is the total cost of the land agreed upon by the

parties whether payable in kind or in money

1. Comparable sales (CS)
2. Capitalized net income (CNI)
3. Market value (MV)
LV=(CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where:
LV = Land value
CNI = Capitalized net income. It is the difference between the product of the
annual gross production and selling price (AGP x SP) less the total cost of
operation (CO) capitalized at 12%, or:
CNI=(AGP x SP)-CO
0.12
CS = Comparable sales. This pertains to any one or the average of all the
applicable factors such as sales transactions, acquisition cost, and market
value based of mortgage price.
MV = Market value per tax declaration. This pertains to the latest tax declaration
and schedule of unit market value issued prior to receipt of claim folder
by LBP.
AGP = Average gross production. This refers to one year’s average gross
production immediately preceding the date of offer in case of VOS or
date of notice of coverage in case of CA.
SP = Selling price. This refers to average prices for the immediately preceding
calendar year from the date of receipt of the claimfolder by LBP for
processing secured from the Department of Agriculture (DA) and other
appropriate regulatory bodies or in their absence.
CO = Cost of operation. Whenever the cost of operation coult not be obtained or
verified, an assumed net income rate (NIR) of 20% shall be used.
Landholdings planted to coconut which are productive at the same time of
offer/coverage shall continue to use the 70% NIR.
12% = Capitalization rate
The formula above shall be used of all the factors are
present, relevant, and applicable and CNI and MV are
applicable, the formula shall be:
LV=(CS x 0.9) + (MV x 0.1)
When the CNI factor is not present, and CS and MV are
applicable, the formula shall be:
LV=(CS x 0.9) + (MV x 0.1)
When both the CS and CNI are not present and only MV
is applicable, the formula shall be:
LV=MV x 2
Ways to Acquire Landholdings for Distribution under CARP and
Land Redistribution.
1. Compulsory Acquisition. This pertains to mandatory land
acquisition by the state of all agricultural lands this undertaken if
the landowner fails to comply with the requirements voluntary offer
to sell (VOS) or Voluntary Land Transfer (VLT)
2. Voluntary offer to sell. This a mode of land acquisition where
landowners come forward and voluntarily offer their agricultural
lands for CARP coverage. These transactions are exempt from
payment of capital gain tax.
3. Voluntary Land Transfer. This is a direct transaction between the
landowner of an agricultural land covered by CARP and the
qualified beneficiaries of such land.
4. Executive Order 407 (1990). As amended by EO 448 and 506, directs
all government instrumentalities, including government financial
institution and government owned and controlled corporation to
immediately transfer to DAR all their holdings suitable for
immediate distribution to qualified beneficiaries under CARP.
5. Operation Land Transfer. This is a mode by which the ownership of
tenanted rice and corn lands are transferred to tenant beneficiaries.
The lands covered by the CARP shall be distrubuted 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:

1. Agricultural lessees and share tenants

2. Regular farm workers
3. Seasonal farm workers
4. Other farm workers
5. Actual tillers or occupants of public lands
6. Collective or cooperatives of the above beneficiaries
7. Others directly working of the land
In order to have a common frame of reference, some words identified
above were defined accordingly:

1. Farmer refers to a natural person whose primary livelihood is cultivation

of land or the productions of agricultural crops either by himself, or
primarily with the assistance of his immediate farm household, whether
the land is owned by him, or by another person under a leasehold or share
tenancy agreement or arrangement with the owner thereof.
2. Farm worker 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,
who has not obtained a substantially equivalent and regular farm
employment.
3. Regural farm worker is natural person who is employed on a permanent
basis by an agricultural enterprise or farm.
4. Seasonal farm worker 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 nonpermanent laborer, such as “dumaan”,
“sacada”, and the like.
5. Other farm worker is a farm worker who does not fall under regular farm
worker and seasonal farm worker.
The End!!!