Agrarian Law and Social Legislation

AGRA S&L
University of San Agustin
Atty. Cirilo Yuro, Jr.

Sources:
➢ Agrarian Law and Social Legislation, Atty. Paulino Ungos, Jr. and Atty Paulino Ungos, III (2016)
➢ Atty. Cirilo Yuro, Jr’s lecture (1st Semester A.Y. 2020-2021 Edition)
➢ Other sources as may be indicated

R.A. 6657 - Comprehensive Agrarian Reform Law (CARL)

CHAPTER I - Preliminary Chapter

Section 1. Title. — This Act shall be known as the Comprehensive Agrarian Reform Law of 1988.

Agrarian Law

History of Philippine Agrarian Laws

A. Civil Code - During the Spanish era, under Special Provisions for Rural Leases
B. Rice Share Tenancy Act - During the American regime, regulating landlords and tenants
C. Sugar Tenancy Act - Relationship between landlords and tenants on sugar cane lands.
D. Commonwealth Act 53 - During commonwealth period
E. RA 1199 - Agricultural Share Tenancy Act - Repealed all earlier tenancy laws except the Sugar Tenancy Act

F. R.A. 3844 - Agricultural Land Reform Code

➢ Approved August 8, 1963

➢ Abolished share tenancy and introduced the leasehold system
➢ Pertinent provisions:
○ Expiration of leasehold contract does not terminate the leasehold relation:

Section 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. - The agricultural leasehold relation under
this Code shall not be extinguished by mere expiration of the term or period in a leasehold contract nor by the sale, alienation or transfer of
the legal possession of the landholding. In case the agricultural lessor sells, alienates or transfers the legal possession of the landholding,
the purchaser or transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural lessor.

- Atty. Yuro Comment: The tenant farmer is given the right of redemption.
- If the tenant farmer does not exercise the right of redemption, the same is not rejected; farmer remains as the lessee to continue
cultivating the land.
- The right of redemption has to be exercised within 180 days from notice or knowledge of sale.

○ Extinguishment of leasehold:

Section 8. Extinguishment of Agricultural Leasehold Relation - The agricultural leasehold relation established under this Code shall be
extinguished by:
(1) Abandonment of the landholding without the knowledge of the agricultural lessor;
(2) Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be served three months in advance; or
(3) Absence of the persons under Section nine to succeed to the lessee, in the event of death or permanent incapacity of the lessee.

- Atty. Yuro Comment: Sec. 9 pertains to (1) Surviving spouse, (2) eldest direct descendant, next eldest, and so forth.

○ Grounds for termination of leasehold agreement:

Section 28. Termination of Leasehold by Agricultural Lessee During Agricultural Year - The agricultural lessee may terminate the
leasehold during the agricultural year for any of the following causes:
(1) Cruel, inhuman or offensive, treatment of the agricultural lessee or any member of his immediate farm household by the agricultural
lessor or his representative with the knowledge and consent of the lessor;
(2) Non-compliance on the part of the agricultural lessor with any of the obligations imposed upon him by the provisions of this Code or by

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his contact with the agricultural lessee;
(3) Compulsion of the agricultural lessee or any member of his immediate farm household by the agricultural lessor to do any work or
render any service not in any way connected with farm work or even without compulsion if no compensation is paid;
(4) Commission of a crime by the agricultural lessor or his representative against the agricultural lessee or any member of his immediate
farm household; or
(5) Voluntary surrender due to circumstances more advantageous to him and his family.

○ Grounds for dispossession for lessee:

Section 36. Possession of Landholding; Exceptions - Notwithstanding any agreement as to the period or future surrender, of the land,
an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been
authorized by the Court in a judgment that is final and executory if after due hearing it is shown that:
(1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the landholding or will convert the
landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes: Provided; That the
agricultural lessee shall be entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his rights
under Sections twenty-five and thirty-four, except when the land owned and leased by the agricultural lessor, is not more than five hectares,
in which case instead of disturbance compensation the lessee may be entitled to an advanced notice of at least one agricultural year before
ejectment proceedings are filed against him: Provided, further, That should the landholder not cultivate the land himself for three years or
fail to substantially carry out such conversion within one year after the dispossession of the tenant, it shall be presumed that he acted in
bad faith and the tenant shall have the right to demand possession of the land and recover damages for any loss incurred by him because
of said dispossessions.
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(7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section twenty-seven.

- Atty. Yuro Comment: Grounds are NOT automatic. Landowner must file a petition before the DARAB and show proof that any of
these grounds existed.
- Sub-leasing is difficult to prove because traditionally no written agreements take place.

G. RA 6389 - Code of Agrarian Reforms

a. Amended some provisions of R.A 3844
b. Approved September 10, 1971

H. PD 27 - Tenant Emancipation Law

➢ Transfer of lands primarily devoted to rice and corn
➢ October 21, 1972
➢ Pertinent provisions:

○ Applicability:
■ To Private agricultural lands
■ Primarily devoted to rice and corn under share tenancy or lease-tenancy

○ Size of land to be transferred to the tenant-farmer:

■ Five (5) hectares, if not irrigated; or
■ Three (3) hectares, if irrigated.

○ Landowner’s retention limits:

■ In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area
or will now cultivate it;
● Atty. Yuro Comment: Retention limit was changed in R.A. 6657 to include that every child--who is cultivating or
managing the cultivation--of the landowner at least 15 years old is entitled to 3 ha. each. “Cooperate with your
spouse”
○ Stages of land transfer:
■ Issuance of Certificate of Land Transfer (CLT) to the farmer-beneficiary
● NOT a land title nor evidence of ownership
● Merely qualifies the tenant-beneficiary to possess the land and comply with certain conditions preparatory to
ownership.
■ Issuance of Emancipation Patent (EP)
● Evidence of OWNERSHIP
● Vests upon the farmer-beneficiary absolute ownership over the landholding.
● Authority for the issuance of an original or transfer certificate of title in the beneficiary’s name.
● Indefeasibility: EPs are indefeasible and imprescriptible after one (1) year from registration with the Office of the
Registry of Deeds.

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 ● Atty. Yuro Comment: Can withstand the scrutiny of the world, unless title is fictitious (Tomas v. Tomas)

○ Cancellation of Emancipation Patents (EPs) (FAM-SIN)

■ Abandonment of the land;
■ Neglect or misuse of land;
■ Failure to pay three (3) annual amortization;
■ Misuse or diversion of financial support services;
■ Sale, transfer or conveyance of the right to use the land; and
■ Illegal conversion of the land.
■ Jurisdiction over cancellation: Secretary of the Department of Agrarian Reform

○ Computation of just compensation to be paid to the land owner:

■ The value of the land shall be equivalent to two and one-half (2 1/2) times the average harvest of three normal crop years
immediately preceding the promulgation of this Decree;
■ Atty. Yuro Comment: Is “just compensation” computation even just?

○ Payment schemes available for farmer-beneficiaries to the landowner

■ Direct payment scheme - Farmer-beneficiaries directly pay to the landowner in cash or in kind, on terms to be mutually
agreed upon, subject to the approval of the Department of Agrarian Reform.
■ Paid by Land Bank - Land Bank will make the payment with 10% payable in cash immediately and the remaining balance in
the form of Land Bank bonds over a 10-year period.
● Tenant farmer will likewise pay Land Bank at a rate of six percent (6%) per annum for twenty (20) years in twenty
(20) equal annual amortizations.
■ Other modes as prescribed or approved by the Presidential Agrarian Reform Council.

I. E.O. 228 under Corazon Aquino

➢ July 17, 1987

J. RA 6657 - Comprehensive Agrarian Reform Law (CARL) of 1988

➢ June 10, 1988
➢ Amended by RAs 7881, 7905, 8532, and 9700
➢ Pertinent provisions:
○ To be discussed further below.

K. R.A. 9700 - Extended the CARL and added reform

➢ Known as CARPER

Meaning of Agrarian Reform

➢ Redistribution of lands to farmers and regular farm workers who are landless.
➢ Not merely confined to distribution of lands, but also alternative modes, such as:
○ Labor administration
○ Profit-sharing
○ Stock distribution

Applicability of the Comprehensive Agrarian Reform Law

➢ Applies only to agricultural lands, not to residential, commercial, industrial, mineral, or forest land.

Meaning of Agricultural Land

➢ Refers to land devoted to agricultural activities.
➢ Lands that are arable and suitable for farming.
➢ SEE: Section 3 of RA 6657

ATTY. YURO SPECIAL: Bernardo Villegas Column

➢ Link to article: http://www.bernardovillegas.org/index.php?go=/Articles/530/
➢ Bernardo Villegas is a Filipino economics and one of the 1987 Phil. Constitution framers.
➢ “...how to “revitalize agricultural productivity and attain inclusive economic growth in the rural areas” of the Philippines.”
➢ Citation of Dr. Raul Fabella (Atty. Yuro’s classmate):
○ “...what fifty years of Philippine land reform accomplished was to increase the number of “landed poor.”
○ “Despite the distribution of 4,542,968 hectares to over 2,653,254 Agrarian Reform Beneficiaries (ARBs), the income
differences between the ARBs versus other farmers resulted in a negligible 2 per cent improvement over the half century
covered.”
➢ “...There had been two avenues of intervention under CARP that the Government insistently used, both with little success: the
first was the funding of farmers through subsidized credit that resulted in poor repayment, thus discouraging many banks as
potential lenders. The second was the establishment of cooperatives (or Agrarian Reform Communities) with also little success
because of inadequate support by way of farm-to-market roads, irrigation systems, post-harvest facilities and agricultural extension
services, with which countries like Taiwan, Thailand and Malaysia lavished their small farmers.”
➢ Indicators of failure:
○ Resources allocated to agriculture have been in decline.
○ Registered investment in agriculture had slid to only about 1.4% of total Philippine investments.
○ Credit to this sector, once at 24% of all loans granted, has now dropped to less than 5%.
○ There are more resources allocated to property development than food security. The so-called “Agri-Agra Fund” has not
found its way to agriculture.
➢ Negative impact:

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 ○ The Philippines imports food in all categories of meat and rice and even onions, garlic and lettuce that can be easily
grown locally with the right support from the Government.
➢ Atty. Yuro Comment: What is Agrarian Reform? Programa or a drama? Dubito, ergo sum.

CASE: Natalia Realty v. DAR (225 SCRA 279) 1992

Facts: Natalia Realty owns a 125-hectare land in Antipolo Rizal. On April 18, 1979, Presidential Proclamation No. 1237 set aside 20, 312
hectares as a townsite to absorb the population, including the said property of Natalia. In execution of said proclamation, Natalia was
granted a permit to develop the land into a subdivision.
On June 15, 1988, the Comprehensive Agrarian Reform Law took effect and DAR issued a Notice of Coverage on the undeveloped
portions of the Natalia property. Natalia sought cancellation of said Notice stating that Proclamation 1237 takes precedence over the
coverage of CARL.

Issue: WON the undeveloped portions of Natalia are covered by the CARL.

Held: NO. The undeveloped portions of the Natalia property are not agricultural lands due to their conversion under the Presidential
Proclamation. Non-agricultural lands are not covered by the CARL.

Constitutionality of the Comprehensive Agrarian Reform Law

- Constitutional as a valid exercise of police power.
- Association of Small Landowners v. Secretary of Agrarian Reform

Section 2. Declaration of Principles and Policies. (as amended by R.A. 9700)— 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.

“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 farmworkers 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.

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 “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.

Main Highlight: EQUITABLE DISTRIBUTION OF WEALTH

Primary Objective of Agrarian Reform

➢ 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
➢ Provides for a possibility of uplifting the economic status of the beneficiaries

Meaning of Economic Family-Size Farm

➢ Area of farm land that permits efficient use of labor and capital resources.
➢ The area will produce an income sufficient to provide a modest standard of living

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.
(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.t 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. (as amended by R.A.
9700)
(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. (as
amended by R.A. 9700)

Agriculture

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 ➢ Lands devoted to raising livestock, poultry, and swine are classified as industrial, not agricultural, hence, exempt from the agrarian
reform program.

CASE: Luz Farms v. Secretary of Agrarian Reform (192 SCRA 51)

It was declared unconstitutional to include lands devoted to raising livestock, poultry, and swine within the term “agriculture”. The reason
is because in livestock, poultry, or swine farming, no land is tilled and no crop is harvested. Land is not the primary resource in the raising
of livestock, poultry or even swine. Since livestock, poultry, or swine do not sprout from the land, they are not “fruits of the land.”

CHAPTER II - Coverage

Section 4. Scope. (as amended by R.A. 9700) — 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 the Agrarian Reform Law

➢ All public and private agricultural lands; and
➢ Other lands of the public domain suitable for agriculture

Lands NOT Covered by the Agrarian Reform Law

➢ Private lands with a total area of five (5) hectares and below;
➢ Lands actually, directly, and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding
grounds, watersheds and mangroves;
➢ Private lands actually, directly and exclusively used for prawn farms and fish ponds;
➢ Lands actually, directly, and exclusively used and found to be necessary for:
○ National defense;
○ School sites and campuses;
○ Experimental farm stations operated for educational purposes;
○ Seeds and seedling 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;
○ Research and quarantine centers; and
○ All lands with eighteen percent (18%) slope and over, except those already developed.

Atty. Yuro Comments: 18% slope is not the same with 18 degree slopes.

CASE: Sharp International v. Court of Appeals, Land Bank of the Philippines, and Deogracias Vistan (G.R. No. 93661) September
4, 1991
FACTS: Sharp International (Sharp) entered into a Contract to Sell with UCPB over a property for the price of P3.1M. Meanwhile, Sharp--
simultaneously and prior to the acquisition of said property--offered to sell said property to the government for P56M (later at 65M). Said
offer was processed by the Bureau of Land Acquisition and Distribution of the DAR through Sec. Juico and the Land Bank dealt with the
financing through President Vistan. Meanwhile, UCPB and Sharp executed a Deed of Absolute Sale for the land worth P3.1M.

On January 9, 1989, Juico and Sharp (through Lina) signed a Deed of Absolute Sale (for the 65M transaction). Upon discovery of Vistan
that Sharp acquired the property from UCPB for only P3.1M, he (and Land Bank) pulled out of financing the said deal. Sharp prays for a
petition for Mandamus for the release of the funds to consummate the contract.

ISSUE: Whether or Not the LBP President (Vistan) has the authority to refuse to sign the Deed of Absolute Sale.

HELD: YES. Said act of Vistan is not merely ministerial but involves a high degree of discretion. It is the duty of the Land Bank to review
the computation and determination of the land value of the property it will pay for, in consideration of its responsibility in handling public

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 funds. Since said property--being valued at 65M--was purchased by Sharp for merely P3.1M, it is evident that LBP will “lose” on this deal.
The LBP is not bound by the Deed of Sale entered into by DAR. The LBP President’s signature is needed for the transaction to take place.

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.
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.n 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.

Implementation Extended by Republic Act No. 9700

- CARPER
- Extends the implementation period of the Comprehensive Agrarian Reform Law until June 30, 2014
- Supposedly completely implemented in 10 years by 1998.
- Atty. Yuro Comment: Implementation was delayed because greatly resisted by land owners.
- “When lawyers enter the picture, justice has to be exceedingly fine”
- “Not justice, but just tiis”

Retention right of the landowner

- Not more than five (5) hectares of his landholdings.
- Retained area need not be personally cultivated by the landowner, but can be done indirectly through labor administration.

Can a landowner who has already exercised his retention rights under P.D. No. 27 be entitled to the retention right under the
Comprehensive Agrarian Reform Law?
- NO. Exercising rights under PD 27 bars the landowner from entitlement to retention right under CARL.
- HOWEVER, if landowner CHOOSES to retain five (5) hectares under CARL, the seven (7) hectares previously retained under PD
27 will be immediately placed under CARL’s coverage.

Can spouses retain 5 hectares each under the agrarian reform law?
- YES and NO.
- YES if property regime is separation of property. Five (5) hectares each (total of 10 hectares)
- NO if property regime is conjugal or absolute community. Five (5) hectares total.

CASE: Sps. Elena and Bernardino Salenillas v. Court of Appeals and William Guerra

FACTS: Sps. Florencia and Miguel Enciso were grantees of a free patent and sold the same to their daughter Sps. Elena and Bernardino
Salenillas. On December 4, 1975, Sps. Salenillas mortgaged the said lot to the Philippine National Bank (PNB) for a loan. Due to failure of
paying the loan, PNB foreclosed the said lot and sold the same at an auction to William Guera. When Guera sought possession, Sps.
Salenillas refused to vacate on the ground that they have the right to repurchase the said lot.

ISSUE: Whether or not Sps. Salenillas may repurchase the said lot as a descendant of a grantee of a free patent.

HELD: YES. The Salenillas may repurchase the said lot within five (5) years, pursuant to Sec. 119 of the Public Land Act. In spite of the
presence of a contract of sale between patent grantee Encisos and petitioners Salenillas, the latter are still entitled to repurchase under
Sec. 119 since they are legal heirs, with Elena being the daughter of the Encisos.

Who has the right to choose the retention area?

- The Landowner
- Chosen area should be compact or contiguous, does not exceed five (5) hectares.
- Right to be exercised within sixty (60) days from receipt of the Notice of Coverage.
- If landowner’s lands have been covered by PD 27, the landowner may select from such covered lands when choosing his retention
area this time under RA 6657.

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Can a landowner exercise his right to retention over the land which has already been covered by an Emancipation Patent or
Certificate of Land Ownership Award?
- YES, through a petition for cancellation of the EP or CLOA under Administrative Order No. 2 (1994).

Who are “tenants” of a land?

- There must exist a landlord-tenant relationship through the following elements:
- Landowner engaged a person to personally cultivate an agricultural land; and
- Landowner is compensated in terms of share in the produce (share tenancy) or in terms of a price certain in produce or
in money or both (leasehold tenancy)
- Substantial evidence is the quantum of evidence.

Suppose the retention area chosen by the landowner is tenanted, what happens to the tenant?
- Tenant chooses either options:
- 1. To remain in the land
- 2. To be a beneficiary in the same land
- 3. To be a beneficiary in another agricultural land
- 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.

Effect if the tenant chooses to remain in the retained area

- Status as TENANT becomes AGRICULTURAL LESSEE
- No longer qualified as an agrarian reform beneficiary

- Agricultural lessee entitled to: (PMM-DBBBR)

- (a) Peaceful possession and enjoyment of the land;
- (b) Manage and work on the land
- (c) Mechanize all or any phase of his farm work;
- (d) Deal with millers and processors and attend to the issuance of quedans
- (e) Be afforded a homelot;
- (f) Be indemnified for the cost and expenses incurred in the cultivation
- (g) Buy the agricultural landholding under reasonable terms
- (h) Redeem the the landholding at a reasonable price

- Agricultural lessee obligations: (CICK NP)

- (a) Cultivate and take care of the farm
- (b) Inform the agricultural lessor of any trespass committed by third persons
- (c) Take reasonable care of the work animals and farm implements
- (d) Keep his farm and growing crops attended during work season
- (e) Notify the agricultural lessor of harvesting or threshing
- (f) Pay the lease rental to the agricultural lessor

Term of the lease of leasehold relation (Agricultural lessee and lessor)

- CONTINUOUS
- Until extinguishment through the following means:
- (a) Abandonment or voluntary surrender of the landholding by the lessee
- (b) Absence of successor
- Surviving spouse, direct descendants (eldest and so on in order of age)
- In case of death or permanent incapacity of the lessee
- This part is the same as Sec. 8 of R.A. 3844--Extinguishment of Agricultural Relation

Effect if the Tenant Chooses to be a Beneficiary

- Loses his right to be a lessee of the land retained by the landowner

Children of the Landowner are Entitled to 3 hectares each

- GIVEN: five (5) hectares retained by the landowner

- IF WITH CHILDREN:
- Excess area awarded to children three (3) hectares each
- Conditions:
- Child at least fifteen (15) years old;
- Child actually tilling the land or directly managing the farm
- RULE: lands awarded to children cannot be sold, transferred or conveyed within a period of ten (10) years
- EXCEPT:
- Through hereditary succession;
- To the government;
- To other qualified beneficiaries;
- Children or spouse of transferor can repurchase within two (2) years from date of transfer.

Right of Homesteaders vis-a-vis Right of Tenants

- The Constitution and CARL respects the superiority of the rights of homesteaders over the rights of tenants.
- C.A. 141 grants homestead patents.
- Sec. 6, Article 13, 1987 Constitution: Agrarian reform stewardship will be subject to homestead rights of small settlers.
- Sec. 6 of the CARL: Original homestead grantees at the time of the approval of this Act shall retain the same areas.
- Entitlement to retention of area of beneficiaries of homestead grants or Free Patents under C.A. 141

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 - They were cultivating the same at the time of the approval of the CARL (June 15, 1988)
- They continue to cultivate the same
- NOTE: Applies even if their area exceeds five (5) hectares.

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 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 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.

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.

General

Expropriation of Private Agricultural Lands by Local Government Units

- Requirements before LGU can expropriate:
- Actual, direct, and exclusive public purpose is present
- Agrarian reform coverage by the DAR
- Acquired by the national government through the DAR
- Payment of Just Compensation
- Distribution of the land to agrarian reform beneficiaries
Expropr
Distributi iation
DAR
Landow on to Pay CARP
by LGU
w/ Just
ner Beneficia beneficiarie
Comp. s Just
ries Compensat
ion
Calculation of Just Compensation

CASE: Landbank v. Dumlao (572 SCRA 108) 2008

FACTS: The 32-hectare land of the Dumlaos was subjected to an Operation Land Transfer (OLT) under PD 27. However, the valuation of
just compensation was not reached. Eventually, before the Court of Appeals, the CA set the price of the land at P109,000 per hectare,
basing their computation on RA 6657, which passed during the pendency of the case.

ISSUE: Whether or not the computation should be based off of PD 27 or RA 6657

HELD: RA 6657. Even if the acquisition of the land was through PD 27, RA 6657 will be the basis for the computation of just compensation
since it is the latest law in agrarian reform. Section 75 provides that with the passage of CARL, PD27 and EO228 will merely be
supplementary.
Calculation of Just Compensation will be: LV = CNI + CS + MV
Where: LV = Land Value; CNI = Capitalized Net Income; CS = Comparable Sales; MV = Market Value

Atty. Yuro’s Comment: The valuation of Just Compensation is “very relative”; that is, “depende (kung) sino imo relative”

Import of the Law

- Section 6-B is an implied recognition that the uniform setting of a 5-hectare limit for all agricultural landholding may not be feasible.
- Hence, the 6-month deadline of a comprehensive study regarding land size appropriate of crop types.

SEC. 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

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 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;

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 1O, 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 o f 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 t o 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

Applicability
- Final acquisition and distribution of all remaining lands during the 5-year extension period up to June 30, 2014.
Order of Priority:
a. Lands with an area of more than fifty (50) hectares, to be completed by June 30, 2012
b. Lands with an area of twenty-four (24) hectares to fifty (50) hectares, to be completed by June 30, 2013.
c. Lands with an area of more than ten (10) hectares up to twenty-four (24) hectares, to be completed by June 30, 2013.
d. Lands with the retention limit up to ten (10) hectares, to be completed by June 30, 2014.
Qualified beneficiaries
- Farmers (tenants or lessees) and regular farm workers actually tilling the lands
- Certified under oath by the Barangay Agrarian Reform Council (BARC)
- Stated under oath before the judge that he/she is willing:
- To work on the land to make it productive
- To assume the obligation of paying the amortization for the compensation of the land and the land taxes.

CASE: Hacienda Luisita v. Presidential Agrarian Reform Council (2011)

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FACTS: In 1980, Hacienda Luisita (owned by Tarlac Dev’t Corp or TADECO), a 6,443-hectare property, was subjected to coverage by
CARP, initiated by the Marcos Admin, and later covered by RA 6657. In 1988, instead of distribution of its land, however, TADECO
complied with the requirements of CARL by opting for a stock distribution option agreement (SDOA), pursuant to Resolution 89-12-2
as approved by the Presidential Agrarian Reform Council (PARC). This option was provided through E.O. 229 and RA 6657 under the
Aquino Administration through Sec. 31 where land or stock transfer are valid modes of land distribution.

From 1989 to 2005, it was claimed by Hacienda Luisita, Inc. (HLI) that they distributed said stocks to the farm worker beneficiaries (FWB).
However, FWB groups such as AMBALA and HLI Supervisory Group claimed otherwise, stating that they have not actually received such
benefits in full. They brought their complaint before the DAR.

Task Force Luisita (of DAR) investigated and found HLI to have been uncompliant. They recommended for (1) the revocation of HLI’s stock
distribution plan (SDP) and (2) the compulsory acquisition of Hacienda Luisita. PARC agreed and consequently revoked the SDP and
subjected HLI’s land under CARP.

ISSUES: (1) Does PARC have authority to revoke the SDP (Stock Distribution Plan)?
(2) Was the revocation of the SDP valid?
(3) Does Sec. 31 impair the fundamental right of the farmworkers under Sec. 4, Art. 13 of the Constitution?
(4) When was the “time of taking” for valuation of Just Compensation?

HELD: (1) YES. Under Sec. 31, the authority of approving (and revoking) SDPs rests on the PARC. An SDP is imbued with public interest,
pursuant to RA 6657, and requires PARC’s approval (or not).
(2) YES. The SDP violates DAO 10, specifically with (a) its failure to comply with the distribution of free homelots of not more than 240
square meters each , and (b) Dilution of shares. The distribution of the shares of stock to the FWBs is based on the number of
"man days," or the number of days that the FWBs have worked during the year. This violates Sec. 1 of DAO 10 which sets the
distribution of equal number of shares to the FWBs as the minimum ratio of shares of stock.
(3) NO. The provision of the option of stock transfer is not inconsistent with Sec. 4, Art. 13 of the Constitution. Land distribution under RA
6657 is not exclusive to actual land distribution, but may be resorted to stock transfer. Moreover, Sec. 4, Art. 13 is not self-executory and
requires law for its implementation.
(4) When PARC approved the SDP in 1989. HLI is entitled to just compensation for the agricultural land that will be transferred to DAR to
be reckoned from November 21, 1989 per PARC Resolution No. 89-12-2. DAR and LBP are ordered to determine the compensation due to
HLI. “Taking” in this sense was when the landowner voluntarily offered the lands for CARP coverage when it was approved by PARC.
Submission of the SDP for approval is deemed acknowledgment by the landowner of coverage by CARP.

November 22, 2011: SC realized that the FWBs (6,296 of them) will never have control over these agricultural lands as long as they remain
as stockholders of HLI, bearing in mind that with the revocation of the approval of SDP, HLI will no longer be operating under SDP and will
only be treated as an ordinary private corporation; the FWBs who remain as stockholders of HLI will be treated as an ordinary stockholders
and will no longer be under the protective mantle of R.A. 6657.

WHEREFORE, Petition is DENIED. The 6,296 qualified FWBs shall have the option to remain as stockholders of HLI, each being entitled to
18,804.32 HLI shares. All salaries, benefits, 3% production share and 3% share in the proceeds of the sale of the 500-hectare converted
land and the 80.51-hectare SCTEX lot and homelots already received by the 10,502 FWBs, composed of 6,296 original FWBs and 4,206
non-qualified FWBs, shall be respected with no obligation to refund or return them.

HLI is directed to pay the 6,296 FWBs the consideration of PhP 500,000,000 received by it from Luisita Realty, Inc., the consideration of
PhP 750,000,000 received by its owned subsidiary, Centennary Holdings, Inc., and the price of PhP 80,511,500 paid by the government
through the Bases Conversion Development Authority. The total amount of PhP 1,330,511,500.

DOCTRINE:
- Applies to fundamental principles of CARL, valuation of Just Compensation, Powers of PARC

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:
(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

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 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 worker-beneficiaries.n 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.

Lands Possessed by Multinational Corporations are Covered by the CARL

- Lands of Multinational Corporations are NOT exempted to compulsory acquisition and distribution.
- Such lands will be distributed to the individual worker-beneficiaries, or their workers’ cooperative or association

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.n line with
the principles of self-determination and autonomy, the systems of land 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.

Ancestral Land, defined.

- 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 thirty (30) years before the date of approval of Presidential Decree
No. 410 (March 11, 1974).
- P.D. 410 declares public lands cultivated by indigenous peoples as alienable and disposable.

Ancestral lands exempted from the Agrarian Reform Law

- RULE: Ancestral lands are exempted from the coverage of the Agrarian Reform Program.

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.

Land classification in the tax declaration is not conclusive

- Tax declarations ARE NOT the sole basis of land classification. The same may be refuted.

CASE: Republic v. Court of Appeals (342 SCRA 189) 2000

FACTS: Green City Estate & Development Corp. sought exemption of their property (112) hectares from being subjected to compulsory
acquisition of the Agrarian Reform program. DAR denied the exemption on the basis that said property is “agricultural land” as stipulated by
the tax declaration.

ISSUE: Whether or not DAR was correct in denying the exemption on the basis of the tax declaration
HELD: NO. The land classification in the tax declaration is not conclusive and may still be refuted. There is no law or jurisprudence that
supports the same. DAR Administrative Order No. 6 lists other documents that must be submitted when applying for exemption, and not
merely the tax declaration.

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Lands classified as non-agricultural prior to the effectivity of the CARL are not covered
- RULE: Lands already classified as residential, commercial, or industrial use prior to the effectivity of CARL (June 10, 1988) are not
subject to agrarian reform.
- RECALL: Natalia Realty v. DAR
- The property of Natalia Realty, having already been classified as residential lands for the purpose of housing cannot be
covered by the agrarian reform program.

Lands with at least 18% slope

- Rationale: To prevent adverse effects on the lowlands and streams resulting from soil erosion.
- Category: Considered as permanent forests or forest reserves

School sites and campuses

- Lands actually, directly, and exclusively used for school sites and campuses are exempted from the coverage of agrarian
reform.
- The School determines whether land is necessary for school site or campuses.
- DAR has no jurisdiction to substitute its judgment for that of the school.

CASE: CMU v. DARAB (215 SCRA 86) 1992

FACTS: Central Mindanao University (CMU) owns 3,000 hectares of land, and is devoted to an agricultural program for its students. DAR
sought to segregate 400 hectares of suitable, compact, and contiguous portions of CMU and subject the same to the agrarian reform
program, justifying the same that said segregated land was not directly, actually, and exclusively used for a school site.

ISSUE: Whether or not the DAR correctly segregated the 400 hectares of CMU land.

HELD: NO. The DAR cannot rely on its reasoning that said land was not currently being directly, actually, nor exclusively used for a school
site. Being a university that promotes agriculture and industry, it is likely the CMU will rely on the vast track of land for future expansion.
Nevertheless, it is the school (CMU) who is in the best position to resolve and answer the question; not the DAR.

Who has the jurisdiction to exempt a property from agrarian

- The Secretary of Agrarian Reform

Section 11. Commercial Farming. — Commercial farms, which are private agricultural lands devoted to commercial livestock, poultry and
swine raising, and aquaculture including saltbeds, fishponds and prawn ponds, 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.n 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.

Commercial farms:
A. Saltbeds
B. Fruit farms
C. Orchards
D. Vegetable and cut-flower farms; and
E. Cacao, coffee and rubber plantations

Implementation of Agrarian Reform Law

A. From the effectivity
B. From the first year of commercial production and operation--for new farms.
a. Some trees (like the palm olive trees) take more than 10 years to grow

Mode of Acquisition of commercial farms

A. Voluntary offer to sell (VOS)
a. But not really “voluntary” because unwillingness is ignored. DAR sends a notice of coverage and compliance is what is
left to do through a “voluntary offer”.
b. Compensation is given an incentive as to the cash portion of 5%.
i. E.g. 30:75
B. Compulsory acquisition (CA)
a. DAR will cover your land, whether you like it or not.
b. Formula is still the same, but without incentive (e.g. 25:75)
C. Direct payment scheme (DPS)
a. Mode of acquisition where the value of the property is agreed upon by both the farmer beneficiary and the landowner,
through the supervision of the DAR
i. DAR intervenes because the landowner has some element of ascendancy over the farmer beneficiary.
- Same modes of acquisition not exclusive to commercial farms.

Manner of distribution of commercial farms:

A. Individually - 1 to 3 hectares each. If not feasible, form a cooperative.

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 B. Collectively
a. Refers to a situation where farmers are required to organize themselves into a cooperative
b. Rationale: commercial farming requires technical knowledge, unlike in the production of rice or corn.
i. E.g. “Tripod planting” combines three seedlings but with only one trunk. When they grow into one tree, there is
self-pollination.

Qualifications of commercial farm beneficiaries

A. 18 years old
B. Willingness, aptitude, and ability to cultivate
C. Employed in the commercial farm

Who are disqualified to become commercial farm beneficiaries? (RRDWV)

A. Farm workers who have Retired from service
B. Farm workers who have Resigned from their employment with the farm
C. Farm workers who were Dismissed for cause
D. Farm workers, lessees, or tenants who Waive or refuse to be a beneficiary
E. Farm workers, lessees, or tenants who have committed a Violation of Agrarian reform laws and regulations.

Freedom of beneficiaries to choose the type of agribusiness (CAM)

A. To Choose the type of agribusiness venture arrangement
B. To Market their products or enter into marketing arrangements
C. To Avail of the services or assistance of individuals, associations, or NGOs

Types of agribusiness venture arrangements (JC LMB) (Jesus Christ, Let Me Business)
A. Joint Venture Arrangement
B. Lease Arrangement
C. Contract Growing/Growership Arrangement
D. Management Contract
E. Build-Operate-Transfer Scheme

Additional Atty. Yuro Comments:

- Farm cooperatives: Borrowers can be lent financial assistance by Land Bank
- Usually taken advantage of by families
- Rationale of borrowing money from Land Bank:
- Farmers borrow money to produce crops and harvest so they can pay the money back

CHAPTER III - Improvement of Tenurial and Labor Relations

Section 12. Determination of Lease 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.

Purpose of determination:
- To protect farmers’ economic status
- To those tenants who chose to stay in the land already owned by others under CARP

Determination and fixing of lease rentals:

A. For lands devoted to rice and other crops
a. 25% of the average normal harvest after deducting the amount used for seeds and the cost of harvesting, or threshing.
b. If there has been no normal harvests, then the estimated normal harvest during the three (3) agricultural years
immediately preceding the date the leasehold was established.
B. For sugar cane lands
a. 25% of average normal harvest less the value of the cost of seeds/cane points, harvesting (cutting), loading, hauling,
and/or trucking fee, and cost of processing.
C. For coconut lands
a. 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.

Production sharing plan applies only to: (PMC)

A. Farms under a production venture, lease, management contract or other similar arrangement;

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 B. Farms leased or operated by multinational corporations;
C. Commercial farms
a. I.e., those devoted to saltbeds, fruit farms, orchards, vegetable and cut flower farms, cacao, coffee or rubber plantations.

CHAPTER IV - Registration

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:
(a) the description and area of the property;
(b) the average gross income from the property for at least three (3) years;
(c) the names of all tenants and farmworkers therein;
(d) the crops planted in the property and the area covered by each crop as of June 1, 1987;
(e) the terms of mortgages, lease, and management contracts subsisting as of June 1, 1987, and
(f) the latest declared market value of the land as determined by the city or provincial assessor.

Information stated in the filing of registration: (DAN CTL) or LAND-CT

A. Description and area of the property
B. Average gross income for at least three (3) years
C. Names of tenants and farmworkers
D. Crops planted in the property as of June 1, 1987
E. Terms of mortgages, leases, and management contracts
F. Latest declared market value
a. As determined by the City or Provincial Assessor
b. As reflected in the tax declaration
c. Qualified word: Latest. As in the year before the coverage.
d. Value of the land determined by its location.

Purpose of the law:

A. To help DAR identify the lands and their owners for effective implementation of the agrarian reform.

Additional Atty. Yuro Comments: Sec. 14 written in such a manner that the ultimate reason is to facilitate the coverage. Why? Law says that
within 180 days from this Act, the landowner shall file an information containing the following: DANCTL. Instead of DAR going to the field and
interviewing, the landowners instead will be the ones to submit to the DAR. But in reality, not all landowners comply with this, especially when
they learn that this is a step towards coverage of their land under the CARP. Since these are preliminary steps prior to the acquisition. DAR
will not have to spend so much time looking for this information.

CNI (Capitalized Net Income)

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.

Data of potential beneficiaries of CARP: (NOLCS) or LOCNS (as in Lochness Monster)

A. Names and members of immediate farm household
a. Successional rights indicated in case grantee passess away.
B. Owners or administrators of lands
C. Location and area of land
D. Crops planted
E. Share in the harvest

Purpose of the Law:

A. To develop a databank of potential and qualified beneficiaries for the effective implementation of the agrarian reform.
B. Purpose of posting
a. A form of notice and a way to seek clarification if name is not included by way of honest mistake, and not through gross
negligence.

Additional Atty. Yuro Comments: Related to Sec. 14. Submission of landowner to the DAR in Sec. 14 is coupled with the registration of the
same to the beneficiaries.

CHAPTER V - Land Acquisition

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 Section 16. Procedure for Acquisition 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 Sections 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 muniments 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 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.

Compulsory Acquisition Process:

1. Entering (INTR)
A. Identification
B. Notice
C. Thirty (30) Days
D. Reply
a. What is the “offer”? Provision is vague.
b. Atty Yuro’s clarification: Assuming that the landowner has complied with the submission of requirements under Sec. 14
and beneficiary information under Sec. 15, these information are to be put in a claim folder where the copy of the title, the
tax declaration, the subdivision plan (if any) or location map, and included therein is the list of qualified farmer
beneficiaries.
i. Once generated, the claim folder is forwarded to the Land Bank
1. Land Bank is designated as the primary authority of computing the value based off of E.O. 5.
2. Given to Land Bank because of Sharp International v. Court of Appeals
ii. Once the claim folder is forwarded to Land Bank, Land Bank employees conduct the ocular inspection.
1. Determine first the actual situation (including actual slope, what are included or excluded in the
coverage, etc.) through a field investigation.
a. Because merely reading the title of the property, will not know if some areas have a slope,
if areas or productive, or if there are streams and rivers in the area (which are not capable
of private appropriation)
b. Or, in the case of Sharp v. CA, so as to double check the Garchitorena affair.
2. Determine the credibility of the names of the farmer beneficiaries that they do exist and are actually
the beneficiaries.
iii. Notice of Valuation is the “offer” referred to by the law.

2.A Acceptance (APTS)

A. Accept
B. Payment by Land Bank
a. Pre-payment requirements first before actual issuance of payment
i. E.g. requirement of heirs for a settlement of the estate in case of death of owners.
1. Payment of estate tax (6% now because of TRAIN)
2. Settlement must be registered in the back of the title (a tedious process)
3. Issued an ICAR, then proceed to registry of deeds and pay more fees
a. Though in this case, should be exempted
C. Thirty (30) Days to pay
D. Surrender
a. Submission of title before actual payment since some of the lands may have been mortgaged with banks.
i. Or some lands where some taxes may be delinquent. Taxes enjoy preference in payment insofar as
immovables are concerned.
- Additional Atty. Yuro Comments: Payment not entirely in cash, depending on the area.
- 25% cash, 75% land bonks

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 - If voluntarily, 30% cash, 70% bonds

2.B Rejection (RS15-30)

A. Rejection or failure to reply
B. Summary administrative proceedings to determine compensation
C. Fifteen (15) days to submit evidence
D. Thirty (30) days for DAR to decide on the case

3. Possession (PIRP)
A. Payment (if acceptance) or just compensation (if rejection) to landowner
B. Possession of land
C. Issuance of a Transfer Certificate of Title upon request
D. Redistribute the land to the qualified beneficiaries

Two notices for validity of implementation to the landowner:

- Notice of Coverage
- Pursuant to DAR Administrative Order No. 12, Series of 1989
- Notice of Acquisition
- Pursuant to Section 16 of the CARL

Land acquisition procedure strictly construed:

- Land acquisition is an extraordinary method of expropriation
- If DAR or any of its agencies fail to comply with proper procedure, treated as violation of constitutional due process
- Considered as arbitrary, capricious, whimsical, and tainted with grave abuse of discretion (Heirs of Nicolas Jugalbot v.
Court of Appeals)

When title or ownership of the land is transferred to the State:

- Only upon FULL PAYMENT of Just Compensation.

Opening of trust account not considered payment

- Mere opening of trust account not constitutive of payment
- Law requires: Just Compensation to be paid in cash and Land Bank bonds

Additional Atty. Yuro Comments:

- Land Bank bonds are a form of investment whose value can increase

END OF PRELIMS

CHAPTER VI - JUST COMPENSATION

Salient Points (From Atty. Yuro)

Determination of Just Compensation is done by DARAB but the final decision may be appealed within 15 days before the RTC (Special
Agrarian Court). This vests on the DARAB judicial powers and making the RTC an appellate court. Sir does not like this!!

SECTION. 17. Determination of Just Compensation. — In determining just compensation, the cost of acquisition of the land, the value of
the standing crop, the current value of like properties, its nature, actual use and income, the sworn valuation by the owner, the tax
declarations, the assessment made by government assessors, and seventy percent (70%) of the zonal valuation of the Bureau of Internal
Revenue (BIR), translated into a basic formula by the DAR shall be considered, subject to the final decision of the proper court. The social
and economic benefits contributed by the farmers and the farmworkers and by the Government to the property as well as the nonpayment
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 (JC)

- Definition: The full and fair equivalent of the property taken from its owner by the expropriator.
- “The measure is not the taker’s gain, but the owner’s loss” [Hacienda Luisita v. PARC]
- Prompt payment
- Payment within a reasonable time from its taking.
- NO PROMPT PAYMENT WHEN:
- Partial payment of just compensation [Land Bank v. Orilla]
- Reimbursement is conditioned upon the Land Bank’s approval and release of the amount is dependent on
compliance with documentary requirements. [Land Bank v. Soriano]

Factors used in valuation of lands

- Cost of acquisition

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 - Value of standing crops
- Actual income of the land
- Tax declarations
- BIR Zonal

Determination of Just Compensation [DAR Administrative Order No. 2, series of 2009]

- Variables:
- Capitalized Net Income (CNI) - based on land use and productivity
- Comparable Sales (CS) - based on 70% of the zonal value
- Market Value (MV) - based on the Tax Declaration
- FORMULA [DAR Administrative Order No. 2, series of 2009]

Variables Present Formula of LAND VALUE

CNI, CS, MV CNI x 0.60 + CS x 0.30 + MV x0.10

CS, MV CS x 0.90 + MV x 0.10

CNI, MV CNI x 0.90 + MV x 0.10

MV MV x 2

Reckoning of valuation
- At the time of taking
- Value of the property at the time it was taken from the owner and appropriated by the government shall be the basis of determining
the value for just compensation.
- Can refer to that stage when the title is transferred to the Republic of the Philippines or the beneficiaries
- Can also refer to the time when the agricultural land voluntarily offered by a landowner was approved by the Presidential Agrarian
Reform Council (PARC). [Hacienda Luisita v. PARC; G.R. No. 1171101]
- IF there is undue delay in payment
- Value of the property determined not at the time of taking, but at the time of full payment [Lubrica v. Land Bank]

Procedure for determination of Just Compensation (JC) (Also found in Sec. 16)
- Land Bank determines land value → DAR makes an offer to the landowner based on valuation → If rejected, summary administrative
proceeding where parties submit evidence of JC
- A party who disagrees with the decision of the adjudicator can go to the SAC for final determination of JC

Role of the Department of Agrarian Reform Adjudication Board (DARAB)

- Conducting summary administrative proceedings for the preliminary determination of JC
- To determine if Land Bank’s computation is in accordance with the rules or administrative orders
- Conducted by:
- Provincial Agrarian Reform Adjudicators (PARAD) - Land valuation is less than P10M
- Regional Agrarian Reform Adjudicators (RARAD) - Land valuation is P10M - P50M
- DARAB - Land valuation is above P50M
- If a PARAD is unavailable, the RARAD may conduct proceedings. If RARAD is unavailable, the DARAB may conduct proceedings.

The valuation set by DAR not conclusive

- Valuation by Land Bank (and DAR) may be contested in the Special Agrarian Court (RTC) within fifteen (15) days from receipt of
the Board/Adjudicator’s decision.

Courts cannot disregard the formula

- The Special Agrarian Court (RTC) cannot disregard the formula laid down by the Department of Agrarian Reform.

CASE: Land Bank v. Barrido [628 SCRA 454]

FACTS: The lands of the Barridos in Sara, Iloilo were subjected to the CARP and to be distributed to the beneficiaries. Land Bank
calculated the just compensation to be at P60,385.49 in total, based on PD 27 and EO 228. The Barridos were not satisfied and filed for
determination of just compensation before the RTC. The RTC came up with its own formula: Land Value = Average Gross Production
(AGP) x 2.5 x Government Support Price (GSP). It concluded that the Barridos are to be awarded a total of P411,997.63.

ISSUE: WON the RTC may rely on their formula for determining Just Compensation

HELD: NO. The Special Agrarian Court appealed to should rely on the R.A. 6657, with PD 27 and EO228 as supplementary statutes.
Under R.A. 6657, the DAR A.O. No. 5 should be followed. The SAC should not disregard the formula and should instead apply the same.
The formula is LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1), if all three factors are present. The case is remanded back to the RTC to
determine just compensation.

CASE: Land Bank v. Colarina [629 SCRA 614]

Doctrine: The factors for the determination of just compensation which the Department of Agrarian Reform converted into a formula are
mandatory, and NOT mere guides that the designated Regional Trial Court may disregard.

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Consent of beneficiary not necessary in determining just compensation
- Consent of the farmer-beneficiary is NOT REQUIRED.
- Determination of just compensation is between the landowner, the Department of Agrarian Reform, and the Land Bank

CASE: Land Bank v. Pascual [G.R. No. 128557]

FACTS: Jose Pascual, a landowner, subjected his properties to be acquired under the land reform program. The Provincial Agrarian
Reform Officer (PARO) of the DAR recommended that the Average Gross Productivity (AGP) should be at 25 cavans per hectare for
unirrigated lowland rice (Don’t mind this formula; it is outdated). This was contested by the Secretary of Agrarian Reform (SAR) who also
conducted his own valuation and came up with a lesser value, to the contentment of Landbank of the Philippines (LBP). Thereafter, the
Provincial Agrarian Reform Adjudicators (PARAD) ruled in favor of Pascual and the PARO’s valuation, ordering LBP to pay Pascual
P1,961,950.00. LBP refused to pay the valuation because the consent of the farmer-beneficiary was not received.

ISSUES: 1. WON the DARAB has jurisdiction to determine the value of the lands
2. WON the farmer-beneficiary’s consent is necessary in determining just compensation

HELD:
1. YES. DARAB’s jurisdiction to determine the value of the lands is valid. However, such determination is merely preliminary. The final
determination of just compensation is still vested in the courts (should an appeal be made within 15 days from promulgation of the valuation
by the DARAB).

2. NO. Only the landowner, the Department of Agrarian Reform, and the Land Bank are parties in the valuation of the land. The farmer-
beneficiaries have no say and their consent is not necessary. The LBP’s contention that the farmer-beneficiaries are parties to the
determination due to their status as the “principal debtor” is wrong. However, Sec. 18 of RA 6657 states that only the landowner, DAR, and
LBP are parties in determining the value of the land.

JFLO 2020

CASE: Land Bank v. Santiago [G.R. No. 182209]

FACTS: Emiliano F. Santiago is the owner of parcels of land that were subjected on October 21, 1972 to the Operation Land Transfer
(OLT) program, where 17.4ha of his land will be taken. In the computation of just compensation, P353,122.62 was finally arrived at in 1998
and paid accordingly to Santiago. However, Santiago assails the computation of the just compensation, stating that such value should be
higher due to the change of the formula based off of R.A. 6657 (which had passed in 1988). LBP assails the same stating that PD 27 and
EO228’s formula should be followed since they were the applicable laws at the time of acquisition of the lands.

ISSUES: 1. WON the formula of PD 27 and E.O. 228 should be followed or R.A. 6657’s
2. WON the Court, in the formulation of just compensation, can disregard the formula prescribed

HELD:
1. RA 6657. The passage of R.A. 6657 makes its formula as the prescribed one, with PD 27 and EO 228 having only suppletory effect. This
is the case even if the lands were acquired before the passage of R.A. 6657 since the determination of just compensation has not yet been
settled and the agrarian reform process still incomplete. The case is therefore remanded back to the SAC.

2. NO. The SAC must adhere strictly to the doctrine of just compensation at the time of taking (and not at rendition of judgment), and is
mandated to rely on the formula of R.A. 6657. The SAC shall not rely on such implementing rules of the DAR as mere guidelines.

CASE: Land Bank v. Santos [G.R. No. 213863]

FACTS: The three (3) parcels of land of Santos were subjected to the Agrarian Reform under P.D. 27 in 1984. It was in 2000, however,
when the valuation of the land was made by the Land Bank (LBP), including a 6% interest. However, such valuation was considered low
and therefore denied. During the summary proceedings before the Provincial Agrarian Reform Adjudicators (PARAD), the valuations were
fixed at higher prices, but without the 6% interest. LBP disagreed with the valuation and filed before the RTC for a recomputation. RTC
ordered LBP to recompute, who arrived at another value through R.A. 6657’s formula. Santos almost accepted the new value, but moved
for reconsideration (MR) due to the exclusion of the 12% interest for delay in payment. The MR was accepted by RTC and recomputation
followed from January 2010 only, since a 6% interest was already included in the years before 2010. Santos appealed the valuation stating
that the 12% interest should be applied entirely, even if such 6% interests had already been included in the other previous computations.

ISSUE: WON the landowner is entitled to the payment of annual interest of 12% on the unpaid balance of just compensation, even
if he was already granted the 6% annual incremental interest prescribed under Department of Agrarian Reform Order Nos. 13,
Series of 1994; 02, Series of 2004; or 06, Series of 2008?

HELD: YES. A uniform interest rate of 12% interest per annum is to be applied in the computation for just compensation when there is
delay in the payment. Such interest rate should be pegged from the time of taking, or the time when the landowner was deprived of the use
and benefit of his property, such as when title is transferred to the Republic, or emancipation patents are issued by the government, until
full payment. As opposed to the usual 6% annual interest, the 12% is symbolic of damages against the government agencies who cause
the delay of payment of just compensation.

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 SECTION 18. Valuation and Mode of Compensation. – The LBP shall compensate the landowner in such amounts as may be agreed upon
by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Sections 16 and 17 and other pertinent
provisions hereof, or as may be finally determined by the court, as the just compensation for the land.
The compensation shall be paid in one of the following modes, at the option of the landowner:
(1) Cash payment, under the following terms and conditions;

(a) For lands above fifty (50) hectares, insofar as the – Twenty-five percent (25%) cash, the balance to be
excess hectarage is concerned. paid in government financial instruments negotiable at
any time.

(b) For lands above twenty-four (24) hectares and up to – Thirty percent (30%) cash, the balance to be paid in
fifty (50) hectares. government financial instruments negotiable at any
time.

(c) For lands twenty-four (24) hectares and below. – Thirty-five percent (35%) cash, the balance to be paid
in government financial instruments negotiable at any
time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other qualified investments in
accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face value of the bonds shall mature every year
from the date of issuance until the tenth (10th) year: Provided, That should the landowner choose to forego the cash portion, whether in full
or in part, he shall be paid correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his successors in interest or his assigns, up to the
amount of their face value, for any of the following:
(i) Acquisition of land or other real properties of the government, including assets under the Asset Privatization Program and other assets
foreclosed by government financial institutions in the same province or region where the lands for which the bonds were paid are situated;
(ii) Acquisition of shares of stock of government-owned or controlled corporations or shares of stocks owned by the government in private
corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused persons, or performance bonds;
(iv) Security for loans with any government financial institution, provided the proceeds of the loans shall be invested in an economic
enterprise, preferably in a small- and medium-scale industry, in the same province or region as the land for which the bonds are paid;
(v) Payment for various taxes and fees to government; Provided, That the use of these bonds for these purposes will be limited to a certain
percentage of the outstanding balance of the financial instruments: Provided, further, That the PARC shall determine the percentage
mentioned above;
(vi) Payment for tuition fees of the immediate family of the original bondholder in government universities, colleges, trade schools, and
other institutions;
(vii) Payment for fees of the immediate family of the original bondholder in government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
In case of extraordinary inflation, the PARC shall take appropriate measures to protect the economy.

Mode of Payment, at the option of the landowner:

A. Cash and financial instruments of the government, payable as follows:
a. Lands above 50 hectares
i. 25% cash; 75% in government financial instruments
b. Lands above 24 hectares to 50 hectares
i. 30% cash; 70% in government financial instruments
c. Lands 24 hectares and below
i. 35% cash; 65% in government financial instruments
B. Shares of stocks in government-owned or -controlled corporations, preferred shares of the Land Bank, physical assets or other
qualified investments;
C. Tax credits which can be used against tax liabilities; and
D. Land Bank bonds which shall mature every year until the 10th year.

Landowner cannot insist in cash payment only

- The landowner CANNOT insist in cash payment only because it is not sanctioned by the agrarian reform law.
- Options available are only part cash, part bonds, government financial instruments, shares, tax credits, LBP bonds.

Features of the Land Bank Bonds

A. Ten percent (10%) of the face value of the bonds shall mature every year from the date of issuance until the tenth (10th) year

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 B. The bonds are transferable and negotiable
C. The bonds can be used for any of the following:
a. Acquisition of land or other real properties of the government
b. Acquisition of land shares of stock of GOCCs
c. Bail bonds
d. Security for loans with government financial institutions
e. Payment for various taxes and fees
f. Payment for tuition fees of the immediate family in government education institutions
g. Payment for fees of the immediate family in government hospitals.

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.

SECTION 20. Voluntary Land Transfer. – Landowners of agricultural lands subject to acquisition under this Act may enter into a voluntary
arrangement for direct transfer of their lands to qualified beneficiaries subject to the following guidelines:
(a) All notices for voluntary land transfer must be submitted to the DAR within the first year of the implementation 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
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.

Documentary requirements for voluntary offers for sale

a. Title or proof of ownership, if untitled;
b. Tax declaration; and
c. Approved survey plan

Voluntary land transfer no longer allowed

- Voluntary land transfer was allowed up to June 30, 2009 only.
- After June 30, 2009, modes of acquisition were limited to voluntary offer to sell and compulsory acquisition.

Mode of payment in voluntary land transfers

- Unlike in compulsory acquisition, the farmer-beneficiary pays the agreed price of the land directly to the landowner.

CHAPTER VII - LAND REDISTRIBUTION

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;
(c) seasonal farmworkers;
(d) other farmworkers;
(e) actual tillers or occupants of public lands;
(f) collectives or cooperatives of the above beneficiaries; and
(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

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 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.

Eligible Agrarian Reform Beneficiaries

- Qualification:
- A farmer or tiller who owns less than three (3) hectares of land
- Could refer to any of the following:
- Agricultural lessees and share tenants
- Regular farmworkers
- Seasonal farmworkers
- Other farmworkers
- Actual tillers or occupants of public lands
- Collectives or cooperatives of the above beneficiaries
- Others directly working on the land

Qualification of an agrarian reform beneficiary

- Filipino Citizen
- Resident of the barangay or municipality where the landholding is located
- At least fifteen (15) years old at the time of identification, screening, and selection; and
- Willing, able, and equipped with aptitude to cultivate and make the land productive
- Special qualifications for farm workers in commercial farms or plantations
- SD

DISQUALIFIED from being agrarian reform beneficiaries [DAR Administrative Order No. 2, series of 2009]. Those who:
1. Do not meet the basic qualifications
2. Waived their right
3. Have not paid an aggregate of three (3) annual amortizations
4. Failed to exercise right of redemption/repurchase within two (2) years
5. Refused to pay three (3) annual amortizations
6. Have been dismissed for cause
7. Have obtained substantially equivalent employment
8. Have retired or voluntarily resigned from employment
9. Have misused the land or diverted the financial support services
10. Have misrepresented material facts in their basic qualifications
11. Have sold, disposed, or abandoned the lands awarded to them
12. Have converted agricultural lands to non-agricultural use
13. Have been finally adjudged guilty of forcible entry or unlawful detainer
14. 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 of three (3) hectares each. Only when these beneficiaries have all
received three (3) hectares each, shall the remaining portion of the landholding, if any, be distributed to other beneficiaries under Section
22, subparagraphs (c), (d), (e), (f), and (g).

SECTION 23. Distribution Limit. – No qualified beneficiary may own more than three (3) hectares of agricultural land.

Order of distribution
1. Children. Each child is entitled to three (3) hectares if he is:
a. Fifteen (15) years old; and
b. Actually tilling the land or directly managing the farm
2. Agricultural lessees and share tenants
3. Regular farmworkers
4. If lessees, tenants, and regular farm workers have received their three (3) hectares, the rest will be distributed to:
a. Seasonal farm workers;
b. Other farm workers; actual tillers or occupants of public lands;
c. Collectives or cooperatives of the above beneficiaries; and
d. Others directly working on the land.

Maximum area
- General rule:
- Three (3) hectares.
- If a tenant or farm worker already owns two (2) hectares of agricultural land, he can still be awarded one (1) hectare.
- If landholding NOT ENOUGH to meet the 3-hectare award ceiling:
- Area is distributed based on the actual size of tillage by each lessee or tenant.
- If landholding is MORE THAN ENOUGH to accommodate the 3-hectare, the excess will be distributed to (by order):

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 1. Seasonal farm workers
2. Other farmworkers;
3. Actual tillers or occupants of public lands;
4. Collectives or cooperatives of the above beneficiaries.
- If it is not economically feasible to divide the excess land to the seasonal or other farm workers, the criteria is observed:
- Willingness, aptitude, and ability to cultivate and make the land productive;
- Physical capacity; and
- Length of service.
- If seasonal or other farm workers equally meet the foregoing criteria:
- Priority to those who have continuously worked on the landholding.
- Other farm workers will be put in a wait list instead.

Factors to determine size of land to be awarded

- Type of crop;
- Type of soil;
- Weather patterns; and
- 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 a duly
registered emancipation patent or certificate of land ownership award and their actual physical possession of the awarded land. Such
award shall be completed in not more than one hundred eighty (180) days from the date of registration of the title in the name of the
Republic of the Philippines: Provided, That the emancipation patents, the certificates of land ownership award, 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
emancipation patents or the certificates of land ownership award being titles brought under the operation of the torrens system, are
conferred with the same indefeasibility and security afforded to all titles under the said system, as provided for by Presidential Decree No.
1529, as amended by Republic Act 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
Land Bank of the Philippines (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 Republic Act No. 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 emancipation patent or the certificate of land ownership award.
“All cases involving the cancellation of registered emancipation patents, certificates of land ownership award, and other titles issued under
any agrarian reform program are within the exclusive and original jurisdiction of the Secretary of the DAR.

Transfer of ownership
- Title and ownership over the land can be transferred to the beneficiaries only upon full payment of the just compensation to the
landowner. [Association of Small Landowners v. Secretary of Agrarian Reform]

When is the Certificate of Land Ownership Award (CLOA) ssued?

- The DAR will issue the CLOA only upon full payment of amortization by the farmer-beneficiary.
- RECAL: The farmer-beneficiary is granted up to 30 annual amortization payments at 6% interest to complete full payment. Non-
payment of three (3) consecutive amortizations will grant the foreclosure of the property.

Indefeasibility of CLOA
- RECALL: CLOAs are titles brought under the operation of the Torrens system.
- Titles issued under the agrarian reform program become indefeasible and imprescriptible after one (1) year from its registration with
the Office of the Registry of Deeds.

Cancellation of CLOAs
- The Secretary of the Department of Agrarian Reform has exclusive and original jurisdiction in all cases involving the cancellation of
CLOAs.
- Grounds for Cancellation of CLOAs [ANF MSI]
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.

When will the rights and obligations of beneficiaries commence?

- From their receipt of a duly registered CLOA and their actual physical possession of the awarded land.
- RECALL: Atty. Yuro’s story about the Pfleiders of Hinoba-an, Negros Occidental.
- The 600-ha. property of the Pfleiders was forwarded to LBP to be distributed to farmer-beneficiaries. The CLOAs were
distributed to the beneficiaries, but the property was “not yet ready to be occupied” due to a pending case of the Pfleiders
with PNB. By the end of the meeting, the decision was “status quo”.
- “Status quo”, however, was interpreted differently by the partise. For the beneficiaries, this meant they can enter (the
correct interpretation). But for the Pfleiders, this meant they could stay in their land (without the farmers entering). The
Pfleiders resisted the lawful entry of the farmers and three (3) people died, with several injured.

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Obligation of Agrarian Reform Beneficiaries
A. Exercise due diligence in the use, cultivation, and maintenance of the land, including improvements thereon;
B. Pay the LBP thirty (30) annual amortizations with 6% interest per annum.
- NOTE:
- The amortization will start one (1) year from the date of registration of the CLOA (see: indefeasibility of CLOA).
- However, if actual occupancy of the land takes place after the registration of the CLOA, the one-year period shall be
reckoned from constructive occupation of the land by the beneficiary.

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. 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 purposes of this Act, a landless beneficiary is one who owns less than three (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’ collective 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 coorkers 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.
“The conditions for the issuance of collective titles are as follows:
“(a) The current farm management system of the land covered by CARP will not be appropriate for individual farming of farm parcels;
“(b) The farm labor system is specialized, where the farmworkers are organized by functions and not by specific parcels such as spraying,
weeding, packing and other similar functions;
“(c) The potential beneficiaries are currently not farming individual parcels but collectively work on large contiguous areas; and
“(d) The farm consists of multiple crops being farmed in an integrated manner or includes non-crop production areas that are necessary for
the viability of farm operations, such as packing plants, storage areas, dikes, and other similar facilities that cannot be subdivided or
assigned to individual farmers.
“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 certificates of land ownership award are given to cooperatives then the names of the beneficiaries
must also be listed in the same certificate of land ownership award.
“With regard to existing collective certificates of land ownership award, the DAR should immediately undertake the parcelization of said
certificates of land ownership award, 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 certificates of land ownership award. The DAR shall prepare a prioritized
list of certificates of land ownership award to be parcelized. The parcelization shall commence immediately upon approval of this Act and
shall not exceed a period of three (3) years. Only those existing certificates of land ownership award that are collectively farmed or are
operated in an integrated manner shall remain as collective.

Individual titles for every beneficiary

- GENERAL RULE:
- The land should be awarded to the individual farmer-beneficiary and should be covered by an individual title.
- XPN:
- If the beneficiaries opt for collective ownership, a collective ownership title may be issued in the name of the co-owners or
the collective organization.
- Collective ownership such as farmers cooperative.
- Names of the beneficiaries must be listed in the same certificate of land ownership award.

Conditions for issuance of collective titles

a. Farm management system of the land covered is not appropriate for individual farming; (should be for groups)
b. Farm labor system is specialized, i.e. the farmworkers are organized by functions and not by specific parcels
c. The beneficiaries are currently not farming individual parcels but collectively work on large contiguous areas;
d. The farm consists of multiple crops being farmed in an integrated manner.

Title must indicate that it is an EP or CLOA

- The title of land must indicate that it is an Emancipation Patent (EP) or a Certificate of Land Ownership Award (CLOA).
- The same rule applies if there is a subsequent transfer title.

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 SECTION. 26. Payment by Beneficiaries. — Lands awarded pursuant to this Act shall be paid for by the beneficiaries to the LBP in thirty
(30) annual amortizations at six percent (6%) interest per annum. The annual amortization shall start one (1) year from the date of the
certificate of land ownership award registration. However, if the occupancy took place after the certificate of land ownership award
registration, the amortization shall start one (1) year from actual occupancy. The payments for the first three (3) years after the award shall
be at reduced amounts as established by the PARC: Provided, That the first five (5) annual payments may not be more than five percent
(5%) of the value of the annual gross production as established by the DAR. Should the scheduled annual payments after the fifth (5th)
year exceed ten percent (10%) of the annual gross production and the failure to produce accordingly is not due to the beneficiary’s fault,
the LBP shall reduce the interest rate and/or reduce the principal obligation to make the repayment affordable.
“The LBP shall have a lien by way of mortgage on the land awarded to the beneficiary; and this mortgage may be foreclosed by the LBP for
non-payment of an aggregate of three (3) annual amortizations. The LBP shall advise the DAR of such proceedings and the latter shall
subsequently award the forfeited landholding to other qualified beneficiaries. A beneficiary whose land, as provided herein, has been
foreclosed shall thereafter be permanently disqualified from becoming a beneficiary under this Act.

Schedule of payment
- Thirty (30) annual amortizations with six percent (6%) interest per annum.
- Payment starts one (1) year from:
- Date of registration of CLOA; or
- Date of actual occupancy, if the occupancy took place after the registration of the CLOA

Basis of amortization
- Maximum amortization is 5% of the annual gross production as established by the DAR
- After the 5th year, the interest rate and/or the principal obligation may be reduced:
- If due to failure of production, the scheduled annual payments exceed 10% of the annual gross production; and
- The failure to produce is not due to the beneficiary’s fault.

Effect of failure to pay the amortizations

- Failure of the beneficiary to pay three (3) annual amortizations leads to Land Bank’s right to forfeit the landholding and award it to
other qualified beneficiaries.
- The beneficiary whose land has been foreclosed will be permanently disqualified from becoming a beneficiary.

SECTION. 27. Transferability of Awarded Lands. — Lands acquired by beneficiaries under this Act or other agrarian reform laws shall not
be sold, transferred or conveyed except through hereditary succession, or to the government, or to the LBP, or to other qualified
beneficiaries through the DAR for a period of ten (10) years: Provided, however, That the children or the spouse of the transferor shall have
a right to repurchase the land from the government or LBP within a period of two (2) years. Due notice of the availability of the land shall be
given by the LBP to the BARC of the barangay where the land is situated. The PARCCOM, as herein provided, shall, in turn, be given due
notice thereof by the BARC.
“The title of the land awarded under the agrarian reform must indicate that it is an emancipation patent or a certificate of land ownership
award and the subsequent transfer title must also indicate that it is an emancipation patent or a certificate of land ownership award.
“If the land has not yet been fully paid by the beneficiary, the rights to the land may be transferred or conveyed, with prior approval of the
DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or conveyance, shall cultivate the land
himself/herself. Failing compliance herewith, the land shall be transferred to the LBP which shall give due notice of the availability of the
land in the manner specified in the immediately preceding paragraph.
“In the event of such transfer to the LBP, the latter shall compensate the beneficiary in one lump sum for the amounts the latter has already
paid, together with the value of improvements he/she has made on the land.

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 the land under Section 16 of this Act, and shall be given a reasonable time to harvest the same.

Sale or transfer of awarded lands prohibited

- GENERAL RULE:
- Beneficiaries cannot, within ten (10) years, sell or transfer ownership of the land awarded to them.
- XPN:
- Through hereditary succession;
- The government;
- The Land Bank of the Philippines;
- To other qualified beneficiaries.

Meaning of hereditary succession

- Succession by intestate succession or by will to the compulsory heirs.
- It DOES NOT pertain to succession to other persons.

Effect of sale or transfer to the Government or the Land Bank

- If the beneficiary sells it back to them, the children or the spouse of the transferor can repurchase the land within two (2) years from
the date of transfer.

Can a beneficiary who has not fully paid the amortizations sell the land to another?

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 - YES, subject to the following conditions:
- Approval of the Department of Agrarian Reform
- Land should be sold only to an heir of the beneficiary or to any other qualified beneficiary;
- The transferee must undertake to cultivate the land himself, otherwise, the LBP will take the land for disposition.
- If the conditions are met, LBP will compensate the beneficiary (seller) in one lump sum for the amounts he has already paid,
together with the value of improvements made thereon.

Can the beneficiary lease the land to another person?

- YES. What is prohibited is the transfer of ownership, not possession. The lease must be for agricultural purposes only.
- However, if the lease is for non-agricultural purposes, the beneficiary must seek the approval of the DAR.

Can the beneficiary lease the land to the former landowner?

- YES. This is possible only after obtaining approval from the DAR, through the Provincial Agrarian Reform Coordinating Committee.

Right over standing crops at the time of acquisition

- The landowner retains his right over crops not yet harvested at the time the DAR took possession of the land.

CHAPTER 8 - CORPORATE FARMS

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.
SECTION 30. Homelots and Farmlots for Members of Cooperatives. – The individual members of the cooperatives or corporations
mentioned in the preceding section shall be provided with homelots and small farmlots for their family use, to be taken from the land owned
by the cooperative or corporation.
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 this 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 within the same period, the agricultural land of the corporate owners or corporation shall be
subject to the compulsory coverage of this Act.

Corporate farms
- Farms owned or operated by corporations or other business associations.
- Lands subjected to the Agrarian Reform shall be distributed directly to the individual worker-beneficiaries

Modes of distribution of corporate farms

1. Direct;
2. Indirect.
a. The exception to direct distribution. This applies if it is not economically feasible and sound to divide the land.
b. Distributed through a workers’ cooperative or association.

Entitlement to homelot and small farmlot

- When the farm is distributed indirectly through a worker’s cooperative or association, the beneficiaries are entitled to a homelot and
a small farmlot not exceeding 1,000 square meters.
- The beneficiary can use the site for his permanent dwelling and for raising vegetables, poultry, pigs, and other animals.

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 - Such homelot and small farmlot will be taken from the land awarded to the cooperative or association.

NOTICE: Schemes under Section 31 NO LONGER OPERATIVE

- They have been amended by R.A. 9700
- The two schemes, (1) voluntary land transfer, and (2) stock distribution were only allowed up to June 30, 2009.
- After June 30, 2009, the modes of acquisition were limited to voluntary offer to sell and compulsory acquisition.

CASE: Hacienda Luisita v. Presidential Agrarian Reform Council (2011)

FACTS: In 1980, Hacienda Luisita (owned by Tarlac Dev’t Corp or TADECO), a 6,443-hectare property, was subjected to coverage by
CARP, initiated by the Marcos Admin, and later covered by RA 6657. In 1988, instead of distribution of its land, however, TADECO
complied with the requirements of CARL by opting for a stock distribution option agreement (SDOA), pursuant to Resolution 89-12-2
as approved by the Presidential Agrarian Reform Council (PARC). This option was provided through E.O. 229 and RA 6657 under the
Aquino Administration through Sec. 31 where land or stock transfer are valid modes of land distribution.

From 1989 to 2005, it was claimed by Hacienda Luisita, Inc. (HLI) that they distributed said stocks to the farm worker beneficiaries (FWB).
However, FWB groups such as AMBALA and HLI Supervisory Group claimed otherwise, stating that they have not actually received such
benefits in full. They brought their complaint before the DAR.

Task Force Luisita (of DAR) investigated and found HLI to have been uncompliant. They recommended for (1) the revocation of HLI’s stock
distribution plan (SDP) and (2) the compulsory acquisition of Hacienda Luisita. PARC agreed and consequently revoked the SDP and
subjected HLI’s land under CARP.

ISSUES: (1) Does PARC have authority to revoke the SDP (Stock Distribution Plan)?
(2) Was the revocation of the SDP valid?
(3) Does Sec. 31 impair the fundamental right of the farmworkers under Sec. 4, Art. 13 of the Constitution?
(4) When was the “time of taking” for valuation of Just Compensation?

HELD: (1) YES. Under Sec. 31, the authority of approving (and revoking) SDPs rests on the PARC. An SDP is imbued with public interest,
pursuant to RA 6657, and requires PARC’s approval (or not).
(2) YES. The SDP violates DAO 10, specifically with (a) its failure to comply with the distribution of free homelots of not more than 240
square meters each , and (b) Dilution of shares. The distribution of the shares of stock to the FWBs is based on the number of
"man days," or the number of days that the FWBs have worked during the year. This violates Sec. 1 of DAO 10 which sets the
distribution of equal number of shares to the FWBs as the minimum ratio of shares of stock.
(3) NO. The provision of the option of stock transfer is not inconsistent with Sec. 4, Art. 13 of the Constitution. Land distribution under RA
6657 is not exclusive to actual land distribution, but may be resorted to stock transfer. Moreover, Sec. 4, Art. 13 is not self-executory and
requires law for its implementation.
(4) When PARC approved the SDP in 1989. HLI is entitled to just compensation for the agricultural land that will be transferred to DAR to
be reckoned from November 21, 1989 per PARC Resolution No. 89-12-2. DAR and LBP are ordered to determine the compensation due to
HLI. “Taking” in this sense was when the landowner voluntarily offered the lands for CARP coverage when it was approved by PARC.
Submission of the SDP for approval is deemed acknowledgment by the landowner of coverage by CARP.

November 22, 2011: SC realized that the FWBs (6,296 of them) will never have control over these agricultural lands as long as they remain
as stockholders of HLI, bearing in mind that with the revocation of the approval of SDP, HLI will no longer be operating under SDP and will
only be treated as an ordinary private corporation; the FWBs who remain as stockholders of HLI will be treated as an ordinary stockholders
and will no longer be under the protective mantle of R.A. 6657.

WHEREFORE, Petition is DENIED. The 6,296 qualified FWBs shall have the option to remain as stockholders of HLI, each being entitled to
18,804.32 HLI shares. All salaries, benefits, 3% production share and 3% share in the proceeds of the sale of the 500-hectare converted
land and the 80.51-hectare SCTEX lot and homelots already received by the 10,502 FWBs, composed of 6,296 original FWBs and 4,206
non-qualified FWBs, shall be respected with no obligation to refund or return them.

HLI is directed to pay the 6,296 FWBs the consideration of PhP 500,000,000 received by it from Luisita Realty, Inc., the consideration of
PhP 750,000,000 received by its owned subsidiary, Centennary Holdings, Inc., and the price of PhP 80,511,500 paid by the government
through the Bases Conversion Development Authority. The total amount of PhP 1,330,511,500.

DOCTRINE:
- Applies to fundamental principles of CARL, valuation of Just Compensation, Powers of PARC

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 farmworkers or farmworkers’ organization,
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.

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 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-A. Incentives. – 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 currently 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 accountants chosen by the workers.
“The foregoing provision shall not apply to agricultural lands subsequently converted to fishpond or prawn farms provided the size of the
land converted does not exceed the retention limit of the landowner.

SECTION 33. Payment of Shares of Cooperative or Association. – Shares of a cooperative or association acquired by farmer-beneficiaries
or worker-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 farmer-beneficiaries and worker-beneficiaries in the payment for said shares by
providing credit financing.

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 worker-beneficiaries in the creation of wealth.
In the determination of a price that is just not only to the individual but to society as well, the PARC shall consult closely with the landowner
and the worker-beneficiaries.
In case of disagreement, the price as determined by the PARC, if accepted by the worker-beneficiaries, shall be followed, without prejudice
to the landowner’s right to petition the Special Agrarian Court to resolve the issue of valuation.

Section 32 - A Transitory Provision

- The provision applies while the land transfer is being processed and finalized.
- Production sharing scheme between individuals/entities owning or operating agricultural land and farm workers.
a. If more than P5M gross sales/year are realized:
i. 3% of the gross sales--to be distributed to regular and other farm workers (over and above the compensation
they currently receive)
ii. 1% of the gross sales--to be distributed to the managerial, supervisory and technical employees.
b. If profits are realized--additional 10% of the net profit after tax, to be distributed to regular and other farm-workers.

Section 32 - Declared unconstitutional with respect to livestock and poultry

- Insofar as it includes the livestock, poultry and swine farms in its coverage, the mandate of production-sharing plans is considered
as unreasonable, confiscatory, and violative of due process. [Luz Farms v. Secretary of Agrarian Reform]

Incentives for Regular fishpond or Prawn Farm Workers

- An incentive plan where 7.5% of their net profit is distributed within sixty (60) days at the end of the fiscal year as compensation to
regular and other pond workers.

Value of shares
- The value will be determined by the Land Bank

CHAPTER 9 - SUPPORT SERVICES

SECTION. 35. Creation of Support Services Office. — There is hereby created the Office of Support Services under the DAR to be headed
by an Undersecretary.
r"The Office shall provide general support and coordinative services in the implementation of the program, particularly in carrying out the
provisions of the following services to farmer beneficiaries and affected landowners: "
1. Irrigation facilities, especially second crop or dry season irrigation facilities; "
2. 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;
3. Government subsidies for the use of irrigation facilities;
4. Price support and guarantee for all agricultural produce;
5. Extending to small landowners, farmers and farmers' organizations the necessary credit, like concessional and collateral-free

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 loans, for agro-industrialization based on social collaterals like the guarantees of farmers' organizations;
6. Promoting, developing and extending financial assistance to small and medium-scale industries in agrarian reform areas;
7. Assigning sufficient numbers of agricultural extension workers to farmers' organizations;
8. 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;
9. Development of cooperative management skills through intensive training;
10. Assistance in the identification of ready markets for agricultural produce and training in the other various aspects of marketing;
11. Conduct an effective information dissemination system through the Department of Agriculture to promote marketing and minimize
spoilage of agricultural produce and products;
12. 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
13. 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.

SECTION. 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: Provided, That the DAR shall pursue integrated land acquisition and distribution and support services strategy requiring a plan to
be developed parallel to the land acquisition and distribution process. The planning and implementation for land acquisition and distribution
shall be hand-in-hand with support services delivery: Provided, further, That for the next five (5) years, as far as practicable, a minimum of
two (2) Agrarian Reform Communities (ARCs) shall be established by the DAR, in coordination with the local government units, non-
governmental organizations, community-based cooperatives and people’s organizations in each legislative district with a predominant
agricultural population: Provided, furthermore, That the areas in which the ARCs are to be established shall have been substantially
covered under the provisions of this Act and other agrarian or land reform laws: Provided, finally, That a complementary support services
delivery strategy for existing agrarian reform beneficiaries that are not in barangays within the ARCs shall be adopted by the DAR.
“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. In each community, the DAR,
together with the agencies and organizations above mentioned, shall identify the farmers’ association, cooperative or their respective
federations approved by the farmers-beneficiaries that shall take the lead in the agricultural development of the area. In addition, the DAR,
in close coordination with the congressional oversight committee created herein, with due notice to the concerned representative of the
legislative district prior to implementation shall be authorized to package proposals and receive grants, aids and other forms of financial
assistance from any source.

SECTION. 37. Support Services for the Agrarian Reform Beneficiaries. — The State shall adopt the integrated policy of support services
delivery to agrarian reform beneficiaries. To this end, the DAR, the Department of Finance, and the Bangko Sentral ng Pilipinas (BSP) shall
institute reforms to liberalize access to credit by agrarian reform beneficiaries. 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;
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: Provided, That one-third (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: 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.
For this purpose, all financing institutions may accept as collateral for loans the purchase orders, marketing agreements or expected
harvests: Provided, That loans obtained shall be used in the improvement or development of the farmholding of the agrarian reform
beneficiary or the establishment of facilities which shall enhance production or marketing of agricultural products or 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, towards helping them understand their rights and responsibilities as owner-
cultivators developing farm-related trust relationships among themselves and their neighbors, and increasing farm production and
profitability with the ultimate end of empowering them to chart their own destiny. The representatives of the agrarian reform beneficiaries to
the PARC shall be chosen from the nominees of the duly accredited agrarian reform beneficiaries’ organizations, or in its absence, from
organizations of actual and potential agrarian reform beneficiaries as forwarded to and processed by the PARC EXCOM.
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

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 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.
The Bagong Kilusang Kabuhayan sa Kaunlaran (BKKK) Secretariat shall be transferred and attached to the LBP, for its supervision
including all its applicable and existing funds, personnel, properties, equipment and records.
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.
The PARC shall also ensure that rural women will be able to participate in all community activities. To this effect, rural women are entitled
to self-organization in order to obtain equal access to economic opportunities and to have access to agricultural credit and loans, marketing
facilities and technology, and other support services, and equal treatment in land reform and resettlement schemes.
The DAR shall establish and maintain a women’s desk, which will be primarily responsible for formulating and implementing programs and
activities related to the protection and promotion of women’s rights, as well as providing an avenue where women can register their
complaints and grievances principally related to their rural activities.

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:
(a) Investment information, financial and counseling assistance, particularly investment information on government-owned and/or
-controlled corporations and disposable assets of the government in pursuit of national industrialization and economic independence:
(b) 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;
(c) Marketing of agrarian reform bonds, as well as promoting the marketability of said bonds in traditional and non-traditional financial
markets and stock exchanges; and/or
(d) Other services designed to utilize productively the proceeds of the sale of such lands for rural industrialization.
A landowner who invests in rural-based industries shall be entitled to the incentives granted to a registered enterprise engaged in a pioneer
or preferred area of investment as provided for in the Omnibus Investment Code of 1987, or to such other incentives as the PARC, the
LBP, or other government financial institutions shall provide.
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.

The import of the Law (Section 35).

- The support services are to propel the beneficiaries to attain economic independence and self-reliance.

Establishment of Agrarian Reform Communities (Section 36).

- The DAR establishes Agrarian Reform Communities in each legislative district with a predominant agricultural population.
- The Agrarian Reform Community
- Composed of and managed by beneficiaries who shall be willing to undertake the development of an area, their
organizations or cooperatives.

Support Services to beneficiaries (Section 37)

- Land surveys and titling
- Liberalized access to credit
- Socialized terms on agricultural credit facilities
- Technology transfer
- Infrastructure, such as storage facilities, mini dams, etc.

Meaning of Rural Women (Section 37-A)

- Those engaged directly or indirectly in farming or fishing as their source of livelihood.
- All qualified women members of the agricultural labor force are guaranteed the following:
- Equal right to ownership of the land

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 - Equal shares of the farm’s produce; and
- Representation in advisory or appropriate decision-making bodies

Support services for landowners (Section 38)

- Incentive granted to a landowner who invests in rural-based industries.
- Land Bank will redeem the landowner’s agrarian reform bonds at its face value if at least 50% of the proceeds are
invested in a Board of Investments-registered company.
- Should this continue for five (5) years, the landowner is entitled to be paid and additional incentive of 2% in
cash.

The import of the Law (Section 39: Land Consolidation)

a. To promote equal distribution of landholdings
b. To provide the needed infrastructure in agriculture;
c. To conserve soil fertility and prevent erosion

CHAPTER 11 - PROGRAM IMPLEMENTATION

SECTION 41. The Presidential Agrarian Reform Council. — The Presidential Agrarian Reform Council (PARC) shall be composed of the
President of the Philippines as Chairperson, the Secretary of Agrarian Reform as Vice-Chairperson and the following as 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; and Labor and Employment; Director-General of the National
Economic and Development Authority; President, Land Bank of the Philippines; Administrator, National Irrigation Administration;
Administrator, Land 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 at least one (1) of
them shall be from the indigenous peoples: Provided, further, That at least one (1) of them shall 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:
Provided, finally, That at least twenty percent (20%) of the members of the PARC shall be women but in no case shall they be less than two
(2).

SECTION 42. Executive Committee. — 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.

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). — A Provincial Agrarian Reform Coordinating Committee
is hereby created in each province, composed of a Chairman, who shall be appointed by the President upon the recommendation of the
EXCOM, the Provincial Agrarian Reform Officer as Executive Officer, and one (1) representative each from the Departments of Agriculture,
and of Environment and Natural Resources and from the LBP; one (1) representative each from existing farmers' organizations, agricultural
cooperatives and non-governmental organizations in the province; two (2) representatives from landowners, at least one (1) of whom shall
be a producer representing the principal crop of the province, and two (2) representatives from farmer and farmworker or beneficiaries, at
least one (1) of whom shall be a farmer or farmworker representing the principal crop of the province, as members: Provided, That in areas
where there are cultural communities, the latter shall likewise have one (1) representative.
The PARCCOM shall coordinate and monitor the implementation of the CARP in the province.It shall 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 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.

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 SECTION 45..Province-by-province Implementation. — The PARC shall provide the guidelines for the province-by-province implementation
of the CARP, taking into account the peculiarities and needs of each place, kind of crops needed or suited, land distribution workload,
beneficiaries development activities and other factors prevalent or obtaining in the area.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 land in each province shall be adjusted from year to 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.

Composition of the Presidential Agrarian Reform Council (PARC)

A. Chairperson - President of the Philippines
B. Vice-Chairperson - Secretary of Agrarian Reform
a. Members:
i. Secretary of DAR
ii. Secretary of DENR
iii. Secretary of DBM
iv. Secretary of DILG
v. Secretary of DPWH
vi. Secretary of DTI
vii. Secretary of DOF
viii. Secretary of DOLE
ix. Director-General - NEDA
x. President - Land Bank of the Philippines
xi. Administrator - National Irrigation Administration
xii. Administrator - Land Registration Authority
xiii. Six (6) Representatives of affected landowners to represent Luzon, Visayas, and Mindanao
xiv. Six (6) Representatives of agrarian reform beneficiaries, two (2) each from Luzon, Visayas and Mindanao:
1. At least one (1) should be from the indigenous peoples
2. At least one (1) should come from a duly recognized national organization of rural women or a
national organization of agrarian reform beneficiaries
- NOTE: At least 20% of the members of the PARC should be women but in no case should they be less than two (2)

Composition of the Provincial Agrarian Reform Coordinating Committee (PARCCOM)

A. Chairman - Appointed by the President upon the recommendation of the EXCOM
B. Executive Officer - Provincial Agrarian Reform Officer
C. 1 Representative each from
a. DAR
b. DENR
c. Land Bank
D. 1 Representative each from
a. Existing farmers’ organizations, agricultural cooperatives and non-governmental organizations in the province.
E. 2 Representatives from
a. Landowners, at least one (1) of whom shall be a producer representing the principal crop of the province
F. 2 Representatives from
a. Farmer and farmworker or beneficiaries, and at least one (1) of whom shall be a farmer or farmworker representing the
principal crop of the province.
G. 1 Representative from
a. Cultural communities, in areas where there are cultural communities.

Manner of implementation of the Agrarian Reform Program

- Peculiarities and needs of each province, such as the kind of crops needed or suited, land distribution workload, and other factors
prevalent or obtaining in the area.

SECTION 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.

SECTION 47. Functions of the BARC. – 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

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 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.

SECTION 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.

SECTION 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
newspapers of general circulation.

Composition of the Barangay Agrarian Reform Council (BARC)

- 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;
f. Non-goverment organizations;
g. Landowners;
h. Land Bank;
i. Official of the DAR assigned to the barangay;
j. Official of the DENR assigned to the area; and
k. DAR Technologist assigned to the area who shall act as the Secretary.

Functions of the BARC under Executive Order No. 229

- To participate and give support to the implementation of programs on agrarian reform;
- To mediate, conciliate or arbitrate agrarian conflicts and issues that are brought to it for resolution; and
- To perform such other functions that the PARC, its Executive Committee, or the DAR Secretary may delegate from time to time.

Legal assistance
- The BARC can ask for legal advice from the DAR to ensure that its proposed solution to disputes is within the bounds of law.

Rule-making power of DAR and PARC

- The DAR and the PARC may promulgate rules and regulations for the agrarian reform program.
- However, the DAR and the PARC cannot enlarge or amend the provisions of the statute.

CHAPTER 12 - ADMINISTRATIVE ADJUDICATION

SECTION. 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby vested with 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 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 of 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 to 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 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 except a decision or a portion
thereof involving solely the issue of just compensation.

Jurisdiction of the Department of Agrarian Reform (DAR)

1. Executive - The enforcement and administration of the laws, carrying them into praactical operation and enforcing their due
observance
2. Judicial - involves the determination of rights and obligations of the parties.

- Functions of the DAR Regional Office v. the DAR Adjudication Board (DARAB)
- DAR Regional Office is concerned with the implementation of agrarian reform laws.
- DARAB, including the Regional Agrarian Reform Adjudicators (RARAD) or Provincial Agrarian Reform Adjudicators
(PARAD) is concerned with adjudication of agrarian reform cases.

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Quasi-judicial jurisdiction of the DAR
- Through the DAR Adjudication Board (DARAB)
- Primary jurisdiction to determine and adjudicate agrarian reform matters; and
- Appellate jurisdiction over orders and decisions of the Agrarian Reform Adjudicators.

Quasi-judicial powers of the DAR (through DARAB)

- Hear and decide cases within its jurisdiction;
- Summon witnesses
- Administer oaths;
- Take testimony;
- Issue subpoena ad testificandum or duces tecum;
- Issue writs of execution; and
- Punish direct or indirect contempt.

The Provincial Agrarian Reform Adjudicators (PARAD)

- Has primary and exclusive jurisdiction to hear and decide agrarian disputes.
- Agrarian disputes, defined.
- 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.
- Primary and exclusive jurisdiction to determine and adjudicate matters pertaining to:
A. Rights and obligations of persons, whether natural or juridical, engaged in the management, cultivation, and use of all
agricultural lands covered by R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL), as
amended, and other related agrarian laws; ACaDTH
B. The preliminary administrative determination of reasonable and just compensation of lands acquired under Presidential
Decree (PD) No. 27 and the Comprehensive Agrarian Reform Program (CARP);
C. Those cases involving the annulment or rescission of lease contracts or deeds of sale or their amendments involving
lands under the administration and disposition of the DAR or Land Bank of the Philippines (LBP), and the amendment
of titles pertaining to agricultural lands under the administration and disposition of the DAR and LBP; as well as EPs
issued under PD 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 and/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/destroyed owner's duplicate
copy and reconstitution of Certificates of Land Ownership Award (CLOAs) and Emancipation Patents (EPs) which are
registered with the Land Registration Authority;
G. Review of leasehold rentals and fixing of disturbance compensation;
H. Collection of amortization payments, foreclosure and similar disputes concerning the functions of the LBP, and
payments for lands awarded under PD No. 27, RA No. 3844, as amended, and R.A. No. 6657, as amended by R.A.
No. 9700, and other related laws, decrees, orders, instructions, rules, and regulations, as well as 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 LBP, which are transferred,
distributed, and/or sold to tenant-beneficiaries and are 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
Section 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 DAR.
Regional Agrarian Reform Adjudicators (RARAD)
- Executive Adjudicator in the Region. It is vested with the following functions:
A. Administrative supervision over the PARAD including the monitoring of cases in the Region;
B. Conduct hearing and adjudication of agrarian disputes within the Region;
C. 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 of 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 onapplications for the issuance of a writ of preliminary injunction or temporary restraining order and such
other cases which the Board may assign.
NO jurisdiction over matters pertaining to ownership
- In matters of ownership, there is no agrarian dispute and the DARAB does not have jurisdiction.
- In Heirs of Herman Rey Santos v. Court of Appeals, the petitioners and private respondent have no tenurial, leasehold, or any
agrarian relations whatsoever that could have brought this controversy under the ambit of the agrarian reform laws.

NO jurisdiction over retention or exemption issues

- Issues pertaining to retention rights are under the jurisdiction of the Secretary of the Department of Agrarian Reform, not the
DARAB.
NO jurisdiction over right of way issues
- A petition for right of way filed by agrarian reform beneficiaries against an adjoining landowner must be dismissed by the DARAB for
lack of jurisdiction.

CASE: Laguna Estates v. Court of Appeals [G.R. No. 119357; July 5, 2000]

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 FACTS: The 234.76 hectares of Sta. Rosa Realty Development Corporation were placed under the DAR. Accordingly, Certificates of Land
Ownership Awards (CLOAs) were awarded to the farmer-beneficiaries. The agricultural lands, however, could only be accessed through a
private road owned by the Laguna Estates, which were initially open to the public. However, after the awarding of the CLOAs, the Laguna
Estates closed access from the same. The beneficiaries petitioned before the DARAB to order Laguna Estates to give a right of way to the
beneficiaries.

ISSUE: WON the DARAB has jurisdiction to grant the right of way in favor of the beneficiaries?

HELD: NO. DARAB has no jurisdiction since there is no tenancy relationship between the Laguna Estates and the farmer-beneficiaries.
Generally, DARAB would only have jurisdiction over cases where private properties have a tenancy relationship with the beneficiaries.
Jurisdiction is vested in a court of general jurisdiction.

NO jurisdiction to identify and classify landholdings for agrarian reform coverage

- The jurisdiction to classify and identify landholdings for coverage belongs to the Secretary of Agrarian Reform, not with the DARAB.
- The matter concerns administrative implementation of the agrarian reform program.

NO jurisdiction over matters pertaining to identification and selection of beneficiaries

- The identification and selection of beneficiaries belongs to the Secretary of Agrarian Reform, not with the DARAB.
- The act involves administrative implementation of the agrarian reform program.
- 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 the Provincial Agrarian Reform Officer (PARO), and later with the DAR.

SECTION. 50-A. Exclusive Jurisdiction on 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.
“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 directly filed in court--action to be taken

- If a case that is agrarian in nature is filed with the Court, the Court should NOT dismiss the case.
- Instead, the court 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:
- Regional Trial Court - for cases referred by the MTC or the prosecutor’s office; and
- Court of Appeals - for cases referred by the RTC

Legal personality of unregistered associations cannot be challenged

- Courts may STILL entertain complaints or petitions filed by unregistered associations or cooperatives composed of agrarian reform
beneficiaries.

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.

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.

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.

Judicial Review
- The aggrieved party may elevate the order/ruling of the DAR to the Court of Appeals by petition for review on certiorari under Rule
43 of the Rules of Court.

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Frivolous or dilatory appeals - what is frivolous is a factual matter which should be decided according to the surrounding facts and
circumstances.

Prerequisite to filing of a complaint before the DARAB

- A certification from the Barangay Agrarian Reform Committee (BARC) of the barangay where the land involved is located is
presented.
- XPNs. BARC certification is not necessary:
- Where the issue involves the valuation of land to determine just compensation for its acquisition;
- Where one party is a public or private corporation, partnership, juridical person, or a public officer or employee and the
dispute relates to the performance of his official functions;
- Where the Secretary of the Department of Agrarian Reform directly refers the matter to the DARAB or Adjudicator; or
- Where the Municipal Agrarian Reform Officer (MARO) or, in his absence, the Senior Agrarian Reform Program
Technologist, or Agrarian Reform Program Technologist certifies the non-existence of the BARC or inability of the BARC
to convene.

BARC Certification NOT needed in judicial determination of just compensation

- BARC is needed only for cases filed before the DARAB.
- It is not needed in petitions filed with the special agrarian courts for determination of just compensation.
- The jurisdiction is before the Special Agrarian Courts. It is original and exclusive.

CHAPTER 13 - JUDICIAL REVIEW

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.
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, the DAR, 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.

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 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.

Remedy from an adverse ruling of the DAR

- File a petition for review on certiorari under Rule 43 of the Rules of Court within fifteen (15) days from notice of the ruling.

RTC as the designated Special Agrarian Court (SAC)

- The Regional Trial Court is specifically designated by the Supreme Court as the Special Agrarian Court
- RTCs that are not designated as such cannot hear petitions for determination of just compensation.

☆SECTION 57. Special Jurisdiction. – The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the
determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall
apply to all proceedings before the Special Agrarian Courts, unless modified by this Act.
The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the
case for decision.

Additional jurisdiction of the Special Agrarian Court (SAC)

- Petitions for the determination of just compensation to land owners; and
- Criminal violations of the Comprehensive Agrarian Reform Law.

Just compensation preliminarily determined by the DARAB should be filed with the SAC within fifteen (15) days from notice
- A party who disagrees with the decision of the Adjudicator may contest the same by filing an original action with the Special
Agrarian Court having jurisdiction over the subject property within fifteen (15) days from his receipt of the adjudicator’s decision.

CASE: Republic v. CA [263 SCRA 758]

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 FACTS: ACIL Corporation owned parcels of land in Davao Del Norte, which were subjected to the Agrarian Reform Program under R.A.
6657. During the determination of Just Compensation by the Land Bank (LBP), the bank came up with the valuation of P19,312.24/ha. for
the riceland and P4267.68/ha. for the brushland for a total of P439,105.39. However, this valuation was rejected by ACIL on the ground that
similar neighboring lands were valued at a higher price of P24,727.40. The matter was then brought before the Provincial Agrarian Reform
Adjudicator (PARAD) who sustained LBP’s valuation. Consequently, ACIL complained before the RTC. However, their petition was rejected
on the ground that ACIL should have appealed with the DARAB instead.

ISSUE: WON claims for just compensation must first be made before the DARAB before going to the RTC?

HELD: NO. Section 57 of R.A. 6657 of the provides that the Special Agrarian Court (SAC) all appropriate cases within their jurisdiction
within 30 days. The SACs of the RTC are given original and exclusive jurisdiction over (1) all petitions for determination of just
compensation to landowners and (2) prosecution of criminal offenses under R.A. 6657.

SECTION 58. Appointment of Commissioners. – The Special Agrarian Courts, upon their own initiative or at the instance of any of the
parties, may appoint one or more commissioners to examine, investigate and ascertain facts relevant to the dispute, including the valuation
of properties, and to file a written report thereof with the court.

SECTION 59. Orders of the Special Agrarian Courts. – No order of the Special Agrarian Courts on any issue, question, matter or incident
raised before them shall be elevated to the appellate courts until the hearing shall have been terminated and the case decided on the
merits.

SECTION 60. Appeals. – An appeal may be taken from the decision of the Special Agrarian Courts by filing a petition for review with the
Court of Appeals within fifteen (15) days from receipt of notice of the decision; otherwise, the decision shall become final.
An appeal from the decision of the Court of Appeals, or from any order, ruling or decision of the DAR, as the case may be, shall be by a
petition for review with the Supreme Court within a non-extendible period of fifteen (15) days from receipt of a copy of said decision.

SECTION 61. Procedure on Review. – Review by the Court of Appeals or the Supreme Court, as the case may be, shall be governed by
the Rules of Court. The Court of Appeals, however, may require the parties to file simultaneous memoranda within a period of fifteen (15)
days from notice, after which the case is deemed submitted for decision.

SECTION 62. Preferential Attention in Courts. – All courts in the Philippines, both trial and appellate, shall give preferential attention to all
cases arising from or in connection with the implementation of the provisions of this Act.
All cases pending in court arising from or in connection with the implementation of this Act shall continue to be heard, tried and decided into
their finality, notwithstanding the expiration of the ten-year period mentioned in Section 5 hereof.

Commissioner’s report (Sec. 58)

- A party has ten (10) days within which to signify grounds for objections to the findings of the report.
- Upon expiry of the 10-day period, the matter will be set for hearing after which the court will issue an order adopting, modifying, or
rejecting the report in whole or in part.

Interlocutory Orders (Sec. 59)

- Such interlocutory orders from the SAC cannot be challenged before the higher court until the case is decided.

Remedy from adverse decision of the Special Agrarian Court (SAC) (Sec. 60)
- Appeal via petition for review under Rule 43 of the Rules of Court.

Remedy from adverse decision of the Court of Appeals

- Appeal by certiorari with the Supreme Court under Rule 45, within fifteen (15) days from notice.
- 15-day period is non-extendible

Expeditious disposition of agrarian cases is the objective (Sec. 62)

- It is imperative that the case be decided with expeditiously for the benefit of both the agrarian reform beneficiary and the landowner
who is entitled to prompt payment of just compensation.

CHAPTER 14 - FINANCING
☆SECTION. 63. Funding Source. — The amount needed to further implement the CARP as provided in this Act, until June 30, 2014, upon
expiration of funding under Republic Act No. 8532 and other pertinent laws, shall be funded from the Agrarian Reform Fund and other
funding sources in the amount of at least One hundred fifty billion pesos (P150,000,000,000.00).
Additional amounts are hereby authorized to be appropriated as and when needed to augment the Agrarian Reform Fund in order to fully

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 implement the provisions of this Act during the five (5)-year extension period.
Sources of funding or appropriations shall include the following:
A. Proceeds of the sales of the Privatization and Management Office (PMO);
B. All receipts from assets recovered and from sales of ill-gotten wealth recovered through the PCGG excluding the amount
appropriated for compensation to victims of human rights violations under the applicable law;
C. Proceeds of the disposition and development of the properties of the Government in foreign countries, for the specific purposes
of financing production credits, infrastructure and other support services required by this Act;
D. All income and collections of whatever form and nature arising from the agrarian reform operations, projects and programs of the
DAR and other CARP implementing agencies;
E. Portion of amounts accruing to the Philippines from all sources of official foreign aid grants and concessional financing from all
countries, to be used for the specific purposes of financing productions, credits, infrastructures, and other support services
required by this Act;
F. Yearly appropriations of no less than Five billion pesos (P5,000,000,000.00) from the General Appropriations Act;
G. Gratuitous financial assistance from legitimate sources; and
H. Other government funds not otherwise appropriated.
All funds appropriated to implement the provisions of this Act shall be considered continuing appropriations during the period of its
implementation: Provided, That if the need arises, specific amounts for bond redemptions, interest payments and other existing obligations
arising from the implementation of the program shall be included in the annual General Appropriations Act: Provided, further, That all just
compensation payments to landowners, including execution of judgments therefor, shall only be sourced from the Agrarian Reform Fund:
Provided, however, That just compensation payments that cannot be covered within the approved annual budget of the program shall be
chargeable against the debt service program of the national government, or any unprogrammed item in the General Appropriations Act:
Provided, finally, That after the completion of the land acquisition and distribution component of the CARP, the yearly appropriation shall be
allocated fully to support services, agrarian justice delivery and operational requirements of the DAR and the other CARP implementing
agencies.

Funding of just compensation

- The payments to landowners can only be sourced from the Agrarian Reform Fund.
- If the annual budget for the agrarian reform fund is not sufficient, the just compensation payments shall be charged against the debt
service program of the national government, or any unprogrammed item in the General Appropriations Act.

Role of Land Bank

- The Land Bank is the financial arm of the agrarian reform program.
- The determination of just compensation commences with the Land Bank determining the value of the lands.
- Using LBP’s valuation, the DAR makes an offer to the landowner.

CHAPTER 15 - GENERAL PROVISIONS

SECTION. 65. Conversion of Lands. — After the lapse of five (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 have a greater economic value for residential,
commercial or industrial purposes, the DAR, upon application of the beneficiary or the landowner with respect only to his/her retained area
which is tenanted, with due notice to the affected parties, and subject to existing laws, 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 or any portion thereof, the applicant, after the conversion is granted, shall invest at least ten percent (10%) of the
proceeds coming from the conversion in government securities: Provided, further, That the applicant upon conversion shall fully pay the
price of the land: Provided, furthermore, That irrigated and irrigable lands, shall not be subject to conversion: Provided, finally, That the
National Irrigation Administration shall submit a consolidated data on the location nationwide of all irrigable lands within one (1) year from
the effectivity of this Act.
“Failure to implement the conversion plan within five (5) years from the approval of such conversion plan or any violation of the conditions
of the conversion order due to the fault of the applicant shall cause the land to automatically be covered by CARP.

Meaning of conversion
- The act of changing the current use of a piece of agricultural land to some other use, to wit:
- 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 to exempt the land
from CARP coverage;
- For non-agricultural use other than that previously authorized.
- NOTE:
- Change of crops to commercial crops or high value crops is considered as a conversion in the use or nature of the land.

Conversion differentiated from reclassification

- Conversion:
- The act of changing the current use of a piece of agricultural land into some other use as approved by the DAR.
- reclassification:
- The act of specifying how agricultural lands shall be utilized for non-agricultural uses
- Such as residential, industrial, and commercial, as embodies in the land use plan

Effect of reclassification

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 - A mere reclassification of an agricultural land does not automatically allow the landowner to change its use.
- The process of conversion must be done first before he is permitted to use the agricultural land for other purposes.

Scope of the DAR’s conversion authority

- Agricultural lands already or reclassified as non-agricultural prior to June 15, 1998 does not require any conversion clearance form
the DAR since said lands are not covered by the agrarian reform program.
- Authority to approve or disapprove conversion of agricultural land to residential, commercial or industrial can only be exercised after
the effectivity of R.A. 6657, on June 15, 1988.

Who can apply for conversion?

- Beneficiary
- Landowner with respect only to his retained area which is tenanted

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

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

Obligations of the beneficiary if the application for conversion is approved

- Invest 10% of the proceeds from the conversion in government securities; and
- Pay the Land Bank the full price of the land upon conversion.

Lands that cannot absolutely be subject to conversion

a. Agricultural lands within protected areas designated under the National Integrated Protected Areas System (NIPAS), including
watershed and recharged areas of aquifers, as determined by the DENR;
b. All irrigated lands, as delineated by the DA and/or the National Irrigation Administration (NIA), where water is available to support
rice and other crop production, and all irrigated lands where water is not available for rice and other crop production but are within
areas programmed for irrigation facility rehabilitation by the DA and/or the NIA;
c. All irrigable lands already covered by irrigation projects with firm funding commitments, as delineated by DA and/or NIA; and
d. All agricultural lands with irrigation facilities operated by private organizations.

Areas highly restricted from conversion

- Irrigable lands not covered by irrigation projects with firm funding commitment;
- Agro-industrial croplands, or lands presently planted to industrial crops that support the economic viability of existing agricultural
infrastructure and agro-based enterprises;
- Highlands or areas located in elevations of 500 meters or above and have the potential for growing semi-temperate and usually
high-value crops;
- Lands issued with notice of land valuation and acquisition, or subject of a perfected agreement between the land-owner and the
beneficiaries under the voluntary land transfer/direct payment scheme (VLT/DPS) under the CARP; and
- Environmentally critical areas (ECAs) as determined by the DENR in accordance with law.
Effect of failure to implement the approved conversion plan
- If the approved conversion plan is not implemented within five (5) years from approval, the land will continue to be covered by the
agrarian reform program.

SECTION 65-A. Conversion into Fishpond and Prawn Farms. – No conversion of public agricultural lands into fishponds and prawn farms
shall be made except in situations where the provincial government with the concurrence of the Bureau of Fisheries and Aquatic Resources
(BFAR) declares a coastal zone as suitable for fishpond development. In such case, the Department of Environment and Natural
Resources (DENR) shall allow the lease and development of such areas: Provided, That the declaration shall not apply to environmentally
critical projects and areas as contained in title (A) sub-paragraph two, (B-5) and (C-1) and title (B), number eleven (11) of Proclamation No.
21-+6, entitled “Proclaiming Certain Areas and Types of Projects as Environmentally Critical and Within the Scope of the Environmental
Impact Statement (EIS) System established under Presidential Decree No. 1586,'” to ensure the protection of river systems, aquifers and
mangrove vegetations from pollution and environmental degradation: Provided, further. That the approval shall be in accordance with a set
of guidelines to be drawn up and promulgated by the DAR and the BFAR: Provided, furthermore, That small-farmer cooperatives and
organizations shall be given preference in the award of the Fishpond Lease Agreements (FLAs).
No conversion of more than five (5) hectares of private lands to fishponds and prawn farms shall be allowed after the passage of this Act,
except when the use of the land is more economically feasible and sound for fishpond and/or prawn farm, as certified by the Bureau of
Fisheries and Aquatic Resources (BFAR), and a simple and absolute majority of the regular farm workers or tenants agree to the
conversion, the Department of Agrarian Reform, may approve applications for change in the use of the land: Provided, finally, That no
piecemeal conversion to circumvent the provisions of this Act shall be allowed. In these cases where the change of use is approved, the
provisions of Section 32-A hereof on incentives shall apply.

SECTION 65-B. Inventory. – Within one (1) year from the effectivity of this Act, the BFAR shall undertake and finish an 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. No lease under Section 65-A hereof may be granted until after the completion of the said inventory.
The sustainable management and utilization of prawn farms and fishponds shall be in accordance with the effluent standards, pollution
charges and other pollution control measures such as, but not limited to, the quantity of fertilizers, pesticides and other chemicals used, that
may be established by the Fertilizer and Pesticide Authority (FPA), the Environmental Management Bureau(EMB),and other appropriate
government regulatory bodies, and existing regulations governing water utilization, primarily Presidential Decree No. 1067, entitled “A
Decree Instituting A Water Code, Thereby Revising and Consolidating the Laws Governing the Ownership, Appropriation, Utilization,

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 Exploitation, Development, Conservation and Protection of Water Resources.

SECTION 65-C. Protection of Mangrove Areas. – In existing Fishpond Lease Agreements (FLAs) and those that will be issued after the
effectivity of this Act, a portion of the fishpond area fronting the sea, sufficient to protect the environment, shall be established as a buffer
zone and be planted to specified mangrove species to be determined in consultation with the regional office of the DENR. The Secretary of
Environment and Natural Resources shall provide the penalties for any violation of this undertaking as well as the rules for its
implementation.

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 the land. The change in crop should however, not prejudice the rights of tenants 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.

Conversion of PUBLIC agricultural lands to fishponds (65-A)

- Conversion of public agricultural lands to fishponds and prawn farms allowed ONLY when the coastal zone is declared suitable for
fishpond development by the provincial government and the BFAR.

Conversion of PRIVATE agricultural lands to fishponds

- Conversion can only be up to a maximum area of five (5) hectares.
- XPN: The DAR may approve conversion of more than five (5) hectares under the following conditions:
- When the use of the land is more economically feasible for fishpond and/or prawn farm, as certified by BFAR; and
- A simple and absolute majority of the regular farm workers or tenants agree to the conversion.

Change of crops does NOT NEED DAR approval (65-D)

- DAR approval is unnecessary since the change of crops to commercial or high value crops is not considered as a conversion.

END OF MIDTERMS

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