History of Agrarian Reform

First denominated as Agricultural Land Reform Code until it was

renamed as Code of Agrarian Reforms by virtue of Republic Act
no. 6839.

Objective of the Code of Agrarian Reforms

1. create a system of owner-cultivatorship and economic family

size farm as basis of Philippine Agriculture
2. create a truly viable social and economic structure in agriculture
conducive to greater productivity and higher farm incomes
3. make the small farmers more independent, self-reliant and
responsible citizens, and a source of genuine strength in our
democratic society.
4. provide a more vigorous and systematic land resettlement
program and public land distribution

Salient features of the Code of Agrarian Reforms

1. Abolished the share tenancy system and replaced it with

agricultural leasehold
2. Established a bill of rights for agricultural workers
3. Established DAR as the machinery for the acquisition and
distribution of agricultural land
4. Established the Land Bank as the financial arm of the agrarian
reform program

Share Tenancy

2 persons agree on joint undertaking of agricultural production; the

other furnishes the land and the other his labor

Agricultural Leasehold

Farmer cultivates the land belonging to or possesed by another with

the latters consent for a price certain in money or in produce or in
both
Situations WHEN a LEASEHOLD RELATIONSHIP may EXIST

1. the area retained by the landowner is tenanted

2. the farmer beneficiary leases the land awarded to him to
another person
3. the farmer beneficiary leases the land awarded to him back to
the former owner of the land
4. land awarded to a farmers cooperative or association is leased
to agricultural corporations

When leasehold principles may apply

1. farmers whose tenancy relations were automatically converted

to leasehold by virtue of the Code of Agrarian Reforms
2. tenanted lands that were retained by the landowner, which
were automatically converted to leasehold by virtue of the
Comprehensive Agrarian Reform Law

Forms of Lease Agreement

requires no particular form

can be oral or written
lessor need not be the owner of the land

In case Lease Agreement is in writing

1. drawn in quadruplicate in a language or dialect known to the

agricultural lessee;
2. signed or thumbed mark by the parties between two witnesses
chosen by each party;
3. acknowledged before the municipal court of the municipality
where the land is situated;
4. registered with the Municipal Treasurer

Terms and Conditions of the Lease Contract

The agricultural lessor and the agricultural lessee are free to
enter into any kind of term, condition, or stipulation in a leasehold
contract, as long as they are not contrary to law, morals, or public
policy.
The following are stipulations contrary to law, morals, or public
policy:
 1. Stipulation requiring agricultural lessee to pay excessive rental;
2. Stipulation requiring the agricultural lessee to pay an amount in
an excess of the fair rental value for the use of the lessors work
animals or farm implements;
3. Stipulation requiring the agricultural lessee to rent work animals
or to hire farm implements from the agricultural lessor or a third
person;
4. Stipulation requiring the agricultural lessee to make use of any
store or services operated by the agricultural lessor or a third
person;
5. Stipulation requiring the agricultural lessee to render any
service other than his duties and obligations as lessee, with or
without compensation
6. Stipulation requiring the agricultural lessee to answer for any
fine, deductions and/or assessments; or
7. Stipulation requiring the agricultural lessee to accept a loan or
to make payment therefor in kind.

Mode of Payment
The rental may be paid by the agricultural lessee:
1. In money
It should be paid within a reasonable time from threshing or
processing.
1. In produce
It should be paid immediately after threshing or processing.
2. Both

Term of the Lease

The term of the lease is indefinite.
Reason: Agricultural lessees-farmers are entitled to security of
tenure.

Expiration of the Lease Contract Does Not Terminate the

Leasehold Relation
Agricultural leasehold relationship is not an ordinary contractual
relation. Thus, the mere fact that the agreed lease period has expired
will not result in the termination of the leasehold relationship. Section
10 of the Code of Agrarian Reforms provides:
Section 10.Agricultural Leasehold Relation Not
Extinguished by Expiration of Period, etc. - The agricultural
leasehold relation under this Code shall not be extinguished by
mere expiration of the term or period in a leasehold contract nor
 by the sale, alienation or transfer of the legal possession of the
landholding. In case the agricultural lessor sells, alienates or
transfers the legal possession of the landholding, the purchaser
or transferee thereof shall be subrogated to the rights and
substituted to the obligations of the agricultural lessor.
Neither will the expiration of the lease contract authorize the
landowner to increase the rentals, unless the landowner introduces
capital improvements to increase its productivity, in which case the
rental may be increased proportionately to the consequent increase
in production due to said improvements.

Transfer of Ownership of the Land Does Not Terminate the

Leasehikd Relation
If the landowner-lessor sells or transfers or transfers ownership
of the land, the leasehold relationship is not extinguished. The buyer
or transferee becomes the lessor.

Death of Physical Incapacity of the Lessee Does Not Terminate

the Leasehold Relation
If the lessee dies or becomes incapacitated, the leasehold
relations is not extinguished, but he may be succeeded either by the
following:
1. The surviving spouse;
2. The eldest direct descendant by consanguinity; or
3. The next eldest descendant or descendants in the order of their
age.
If none of the above exists, or if the above persons are not
willing to cultivate the land, the leasehold relations is extinguished.
Section 9 of the Code of Agrarian Reforms, as amended, provides:
Section 9. Agricultural Leasehold Relation Not
Extinguished by Death or Incapacity of the Parties - In case of
death or permanent incapacity of the agricultural lessee to work
his landholding, the leasehold shall continue between the
agricultural lessor and the person who can cultivate the
landholding personally, chosen by the agricultural lessor within
one month from such death or permanent incapacity, from
among the following: (a) the surviving spouse; (b) the eldest
direct descendant by consanguinity; or (c) the next eldest
descendant or descendants in the order of their age: Provided,
That in case the death or permanent incapacity of the
agricultural lessee occurs during the agricultural year, such
choice shall be exercised at the end of that agricultural year:
 Provided, further, That in the event the agricultural lessor fails
to exercise his choice within the periods herein provided, the
priority shall be in accordance with the order herein established.
In case of death or permanent incapacity of the
agricultural lessor, the leasehold shall bind his legal heirs.

When the Agricultural Leasehold is Extinguished

The agricultural leasehold, established under the Code of
Agrarian Reforms, is extinguished by:
1. Abandonment of the landholding without knowledge of the
agricultural lessor;
2. Voluntary surrender of the landholding by the agricultural
lessee; or
3. Absence of the persons under Section 9 to succeed to the
lessee, in the event of death or permanent incapacity of the
lessee.

What constitutes abandonment of landholding?

1. There must be intent to abandon
2. There must be actual act of abandonment

What constitutes voluntary surrender

The decision must not be influenced by any compelling factor
from the landowner
The farmer lessee must serve three (3) months advance notice

Causes of termination of leasehold by agricultural lessee

Cruel, inhumane or offensive, treatment of the agricultural
lessee or any member of his immediate farm household by the
agricultural lessor.
Non-compliance on the part of the agricultural lessee with any
of his obligations under the Code of Agrarian Reform or under
the lease agreement.
Compulsion of the agricultural lessee or any member of his
immediate farm household by the agricultural lessor to render
any service not in any way connected with farm work, or even
without compulsion if no compensation is paid
 Commission of a crime by the agricultural lessor or his
representative against the agricultural lessee or any member of
his immediate farm household
Voluntary surrender due to circumstances more advantageous
to him and his family.

Grounds for Dispossession

(a) The land has been declared by the appropriate government
agency to be suited for residential, commercial, industrial or for
some other urban purposes.
(b) Failure of the agricultural lessee to substantially comply with
any of the terms and conditions of the lease contract or any of
the provisions of the Code of Agrarian Reform
(c) The agricultural lessee planted crops or used the landholding
for a purpose other than what had been previously agreed
upon.
(d) The agricultural lessee failed to adopt proven farm practices as
determined under paragraph 3, Section 29 of the Code of
Agrarian Reform
(e) The land or other substantial permanent improvement thereon
is substantially damaged or destroyed or has unreasonably
deteriorated through the fault or negligence of the agricultural
lessee
(f) The agricultural lessee does not pay the lease rental when it
falls due
(g) The lessee employed a sub-lessee on his landholding

Obligations of the agricultural lessor

Keep the agricultural lessee in peaceful possession and
cultivation of his landholding
Keep intact such permanent useful improvements existing on
the landholding at the start of the leasehold relation

Obligations of the agricultural lessee

Cultivate and take care of the farm in accordance with proven
farm practices
 Inform the agricultural lessor within a reasonable time of any
trespass committed
Take reasonable care of the work animals
Keep his farm and growing crops attended during the work
season
Notify the agricultural lessor at least three days before the date
of harvesting or, whenever applicable, threshing;
Pay the lease rental

RIGHTS OF THE AGRICULTURAL LESSOR:

Section 29 of the Code of Agrarian Reform provides for the

Right of the Agricultural lessor. The agricultural lessor can exercise
the right provided as long as it does not interfere with the lessees
peaceful possession of the landholding.

Hence, Section 29 of the said Code provides:

Section 29.Rights of the Agricultural Lessor - It shall be the

right of the agricultural lessor:

(1) To inspect and observe the extent of compliance with

the terms and conditions of their contract and the provisions
of this Chapter;

(2) To propose a change in the use of the landholding to

other agricultural purposes, or in the kind of crops to be
planted: Provided, That in case of disagreement as to the
proposed change, the same shall be settled by the Court
according to the best interest of the parties concerned:
Provided, further, That in no case shall an agricultural lessee
be ejected as a consequence of the conversion of the land to
some other agricultural purpose or because of a change in
the crop to be planted;

(3) To require the agricultural lessee, taking into

consideration his financial capacity and the credit facilities
available to him, to adopt in his farm proven farm practices
necessary to the conservation of the land, improvement of its
fertility and increase of its productivity: Provided, That in
case of disagreement as to what proven farm practice the
lessee shall adopt, the same shall be settled by the Court
according to the best interest of the parties concerned; and
 (4) To mortgage expected rentals.

RIGHTS OF AGRICULTURAL LESSEE

The rights of and agricultural lessee is provided under Section

23 and 24 of the Code of Agrarian Reform.

Section 23.Rights of Agricultural Lessee in General - It

shall be the right of the agricultural lessee:

(1) To have possession and peaceful enjoyment of the

land;

(2) To manage and work on the land in a manner and

method of cultivation and harvest which conform to proven
farm practices;

(3) To mechanize all or any phase of his farm work; and

(4) To deal with millers and processors and attend to the
issuance of quedans and warehouse receipts for the
produce due him.

Section 24.Right to a Home Lot - The agricultural lessee

shall have the right to continue in the exclusive possession
and enjoyment of any home lot he may have occupied upon
the effectivity of this Code, which shall be considered as
included in the leasehold.

The Rights of an agricultural lessee is provided in the above

mentioned rule of the Code of Agrarian Reform. It is said that RA
3844 usually favor the lessee as stated in the case of Castillo vs.
Tolentino (580 SCRA 629G.R. No. 181525.March 4, 2009.)where
Petitioner constructed a water reservoir for the irrigation system
despite Respondents disagreement. Hence, the Court ruled in the
said case that before the agricultural lessee may use the leasehold
for a purpose other than what had been agreed upon, the consent of
the agricultural lessor must be obtained, lest he be dispossessed of
his leasehold. The law does not give blanket authority to the
agricultural lessee to construct an irrigation system at anytime and for
any reason; instead, it presupposes primarily that the same is
necessary.

The agricultural lessee may have been given rights by the law
but the same cannot be used to justify his acts which would be to the
detriment of the lessor. What he can exercise to his benefits cannot
go beyond the bounds intended by the right given as it will result to
the detriment of another.

RIGHT OF LESSEE TO BE INDEMNIFIED FOR HIS LABOR

Section 25 of the Code of Agrarian Reform provides for the

right of lessee to be indemnified for his labor. If the agricultural lessee
surrenders, abandons or is validly ejected from his landholding, he is
entitled to be indemnified for the cost and expenses he incurred for
cultivation and improvement. Also, he is entitled for one-half of the
necessary and useful improvements made by him in the landholding
which are tangible.

Section 25.Right to be Indemnified for Labor - The

agricultural lessee shall have the right to 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 is 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
and have not yet lost their utility at the time of surrender
and/or abandonment of the landholding, at which time their
value shall be determined for the purpose of the indemnity
for improvements.

RIGHT OF PRE-EMPTION

The agricultural lessee has the preferential right to buy the land
actually cultivated by him under reasonable terms and conditions.
Therefore, if the agricultural lessor decides to sell the landholding, he
should give notice to: (a) the Department of Agrarian Reform; and (b)
all the lessees affected.

If the the agricultural lessee agrees with the terms and

conditions of the sale, he must give written notice to the agricultural
lessor of his intention to exercise his right of pre-emption, and
thereafter tender payment of, or present a guarantee certificate from
the Land Bank to the agricultural lessor. If the lessor refuses to
accept such tender or presentment, he may consign it with the court.

Any dispute as to the reasonableness of the terms and

conditions may be brought by the lessee or by the Department of
Agrarian Reform to the proper court. Hence, Section 11 of the
Agrarian Reforms, as amended provides:
"Sec. 11. Lessee's Right of Pre-emption. - In case the
agricultural lessor decides to sell the landholding, the
agricultural lessee shall have the preferential right to buy the
same under reasonable terms and conditions: Provided,
That the entire landholding offered for sale must be pre-
empted by the Department of Agrarian Reform upon petition
of the lessee or any of them: Provided, further, That where
there are two or more agricultural lessees, each shall be
entitled to said preferential right only to the extent of the area
actually cultivated by him. The right of pre-emption under
this Section may be exercised within one hundred eighty
days from notice in writing, which shall be served by the
owner on all lessees affected and the Department of
Agrarian Reform.

"If the agricultural lessee agrees with the terms and

conditions of the sale, he must give notice in writing to the
agricultural lessor of his intention to exercise his right of pre-
emption within the balance of one hundred eighty day's
period still available to him, but in any case not less than
thirty days. He must either tender payment of, or present a
certificate from the land bank that it shall make payment
pursuant to section eighty of this Code on, the price of the
landholding to the agricultural lessor. If the latter refuses to
accept such tender or presentment, he may consign it with
the court.

"Any dispute as to the reasonableness of the terms and

conditions may be brought by the lessee or by the
Department of Agrarian Reform to the proper Court of
Agrarian Relations which shall decide the same within sixty
days from the date of the filing thereof: Provided, That upon
finality of the decision of the Court of Agrarian Relations, the
Land Bank shall pay to the agricultural lessor the price fixed
by the court within one hundred twenty days: Provided,
further, That in case the Land Bank fails to pay within that
period, the principal shall earn an interest equivalent to the
prime bank rate existing at the time.

"Upon the filing of the corresponding petition or request with

the department or corresponding case in court by the
agricultural lessee or lessees, the said period of one
hundred and eighty days shall cease to run.

"Any petition or request for pre-emption shall be solved

within sixty days from the filing thereof; otherwise, the said
period shall start to run again.
 The Register of Deed will not register or issue a Transfer
Certificate of Title without a sworn statement from the vendor
(landowner) that he has given the required notice to the lessee or that
the land is not covered by an agricultural lease.

Hence, Section 13 of the Code of Agrarian Reforms provides.

Section 13.Affidavit Required in Sale of Land Subject to

Right of Pre-emption - No deed of sale of agricultural land
under cultivation by an agricultural lessee or lessees shall be
recorded in the Registry of Property unless accompanied by
an affidavit of the vendor that he has given the written notice
required in Section eleven of this Chapter or that the land is
not worked by an agricultural lessee.

Agricultural workers have the following rights:

1. Right To Self Organization
2. Right To Engage In Concerted Activities
3. Right To Minimum Wage
4. Right To Work For Not More Than Eight Hours
5. Right To Compensation For Personal Injuries, Death Or Illness;
And
6. Right To Security Of Tenure

The following are the prohibited acts agricultural lessor:

1. To dispossess the agricultural lessee of his land holding without
just cause;
2. To require the agricultural lessee to assume the payment of the
taxes or part thereof levied by the government on the
landholding;
3. To require the agricultural lessee to assume any part of the
rent, canon or other consideration which the agricultural lessor
is under obligation to pay to third persons for the use of the
land;
4. 4. To deal with millers or processors without written
authorization of the lessee in cases where the crop has to be
sold in processed form before payment of the rental; or
 5. 5. To discourage, directly or indirectly, the formation,
maintenance or growth on unions or organizations of
agricultural lessees in his landholding, or to initiate, dominate,
assist or interfere in the formation or administration of any such
union or organization

The following are the prohibited of agricultural lessee:

1. To work additional landholdings belonging to a different
agricultural lessor; and
2. To employ a sub-lessee on his landholding

A loan obtained by an agricultural lessee is enforceable only

when the following requirements are met:
1. Must be written in a language or dialect known to the
agricultural lessee; and
2. Must be signed or thumb-marked by the agricultural lessee or
by his agent

The following properties of the lessee are exempt from liens or

execution:
1. 25% of the entire produce of the land under cultivation; and
2. Work animals and farm implements, except upon a judgement
for its price or upon a judgement of foreclosure of a mortgage

Prescription of Action
An action to enforce the rights and obligations under the Code
of Agrarian Reform is three (3) years reckoned from the time the
cause of action accrued.