BUENSUCESO, Veronica E. CARLOS, Ma. Christine D. ESTRABINIO, Arniesa Mari GONZAGA, Marge Rea Erma C.

3CE B 13C: AGRARIAN REFORM

AGRARIAN REFORM Being a factor of production, laws involving land especially agrarian reform laws were made to increase economic stability of the people especially the farmers. Land reform laws were first implemented under the governance of the former President Diosdado Macapagal and President Ferdinand Marcos. But because of too many conflicts the land reform law became a failure, which gave way to R.A. No. 6657 or the Comprehensive Agrarian Reform Law signed by the former President Corazon C. Aquino and under it the Comprehensive Agrarian Reform Program was established. The Department of Agrarian Reform (DAR) is the one responsible for managing issues and things about agrarian reform.

LAND REFORM VS. AGRARIAN REFORM Most of the time people tend to think that land reform and agrarian reform are the same but no they are not. Land Reform is only concerned with the farmers relationship to the land that he is tilling while Agrarian Reform is concern with the totality of the farmers development in terms of economic, social and political developments. The Agrarian Reform is Comprehensive in terms of: 1. Concept does not only provide distribution of land but also support services for both farmers and landowners. 2. Coverage covers both public and private lands regardless of the crops planted. 3. Beneficiaries Both farmers and landowners benefit from the law. Due to unmet goals of the CARP upon its expiration in year 2008, Comprehensive Agrarian Reform Program Extension with Reforms (CARPER) or R.A. No. 9700 has been implemented in 2009 during the term of former President Gloria Macapagal-Arroyo and is set to expire in year 2014.

PRINCIPLES BEHIND AGRARIAN REFORM 1. SOCIAL JUSTICE it means having equality on having lands especially the farmers who cannot afford to buy one. 2. JUST COMPENSATION not only the farmers benefit from the program but also land owners. The land owners are paid by the full amount of the land based fair market value considered from the land valuation process.

RETENTION LIMIT OF A LAND OWNER It is the size of land a land owner is allowed to have, Section 6 of R.A. No. 6657 states that a land owner is only allowed to have a maximum of 5 hectares of land and that each child of the land owner can have 3 hectares provided that the child is at least 15 years old. On the other hand PD 27 states that a land owner may have not more than 7 hectares of land if the owner is tilling or will till the land. While original owners or heirs who still own the land have 24 hectares as long as they continue to till the land.

SCOPE, EXEMPTIONS AND EXCLUSIONS OF THE COMPREHENSIVE AGRARIAN REFORM PROGRAM CARP shall cover all public and private lands and other lands of the public domain allotted for or suitable for agriculture. Covered Lands: 1. 2. 3. 4. Government-owned lands Alienable and Disposable Lands Private Lands Public Domain Lands

Exempted Lands: 1. Lands used for or reserved for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves. 2. Private Lands used for prawn farms and fish ponds provided that it had not been issued a Certificate of Land Ownership Award (CLOA) to CARP Beneficiaries. 3. Lands used for national defense, schools and campuses, experimental farm stations, seeds and seedling research, pilot production center, church sites, convents, mosque

sites, Islamic centers, burial grounds and cemeteries, penal colonies and farms, research quarantine centers and all lands with eighteen percent slope. 4. All lands tilled buy original owners and heirs. 5. Lands used for raising livestock such as chicken, cow and pigs. After the Government has acquired the land, the land owner can choose on how he or she would like the government to compensate him or her. These different modes are: 1. Cash payment, given the following conditions: a. Lands above fifty (50) hectares will be paid twenty-five percent (25%) cash and remaining balance shall be paid through government financial instruments. b. Lands above twenty-four (24) hectares up to fifty (50) hectares will be paid thirty percent (30%) cash and remaining balance will be paid through government financial instruments. c. Lands twenty-four (24) hectares and below will be paid thirty-five percent (35%) cash and remaining balance will be paid through government financial instruments. 2. Shares of stock in government-owned or controlled corporations such as NAIA, NFA, NHA and more. 3. Tax credits which can be used to pay tax liabilities. 4. Land Bank of the Philippines (LBP) Bonds which include the following: 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 date of issuance until the tenth year. b. Transferability and negotiability. If the LBP bonds may be used by the land owner for any of the following: b. 1. Acquisition of land or other real properties of the government including assets. b. 2. Acquisition of shares of stocks of government-owned or controlled corporations b. 3. In exchange for surety or bail bonds for release of accused persons b. 4. Security for loans with any government financial institutions provided that it would be used in an economic enterprise. b. 5. Payment for taxes and other fees to the government. b. 6. Payment of tuition fees for immediate family members of bond holder in government schools and institutions. b. 7. Payment of fees in government hospitals b. 8. And other uses as the PARC may allow.

LAND VALUATION LBP is responsible for determining the value and compensation of all private agricultural lands under voluntary offer to sell (VOS) and compulsory Acquisition (CA). Land Valuation in the total cost of the land agreed by both parties and to be paid in cash or in kind. FACTORS TO BE CONSIDERED WHEN COMPUTING LAND VALUE: 1. Comparable Sales (CS) average of all applicable factors such as sales transaction, acquisition cost and market value based on mortgage price. 2. Capitalized Net Income (CNI) difference between the product of the annual gross production and selling price minus the total cost of operation at 12%. 3. Market Value (MW) per tax declaration latest tax declaration and schedule of unit market value. FORMULAS IN DETERMINING LAND VALUE: 1. Land value is considered as the sum of the CS, CNI and MW weighted 60%, 30% and 10% respectively and all other factors are present. ( ) ( ) ( )

where: LV Land Value CNI Capitalized Net Income, difference between the product of the annual gross production and selling price minus the total cost of operation at 12%. ( )

CS Comparable Sales, average of all applicable factors such as sales transaction, acquisition cost and market value based on mortgage price. MV Market Value per Tax Declaration, latest tax declaration and schedule of unit market value. AGP Average Gross Production, one year average gross production. SP Selling Price, average prices CO Cost of Operation, whenever it is not obtainable a net income rate (NIR) of 20% shall be use and a NIR of 70% for lands connected to coconut planting. 12% - Capitalization rate

2. When CS is missing and CNI and MV are present. ( ) ( )

3. When CNI is missing and CS and MV are present ( ) ( )

4. When CS and CNI is missing and only MV is present

As to VOS lands the landowner can give a selling price which is known as the Declared Value (DV). Whichever is lower between the computed price and the declared value shall be adopted for compensating the land owner.

WAYS TO ACQUIRE LANDHOLDINGS FOR DISTRIBUTION UNDER CARP AND LAND REDISTRIBUTION 1. Compulsory Acquisition (CA) these are lands mandatorily demanded by the government of all agricultural lands. This is done when VOS and Voluntary Land Transfer is not possible. 2. Voluntary Offer to Sell (VOL) land owner voluntarily sells the land. 3. Voluntary Land Transfer (VLT) direct transaction between landowner, beneficiaries and CARP. 4. Executed Order 407 of 1990 directs all government instrumentalities and financial institutions to immediately transfer to DAR all their holding suitable for distribution. 5. Operation Land Transfer Ownership of tenanted lands are transferred to tenant beneficiaries. KINDS OF TENANT PRACTICE Different types of tenant practice before and after implementation of CARP.

1. Cash Tenant farmers pays in cash as rent for their use of the land. Example: P10,000 per hectare 2. Share of Produce Tenant the farmer gives the land owner a portion of their harvest. Example: 20 sacks of palay per hectare

3. Cash and share-of-produce Tenant farmer pays a combination of cash and portion of harvest. Example: farmer is to pay 50% in cash and 50% in produce 4. Fixed-amount-of-produce-Tenant the farmer is to pay a certain amount of harvest regardless of the amount harvested. Example: 1/3 or 33% of the total harvest 5. Cash and fixed-amount-of-produce Tenant pays a combination of cash and portion of harvest regardless of the amount harvested. Example: farmer is to pay 50% in cash and 50% in produce 6. Rent-free Tenants are farmers tilling the land with the knowledge of the owner but free of rent.