reform Program? Yes. In the case of LBP v. CA and Pascual, there must be at least (3) parties: the creditor, debtor and financier or guarantor. LBP mere guarantees the payment the value of the land, the farmer- beneficiarys consent is indispensable and that the only time petitioner becomes legally bound to finance the transaction is when the farmer beneficiary approves the appraised land value. Thus, the landowner, the DAR, the Land Bank and the farmerbeneficiary must all agree to the value of the land as determined by them. A perusal of the law 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 RA 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 the 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. (LBP v. Pascual) When is Just Compensation be paid? PROMPTLY. Without prompt payment, compensation cannot be considered just for the property owner is made to suffer the consequence if being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with the loss. ( LBP v CA, Pedro Yap et al) With regard to the interest from the time of the taking, owners of expropriated land are entitled to recover interest from the date the condemner takes possession of the land and the amount granted by the court shall cease to earn interest only from the moment they are paid to the owners or deposited in Court. ( Republic v. Tayengco) On prompt payment In the case of Apo Fruits Corporation & Hijo Plantation v. CA, the Court sought to protect the landowners from unfairness. Thus: "The concept of just compensation embraces not only the correct determination of the amount to be paid but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered "just." (G.R. No. 164195, February 6, 2007). The Apo Fruits case also reiterated the criticism of the Court in Pascual and Lubrica. Court held Land Bank responsible for the unnecessary delay in the cases abovementioned because although the valuation had already been determined by the DAR, Land Bank either refused to pay or make the provisional deposit. Formula in determining just compensation by DAR and LBP Before: PD 27 Formula + 6% compounded interest ; applying the current prices Of palay/corn The compensable value of land acquired under PD 27: Average Gross Production (AGP) x Factor 2.5 The addition of interest was provided for protection against inflation for the landowners who were not paid on time so as to preserve the real value of the unpaid compensation and interest. Today: Sec. 18, RA 6657, as expressly stated in Lubrica GR Formula: LV =(CNI x 0.06) + (CS x 0.30) + (MV x 0.10) Where CNI = capital net income CS = Comparable Sales MV = market value Court held: "Petitioners were deprived of their properties way back in 1972, yet to date they have not yet received Just Compensation, thus, it would be certainly inequitable to determine Just Compensation based on the guidelines provided by PD 27 and EO 228 considering the failure to determine Just Compensation for a considerable length of time. That Just compensation should be the full and fail equivalent of the property taken from its owner by the expropriator, the equivalent being real, substantial, full and ample. Reason: PD 27 and EO 228 is limited to considering production in the valuation and still uses the 1972 price of rice and corn, whereas RA 6657 considers several factors. Due to the foregoing, a question was posed in Sigre v. CA on whether RA 6657 superseded or repealed PD 27. Court held thus: "R.A. 6657 covers all public and private agricultural land including other lands of the public domain suitable for agriculture as provided for in Proclamation No. 131 and Executive Order No. 229; while, P.D. 27 covers rice and corn lands. On this score, E.O. 229, which provides for the mechanism of the Comprehensive Agrarian Reform Program, specifically states: "(P)residential Decree No. 27, as amended, shall continue to operate with respect to rice
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and corn lands, covered thereunder. . . ." It cannot be gainsaid, therefore, that R.A. 6657 did not repeal or supersede, in any way, P.D. 27. And whatever provisions of P.D. 27 that are not inconsistent with R.A. 6657 shall be suppletory to the latter, and all rights acquired by the tenant-farmer under P.D. 27 are retained even with the passage of R.A. 6657." Court also held in Land Bank v. CA and Pascual that "RA 6657 applies to rice and corn lands after its effectivity, and that PD 27 shall apply when the agrarian reform coverage was completed though the full payment of Just Compensation under PD 27. However, where the process was started under PD 27 but was not completed, it shall be completed under RA 6657 with PD 27 having a suppletory effect. How is Just Compensation determined? The case of Lubrica v. Land Bank enunciates the settled rule on how just compensation is determined: At the time of payment. It was explained that if just compensation would be computed at the time of the taking, such would be unjust for the landowner for the government and the farmer-beneficiaries have already derived benefits from the land despite the lack of ownership. Therefore, the transfer of possession or ownership is should be conditioned upon payment to the landowner or deposit of the compensation by DAR with an accessible bank. Until then, ownership shall remain with the landowner. Also, the case of Lubrica eliminated the distinction between rice and corn lands in relation to just compensation. Just Compensation Formula: Private Agricultural lands devoted to rice and corn In recent cases, the Supreme Court, in determining just compensation, applied the formula under R.A. 6657 and not under P.D. 27. The formula under P.D. 27 provides that the value of the land shall be equivalent to two and a half times the average harvest of three normal crop years immediately preceding the promulgation of P.D. 27; while under Section 18 of R.A. 6657, the law sets forth a different valuation and several modes of payment for just compensation. In the 2009 case of Land Bank of the Philippines vs. J.L. Jocson and Sons, the court affirmed the ruling of the lower court stating that the amount of just compensation is determined by R.A. 6657 and not by P.D. 27. This case involved two parcels of tenanted rice land having an area of 27.3808 hectares in Negros Occidental, which was owned and registered under the name of the respondent, J.L. Jocson and Sons. The aforementioned property was a subject of P.D. 27 and was valued at P250,563.80. the valuation of the land followed the formula under P.D. 27 and E.O. 228. In accordance with DAR Administrative Order No. 13, series of 1994, the amount was increased after computing the 6% annual interest increment having a total valuation of P 903, 637.03. Respondents herein, J.L. Jocson and Sons, filed with the Regional Trial Court a complaint for the determination and fixing of just compensation for the acquisition of land and payment of rentals. According to them, the price fixed by the Land Bank of the Philippines was grossly inadequate and they petitioned the court that just compensation be computed in accordance with Sec. 17, of R.A. 6657. Land Bank of the Philippines and the Department of Agrarian Reform (DAR) contends that the computation should follow P.D. 27 as the land was acquired pursuant to this decree; however, the trial court did not rule in their favor. Instead, ordered them to pay P 1,660,766.55 following R.A. 6657. The court, citing Land Bank of the 2 Philippines vs. Chico, stated that just compensation should be determined at the time of payment. The reason for this is to give the landowner the full and fair equivalent of the property, which should be real, substantial, full and ample. A rule in the Agrarian Reform Law is that compensation would be determined at the time of the payment. This is an exception to the general rule laid down under the Rules of Court where the determination coincides with the filing of the complaint. The reason for the exception is mentioned by the court in the case of MIAA vs. Rodriguez (G.R. No. 16183, February 28 2006) where the government occupied a piece of private land for the extension of its airport runway but without expropriating it and after lapse of many years, compensation by the government has not been made in which case it would be unfair for the landowner if the valuation of just compensation would be determined from the date when the act of expropriation has been made. In cases where payment of just compensation has not been completed, the court in the case of Land Bank of the Philippines v. Heirs of De Leon stated that it is still the provisions of R.A. 6657 that is controlling in determining the 3 computation. R.A. 6657 was enacted in order to promote social justice to the landless, but this does not mean that it should deprive the landowners. The Constitution provides that the landowners right to just compensation should be balanced with agrarian reform. It would constitute inequity for the landowners if just compensation would be computed at the time of the taking of the land in 1972 pursuant to P.D. 27 and not at the time when payment is made, numerous events showed that the applicability of P.D. 27 would be inequitable. The proclamation of P.D. 27 is not automatic. In order for the transfer of rice and corn land to the farmers, just compensation should first be made. In a more recent decision, the law mentions that the issue regarding the application of the formula in cases involving tenanted privately-owned rice and corn lands have been settled in numerous cases. The court concluded that R.A. 7 6657 is the applicable law and that P.D. 27 has a mere suppletory effect. This has also been clearly stated under Sec. 75 of R.A. 6657, which provides that the provisions of R.A. 3844, P.D. 27 and 266, E.O. 228 and 229, both Series of 1987; and other laws not inconsistent with this Act shall have suppletory effect. Despite provisions of the law as to the suppletory effect of P.D. 27, the Supreme Court in a 1999 case still applied the formula under P.D. 27 despite the passage of R.A. 6657. In this case, the court denied the landowners contention that just compensation should be based on the Comprehensive Agrarian Reform Law. The failure of the landowner to appeal the decision of the PARAD and even considering that petitioner participated during the valuation of the land and also stated his willingness in paying the value determined by the PARAD made the decision final and executory. The Comprehensive Agrarian Reform Law lay down the procedure for the acquisition of private lands, the determination of just compensation and the mode of payment to the landowner. There are also several factors to
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consider in determining just compensation and this was enumerated by the court in the 2002 case of Gonzales vs. Sigre: Cost of acquisition of the land, (2) current value of like properties, (3) sworn valuation by the owner, (4) tax declaration and assessments, (5) assessment made by government assessors, (6) social and economic benefits contributed by the farmers and farm workers and by the government to the property, and (7) non-payment of taxes or loans secured from any government financing institution on the said land.
Just Compensation Formula: Other agricultural lands under R.A. 6657 The other agricultural lands covered under R.A. 6657 are enumerated under Sec 4 of the law: a. All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain. b. All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph; 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. The Department of Agrarian Reform instituted DAR Administrative Order 17-89, which lays down the rules and procedures for the valuation of lands under RA 6657. The rules provide for Three Factors in determining just compensation: Comparable Sales, Capitalized Net Income, and Market Value per Tax Declaration. Comparable sales is a method of appraising real property by surveying the market and comparing the property to similar pieces of property that have been recently sold, and making appropriate adjustments for differences between 11 the properties including location, size of the property, and the dates of sale. The first factor is not always used in determining compensation. DAR A.O. 17-89 states that comparable sale shall refer to the average of three comparable sales transaction having the following criteria: first, sale transactions shall be in the same municipality, in the absence thereof, sales transactions within the province may be considered; second, one transaction must involve land whose are is at least 10% of the area being offered or acquired but in no case should it be less than 1 hectare, the two others should involve land whose area is at least 1 hectare each; third, the land subject of acquisition as well as those subject of comparable sales should be similar in topography land use, in case of permanent crops the subject properties should be more or less comparable in terms of their stages of productivity and plant density; and fourth, the comparable sales should have occurred between the periods 1985 and June 15, 1988. In cases where comparative sales cannot be applied, it is the Market Value Based on Mortgage, which will be applied in instances where it involves a mortgage in favor of the bank. Under this, DAR A.O 17-89 mentions that the MVM shall be obtained by dividing the loan or mortgage value by 70% if this can be determined; in instances where it cannot be determined, a sworn certification shall be obtained from the bank for the value of the property. In cases where three Comparable Sales and MVM are available, this formula should be used : CS = T1 + T2 + MVM / 3. If the value of the Comparable Sales is more than the Cost of Acquisition, the latter will be used. When MVM is applicable and there is no CS the MVM shall be compared with the Cost of Acquisition, if relevant, and the lower of the two shall be used. In case MVM is applicable and there is no CS and CA is not relevant MVM shall be considered in lieu of the CS and CA. While Comparable Sales is not always used, Capitalized Net Income and Market Value per Tax Declaration is always used in the valuation. Capitalized Net Income refers to the difference between the gross sales and total cost of operations capitalized at 20%. The formula shall be: [(AGP) X (SP-(CO)] / .20. The Market Value per Tax Declaration refers to the market value per tax declaration issued before August 29, 1987. The most recent tax assessment made prior to August 29, 1987 shall be considered. In case the area as appearing in the TD differs from the findings per actual ocular inspection (OCI), the latter (OCI) shall prevail; whereas, in case the land classification/land use per OCI differs from those reflected in the TD and therefore the unit market value does not appear thereon, the result of the actual OCI shall prevail and the unit market value shall be obtained from the Municipal assessor's office concerned. Manner of Payment of Just Compensation Payment of just compensation may be in any form. The landowner cannot insist that the entire payment should be made in cash. Under Section 18 of RA 6657, the law provides that the compensation may be paid under different modes: cash payment subject to the terms and conditions; shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets, or other qualified investments in accordance with the guidelines set by the PARC; tax credits which can be used against any tax liability; and LBP bonds. In case of payment made in cash the law provides for three conditions: first, for lands above 50 hectares, insofar as the excess hectare is concerned: 25% cash, and the remaining 75% shall be paid in government financial instruments; second, for lands above 24 hectares and up to 50 hectares: 30% shall be paid in cash, while the remaining balance shall be paid by government financial instruments; and lastly, for lands 24 hectares and below, 35% shall be paid in cash, while 70% 15 of which shall be paid in government financial instruments. In Santos vs. Land Bank of the Philippines, the petitioner questioned the payment of compensation for his land taken under the Comprehensive Agrarian Reform Program, which was made in cash and bonds. According to him, the Land Bank obligated itself to pay in cash the compensatio n due to him. However, the Land Banks agreement to pay 17 the landowner should be in the manner set forth under R.A. 6657 pursuant to the final judgment.
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In Manila Railroad Co. vs. Paredes [31 Phil. 118, 134 (1915)], the court stated that it will be sufficient if a certain and adequate remedy is provided by which the owner can obtain compensation without any unreasonable delay. The constitution neither requires prior compensation; nor does it specify that compensation be made in money. Art. XIII, Section 8, of the 1987 provides that Financial Instruments used as payment for their lands shall be honored as equity in enterprises of their choice. This constitutional mandate means that payment for just compensation need not be in cash. Considering that the landowners would have to accept payments made through bonds and not in cash, the court in Ramirez vs. Court of Appeals (G.R. No. 83972, February 15 1991) states that it should also be obligatory for the government to accept Land Bank bonds at their face value.
E.O. 659: Improving the Negotiability and Acceptability of Agrarian Reform Bonds In 2007, the government under the administration of Gloria Macapagal Arroyo implemented Executive Order No. 659, which intended to improve the negotiability and acceptability of Agrarian Reform Bonds. This was made after the landowners have made several complaints for lack of acceptability of bonds In fact, even government entities refused to accept Agrarian Reform Bonds at face value, but merely at a discounted price. In turn, just compensation has not been made. Because of which, this order was made in order to strengthen Agrarian Reform Bonds.This will make the Agrarian Reform Bonds negotiable at any time and it would replace the LBP bonds or land transfer payments under the Agrarian Reform Program with the same features of the LBP Bonds. E.O. 659 set forth the two features of Agrarian Reform Bonds: first, market interest rates aligned with 91-day Treasury bill rates. 10% of the face value of the bonds shall mature every year thereafter from the date of issuance of the bond; provided, that should a landowner choose to forego the cash portion, whether in full or in part, he shall be paid correspondingly in Agrarian Reform Bonds and second, transferability and negotiability: the Agrarian Reform Bonds may be used by the landowner, his successors-in-interest or his assigns. Under Section 3 of E.O. 659, the landowner, his successors-in-interest or assigned are allowed by law to use the Agrarian Reform Bonds under the following instances: 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 where paid are situated; acquisition of shares of stock of government-owned or controlled corporations or shares of stock 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 any government financial institution, provided the proceeds of the loans shall be invested in an economic enterprises, preferably in a small and medium scale industry, in the same province or region as the land for which the bonds are paid; payment for various taxes and fees to the government, provided that the use of these bonds for these purposes shall be limited to a certain percentage of the outstanding balance of the financial instruments, and provided further, that the Presidential Agrarian Reform Council (PARC) shall determine the percentage mentioned above; payment for tuition fees of the immediate members of the family of the original bondholder in government universities, colleges, trade schools, and other institutions; payment of fees of the immediate members of the family of the original bondholder in government hospitals; and other uses as the PARC may, from time to time, allow. The law allows for the portion of the 10-year AR Bond that has matured or will mature within the given year in which the tax liability shall be paid or for such percentage of the outstanding balance of the bond as determined by the PARC to be accepted as payment for: income taxes, capital gains tax due from individual taxpayers, estate tax, donors tax, value added tax, excise tax, other percentage taxes, deficiency tax assessment arising from tax investigations, surcharge, interest and penalties arising from late filing of returns or payment of taxes, and tax arrearages and penalties. It can also be used as payment of real estate taxes, interest charges and penalties; payment of various fees, interest charges and penalties that may be assessed against private or government banks and other financial institutions by the BSP and other government agencies in the course of their operation; acquiring shares of stock of government owner or controlled corporations or government private corporations; security deposit of foreign corporations with the SEC; and performance bond of housing contractors with the HLURB. Agrarian Reform Bonds shall also be accepted as a collateral for securing loans in government institutions. Trust Accounts Trust accounts are defined as a savings account deposited in the name of a trustee who controls it during his lifetime, after which the balance is payable to a prenominated beneficiary. According to the Supreme Court, the opening of a trust account as a mode of deposit does not constitute just compensation as this is beyond the scope under R.A. 6657. Payment is limited to cash or LBP Bonds, R.A. 6657 is clear and unambiguous in providing for the modes of payment. Determination of Just Compensation by the DAR or Land Bank of the Philippines The many cases decided by the Supreme Court involving the validity of the power of eminent domain proves that it is subject to judicial review. The valuation made under the Comprehensive Agrarian Reform Law is only a guiding principle as it may not substitute the courts own judgment as to the amount. The determination of just compensation in eminent domain cases is a judicial function; the valuation by the legislative and executive are mere initial determinations. When a party claims a violation of the Power of Eminent Domain, no statue, decree, or executive order can mandate that its own determination shall prevail over the courts findings. Prior Recourse to the DARAB is not necessary The prior recourse to the DARAP is not necessary before a case may be filed before the Regional Trial Court acting
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as a Special Agrarian Court for the determination of just compensation or for a criminal violation of the Comprehensive Agrarian Reform Law. Under R.A. 6657, the law provides that Special Agrarian Courts, which are Regional Trial Courts, are given original and execlusive jurisdiction over: all petitions for the determination of just compensation to landowners and the prosecution of all criminal offenses under R.A. 6657. The DAR is an administrative agency, which cannot be granted jurisdiction over cases of eminent domain. It is the Land Bank of the Philippines who shall initially determine the value of lands placed under the land reform and the compensation to be paid for their taking. The DAR makes an offer through a notice sent to the landowner. If this is rejected, a summary administrative proceeding is held and then, the PARAD, RARAD, or DARAB, depending on the case, shall act as the adjudicator in fixing the amount of the land. If he landowner still does not agree to the price fixed, he may bring the matter to the Regional Trial Court.Section 57 of R.A. 6657 vests in the Regional Trial Court the exclusive and original jurisdiction to determine such cases. The adjudicators are merely empowered to determine in a preliminary manner the reasonable compensation to be paid to the landowners. It is the Regional Trial Court who has the ultimate power to decide the case. Withdrawal of Compensation during Pendency of the Case The landowner is permitted by law to withdraw the amount even if there is no final determination of just compensation if the same has been deposited in his name. The rejection of DARs valuation and di sallowing the landowner to withdraw the compensation at the same time be deprived of the possession and use of the property is an oppressive 30 exercise of eminent domain. Landowners Right to Prove the Real Value of his Property The landowner is allowed to prove the real value of property in line with the mandate of the Constitution as to due process. To deny the owner opportunity to prove the real value of his property is violative of due process and 31 repulsive to the basic tenets of justice and fairness. Administrative Bodies should afford the parties due process. In Ang Tibay vs. CIR [69 Phil. 635 (1940)] the court mentions that due process in not always a judicial process. It has to be recognized and it is required not only in the courts of justice but also by administrative bodies that frequently decides legal controversies. What are the Eligibilities of the AR bonds to make them more marketable? Capital reserve instruments for insurance companies and investment for Reserve for pre-need companies; Performance and judicial bonds; Reserve for trusts duties; Liquidity floor requirements for governmental funds or deposits; and Investments for small and medium enterprises (SME) funds; and compliance with Agri-Agrarian Law Opening of Trust Accounts in favor of Landowners considered to be a substantial compliance with the requirement of just compensation under Comprehensive Agrarian Reform Law? No, trust accounts cannot be considered as the just compensation required by CARL. In the case of Land Bank vs. CA et al, the Land Bank and the DAR contended that the opening of trust accounts in favor of the rejecting landowners is sufficient compliance with the mandate of RA 6657 (Comprehensive Agrarian Reform Law). However, the Court rejected this argument. It ruled that: Section 16(e) was very specific in limiting the type of deposit to be made as compensation for the rejecting landowners that is in cash or in LBP bonds to wit: Section 16. Procedure for Acquisition of Private Lands (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 Title (TCT) in the name of the Republic of the Philippines. Thus, recourse to any rule which allows the opening of trus t accounts as mode of deposit under Section 16 (e) of RA 6657 goes beyond the scope of the said provision and is therefore impermissible. Furthermore, the Court held in this very same case that to allow the taking of the landowners properties, and in the meantime leave them empty handed by withholding payment of compensation while the government speculates on whether or not it will pursue expropriation, or worse for government to subsequently decide to abandon the property and return it to the landowners when it has already been rendered useless by force majeure, is undoubtedly an oppressive exercise of eminent domain that must never be sanctioned. Is the determination of just compensation by the DAR/LBP final? The determination of just compensation by the Department of Agrarian Reform and the Land Bank of the Philippines is final and executory unless accepted by the landowner. Therefore, the determination by the DAR/LBP is only preliminary; otherwise, courts have the right of review with finality. If the landowner does not accept it, what will happen then? The Supreme Court ruled that the determination of just compensation is a function addressed to the Courts of Justice and may not be usurped by any other branch of the government and the mathematical formulas are nothing but mere formality or charade as the courts are deprived of their discretion or independence in determining what just or fair.
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In Sigre vs. Court of Appeals, the Court stressed: The method of ascertaining just compensation under the aforecited decrees constitutes impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this Constitution is reserved to it for final determination. It should be noted also that, in the same case, the Court said that the determination by the DAR is not by any means final and conclusive upon the landowner or any other interested party. The Court cited Section 16(f) of RA 6657 that provides that Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final determination of just compensation. Hence, it bolsters the limitation that unless the party agrees, the determination of DAR/LBP is final and executor. If the landowner does not agree with the determination of DAR/LBP of just compensation, he may go to Court for the final determination of just compensation. If the landowner has rejected the preliminary determination of just compensation by the LBP and the DAR, and there has not yet been a final determination thereof, can the landowner withdraw the amount of compensation deposited in his name? Yes, the landowner can withdraw the amount even while there is still no final determination of just compensation. The Court held in this very same case that to allow the taking of the landowners properties, and in the meantime leave them empty handed by withholding payment of compensation while the government speculates on whether or not it will pursue expropriation, or worse for government to subsequently decide to abandon the property and return it to the landowners when it has already been rendered useless by force majeure, is undoubtedly an oppressive exercise of eminent domain that must never be sanctioned. Is prior recourse to the DARAB necessary before a case for determination of just compensation, or for a criminal violation of the CARP Law, may be filed before the Regional Trial Court, as a Special Agrarian Court? To give a brief meaning, a Special Agrarian Court is a branch of the Regional Trial Court designated by the Supreme Court, under its authority, within each province. Furthermore, under its authority, 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. The judges of these special courts shall exercise their jurisdiction as such in addition to their regular duties as RTC judges. The Special Agrarian Courts are given original and exclusive jurisdiction over two categories of cases, to wit: (a) All petitions for the determination of just compensation to landowners; and (b) The prosecution of all criminal offenses under RA 6657. With this, an RTC branch designated as a Special Agrarian Court has the original and exclusive jurisdiction over all petitions for the determination of just compensation in that province. To answer the question posted, it can be concluded that the prior recourse to the DAR is not necessary before a case for the determination of just compensation, or for a criminal violation of the CARP Law. This is because the exclusive and original jurisdiction over these cases belongs to the Special Agrarian Courts, a branch of the Regional Trial Court. Does the owner have the right to prove the real value of his property? Yes. This is the part and parcel of the landowners right to due process. To deny the owner the opportunity to prove real value of his property is a violation of his due process and repulsive to basic tenets of justice and fairness. Does DAR AO No. 2, series of 1996 violate the Property Registration Decree? This Administrative Order of DAR can simply be put in a gist: that the Title of the Landowner over his land can be cancelled without his knowledge. This act of cancellation without the knowledge of the owner strikes at the very heart of the Torrens System. The system guarantees that so long as a landowner has the title in his hands, he might rest secure, without the necessity of waiting in the portals of the court, or sitting in the mirador de su casa to avoid the possibility of losing his land. Clearly, this act of DAR violates the most basic rights of property of petitioner landowners, by depriving them of their land without due process of law. So what should be done in order that there will be no violation of due process of law? Under the Property Registration Decree, a transfer certificate of title could only be cancelled through voluntary dealings or an involuntary instrument. Under the said law, registration pursuant to involuntary dealing could only be done through the regular court processes. In short, it is only the court that could cancel a title under the Torrens System involuntarily or against the consent or will of the landowner. In eminent domain cases that are an involuntary process, a judgment from the court is required in order to cancel a landowners title. Furthermore, under the same law, whether voluntary or involuntary, it is a requirement that the landowners original title over the land must be surrendered to the Register of Deeds. This is understandable because there can be no two subsisting titles over the same land. If the landowner refuses or fails to surrender the original title, the party in interest [DAR for that matter] is obligated to file a petition in court to compel the surrender of the said title. Is the determination of just compensation by the DAR final and conclusive upon the landowner and other interested parties? No. It is only preliminary unless accepted by the parties concerned. As what we have discussed earlier, the Courts, through the Special Agrarian Courts, have the exclusive and original jurisdiction to determine just compensation. Why are the courts given the prerogative to make the final determination of just compensation?
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The Courts function is to guard against arbitrariness in the determination of just compensation. The courts must ensure: 1. That due process is observed, whereby the prescribed rule of procedure is observed and the landowner is given full and fair opportunity to present his proofs as to how much his property is worth. 2. That the compensation to be paid by the government is indeed just and 3. The government pays the just compensation so determined promptly, i.e., before it takes away the ownership from the landlord and transfers the same to the farmer-beneficiary.
Can government agencies and government-owned or controlled corporations be compelled to accept Land Bank Bonds at face value? Land Bank bonds shall be accepted in the amount of their face value. A GOCC like the GSIS is compelled to accept Land Bank bonds as payment for the purchase its assets. What are the reasons for compelling government agencies and corporations to accept Land Bank Bonds at face value? In Maddumba v GSIS, the Supreme Court pointed out that acceptance of Land Bank bonds, instead of money, already involves a certain degree of sacrifice for the landowner. Discounting the Land Bank bonds and thereby reducing their effective value, entails and imposes an unfair and unjustified additional burden on the part of the landowner. In Ramirez v CA, the Supreme Court said that if landowners are called to sacrifice in the interest of land reform, by their acceptance of Land Bank bonds in payment of their agricultural lands, government lending institutions should share in the sacrifice by accepting the same Land Bank bonds at their face value, as tendered by landowners in payment of their loans with such government lending institutions, as long as such Land Bank bonds are derived by landowners from the sale of their agricultural lands to the Land Bank. LAND BANK/AGRARIAN REFORM BONDS What is the authority of the Land Bank to determine just compensation? Land Bank does not have the authority to determine just compensation because under RA 6657, it is the Department of Agrarian Reform through the PARC that has such authority not the Land Bank. The alleged authority of the Land Bank appears to be based on Executive Order No. 405 dated June 1990 by then President Aquino. However, since said order was issued when Congress was already in session then President Aquino no longer had legislative powers. Consequently, Land Bank does not have the authority to determine just compensation. Contractual Obligations Guaranteed by Government Land Bank bonds are deemed contracts, which are protected by the non-impairment clause of the Constitution. 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 Philippines. Not Ordinary Commercial Paper Subject to Discounting Land Bank bonds are issued neither in the open market nor for the primary purpose of raising funds or pooling financial resources but in 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 papers that are subject to discounting. What are the remedies of a landowner where a government agency refuses to accept land bank bonds at face value? The landowner can file a case for mandamus to compel said government agency to accept the LBP Bonds at face value.
SECTION 19: INCENTIVES FOR VOLUNTARY OFFERS FOR SALES Landowners, other than banks and other financial institutions, who voluntarily offer their lands for sale shall be entitled to an additional five percent (5%) cash payment. Land will be subject to Compulsory Acquisition (CA) if he fails to provide the necessary document(s) within 15 days from receipt of notice acquiring him to do so. Compulsory Acquisition (CA) the power of the government to acquire private rights in land without the willing consent of its owner or occupant in order to benefit society. This is often necessary for social and economic development and the protection of the natural environment. [DAR Memorandum Circular No. 02] All pending voluntary offer claim folders (VOCFs) should be reviewed to ascertain whether the Landowner-Offeror has submitted certified copies of the following documents with his letter-offer (CARP Form No. 1): 1. Title or Proof of Ownership (if untitled) 2. Tax Declaration 3. Approved Survey Plan
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LO should be given 15 days from receipt of notice to submit ant-lacking document. If still fails, LO will be informed that his land will be acquired by Compulsory Acquisition (CA) and he may choose his retained area; otherwise, the DAR will choose the area for him. Afterwards, under Memorandum Circular No. 2, LO will no longer be entitled to the additional 5% cash payment under section 19, RA 6657.
SECTION 20: VOLUNTARY LAND TRANSFER Landowners of agricultural lands subject to acquisition under this Act may enter into a voluntary arrangement for direct transfer of their lands to qualified beneficiaries subject to the following guidelines: (a) 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 this Act. (b) The terms and conditions of such transfer 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. (c) The voluntary agreement shall include sanctions for non-compliance by either party and shall be duly recorded and its implementation monitored by the DAR. Land can only be transferred from one individual to another in the legally prescribed manner. Usually a written deed is the instrument used to convey ownership of real property.
SECTION 21: PAYMENT OF COMPENSATION BY BENEFICIARIES UNDER VOLUNTARY LAND TRANSFER Direct payments in cash or in kind may be 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 shall be considered given, unless notice of disapproval is 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. Thus, the main point of Section 21 is that it provides that direct payment may be made in cash or in kind by the Agrarian Reform Beneficiary (ARB) to the landowner (LO) under the terms to be mutually agreed upon by both parties and which will be binding upon registration with and approval by the Department of Agrarian Reform (DAR). Section 44 of R.A. No. 6657 is the act instituting a comprehensive Agrarian reform program to promote social justice and industrialization, and provides for the mechanism for its implementation and for other purposes. However, R.A. No. 7905, otherwise known as, "An Act to Strengthen the Implementation of the Comprehensive Agrarian Reform Program and for Other Purposes" amended the same provision of the law and is now the governing authority thereto. R.A. No. 7905 contains some of these provisions: Creation of Support Services Office (1) Irrigation facilities, especially second crop or dry season irrigation facilities (2) Infrastructure development and public works projects in areas and settlements that come under agrarian reform (3) Government subsidies for the use of irrigation facilities (4) Price support and guarantee for all agricultural produce (5) Extending to small landowners, farmers and farmers' organizations (6) Promoting, developing and extending financial assistance to small and medium-scale industries in agrarian reform areas (7) Assigning sufficient numbers of agricultural extension workers to farmers' organizations (8) Undertaking research, development and dissemination of information on agrarian reform, plants and crops (9) Development of cooperative management skills through intensive training (10) Assistance in the identification of ready markets for agricultural produce and training in the other various aspects of marketing (11) Conduct an effective information dissemination system through the Department of Agriculture (12) Create a credit guarantee fund for agricultural landowners
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(13) Administration, operation, management and funding of support services programs and projects This law provides that the Provincial Agrarian Reform Coordinating Committee (PARCCOM) shall recommend to the Presidential Agrarian Reform Council (PARC) the adoption of a direct payment scheme between the landowner and the farmer or farm-worker. Thus, no voluntary land transfer scheme can be availed. Moreover, it further provides that after June 30,2009, the modes of acquisition and that the voluntary land transfer shall be allowed only for landholdings submitted for Voluntary Land Transfer (VLT) as of June 30,2009.
Voluntary Land Transfer The governing provision on the process how voluntary land transfer occurs is provided under Section 20 of RA 6657. Stated in this provision that landowners of agricultural lands subject to acquisition under the CARP may enter into a voluntary arrangement for the direct transfer of their lands to qualified beneficiaries. Section 21, on the other hand provides that direct payment may be made in cash or in kind by the agrarian reform beneficiary ARB to the land owner under terms to be mutually agreed upon by the parties and to be binding upon registration with and approval by the DAR. Administrative Order No. 02- series of 1995 rules and regulations were promulgated governing the Voluntary Land Transfer or Direct payment Scheme, with the following salient features. (7 features) 1. Compulsory Acquisition and Voluntary Offer to Sell- Beneficiaries are determined by DAR to be the same individuals who would be eligible to purchase the land in case the government acquired the land for sale 2. The area of land to be transferred to ARBs should not be less that the area, which the government, through CA, would otherwise acquire for redistribution. 3. The terms and conditions of VLT/DPS should include the immediate transfer of possession and ownership of land in favor of the identified beneficiaries; Certificates of Land Ownership Award shall be issued to the ARB with proper annotations 4. Terms and conditions of the VLT/DPS shall not be less favorable to the ARB than those of the government's standing offer to purchase from the land owner and to sell to the beneficiary 5. The direct payment in cash or in kind may be made by the Agrarian Reform Beneficiary to the landowner depending on their terms agreed upon. This agreement will be binding upon registration and approval by the DAR. Such approval shall be presumed unless a notice is received by the ARB within 30 days from the registration date. 6. The Voluntary Offer to sell/Direct Payment Scheme agreement shall include sanctions for noncompliance by either party and shall be duly recorded and its implementation monitored by DAR 7. Should the beneficiary, for the reasons other than those brought about by force majeure default in his obligations for three consecutive installments to pay the land in his obligations for three consecutive installments to pay the land amortization
RA No. 3844 as amended by RA No. 6389 (Pars. 7 and 8) Refers to the replacement by a beneficiary and permanent disqualification from becoming a beneficiary under the CARP. The Certificate of Land Ownership Award (CLOA) issued to him/her shall be cancelled accordingly and the land shall either be: a. Heir of the beneficiary will assume the balance of the value of the award upon awarding b. If the qualified heir is absent, a new qualified beneficiary will be awarded who is willing to abide by the terms and of the existing VLT/DPS agreement that will pay for the entire value of the land.
Substitution- if substitution exists, then, the landowner must refund the previous beneficiary the amounts already paid and for the improvements made less the computed rental and charges.
Chapter 7: Land Distribution (Sections 22-28)

SECTION 22: QUALIFIED BENEFICIARIES. The 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 in the following order of priority: (a) agricultural lessees and share tenants; (b) regular farm workers; (c) seasonal farm workers; (d) other farm workers; (e) actual tillers or occupants of public lands; (f) collective or cooperatives of the above beneficiaries; and (g) others directly working on the land. Provided, however, That the children of landowners who are qualified under Section 6 of this Act shall be given preference in the distribution of the land of their parents; and: Provided, further, that actual tenant -tillers in the landholding shall not be ejected or removed therefrom.
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Beneficiaries under Presidential Decree No. 27 who have culpably sold, disposed of, or abandoned their land are disqualified to become beneficiaries under their program. A basic qualification of a beneficiary shall be his willingness, aptitude and ability to cultivate and make land as productive as possible. The DAR shall adopt a system of monitoring the record or performance of each beneficiary, so 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. The DAR shall submit periodic reports on the performance of the beneficiaries to the PARC. If, due to landowner's retention rights or to the number of tenants, lessees, or workers on the land, there is not enough land to accommodate any or some of them, they may be granted ownership of other lands available for distribution under this Act, at the option of the beneficiaries. Farmers already in place and those not accommodated in the distribution of privately-owned lands will be given preferential rights in the distribution of lands from the public domain. SECTION 22-A: ORDER OF PRIORITY. A landholding of a landowner shall be distributed first to qualified beneficiaries under Section 22, subparagraphs (a) and ( b) of that same landholding up to a maximum of three (3) hectares each. Only when these beneficiaries have all received three (3) hectares each, shall the remaining portion of the landholding, if any, be distributed to other beneficiaries under Section 22, subparagraphs (c), (d), (e), (f), and (g). Who are entitled to be beneficiaries of the lands? Article XIII Section 4 of the 1987 Constitution provides that, 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 Under the 1987 Constitution, the following are entitled to own, directly and indirectly, the lands they till: 1. Farmers and regular farm workers who are landless and who till the soil or the tenants whether on leasehold or sharehold; 2. Other farm workers who are landless including seasonal workers are merely entitled to a share in the profits. The landless resident in Section 22 of CARP If this statute is to be read in consonance with the 1987 Constitution, landless resident means a landless beneficiary, which is the closest definition thereto (DAR AO 02 -09, Definition of Terms). And in order to be a qualified beneficiary, one must be determined/identified during the DAR's actual investigation and documentation as landless resident of the same barangay or in the absence thereof, landless resident of the same municipality and tills the soil and owns less than three (3) hectares of agricultural land. (DAR Order 07-03 Article I Section 2) What must a claimant show in order to be entitled as beneficiary of the agrarian reform program? Claimant must prove he is a landless peasant who is either a farmer or a regular farmworker. And, in addition for rice and corn lands under PD 27 and EO 228, the farmer/grantee must prove: 1. he is a full-fledged member of a duly recognized farmers cooperative as of 1985; 2. he complied with the obligation to pay lease rentals or amortization payments to the landowner or agricultural lessor when they fall due. Failure to do so for a period of two (2) years is a ground for forfeiture of the certificate of land transfer. In Republic vs. Baylosis (96 Phil. 461), tenants and occupants of the land who seek to be expropriated but already have lands of their own are hardly the landless class sought to be benefited by the Constitution, and so are not qualified to become beneficiaries of expropriation. Can the right to own the land they till by these qualified beneficiaries be waived? During the discussions on agragrian reform, the Constitutional commissioners cited that the provision does not contemplate a waiver but that the tenant may NOT WANT to exercise his right. They agreed that the intended beneficiaries have the right not to be compelled to accept the governments imposition of the corresponding obligations of beneficiaries under the agrarian reform especially if the result would be more detrimental to them than their present situation. Example: Situation given by Commissioner Lerum, While we provide here that the tenant has a right to own, but if he does not want to buy, why should we force him to buy, if for example, he does not have the means to do so? (Record of the 1986 Constitutional Commission Vol 3 / 08-07-86 R.C.C. 50) Does the amendment in Section 22 modify the amended provision in Section 7 which declares that only farmers (tenants or lessees) and regular farmworkers actually tilling the lands, as certified by the Barangay Agrarian Reform Council (BARC) and attested under oath by the landowners, are the qualified beneficiaries? Only landless farmers and regular farmworkers actually tilling the land are entitled to own the land they till. (Reference: Article XIII Section 4 of the 1987 Constitution) The Supreme Court has reiterated this in a number of cases, such as in: Fortich vs. Corona being seasonal farmworkers beneficiaries were entitled only to a just share of the fruits of the land, but did not have the right to be awarded ownership of the land.
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Homeowners Association of Hermosa, Bataan vs. Litton persons who claim to be bona fide farmer-beneficiaries, but who, under the Constitution, are not qualified to be granted the right to own the Land itself have no legal or actual and substantive interest over the subject land, in as much as they have no right to own the land. Jimenez vs. Tolentino there were probable cause for filing graft charges against DAR officials and employees who installed beneficiaries who were unqualified because they were not bona fide tenants of the land. Does that mean that if the tenants/agricultural lessees and regular farmworkers refuse to receive the land, the DAR is authorized to identify persons under Section 22 (d) to (g) as beneficiaries? The DAR cannot replace the qualified beneficiaries because it will violate the Constitution. Section 22 of RA 6657 provided for an order of priority among beneficiaries in cases where all the land is to be distributed. It allows resettlement of landless farmers and regular farmworkers in the States own agricultural estates (1987 Constitution Art XIII Sec 6) but, not on private agricultural lands, unless these are idle or abandoned (1987 Constitution Art XVIII, Sec 22). Section 22, sub-paragraphs (d) and (g) applies to tillers of government or idle private lands already acquired by the government. An example would be those acquired through Voluntary Offer to Sell. Any other interpretation would be a violation of Art XIII, Sec 4 of the 1987 Constitution which provides, 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. 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. Section 22-A extends the application of Section 22 to a situation where the landowner is abandoning the land, or stopping operations totally, so that the non-regular farmworkers can no longer obtain the benefit they are entitled to, namely, a just share of the fruits of the land. If there are no more qualified beneficiaries, or if the farmworkers opt not to receive the land, but insist to be beneficiaries under an alternative mode, the remaining land shall be operated by the landowner under an alternative (non-LAD) mode. (Reference: Landowners Rights, Hernandez et al. page 260 -261) Rules and Procedure followed by DAR on the identification, screening and selection of a qualified Farmer Beneficiary: (Reference: DAR AO 02-09) General Qualifications: All agrarian reform beneficiaries must be: 1. Landless as defined by RA No. 6657, as amended and under Item III (1) of DAR AO 02-09; 2. Filipino citizen; 3. Permanent resident of the barangay and/or municipality where the landholding is locates as provided under Section 22 of RA No. 6657; 4. At least 15 years of age at the time of identification, screening and selection of farmer-beneficiaries; and 5. Willing, able , equipped with the aptitude to cultivate and make the land productive. Specific Qualification for Farmworkers in Commercial Farms and Plantations: 1. Applicant must have been employed as of June 15, 1988 in the landholding covered under CARP. 2. All farmworkers holding managerial or supervisory positions as of June 15, 1988 shall not be qualified as a beneficiary. However, farmworkers who were promoted to managerial or supervisory positions after they were identified, screened and selected shall remain as qualified agrarian reform beneficiaries. Qualified beneficiaries shall be prioritized as follows: Section 22 of RA 6657: (a) agricultural lessees and share tenants; (b) regular farm workers; (c) seasonal farm workers; (d) other farm workers; (e) actual tillers or occupants of public lands; (f) collective or cooperatives of the above beneficiaries; and (g) others directly working on the land. Grounds for Disqualification in the identification of ARBs of the CARP: 1. 2. 3. Failure to meet qualifications as provided for under Section 22 of RA 6657, as amended; Execution of a waiver of right to become an ARB in exchange for due compensation; Non-payment of an aggregate of three (3) annual amortizations and failure to exercise the right of redemption/ repurchase within two (2) years resulting to foreclosure of mortgage by the LBP of previously awarded land;
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4. 5. 6.
7. 8. 9. 10. 11. 12. 13. 14.
Deliberate non-payment of three (3) annual amortizations to the landowner resulting to landowners repossession in case of VLT and direct payment scheme of the awarded land; Dismissal from service for cause upon a judgment that is final and executory as of the approval of this order; Obtaining a substantially equivalent and regular employment, as defined in Item III (9) of AO 02-09. Substantially Equivalent and Regular Employment means any employment or profession from which the applicant farmer derives income equivalent to the income of a regular farmworker at the time of ARB identification, screening and selection. Retirement from service, whether optional or mandatory or voluntary resignation, provided it was not attended by coercion and/or deception; Misuse or diversion of financial support services extended by the government; Negligence or misuse of the land or any support extended by the government; Material misrepresentation of the ARBs basic qualification as provided for under Section 22 of RA No. 6657, as amended, PD No. 27, and other agrarian laws; Sale, disposition, or abandonment of the lands awarded by government under CARP or PD 27 violative of agrarian laws; Conversion of agricultural lands to non-agricultural use without prior approval of DAR; Final judgment for forcible entry into the property or for unlawful detainer; Commission of any violation of the agrarian reform laws and regulations, or related issuances, as determined with finality after proper proceedings by appropriate tribunal or agency.
Only after agricultural lessees and share tenants, and regular farmworkers have each been awarded three (3) hectares pursuant to Section 8 of RA 9700, shall other qualified beneficiaries such as seasonal farmworkers, etc. be accommodated. (1) The child of a land owner shall be given preference in the distribution of his/her parents land pursuant to existing rules and regulations on award to children of land owners provided he/she meets ALL the following criteria: 1. Filipino citizen; 2. At least fifteen (15) years of age; 3. Actual tiller or directly managing the farm as of the time of the conduct of the field investigator under CARP; However, only untenanted portions only can be awarded to the qualified children of the land owner. Provided further, actual tenant-tillers in the landholding shall not be ejected or removed therefrom. (2) Farmworker-beneficiaries therein on or prior to June 15, 1988 shall enjoy priority of award of a maximum of three (3) hectares, in the event that the agricultural land for distribution in commercial farms or plantations is sufficient following the order of priority under Section 22 of RA 6657, as amended. Farmworkers who were hired after the effectivity of RA 6657 shall be accommodated based on their length of service reckoned from June 15, 1988 and subject to Specific Qualifications of Farmworker beneficiaries. (3) All potential ARBs including those who have signified their intent or interest with the DAMRO to be included in the preliminary list of potential ARBs must submit their qualifications as ARBs within fifteen (15) days from posting of the said list in at least three (3) conspicuous places. (4) For the purpose of screening and selection of qualified ARBs, all concerned PAROs shall create a Beneficiary Screening Committee (BSC) whose members shall be composed of the 1. PARO as the Ex-Officio Chairperson, 2. MARO, 3. DARPO Legal Offer, 4. Provincial Agrarian Reform Coordinating Committee (PARCCOM) Chairman or his representative, and 5. BARC Chairman of the area where the landholding is located or his representative, pursuant to DAR A.O. No. 7, Series of 2003. The BSC may invite the landowner/s and/or civil society organization (CSO) representatives in the area to serve as resource persons in the ARB selection and screening process, as may be necessary. The BSC shall exercise exclusive jurisdiction in the screening and selection of ARBs in commercial farms, plantations and other landholdings for collective distribution to ARBs. (5) Qualified beneficiaries in a particular landholding shall include those determined/identified by the DAR during the actual investigation and documentation process. The master list of ARBs selected by the MAROs or the Beneficiaries Screening Committee (BSC) in the case of commercial farms or plantations, shall be certified under oath by the BARC and further attested to under oath by the LO in so far as his tenants, lessees and regular farmworkers in the landholding are concerned, pursuant to Item IV (E) (10) of this Order. (6) The right of the LO to attest to the master list of ARBs in so far as the tenants, lessees and regular farmworkers in his/her landholdings are concerned, is deemed waived after the lapse of fifteen (15) days from his/her receipt of the
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said master list of ARBs, if he fails to act on it within the said period. Thereafter, the master list of ARBs shall become final and executory. Landowners who fail, refuse or delay the issuance of the attestation despite proof of qualification of the beneficiaries, shall be liable under Sections 24 and 25 of R.A. No. 9700. In case of partial or full non-attestation or repudiation by the LO of the ARBs in the master list, the LO shall be required to submit evidence to sustain his partial or full non-attestation, repudiation of ARBs, and/or substitution or addition to the master list of ARBs. The landowner's refusal to attest to all or specific ARB/s in the master list despite the presentation of proof of their being either tenants or lessees or regular farmworkers shall not in any way delay the LAD process. The MARO shall submit a report on this to the PARO. (7) The DARPO shall, within fifteen (15) days from receipt of the DARMO's report, conduct a revalidation of the qualifications of the ARBs' being tenants or lessees or regular farmworkers in cases where the landowner refuses to attest to: 11.1 Specific ARBs in the master list of ARBs (partial attestation); 11.2 Specific ARBs in the master list of ARBs (partial attestation) and identifies other ARBs either by substitution or addition whom the LO claims are his tenants, lessees or regular farmworkers; or All ARBs in the master list of ARBs (full non-attestation) and identifies other ARBs either by substitution or addition whom the LO claims are his tenants, lessees or regular farmworkers. Should the PARO find that there is possible merit to the LO's partial or full non-attestation of the master list of ARBs, he shall order the BARC to conduct compulsory arbitration within thirty (30) days to pass upon the issue. The BARC shall submit a report of its findings within five (5) days after arbitration to the PARO who shall then evaluate and finally determine the qualifications of the ARBs in the master list. The PARO's decision shall be final in so far as the master list is concerned. (8) Protests for inclusion/exclusion from the master list of qualified ARBs may be filed in writing at the DARPO by an interested party not later than fifteen (15) days from the last day of posting of the master list, for resolution within thirty (30) days from receipt of the same. (9) The master list of qualified ARBs becomes final after the lapse of fifteen (15) days from issuance of the PARO's decision on the protest and receipt of the same by the parties.
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(10) The authority of the PARO to determine ARBs' qualifications is specifically limited in the context of partial attestation or full non-attestation by the LO and to resolve protests and petitions on the ARBs' qualifications to be included in the master list. After this phase, the other processes and the authority to decide on the determination of ARBs' qualifications under specific issuances (e.g., inclusion/exclusion of ARBs issued with CLOA from the master list of ARBs under agrarian law implementation cases) shall remain. (11) In case an appeal/motion for reconsideration is filed on the PARO's decision/s or order/s for inclusion/exclusion of potential ARBs in/from the master list, the rules and procedures provided under the existing agrarian law implementation (ALI) rules shall be followed. (12) The ARBs who qualify under the screening process shall state under oath before the judge of the city or municipal court that he/she is willing to work on the land to make it productive and to assume the obligation of paying the amortization for the compensation of the land and the land taxes thereon as stipulated in the Application to Purchase and Farmer's Undertaking (APFU). (13) ARBs in the master list who fail or refuse to execute and sign the APFU shall be given thirty (30) days from the date of receipt of the APFU to sign it. Failure to sign the APFU within the reglementary period of thirty (30) days shall be considered as a waiver of right to become an ARB. Due notice shall be given to the concerned parties stating the consequence of such failure to sign and execute the APFU within the prescribed period. Is the exemption of sugar lands in land distribution in compliance with RA 6657? Section 3 of RA 6657 provides that agrarian reform includes alternatives to the physical redistribution of lands: such as (1) production or profit-sharing, (2) labor administration, and (3) distribution of shares of stock, which allow beneficiaries to receive a just share of the fruits if the lands they work on.
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If we look into the unique situation of the sugar industry: First, sugar is an industrial product. In producing sugar as product, the plowing, harrowing, planting, fertilizing, chemical application, cane-cutting, cane loading, harvesting and milling are performed with the use of equipment and machines. The sugar planter does not produce sugarcane to sell but rather sells an industrial product which is the refined or raw sugar. Thus, sugarcane can only be planted in areas where there are mills. If we recall in the Luz Farms vs. Secretary of Agrarian Reform case, the Supreme Court ruled that raising of livestock, swine, and poultry is different from crop or tree farming. It is an industrial, not an agricultural activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets . Second, there are laws applicable to the sugar industry only, such as, the Social Amelioration law and the Labor Code on the sharing between planters and millers. Farm workers are assigned specific duties such as truck drivers, mechanics, chemical and irrigation sprinklers, and harvester operators. These employees do not share in the harvest, but are paid minimum wages and receive other benefits, such as overtime pay, vacation and sick leaves, SSS, as well as housing, electricity, water, etc. By operating like a business or industrial company with labor laws, sugar plantations are therefore deemed to be in compliance with agrarian laws. Also, our Social Amelioration Law requires planters to give their workers a just share in the profits; hence, quedans are subject to sugar liens that are remitted to the Department of Labor and Employment (DOLE) for distribution to the workers as cash bonus. Finally, the planter has contracts with the sugar millers. In some cases, the sugar planter is further bound by international commitments to fill up export quotas. Therefore, the acquisition and distribution of the land will impair the obligation of contracts between planters and millers violative of another constitutional prohibition.(Reference: Landowners Rights, Hernandez et al. pages 276 -278) Certificate of Land Transfer A Certificate of Land Transfer does not necessarily mean that the farmer beneficiary whose name appears on it is already the true owner of the land. 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 land holding a right which has become fixed and established and is no longer open to doubt and controversy. Squatter is a person entering upon 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. They 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. When does ownership transfer to the farmer- beneficiary? According to the Supreme Court, there must be: Full payment of just compensation before the title to the expropriated property is transferred. o In the case of Republic of the Philippines v. Salem Investment Corporation : Expropriation may be initiated by court action or by legislation. In both instances, just compensation is determined by the courts. o Two Phases of expropriation of lands: First Phase: Determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. Second Phase: Determination by the court of the just compensation for the property sought to be taken. What is required by the CARL in transfer of ownership and possession to the farmer beneficiary? The receipt by the landowner of the corresponding payment and deposit. Requirements needed as recognized by the Department of Agrarian Reform before ownership may be transferred to farmer-beneficiaries? Under DAR AO No. 11 series 119, states: the Emancipation Patents (EPs) and Certificates of Land Ownership Award (CLOAs) cannot be immediately issued pending the fulfillment of certain legal administrative requirements. Under the Supreme Court ruling in the case Association of Small Landowners in the Philippines, Inc. , et al. vs. The Honorable Secretary of Agrarian Reform (G.R. No. 78742, July 14, 1989) states that: Title to all expropriated properties shall be transferred to the State only upon full payment of compensation to their respective land-owners. Status of the Emancipation Patents (EPs) and Certificates of Land Ownership Award (CLOAs) which were issued without prior payment of just compensation: EPs and CLOAs must necessarily be spurious, null and void as they were obviously issued ultra vires. This also applies even if the EP or CLOA is already registered. Registration does not vest title. It is merely an evidence of such title over a particular property. Possession of a Certificate of Land Transfer vest ownership over the land to the farmer/grantee
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The mere issuance of the certificate of land transfer does not vest in the farmer/grantee ownership of the land described. It is merely evidences that the governments recognition of the grantee as the party qualified to avail of the statutory mechanisms for the acquisition of ownership. Titled by him as provided under PD27. Neither is this recognition permanent nor irrevocable.
The right of retention of the landowner wherein Emancipation Patents and CLOAs previous issued to farmerbeneficiaries According to the Supreme Court states: EPs or CLOAs do not by themselves, confer title, and may be cancelled in case a landowner is denied his right of retention prior to their issuance. Under PD No. 27 which was amended by RA No. 6657 the procedure will be: Only CLOAs are issued in lieu of EPs after compliance with all pre requisite. Upon presentation of CLOAs to the Register of Deeds, TCTs are issued to the designated beneficiaries. Therefore, CLTS are no longer issued. Requirements for a valid cancellation of the landowners certificate of title: Any cancellation of the landowners Certificate of Title would be illegal and anomalous, absent showing that the flowing legal requirements therefore have been observed, namely: 1. The farmer-beneficiary must be proven to be qualified under the law by which the expropriation is exercised. This includes being a landless farmer of regular farm worker, as well as faithful payment of lease rentals to the landlord of agricultural lessee, as well as full-fledged membership in a duly recognized farmers cooperative. 2. Full payment of just compensation, duly determined by final judgment of the proper court, must have already been made. 3. The landowner must have been allowed to exercise his mandatory and prior right to retention. TCT- EPs issuance directly to beneficiaries is not legal. In the case of Fortune Securities, Inc v Secretary Garilao (CA- G.R. So. No. 30243, November 14, 1994): Alleging grave abuse of discretion amounting to lack of jurisdiction on the part of the Secretary of the Department of Agrarian Reform and the Register of Deeds of Laguna, et al. No denial is made of the fact that the issuance of TCT Nos. EP-777 and EP-778 was irregular and not in compliance with the rule on acquisition of lands under the Comprehensive Agrarian Reform Program. The pertinent provision of law, to elucidate and to clarify is as follows: (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.'' (Section 16(e), Comprehensive Agrarian Reform Law, Rollo, pp. 116-117) The unambiguous import of the law is, the DAR may only take possession, and may request the Register of Deeds for the issuance of a TCT in the name of the Republic of the Philippines , only AFTER the landowner has received payment, or UPON deposit of the compensation in an accessible bank, in case the landowner rejects the offer of compensation or does not respond to the DAR'S notices. Therefore, the issuance of the TCTs herein, on February 7, 1992, a good seven days before Fortune received its first notice that its property shall be acquired by the government, pursuant to the CARP, represents a substantial deviation from the procedural mandate of the law. The Court of Appeals ruled that the acquisition of land by the DAR under land reform should strictly comply with the mode of procedure laid down by law; otherwise, any other procedure would do violence to the principle of due process, as aptly described by the court. One of the most basic constitutional provisions is thus stated: Article III Section 1 No person shall be deprived of life, liberty or property without due process of law. Memorandum Order No. 6 series of 1978 valid even though it is unpublished? Memorandum Circular Order No. 6 Series of 1978, Guidelines in the payment of lease rental/partial payment by farmer beneficiaries under the land transfer program pursuant to Presidential Decree No. 27 Amends or expands PD 27 amounting to unauthorized legislation on the part of DAR because its provision that the obligation of the tenant-farmer to pay the landowner the lease rentals for land shall terminate on the date the value of the land is established and the tenant-farmer shall pay said rentals to the Land Bank of the Philippines. But it was not found or sanctioned under PD 27. It was also found that Memorandum Circular Order No. 6, series of 1978 was never been published. This memorandum circular order directs the tenant-farmer to pay the lease rental to the Land Bank of the Philippines, on the other hand Presidential Decree 816, mandates that it be paid to the landowner and the failure of the tenant-farmer to do so for a period of two years would result, upon hearing and final judgment in the forfeiture of his Certificate of Land Transfer, if one has already been issued to him. In the case of Gonzales v. Sigre CA G.R. Sp No. 28906 Supreme Court declared that Memorandum Circular No. 6, Series of 1978 of the Department of Agrarian Reform is hereby declared null and void and respondents are hereby enjoined from enforcing it against petitioner herein. Respondent LBP is directed to return to petitioner the lease rentals paid by respondent Sigre to it, and respondent
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Sigre is directed to pay to petitioner the rentals that have accrued since his last payment to LBP, as well as the current rentals due on the land. The landowners creditor cannot be compelled to surrender the owners duplicate of titles. What cannot be done by way of voluntary registration could be obtained by some other means, such as by serving a notice of lis pendens to the office of defendant Register of Deeds. Since the duplicate titles are in the possession of the creditor/mortgagee, and since it appears that the mortgage loan covering the properties have not been fully paid for, the creditor has the right to refuse to release the duplicate titles to the petitioners purposes of registration. The landowners have the right to participate in the identification of farmer-beneficiaries of his land. Failure to notify the landowner regarding the placement of his land under agrarian reform, which deprives him of an opportunity to participate in the inclusion-exclusion proceedings, like identification of famer-beneficiaries, is a violation of the land owners right to due process. In the case of Samahang Magbubukid ng Kapdula, Inc. v. Court of Appeals (305 SCRA 147, 1999): This is a case wherein Ruben Rodriguez and Gloria Bugagao, lease the land for a term of seven (7) years after the expiration of the lease, that land were then developed into a sugarcane plantation, for the regular farmworkers. Respondent court found that herein private respondents were denied the opportunity to ventilate their stance before the DAR. But according to the petitioner, during the investigation and conferences conducted on the question of inclusion of subject properties in the CARP of the government, Mr. Ruben Rodriguez was notified. Records show, however, that the letter which was supposed to be the notice to the private respondents regarding the inclusion of subject properties in the CARP was ineffective. First of all, the letter of Provincial Agrarian Reform Officer Serapio T. Magpayo to Mr. Ruben Rodriguez indicates no receipt of the same by Mr. Rodriguez nor was it signed by Mr. Magpayo. Secondly, if it was ever sent, it was sent too late, the same being dated June 5, 1991, when the said parcels of land had already been awarded to the members of petitioner. (The CLOAs under controversy were issued on March 26, 1991.) Thirdly, the letter was addressed to Mr. Ruben Rodriguez, who no longer possessed the said properties as his lease there over ended on July 8, 1990. Therefore, the Supreme Court held that, There is thus a need for further hearings to determine the beneficiaries of subject parcels of land. In such hearings, the private respondents, who were deprived of an opportunity to be heard before the DAR, should participate. This is in pursuance of the provisions of Section 40(4) in relation to Section 22 of RA 6657, providing for the order or priority of the qualified beneficiaries of CARP. SUMALO HOMEOWNERS ASSOCIATION OF HERMOSA, BATAAN vs. JAMES T. LITTON, EMMA L. LAPERAL, GLORIA L. DEL RIO, GEORGE T. LITTON, JR., GRACE L. GALLEGO and the HEIRS OF EDWARD T. LITTON, G.R. No. 146061 August 31, 2006 Facts: On August 16, 1989, respondents filed with the Department of Agrarian Reform voluntary offer to sell their property located in Brgy. Sumalo, Hermosa, Bataan, consisting of consisting of three contiguous parcels of land, with an aggregate area of 213.6189 hectares and covered by Transfer Certificate of Title (TCT) Nos. 80135, 80136, 80137. On August 26, 1991, the DAR Region III Office issued a Notice of Acquisition, informing the respondents that the DAR will only acquire 42.4034 hectares of the property. Thereafter, on July 6, 1993, the Provincial Agrarian Reform Officer (PARO) informed the respondents that DAR would acquire 45.3789 hectares at P1.17 per square meter or a total purchase price of P529,414.68. Respondents then withdrew the VOS and applied for the conversion of the property from agricultural to industrial, commercial and residential uses. Their basis was RA 7227 otherwise known as The Bases Conversion and Development Act of 1992, providing for the creation of a Special Economic and Free Port Zone in an area consisting of Olongapo City, Subic in Zambales and parts of the municipalities of Morong and Hermosa in the Province of Bataan, and the declaration by the Sangguniang Bayan of Hermosa and the Sangguniang Panlalawigan of Bataan that the Hermosa Agro-Industrial Estate, a property contiguous to the land of the respondents, is an industrial area. Like wise, the Department of Agriculture has determined the property not economically suitable for agricultural production and there was no tenurial relationship between the owners and the occupants of the property. On May 14, 1996, DAR Secretary denied the application for the conversion of the property as well as the motion for reconsideration. Hence, the respondents appealed to the Office of the President. During the pendency of the case, the Sangguniang Panlalawigan reclassified the area from agriculture to industrial zone. On June 16, 1997, a resolution was issued in favour of the respondents, setting aside the resolution of the secretary of the Agrarian Reform. The petitioners then filed a motion for reconsideration and were granted, which reversed the prior resolution favoring the conversion. The respondents filed and appeal by way of a petition for review which was granted and reversed and set aside the decision in favor of the petitioners. Petitioners motion for reconsideration was denied. Issue: Whether or not the petitioners are real parties in this case. Whether or not the decision in the Fortich v. Corona is applicable in this case. Held: In the case of Fortich v. Corona, the Office of the President issued a resolution approving the conversion of a land from agricultural to agro-industrial/institutional area. It was then opposed by some alleged farmer beneficiaries who culminated in a dramatic and well publicized hunger strike that caught nationwide attention. This led to the rendering of the so called Win-
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Win Resolution which divided the area; 44 hectares for agro-industrial and 100 hectares for the qualified farmer beneficiaries. Aggrieved by this Win-Win Resolution, the petitioners filed a special civil action for certiorari and pro hibition. It was then decided that the said resolution is void. As regards the standing of the purported farmer-beneficiaries who sought to intervene in the said case the recognized rule in this jurisdiction is that a real party in interest is a party who would be benefited or injured by the judgment or is the party entitled to the avails of the suit. Interest within the meaning of the rule means material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a more incidental interest. Real Interest means a present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate or consequential interest. In the instant case, the petitioners claim that they have been identified as qualified beneficiaries of the respondents property under the CARP citing Sec. 22 of R.A. No. 6657. They claim that they are considered as other farm workers, collective or cooperative of the above beneficiaries, and others directly working on the land. They also alleged that they have been working on the Litton property for a long time. The court ruled that this petition lacks merit. In an ocular inspection made by DA Region III, it was reported that the only notable developments on the property are residential houses, roads and recreational facilities. It did not mention any agricultural developments to support the contention of the petitioners that they have been working on the land. Moreover, the Municipal Agrarian Reform Office of Hermosa, Bataan stated that the subject properties are untenanted. The court also considered the findings in the first resolution which stated that the petitioners are in reality, not composed of tenants of the Littons but mere occupants of homelots without their consent, who use the property primarily for residential purposes and commercial activities and who have been subject for ejectment suits by the respondents. REPUBLIC OF THE PHILIPPINES vs. CIRILO P. BAYLOSIS, ET AL. G.R. No. L-6191 January 31, 1955 Facts: Nelson Sinclair, one of the lessees of Hacienda Lian or Lian Estate in the municipality of Lian, Batangas, bought parcels of land from the said hacienda. However, a group of people are claiming to be tenants and occupants of the said parcels of land. They seek the help of the Rural Progress Administration to convince Sinclair to sell the land he bought to them for their ancestors were the ones who cleared and cultivated the land and they are having tenancy issue. A letter was sent to Sinclair and in reply, he refused to sell the land and he requested the office to give him time to submit facts regarding the land. It was later found out that Sinclair already sold the area to Cirilo Babylosis and others. A case for expropriation against Babylosis and Sinclair was filed. A motion to dismiss the case was filed. Issue: Whether or not tenants can seek the help of the government to file expropriation case to acquire the land. Held: The Court ruled to dismiss the expropriation case filed against Babylosis. The court hold that under section 4, Article XIII of the Constitution, the Government may expropriate only landed estates with extensive areas, specially those embracing the whole or a large part of a town or city; that once a landed estate is broken up and divided into parcels of reasonable areas, either thru voluntary sales by the owner or owners of said landed estate, or thru expropriation, the resulting parcels are no longer subject to further expropriation under section 4, Article XIII of the Constitution; that mere notice of the intention of the Government to expropriate a parcel of land does not bind either the land or the owner so as to prevent subsequent disposition of the property such as mortgaging or even selling it in whole or by subdivision; that tenancy trouble alone whether due to the fault of the tenants or of the landowners does not justify expropriation; that the Constitution protects a landowner against indiscriminate and unwarranted expropriations; that to justify expropriation, it must be for the public purpose and public benefit, and that just to enable the tenants of a piece of land of reasonable area to own portions of it, even if they and their ancestors had cleared the land and cultivated it for their landlord for many years, is no valid reason or justification under the Constitution to deprive the owners or landlord of his property by means of expropriation.
SECTION 23: DISTRIBUTION LIMIT No qualified beneficiary may own more than three (3) hectares of agricultural land. A qualified beneficiary may not own more than three (3) hectares of land . Under PD 27, a tenant qualifies as an owner if he tills a farm which is not more than five hecatares, but if the rice land is irrigated , it is enough if the area is 3 hectares Under R.A. 6657 , a qualified beneficiary cannot own more than 3 hectares. It does not secify whether the 3 hectares is irrigated or not.
SECTION 24. AWARD TO BENEFICIARIES The rights and responsibilities of the beneficiary shall commence from the time the DAR makes an award of the land to him, which award shall be completed within one hundred eighty (180) days from the time the DAR takes actual possession of the land. Ownership of the beneficiary shall be evidenced by a Certificate of Land Ownership Award, which shall contain the restrictions and conditions provided for in this Act, and shall be recorded in the Register of Deeds concerned and annotated on the Certificate of Title.
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Rules and Procedures followed by DAR in Land Distribution 1. Equitable Distribution of the land -Land holdings covered by carp shall be distributed first to agricultural lessees and share tenants and regular farmworkers of the same landholding up to a maximum of 3 hectares. - excess areas subsequent to the 3 hectare award shall be distributed to other qualified beneficiaries, without prejudice to the consideration of immediate family members of agricultural lesees who are actually tilling the land. - for untenanted land, all the farmers / tillers/ farmworkers therein who qualify under the existing guidelines on the identification, screening and selection of agrarian reform beneficiaries. For unoccupied lands, each qualified landless farmer shall be allowed the award ceiling of 3 hectares. 2. Land awarded should be under an individual CLOA-title covering 1 contiguous tract or several parcels of land cumulated upto 3 hectares Opting in for collective ownership. Qualified beneficiaries may opt for collective , ownership , through a co-workers or farmers cooperative , provided that the total area to be awarded shall not exceed the total number of co-workers multiplied by 3 hectares. Collective CLOAS issued to farmers through the following instances: the current farm management system of the land covered by CARP is not appropriate for either individual farming or division of the landholding into farm parcels the farm labor system is specialized where the farmworkers are organized by functions such as spraying, weeding, packing and other similar activities. The potential beneficiaries are currently not farming individual parcels but collectively working on the large contigious areas. The farm consists of multiple crops being farmed in an integrated manner or includes non-crop production areas that are necessary for the viability of farm operations. Subdividing collective CLOAS if the conditions for the issuance of collective CLOAs no longer exist , the landholding shall be parcelized / subdivided and the ARBs subsequently issued individual CLOA-titles. Collective ownership allowed for abandoned lands. -for idle and abandoned land or undeveloped agricultural lands to be covered by CARP, collective ownership shall be allowed only if the beneficiaries opt for it and there is clear development plan that would require collective farming or integrated farm operations exhibiting the conditions. Otherwise, such lands awarded to ARBs should be under individual CLOAs, covering 1 contagious tract or several parcels of land cumulated upto a maximum of 3 hectares. Immediate possession of a landholding by DAR, and distribution to qualified agrarian reform beneficiaries. As a general rule, the DAR shall take immediate possession of land holding upon the issuance of TCR or OCT in the name of the Republic of the Philippines by the concerned Register of Deeds, and shall thereafter proceed with the distribution process to the qualified agrarian reform beneficiaries of the landholding. Right of Usufruct The ARB have the right of usufruct over the land from the time the DAR takes constructive and actual possession of the same until the award of the CLOA Existence of labor related problems will not deter or delay the process of land acquisition and distribution
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10. Rights and Duties of the ARB All ARB shall exercises diligence in the use, cultivation and maintenance of the land including the improvements thereon Negligence shall be a ground for the forfeiture of ones right. Lands awared may not be sold, transferred , conveyed except through hereditary succession or to the government. Or to other qualified beneficiaries within a period of 10 years, provided the transferor shall have a right to repurchase the land from the government. Within a period of 2 years from the date of transfer. ARB have the obligation to pay the LBP in 30 annual amortizations with interest at 6% per annum unless the ARB opts to accelerate payment. Amortization shall commence 2 year from the date of the CLOA registration. However , if the actual occupancy of the ARB takes place after the CLOA registration ,the amortixation shall start 1 year after constructive and physical occupation of the land by the ARB.
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11. Responsibility of the ARB cooperative The ARB cooperative shall assume the responsibility of paying the local government unit the real property tax of collectively awarded land subject to the provisions of the Cooperative Code of the Philippines. 12. Land Improvements and facilities. Land improvements such as roads , bridges, warehouse, irrigation systems and the like for common use and benefit as maybe defined by DAR, maybe transferred through a farmers association or cooperative , or in the absence therof, through co-ownership, and equally shared payments covered under either individual or collective land amortizations, as the case maybe. 13. Entitlement of 3 hectares as to Agricultural lessees. Agricultural lessees and tenants may be entitled to 3 hectares each provided that they qualify as ARBs in their own individual rights and that their respective vested rights to the land have been duly established. 14. For married couples, the name of both the husband and wife shall appear in the CLOA. 15. Ministerial Duty of the ROD: Issue the title of the land in the name of the Republic of the Philippines, after the LBP has certified that the claim proceeds have been deposited in the name of the landowner constituting full payment in cash and bonds, with due notice to the landowner Register the CLOA generated by DAR. Cancel previous titles pertaining thereto Issue title to the Landowners retained area. 16. Releasing Registered ROD All registered CLOAs shall be released by the registry of Deed to LBP as the mortgagee financing institution. SECTION 25: AWARD CEILINGS FOR BENEFICIARIES Beneficiaries shall be awarded an area not exceeding three (3) hectares which may cover a contiguous tract of land or several parcels of land cumulated up to the prescribed award limits. For purposes of this Act, a landless beneficiary is one who owns less than three (3) hectares of agricultural land. The beneficiaries may opt for collective ownership, such as co-ownership or farmers cooperative or some other form of collective organization: provided, that the total area that may be awarded shall not exceed the total number of co-owners or member of the cooperative or collective organization multiplied by the award limit above prescribed, except in meritorious cases as determined by the PARC. Title to the property shall be issued in the name of the co-owners or the cooperative or collective organization as the case may be.
SECTION 26: PAYMENT BY BENEFICIARIES Restatement: Awarded lands shall be paid to the Landbank of the Philippines (LBP) in thirty (30) annual amortizations at the rate of six percent (6%) per annum. Payment will start: (1) one year from the date that the certificate of land ownership award (CLOA) is registered with the Register of Deeds (ROD); or (2) in case the occupancy took place after said registration, then one year from actual occupancy. Payment during the first three years shall be at reduced amounts as established by the Presidential Agrarian Reform Council (PARC); provided that the first five (5) annual payments should not be more than five percent (5%) of the value of the annual gross production as established by the Department of Agrarian Reform (DAR). Should annual payments after the fifth year exceed ten percent (10%) of the annual gro ss production and the failure to produce accordingly is not due to the beneficiarys fault, LBP shall reduce the interest rate and/or reduce the principal obligation to make the repayment affordable. The land shall be mortgaged to LBP as security, which LBP may foreclose in case of non-payment of a total of three (3) annual amortizations. The LBP shall advise DAR of the foreclosure proceedings and the latter shall subsequently award the forfeited landholdings to other qualified beneficiaries. A beneficiary whose land has been foreclosed shall thereafter be permanently disqualified from becoming a beneficiary under CARP.
SECTION 27: TRANSFERABILITY OF AWARDED LANDS Restatement:
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Lands acquired under CARP or other agrarian reform laws shall not be sold, transferred, or conveyed for a period of ten (10) years, except: 1. By hereditary succession; 2. To the government; 3. To LBP; or 4. To another qualified beneficiary through the DAR. Even if sold or conveyed to government or LBP, the children or spouse of the transferor would still have the chance to repurchase the land within a two-year period. LBP shall give notice of the availability of the land to the concerned Barangay Agrarian Reform Council (BARC), who will in turn give due notice to the Provincial Agrarian Reform Coordinating Committee (PARCCOM). The title of the land awarded, as well as the subsequent transfer title, must indicate that it is an emancipation patent (EP) or a CLOA. If the land has not yet been fully paid by the beneficiary, the rights of the land may be transferred or conveyed, with prior approval of DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or conveyance, shall cultivate the land himself/herself. If the land is sold or transferred to a qualified beneficiary who fails to cultivate the land, the land will be transferred to the LBP, which shall again make the land available to another beneficiary. In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for the amounts the latter has already paid, together with the value of improvements s/he has made on the land. Discussion: Right of pre-emption and/or redemption for agricultural lands (based from Commentaries of Hernandez, Alba and Hernandez) If the agricultural lessor or landowner decides to sell his land, the agricultural lessee shall have the preferential right to buy the same under reasonable terms and conditions (this particularly applies to lands retained by the landowner and lands covered by CARL but still under leasehold). The right must be exercised within 180 days from notice in writing, which must be served on all lessees affected and DAR. The purpose for the notice in writing is to remove all uncertainties regarding the sale (Quio v. CA, GR No. 118599, June 26, 1998). There is likewise no prescribed form for the notice, so long as it is in writing. However, a bare letter which does not contain the terms and price of the sale is insufficient; the notice must at least make certain the terms, particulars, and validity of the sale. In the event that the land is sold to a third person without the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable price within 180 days from actual notice of the sale (Legaspi v. Quezon CA-GR No. SP-06705, November 22, 1978, applying Section 12 of RA No. 3844) . The offer to redeem may be made either through: (1) formal tender with consignation; or (2) filing a complaint in court coupled with consignation of the full redemption or repurchase price (Quio v. CA, GR No. 118599, June 26, 1998). The necessity for consigning the full redemption price is: (1) in order to show the buyer that the redemptioner is serious about his offer to redeem; as well as (2) to remove all controversies as to the redemptioners ability to pay at the proper time .
SECTION 28: STANDING CROPS AT THE TIME OF ACQUISITION Restatement: The landowner shall retain his share of any standing crops unharvested, as well as given reasonable time to harvest the same, at the time the DAR takes possession of the land. Discussion: Procedures under Administrative Order No. 8 s.2006 (Guidelines on Standing Crops on Lands Acquired by Government Pursuant to CARP) Upon failure of the former landowner (LO) to harvest the standing crops within the defined harvestable period, the same shall constitute a waiver, thereby causing the Municipal Agrarian Reform Officer (MARO) to harvest said crops for the account of the LO; costs for which shall be charged against the proceeds of the standing crops. The net proceeds shall be turned over to the former LO or deposited in an accessible bank in the name of the LO; such act shall constitute a bar from instituting any action for damages against the MARO and/or the beneficiaries. The right of usufruct shall be conferred to the beneficiaries immediately after the completion of the harvest by the Department of Agrarian Reform Municipal Office (DARMO) over the area where there are overdue standing crops. The MARO nor the beneficiaries shall not be held liable for the loss of the value or the deterioration of standing crops by reason of failure to reap the same within the identified reasonable period of harvest. Alternatively, if the beneficiaries are willing and capable to compensate for the value of the standing crops in exchange of their right to harvest the same, the MARO shall exert efforts towards getting the former LO and the beneficiaries to conclude an agreement within the harvestable period; the MARO shall ensure that the terms and conditions are reasonable for both parties. In case no agreement is reached, the right of the former LO to harvest the standing crops shall be respected.
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RA 6675 As Amended by RA 9700report1-8rev1

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RA 6675 As Amended by RA 9700report1-8rev1

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RA 6675 as amended by RA 9700: COMPREHENSIVE AGRARIAN REFORM LAW of 1988

Chapter 1: Preliminary Chapter (Sections 1-3)

Chapter 2: Coverage (Sections 4-11)

What is an Ancestral Land?

DAR Administrative Order No. 9 (1993)

Chapter 3: Improvement of Tenurial and Labor Relations (Sections 12 & 13)

Chapter 4: Registration (Sections 14 & 15)

Chapter 5: Land Acquisition (Section 16)

Chapter 6: Just Compensation (Sections 17-21)

Chapter 7: Land Distribution (Sections 22-28)

7. 8. 9. 10. 11. 12. 13. 14.

SECTION 27: TRANSFERABILITY OF AWARDED LANDS Restatement:

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