G.R. No.

86889 : December 4, 1990

LUZ FARMS, Petitioner,
vs.
THE HONORABLE SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, Respondent.

PARAS, J.

FACTS:

On June 10, 1988, The President of the Philippines promulgated R.A. 6657,
otherwise known as the Comprehensive Agrarian Law act of 1988, which includes
raising livestock, poultry, and swine in its coverage. In January of 1989, the
Secretary of Agrarian Reform enforced the Guidelines Implementing Production and
Profit Sharing as well as the Implementing Rules and Regulations which includes
Commercial Farms.

Luz Farms, a corporation engaged in livestock and poultry, stands affected by

the enforcement of Section 3(b), Section 11, Section 13, Section 16(d), Section 17,
and 32 of R.A. 6657, known as the Comprehensive Agrarian Reform Law of 1988,
including its Implementing Procedure in Production and Profit Sharing. The
Corporation filed a petition assailing the constitutionality of the aforesaid provisions
which are made to apply:

(a) Section 3(b) includes the "raising of livestock (and poultry)"

in the definition of "Agricultural, Agricultural Enterprise or
Agricultural Activity."

(b) Section 11 which defines "commercial farms" as "private

agricultural lands devoted to commercial, livestock, poultry and
swine raising . . ."

(c) Section 13 which calls upon the farm to execute a

production-sharing plan.

(e) Section 32 which spells out the production-sharing plan that three (3%)
percent of the gross sales from the production will be distributed in form of
compensation to the farmers by the end of the fiscal year, for entities that
have gross sales excess of five (5) million, unless DAR determines a lower
ceiling. While when a profit was realized, an additional ten (10%) percent of
the net profit after tax will be distributed to regular and other farmworkers by
the end of the fiscal year.
 The farm corporation further argued that the mandate of the Constitution was
transcended by the enactment of the Congress. The coverage of Agrarian Reform
was raised and included the lands dedicated to Livestock and Poultry, when the said
industries are not primarily focused on Land and significantly different from crop and
tree farming. Whereas, Section 4 of Article XIII supports the Agrarian Reform
Program of the Government and the right of farmers and regular farm workers to
directly own the lands they till or receive a just share of its fruits.

ISSUE: W/N the livestock and poultry should be subject to Agrarian Reform
Program of the Government and its Implementing Guidelines in Profit Sharing

RATIO DECIDENDI:

Being a question of Constitutionality, the Court considered the debates from

the Constitutional Commission of 1986 to shed light for the intent of the framers of
the Constitution. From the said deliberations, the term “Agricultural” was never
intended to include livestock and poultry in the constitutionally-mandated Agrarian
Reform program of the Government. Commissioners Regalado and Tadeo clarified
that “Agricultural workers” were not mentioned, since it would include piggery, poultry
and livestock workers. Instead, it was worded as “farm workers”. Otherwise, it would
entail the workers in piggeries and poultry projects to eventually have a right to own
lands where the said industries were constructed.

Hence, it is evident from the discussion that “private agricultural lands devoted
to commercial livestock, poultry and swine raising” therein defines “commercial
farms” from Section II of R.A. 6657, invalid. It also makes the implementation of
Production-Sharing plans from Section 13 and 32, which requires the farms to
distribute three (3%) percent of gross sales and ten (10%) percent of net profits to
their workers, unreasonable and violative of due process.

Therefore, the petition of Luz Farm is Granted, Sections 3(b), 11, 13 and 32 of
R.A. 6657, which includes raising livestock, poultry and swine in its coverage as well
as its Implementing Guidelines and Rules be declared ​null ​and ​void for being
unconstitutional.