CHAPTER 1

COMPREHENSIVE AGRARIAN REFORM LAW OF 1998

(REPUBLIC ACT NO. 6657)

(As amended by Republic Act Nos. 7881, 7905, 8532 and 9700)
AN ACT INSTITUTING A COMPREHENSIVE AGRARIAN REFORM PROGRAM TO PROMOTE SOCIAL JUSTICE
AND INDUSTRIALIZATION, PROVIDING THE MECHANISM FOR ITS IMPLEMENTATION, AND FOR OTHER
PURPOSES

INTRODUCTION
Agrarian Law

The term “agrarian” is derived from the Latin word “ager” which means a field. Lexically, the word agrarian means
“relating to land or to the ownership or division of land”.

Agrarian Law, therefore, basically refers to the distribution of public agricultural lands, large estates, and regulation of
the relationship between the landowner and the farmer who works on the land. It embraces all laws that govern and
regulate the rights and relationship over agricultural lands between landowners, tenants, lessees or agricultural
workers.

Presently, the focus of agrarian laws is on agrarian reform, the thrust of which is the redistribution of agricultural lands.
Our basic law on Agrarian Reform is the Comprehensive Agrarian Reform Law, supplemented by the Tenant
Emancipation Law and the Code of Agrarian Reforms.

The primary objective of the agrarian reform program is to breakup agricultural lands and transform them into
economic-size farms to be owned by the farmers themselves, with the end in view of uplifting their socio-economic
status.

The agrarian reform program is founded on the right of the farmers and regular farm workers who are landless, to own
directly or collectively the lands they till or, in the case of other farm workers, to receive a just share in the fruits thereof.

History

PERIOD LAW PARTICULARS

Spanish Era Civil Code, particularly by Governs the relationship between

the Special Provisions for landowners and tenants
Rural Leases
American Regime Rice Share Tenancy Act Regulates the relationship between
(Act 4054) landlords and tenants on rice lands.

Sugar Tenancy Act (Act Regulates the relationship between

4113) landlords and tenants on lands planted
to sugar cane.
Commonwealth Commonwealth Act 53 Recognized the testimony of the tenant
Period as prima facie evidence of the terms of a
tenancy contract that was not reduced in
writing in a language known to him.

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PERIOD LAW PARTICULARS

Commonwealth Commonwealth Act 178 Enacted to revise the provisions of the

Period Rice Tenancy Act.

Commonwealth Act 271 Enacted to amend Sugar Tenancy Act by

extending its application to sugar farm
workers.
Commonwealth Act 461 Enacted to provide security of tenure to
agricultural tenants.

Commonwealth Act 608 Amended Commonwealth Act 608.

After the grant of Republic Act (RA) No. 34 Amended the Rice Tenancy Act by
Independence introducing changes in crop division.

Agricultural Share Repealed all the earlier tenancy laws

Tenancy Act (RA No. 1199) except the Sugar Tenancy Act.

RA No. 1400 Set the motion of expropriation of all

tenanted estates

RA No. 2263 Amended RA No. 34

Agricultural Land Reform Abolished share tenancy. Instituted the

Code (RA No. 3844) agricultural leasehold system

Code of Agrarian Reforms Amended RA 3844

(RA No. 6389)

After the declaration Tenant Emancipation Law ( Provided for the transfer of lands
of Martial Law PD No. 27) primarily devoted to rice and corn to the
tenants
PD No. 946 The Court of Agrarian Relations was
reorganized

PD No. 1038 Strengthen the Security of tenure of

tenants in non-rice or corn agricultural
lands.
PD Nos. 251, 444, 1039, and Amended the Code of Agrarian Reforms.
1817

After Martial Law Executive Order (EO) 228 Declared full land ownership in favor of
beneficiaries under PD No.27.

EO 229 Provided the mechanics for the

implementation of EO 228.

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 PERIOD LAW PARTICULARS

Proclamation No. 131 Instituted a comprehensive agrarian

reform program.

Comprehensive Agrarian Instituted a comprehensive agrarian

Reform Law of 1998 (RA reform program to promote social
No. 6657) justice and industrialization, providing
the mechanism for its implementation,
and for other purposes
RA Nos. 7881, 7905, 8532 Amended certain provisions of RA No.
and 9700 6657.

SECTION 1. Title – This Act shall be known as the Comprehensive Agrarian Reform Law of 1998.

Social Justice is "neither communism, nor despotism, nor atomism, nor anarchy," but the humanization of laws and
the equalization of social and economic forces by the State so that justice in its rational and objectively secular
conception may at least be approximated. It means the promotion of the welfare of all the people, the adoption by the
Government of measures calculated to insure economic stability of all the competent elements of society, through the
maintenance of a proper economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through the exercise of
powers underlying the existence of all governments on the time-honored principle of salus populi est suprema lex.
(Calalang vs. Williams)

Applicability of the Comprehensive Agrarian Reform Law

The Comprehensive Agrarian Reform Law applies only to agricultural lands. It does not apply to lands classified as
residential, commercial, industrial, mineral, or forest land.

NATALIA vs. DAR

Facts: Natalia Realty, Inc, (NATALIA) is the owner of a 125- hectare land in Antipolo, Rizal.
On April 18, 1979, Presidential Proclamation No. 1637 set aside 20,312 hectares of lnd located
in Antipolo, San Mateo and Montalban as townsite areas to absorb the population overspill in
the metropolis. The NATALIA properties were situated within the areas proclaimed as townsite
reservation.

Private landowners were allowed to develop their properties into low-cost housing subdivisions
within the reservation. The Human Settlements Regulatory Commission (now Housing and
Land Use Regulatory Board) granted NATALIA the necessary permit to develop the land into
a subdivision.

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 When the Comprehensive Agrarian Reform Law took effect on June 15, 1988, the Department
of Agrarian Reform issued a Notice of Coverage on the undeveloped portions of the
subdivision. NATALIA sought the cancellation of the notice of the Coverage on the ground that
the land in question ceased to be agricultural lands when President Proclamation No. 1637
transformed it into a town site reservation.

Issue: Whether or not the undeveloped portions of the NATALIA properties are covered by
the Comprehensive Agrarian Reform Law.

Held: The undeveloped portions of the NATALIA properties are not covered by the
Comprehensive Agrarian Reform Law because they are not agricultural lands. Agricultural
lands do not include commercial, industrial or residential lands. The NATALIA properties
ceased to be agricultural lands upon approval of their inclusion in the townsite reservation.

Meaning of Agricultural Land

Agricultural land refers to land devoted to agricultural activities. It contemplates lands that are arable and suitable for
farming.

LUZ FARMS vs. SECRETARY OF AGRARIAN REFORM

Facts: On 10 June 1988, RA 6657 was approved by the President of the Philippines, which
includes, among others, the raising of livestock, poultry and swine in its coverage. Petitioner
Luz Farms, a corporation engaged in the livestock and poultry business, avers that it would be
adversely affected by the enforcement of sections 3(b), 11, 13, 16 (d), 17 and 32 of the said
law. Hence, it prayed that the said law be declared unconstitutional. The mentioned sections
of the law provide, among others, the product-sharing plan, including those engaged in
livestock and poultry business. Luz Farms further argued that livestock or poultry raising is not
similar with crop or tree farming. That the land is not the primary resource in this undertaking
and represents no more than 5% of the total investments of commercial livestock and poultry
raisers. That the land is incidental but not the principal factor or consideration in their industry.
Hence, it argued that it should not be included in the coverage of RA 6657 which covers
“agricultural lands”.

Issue: Whether or not certain provisions of RA 6657 is unconstitutional for including in its
definition of “Agriculture” the livestock and poultry industry.

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
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 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). 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 lands.

Constitutionality of the Agrarian Reform Law

The Comprehensive Agrarian Reform law is not unconstitutional because it is a valid exercise of police power.

ASSOCIATION OF SMALL LAND OWNERS

vs. SEC. OF AGRARIAN REFORM

Facts: Several petitions are the root of the case: a. A petition alleging the constitutionality of
PD No. 27, EO 228 and 229 and RA 6657. Subjects of the petition are a 9-hectare and 5
hectare Riceland worked by four tenants. Tenants were declared full owners by EO 228 as
qualified farmers under PD 27. The petitioners now contend that President Aquino usurped
the legislature’s power. b. A petition by landowners and sugar planters in Victoria’s Mill Negros
Occidental against Proclamation 131 and EO 229. Proclamation 131 is the creation of Agrarian
Reform Fund with initial fund of P50Billion. c. A petition by owners of land which was placed
by the DAR under the coverage of Operation Land Transfer. d. A petition invoking the right of
retention under PD 27 to owners of rice and corn lands not exceeding seven hectares.

Issue: Whether or not RA 6657 is constitutional.

Held: RA 6657 is a valid exercise of police power. The carrying out of the regulation under
CARP becomes necessary to deprive owners of whatever lands they may own in excess of
the maximum area allowed, there is definitely a taking under the power of eminent domain for
which payment of just compensation is imperative. The taking contemplated is not a mere

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 limitation of the use of the land. What is required is the surrender of the title and the physical
possession of said excess and all beneficial rights accruing to the owner in favor of the farmer.
A statute may be sustained under the police power only if there is concurrence of the lawful
subject and the method. Subject and purpose of the Agrarian Reform Law is valid.

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.

The State shall promote industrialization and full employment based on sound agricultural development and
agrarian reform, through industries that make full and efficient use of human and natural resources, and
which are competitive in both domestic and foreign markets: Provided, That the conversion of agricultural
lands into industrial, commercial or residential lands shall take into account, tillers' rights and national food
security. Further, the State shall protect Filipino enterprises against unfair foreign competition and trade
practices.

The State recognizes that there is not enough agricultural land to be divided and distributed to each farmer
and regular farmworker so that each one can own his/her economic-size family farm. This being the case, a
meaningful agrarian reform program to uplift the lives and economic status of the farmer and his/her children
can only be achieved through simultaneous industrialization aimed at developing a self-reliant and
independent national economy effectively controlled by Filipinos.

To this end, the State may, in the interest of national welfare or defense, establish and operate vital industries.

A more equitable distribution and ownership of land, with due regard to the rights of landowners to just
compensation, retention rights under Section 6 of Republic Act No. 6657, as amended, and to the ecological
needs of the nation, shall be undertaken to provide farmers and farmworkers with the opportunity to enhance
their dignity and improve the quality of their lives through greater productivity of agricultural lands.

The agrarian reform program is 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 the priorities and retention limits set forth in this Act, taking into account
ecological, developmental, and equity considerations, and subject to the payment of just compensation. The
State shall respect the right of small landowners, and shall provide incentive for voluntary land-sharing.

As much as practicable, the implementation of the program shall be community-based to assure, among
others, that the farmers shall have greater control of farmgate prices, and easier access to credit.

The 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, and shall provide support to agriculture through appropriate technology and research, and
adequate financial, production, marketing and other support services.

The State shall recognize and enforce, consistent with existing laws, the rights of rural women to own and
control land, taking into consideration the substantive equality between men and women as qualified
beneficiaries, to receive a just share of the fruits thereof, and to be represented in advisory or appropriate
decision-making bodies. These rights shall be independent of their male relatives and of their civil status.

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The State shall apply the principles of agrarian reform, or stewardship, whenever applicable, in accordance
with law, in the disposition or utilization of other natural resources, including lands of the public domain,
under lease or concession, suitable to agriculture, subject to prior rights, homestead rights of small settlers
and the rights of indigenous communities to their ancestral lands.

The 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.

By means of appropriate incentives, the State shall encourage the formation and maintenance of economic-
size family farms to be constituted by individual beneficiaries and small landowners.

The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential
use of communal marine and fishing resources, both inland and offshore. It shall provide support to such
fishermen through appropriate technology and research, adequate financial, production and marketing
assistance and other services. The State shall also protect, develop and conserve such resources. The
protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion.
Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources.

The 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 thereby make the land productive.

The 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. Financial instruments
used as payment for lands shall contain features that shall enhance negotiability and acceptability in the
marketplace.

The State may lease undeveloped lands of the public domain to qualified entities for the development of
capital-intensive farms, and traditional and pioneering crops especially those for exports subject to the prior
rights of the beneficiaries under this Act.

Primary Objective Comprehensive Agrarian Reform Law

The primary objective of Comprehensive Agrarian Reform Law is to break-up the agricultural lands and transform
them into economic-size farms to be owned by the farmers themselves. The expected outcome of this law is to uplift
the farmer’s socio-economic status by providing an opportunity to till their own lands which can be a source of income
for their basic needs and payment for the land.
Constitutional Basis of Comprehensive Agrarian Reform Law
The basis of this law was Article XIII, Sec. 4 of the 1987 Constitution which states the following:
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.

Principles and Policies of Comprehensive Agrarian Reform Law

Aside from the adoption of the above section of the Constitution, this law asserts the following principles and policies
for the State in enacting this law:
a. Pursue a Comprehensive Agrarian Reform Program (CARP) wherein the “welfare of the landless farmers and
farmworkers” must be given the highest consideration. This program aims the following:

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 i. to promote social justice,

ii. to move the nation toward sound rural development and industrialization, and

iii. establishment of owner cultivatorship of economic-size farm as basis of Philippine agriculture.

b. More equitable distribution and ownership of land with the following considerations:

i. rights of landowners to just compensation,

ii. retention rights of landowners, and

iii. ecological needs of the nation.

c. 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.

d. Provide support to agriculture through appropriate technology and research, and adequate financial
production, marketing and other support services.

e. Apply the principles of agrarian reform, or stewardship in the utilization of other natural resources including
the lands of the public domain, under lease or concession, suitable to agriculture which is subject to:

i. prior rights,

ii. homestead rights of small settlers, and

iii. rights of indigenous communities to their ancestral lands.

f. For fishermen, marine and fishing resources:

i. protect the rights of subsistence fishermen, especially of local communities, to the preferential use of
communal marine and fishing resources, both inland and offshore,

ii. provide support through appropriate technology and research, adequate financial, production and
marketing assistance and other services,

iii. protect, develop and conserve such resources, and

iv. fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources

g. Guided by the principles that land has a social function and land ownership has a social responsibility.

i. agricultural landowners have the obligation to cultivate lands to make it productive, and

ii. incentives to landowners.

h. Lease undeveloped lands of the public domain to qualified entities for the development of capital intensive
farms, and traditional and pioneering crops especially those for exports.

Additional Principles and Policies of Comprehensive Agrarian Reform Law, as amended

The law was amended and the following additional principles and policies were included:
a. Promote industrialization and full employment based on sound agricultural development and agrarian reform
through the following:

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 i. competitive industries in domestic and foreign markets that make full and efficient use of human and
natural resources, and

ii. conversion of agricultural lands into industrial, commercial or residential lands.

b. promote industrialization and full employment based on sound agricultural development and agrarian reform
with the following considerations:
i. take into account tiller’s rights and national food security

ii. protect Filipino enterprises against unfair foreign competition and trade practices.

c. As much as practicable, the implementation of the program shall be community-based. The farmers shall
have greater control of farmgate prices, and easier access to credit.

d. The rights of rural women to own and control land which shall be independent of their male relatives and
of their civil status.

i. as qualified beneficiaries,

ii. receive a just share of the fruits thereof, and

iii. to be represented in advisory or appropriate decision-making bodies.

Industrialization is Needed in Achieving the Expected Outcome of the Law

The State recognizes that there is not enough agricultural land to be divided and distributed to each farmer and regular
farmworker. To uplift the lives and economic status of the farmer and his/her children can only be achieved through
simultaneous industrialization aimed at developing a self-reliant and independent national economy effectively
controlled by Filipinos.

HACIENDA LUISITA INC. VS PRESIDENTIAL AGRARIAN REFORM COUNCIL

FACTS: The core of the case is Hacienda Luisita, once a 6,443-hectare mixed agricultural-
industrial-residential expanse straddling several municipalities of Tarlac which was eventually
owned by Tadeco. May 7, 1980, Martial law administration filed a suit before the Manila RTC
against Tadeco for them to surrender Hacienda Luisita to MAR so that the land can be
distributed to farmers at cost. Manila RTC rendered judgment ordering Tadeco to surrender
Hacienda Luisita to MAR. Tadeco appealed to the Court of Appeals (CA). May 18, 1988, CA
dismissed the case but made subject to the obtention by Tadeco of the PARC’s approval of a
stock distribution plan (SDP) that must initially be implemented after such approval shall have
been secured. HLI submitted to DAR its SDP, designated as "Proposal for Stock Distribution

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 under C.A.R.P.," which was substantially based on the SDOA. PARC, under then Sec.
Defensor-Santiago, by Resolution No. 89-12-2 dated November 21, 1989, approved the SDP
of Tadeco/HLI. In 2003, petition by private respondents sought to revoke the SDOA. One of
the contentions was their lives have not improved contrary to the promise and rationale for the
adoption of the SDOA. DAR constituted a Special Task Force to attend to issues which stated
that HLI has not complied with its obligations under RA 6657 despite the implementation of
the SDP and later approved by DAR Secretary. In the Terminal Report, it is stated that the
SDP violates the agrarian reform policy under Sec. 2 of RA 6657, as the said plan failed to
enhance the dignity and improve the quality of lives of the FWBs through greater productivity
of agricultural lands. In 2005, PARC ordered that the lands subject of the recalled/revoked
TDC/HLI SDP be forthwith placed under the compulsory coverage or mandated land
acquisition scheme of CARP. HLI, on January 2, 2006, sought reconsideration which was
denied by PARC in its Resolution No. 2006-34-01 dated May 3, 2006. On August 31, 2010,
the Court, in a bid to resolve the dispute through an amicable settlement but no acceptable
agreement could be reached. Hence, this case.

ISSUE: Is the revocation made by PARC to the SDP of HLI valid on the grounds of failure to
enhance the dignity and improve the quality of lives of the FWBs through greater productivity
of agricultural lands?

RULING: NO. Sec. 2 of RA 6657 states that it is the policy of the State to pursue a
Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and
farm workers will receive the highest consideration to promote social justice and to move the
nation towards sound rural development and industrialization, and the establishment of owner
cultivatorship of economic-sized farms as the basis of Philippine agriculture. To this end, a more
equitable distribution and ownership of land, with due regard to the rights of landowners to just
compensation and to the ecological needs of the nation, shall be undertaken to provide farmers
and farm workers with the opportunity to enhance their dignity and improve the quality of their
lives through greater productivity of agricultural lands. The agrarian reform program is founded
on the right of farmers and regular farm workers, who are landless, to own directly or collectively
the lands they till or, in the case of other farm workers, to receive a share of the fruits thereof.
To this end, the State shall encourage the just distribution of all agricultural lands, subject to
the priorities and retention limits set forth in this Act, having taken into account ecological,
developmental, and equity considerations, and subject to the payment of just compensation.
The State shall respect the right of small landowners and shall provide incentives for voluntary
land-sharing.

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 Paragraph 2 of the above-quoted provision specifically mentions that "a more equitable
distribution and ownership of land x x x shall be undertaken to provide farmers and farm
workers with the opportunity to enhance their dignity and improve the quality of their lives
through greater productivity of agricultural lands." Of note is the term "opportunity" which is
defined as a favorable chance or opening offered by circumstances. Considering this, by no
stretch of imagination can said provision be construed as a guarantee in improving the lives of
the FWBs. At best, it merely provides for a possibility or favorable chance of uplifting the
economic status of the FWBs, which may or may not be attained. Pertinently, improving the
economic status of the FWBs is neither among the legal obligations of HLI under the SDP nor
an imperative imposition by RA 6657 and DAO 10, a violation of which would justify discarding
the stock distribution option. Nothing in that option agreement, law or department order
indicates otherwise. The primary objective of the farmers and regular farmworkers to own
lands they till or receiving a just share in the fruits thereof can be achievable. But it does not
guarantee improvement in the lives of the agrarian reform beneficiaries. At best, it merely
provides for a possibility or a favorable chance of uplifting the economic status of the agrarian
reform beneficiaries, which may or may not be attained.

SECTION 3. Definitions. — For the purpose of this Act, unless the context indicates otherwise:

(a) Agrarian Reform means redistribution of lands, regardless of crops or fruits produced, to farmers and
regular farmworkers 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 stocks, which will allow beneficiaries to receive a just share of the fruits of
the lands they work.

(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 person whether natural or juridical.

(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.
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(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 purpose.

(f) Farmer refers to a natural person whose primary livelihood is cultivation of land or the production of
agricultural crops, livestock and/or fisheries either by himself/herself, or primarily with the assistance of
his/her immediate farm household, whether the land is owned by him/her, 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 and 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.

(j) Other Farmworker is a farmworker who does not fall under paragraphs (g), (h) and (i).

(k) Cooperatives shall refer to organizations composed primarily of small agricultural producers, farmers,
farmworkers, or other agrarian reform beneficiaries who voluntarily organize themselves for the purpose of
pooling land, human, technological, financial or other economic resources, 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.

(l) Rural women refer to women who are engaged directly or indirectly in farming and/or fishing as their source
of livelihood, whether paid or unpaid, regular or seasonal, or in food preparation, managing the household,
caring for the children, and other similar activities.

Agriculture, Agricultural Enterprise or Agricultural Activity

Lands devoted to raising of livestock, poultry, and swine are excluded in the definition of agriculture, agricultural
enterprise or agricultural activity. The reason is that in livestock, poultry, and swine farming, no land is tilled and no
crop is harvested. Land is not the primary resource in raising of livestock, poultry or even swine; of livestock, poultry
or swine do not sprout from the land, hence, they are not “fruit of the land.” This is cited in the case of DAR vs. Sutton.

As amended, agriculture, agricultural enterprise or agricultural activity is read as follows: the cultivation of the soil,
planting of crops, growing of fruit trees, 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 or
juridical.

Economic Family-Size Farm

As cited in Sec. 166 (20), Code of Agrarian Reforms, economic family-size farm is the area of farmland that permits
efficient use of labor and capital resources of the farm family and will produce an income sufficient to provide a modest
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standard of living to meet a farm family’s needs for food, clothing, shelter, and education with possible allowance for
payment of yearly installments on the land, and reasonable reserves to absorb yearly fluctuations in income.

SECTION. 4. Scope. - The Comprehensive Agrarian Reform Law of 1988 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:

(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.

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."

Lands Covered by Comprehensive Agrarian Reform Law

As a general rule, it covers the following lands:
a. all public and private agricultural lands

b. other lands of the public domain suitable for agriculture

Lands Not Covered by Comprehensive Agrarian Reform Law

The following are not covered by Comprehensive Agrarian Reform Law:
a. Private lands with a total area of five (5) hectares and below

b. Lands actually, directly, and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries
and breeding grounds, watersheds and mangroves

c. Private lands actually, directly, and exclusively used for prawn farms and fishponds

d. Lands actually, directly, and exclusively used and found to be necessary for:

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 (i) national defense
(ii) school sites and campuses
(iii) experimental farm stations operated for educational purposes
(iv) seeds and seedling research and pilot production center
(v) church sites and convents appurtenant thereto
(vi) mosque sites and Islamic centers appurtenant thereto
(vii) communal burial grounds and cemeteries
(viii) penal colonies and penal farms actually worked by inmates
(ix) research and quarantine centers
(x) all lands with eighteen percent (18%) slope and over, except those already developed.

SECTION 5. Schedule of Implementation – The distribution of all lands covered by this Act shall be
implemented immediately and completed within ten (10) years from the effectivity thereof.
NOTE: Section 7 of Republic Act 9700 extended the implementation of the CARL, particularly the acquisition and
distribution of agricultural lands to June 30, 2014.

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.
In 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. In 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

14
inform the Department of Agrarian Reform (DAR) within thirty (30) days of any transaction involving
agricultural lands in excess of five (5) hectares.

Retention right of the landowner:

The landowner has the right to retain not more than five (5) hectares of his landholdings.
The retained area need not be personally cultivated by the landowner – cultivation can be done indirectly through
labor administration.
As provided in Sec. 2 (b), DAR Administrative Order No. 05-00 – “The landowner has the obligation to cultivate the
land directly or through labor administration and thereby make the area he retains productive.”
If the landowner has already exercised his right of retention under PD 27, he can no longer exercise the retention right
under CARL.
However, if the landowner chooses to retain five (5) hectares under CARL, the seven (7) hectares previously retained
by him under PD 27 shall be immediately placed under the coverage of the CARL.
Retention right of the spouses:
If the property regime is conjugal or absolute community – the spouses can retain only five (5) hectares.
If the property regime is separation of property – the spouses can retain five (5) hectares each (a total of 10 hectares).
Right to choose the retention area:
The landowner has the right to choose the area to be retained.
The retention area should be compact or contiguous.
As long as it will not exceed the retention ceiling of five (5) hectares, the landowner’s choice of the area to be retained
must prevail.
Right to choose the retention area:
The landowner should exercise his right of retention within sixty (60) days from receipt of the Notice of Coverage.
If the landowner does not exercise his right of retention within the period, the Municipal Agrarian Reform Officer
(MARO) will designate the retained area for the landowner.
If the landowner disagrees with the area selected for retention, he may file a protest with the MARO.
Right of landowner to retain land vs EP and CLOA:
EP – Emancipation Patent
CLOA – Certificate of Land Ownership Award
The issuance of these two to beneficiaries will not bar the landowner from retaining the land
- if the landowner is deprived of retention, he may file a cancellation of EP and CLOA
- as provided under Administrative Order No. 2 series of 1994, the EP and CLOA may be cancelled if the land
covered is found to be part of the landowner’s retained area.
If the retention area by the landowner is tenanted:
The tenant may choose either to:
a. remain therein
b. become a beneficiary of the said land or another agricultural land with similar or comparable features.

15
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.
There should exist a relationship of landlord-tenant. Mere occupation or cultivation of an agricultural land will not ipso
facto make the tiller an agricultural tenant.
If the tenant chooses to remain in the retained area:
The tenant will be considered as an agricultural lessee and he will not qualify as an agrarian reform beneficiary.
He will be entitled to:
a. Peaceful possession and enjoyment of the land;
b. Manage and work on the land in a manner and method of cultivation and harvest which conform to proven
farm practices;
c. Mechanize all or any phase of his farm work;
d. Deal with millers and processors and attend to the issuance of quedans and warehouse receipts for the
produce due him;
e. Be afforded a homelot;
f. 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 rejected therefrom;
g. Buy the agricultural landholding under reasonable terms and conditions in case the agricultural lessor
decides to sell the same;
h. Redeem the landholding at a reasonable price and consideration in case the agricultural lessor sold the
same to a third person without his knowledge.
Tenant’s obligations:
a. 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;
b. 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;
c. 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;
d. Keep his farm and growing crops attended to during the work season;
e. Notify the agricultural lessor at least three (3) days before the date of harvesting or whenever applicable, of
threshing; and
f. Pay the lease rental to the agricultural lessor when it falls due.
Term of the Lease:
The agricultural leasehold continues once established.
It will be extinguished through any of the following:
a. abandonment or voluntary surrender of the landholding by the lessee; or
b. absence of successor in the event of death or permanent incapacity of the lessee.
Note: If the lessee dies or permanently disabled, the leasehold continues between the agricultural lessor and the
person who can cultivate the landholding personally.

16
The lessor can choose from 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.
The leasehold is not terminated or extinguished by mere expiration of the term or period in the leasehold contract. It
cannot be terminated by transfer of ownership.
Tenant chooses to be a Beneficiary:
If the tenant chooses to be a beneficiary in the same or another agricultural land, he loses his right to be a lessee of
the land retained by the landowner.
Children of the Landowner:
- are entitled to three (3) hectares each of the excess area owned by the landowner
- subject to the following conditions:
a. the child is at least fifteen (15) years old; and
b. the child is actually tilling the land or directly managing the farm.
Note: a qualified child who owns less than five (5) hectares of agricultural land is still entitled for an award provided
that the total area will not exceed the 5-hectare ceiling.
Lands awarded to qualified children cannot be sold, transferred or conveyed within a period of ten (10) years, except:
a. through hereditary succession:
b. to the government;
c. to the Land Bank of the Philippines; or
d. to other qualified beneficiaries
Note: The transferor’s spouse or child can repurchase the land from the government or LBP within a period of two (2)
years from the date of transfer.
Right of homesteaders vis-à-vis right of tenants:
a. Section 6, Article XIII of the Constitution
b. Section 6 of the Comprehensive Agrarian Reform Law
- provides the superiority of rights of homesteaders over rights of tenants.
Commonwealth Act 141 known as the Homestead Act has been enacted for the welfare and protection of the poor.
- the law gives the needy citizen a piece of land where he build a house for the family and plant what is needed for
the subsistence of life’s needs.
The owners (or heirs) through homestead grants can retain an area even if it exceeds 5 hectares provided that:
a. they are cultivating the retained area at the time of the approval of the CARL.
b. they continue to cultivate the same.

SECTION 6-A. Exception to Retention Limits. — Provincial, city and municipal government units acquiring
private agricultural lands by expropriation or other modes of acquisition to be used for actual, direct and
exclusive public purposes, such as roads and bridges, public markets, school sites, resettlement sites, local
government facilities, public parks and barangay plazas or squares, consistent with the approved local
17
comprehensive land use plan, shall not be subject to the five (5) hectare retention limit under this Section
and Sections 70 and 73 (a) of Republic Act No. 6657, as amended: Provided, That the lands subject to CARP
shall first undergo the land acquisition and distribution process of the program: Provided, further, That when
these lands have been subjected to expropriation, the agrarian reform beneficiaries therein shall be paid just
compensation.
Expropriation of Private Agricultural Lands by LGUs
If a LGU expropriates a private agricultural land for public purposes, the Department of Agrarian Reform should first
subject it to agrarian reform coverage.
- the land should be acquired first by the national government through DAR
- DAR will pay just compensation to the landowner
- the DAR will distribute the land to the agrarian reform beneficiaries.
- after distribution, the LGU will expropriate the land and pay the agrarian reform beneficiaries the just
compensation.

SECTION 6-B. Review of Limits of Land Size. — Within six (6) months from the effectivity of this Act, the DAR shall
submit a comprehensive study on the land size appropriate for each type of crop to Congress for a possible review of
limits of land sizes provided in this Act.
Importance of the Law:
- it is an implied recognition that the uniform setting of a 5-hectare limit for all agricultural landholding may not be
feasible.
- considering the economic differences for each type of agricultural product cannot be treated identically.

SECTION 7. Priorities. — The DAR, in coordination with the Presidential Agrarian Reform Council (PARC)
shall plan and program the final acquisition and distribution of all remaining unacquired and undistributed
agricultural lands from the effectivity of this Act until June 30, 2014. Lands shall be acquired and distributed
as follows:
Phase One: During the five (5)-year extension period hereafter all remaining lands above fifty (50) hectares
shall be covered for purposes of agrarian reform upon the effectivity of this Act. All private agricultural lands
of landowners with aggregate landholdings in excess of fifty (50) hectares which have already been subjected
to a notice of coverage issued on or before December 10, 2008; rice and corn lands under Presidential Decree
No. 27; all idle or abandoned lands; all private lands voluntarily offered by the owners for agrarian reform:
Provided, That with respect to voluntary land transfer, only those submitted by June 30, 2009 shall be allowed:
Provided, further, That after June 30, 2009, the modes of acquisition shall be limited to voluntary offer to sell
and compulsory acquisition: Provided, furthermore, That all previously acquired lands wherein valuation is
subject to challenge by landowners shall be completed and finally resolved pursuant to Section 17 of
Republic Act No. 6657, as amended: Provided, finally, as mandated by the Constitution, Republic Act No.
6657, as amended, and Republic Act No. 3844, as amended, only farmers (tenants or lessees) and regular
farmworkers actually tilling the lands, as certified under oath by the Barangay Agrarian Reform Council
(BARC) and attested under oath by the landowners, are the qualified beneficiaries. The intended beneficiary
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; all lands
foreclosed by government financial institutions; all lands acquired by the Presidential Commission on Good
Government (PCGG); and all other lands owned by the government devoted to or suitable for agriculture,
which shall be acquired and distributed immediately upon the effectivity of this Act, with the implementation
to be completed by June 30, 2012;

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Phase Two: (a) Lands twenty-four (24) hectares up to fifty (50) hectares shall likewise be covered for purposes
of agrarian reform upon the effectivity of this Act. All alienable and disposable public agricultural lands; all
arable public agricultural lands under agro-forest, pasture
and agricultural leases already cultivated and planted to crops in accordance with Section 6, Article XIII of
the Constitution; all public agricultural lands which are to be opened for new development and resettlement;
and all private agricultural lands of landowners with aggregate landholdings: above twenty-four (24) hectares
up to fifty (50) hectares which have already been subjected to a notice of coverage issued on or before
December 10, 2008, to implement principally the rights of farmers and regular farmworkers, who are landless,
to own directly or collectively the lands they till, which shall be distributed immediately upon the effectivity
of this Act, with the implementation to be completed by June 30, 2012; and "(b) All remaining private
agricultural lands of landowners with aggregate landholdings in excess of twenty-four (24) hectares,
regardless as to whether these have been subjected to notices of coverage or not, with the implementation
to begin on July 1, 2012 and to be completed by June 30, 2013;
Phase Three: All other private agricultural lands commencing with large landholdings and proceeding to
medium and small landholdings under the following schedule: "(a) Lands of landowners with aggregate
landholdings above ten (10) hectares up to twenty-four (24) hectares, insofar as the excess hectarage above
ten (10) hectares is concerned, to begin on July 1, 2012 and to be completed by June 30, 2013; and "(b) Lands
of landowners with aggregate landholdings from the retention limit up to ten (10) hectares, to begin on July
1, 2013 and to be completed by June 30, 2014; to implement principally the right of farmers and regular
farmworkers who are landless, to own directly or collectively the lands they till.
The schedule of acquisition and redistribution of all agricultural lands covered by this program shall be made
in accordance with the above order of priority, which shall be provided in the implementing rules to be
prepared by the PARC, taking into consideration the following: the landholdings wherein the farmers are
organized and understand the meaning and obligations of farmland ownership; the distribution of lands to
the tillers at the earliest practicable time; the enhancement of agricultural productivity; and the availability of
funds and resources to implement and support the program: Provided, That the PARC shall design and
conduct seminars, symposia, information campaigns, and other similar programs for farmers who are not
organized or not covered by any landholdings. Completion by these farmers of the aforementioned seminars,
symposia, and other similar programs shall be encouraged in the implementation of this Act particularly the
provisions of this Section. "Land acquisition and distribution shall be completed by June 30, 2014 on a
province-by-province basis.
In any case, the PARC or the PARC Executive Committee (PARC EXCOM), upon recommendation by the
Provincial Agrarian Reform Coordinating Committee (PARCCOM), may declare certain provinces as priority
land reform areas, in which case 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 been completed: Provided, That notwithstanding the above schedules, phase three (b)
shall not be implemented in a particular province until at least ninety percent (90%) of
the provincial balance of that particular province as of January 1, 2009 under Phase One, Phase Two (a),
Phase Two (b), and Phase Three (a), excluding lands under the jurisdiction of the Department of Environment
and Natural Resources (DENR), have been successfully completed.
The PARC shall establish guidelines to implement the above priorities and distribution scheme, including the
determination of who are qualified beneficiaries: Provided, That an owner-tiller may be a beneficiary of the
land he/she does not own but is actually cultivating to the extent of the difference between the area of the
land he/she owns and the award ceiling of three (3) hectares: Provided, further, That collective ownership by
the farmer beneficiaries shall be subject to Section 25 of Republic Act No. 6657, as amended: Provided,
furthermore, That rural women shall be given the opportunity to participate in the development planning and
implementation of this Act: Provided, finally, That in no case should the agrarian reform beneficiaries' sex,
economic, religious, social, cultural and political attributes adversely affect the distribution of lands.

Acquisition and Distribution Scheme:

19
The scheme for all remaining agricultural lands during the 5-year extension period up to June 30, 2014 in the following
order of priority:
a. Lands with an area of more that fifty (50) hectares to be completed by June 30, 2012, specifically:
- those which have already been subjected to a NOC on or before December 10, 2008;
- rice and corn lands;
- idle or abandoned lands;
- private lands voluntarily offered by the owners for agrarian reform;
- lands foreclosed by government financial institutions;
- lands acquired by the Presidential Commission on Good Government (PCGG); and
- all other lands owned by the government devoted to or suitable for agriculture.
b. lands with an area of twenty-four (24) hectares up to fifty (50) hectares, to be completed by June 30, 2013,
specifically:
- all alienable and disposable public agricultural lands;
- all arable public agricultural lands under agro-forest, pasture and agricultural leases already cultivated and
planted to crops in accordance with Section 6, Article XIII of the Constitution;
- all public agricultural lands which are to be opened for new development and resettlement;
- all private agricultural lands which have already been subjected to a Notice of Coverage issued on or before
December 10, 2008; and
- all remaining private agricultural lands regardless as to whether they have been subjected to notices of
coverage.
c. Lands with an area of more than ten (10) hectares up to twenty-four (24) hectares, to be completed by June 30,
2013; and
d. Lands from the retention limit up to ten (10) hectares, to be completed by June 30, 2014
Only farmers (tenants or lessees) and regular farmworkers who actually tilled the lands can be considered as qualified
beneficiaries.
- Provided they are certified under oath by the Barangay Agrarian Reform Council (BARC)
- Attested under oath by the landowners
The qualified beneficiary shall state under oath before the judge of city or municipal court that:
- he is willing to work to make the land productive
- to assume the obligation of paying the amortization for the compensation of the land and land taxes.

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:

20
(a) 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.

(b) 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.

(c) 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. 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 non-governmental
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 workerbeneficiaries. 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 provisions 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 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.

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,

21
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.

Public Domain - lands to which the government has propriety rights

Multinational Corporation (MNC) – an international or transnational corporation with headquarters in one country
but has branch offices in a wide range of both developed and developing countries.

Examples: Dole, Del Monte, General Motors, Coca-cola, Firestone, Philips, Renault, British Petroleum, etc. (San
Miguel Corp., Shell, Magnolia, Nestle, Unilever, P&G)

Government Lands - include both public lands and other lands of the government already reserved or devoted to
public use or subject to private rights

Private Agricultural Lands - lands devoted to agricultural activities and are under the effective control and disposition
of natural or juridical persons

Agri-business - 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.

Agri-business, therefore, include all activities involved in growing agricultural produce and making them readily usable
by consumers.

Agro-industrial - covers enterprises that process farm products into final consumer goods (such as foods and
clothing) into raw industrial raw materials

Lands covered by the paragraph immediately preceding, under lease, management, grower or service contracts, and
the like, shall be disposed of as follows:
(a) 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.

Question: What are the limitations provided in Sec. 3, Article XII of the Constitution?
Answer:
Limitations provided in Art. XII, Sec. 3
xxx Private corporations or associations may not hold such alienable lands of the public domain except by lease,
• for a period not exceeding 25 years,

• renewable for not more than 25 years,

• and not to exceed 1000 hectares in area.

Citizens of the Philippines may

• lease not more than 500 hectares,

• or acquire not more than 12 hectares thereof, by purchase, homestead, or grant

22
 (b) 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.

(c) 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.

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 non-
governmental 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.

Question: What justifies the State’s act of compulsory acquisition and distribution of lands owned by private
corporations and individuals?
Answer:
Police power
- It is the power vested in the legislature by the Constitution to make, ordain, establish all manner of wholesome and
reasonable laws for the good and welfare of the State and its people. (Ermita Malate Hotel vs. City Mayor, July 31,
1967)
Requisites:
(1) Regulation is for public interest and welfare;
(2) that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive
upon individuals.
- Concurrence of both elements is necessary for a valid police power

Question: In relation to CARL, is there a valid exercise of the State’s police power?
Answer:
Public Welfare and Interest
CARL’s primary objective is to breakup agricultural lands and transform them into economic-size farms to be owned
by the farmers themselves, with the end in view of uplifting their socio-economic status.

Reasonable means, not unduly oppressive upon individuals

Just and lawful limitations are provided by CARL as to what extent only shall be the coverage of the program.
23
As provided in the 1st paragraph of this Section, only those lands:
devoted to existing and operational agri-business or agro-industrial enterprises, operated by multinational
corporations and associations, shall be programmed for acquisition and distribution with the implementation to
be completed within three (3) years.
Subject to limitations provided for in Sec. 3 of Art. XII

Question: What other legal basis would justify the State’s act of compulsory acquisition and distribution of lands
owned by private corporations and individuals?
Answer:
Power of Eminent Domain
the right or power of a sovereign state to appropriate private property to particular uses to promote public
welfare. It is an indispensable attribute of sovereignty; a power grounded in the primary duty of government to serve
the common need and advance the general welfare.
Conditions:
1. that private property shall not be taken for public use without just compensation (Sec. 9, Art. III, 1987
Constitution)

2. that no person shall be deprived of his/her life, liberty, or property without due process of law (Sec. 1, Art. III,
1987 Constitution)

Question: What is the legal basis of the State’s exercise of power of eminent domain in relation to CARL?
Answer:
Basis:
Article XIII - SOCIAL JUSTICE AND HUMAN RIGHTS (Agrarian and Natural Resources Reform)
Sec. 4 ……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.

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.

Basis:
Section 5, Art. XIII. The State shall….. provide support to agriculture through appropriate technology and research,
and adequate financial, production, marketing, and other support services.

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.

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 Systems 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 principles of self-determination and autonomy, the systems of land
24
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.

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 Systems shall be respected.

Question: What is Torrens System?

Answer:
Torrens Systems
Land registration system in which the government is the keeper of all land and title records, and a land title serves as
a certificate of full, indefeasible, and valid ownership.

Ancestral lands are:

 lands of public domain
 that have been in open, continuous, exclusive, and notorious occupation and cultivation
 by members of the National Cultural Communities by themselves or through their ancestors,
 under a bona fide claim of acquisition of ownership according to their customs and traditions
 for a period of at least 30 years before the date of approval of Presidential Decree. 410
(P.D. 410 - Declaring Ancestral Lands Occupied And Cultivated By National Cultural Communities As Alienable And
Disposable, And For Other Purposes)

Ancestral Lands refers to:

 land occupied, possessed and utilized by individuals, families and clans who are members of the indigenous
cultural communities or indigenous peoples
 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;
(Sec. 3(b), R.A. No. 8371, An Act To Recognize, Protect And Promote The Rights Of Indigenous
Cultural Communities/Indigenous Peoples, Creating A National Commission On Indigenous Peoples,
Establishing Implementing Mechanisms, Appropriating Funds Therefor, And For Other Purposes)

In such case, the interruption of the period of their occupation and cultivation on account of civil disturbance or force
majeure shall not militate against their right granted.

Ancestral lands are exempted from the coverage of the Agrarian Reform Law. (DAR Administrative Order No. 02,
series of 2009)

RATIONALE:

25
The Comprehensive Agrarian Reform Law recognizes and respects the systems of land ownership, land use, and the
modes of settling land disputes of all indigenous cultural communities or indigenous peoples, in line with the principles
of self-determination. (Par. 2)

In Cruz v. DENR, the Supreme Court held that:

Ancestral domains are areas owned by the indigenous people since time immemorial, hence, these were never part
of public domain. Since these lands were never a part of public domain, therefore, they are not covered by the
Regalian Doctrine.

Question: What is the Regalian Doctrine?

Answer:
Regalian Doctrine is enshrined in Article XII, Section 2 of the 1987 Constitution which provides that all lands of public
domain, including its natural resources, belong to the State, such is the source of any asserted right to any ownership
of land. All lands not clearly appearing to be within private ownership are presumed to belong to the State.
Accordingly, public lands not shown to have been reclassified or released as alienable agricultural land, or alienated
to a private person by the State, remain part of the inalienable public domain. The burden of proof in overcoming the
presumption of State ownership of the lands of the public domain is on the person applying for registration (or claiming
ownership), who must prove that the land subject of the application is alienable or disposable. To overcome this
presumption, incontrovertible evidence must be established that the land subject of the application (or claim) is
alienable or disposable.
SECTION 10. Exemptions and Exclusions – Lands actually, directly and exclusively used and found to be necessary
for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds, and
mangroves, 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 centers, 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 the Act.

a) Lands actually, directly and exclusively used and found to be necessary for
- parks,
- wildlife,
- forest reserves,
- reforestation,
- fish sanctuaries and breeding grounds,
- watersheds,
- and mangroves
shall be exempt from the coverage of this Act.

b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the
coverage of this Act: Provided, that said prawn farms and fishponds have not been distributed and Certificate of Land
Ownership Award (CLOA) issued to agrarian reform beneficiaries under the Comprehensive 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 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 a cooperative or association to manage the same.

26
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.

c) 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 the Act.

NOTE:
Land classification in the tax declaration is not conclusive
 Tax declarations are not the sole basis of land classification.
 Thus, even if the tax declaration classifies the land as agricultural, such classification is not irrefutable.
(Republic v. Salvador N. Lopez Agri-Business Corp., 639 SCRA 49)

Republic v. Court of Appeals

342 SCRA 189

FACTS:
Green City Estate & Development Corp. is the owner of a parcel of land located in
Jala-Jala, Rizal with a total area of 112 hectares. Under the tax declaration, the land is
classified as agricultural. Hence, the Department of Agrarian Reform (DAR) subjected the land
to compulsory acquisition under the agrarian reform law.

Thereafter, Green City Estate & Development Corp. filed an application for exemption
from agrarian reform on the found that the land is non-agricultural because it is within the
residential and forest conservation zones of the town plan/zoning ordinance of Jala-Jala. The
DAR denied the application for exemption on the basis of the classification embodied in the
tax declaration.

ISSUE:
Was the DAR correct in denying the application for exemption on the mere fact that
the tax declaration classified the land as agricultural?

HELD:

27
 The DAR was not correct in denying the application for exemption by the mere fact
that the tax declaration classified the land as agricultural. There is no law or jurisprudence that
holds that the land classification embodied in the tax declarations is conclusive and final nor
would proscribe further inquiry.
Furthermore, the tax declarations are not clearly the sole basis of the classification of a land.
In fact, DAR Administrative Order No. 6 lists other documents, aside from tax declarations,
that must be submitted when applying for exemption from CARP.

Non- agricultural lands classified as:

- residential
- commercial
- industrial use
by the Housing and Land Use Regulatory Board prior to the effectivity of the CARL are not subject to agrarian reform.
(Buklod Ng Magbubukid sa Lupaing Ramos v. E.M. Ramos & Sons, 645 SCRA 401; Heirs of Dr. Jose Deleste v. LBP,
651 SCRA 352.)

Lands with at least 18% slope

Natalia Realty v. DAR

225 SCRA 278

Supreme Court held that: “Based on the foregoing, it is clear that the undeveloped portions
of the Antipolo Hills Subdivision cannot in any language be considered as ‘agricultural lands.’
These lots were intended for residential use. They ceased to be agricultural lands upon
approval of their inclusion in the Lungsod Silangan Reservation. ….
Indeed, lands not devoted to agricultural activity are outside the coverage of Carl. These
includes previously converted to non-agricultural uses prior to the effectivity of the CARL by
government agencies other than respondent DAR….
Since NATALIA lands were converted prior to June 15, 1998, respondent DAR is bound by
such conversion. It was therefore error to include the undeveloped portions of the Antipolo
Hills subdivision within the coverage of CARL.

Reason: To prevent adverse effects on the lowlands and streams resulting from soil erosion.
(these lands are considered as permanent forests or forest reserves, regardless of the
condition of vegetative cover, occupancy, or use of any kind; thus, not alienable and
disposable)

Conditions:
If the land with at least 18% slope has been previously classified as alienable or disposable, but not yet titled
• it shall be reverted to the category of public forest.

If the land has been covered by an approved public land application or occupied openly, continuously,
adversely, and publicly for a period of not less than 30 years as of the effectivity of the Forestry Reform Code

28
 • it shall remain as such alienable or disposable on condition that the land is kept in a vegetative state
sufficient to prevent erosion and adverse effects on the lowlands and streams. (Sec. 16. P.D. No. 389
known as Forest Reform Code of the Philippines

School sites and campuses

Lands actually, directly, and exclusively used and found necessary for school sires and campuses are exempted from
the coverage of agrarian reform.

The School is in the best position to determine whether the land is necessary for use as school site or campuses.

The DAR has no right to substitute judgment or discretion for that of the school. (CMU v. DARAB, 215 SCRA 86;
DAR v. DECS, 426 SCRA 217)

CMU v. DARAB
215 SCRA 86 (1992)

FACTS: Central Mindanao University (CMU) is an agricultural institution which owns 3,000
hectares of land. In 1984, CMU adopted a livelihood program under which its land resource
were leased to its faculty and employees (groups of 5 members each group) to enable each
group to cultivate 4 to 5 hectares of land for lowland rice project. Later, these faculty and
employees filed before the Department of Agrarian Reform (DAR) a complaint praying that
they be declared as tenants under the Comprehensive Agrarian Reform Law.

Acting on the said complaint, the DAR found that the faculty and employees were not tenants,
and cannot therefore qualify as an agrarian reform beneficiary. However, the DAR segregated
400 hectares of suitable, compact, and contiguous portions of the CMU land and subjected it
to agrarian reform coverage for distribution to qualified beneficiaries, on the ground that it was
not directly, actually, and exclusively used for school site.

ISSUE: Whether or not the DAR was correct in segregating the 400 hectares of CMU land.

HELD: The construction given by the DAR to Section 10 of the Comprehensive Agrarian
Reform Law restricts the land area of the CMU to its present needs or to a land area presently,
actively exploited and utilized by the university in carrying out its present educational program
with the present student population and academic facility – overlooking the very significant
factor of growth of the university in the years to come.

By the very nature of the CMU, which is a school established to promote agriculture and
industry, the need for vast tract of agricultural land for future expansion is obvious.

29
 As to the determination of when and what lands are found to be necessary for use by the CMU,
the school is in the best position to resolve and answer the question and pass upon the
problem of its needs in relation to its avowed objectives.

Question: Who has jurisdiction to exempt a property from agrarian reform coverage?

Answer:
The Secretary of Agrarian Reform has the jurisdiction and authority to exempt or exclude a property from the
coverage of the Agrarian Reform Program.

Section 11. Commercial Farming – Commercial farms, which are private agricultural lands devoted to
saltbeds, fruit farms, orchards, vegetable and cut-flower farms, and cacao, coffee and rubber plantations,
shall be subject to immediate compulsory acquisition and distribution after (10) years from the effectivity of
the 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 the 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 hereafter manage the said
lands for the worker-beneficiaries.
If the DAR determines that the purposes for which this deferment is granted no
longer exist, such areas shall automatically be subject to redistribution. The provisions of Section 32 of the
Act, with regard to production-and income sharing, shall apply to commercial farms.

What comprises a commercial farm?

Commercial Farms are lands devoted to:
- saltbeds;
- fruit farms
- orchards
- vegetable and cut-flowerfarms; and
- cacao, coffee and rubber plantations

Implementation of Agrarian Reform Law

Which was deferred on commercial farms.
Compulsory acquisition and distribution of commercial farms has been deferred for 10 years;
A. from the effectivity of CARP- for farms already existing when the law took effect, and
B. from the first year of commercial production and operation – for new farms

Mode of acquisition of commercial farms

Commercial Farms may be acquired through:
A. Voluntary Offer to Sell (VOL);
 Scheme whereby the landowner voluntarily offer their agricultural lands for coverage regardless
of phasing.

B. Compulsary Acquisition (CA); or

30
  Whereby the land is expropriated by the state (Section 16 of RA 6657)

C. Direct Payment Scheme (DPS).

 The landowner and the beneficiary enter into a voluntary agreement for the direct transfer of lands
to the latter.

Manner of distribution of commercial farms

 The commercial farms may be distributed individually or collectively.
 Individual beneficiaries are entitled to (3) three hectares each or a minimum of (1) hectare each.
If the subject land is not sufficient to accommodate all the beneficiaries.

The following is the order of priority to be observe in the distribution of the commercial farm;
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. collectives or cooperatives of the above beneficiaries; and
G. others directly working on the land.

If it is not economically feasible and sound to divide the land, the beneficiaries will be obliged to form a
workers cooperative or association. Infrastructure facilities and improvements which are necessary and beneficial
to the operations of the farms, including buildings, roads, machinery, receptacles, instruments or implements
permanently attached to the land may be subject to acquisition, as determined by the DAR Department of Agrarian
Reform upon the recommendation of the agrarian reform beneficiaries.

Qualifications of Commercial Farm Beneficiaries

A. must be 18 years old at the time of the filing of the application as beneficiary;
B. must have willingness, aptitude, and ability to cultivate and make the land productive; and
C. must have been employed in the commercial farm between June 15, 1988 and June 15, 1998 or upon the
expiration of the deferment

The following are disqualified to become commercial farm beneficiaries:

A. Farm workers who have RETIRED from service, whether optional or compulsory
B. Farm workers who have RESIGNED from their employment with the farm;
C. Farm workers who have been DISMISSED for cause;
D. Farm workers, lessees, or tenants who waive or REFUSED to be a beneficiary; and
E. Farm workers, lessees or tenants who have committed VIOLATION of agrarian reform laws and
regulations.

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Beneficiaries of commercial farms have the full freedom;
 To choose the type of agribusiness venture arrangement that will maintain the economic viability of
the farm;
 To market their products or enter into marketing arrangements; and
 To avail the services or assistance of individuals, associations or non-government organizations in
negotiating for the most advantageous agribusiness venture arrangement, enterprise development,
and capability building
Types of agribusiness venture arrangements
Under Section 29 of DAR Administrative Order No. 09, series of 1998, among the agribusiness venture
arrangements which commercial farm beneficiaries or their cooperatives may enter into are the following;
A. Joint Venture Arrangement
B. Lease Arrangement
C. Contract Growing/ Growership Arrangement
D. Management Contract
E. Build-Operate-Transfer Scheme

Right of retention over commercial farms

Owners of commercial farms whether individual or corporate are entitled to the retention rights granted by section 6
of the Comprehensive Agrarian Reform law.

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. In 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. In 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.

32
Section 12. Determination of 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
Republic Act No. 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 conditions of the farmer, tenant or lessee.

Power of Department of Agrarian Reform to fix rentals

Under Section 6 of the Comprehensive Agrarian Reform Law, the tenant may choose to remain in the portion retained
by the landowner, in which case, he will no longer be considered as a tenant but a lessee.
In order to protect the economic status of the farmer, the Department of Agrarian Reform is empowered to determine
and fix the release rental. The Department of Agrarian Reform has fixed the rentals in this wise:
A. for lands devoted to rice and other crops – 25% of the average normal harvest after deducting the amount
used for seeds and the cost of harvesting, or threshing. If there has been no normal harvests, then the
estimated normal harvest during the (3) agricultural years immediately preceding the date the leasehold was
established
B. For sugarcane lands- 25% of average normal harvest less the value of the cost of seed/cane points,
harvesting (cutting), loading, hauling, and/or trucking fee, and cost of processing.
C. for coconut lands – 25 % of the average normal harvest for a specific area for the preceding three (3)
calendar years less the value of production cost.

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.

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.

33
This provision which obliges the establishment of a production-sharing plan, applies only to:
A. farms operating under a production venture, lease, management contract or other similar arrangement;
B. farms leased or operated by multinational corporations;
C. commercial farms

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:
• The description and area of the property
• The average gross income from the property for at least three years
• The names of all the tenants and farmworkers therein
• The crops planted in the property and the area covered by each crop as of The terms of mortgages,
leases, and management contracts subsisting as of June 1, 1987
• The latest declared value of the land as determined by the city or provincial assessor.
• Purpose of registration: The purpose of the sworn statements is to help the Department of Agrarian Reform
identify the lands and their owners for effective implementation of the agrarian reform program.

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 copy of the registry or list of all potential CARP beneficiaries in the barangay shall be posted in the barangay
hall, school or other public buildings in the barangay where it shall be open to inspection by the public at all
reasonable hours.

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:
• Names and members of their immediate farm household
• Owners and administrators of the lands they work on and the length of tenurial relationship
• Location and area of the land they work
• Crops planted
• Their share in the harvest or amount of rental paid or wages received

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Purpose: The purpose of requiring registration of agricultural lessees, tenants, and farm workers is to develop a
databank of potential and qualified beneficiaries for the effective implementation of the agrarian reform program.

Section 16. Procedure for Acquisition and Distribution of Private Lands – For purposes of acquisition of
private lands, the following procedures shall be followed:
(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to
acquire the land to the owners thereof, by personal delivery or registered mail, and post the same in a
conspicuous place in the municipal building and barangay hall of the place where the property is located.
Said notice shall contain the offer of the DAR to pay a corresponding value in accordance with the
valuation set forth in Section 17, 18, and other pertinent provisions hereof.
(b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail,
the landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of
the offer.
(c) If the landowner accepts the offer of the DAR, the Land Bank of the Philippines (LBP) shall pay the
landowner the purchase price of the land within thirty (30) days after he executes and delivers a deed of
transfer in favor of the Government and surrenders the Certificate of Title and other monuments of title.
(d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to
determine the compensation for the land by requiring the landowner, the LBP and other interested parties
to submit evidence as to the just compensation for the land, within fifteen (15) days from the receipt of
the notice. After the expiration of the above period, the matter is deemed submitted for decision. The DAR
shall decide the case within thirty (30) days after it is submitted for decision.
(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.
(f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation.

Two notices are required for valid implementation

For a valid implementation of the agrarian reform program, two (2) notices to the landowner are required, namely:
(a) Notice of Coverage pursuant to DAR Administrative No. 12, series of 1989; and
(b) Notice of Acquisition pursuant to Section 16 of the Comprehensive Agrarian Reform Law. (Sta. Rosa
Development v. CA, 367 SCRA 175)
The first notice is in compliance with administrative due process, considering that implementation of the agrarian
reform law is an exercise of police power of eminent domain.
Land Acquisition procedure should be strictly construed
Since land acquisition under the agrarian reform law is an extraordinary method of expropriation, it must be strictly
construed. Hence, the failure of the DAR or any of its agencies to comply with the proper procedure for expropriation,
i.e., when no Notice of Coverage was issued, it should be treated as a violation of constitutional due process and
should be deemed arbitrary, capricious, whimsical and tainted with grave abuse of discretion.
Opening of trust account does not constitute payment
Opening of a trust account does not constitute payment because the law requires just compensation to be paid in
cash and LBP bonds and not by trust account.

35
When title or ownership of the land is transferred to the State
Title and ownership over the land will be transferred to the Republic of the Philippines only upon full payment of the
just compensation. Until the just compensation is finally determined and fully paid, the title and ownership remains
with the landowner. This is so even if the DAR has deposited the offered price with the LBP. The mere fact, therefore,
that the DAR has deposited the offered price does not warrant the cancellation of the owner’s title.

Sta. Rosa Development Corp. v. CA

Facts: SRDC is the registered owner of two parcels of land in Cabuyao, Laguna. According to
them, these lands are watersheds which provide clean and potable water to the Canlubang
community. They were alleging that the private respondents usurped its rights over the
property thereby destroying the ecosystem. SRDC sought ejectment against respondents.

Private respondents filed a case for compulsory acquisition of the SRDC Property in DAR.
Land was therefore inspected by the Municipal and Agrarian Reform Officer and declared that
land must be placed under compulsory acquisition. Petitioner filed an objection on the ground
that the area is not appropriate for agricultural purposes. Furthermore, the area is rugged in
terrain with slopes 18% and above which falls under the exception in compulsory acquisition
of CARL. Private respondents answered stating that the slope of the land is 5-10% and that it
is suitable and economically viable for agricultural purposes. Provincial Agrarian Reform
Officer Durante Ubeda forwarded his endorsement of the compulsory acquisition to the
Secretary of Agrarian Reform. Secretary Miriam Defensor Santiago sent two notices of
acquisition to petitioner, stating that petitioners landholdings had been placed under CARP.
SRRDC filed a protest. DAR Secretary Benjamin Leong issued a memorandum directing the
Land Bank of the Philippines to open a trust account in favor of SRRDC, for P5,637,965.55.
According to DARAB, SRRDC landholdings shall be immediately transferred to the name of
the Republic of the Philippines and distribute the same to the farmer-beneficiaries.

Court of Appeals affirmed the decision of DARAB.

Issue: Whether or not DAR and other accountable agencies were able to follow the
appropriate procedures in compulsory acquisition.

Held: No. DAR and the other agencies did not follow the proper procedures:

SC noted that the payment of just compensation was not in accordance with the procedural
requirement. The law required payment in cash or LBP bonds, not by trust account as was
done by DAR.

36
 Section 16 of CARL states that: “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.”

The Court directs DARAB to conduct a reevaluation and determination of the nature of the
land involved to resolve the issue of its coverage in the CARL.

Roxas & Co. v. CA

Facts: Before CARL, petitioner filed VOS to sell Hacienda Caylaway. Later on, two other
haciendas (Palico and Banilad) were placed under compulsory acquisition by DAR. Notice
entitled ‘Invitation to Parties’ were sent. It was addressed to the Hacienda Administrator Jaime
Pimentel. Petitioner withdrew VOS when Hacienda Caylaway was reclassified from
agricultural to non-agricultural. Consequently, petition of conversion for the three haciendas
was denied by DAR.

Issue: Whether DAR followed the guidelines in the acquisition of the land.

Held: No. DAR issued CLOAs without just compensation to petitioner. Trust deposit accounts
does not constitute payment under the law.

Doctrine of Primary Jurisdiction does not warrant a court to arrogate unto itself authority to
resolve a controversy the jurisdiction over which is initially lodged with an administrative body
of special competence. Failure of DAR to comply with due process does not give power to SC
to nullify CLOAs.

Petition was granted in part. Acquisition proceedings were nullified. Case remanded to DAR
for proper acquisition proceeding and determination of the application of conversion.

Section 17 – Determination of Just Compensation:

i. the cost of acquisition of the land,

ii. the current value of the like properties, its nature,

iii. actual use and income,

37
 iv. the sworn valuation by the owner,

v. the tax declarations,

vi. the assessment made by government assessors

Additional Factors:

i. The social and economic benefits contributed by the farmers and the farmworkers and
by the Government to the property

ii. 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.

Just Compensation - The full and fair equivalent of the property taken from its owner by the
expropriator.

i. Hacienda Luisita v. PARC - The measure is not the taker's gain, but the owner's loss.

Prompt Payment – Paid in full within a reasonable time from the taking. Without prompt payment,
compensation cannot be considered "just" because the landowner has already been deprived of his
land immediately while being made to wait before he receives compensation.

Reckoning of Valuation –

i. GENERAL RULE: Value of the property at the time it was taken from the owner and
appropriated by the government shall prevail. If the government takes possession of it before
the expropriation proceedings, the value as of the time of the taking of the possession shall
prevail.

ii. EXCEPTION – Undue Delay - If there is undue delay in payment, the value should be
determined not at the time of taking of the land, but at the time of full payment of the just
compensation.

Procedure in determining just compensation:

i. Land Bank determines value of lands

ii. DAR makes an offer based on valuation

iii. In case of rejection, landowners and other interested parties are to submit evidence of
just compensation

iv. Party who disagrees may bring the matter to the RTC.

38
Role of the DARAB - DARAB can conduct a summary administrative proceeding for the preliminary
determination of just compensation. This is to determine whether the Land Bank computations are in
accordance with the rules and administrative orders.

Role of the RTC - The RTC is designated as the Special Agrarian Court by the 2009 DARAB Rules
of Procedure. While the determination of just compensation is essentially a judicial function, it cannot
disregard the formula laid down by DAR.

Section 18 – Valuation and Mode of Compensation:

Consent:

i. Farmer-beneficiary = not required

ii. Landowner, DAR, LBP = required (as per Sec. 18)

At the option of the landowner, compensation shall be paid on one of the following modes:

i. Cash payment under certain terms & conditions

a. Above 50 ha. (excess hectarage) – 25% cash; balance in gov’t negotiable

instruments

b. More than 24 ha., less than 50 ha. – 30% cash; balance in gov’t negotiable
instruments

c. 24 ha. & below – 35% cash; balance in gov’t negotiable instruments

ii. Shares of stock in GOCCs, LBP preferred shares, physical assets or other qualified
investments in accordance with guidelines set by the PARC

iii. Tax credits which can be used against any tax liability

iv. LBP bonds with certain features

Section 19 – Incentives for Voluntary Offers for Sale

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.

Documentary Requirements:

i. Title, or proof of ownership (if untitled)

ii. Tax declaration

iii. Approved survey plan

39
SECTION 20. Voluntary Land Transfer- Landowners of agricultural lands subject t0 acquisition under
this Act may enter into a voluntary arrangement for direct transfer of their lands to qualified
beneficiaries subject to the following:

a) All notices for voluntary land transfer must be submitted to the DAR within the first year 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 be monitored by the DAR.

SECTION 21. Payment of Compensation by Beneficiaries Under Voluntary Land Transfer- Direct
payments in cash or in kind may be made 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 and
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.

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 farmworkers;

© seasonal farmworkers;

(d) other farmworkers;

€ actual tillers or occupants of public lands;

(f) collectives or cooperatives of the above beneficiaries; and

40
 (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 landholdings shall not be ejected or removed therefrom.

Beneficiaries under Presidential Decree No. 27 who have culpably sold, disposed of, or
abandoned their land are disqualified to become beneficiaries under this Program.

A basic qualification of a beneficiary shall be his willingness, aptitude, and ability to cultivate
and make the 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 the 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.

Who are eligible to as beneficiaries?

A landless resident of the same barangay/municipality

A farmer or a tiller who owns less than three (3) hectares of land, who could be any of
the following:

Agricultural lessees and share tenants

Regular farm workers

Seasonal farm workers

Other farm workers

Actual tillers or occupants of public lands

Collectives or cooperatives of the above beneficiaries

Others directly working on the land

Qualifications to be a beneficiary the farmer (tenant, lessee or worker) must be:

A Filipino citizen

Resident of the barangay or municipality where the landholding is located

41
 At least fifteen (15) years old at the end of identification, screening, and selection

Willing, able and equipped with aptitude to cultivate and make the land productive.

Qualifications for farm workers in Commercial Farms or Plantation

• Already employed as of June 15, 1988 in the landholding covered by CARL.

Who are disqualified to be beneficiaries?

• Those who do not meet the basic qualifications.

• Those who have waived their right to become a beneficiary in exchange of

compensation, provided that the waiver has not been questioned in proper government entity.

• Those who have not paid an aggregate of three (3) annual amortizations.

• Those who have failed to exercise right of redemption/repurchase within two years
resulting in the foreclosure of mortgage by the Land Bank of the Philippines of a previously
awarded land.

• Those who refused to pay three annual amortizations for land acquired through
voluntary land transfer or direct payment scheme, resulting in the repossession by the
landowner.

• Those who have been dismissed for cause.

• Those who have obtained substantially equivalent employment.

• Those who have retired or voluntarily resigned from their employment.

• Those who have misused the land or diverted the financial support services extended
by the government.

• Those who have misrepresented material facts in their basic qualifications.

• Those who have sold, disposed, or abandoned the lands awarded to them by the
government.

• Those who have converted agricultural lands to non-agricultural use without prior
approval of the DAR.

• Those who have been finally adjudged guilty of forcible entry or unlawful detainer over
the property

• Those who have violated agrarian reform laws and regulations

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
42
of three hectares each, shall the remaining portion of the landholding, if any, be distributed to other
beneficiaries under Section 22, subparagraphs (c), (d), €, (f), (g).

ORDER OF DISTRIBUTION

• Children of landowner (3 hectares)

• 15 years old

• Actually tilling the land or directly managing the farm

• Agricultural lessees, share tenants, regular farm workers (3 hectares)

• Seasonal farm workers, other farm workers, actual tillers or occupants of public lands,
collectives or cooperatives of the above beneficiaries, others directly working on the land.

SECTION 23. Distribution Limit- No qualified beneficiary may own more than three hectares of
agricultural land.

The maximum agricultural land area that can be owned or awarded to a beneficiary is THREE
HECTARES.

If the landholding is not enough to meet the 3 hectare award ceiling for each agricultural lessee
or tenant, the area to be distributed will be based on the actual size of tillage by each lessee or tenant.

If the landholding is more than enough to accommodate the 3 hectare limit for each lessee or
tenant, the excess will be distributed to agrarian reform beneficiaries in the following order:

• Seasonal farm worker

• Other farm workers

• Actual tillers or occupants of public lands

• Collectives or cooperatives of the above beneficiaries

If it is not economically feasible and sound to divide the excess land to the seasonal or other
farm workers, the following criteria for prioritization shall be observed:

• Willingness, aptitude, and ability to cultivate and make the land productive

• Physical capacity

• Length of service

Factors to Consider in Determining the Size of the Land to be Awarded

43
 • Type of crop

• Type of soil

• Weather patterns

Other pertinent factors critical for the success of the beneficiaries

Section 24. Award to Beneficiaries

The rights and responsibilities of the beneficiaries shall commence from their receipt
of their duly registered emancipation patent or certificate of land ownership award and their actual
physical possession of the awarded land.

Commencement of rights and responsibilities

General Rule

receipt of duly registered EPs and CLOAs; and

When does DAR issue CLOA? (Padua v. CA)

actual physical possession of awarded land

Padua v. CA

Facts: Private Respondents Pepito Dela Cruz, et al. were tenants of Lot Nos. 68 and 90 of
Dolores Ongsiako Estate. Upon request of Mayor Catalino Cruz, Dela Cruz, et al. agreed to
donate said properties to the municipality to the condition that these be used as school sites.
The project did not materialize so Dela Cruz, et al. asked for return of said properties. However,
they found out that Mayor Cruz had distributed Lot no. 68 to Flor Labagnoy and Lot no. 90 to
Edwin Cruz under Certificate of Land Transfer (CLT).

Upon Petition for Cancellation of CLT, DAR Secretary ordered the cancellation of those
CLTs. However, during the pendency of the appeal Cruz executed an Affidavit of Waiver of
interest in lot no. 90 hence, the DAR RO III’s cancellation of CLT and declaring it as open for
disposition. DAR Secretary then issued an Order awarding lot no. 90 to petitioner Roberto
Padua who had been occupying said property and paying the amortization thereon on LBP.

Aggrieved Dela Cruz, et al. filed with DAR Secretary a Letter-Petition for cancellation
of DAR RO III and DAR Orders. Thus, the grant of Letter-Petition thereby cancelling Order
issued in favor of Padua and directing the restoration of possession of said lot to petitioners.
Payments made by Padua as rentals were then forfeited in favor of government.

Issue: WON the prior issuance of CLOA to petitioner was proper?

44
 Ruling: No. Under the statutory mechanism for the acquisition of land through agrarian reform
requires full payment of amortization before a farmer-beneficiary may be issued a CLOA or
EP, which, in turn, can become the basis for the issuance in his name of an original or a
transfer certificate of title. As Padua himself admitted that he is still paying amortization, his
status in relation to said property remains of that potential farmer-beneficiary whose eligibilities
DAR may either confirm or reject.

Such award shall be completed in not more than 180 days from the date of registration
of the title in the name of the Republic of the Philippines: Provided, That the EPs, the CLOAs, and
other titles issued under any agrarian reform program shall be indefeasible and imprescriptible after
one (1) year from its registration with the Office of the Registry of Deeds, subject to the conditions,
limitations and qualifications of this Act, the property registration decree, and other pertinent laws.

The EPs and CLOAs being titles brought under the operation of the Torrens systems,
are conferred with the same indefeasibility and security afforded to all titles under the said system, as
provided for by PD No. 1529, as amended by RA No. 6732.

It is the ministerial duty of the Registry of Deeds to register the title of the land in the
name of the Republic of the Philippines, after the LBP has certified that the necessary deposit in the
name of the landowner constituting full payment in cash or in bond with due notice to the landowner
and the registration of the certificate of land ownership award issued to the beneficiaries, and to cancel
previous titles pertaining thereto.

Identified and qualified agrarian reform beneficiaries based on Section 22 of RA 6657,

as amended, shall have usufructuary rights over the awarded land as soon as the DAR takes
possession of such land, and such right shall not be diminished even pending the awarding of the EP
or the CLOA.

Exception to the Rule

pending the issuance of CLOA, identified and qualified beneficiaries have usufructuary
rights provided that DAR have already taken possession of the land to be awarded.

(Usufructuary rights not applicable in the case of Pasco v Pison-Arceo Agricultural and Dev. Corp.)

Pasco v. Pison-Arceo Agricultural and Dev. Corp

Facts: Respondent is the registered owner of a parcel of land, constructed thereon are houses
which are occupied by its workers. Petitioners, among other workers, used to work for
respondent until 1987. They having ceased to be employed by respondent, petitioners were
asked to vacate the house they were occupying but they refused, hence, respondent’s filing of
a complaint for unlawful detainer.
45
 After the promulgation of the MTCC decision, the Municipal Agrarian Reform Office
(MARO) sent a Notice of Coverage and Field Investigation advising respondent that its parcel
of land is now covered under CARL. MARO then issued a Certification that petitioner Jesus
Pasco is registered as potential Comprehensive Agrarian Reform Program (CARP) beneficiary
in the land owned by respondent.

Issue: WON the petitioners being identified and qualified as potential agrarian reform
beneficiaries acquires rights and responsibilities over the land?

Ruling: No. The issuance of Notice of Coverage does not automatically vest title or transfer
the ownership of the land to the government, hence, a mere preliminary step for State’s
acquisition of land for agrarian reform purposes.

Absent of records that DAR acquired possession of subject and that DAR made an
award in favor of petitioners, no rights or even usufructuary rights over the land they occupy
can be considered to have vested in their favor, even pending the issuance of CLOA.

All cases involving the cancellation of registered EPs, CLOAs, and other titles issued
under any agrarian reform program are within the exclusive and original jurisdiction of the Secretary
of the DAR.

Grounds for cancellation of CLOAs

a. Abandonment of the land

b. Neglect or misuse of land

c. Failure to pay three (3) annual amortizations

d. Misuse or diversion of financial and support services

e. Sale, transfer or conveyance of the right to use the land; and

f. Illegal conversion of the land

Obligations of Agrarian Reform Beneficiaries

a. Exercise due diligence in the use, cultivation, and maintenance of the land, including
improvements thereon; and

b. Pay the Land Bank 30 annual amortizations with 6% interest per annum

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.
46
The determination of the size of the land for distribution shall consider crop type, soil type, weather
patterns and other pertinent variables or factors which are deemed critical for the success of the
beneficiaries.

For the purposes of this Act, a landless beneficiary is one who owns less than 3
hectares of agricultural land.

Whenever appropriate, the DAR shall encourage the agrarian reform beneficiaries to
form or join farmers’ cooperatives for purposes of affiliating with existing cooperative banks in their
respective provinces or localities, as well as forming blocs of agrarian reform beneficiaries,
corporations, and partnerships and joining other farmers’ cooperative organizations, including
irrigators’ associations: Provided, That the agrarian reform beneficiaries shall be assured of
corresponding shares in the corporation, seats in the board of directors, and an equitable share in the
profit.

In general, the land awarded to a farmer-beneficiary should be in the form of an

individual title, covering one (1) contiguous tract or several parcels of land cumulated up to a maximum
of three (3) hectares.

The beneficiaries may opt for collective ownership, such as co-workers or farmers’
cooperative or some other form of collective organization and for the issuance of collective ownership
titles: Provided, That the total area that may be awarded shall not exceed the total number of co-
owners or members of the cooperative or collective organization multiplied by the award limit above
prescribed, except in meritorious cases as determined by the PARC.

For idle and abandoned lands or underdeveloped agricultural lands to be covered by

CARP, collective ownership shall be allowed only if the beneficiaries opt for it and there is a clear
development plan that would require collective farming or integrated farm operations exhibiting the
conditions described above. Otherwise, the land awarded to a farmer-beneficiary should be in the form
of an individual title, covering one (1) contiguous tract or several parcels of land cumulated up to a
maximum of three (3) hectares.

In case of collective ownership, 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. If the CLOAs are given to
cooperatives then the names of the beneficiaries must also be listed in the same CLOA.

With regard to existing collective CLOAs, the DAR should immediately undertake the
parcelization of said CLOAs, particularly those that do not exhibit the conditions for collective
ownership outlined above. The DAR shall conduct a review and redocumentation of all the collective
CLOAs. The DAR shall prepare a prioritized list of CLOAs to be parcelized. The parcelization shall
commence immediately upon approval of this Act and shall not exceed a period of three (3) years.

47
Only those existing CLOAs that are collectively farmed or are operated in an integrated manner shall
remain as collective.

Section 26. Payment by Beneficiaries

Schedule of Payment

The cost of the awarded land is payable to the LB (by the beneficiaries) in 30 annual
amortizations with 6% interest per annum.

Payment starts 1 year from:

a. date of registration of CLOA; or

b. date of actual occupancy, if the occupancy took place after registration of CLOA.

Basis of Amortization

The maximum amortization is 5% of the annual gross production as established by DAR

After the 5th year, the interest rate and/or the principal obligation may be reduced by the Land
Bank to make the repayment affordable:

a. if due to failure of production, the scheduled annual payments exceed 10% of the
annual gross production;

b. failure to produce is not due to beneficiary’s fault

Effect of Failure to pay amortizations

If the beneficiary fails to pay three (3) annual amortizations, the Land Bank can forfeit the
landholding and award it to other qualified beneficiaries.

The beneficiary whose land has been foreclosed or forfeited will be permanently disqualified
from becoming a beneficiary.

Section 27. Transferability of Awarded Lands

General Rule:

Agrarian Reform beneficiaries cannot, within 10 years, sell or transfer ownership of the land
awarded to them.

Exceptions:

a. through hereditary succession;

b. to the government;

c. to the LBP; or
48
 d. to other qualified beneficiaries

Effect of sale or transfer to the Government or the LB

- the children or spouse of transferor can repurchase the land within 2 years from the date of
transfer.

Hereditary Succession

- means succession by intestate succession or by will to the compulsory heirs under the Civil
Code, but does not pertain to testamentary succession to other persons.

Estate of the Late Encarnacion Vda. De Panlilio v. Dizon

Facts: Encarnacion Vda. De Panlilio is the owner of the disputed landholdings over a vast
tract of land called Hacienda Masamat located in Pampanga. Sometime in 1973, pursuant to
OLT under PD 27, DAR issued 38 CLTs to Panlilio’s tenants. On January 12, 1997, Panlilio
executed an Affidavit stating “to distribute all land transfer certificates, in view of the desire of
Encarnacion Vda. De Panlilio to place her property under the Land Transfer Program of the
government.” On 1994, RTC appointed petitioner George Lizares as executor of estate of
Panlilio, the latter being the son of Jesus Lizares (husband of Encarnacion). Lizares then filed
a complaint with PARAD for annulment of coverage of landholding under PD 27 and ejectment
against Reynaldo Villanueva, et al.

Issue: WON the transfer of title to third persons was valid?

Ruling: No. PD 27 is clear that after full payment and title to the land is acquired, the land
shall not be transferred except to the heirs of the beneficiary or the government. Although,
Sec. 6 of EO 228 states xxx Ownership of lands acquired by farmer-beneficiary may be
transferred after full payment of amortizations, this provision, however, is silent as to who can
be the transferees of the land acquired through CARP. The rule in statutory construction is
that statutes in pari material should be construed together and harmonized. Since there
appears no irreconcilable conflict between PD 27 and EO 228, the two (2) provisions can be
made compatible by maintaining the rule in PD 27 that lands acquired under said decree can
only be transferred to the heirs of original beneficiary or to the Government.

Beneficiary not fully paid the amortizations may sell the land to another provided:

a. DAR approval was obtained;

b. land was sold only to an heir of beneficiary or to any other qualified beneficiary; and

49
 c. transferee must undertake to cultivate the land himself, otherwise, LB will take the land for
proper disposition

*If the sale or transfer complies with the conditions, LB will compensate beneficiary (in lump sum for
amounts already paid) together with the value of improvement.

Beneficiary may lease the land to another person

General Rule:

Beneficiary can lease the land to another person provided that the lease is for agricultural
purposes.

Exception to the Rule:

If for non-agricultural purposes, beneficiary must first seek the approval of DAR

Note: the law prohibits transfer of ownership not transfer of possession

Beneficiary may lease the land to former landowner

This can only be done after obtaining approval from DAR through Provincial Agrarian Reform
Coordinating Committee.

Section 28. Standing Crops at the Time of Acquisition

• The landowner shall retain his share of any standing crops unharvested at the time the
DAR shall take possession of land under Section 16 of this Act, and shall be given a reasonable time
to harvest the Same

Section 29. Farms owned or Operated by Corporations or Other Business Associations

• In the case of farms owned or operated by corporations or other business associations,

the following rules shall be observed by the PARC.

• 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 it shall be
owned collectively by the worker-beneficiaries who shall form a workers' cooperative or association
which will deal with the corporation or business association. Until a new agreement is entered into by
and between the workers' cooperative or association and the corporation or business association, 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 or business
association.

Collective Ownership
50
 • This is in recognition of the fact that land reform may become successful even if it is
done through the medium of juridical entities composed of farmers. An individual farmer will often face
greater disadvantages and difficulties than those who exercise ownership in a collective manner
through a cooperative or corporation

• Although success is not guaranteed, a cooperative or a corporation stands in a better

position to secure funding and competently maintain the agri-business than the individual farmer.

Section 30. Homelots and farmlots for Members of Cooperatives

• The beneficiaries are entitled to a homelot and a small farmlot not exceeding 1,000
square meters.

• If the Existing homelot is situated within the retained area of the Landowner, the
beneficiary may be made to transfer his dwelling in his farm lot or other area designated for his home
lot, Provided that the landowner shoulders the cost of the transfer.

Section 31 - Corporate Landowners

Corporate landowners may voluntarily transfer ownership over their agricultural landholdings
to the Republic of the Philippines pursuant to Section 20 hereof or to qualified beneficiaries, under
such terms and conditions, consistent with this Act, as they may agree upon, subject to confirmation
by the DAR. Upon certification by the DAR, corporations owning agricultural lands may give their
qualified beneficiaries the right to purchase such proportion of the capital stock of the corporation that
the agricultural land, actually devoted to agricultural activities, bears in relation to the company's total
assets, under such terms and conditions as may be agreed upon by them. In no case shall the
compensation received by the workers at the time the shares of stocks are distributed be reduced.
The same principle shall be applied to associations, with respect to their equity or participation.
Corporations or associations which voluntarily divest a proportion of their capital stock, equity or
participation in favor of their workers or other qualified beneficiaries under this section shall be deemed
to have complied with the provisions of the Act: Provided, That the following conditions are complied
with: a) In order to safeguard the right of beneficiaries who own shares of stocks to dividends and
other financial benefits, the books of the corporation or association shall be subject to periodic audit
by certified public accountants chosen by the beneficiaries; b) Irrespective of the value of their equity
in the corporation or association, the beneficiaries shall be assured of at least one (1) representative
in the board of directors, or in a management or executive committee, if one exists, of the corporation
or association; and c) Any shares acquired by such workers and beneficiaries shall have the same
rights and features as all other shares. d) Any transfer of shares of stocks by the original beneficiaries
shall be void ab initio unless said transaction is in favor of a qualified and registered beneficiary within
the same corporation. If within two (2) years from the approval of this Act, the land or stock transfer
envisioned above is not made or realized or the plan for such stock distribution approved by the PARC

51
within the same period, the agricultural land of the corporate owners or corporation shall be subject to
the compulsory coverage of this Act.

Schemes Available to Corporate Landowners

Before June 30, 2009 and the amendment made by Republic Act 9700, the following are the
available means for corporate landowners to subject their lands under the comprehensive agrarian
reform program:

a) Voluntary Land Transfer; and

pursuant to Section 20 of CARP

b) Stock Distribution.

public audit to protect rights of beneficiaries;

representation in the board of directors, management or executive committees;

same rights and features as other shares; and

in favor of beneficiary within same corporation.

After June 30, 2009, the mode of acquisition shall be limited to the following:

a) Voluntary Offer to Sell; and

b) Compulsory Acquisition.

Hacienda Luisita vs. PARC

FACTS: Tarlac Development Corporation (TADECO) bought Hacienda Luisita and Central
Azucarera De Tarlac in 1957. It was acquired with the help of the Philippine government and
a loan from GSIS. One of the conditions of the GSIS loan is for TADECO to divide the land
and be sold to tenants. During the martial law regime, the RTC compelled TADECO to
surrender Hacienda Luisita to the Ministry of Agrarian Reform. TADECO argued that they
could not be compelled because they do not have tenants.

At the Court of Appeals, TADECO was ordered to submit a Stock Distribution Plan
subject to approval by PARC. It came after the Office of Solicitor General withdrew the case.
Hacienda Luisita Inc was formed to facilitate stock acquisition by land owners.

TADECO moved a total of 590,554,220 pesos worth of properties and assets into HLI
under the Stock Distribution Plan. In May 1989, 93% of farmworker-beneficiaries approved the
Stock Distribution Option Plan. A Stock Distribution Option Agreement was entered on May
11, 1989. It includes:

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 Product-sharing equivalent to 3% of gross sales from the production of agricultural
land, payable in cash dividends or incentive bonus; and

Distribution of free homelots of not more than 240 square meters each to family-
beneficiaries.

HLI applied for conversion of 500 hectares of land into industrial use in August 1995.
The plan was approved by DAR on August 14, 1996. Said lands were transferred to
Centennary Holdings Inc. and Luisita Realty Corporation. Centennary later sold its land to
Luisita Industrial Park Corporation.

Aside from the 500 hectares, another 80.51 hectares was transferred to the
government for the Subic-Clark-Tarlac Expressway (SCTEX).

Prompted by these developments, a group filed a petition with DAR asking it to revoke
the Stock Distribution Option Agreement. Another group also filed a complaint asking for land
distribution and not stock option.

PARC revoked the Stock Distribution Option Agreement and placed Hacienda Luisita
under the compulsory coverage of the agrarian reform law.

ISSUE:

1. Does the Presidential Agrarian Reform Council (PARC) have jurisdiction,

power and authority to nullify or revoke the Stock Distribution Option Agreement?

2. Was the PARC correct in nullifying or revoking the Stock Distribution Option
Agreement?

3. Was the PARC correct in including th lands that RCBC and LIPCO had
acquired from HLI in the coverage of the agrarian reform program?

4. Should the 80.51-hectare land transferred to the government for use as parrt
of the SCTEX, be excluded from the compulsory agrarian reform coverage?

HELD:

1. PARC has jurisdiction, power and authority to nullify or revoke the Stock
Distribution Option Agreement. While R. A. No. 6657 did not vest such power, it is deemed
possessed under the doctrine of necessary implication.

2. PARC has not erred in nullifying or revoking the Stock Distribution Option
Agreement because:

a) HLI failed to fully comply with its undertaking (distribute homelands to

beneficiaries); and
53
 b) stock distribution violates some provisions of DAO 10.

3. Lands acquired by RCBC and LIPCO from HLI should have not been included
in the coverage of the agrarian program.

4. Land transferred to the government for use as part of the SCTEX should also
be excluded from the compulsory agrarian reform coverage.

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.

Section 32 is a Transitory Provision

Applies only while the land transfer is being processed and finalized.

Requires individuals or entities owning or operating an agricultural land under lease or

management contract to adopt a production sharing with farm workers.

Production Sharing

Adopted with farm workers in the following manner:

If more tha five million pesos sales per year are realized:

a) 3% of the gross sales - to be distributed to regular and other farm workers (over and
above the compensation they currently receive)

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 b) 1% of the gross sales - to be distributed to the managerial supervisory and
technical employees.

If profits are realized - additional 10% of the net profit after tax, to be distributed to regular and other
farmworkers.

Section 32 is Unconstitutional

Luz Farms v. Secretary of DAR

Facts: On 10 June 1988, RA 6657 was approved by the President of the Philippines, which
includes, among others, the raising of livestock, poultry and swine in its coverage.

Petitioner Luz Farms, a corporation engaged in the livestock and poultry business,
avers that it would be adversely affected by the enforcement of sections 3(b), 11, 13, 16 (d),
17 and 32 of the said law. Hence, it prayed that the said law be declared unconstitutional. The
mentioned sections of the law provides, among others, the product-sharing plan, including
those engaged in livestock and poultry business.

Luz Farms further argued that livestock or poultry raising is not similar with crop or tree
farming. That the land is not the primary resource in this undertaking and represents no more
than 5% of the total investments of commercial livestock and poultry raisers. That the land is
incidental but not the principal factor or consideration in their industry. Hence, it argued that it
should not be included in the coverage of RA 6657 which covers “agricultural lands”.

Issue: Whether or not certain provisions of RA 6657 is unconstitutional for including in its
definition of “Agriculture” the livestock and poultyr industry?

Ruling: The Court held YES.

Looking into the transcript of the Constitutional Commission on the meaning of the
word “agriculture”, it showed that the framers never intended to include livestock and poultry
industry in the coverage of the constitutionally mandated agrarian reform program of the
government.

Further, Commissioner Tadeo pointed out that the reason why they used the term
“farmworkers” rather than “agricultural workers” in the said law is because “agricultural
workers” includes the livestock and poultry industry, hence, since they do not intend to include
the latter, they used “farmworkers” to have distinction.

Hence, there is merit on the petitioner’s argument that the product-sharing plan applied
to “corporate farms” in the contested provisions is unreasonable for being consficatory and
violative of the due process of law.

Section 32-A - Incentives

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 Individuals or entities owning or operating fishponds and prawn farms are hereby mandated
to execute within six (6) months from the effectivity of this Act an incentive plan with their regular
fishpond or prawn farmworkers or fishpond or prawn farm workers' organization, if any, whereby seven
point five percent (7.5%) of their net profit 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 in such ponds over and above the compensation they concurrently receive.

In order to safeguard the right of the regular fishpond or prawn farm workers under the
incentive plan, the books of the fishpond or prawn farm owners shall be subject to periodic audit or
inspection by certified public accounts chosen by the workers.

The foregoing provision shall not apply to agricultural land subsequently converted to fishpond
or prawn farms provided the size of the land converted does not exceed the retention limit of the
landowner.

This section applies to the following:

Covers fishpond and prawn farm owners

Incentive is 7.5% of the net profit before tax

Section 33 - Payment of Shares of Cooperative or Association

Shares of a cooperative or association acquired by farmers-beneficiaries or workers-

beneficiaries shall be fully paid for in an amount corresponding to the valuation as determined in the
immediately succeeding section. The landowner and the LBP shall assist the farmers-beneficiaries
and workers-beneficiaries in the payment for said shares by providing credit financing.

Land Bank

determines the value of shares of a cooperative or association

Section 34 - Valuation of Lands

A valuation scheme for the land shall be formulated by the PARC, taking into account the
factors enumerated in Section 17, in addition to the need to stimulate the growth of cooperatives and
the objective of fostering responsible participation of the workers-beneficiaries in the creation of
wealth. In the determination of price that is just not only to the individuals but to society as well, the
PARC shall consult closely with the landowner and the workers-beneficiaries. In case of disagreement,
the price as determined by the PARC, if accepted by the workers-beneficiaries, shall be followed,
without prejudice to the landowner's right to petition the Special Agrarian Court to resolve the issue of
valuation.

Executive Order No. 45

56
 Authorized the Land Bank of the Philippines to determine the valuation or just
compensation of lands.

Promulgated on June 14, 1990.

The Presidential Agrarian Reform Council (PARC) previously has authority over
valuation.

Section 35. Creation of Support Services Office

• General support and coordinative services in the implementation of the program in

carrying out the following services to farmer beneficiaries and affected landowners:

Irrigation facilities, especially second crop or dry season irrigation facilities;

Infrastructure development and public works projects in areas and settlements that
come under agrarian reform, and for this purpose, the preparation of the physical development plan
of such settlements providing suitable barangay sites, potable water and power resources, irrigation
systems, seeds and seedling banks, post-harvest facilities, and other facilities for a sound agricultural
development plan.

For the purpose of providing the aforecited infrastructure and facilities, the DAR is authorized
to enter into contracts with interested private parties on long term basis or through joint-venture
agreements or build-operate-transfer scheme;

Government subsidies for the use of irrigation facilities;

Price support and guarantee for all agricultural produce;

Extending to small landowners, farmers and farmers’ organizations the necessary

credit, like concessional and collateral-free loans, for agro-industrialization based on social collaterals
like the guarantee of farmers’ organizations;

Promoting, developing and extending financial assistance to small and medium-scale

industries in agrarian reform areas;

Assigning sufficient numbers of agricultural extension workers to farmers’

organizations;

Undertake research, development and dissemination of information on agrarian

reform, plants and crops best suited for cultivation and marketing, and low-cost and ecologically sound
farm inputs and technologies to minimize reliance on expensive and imported agricultural inputs.

Development of cooperative management skills through intensive training;

57
 Assistance in the identification of ready markets for agricultural produce and training
in the other various aspects of marketing;

Conduct an effective information dissemination system through the Department of

Agriculture to promote marketing and minimize spoilage of agricultural produce and products;

Create a credit guarantee fund for agricultural landowners that will enhance the
collateral value of agricultural lands that are affected or will be affected by coverage under the agrarian
reform program; and

Administration, operation, management and funding of support services programs and

projects including pilot projects and models related to agrarian reform as developed by the DAR

What is the Import of the Law?

• Propel the beneficiaries to attain economic independence and self-reliance.

Section 36. FUNDING FOR SUPPORT SERVICES

• In order to cover the expenses and cost of support services, at least forty (40%) of all
appropriations for agrarian reform during the five (5)-year extension period shall be immediately set
aside and made available for this purpose.

• An Agrarian Reform Community is composed and managed by agrarian reform

beneficiaries who shall be willing to be organized and to undertake the integrated development of an
area and/or their organizations/cooperatives.

Section 37- SUPPORT SERVICES FOR THE AGRARIAN REFORM BENEFICIARIES

• The State shall adopt the integrated policy of support services delivery to agrarian
reform beneficiaries.

(1) Department of Agrarian Reform,

(2) Department of Finance,

(3) Bangko Sentral ng Pilipinas (BSP)

• The PARC shall ensure that support services for agrarian reform beneficiaries are
provided, such as:

(a) Land surveys and titling;

(b)Socialized terms on agricultural credit facilities;

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 • Socialized credit – credit assistance that is made available, accessible, and affordable
to existing men and women ARBs to finance agricultural production and agri-based enterprises.

• Agricultural Credit facilities- financial windows that are available to support agricultural
needs of men and women ARBs.

• Agricultural production – involves natural farming activities from land preparation,

planting to harvesting and corresponding utilization of farm inputs/materials such as seeds, fertilizers,
and farm implements/equipment, to include fisheries, livestock and poultry.

Thirty percent (30%) of all appropriations for support services referred to in Section 36 of
Republic Act No. 6657, as amended, shall be immediately set aside and made available for agricultural
credit facilities:

SEC. 36. Funding for Support Services. — In order to cover the expenses and cost of support
services, at least forty percent (40%) of all appropriations for agrarian reform during the five (5)-year
extension period shall be immediately set aside and made available for this purpose…

– From the total fund appropriation for CARP, forty percent (40%) shall be allocated for
support services.

– Thirty percent (30%) of the support services fund shall be immediately set aside and
made available for agricultural credit facilities.

– The remaining 70% shall be utilized for extension and other support services.

• Provided, (1/3) of this segregated appropriation shall be specifically allocated for

subsidies to support the initial capitalization for agricultural production to new agrarian reform
beneficiaries upon the awarding of the emancipation patent or the certificate of land ownership award

• And the remaining two-thirds (2/3) shall be allocated to provide access to socialized
credit to existing agrarian reform beneficiaries, including the leaseholders:

What are the institutions mandated to provide the delivery system of such financial
assistance?

• Provided, further, the LBP and other concerned government financial institutions,
accredited savings and credit cooperatives, financial service cooperatives and accredited cooperative
banks shall provide the delivery system for disbursement of the above financial assistance to individual
agrarian reform beneficiaries, holders of collective titles and cooperatives.

What can be accepted as collateral for loans?

• For this purpose, all financing institutions may accept as collateral for loans the
purchase orders, marketing agreements or expected harvests:

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 • Provided, That loans obtained shall be used in the improvement or development of the
farm holding of the agrarian reform beneficiary or the establishment of facilities which shall enhance
production or marketing of agricultural products of increase farm income therefrom

• Provided, further, That of the remaining seventy percent (70%) for the support
services,

• fifteen percent (15%) shall be earmarked for farm inputs as requested by the duly
accredited agrarian reform beneficiaries' organizations, such as, but not limited to: (1) seeds, seedlings
and/or planting materials; (2) organic fertilizers; (3) pesticides; (4)herbicides; and (5) farm animals,
implements/'machineries;

• and five percent (5%) for seminars, trainings and the like to help empower agrarian
reform beneficiaries.

(c) Extension services by way of planting, cropping, production and post-harvest technology transfer,
as well as marketing and management assistance and support to cooperatives and farmers'
organizations;

(d) Infrastructure such as, but not limited to, access trails, mini-dams, public utilities, marketing and
storage facilities;

(e) Research, production and use of organic fertilizers and other local substances necessary in farming
and cultivation; and

(f) Direct and active DAR assistance in the education and organization of actual and potential agrarian
reform beneficiaries, at the barangay, municipal, city, provincial, and national levels,

Purpose:

1. to help them understand their rights and responsibilities as owner-cultivators

developing farm- related trust relationships among themselves and their neighbors and

2. to increase farm production and profitability with the ultimate end of empowering
them to chart their own destiny.

The PARC shall formulate policies to ensure that support services for agrarian reform
beneficiaries shall be provided at all stages of the program implementation with the concurrence of
the concerned agrarian reform beneficiaries.

The PARC shall likewise adopt, implement, and monitor policies and programs to ensure the
fundamental equality of women and men in the agrarian reform program as well as respect for the
human rights, social protection, and decent working conditions of both paid and unpaid men and
women farmer-beneficiaries.

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 The Bagong Kilusang Kabuhayan sa Kaunlaran (BKKK) Secretariat shall be transferred and
attached t o the LBP, for its supervision including all its applicable and existing funds, personnel,
properties, equipment and records.

What will happen if there are misuse of the support services provided?

Misuse or diversion of the financial and support services herein provided shall result in
sanctions against the beneficiary guilty thereof, including the forfeiture of the land transferred to
him/her or lesser sanctions as may be provided by the PARC, without prejudice to criminal
prosecution.

Section 37-A. Equal Support Services for Rural Women.

Support services shall be extended equally to women and men agrarian reform beneficiaries.

The PARC shall ensure that these support services, as provided for in this Act, integrate the
specific needs and well-being of women farmer- beneficiaries taking into account the specific
requirements of female family members of farmer- beneficiaries.

Rural Women

Are those engaged directly or indirectly in farming or fishing as their source of livelihood,
whether paid or unpaid, regular or seasonal, or in food preparation, managing the household, caring
for the children, and other similar activities. Sec 3 (l), CARL

The PARC shall also ensure that rural women will be able to participate in all community
activities.

How?

Rural women are entitled to self-organization

1. in order to obtain equal access to economic opportunities

2. to have access to agricultural credit and loans, marketing facilities and technology, and other
support services, and

3. equal treatment in land reform and resettlement schemes.

The DAR shall establish and maintain a women's desk

Role:

1. It will be primarily responsible for formulating and implementing programs and activities
related to the protection and promotion of women's rights,

2. It also serves as an avenue where women can register their complaints and grievances
principally related to their rural activities.
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Section 38. Support Services for Landowners

The PARC, with the assistance of such other government agencies and instrumentalities as it
may direct, shall provide landowners affected by the CARP and prior agrarian reform programs with
the following services:

• Investment information,

• Financial and counseling assistance,

• Facilities, programs and schemes for the conversion or exchange of bonds issued for
payment of the lands acquired with stocks and bonds issued by the National Government, the BSP
and other government institutions and instrumentalities;

• Marketing of agrarian reform bonds

• Other services designed to utilize productively the proceeds of the sale of such lands
for rural industrialization.

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.

The DAR, the LBP and the Department of Trade and Industry shall jointly formulate the program to
carry out these provisions under the supervision of the PARC:

• Provided, That in no case shall the landowners' sex, economic, religious, social,
cultural and political attributes exclude them from accessing these support services."

Section 39. Land Consolidation

The DAR shall carry out land consolidation projects to promote equal distribution of
landholdings, to provide the needed infrastructures in agriculture, and to conserve soil fertility and
prevent erosion.

Section 40. Special Areas of Concern

• Subsistence Fishing

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 • Logging and Mining Concessions
• Sparsely Occupied Public Agricultural Land
• Idle, Abandoned, Foreclosed and Sequestered Lands
• Rural Women
• Veterans and Retirees
• Agricultural Graduates
(1) Subsistence Fishing

• Small fisher folk, including seaweed farmers, shall be assured of greater access to the
utilization of water resources.

(2) Logging and Mining Concessions

• Subject to the requirement of a balanced ecology and conservation of water resources,

suitable areas, as determined by the Department of Environment and Natural Resources (DENR), in
logging, mining and pasture areas, shall be opened up for agrarian settlements whose beneficiaries
shall be required to undertake reforestation and conservation production methods. Subject to existing
laws, rules and regulations, settlers and members of tribal communities shall be allowed to enjoy and
exploit the products of the forest other than timber within the logging concessions.

What is the reason behind the exclusion of Timber?

• PRESIDENTIAL DECREE NO. 705 (May 19, 1975)

• REVISING PRESIDENTIAL DECREE NO. 389, OTHERWISE KNOWN AS THE FORESTRY

REFORM CODE OF THE PHILIPPINES-

Section 68.

• Cutting, gathering and/or collecting timber or other products without license. Any
person who shall cut, gather, collect, or remove timber or other forest products from any forest land,
or timber from alienable and disposable public lands, or from private lands, without any authority under
a license agreement, lease, license or permit, shall be guilty of qualified theft as defined and punished
under Articles 309 and 310 of the Revised Penal Code; Provided, That in the case of partnership,
association or corporation, the officers who ordered the cutting, gathering or collecting shall be liable,
and if such officers are aliens, they shall, in addition to the penalty, be deported without further
proceedings on the part of the Commission on Immigration and Deportation.

• EXECUTIVE ORDER No. 277 (July 25, 1987)

(Amending Section 68 of Presidential Decree (P.D.) No. 705)

"Sec. 68-A.

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• Administrative Authority of the Department Head or His Duly Authorized Representative to
Order Confiscation. In all cases of violations of this Code or other forest laws, rules and regulations,
the Department Head or his duly authorized representative, may order the confiscation of any forest
products illegally cut, gathered, removed or possessed or abandoned, and all conveyances used either
by land, water or air in the commission of the offense and to dispose of the same in accordance with
pertinent laws, regulations or policies on the matter.

"Sec. 68-B.

• Rewards to Informants. Any person who shall provide any information leading to the
apprehension and conviction of any offender for any violation of this Code or other forest laws, rules
and regulations, or confiscation of forest products shall be given a reward in the amount of twenty per
centum (20%) of the proceeds of the confiscated forest products."

• EXECUTIVE ORDER No. 23 (February 1, 2011)

Declared a moratorium on the cutting and harvesting of Timber in the natural and
residual forests and creating the Anti-Illegal Logging Task-Force;

• DENR is prohibited from issuing logging contracts/agreements in all natural and residual
forests; and

• Strictly implement a forest certification system to ascertain the sustainability of legal sources
and chain of custody of timber and wood products, nationwide.

(3) Sparsely Occupied Public Agricultural Lands

• Shall be surveyed, proclaimed and developed as farm settlements for qualified landless people
based on an organized program to ensure their orderly and early development.

• Agricultural land allocations shall be made for ideal family-size farms as determined by the
PARC. Pioneers and other settlers shall be treated equally in every respect.

• Subject to the prior rights of qualified beneficiaries, uncultivated lands of the public domain
shall be made available on a lease basis to interested and qualified parties. Parties who will engaged
in the development of capital intensive, traditional or pioneering crops shall be given priority.

• The lease period, which shall not be more than a total of fifty (50) years, shall be proportionate
to the amount of investment and production goals of the lessee. A system of evaluation and audit shall
be instituted.

(4) Idle, Abandoned, Foreclosed and Sequestered Lands

• Shall be planned for distribution as home lots and family-size farmlots to actual occupants. If
land area permits, other landless families shall be accommodated in these lands.

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• 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 (Sec. 2, par. (f), RA 6657)

• Foreclosed Lands- Lands obtained by a procedure by which the holder of a mortgage—an

interest in land providing security for the performance of a duty or the payment of a debt—sells the
property upon the failure of the debtor to pay the mortgage debt and, thereby, terminates his or her
rights in the property.

• Sequestered Lands-sequestration takes place when the attachment or seizure of property in

litigation is ordered. (Art. 1785, NCC)

(5) Rural Women

• Women who are engaged directly or indirectly in farming and/or fishing as their source of
livelihood, whether paid or unpaid, regular or seasonal, or in food preparation, managing household,
caring for the children and other similar activities, as defined in Sec. 3 of RA 9700.

• (RA NO. 9700, otherwise known as AN ACT STRENGTHENING THE COMPREHENSIVE

AGRARIAN REFORM PROGRAM (CARP), EXTENDING THE ACQUISITION AND DISTRIBUTION
OF ALL AGRICULTURAL LANDS, INSTITUTING NECESSARY REFORMS, AMENDING FOR THE
PURPOSE CERTAIN PROVISIONS OF REPUBLIC ACT NO. 6657, OTHERWISE, KNOWN AS THE
COMPREHENSIVE AGRARIAN REFORM LAW OF 1988, AS AMENDED, AND APPROPRIATING
FUNDS THEREFOR)

Qualified Women Must Be Guaranteed:

• Equal shares of the farm's produce;

• Equal right to ownership of the land;

• Representation in advisory or appropriate decision-making bodies.

(6) Veterans and Retirees

• Landless war veterans and veterans of military campaigns, their surviving spouse and
orphans, retirees of the Armed Forces of the Philippines (AFP) and the Integrated National Police
(INP), returnees, surrenderees, and similar beneficiaries shall be given due consideration in the
disposition of agricultural lands of the public domain.

Section 7, Article XVI of the 1987 Constitution provides:

• The State shall provide immediate and adequate care, benefits, and other forms of assistance
to war veterans and veterans of military campaigns, their surviving spouses and orphans. Funds shall

65
be provided therefor and due consideration shall be given them in the disposition of agricultural lands
of the public domain and, in appropriate cases, in the utilization of natural resources.

(7) Agricultural Graduates

• Graduates of agricultural schools who are landless shall be assisted by the government,
through the DAR, in their desire to own and till agricultural lands.

PROGRAM IMPLEMENTATION

Section 41. THE PRESIDENTIAL AGRARIAN REFORM COUNCIL (PARC)

• CHAIRMAIN - President of the Philippines

• VICE-CHAIRMAN - Secretary of Agrarian Reform

• MEMBERS - Secretaries of the Departments of Agriculture; Environment and Natural

Resources; Budget and Management; Interior and Local Government: Public Works and Highways;
Trade and Industry; Finance; Labor and Employment; Director-General of the National Economic and
Development Authority; President, Land Bank of the Philippines; Administrator, National Irrigation
Administration; Administrator, Lan Registration Authority, and six (6) representatives of affected
landowners to represent Luzon, Visayas and Mindanao; six (6) representatives of agrarian reform
beneficiaries, two (2) each from Luzon, Visayas and Mindanao, provided that one of them shall be
from the cultural communities.

• Of the 6 representatives of the agrarian reform beneficiaries:

at least one (1) should be from the indigenous people

at least one (1) should come from a duly recognized national organization of rural
women or a national organization of agrarian reform beneficiaries with a substantial number
of women members.

At least 20 % of the members of the PARC should be women but in no case should
they be less than two (2).

Functions of PARC:

(a) Formulate and/or implement the policies, rules and regulations necessary to implement each
component of the CARP

(b) Authorize any of its members to formulate rules and regulations concerning aspects of agrarian
reform falling within their area of responsibility

(c) Coordinate the implementation of the CARP and to ensure the timely and effective delivery of
the necessary support services.

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Section 42. EXECUTIVE COMMITTEE

o There shall be an Executive Committee (EXCOM) of the PARC composed of the Secretary of
the DAR as Chairman, and such other members as the President may designate, taking into account
Article XIII, Section 5 of the Constitution. Unless otherwise directed by PARC, the EXCOM may meet
and decide on any and all matters in between meetings of the PARC: Provided, however, that its
decisions must be reported to the PARC immediately and not later than the next meeting.

Article XIII, Section 5 of the 1987 Constitution provides:

o The 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, and shall provide support to agriculture through
appropriate technology and research, and adequate financial, production, marketing, and other
support services.

Section 43. SECRETARIAT

• A PARC Secretariat is hereby established:

-to provide general support and coordinative services such as inter-agency linkages;

-program and project appraisal; and

-evaluation and general operations monitoring for the PARC.

• The Secretariat shall be headed by the Secretary of Agrarian Reform who shall be assisted by
an Undersecretary and supported by a staff whose composition shall be determined by the PARC
Executive Committee and whose compensation shall be chargeable against the Agrarian Reform
Fund. All officers and employees of the Secretariat shall be appointed by the Secretary of Agrarian
Reform.

Section 44. Provincial Agrarian Reform Coordinating Committee (PARCCOM)

COMPOSITION:

• CHAIRMAN- appointed by the President upon the recommendation of the EXCOM

• EXECUTIVE OFFICER- Provincial Agrarian Reform Officer

• 1 representative each from - Departments of Agriculture, and of Environment and Natural

Resources and from the LBP

• 1 representative each from - existing farmers' organizations, agricultural cooperatives and non-
governmental organizations in the province;

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• 2 representatives from - landowners, at least one of whom shall be a producer representing
the principal crop of the province

• 2 representatives from - farmer and farmworker-beneficiaries, at least one of whom shall be a

farmer or farmworker representing the principal crop of the province,

• 1 representative from – cultural community, in areas where there are cultural communities

Functions of PARCOOM:

• shall coordinate and monitor the implementation of the CARP in the province

• provide information on the provisions of the CARP, guidelines issued by the PARC and on the
progress of the CARP in the province.

• In addition, it shall:

(a) Recommend to the PARC the following:

1. Market prices to be used in the determination of the profit sharing obligation of agricultural
entities in the province.

2. Adoption of the direct payment scheme between the landowner and the farmer and/or
farmworker beneficiary: Provided, that the amount and terms of payment are not more burdensome
to the agrarian reform beneficiary than under the compulsory coverage provision of the CARL:
Provided, further, That the agrarian reform beneficiary agrees to the amount and terms of payment :
Provided, furthermore, that the DAR shall act as a mediator in cases of disagreement between the
landowner and the farmer and/or farmworker beneficiary; Provided, finally, that the farmer and/or
farmer beneficiary shall be eligible to borrow from the LBP an amount equal to eighty-five percent
(85%) of the selling price of the land that they have acquired;

3. Continuous processing of applications for lease back arrangements, joint venture agreements
and other schemes that will optimize the operating size for agricultural production and also promote
both security of tenure and security of income to farmer beneficiaries: provided, That lease back
arrangements should be the last resort.

Section 45. Province-by-Province Implementation

• PARC shall provide the guidelines for the province-by-province implementation of CARP
taking into account:

• Peculiarities and needs of each province, such as the kind of crops needed or suited

• Land distribution workload

• Other factor prevalent or obtaining in the areas.

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• In all cases, the implementing agencies at the provincial level shall promote the development
of identified ARCs without neglecting the needs and problems of other beneficiaries. The ten-year
program of distribution of public and private lands in each province shall be adjusted from year by the
province's PARCCOM in accordance with the level of operations previously established by the PARC,
in every case ensuring that support services are available or have been programmed before actual
distribution is effected.

• (As amended by R.A. 7905, An Act to Strengthen the Implementation of the Comprehensive
Agrarian Reform Program, and For Other Purposes.)

SECTION 51. Finality of Determination.

• Any case or controversy before it shall be decided within thirty (30) days after it is submitted
for resolution. Only one (1) motion for reconsideration shall be allowed. Any order, ruling or decision
shall be final after the lapse of fifteen (15) days from receipt of a copy thereof.

30 DAYS – Any case or controversy before the DAR shall be decided within thirty (30)
days after it is submitted for resolution.

1 MOTION FOR RECONSIDERATION – Only one (1) motion for reconsideration shall
be allowed.

15 DAYS – Any order, ruling or decision shall be final after the lapse of fifteen (15)
days from receipt of a copy thereof.

• The aggrieved party can elevate the order or ruling of the DAR to the Court of Appeals (CA)
by way of a petition for review on certiorari under Rule 43 of the Rules of Court.

Sec. 46 – BARANGAY AGRARIAN REFORM COMMITTEE (BARC)

• Unless otherwise provided in this Act, the provisions of Executive Order No. 229 regarding the
organization of the Barangay Agrarian Reform Committee (BARC) shall be in effect.

COMPOSITION OF THE BARANGAY AGRARIAN REFORM COUNCIL (BARC)

The Barangay Agrarian Reform Council (BARC) is composed of representatives coming from the
following:

a) Farmers and farmworkers beneficiaries;

b) Farmer and farmworkers non-beneficiaries;

c) Agricultural cooperatives;

d) Other farmer organizations;

e) Barangay Council;

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f) Non-government organizations;

g) Landowners;

h) Land Bank;

i) Official of the Department of Agriculture assigned to the barangay;

j) Official of the Department of Environment and Natural Resources official assigned to the area;
and

k) Department of Agrarian Reform Technologist assigned to the area who shall act as the
Secretary.

Sec. 47 – FUNCTIONS OF THE BARANGAY AGRARIAN REFORM COMMITTEE

1) In addition to those provided in Executive Order No 229, the BARC shall have the following
functions:

a) Mediate and conciliate between parties involved in an agrarian dispute including

matters related to tenurial and financial arrangements;

b) Assist in the identification of qualified beneficiaries and landowners within the

barangay;

c) Attest to the accuracy of the initial parcellary mapping of the beneficiary’s tillage;

d) Assist qualified beneficiaries in obtaining credit from lending institutions;

e) Assist in the initial determination of the value of the land;

f) Assist the DAR representatives in the preparation of periodic reports on the CARP
implementation for submission to the DAR;

g) Coordinate the delivery of support services to beneficiaries; and

h) Perform such other functions as may be assigned by the DAR.

2) The BARC shall endeavor to mediate, conciliate and settle agrarian disputes lodged before it
within thirty (30) days from its taking cognizance thereof. If after the lapse of the thirty-day period, it is
unable to settle the dispute, it shall issue a certificate of its proceedings and shall furnish a copy thereof
upon the parties within seven (7) days after the expiration of the thirty-day period.

FUNCTIONS OF THE BARC under Section 19, Executive Order No. 229

a) To participate and give support to the implementation of programs on agrarian reform;

b) To mediate, conciliate or arbitrate agrarian conflicts and issues that are brought to it for
resolution; and
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c) To perform such other functions that the PARC, its Executive Committee, or the DAR
Secretary may delegate from time to time.

Sec. 48 – LEGAL ASSISTANCE

• The BARC or any member thereof may, whenever necessary in the exercise of any of its
functions hereunder, seek the legal assistance of the DAR and the provincial, city, or municipal
government.

LEGAL ASSISTANCE

• The Barangay Agrarian Reform Council can ask for legal advice from the Department of
Agrarian Reform to ensure that its proposed solution to the dispute is within the bounds of law. This is
done in the exercise of its mediation or conciliation functions.

Sec. 49 – RULES AND REGULATIONS

• The PARC and the DAR shall have the power to issue rules and regulations, whether
substantive or procedural, to carry out the objects and purposes of this Act. Said rules shall take effect
ten (10) days after publication in two (2) national newspaper of general circulation.

ADMINISTRATIVE ADJUDICATION

Sec. 50 – QUASI-JUDICIAL POWERS OF THE DEPARTMENT OF AGRARIAN REFORM

• The DAR is hereby vested with the primary jurisdiction to determine and adjudicate agrarian
reform matters and shall have exclusive original jurisdiction over all matters involving the
implementation of agrarian reform except those falling under the exclusive jurisdiction of the
Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR).

• It shall not be bound by technical rules of procedure and evidence but shall proceed to hear
and decide all cases, disputes or controversies in a most expeditious manner, employing all
reasonable means to ascertain the facts of every case in accordance with justice and equity and the
merits of the case. Toward this end, it shall adopt a uniform rule of procedure to achieve a just,
expeditious and inexpensive determination for every action or proceeding before it.

• It shall have the power to summon witnesses, administer oaths, take testimony, require
submission of reports, compel the production of books and documents and answers to interrogatories
and issue subpoena, and subpoena duces tecum, and enforce its writs through sheriffs or other duly
deputized officers. It shall likewise have the power to punish direct and indirect contempts in the same
manner and subject to the same penalties as provided in the Rules of Court.

• Responsible farmer leaders shall be allowed to represent themselves, their fellow farmers, or
their organizations in any proceedings before the DAR: Provided, however, That when there are two
or more representatives for any individual or group, the representatives should choose only one among
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themselves to represent such party or group before any DAR proceedings. Notwithstanding an appeal
to the Court of Appeals, the decision of the DAR shall be immediately executory.

TWO-FOLD JURISDICTION OF THE DEPARTMENT OF AGRARIAN REFORM

• EXECUTIVE - pertains to the enforcement and administration of the laws, carrying them into
practical operation and enforcing their due observance.

• JUDICIAL – involves the determination of rights and obligations of the parties.

FUNCTION OF THE DEPARTMENT OF AGRARIAN REFORM REGIONAL OFFICE

• The function of the DAR Regional Office concerns with the Implementation of agrarian reform
laws. (executive in nature)

FUNCTIONS OF THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD

(including the REGIONAL AGRARIAN REFORM ADJUDICATORS (RARAD) or PROVINCIAL
AGRARIAN REFORM ADJUDICATORS (PARAD))

• Their function concerns adjudication of agrarian reform cases. (judicial in nature)

QUASI-JUDICIAL JURISDICTION OF THE DEPARTMENT OF AGRARIAN REFORM

(Sec. 2, Rule II, 2009 DARAB Rules of Procedure.)

a) Primary jurisdiction to determine and adjudicate agrarian reform matters; and

b) Appellate jurisdiction over orders and decisions of the Agrarian Reform Adjudicators.

QUASI-JUDICIAL POWERS OF THE DEPARTMENT OF AGRARIAN REFORM

a) Hear and decide cases within its jurisdiction;

b) Summon witnesses;

c) Administer oaths;

d) Take testimony;

e) Issue subpoena ad testificandum or duces tecum;

f) Issue writs of execution; and

g) Punish direct or indirect contempt.

PROVINCIAL AGRARIAN REFORM ADJUDICATORS (PARAD)

(Sec. 1, Rule II, 2009 DARAB Rules of Procedure)

(See also Sec. 12 of Presidential Decree No. 946)

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It has primary and exclusive jurisdiction to hear and decide agrarian disputes, pertaining to:

a) Rights and obligations of persons engaged in the management, cultivation, and use of all
agricultural lands covered by the CARL and other related agrarian laws;

b) Preliminary administrative determination of reasonable and just compensation of lands

acquired under PD No. 27 and the CARP;

c) Annulment or rescission of lease contracts or deeds of sale of lands under the administration
and disposition of the DAR or Land Bank, including amendment of titles of agricultural lands under the
administration and disposition of the DAR, Land Bank, as well as Emancipation Patents issued under
PD No. 266, Homestead Patents, Free Patents, and miscellaneous sales patents to settlers in
settlement and re-settlement areas under the administration and disposition of the DAR;

d) Ejectment and dispossession of tenants or leaseholders;

e) Sale, alienation, pre-emption, and redemption of agricultural lands under the coverage of the
CARL, as amended or other agrarian laws;

f) Correction, partition, secondary and subsequent issuances such as reissuance of lost or

destroyed owner’s duplicate copy and reconstitution of CLOA and EP which are registered with the
LRA;

g) Review of leasehold rentals and fixing of disturbance compensation;

h) Collection of amortization payments, foreclosure and similar disputes concerning the functions
of the Land Bank, and payments for lands awarded under agrarian laws, including payment for
residential, commercial, and industrial lots within the settlement and resettlement areas under the
administration and disposition of the DAR;

i) Boundary disputes over lands under the administration and disposition of the DAR and the
Land Bank, which were transferred, distributed, or sold to tenant-beneficiaries and covered by deeds
of sale, patents, and certificates of title;

j) Cases previously falling under the original and exclusive jurisdiction of the defunct Court of
Agrarian Relations under Sec. 12 of PD No. 946 except those cases falling under the proper courts or
other quasi-judicial bodies; and

k) Such other agrarian cases, disputes, matters or concerns referred to it by the Secretary of the
Department of Agrarian Reform.

AGRARIAN DISPUTES

(Sec. 3 (d), Comprehensive Agrarian Reform Law)

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 “Agrarian disputes 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 and 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.”

“If the occupancy and possession was by mere tolerance, there is no agrarian reform dispute
to speak of.” Isidro vs. CA, 216 SCRA 503

APPEAL FROM DECISION OF THE PARAD

(Sec. 2, Rule II; Sec. 1, Rule XIV, 2009 DARAB Rules of Procedure )

Decisions of the PARAD are appealable to the DAR Adjudication Board (DARAB) within fifteen (15)
days.

FUNCTIONS OF THE REGIONAL AGRARIAN REFORM ADJUDICATORS (RARAD)

(Sec. 2, Rule II, 2009 DARAB Rules of Procedure)

1) Administrative supervision over the PARAD including the monitoring of cases in the Region;

2) Conduct hearing and adjudication of agrarian disputes within the Region;

3) Conduct hearing on the following:

a) Cases that cannot be handled by the PARAD on account of inhibition,

disqualification or when there is no PARAD designated in the locality;

b) Matters if such complexity and sensitivity that the decision thereof would
constitute an important precedent affecting regional interest as may be recommended by the
concerned RARAD and approved by the Board; and

c) Preliminary determination of just compensation of lands valued at P10M to

P50M.

d) Conduct hearing on applications for the issuance of writ of preliminary

injunction or temporary restraining order and such other cases which the Board may assign.

DARAB has no jurisdiction over . . .

• Matters pertaining to ownership

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 When the controversy pertains to ownership, there is no agrarian dispute, hence, the matter
is beyond the jurisdiction of the DARAB.

• Retention or exemption issue

Issues pertaining to retention rights of the landowner and the exclusion or exemption from
agrarian reform coverage are not cognizable by the DARAB, but by the Secretary of the Department
of Agrarian Reform because they pertain to administrative implementation of agrarian law.

• Right of way issues

The DARAB cannot entertain a petition for right of way filed by agrarian reform beneficiaries
against an adjoining landowner because the issue of right of way or easement over private property
without tenancy relations is outside the jurisdiction of the DARAB.

• To identify and classify landholdings for agrarian reform coverage

The jurisdiction to classify and identify landholdings for agrarian reform coverage is reposed
in the Secretary of Agrarian Reform and not with the DARAB because the matter of agrarian reform
coverage is strictly a part of the administrative implementation of the agrarian reform program.

• Matters pertaining to identification and selection of beneficiaries

Identification and selection of agrarian reform beneficiaries are matters involving

administrative implementation of the agrarian reform program. Therefore, the matter is cognizable by
the Secretary of Agrarian Reform and not by the DARAB. Hence, any party who claims to have priority
over those who have been identified by the Municipal Agrarian Reform Officer (MARO) should file his
protest with the MARO or Provincial Agrarian Reform Officer (PARO) and later to the Department of
Agrarian Reform, but not with the DARAB.

Sec. 50-A – EXCLUSIVE JURISDICTION OF AGRARIAN DISPUTE

• No court or prosecutor's office shall take cognizance of cases pertaining to the implementation
of the CARP except those provided under Section 57 of Republic Act No. 6657, as amended. If there
is an allegation from any of the parties that the case is agrarian in nature and one of the parties is a
farmer, farmworker, or tenant, the case shall be automatically referred by the judge or the prosecutor
to the DAR which shall determine and certify within fifteen (15) days from referral whether an agrarian
dispute exists:

• Provided, That from the determination of the DAR, an aggrieved party shall have judicial
recourse. In cases referred by the municipal trial court and the prosecutor's office, the appeal shall be
with the proper regional trial court, and in cases referred by the regional trial court, the appeal shall be
to the Court of Appeals.

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• "In cases where regular courts or quasi-judicial bodies have competent jurisdiction, agrarian
reform beneficiaries or identified beneficiaries and/or their associations shall have legal standing and
interest to intervene concerning their individual or collective rights and/or interests under the CARP.
"The fact of non-registration of such associations with the Securities and Exchange Commission, or
Cooperative Development Authority, or any concerned government agency shall not be used against
them to deny the existence of their legal standing and interest in a case filed before such courts and
quasi-judicial bodies."

AGRARIAN CASE FILED DIRECTLY IN COURT—action to be taken

• The Court should not dismiss the case. It should refer the matter to the DAR for the purpose
of determining whether an agrarian dispute exists.

The aggrieved party has fifteen (15) days to appeal the ruling of DAR to the: a) Regional Trial
Court

i. For cases referred by the Municipal Trial Court or the prosecutor’s office; and

b) Court of Appeals

i. For cases referred by the Regional Trial Court.

LEGAL PERSONALITY OF UNREGISTERED ASSOCIATIONS CANNOT BE CHALLENGED

Courts can still entertain complaints or petitions filed by unregistered associations or

cooperatives composed of agrarian reform beneficiaries despite the fact that they are not incorporated
with the Securities and Exchange or registered with the Cooperative Development Authority.

SECTION 52. Frivolous Appeals.

• To discourage frivolous or dilatory appeals from the decisions or orders on the local or
provincial levels, the DAR may impose reasonable penalties, including but not limited to fines or
censures upon erring parties.

• Whether an appeal is frivolous or dilatory is a factual matter which should be decided according
to the surrounding facts and circumstances.

SECTION 53. Certification of the BARC

• The DAR shall not take cognizance of any agrarian dispute or controversy unless a certification
from the BARC that the dispute has been submitted to it for mediation and conciliation without any
success of settlement is presented: Provided, however, That if no certification is issued by the BARC
within thirty (30) days after a matter or issue is submitted to it for mediation or conciliation the case or
dispute may be brought before the PARC.

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• Barangay Agrarian Reform Committee (BARC) The jurisdiction of the BARC is in the barangay
where the land involved is located.

• BARC Certification It is a certification to the effect that the dispute has been submitted to the
BARC for mediation or conciliation without any success or settlement.

• If no certification is issued by the BARC within thirty (30) days after a matter or issue is
submitted to it for mediation or conciliation, the case or dispute may be brought before the Presidential
Agrarian Reform Council (PARC).

BARC Certification is not necessary:

• where the issue involves the valuation of land to determine just compensation for its
acquisition;

• where one party in a public or private corporation, partnership, association or juridical person,
or a public officer or employee and the dispute relates to the performance of his official functions;

• where the Secretary of the DAR directly refers the matter to the Board or Adjudicator; or

• upon certification of the Municipal Agrarian Reform Officer (MARO) or, in his absence, the
Senior Agrarian Reform Program Technologist (SARPT) or Agrarian Reform Program Technologist
(ARPT) of the non-existence of the BARC or the inability of the BARC to convene.

SECTION 54. Certiorari.

• Any decision, order, award or ruling of the DAR on any agrarian dispute or on any matter
pertaining to the application, implementation, enforcement, or interpretation of this Act and other
pertinent laws on agrarian reform may be brought to the Court of Appeals by certiorari except as
otherwise provided in this Act within fifteen (15) days from the receipt of a copy thereof. The findings
of fact of the DAR shall be final and conclusive if based on substantial evidence.

• The remedy from an adverse ruling of the DAR is to file a petition for review on certiorari under
Rule 43 of the Rules of Court within fifteen (15) days from notice of the ruling.

GREENFIELD REALTY V. CARDAMA

G.R. No. 129246 January 25, 2000

FACTS: Private respondents filed with the Provincial Adjudicator of Sta. Cruz, Laguna against
petitioners who were claiming to have already been issued their respective Certificates of Land
Transfer pursuant to Presidential Decree No. 27 which took effect on October 21, 1972, thus
subject landholdings can no longer be covered by the CARP law. They prayed for petitioners
to respect their rights as legitimate leasehold tenants of their respective landholdings. They
also claimed to have succeeded their father who died on January 9, 1989 in the latter’s tenancy

77
 rights, and should be declared now as leasehold tenants and actual tillers of the subject
irrigated rice land. Judgment was rendered in favor of the private respondents by the Provincial
Adjudicator. On appeal to the DARAB, it was declared that the respondents are not bona fide
tenant of the subject property. When the case was brought to the CA, the decision of the
Provincial Adjudicator was reinstated.

ISSUE: Whether the Court of Appeals erred in reversing the findings of fact of the DARAB
which were based on, at the very least, substantial evidence, and thus should have been final
and conclusive upon the court a quo

HELD: No. Substantial evidence is such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion. The pieces of evidence presented by the petitioners are
not relevant or adequate to support the conclusion reached by the DARAB. On the other hand,
the records of the case are replete with relevant evidences adequate to support the conclusion
that Hermogenes Cardama is the bona fide tenant of the subject property. Hence, the Court
of Appeals did not err in reversing the findings of fact of DARAB, the same not being based
on substantial evidence.

SECTION 55. No Restraining Order or Preliminary Injunction. —Except for the Supreme Court, no
court in the Philippines shall have jurisdiction to issue any restraining order or writ of preliminary
injunction against the PARC or any of its duly authorized or designated agencies in any case, dispute
or controversy arising from, necessary to, or in connection with the application, implementation,
enforcement, or interpretation of this Act and other pertinent laws on agrarian reform.

• Only the Supreme Court can issue restraining order or writ of preliminary injunction against
the PARC or any of its duly authorized or designated agencies in any case arising from laws on
agrarian reform.

• Once a ruling is rendered, the prohibition will no longer apply. The aggrieved party may bring
the matter to the proper courts for the remedy available to him.

Purpose:

• To prohibit the issuance of restraining orders or injunctions against the proceedings before the
Department of Agrarian Reform (DAR) or the Presidential Agrarian Reform Council (PARC) so as not
to disrupt the smooth implementation of agrarian reform program.

SECTION 56. Special Agrarian Court.

• The Supreme Court shall designate at least one (1) branch of the Regional Trial Court (RTC)
within each province to act as a Special Agrarian Court. The Supreme Court may designate more
branches to constitute such additional Special Agrarian Courts as may be necessary to cope with the
number of agrarian cases in each province. In the designation, the Supreme Court shall give

78
preference to the Regional Trial Courts which have been assigned to handle agrarian cases or whose
presiding judges were former judges of the defunct Court of Agrarian Relations. The Regional Trial
Court (RTC) judges assigned to said courts shall exercise said special jurisdiction in addition to the
regular jurisdiction of their respective courts. The Special Agrarian Courts shall have the powers and
prerogatives inherent in or belonging to the Regional Trial Courts.

• The Regional Trial Court (RTC) should be specifically designated by the Supreme Court as a
Special Agrarian Court.

• The Supreme Court may designate at least one (1) branch of the RTC within each province to
act as a Special Agrarian Court. It may designate more as necessary to cope with the number of
agrarian cases in each province.

• RTCs which have not been designated as special agrarian courts cannot hear petitions for
determination of just compensation even if the land subject of such cases happen to be within their
territorial jurisdiction.

LAND BANK V. VILLEGAS

G.R. No. 180384 March 26, 2010

FACTS: Land Bank filed cases for determination of just compensation of agricultural lands
against Villegas and the heirs of Noel before RTC of Dumaguete City Branch 32, the Special
Agrarian Court for the province of Negros Oriental. The lands of the respondents happened to
be outside the regular territorial jurisdiction of RTC Branch 32 Dumaguete City. The RTC
Branch 32 dismissed both cases holding that it has no jurisdiction and that it is RTC Branch
64 of Guihulngan City that has jurisdiction over the property of Villegas since it is where it could
be found and that the property of the heirs of Noel is under the jurisdiction of RTC Branch 63
of Bayawan City; hence, this petition.

ISSUE: Whether the RTC Branch 32 of Dumaguete City, the Special Agrarian Court of the
province of Negros Oriental, has jurisdiction over agricultural lands outside its regular
jurisdiction but within the province where they are designated

HELD: Yes. The court’s jurisdiction over the nature and subject matter of an action is conferred
by law. In this case, the law that confers jurisdiction on Special Agrarian Courts in every
province is RA No. 6657. It states that a branch of an RTC designated as Special Agrarian
Court for a province has the original and exclusive jurisdiction over all petitions for the
determination of just compensation in that province. Therefore, RTC Branch 32, being
designated as the Special Agrarian Court for the province of Negros Oriental has jurisdiction
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 over all cases for determination of just compensation involving agricultural lands within that
province, regardless of whether or not those properties are outside its regular territorial
jurisdiction.

Section 63 Fund Source

• The amount need to further implement CARP, upon expiration of funding under RA 8532, shall
be funded from Agrarian Reform Fund and other funding sources in the amounting to 150,000,000,000

• The sources of funding shall include the following

-Proceeds of the sale of Privatization and Management Office

-All receipts from assets recovered and from sales of Ill-gotten wealth recovered by
PCGG

-Proceeds of the disposition and development of the properties of Government in

foreign countries

-All income and collections of whatever forms and nature arising from agrarian reform
operations, projects and programs of DAR

-Portion of amounts accruing to the Philippines from all sources of official foreign aid
grants.

-Yearly appropriation of no less than 5,000,000,000 from General Appropriation funds

-Gratuitous financial assistance from legitimate sources

-Other Government funds not otherwise appropriated

• The Just compensation payment to the land owners can only be sourced from the agrarian
reform fund.

• If the annual budget for the Agrarian reform fund is not sufficient, the just compensation
payment shall be charged against the debt service program of the national government, or any
unprogrammed item in General Appropriation Act

Section 64 Financial Intermediary for the CARP

• The Land Bank of the Philippines (LBP) shall be the financial intermediary for CARP, and shall
insure that the social justice objectives of the CARP shall enjoy preference among priorities

• The Land Bank is the financial arm of the agrarian reform program, the determination of just
compensation under CARL commences with the Land Bank determining the value of the land.

• Using the Land Bank valuation, the Department of Agrarian Reform makes an offer to the land
owner
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Section 65 Land Conversion

• After 5 years from its award, when the land ceases to be economically feasible and sound for
agricultural purposes, or the locality has become urbanized and the land will become greater economic
value for residential, commercial, or industrial purpose, the DAR, upon application of the beneficiary
may authorize the reclassification or conversion of the land and its disposition

• Provided that if the applicant is a beneficiary under Agrarian Laws and the land sought to be
converted is the land awarded to him/her, the applicant after the conversion is granted, shall invest at
least 10% of the proceeds coming from the conversion in government securities.

• Exception Irrigated and irrigable lands

Meaning of Conversion

• It is the act of changing the current uses of piece of agricultural land into some other use

-For residential, commercial, industrial and other non-agricultural purposes;

-For another type of agricultural activity such as livestock, poultry, and fishpond the
effect of which is so exempt the land from CARP coverage

-For non- agricultural use, other than that previously authorized

• Change of crops to commercial crops or high value crops is considered as conversion in the
use or nature of land.

Conversion differs from Reclassification

• Conversion is the act of changing the current use of piece of agricultural land into some other
use as approved by DAR

• Reclassification is the act of specifying how agricultural lands shall be utilized for non-
agricultural uses such as residential, industrial, and commercial, as embodied in the land use plan,
subject to the requirements and procedures for land use conversion

Effects of Reclassification

• A mere reclassification of an agricultural land does not automatically allow the landowner to
change its use. He must undergo the process of conversion before he is permitted to use the
agricultural land for other purpose

Who can apply for conversion?

• The following persons can apply for land conversion

-The beneficiary

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 -The landowner with respect only to his retained area which is tenanted.

When is the proper time to file the application for conversion?

• The application for conversion can be filed after the lapse of five (5) years from the award of
the land

Under what conditions can an application for conversion be filed?

• When the land ceases to be economically feasible for agricultural purposes

• When the locality has become urbanized and the land will have a greater economic value for
residential, commercial or industrial purposes

Section 65-A Conversion Into Fishpond and Prawn Farms

• No Converasion of public agricultural lands into fishponds and prawn farms shall be made
except in situations where the provincial government with the concurrence of BFAR declare a costal
zone as suitable for fishpond development.

Conversion of Public Agricultural Lands to Fishponds

• Public agricultural lands can be converted into fishponds and prawn farms only when the costal
zone is declared suitable for fishpond development by the provincial government and the BFAR

• If the condition is complied with, the DENR can allow the lease and development of area

• Private agricultural lands can be converted into fishponds and prawn farms up to a maximum
area of five (5) hectares. Exceptionally, the Department of Agrarian Reform may approve the
conversion of more than five (5) hectares of agricultural land to fishponds and prawn under the
following conditions

-When the use of the land is more economically feasible and sound for fishpond and/or
prawn farm, as certified by Bureau of Fisheries and Aquatic Resources (BFAR); and

-A simple and absolute majority of the regular farm workers or tenants agree to
conversion

Section 65 B- Inventory

• Within one year from the effectivity of this Act, the BFAR shall undertake and finish in inventory
of all government and private fishponds and prawn farms, and undertake a program to promote the
sustainable management and utilization of prawn farms and fishponds

Purpose of Inventory

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• The inventory of all government and private fishponds and prawn farms will help the
Department of Agrarian Reform monitor unauthorized conversion of lands into fishpond and prawn
farms.

Section 65 C- Protection of Mangrove

• In existing Fishpond Lease Agreement and those that will be issued after the effectivity of this
act, a portion of the fishpond area fronting the seas, sufficient to protect the environment, shall be
established as buffer zone and be planted to specified mangrove species to be determine in
consultation with the regional office of the DENR

Section 65-D Change of Crops

• The change of crops to commercial crops or high value crops shall not be considered as a
conversion in the use or nature of land.

• The change in crops should however, not prejudice the rights of tenant or leaseholders should
there be any and the consent of a simple and absolute majority of the affected farm workers, if any
shall first be obtained

Change of Crops does not need DAR approval

• Considering that change of crops to commercial crops or high value crops is not considered
as conversion in the use of nature of the land, approval of the Department of Agrarian Reform is not
required

SECTION 66. Exemptions from Taxes and Fees of Land Transfers.

• Transactions under this Act involving a transfer of ownership, whether from natural or juridical
persons, shall be exempted from taxes arising from capital gains. These transactions shall also be
exempted from the payment of registration fees, and all other taxes and fees for the conveyance or
transfer thereof; Provided, that all arrearages in real property taxes, without penalty or interest, shall
be deductible from the compensation to which the owner may be entitled.

Lands transferred to beneficiaries exempted from taxes and fees

• Deeds transfer of ownership to agrarian reform beneficiaries, whether voluntary transfer or

compulsory acquisition are exempted from capital gains, and other applicable taxes or fees.

Taxes and fees of Land Transfers:

• Capital Gains Tax

• Registration fees

• All other taxes and fees for the conveyance or transfer

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SECTION 67. Free Registration of Patents and Titles.

• All Registers of Deeds are hereby directed to register, free from payment of all fees and other
charges, patents, titles and documents required for the implementation of the CARP.

Exemption from registration fees

• Lands acquired by:

-agrarian reform beneficiaries

-retained by the landowner

are exempted from transfer fees, registration fees, etc.

SECTION 68. Immunity of Government Agencies from Undue Interference.

• No injunction, restraining order, prohibition or mandamus shall be issued by the lower courts
against the Department of Agrarian Reform (DAR), the Department of Agriculture (DA), the
Department of Environment and Natural Resources (DENR), and the Department of Justice (DOJ) in
their implementation of the program.

No injunction policy

• The purpose of the law is to ensure the unhampered, speedy, and smooth implementation of
the agrarian reform program.

SECTION 69. Assistance of Other Government Entities.

• The PARC, in the exercise of its functions, is hereby authorized to call upon the assistance
and support of other government agencies, bureaus and offices, including government owned or -
controlled corporations.

Inter-Agency Cooperation

• This provision emphasizes the utmost importance given by the government to the agrarian
reform program.

SECTION 70. Disposition of Private Agricultural Lands.

• The sale or disposition of agricultural lands retained by a landowner as a consequence of

Section 6 hereof shall be valid as long as the total landholdings that shall be owned by the transferee
thereof inclusive of the land to be acquired shall not exceed the landholding ceilings provided for in
this Act. Any sale or disposition of agricultural lands after the effectivity of this Act found to be contrary
to the provisions hereof shall be null and void. Transferees of agricultural lands shall furnish the
appropriate Register of Deeds and the BARC an affidavit attesting that his total landholdings as a
result of the said acquisition do not exceed the landholding ceiling. The Register of Deeds shall not

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register the transfer of any agricultural land without the submission of this sworn statement together
with proof of service of a copy thereof to the BARC.

Affidavit of aggregate landholding – a requirement for registration

Aside from the normal requirements for registration, the buyer of an agricultural land is
required, as a condition for registration of title to submit to the Register of Deeds an affidavit of
aggregate landholding (with confirmation from the Assessor's Office) in order to ensure that the
landholding of the buyer does not exceed the 5-heactare limit.

SECTION 71. Bank Mortgages –

• Banks and other financial institutions allowed by law to hold mortgage rights or security
interests in agricultural lands to secure loans and other obligations of borrowers, may acquire title to
these mortgaged properties, regardless of area, subject to existing laws on compulsory transfer of
foreclosed assets and acquisition as prescribed under Section 13 of this Act.

Bank or Financial Institution as Landowner

• The bank or any financial institution is considered as landowner if before deposit of just
compensation:

a) It is the purchaser in the foreclosure sale and the redemption period, as provided by law, has
already expired in cases where the right of redemption exists; or

b) It is the purchaser in the foreclosure sale and said foreclosure sale is confirmed by the court
in cases where only equity of redemption is provided.

Rights and Privileges of Bank or Financial Institution as Landowner

• The bank or any financial institution as landowner has the right to receive all notices, advices,
correspondence and all other communications from the Department of Agrarian Reform (DAR) or Land
Bank (LB) m including but not limited to:

-Notice of Coverage

-Notice of Land Valuation and Acquisition

-Letter Requirement for Processing

-Payment of Claim

-Transact with DAR or LB regarding all aspects of subject land transfer claim, to the
exclusion of all other persons

-Be named as the recipient of all cash and bond deposits

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 -Receive all the proceeds of subject land transfer claim, less deductions to which the
land may be liable.

Obligations of a Bank or Financial Institution as Landowner

• It is an obligation of the bank or any financial institution as landowner to comply with all the
requirements for processing and payment of a claim, such as surrendering the Owner’s Duplicate
Copy of Title. It shall also sign all land transfer documents required as a consequence of the
processing and payment of the land transfer claim such as:

-Deed of Assignment

-Warranties and Undertaking

-Deed of Transfer

-Deed of Confirmation of Coverage and Transfer

Bank or Financial Institution as Lien-Holder

• The bank or any financial institution is considered as lien-holder if on the date the land transfer,
the claim was received by the Land Bank from the Department of Agrarian Reform:

a) The mortgage debt is not yet due and demandable; or

b) The mortgage debt is already due and demandable but the bank or financial institution
has not foreclosed on the property; or

c) The mortgage has already been foreclosed but the period to exercise the right of
redemption, in case provided by law, has not yet expired; or

d) The foreclosure sale has not yet been confirmed by the court in cases where there is
only equity of redemption

Rights and Privileges of Bank or Financial Institution as Lien-Holder

• The bank or any financial institution as landowner has the right to receive payment for the
obligation of the mortgagor, from the land transfer proceeds up to an amount equivalent to the
landowner’s compensation and value. Also, it has the right to receive notices, advices, and all other
communications pertaining to the obligation to the landowner-debtor. (i.e. mortgagor)

Obligations of a Bank or Financial Institution as Lien-Holder

• It is an obligation of the bank or any financial institution as lien-holder to:

a) Issue a release of mortgage, or execute a deed of redemption, and deliver the Owner’s
Duplicate Copy of Title after payment of the value of the lien; and

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 b) Sign all other documents necessary to effect the cancellation of the mortgage

SECTION 72. Lease, Management, Grower or Service Contracts, Mortgages and Other Claims
–

• Lands covered by this Act under lease, management, grower or service contracts, and the like
shall be disposed of as follows:

a) Lease, management, grower or service contracts covering private lands may

continue under their original terms and conditions until the expiration of the same even if such
land has, in the meantime, been transferred to qualified beneficiaries.

b) Mortgages and other claims registered with the Register of Deeds shall be
assumed by the government up to an amount equivalent to the landowner's compensation
value as provided in this Ac

• Lease, management and grower or service contracts covering private lands may continue
under their original terms and conditions until the expiration of the same even if such land has, in the
meantime, been transferred to qualified beneficiaries.

• Mortgages and other claims registered with the Register of Deeds shall be assumed by the
government up to an amount equivalent to the landowner’s compensation value as provided in this
act.

SECTION 73. Prohibited Acts and Omissions –

• The following are prohibited:

a) The ownership or possession, for the purpose of circumventing the provisions

of this Act, of agricultural lands in excess of the total retention limits or award ceilings by any
person, natural or juridical, except those under collective ownership by farmer-beneficiaries.

b) The forcible entry or illegal detainer by persons who are not qualified
beneficiaries under this Act to avail themselves of the rights and benefits of the Agrarian
Reform Program.

c) The conversion by any landowner of his agricultural land into any

nonagricultural use with intent to avoid the application of this Act to his landholdings and to
dispossess his tenant farmers of the land tilled by them

d) The willful prevention or obstruction by any person, association or entity of the

implementation of the CARP.

e) The sale, transfer, conveyance or change of the nature of lands outside of

urban centers and city limits either in whole or in part after the effectivity of this Act. The date

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 of the registration of the deed of conveyance in the Register of Deeds with respect to titled
lands and the date of the issuance of the tax declaration to the transferee of the property with
respect to unregistered lands, as the case may be, shall be conclusive for the purpose of this
Act.

f) The sale, transfer or conveyance by a beneficiary of the right to use or any

other usufructuary right over the land he acquired by virtue of being a beneficiary, in order to
circumvent the provisions of this Act.

g) The unjustified, willful, and malicious act by a responsible officer or officers of

the government through the following:

1) The denial of notice and/or reply to landowners;

2) The deprivation of retention rights;

3) The undue or inordinate delay in the preparation of claim folders; or

4) Any undue delay, refusal or failure in the payment of just

compensation;

h) The undue delay or unjustified failure of the DAR, the LBP, the PARC, the
PARCCOM, and any concerned government agency or any government official or employee
to submit the required report, data and/or other official document involving the implementation
of the provisions of this Act, as required by the parties or the government, including the House
of Representatives and the Senate of the Philippines as well as their respective committees,
and the congressional oversight committee created herein;

i) The undue delay in the compliance with the obligation to certify or attest and/or
falsification of the certification or attestation as required under Section 7 of Republic Act No.
6657, as amended; and

j) Any other culpable neglect or willful violations of the provisions of this Act.

• In the case of government officials and employees, a conviction under this Act is without
prejudice to any civil case and/or appropriate administrative proceedings under civil service law, rules
and regulations. Any person convicted under this Act shall not be entitled to any benefit provided for
in any agrarian reform law or program.

Criminal Violations

• The following are the criminal violations of Comprehensive Agrarian Reform Law:

1. Ownership or possession of agricultural lands in excess of the total retention

limits or award ceilings, with the intent to circumvent CARP

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 2. Forcible entry or illegal detainer by persons who are not qualified beneficiaries,
with intent to avail of the right and benefits of CARP

3. Conversion of agricultural land to non-agricultural use, with intent to avoid

application of CARP

4. Malicious and willful prevention or obstruction of the implementation of CARP

5. Sale, transfer, conveyance or change of the nature of lands outside urban

centers and city limits either in whole or part after effectivity of CARP, unless it took place after
the final completion of appropriate conversion under Sec 655 of RA 665

6. Sale, transfer or conveyance by a beneficiary of the right to use or any other

usufructuary rights over the land acquired by virtue of being a beneficiary, with the intent to
circumvent CARP

7. Unjustified, willful and malicious act by a responsible officer/s of the

government through the following:

-Denial of Notice and/or Reply to Landowners

-Deprivation of retention rights

-Undue or inordinate delay in the preparation of claim folders;

-Undue delay, refusal or failure in the payment of just compensation

8. Undue delay or unjustified failure by any concerned government agency or any

government official or employee to submit the required report, data and/or other official
documents involving implementation of CARP Law as required by

-Parties or the Government

-Congress and its respective committees

-Congressional oversight committee

9. Undue delay in the compliance with the obligation to certify or attest and/or
falsification of the certification or attestation as required under Sec 7 of RA 6657

10. Any other culpable neglect or willful violations of the provisions of this act.

SECTION 73-a. Exception –

• The provisions of Section 73, paragraph (e), to the contrary notwithstanding, the sale and/or
transfer of agricultural land in cases where such sale, transfer and conveyance is made necessary aa
a result of a bank’s foreclosure pf the mortgaged land is hereby permitted.

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• The sale and/or transfer of agricultural land in cases where such sale, transfer or conveyance
is made necessary as a result of a bank’s foreclosure of the mortgaged land is hereby permitted.

SECTION 74. Penalties –

• Any person who knowingly or willfully violates the provisions of this Act shall be punished by
imprisonment of not less than one (1) month to not more than three (3) years or a fine of not less than
One thousand pesos (P1,000.00) and not more than Fifteen thousand pesos (P15,000.00), or both, at
the discretion of the court: Provided, That the following corresponding penalties shall be imposed for
the specific violations hereunder:

a) Imprisonment of three (3) years and one (1) day to six (6) years or a fine of not
less than Fifty thousand pesos (P50,000.00)and not more than One hundred fifty thousand
pesos (P150,000.00), or both, at the discretion of the court upon any person who violates
Section 73, subparagraphs (a), (b), (f), (g), and (h) of Republic Act No. 6657, as amended;
and

b) Imprisonment of six (6) years and one (1) day to twelve (12) years or a fine of
not less than Two hundred thousand pesos (P200,000.00) and not more than One million
pesos (P1,000,000.00), or both, at the discretion of the court upon any person who violates
Section 73, subparagraphs (c), (d), (e), and (i) of Republic Act No. 6657, as amended.

• If the offender is a corporation or association, the officer responsible therefor shall be criminally
liable.

OFFENSE IMPRISONMENT FINE

Violates the provision of this Act 1 Month to 3 Years P 1,000.00 to P 15,000.00

Violation of Sec 73 (a), (b), (f), (g) and (h) or RA 6657 3 Years and 1 Day to 6 Years P
50,000.00 to P 150,000.00

Violation of Sec 73 (c), (d), (e), and (i) 6 Years and 1 Day to 12 Years P 200,000.00 to P
1,000,000.00

SECTION 75. Suppletory Application of Existing Legislation –

• The provisions of Republic Act No. 3844 as amended, Presidential Decree Nos. 27 and 266
as amended, Executive Order Nos. 228 and 229, both Series of 1987; and other laws not inconsistent
with this Act shall have suppletory effect.

SECTION 76. Repealing Clause –

• Section 35 of Republic Act No. 3834, Presidential Decree No. 316, the last two paragraphs of
Section 12 of Presidential Decree No. 946, Presidential Decree No. 1038, and all other laws, decrees

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executive orders, rules and regulations, issuances or parts thereof inconsistent with this Act are hereby
repealed or amended accordingly.

SECTION 77. Separability Clause –

• If, for any reason, any section or provision of this Act is declared null and void, no other section,
provision, or part thereof shall be affected and the same shall remain in full force and effect.

SECTION 78. Effectivity Clause –

• This Act shall take effect immediately after publication in at least two (2) nation

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