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YOAN B.

BUENO
ISU-College of Law
AGRARIAN LAW by Barte
INTRODUCTION
A. DEFINITIONS AND TERMS
Reform presupposes that something is defective, hence, needs reformation and correction.
Land Reform denotes a broad concept of conventional and revolutionary measures intended to correct
certain defects in the relationship between landowner and tiller regarding their rights and obligations in the
cultivation and management of landholding.
Agrarian Reform refers not only to land reform but also embraces a full range of measures designed to
improve the relationship between landowner and tiller, employer and employee, corporate management and
stockholders, cooperatives and members, and other farmers organizations including their economic, social
and political relations with the community and the government.
Comments:
Under the Comprehensive Agrarian Reform Law of 1998 (R.A. No. 6657), Agrarian Reform is defined as the
redistribution of lands, regardless of crops or fruits produced, to farmers and regular farmworkers who are
landless, irrespective of tenurial arrangement.
AGRARIAN STRUCTURE
Refers to that complex set of relationships within the agricultural sector between tenure structure,
production structure and structure for supporting services.
1. Land Tenure Structure is a concept that connotes one or more types of land tenure system regulating
the rights to ownership and control and usages of land and the duties accompanying such rights.
a. Agricultural Tenancy refers to the manner of holding agricultural lands.
b. Share Tenancy under this system of landholding, tillers work the land as sharecroppers entitled to
share in the produce of the land.
c. Leasehold Tenancy is a tenurial system which was instituted by R.A. No. 3844 (Code of Agrarian
Reforms) characterized by lessor and lessee relationship which is created either by written or oral
agreement between the parties or impliedly by acceptance of benefits by the landowner, or by an act of
cultivation thru the toleration of the owner.
Comments:
Leasehold relationship abolished the share tenancy system under the Rice Share Tenancy Act of 1933 as
amended, P.D. No. 27 was issued by then President Ferdinand Marcos which aside from upholding the
leasehold relationship, likewise ordained the emancipation of tenant-farmers from the bondage of the soil, and
considered them ipso facto owners of the lands they till primarily devoted to rice and corn.
P.D. No. 27 (Tenants Emancipation Decree) likewise fixed the retention limit for the landowner an area not
exceeding seven (7) hectares, provided, that such landowner is cultivating or will now cultivate the land, and
furthermore, that he does not own other agricultural lands of more than seven (7) hectares.

YOAN B. BUENO
ISU-College of Law
d. Amortizing Owner a tenant-farmer whose status had been raised automatically by operation of law
from leasehold tenant to that of amortizing owner, who makes repayments of the purchase price of the
land he tills to the Land Bank.
e. Full Owner or Owner-Cultivator is an amortizing owner (tenant-farmer) who has completed full
payment of his amortization to the Land Bank of the Philippines, and is therefore entitled to a certificate
of title under the Torrens System.
Comments:
Under R.A. No. 3844, as amended by R.A. No. 6389, there are three shifts in the conversion of the tenurial
status of tenant-farmer to full owner, namely: share tenant to leaseholder to amortizing owner, and from
amortizing owner to full owner (owner-cultivator).
An amortizing owner by operation of law (P.D. No. 27) is entitled to an Emancipation Patent which serves as a
farmholders provisional title of ownership to the land upon completion of his amortization repayments to the
Land Bank, or to the Landowner in cases of farmers who have been amortizing their lands with the landowner.
f.

Owner-Cultivator is the term applied to a tenant farmer who has attained the status of full owner
and qualified beneficiary under the Agrarian Reform Law of the Philippines.

2. Production Structure is a concept that refers to the use of the land, nature and method of farm
operation, and the process of production.
3. Structure for Supporting Services is an agrarian reform measure designed to help the tenant tiller in
the availment of credit facilities, marketing of his products, supplying of seeds, insecticides, fertilizers,
irrigation, storage, processing and other technical assistance / services in direct bearing to reforms of tenure
and production structures.
HISTORICAL BACKGROUND
Even before the Spaniard came into these Island, the idea of private ownership of land was not prevalent.
Land was commonly owned by the community or barangay, cultivated communally or individually by members
of the barangay.
When the Spaniard came in 1521, common ownership of land slowly took the backseat, and private property
became dominant, paving the way to Encomienda system.
The encomienda was a vehicle used to collect taxes from Filipinos, who tilled the land and surrendered part of
their produce to the encomendero as tribute in the form of agricultural crops, poultry, woven mats, etc.
Towards the end of the 18th century, there was a mad scramble for wealth thru world trade. Thus, encomienda
were replaced by haciendas.
CONSTITUTIONAL MANDATES ON AGRARIAN REFORM
The state shall promote a just and dynamic social order that will free the people from poverty through policies
adequate social services, promote full employment, a rising standard of living, and an improve quality of life for
all.

YOAN B. BUENO
ISU-College of Law
The state shall promote a comprehensive rural development and agrarian reform.
The State shall, by law, undertake an agrarian reform program founded on the right of the 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. (Art. XIII, Social Justice and Human Rights, Sec. 4).
CONTEMPORANEOUS PRECEPTS AND MEASURES
In order to implement the 1987 Constitution, Congress passed the Comprehensive Agrarian Reform Law of
1988. (R.A. NO. 6657) which was signed into law by the President of the Phillippines on June 10, 1988, and
took effect on June 15, 1988. This is the main law on agrarian reform in the Philippines today. The CARL
provides that all other laws on agrarian reform not contrary or inconsistent with the provisions of this Act shall
have suppletory effect.
LAND REFORM MEASURES RETRACED
Treaty of Paris (1898) the confiscation of friar lands and distributed among peasants by the independent
government of Malolos during the Philippine Revolution.
Philippine Bill (1902) Limited private individual landholdings to 16 hectares, and corporate landholdings to
1,024 hectares.
Land Registrations Act (1902) Landowners were required to register their landholdings and acquire Torrens
titles to land properties.
Friar Land Act Instituted transfer of friar lands to the tenants to diffuse the peasant unrest.
Rice Share Tenancy Act (Public Act No. 4054) - which provided for a 50-50 sharing of the crop, an interest
rte ceiling of 10 percent per crop year, and safeguards against arbitrary dismissal of tenants by landlords.
Commonwealth Act.No. 278 of 1938 to buy farms and large estates for subletting to bonafide occupants
with an option to buy, thru the National Land Settlement Administration (NLSA).
Sugar Cane Tenancy Contracts Act. (Act. No. 4113) makes it a duty of the sugar central to exhibit to the
tenant the receipts of the number of tons milled by the landowner thereat.
Commonwealth Act. No. 103 created the Court of Industrial Relations (CIR) which exercised jurisdiction
over disputes arising from relationship between agricultural workers and landowners.
Commonwealth Act. No. 213 deals with the right to form legitimate labor organizations and to enter into
collective bargaining agreements between management and labor.
Commonwealth Act No. 178 which improved the provision of Act No. 4054 the Rice Share Tenancy Act,
giving more teeth and protection to the rights of tenants of agricultural lands.
Republic Act. No. 34 amended certain Sections of the Rice Share Tenancy Act providing for a 70 30 crop
sharing method.
Republic Act No. 1160 established the National Resettlement and Rehabilitation Administration (NARRA) of
landless dissidents and other landless farmers.

YOAN B. BUENO
ISU-College of Law
Republic Act No. 1199 (Agricultural Tenancy Act) infused an added boost to the tenurial rights of tenant
tiller.
Land Reform Act (R.A. No. 1400, 1955) - guaranteed the expropriation of all tenanted landed estates. It set a
retention limit of 300 hectares for individually owned estates, and 600 hectares for corporate owned
estates.
Republic Act. No. 1267 An Act Creating the Court of Agrarian Relations to try and decide all matters arising
from the relationship of persons in the cultivation and use of agricultural lands.
Republic Act. No. 3844 marked the abolition of share tenancy and / or the system of share cropping
between landowner and tenant, and the automatic conversion of share tenants into leaseholders.
Republic Act No. 6389 (Code of Agrarian Reforms) an improvement of R.A. No. 3844, this amendatory
Act featured the creation of the Department of Agrarian Reforms (DAR).
Agrarian Reform Special Fund Act (Rep. Act. No. 6390) provided for a special account and financial
support for the Agrarian Reform Program of the government.
Presidential Decree No. 2 declaring the entire nation as a land reform area.
Presidential Decree No. 27 decreeing the emancipation of the tenants, transferring to them the ownership
of the land they till.
Proclamation No. 131 Instituting a comprehensive agrarian reform program which covers, all public and
private agricultural lands as provided in the Constitution.
Executive Order No. 228 Declaring full landownership to qualified beneficiaries covered by Presidential
Decree No. 27.
Executive Order No. 229 Providing for the mechanisms for the implementation of the comprehensive
agrarian reform program, creating the Presidential Agrarian Reform Council (PARC).
Executive Order No. 129-A Modifying Executive Order No. 129, reorganizing and strengthening the
Department of Agrarian Reform.
Republic Act No. 6657 - As primary agrarian land reform measure in the country today, its operation covers
all public and private agricultural lands, including other lands of the public domain suitable for agriculture.
CHAPTER I
AGRICULTURAL LEASEHOLD CONCEPT
A. AGRICULTURAL LAND REFORM CODE (Rep. Act. No. 3844)
REPUBLIC ACT No. 3844 August 8, 1963
AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE AND TO INSTITUTE LAND REFORMS
IN THE PHILIPPINES...
REPUBLIC ACT No. 3844
AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE AND TO INSTITUTE LAND REFORMS
IN THE PHILIPPINES, INCLUDING THE ABOLITION OF TENANCY AND THE CHANNELING OF CAPITAL

YOAN B. BUENO
ISU-College of Law
INTO INDUSTRY, PROVIDE FOR THE NECESSARY IMPLEMENTING AGENCIES, APPROPRIATE FUNDS
THEREFOR AND FOR OTHER PURPOSES
Section 1. Title - This Act shall be known as the Agricultural Land Reform Code.
1. PREFATORY STATEMENTS
The thrust of this legislation is the drastic abolition of share tenancy system. It provided for the automatic
conversion of the sharecropper to the status of an agricultural lessee, governed by the system of agricultural
leasehold which is established either:
a. by agreement of the parties, whether oral or written, or
b. by operation of law.
The Agricultural Land Reform Code still finds application to the following:
a.
b.
c.
d.
e.

f.

areas which have not come within the operation and implementation of P.D. No. 27;
agricultural laborers subject to the provisions of the Labor Code;
organization and operation of the Land Bank;
provisions on resettlements of farmers;
right to pre-emption and redemption, with respect to land-owners retained area, should such
landowner decide to sell his tenanted / leased retained area, the tenant has the preferential right to
purchase and / or redeem the same in case the land is sold to a third person without the tenants
knowledge;
right of the tenant / lessee to 75% share from the standing crops;

Three shifts in the mode of acquisition


a.
b.
c.

The automatic conversion of the status of share tenant to leaseholder characterized by payment of
fixed rentals;
The second shift which is the conversion of the leaseholder to amortizing owner, characterized by the
Land Bank purchase of the property with a concomitant obligation imposed on the tenant-lessee to
pay Land Bank on amortization basis the purchase price of the farmholding;
The third shift which converts the status of an amortizaing owner into full owner or owner-cultivator
upon full payment of the remaining balance of the amortization.

Section 3. Composition of Code 1.


2.
3.
4.
5.
6.

An agricultural leasehold system to replace all existing share tenancy systems in agriculture;
A system of crediting rental as amortization payment on purchase price;
A declaration of rights for agricultural labor;
A machinery for the acquisition and equitable distribution of agricultural land;
An institution to finance the acquisition and distribution of agricultural land;
A machinery to extend credit and similar assistance to agricultural lessees,
amortizing
ownerscultivators, owners-cultivator and cooperatives;
7. A machinery to provide marketing, management and other technical assistance and / or services to
agricultural lessees, amortizing owners-cultivators, owner-cultivator, cooperatives;
8. A machinery for cooperative development;
9. A department for formulating and implementing projects of agrarian reform;
10. An expanded program of land
11. A judicial system to decide issues arising under this Code.

YOAN B. BUENO
ISU-College of Law
12. A machinery to provide legal assistance to agricultural lessees, amortizing owners-cultivator, and
owners-cultivator.
Repayment Scheme and Credit Assistance
Jurisdiction on Agrarian Disputes
All agrarian disputes are now under the cognizance of the Department of Agrarian Reform thru the Agrarian
Reform Adjudication Board.
The Department of Agrarian Reform Adjudication Board (DARAB) in turn delegates its functions to the
respective Regional and Provincial Adjudicators of the DAR. Any decision, order, award or ruling of the DAR
on any agrarian dispute, may be brought to the Court of Appeals on certiorari.
Special Agrarian Courts
Under the present law (R.A. No. 6657) all controversies involving the determination of just compensation and
prosecution of all criminal offenses arising from violations of the provisions of this Act, fall under the original
and exclusive jurisdiction of Special Agrarian Courts.
Bureau of Agrarian Legal Assistance
They shall be responsible for the development of plans and programs for the extension of legal information to
farmers; extension of legal services to them.
DEFINITION OF TERMS
Agricultural land means land devoted to any growth, including but not limited to crop lands, saltbeds,
fishponds, idle land and abandoned land.
Agricultural lessee means a person who by himself and with the aid available from within his immediate
farm household, cultivates the land belonging to, or possessed by, another with the latters consent.
Agricultural lessor means a person, lets or grants to another the cultivation and use of his land for a price
certain.
Agricultural year means the period of time required for raising a particular agricultural product.
Farm implements means hand tools or machineries in a farm enterprise.
Immediate farm household - means the members of the family of the lessee or lessor and other persons
who are dependent upon him for support.
Proven farm practices means sound farming practices.
Personal cultivation means cultivation by the lessee or lessor in person.
Work animals means animals ordinarily employed in a farm enterprise.

YOAN B. BUENO
ISU-College of Law
Agrarian dispute means any controversy relating to terms, tenure or condition of employment, or
concerning an association or representation of persons in negotiating, maintaining, changing or seeking to
arrange terms on conditions of employment.
Agricultural owner-cultivator means any person who, personally cultivates his own land.
Fair rental value means the value not in excess of allowable depreciation plus 6% interest per annum.
Incapacity means any cause or circumstance which prevents the lessee from fulfilling his contractual and
other obligations under the Code.
Modes of Land Tenure Allowed under R.A. No. 3844
1. Leasehold system characterized by a tenant farmer personally and actually cultivating the
farmholding under a leasehold relationship whereby the lessee pays a fixed amount of rental whether in
cash or in kind to the lessor.
2. Share tenancy
3. Owner-cultivatorship
4. Cooperative-cultivatorship which is a form of agrarian relationship among members of a
cooperative who work and live on the land as tillers in common.
5. Labor administration which employs laborers and workers on a daily wage basis, and engaged in a
large scale plantation farming of permanent crops by their respective managers.
How Leasehold Relation is Established
1. by agreement of the parties
2. by operation of law implementation of R.A. No. 3844 providing for the abolition of share tenancy.
Parties to Leasehold Relation
1.
2.

the landholder
the person who personally cultivates the land.

ESSENCE OF LEASEHOLD RELATION


1. It is essentially personal, in the sense that it cannot be exercised by third persons other than the lessor
himself, and the lessee who personally cultivates the land;
2. It has the nature of an in rem or real relationship, because it imposes a burden upon the land subject of
the landholding and continues to exist even by the death or incapacity of either party, or the expiration
of the agreement.
Tenurial Arrangement of Leasehold
It makes it a penal offense to eject a tenant illegally from his holding except upon approval of the court.
Doctrine on security of land tenure

YOAN B. BUENO
ISU-College of Law
Security of land tenure the agricultural leasehold relation under this Code, shall not be extinguished by mere
expiration of the term or period in the leasehold contract, in case the agricultural lessor sells, alienates of
transfers the legal possession of the landholding, the purchaser or transferee thereof shall be subrogated to
the rights and substituted to the obligations of the agricultural lessor.
In order to possess the status of a de jure tenant, the following essential requisites must concur, to wit:
1.
2.
3.
4.
5.
6.

the parties are the landowner and the tenant;


the subject is agricultural land;
there is consent;
the purpose is agricultural production;
there is personal cultivation;
there is sharing of harvests.

The absence of one does not make an occupant of a parcel of land or a cultivator thereof, a de jure tenant,
hence cannot invoke the defense of security of tenure.
What then constitutes as family-size farm so as to give rise to tenancy relationship?
Family-size farm an 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 standard of living to meet a farm familys
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.
What now is the effect of the law to cultivator-tiller of a less than family-size farms?
Such landholder-tiller or tiller-sharer, is at most considered as a mere caretaker before the eyes of the law who
is not entitled to the security of tenure.
Should the landholding be sold or alienated to a new owner, what happens to the rights and
obligations of the transferee and his heirs?
The transferee and his heirs are subrogated to the rights and obligations of the former landowner. However,
the change of landowner cannot be allowed to raise the status of a mere caretaker or tiller sharer to that of
an agricultural tenant and leaseholder.
Causes for Extinguishment of Leasehold Relation
1.
2.
3.
4.
5.
6.
7.
8.

Abandonment of the landholding;


Voluntary surrender of the landholding;
Absence of successor or qualified heir, in case of death or permanent incapacity of the lessee;
Judicial ejectment of the lessee;
Acquisition by the lessee of the landholding;
Termination of the leasehold under Sec. 28;
Mutual consent of the parties;
Conversion of the landholding for non-agricultural purposes.

Obligations of the Lessees


1. To cultivate and take care of the farm as a good father of a family
2. To inform the agricultural lessor any trespass committed by third persons upon the farm;

YOAN B. BUENO
ISU-College of Law
3. To take reasonable care of the work animals and farm implements delivered to him by the agricultural
lessor, he shall be held responsible and made answerable therefore to the extent of the value of the
work animals and / or farm implements at the time of the loss, death or destruction;
4. To keep his farm and growing crops attended to during the work season. In case of unjustified
abandonment all of the expected produce, any upon order of the court be forfeited in favor of the
agricultural lessor.
5. To notify the agricultural lessor at least three (3) days before the date of harvesting;
6. To pay the lease rental to the agricultural lessor when it falls due.
Section 26, R.A. No. 3844, empowers the lessee to take direct action against any trespasser to the landholding
without waiting for the response from the lessor.
Prohibitions to Agricultural Lessee
a. To contract to work additional lanholdings belonging to a different agricultural lessor;
b. To acquire and personally cultivate a family-size farm without knowledge and consent of the agricultural
lesor;
c. To employ a sub-lessee.
Termination of Leasehold by the Lessee
1.
2.
3.
4.
5.

Cruel, inhuman or offensive treatment of the agricultural lessee by the agricultural lessor;
Non-compliance on the part of the agricultural lessor with any of the obligations imposed;
Compulsion of the agricultural lessee by the agricultural lessor to do any work not in any way
connected with farm work;
Commission of a crime by the agricultural lessor against the agricultural lessee
Voluntary surrender due to circumstances more advantageous to him and his family.

Rights of the Agricultural Lessor


1.
2.
3.

4.

To inspect and observe the extent of compliance of their contract and the provision of this Chapter;
To propose a change in the use of the landholding to other agricultural purposes. In case of
disagreement, the same shall be settled by the Court (Now Adjudication Board);
To acquire the agricultural lessee, to adopt in his proven farm practices necessary to the conservation
of the land, improvement of its fertility and increase its productivity: That in case of disagreement as to
what proven farm practice the lessee shall adopt, the same shall be settled by the court (now the
DARAB);
To mortgage expected rentals.

Obligations of the Lessor


1. To keep the lessee in peaceful possession and cultivation of his landholding;
2. To keep intact the permanent useful improvements existing on the landholding.
The lessee may seek relief from the nearest Regional Agrarian Reform Adjudicators (RARAD) or the Provincial
Agrarian Reform Adjudicators (PARAD) to compel the agricultural lessor to comply with this obligation in case
of refusal, neglect or resistance on the part of the lessor.
Prohibition to the Agricultural Lessor
1.

To dispossess the agricultural lessee of his landholding except upon authorization by the court under
Section 36.

YOAN B. BUENO
ISU-College of Law
2.
3.
4.
5.

To require the agricultural lessee to assume, the payment of the taxes on the landholding;
To require the agricultural lessee to assume, any part of the rent, to pay to third persons for the use of
the land;
To deal with millers or processors without written authorization of the lessee;
To discourage, the formation, maintenance or growth of unions or organizations of agricultural lessees
in his landholding.

Ground for Disposition of Agricultural Lessee


1. When the landholding is declared by the Department Head to be suited for residential, commercial,
industrial or some other urban purposes;
2. Failure to comply with any of the of the terms and conditions of the contract of lease;
3. Planting of crops or used the landholding for a purpose other than what had been previously agreed
upon;
4. Failure to adopt proven farm practices as determined under paragraph 3 of Section twenty-nine;
5. When through fault or negligence of the lessee, the land or other substantial permanent improvement
thereon is substantially damaged or destroyed or has reasonably deteriorated;
6. Failure to pay the lease rental when it falls due;
7. Employment of a sub-lessee.
The above causes are grounds for ejectment of an agricultural lessee only after observance of due process.

Lessees Right of Pre-emption and Redemption


In case the agricultural lessor decide to sell the landholding, the agricultural lessee shall have the preferential
right to buy the same under reasonable terms and conditions: each shall be entitled to said preferential right
only to the extent of the area actually cultivated by him. The right of pre-emption may be exercised within one
hundred eighty (180) days from notice in writing, which shall be served by the owner on all lessees affected
and the Department of Agrarian Reform.
He must either tender payment of, or present a certificate from the Land Bank that it shall make payment
pursuant to Sec. 80 of this Code. If the latter refuses to accept such tender or presentment, he may consign it
with the Court.
Any dispute as to reasonableness of the terms and conditions, may be brought by the lessee or by the
Department of Agrarian Reform to the proper Court of Agrarian Relations.
Comments:
The right of pre-emption as distinguished from redemption, is the right to purchase the property from the
agricultural lessor by the lessees which is exercised before it is sold to a third person other than the lessee.
The lessee may consign the purchase money with the Department of Agrarian Reform.
Lessees Right of Redemption
In case the landholding is sold to a third person without the knowledge of the agricultural lessee, the latter shall
have the right to redeem the same at a reasonable price and consideration: where there are two or more
agricultural lessees, each shall be entitled to said right of redemption only to the extent of the area actually
cultivated by him. The right of redemption under this Section may be exercised within one hundred and eighty
days from notice in writing.

YOAN B. BUENO
ISU-College of Law
Upon the filing of the petition, the said period o one hundred and eighty days shall cease to run.
Any petition shall be resolved within sixty days.
The Department of Agrarian Reform shall initiate, while the Land Bank shall finance, said redemption as in the
case of pre-emption.
Right to Self-organization
The farmworkers shall have the right to self-organization and form, join or assist farmworkers organizations of
their own choosing for the purpose of collective bargaining through representatives of their own choosing.
Bill of Rights for Agricultural Labor:
1.
2.
3.
4.
5.
6.
7.

Right to self organization;


Right to engage in concerted activities.
Right to minimum wage;
Right to work for not more than eight hours;
Right to claim for damages for death or injuries sustained while at work;
Right to compensation for personal injuries; death or illness;
Right against suspension or lay-off.

Comments:
The right to self organization includes the right to strike and hold picket in order to compel the management
in the case of large scale plantations and multinational corporations to meet the demands of the farm workers
for wage increase and better working conditions.
Irrigation Facilities
Permanent irrigation system may be constructed at the expense of the lessor:
1. Should the lessor refuse to bear the expenses, he should not be entitled to the increase in rental and
shall upon the termination of the leasehold relationship pay the lessee or his their the reasonable value
of the improvements at the time of the termination;
2. Should the lessor bear expenses he shall be entitled to an increase in the rental proportionate to the
resultant increase in production.
Management of Irrigation System
1.
2.

When constructed and operated by the government. Lessees either as individuals or groups shall
allocate not more than 25% of their rental collection to the government.
Irrigation systems installed and / or constructed at expense of landowner or agricultural lessor
acquisition of these irrigation system shall be initiated by the DAR to be financed by the Land Bank.

Lease of Ricelands and Lands Devoted to Other Crops


1.

2.

25% of the average normal harvest shall be the amount of rental for ricelands or estimated normal
harvest during the three (3) agricultural years immediately preceding the establishment of the
leasehold after deducting the expenses for seeds, cost of harvesting, threshing, loading, hauling and
processing;
Average normal harvest for three (3) preceding years.

YOAN B. BUENO
ISU-College of Law
3.

No agreement as to rental the court (now DAR) shall fix a provisional rental until fixed rental is
determined within (30) days from submission of the case for decision.

Amortization Payment for Land under Leasehold:


The rentals paid by the lessee to the lessor at the place agreed upon by the parties shall be credited as
amortization payments for the purchase price of the landholding titled by the leasee:
a) When the landholding is expropriated by the government;
b) When it is redeemed.
Whatever balance remaining after crediting as amortization the rental paid, the same may be finances by the
Land Bank in the same ratio and mode of payment provided under Section 80 of the Code.
Default on the Part of the Lessee: Should the lessee incur default in the payment of at least three (3)
installments on the loan, the lender shall immediately notify the Land Bank and the DAR so that appropriate
steps shall be taken by these agencies:
a) to answer for the default in case the failure is due to fortuitous event
b) to take over the ownership and administration of the landholding.
Where the case of the default is attributable to the lessee, the DAR shall endeavor to substitute the defaulting
amortization owner. In case the default is due to fortuitous event, the Land Bank shall assume the payment of
the balance and the farmer shall be released from his obligation.
Period of Prescription
An action to enforce any cause of action accruing under this Code (R.A. No. 3844) shall be brought within the
period of three (3) years.