Miguel, Anna Patricia R.

2017-2297

Chapter 3
The Code of Agrarian Reforms – Republic Act 3844

History

The Agricultural Land Reform Code was an administration bill submitted by

President Diosdado Macapagal and it was enacted in August 8, 1963.

Objective

To create a system of owner-cultivatorship and economic family-sized farms as

basis of Philippine agriculture.

Salient Features

1. It abolished the share tenancy system and replaced it with agricultural leasehold;
2. It established a bill of rights for agricultural workers;
3. It established the Department of Agrarian Reform as the machinery for sequisition
and distribution of agricultural land; and
4. It established the Land Bank as the financial arm of the agrarian reform program.

Share Tenancy

Share tenancy is a situation where two persons agree on a joint undertaking for
agricultural production wherein one party furnishes he land and the other his labor, with
either or both, contributing one or several of the items of production, the tenant cultivating
the land personally with the aid of labor available from members of his immediate farm
household, and the produce thereof to be divided between the land owner and the tenant.

Existence of Leasehold Relationship

1. In case the area retained by the landowner is tenanted;

2. In case the farmer-beneficiary leases the land awarded to him to another person;
3. In case the farmer-beneficiary leases the land awarded to him back to the former
owner of the land;
4. In case the land awarded to a farmer’s cooperative or association is leased to an
agricultural corporation.

Form of Lease Contract

No particular form is required to form the leasehold relationship; the contract may
be oral or written. Should the parties agree to reduce their agreement into writing, the
agricultural leasehold contract shall be:
 1. Drawn in quadruplicate in a language or dialect known to the agricultural lessee;
2. Signed or thumbmarked by the agricultural lessee personally and the agricultural
lessor before two witnesses, to be chosen by each party;
3. Acknowledged before the municipal court of the municipality where the land is
situated; and
4. Registered with the Municipal Treasurer.

Terms and Conditions of the Lease Contract

The parties are free to enter into any kind of term, condition, or stipulation in a
leasehold contract, provided they are not contrary to law, morals, or public policy. The
following are contrary to law, morals, or public policy:

1. Stipulation requiring the agricultural lessee to pay excessive rental;

2. Stipulation requiring the agricultural lessee to pay an amount in excess of the fair
rental value for the use of the lessor’s work animals and 5% for implements;
3. Stipulation requiring the agricultural lessee to rent work animals or hire farm
implements from the agricultural lessor or third persons;
4. Stipulation requiring the agricultural lessee to make use of any store or services
operated by the agricultural lessee or third persons;
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, or
assessments; and
7. Stipulation requiring the agricultural lessee to make a loan or to make payment
therefor in kind.

Mode of Payment of Rental

1. Money – should be paid within a reasonable time from thrashing or

processing;
2. Produce – should be paid immediately after thrashing or processing; or
3. Both

Term of the Lease

INDEFINITE – Until the lessee is terminated for cause.

Expiration of lease contract does not terminate the leasehold relation

 Agricultural leasehold relationship is not an ordinary contractual relation.

 The fact that the agreed lease period has expired will not result in the termination
of the leasehold relationship.
 The expiration of the contract does not permit the landowner to increase rentals
unless he introduces capital improvements to increase its productivity.
 Transfer of Ownership

If the landowner-lessor sells or transfers ownership of the land, the leasehold

relationship is not extinguished. The buyer or transferee becomes the lessor.

Death or incapacity of the lessee

Death or incapacity of the lessee does not extinguish the leasehold relations. The
lessor must choose a successor among the following if they are willing to cultivate the
land:

1. The surviving spouse;

2. The eldest direct descendant by sanguinity;
3. The next eldest descendant or descendants in the order of their age.

If none of the above exist or if the persons are not willing to cultivate the land, then
the leasehold is extinguished.

When the agricultural leasehold is extinguished

1. Abandonment of the landholding without the knowledge of the agricultural land

owner
a. There must be intent to abandon;
b. There must be an actual act of abandonment
2. Voluntary surrender of the landholding
a. The surrender of the landholding must be voluntary on the part of the farmer-
lessee;
b. The farmer lessee must serve three (3) months advance notice
3. Absence of the persons under Section 9 to succeed the lessee in the event of
death or permanent incapacity of the lessee

Termination of Leasehold by the agricultural lessee

1. Cruel, inhumane, or offensive treatment of the agricultural lessee or any member

of his immediate farm household by the agricultural lessor;
2. Non-compliance on the part of the agricultural lessor with any of his obligations
under the Code of Agrarian Reforms or under the lease contract;
3. 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 not compensation is paid;
4. Commission of a crime by the agricultural lessor or his representative against the
agricultural lessee or any member of his immediate farm household;
5. Voluntary surrender due to circumstances more advantageous to him and his
family.
 Dispossession

The lessee may be dispossessed of the landholding on the following grounds:

1. The land has been declared by the appropriate government agency to be suited
for residential, commercial, industrial or some other urban purpose;
2. 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;
3. The agricultural lessee planted crops or used the landholding for a purpose other
than what had been previously agreed upon;
4. The agricultural lessee failed to adopt proven farm practices as determined under
Paragraph 3, Section 29 of the Code of Agrarian Reforms;
5. The land or others substantial permanent improvement thereon is substantially
damaged or destroyed or has unreasonably deteriorated through the fault or
negligence of the agricultural lessee;
6. The agricultural lessee does not pay the lease rental when it falls due;
7. The lessee employed a sub-lessee on his land holding.