THE COMPREHENSIVE AGRARIAN REFORM LAW

Republic Act No. 6657, as amended

I. Introduction

A. Constitutional Basis

1. Article II, Section 21: The State shall promote

comprehensive rural development and agrarian re-
form.

2. Article XII, Section 1: x x x The State shall promote

industrialization and full employment based on sound
agricultural development and agrarian reform, x x x

3. Article XIII, Section 3: x x x The State shall regulate

the relations between workers and employers,
recognizing the right of labor to its just share in the
fruits of production and the right of enterprises to
reasonable returns on investments, and to expansion
and growth.

4. Article XIII, Section 4: The State shall, by law, under-

take an agrarian reform program founded on the
rights of farmers and regular farmworkers, who are
 landless, to own directly or collectively the lands they
till or, in the case of other farmworkers, to receive a
just share of the fruits thereof. To this end, the State
shall encourage and undertake the just distribution
of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may pre-
scribe, taking into account ecological, developmental,
or equity considerations, and subject to the payment
of just compensation. In determining retention
limits, the State shall respect the right of small
landowners. The State shall further provide
incentives for voluntary land-sharing.

5. Article XIII, Section 5: The State shall recognize the

rights 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.

6. Article XIII, Section 6: The State shall apply the princi-

ples of agrarian reform or stewardship, whenever
applicable in accordance with law, in the disposition
 or utilization of other natural resources, including
lands of the public domain under lease or concession
suitable to agriculture, subject to prior rights,
homestead rights of small settlers, and the rights of
indigenous communities to their ancestral lands.
The State may resettle landless farmers and farm-
workers in its own agriculture estates which shall be
distributed to them in the manner provided by law.

7. Article XIII, Section 8: The State shall provide incen-

tives to landowners to invest the proceeds of the
agrarian reform program to promote industrial-
ization, employment creating, and privatization of
public sector enterprises. Financial instruments used
as payment for their lands shall be honored as equity
in enterprises of their choice.

B. Declaration of Principles and Policies [Section 2]

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.
 5

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
 6

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.
 7

The State shall apply the principles of agrarian

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

The State may resettle landless farmers and farm

workers in its own agricultural estates, which shall be
distributed to them in the manner provided by law.

By means of appropriate incentives, the State shall

encourage the formation and maintenance of
economic-size family farms to be constituted by
individual beneficiaries and small landowners.
The State shall protect the rights of subsistence
fishermen, especially of local communities, to the
preferential use of communal marine and fishing
resources, both inland and offshore. It shall provide
support to such fishermen through appropriate
technology and research, adequate financial,
production and marketing assistance and other
 8

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
 9

crops especially those for exports subject to the prior

rights of the beneficiaries under this Act.

C. Definition of Agrarian Reform

1. Agrarian Reform means the 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
arrangement alternative to the physical redistribu-
tion of lands, such as production or profit-sharing,
labor administration, and the distribution of stock,
which will allow beneficiaries to receive a just share
of the fruits of the lands they work. [Section 3(a) of
RA 6657]

2. Distinguished from Land Reform

* Land Reform is the physical redistribution of land

 10

such as the program under Presidential Decree No.

27. Agrarian reform means the redistribution of
lands including the totality of factors and support
services designed to lift the economic status of the
beneficiaries. Thus, agrarian reform is broader
than land reform.

D. RA 6657 is Constitutional

In the case of Association of Small Landowners in the

Philippines, Inc. v. Secretary of Agrarian Reform,1 the
Supreme Court held:

"The case before us presents no knotty complication

insofar as the question of compensable taking is con-
cerned. To the extent that the measures under
challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for
the regulation of private property in accordance with
the Constitution. But where, to carry out such
regulation, it becomes necessary to deprive such
owners of whatever lands they may own in excess of
1
175 SCRA 343.
 11

the maximum area allowed, there is definitely a taking

under the power of eminent domain for which payment
of just compensation is imperative. The taking contem-
plated is not a mere limitation of the use of the land.
What is required is the surrender of the title to and the
physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer-
beneficiary. This is definitely an exercise not of the
police power but of the power of eminent domain.

"Classification has been defined as the grouping of

persons or things similar to each other in certain
particulars and different from each other in these same
particulars. To be valid, it must conform to the
following requirements: (1) it must be based on
substantial distinctions; (2) it must be germane to the
purpose of the law; (3) it must not be limited to existing
conditions only; and (4) it must apply equally to all the
members of the class. The Court finds that all these
requisites have been met by the measures here
challenged as arbitrary and discriminatory.

"Equal protection simply means that all persons or

things similarly situated must be treated alike both as
to the rights conferred and the liabilities imposed. The
 12

petitioner have not shown that they belong to a

different class and entitled to a different treatment.
The argument that not only landowners but also
owners of other properties must be made to share the
burden of implementing land reform must be rejected.
There is a substantial distinction between these two
classes of owners that is clearly visible except to those
who will not see. There is no need to elaborate on this
matter. In any event, the Congress is allowed a wide
leeway in providing for a valid classification. Its
decision is accorded recognition and respect by the
courts of justice except only where its discretion is
abused to the detriment of the Bill of Rights.

"It is worth remarking at this juncture that a statute

may be sustained under the police power only if there
is a concurrence of the lawful subject and the lawful
method. Put otherwise, the interests of the public
generally as distinguished from those of a particular
class require the interference of the State and, no less
important, the means employed are reasonably
necessary for the attainment of the purpose sought to
be achieved and not unduly oppressive upon individu-
als. As the subject and purpose of agrarian reform have
been laid down by the Constitution itself, we may say
 13

that the first requirement has been satisfied. What

remains to be examined is the validity of the method
employed to achieve the Constitutional goal.

"Eminent domain is an inherent power of the State

that enable it to forcibly acquire private lands intended
for public use upon payment of just compensation to
the owner. Obviously, there is no need to expropriate
where the owner is willing to sell under terms also
acceptable to the purchaser, in which case an ordinary
deed of sale may be agreed upon by the parties. It is
only where the owner is unwilling to sell, or cannot
accept the price or other conditions offered by the
vendee, that the power of eminent domain will come
into play to assert the paramount authority of the State
over the interest of the property owner. Private rights
must then yield to the irresistible demands of the public
interest on the time-honored justification, as in the
case of the police power, that the welfare of the people
is the supreme law.

"But for all its primacy and urgency, the power of

expropriation is by no means absolute (as indeed no
power is absolute). The limitation is found in the
constitutional injunction that "private property shall not
 14

be taken for public use without just compensation" and

in the abundant jurisprudence that has evolved from
the interpretation of this principle. Basically, the re-
quirements for a proper exercise of the power are: (1)
public use and (2) just compensation.

"[T]he determination of just compensation is a

function addressed to the courts of justice and may not
be usurped by any other branch or official of the
government. EPZA v. Dulay resolved a challenge to
several decrees promulgated by President Marcos
providing that the just compensation for property
under expropriation should be either the assessment of
the property by the government or the sworn valuation
thereof by the owner, whichever was lower.

"With these assumptions, the Court hereby declares

that the content and manner of the just compensation
provided for in the afore-quoted Section 18 of the CARP
Law is not violative of the Constitution. We do not
mind admitting that a certain degree of pragmatism has
influenced our decision on this issue, but after all this
Court is not a cloistered institution removed from the
realities and demands of society or oblivious to the
need for its enhancement. The Court is as acutely
 15

anxious as the rest of our people to see the goal of

agrarian reform achieved at last after the frustrations
and deprivations of our peasant masses during all these
disappointing decades. We are aware that invalidation
of said section will result in the nullification of the
entire program, killing the farmer's hopes even as they
approach realization and resurrecting the specter of
discontent and dissent in the restless countryside. That
is not in our view the intention of the Constitution, and
that is not what we shall decree today.

"Accepting the theory that payment of the just

compensation is not always required to be made fully in
money, we find further that the proportion of cash
payment to the other things of value constituting the
total payment, as determined on the basis of the areas
of the lands expropriated, is not unduly oppressive
upon the landowner. It is noted that the smaller the
land, the bigger the payment in money, primarily
because the small landowner will be needing it more
than the big landowner, who can afford a bigger
balance in bonds and other things of value. No less
importantly, the government financial instruments
making up the balance of the payment are "negotiable
at any time." The other modes, which are likewise
 16

available to the landowner at his option, are also not

unreasonable because payment is made in shares of
stock, LBP bonds, other properties or assets, tax credits,
and other things of value equivalent to the amount of
just compensation."

II. Scope

A. Lands Covered

1. 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. [Section 4]

a. Agricultural land refers to land devoted to agricul-

tural activity and not classified as mineral, forest,
 17

residential, commercial or industrial land [Section

3(c)].
b. Agricultural activity means the cultivation of the
soil, planting of crops, growing of fruit trees,
raising of fish, including the harvesting of such
farm products, and other farm activities and prac-
tices performed by a farmer in conjunction with
such farming operations done by persons whether
natural or juridical [Section 3(b)].

2. Specifically, the following lands are covered by the

Comprehensive Agrarian Reform Program:

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
 18

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.

B. Exclusions from the Coverage of CARL

1. Under Section 102, excluded from the coverage of

the CARL are lands actually, directly and exclusively
used for:

a. Parks;
b. Wildlife;
c. Forest reserves;
d. Reforestation;
e. Fish sanctuaries and breeding grounds;
f. Watersheds and mangroves.

2. Private lands actually, directly and exclusively used

for prawn farms and fishponds shall be exempt from
2
As amended by Republic Act No. 7881.
 19

the coverage of this Act: Provided, That said prawn

farms and fishponds have not been distributed and
Certificate of Land Ownership Award (CLOA) issued to
agrarian reform beneficiaries under the
Comprehensive Agrarian Reform Program.
In cases where the fishponds or prawn farms have
been subjected to the Comprehensive Agrarian
Reform Law, by voluntary offer to sell, or commercial
farms deferment or notices of compulsory
acquisition, a simple and absolute majority of the
actual regular workers or tenants must consent to
the exemption within one (1) year from the
effectivity of this Act. When the workers or tenants
do not agree to this exemption, the fishponds or
prawn farms shall be distributed collectively to the
worker-beneficiaries or tenants who shall form a
cooperative or association to manage the same.

3. Likewise, execluded from the coverage the CARL are

lands actually, directly and exclusively used and
found to be necessary for:

a. National defense;
b. School sites and campuses including experimental
farm stations operated by public or private schools
 20

for educational purposes;

c. Seeds and seedling research and pilot production
center;
d. Church sites and convents appurtenant thereto;
e. Mosque sites and Islamic centers appurtenant
thereto;
f. Communal burial grounds and cemeteries;
g. Penal colonies and penal farms actually worked by
the inmates; and
h. Government and private research and quarantine
centers.

4. All lands with eighteen percent (18%) slope and over

which are not developed for agriculture are
exempted from the coverage of CARL.

* An eighteen percent slope is not equivalent to an

eighteen degree angle. Eighteen percent slope is
obtained by having a 100 meter run and an 18
meter rise.

5. In the case of Luz Farms v. Secretary of Agrarian Re-

form,3 the Supreme Court has excluded agricultural
Lands Devoted to Commercial Livestock, Poultry and
3
192 SCRA 51.
 21

Swine Raising from the coverage of CARL.

The Supreme Court said:

"The transcripts of the deliberations of the

Constitutional Commission of 1986 on the meaning
of the word "agricultural," clearly show that it was
never the intention of the framers of the Constitution
to include livestock and poultry industry in the
coverage of the constitutionally-mandated agrarian
reform program of the Government.

"The Committee adopted the definition of "agricul-

tural land" as defined under Section 166 of RA 3844,
as lands devoted to any growth, including but not
limited to crop lands, saltbeds, fishponds, idle and
abandoned land (Record, CONCOM, August 7, 1986,
Vol. III, p. 11).

"The intention of the Committee is to limit the

application of the word "agriculture." Commissioner
Jamir proposed to insert the word "ARABLE" to
distinguish this kind of agricultural land from such
lands as commercial and industrial lands and
residential properties because all of them fall under
 22

the general classification of the word "agricultural."

This proposal, however, was not considered because
the Committee contemplated that agricultural lands
are limited to arable and suitable agricultural lands
and therefore, do not include commercial, industrial
and residential lands (Record, CONCOM, August 7,
1986, Vol. III, p. 30).

"In the interpellation, then Commissioner Regalado

(now a Supreme Court Justice), posed several
questions, among others, quoted as follows:

xxx xxx xxx

"Line 19 refers to genuine reform program
founded on the primary right of farmers and
farmworkers. I wonder if it means that leasehold
tenancy is thereby proscribed under this provision
because it speaks of the primary right of farmers
and farmworkers to own directly or collectively the
lands they till. As also mentioned by Commissioner
Tadeo, farmworkers include those who work in pig-
geries and poultry projects.
I was wondering whether I am wrong in my
appreciation that if somebody puts up a piggery or
a poultry project and for that purpose hires farm-
 23

workers therein, these farmworkers will automati-

cally have the right to own eventually, directly or
ultimately or collectively, the land on which the
piggeries and poultry projects were constructed.
(Record, CONCOM, August 2, 1986, p. 618).
xxx xxx xxx"

"The question were answered and explained in the

statement of the then Commissioner Tadeo, quoted
as follows:

xxx xxx xxx

"Sa pangalawang katanungan ng Ginoo ay
medyo hindi kami nagkaunawaan. Ipinaaalam ko
kay Commissioner Regalado na hindi namin
inilagay ang agricultural worker sa kadahilanang
kasama rito ang piggery, poultry at livestock work-
ers. Ang inilagay namin dito ay farm worker kaya
hindi kasama ang piggery, poultry at livestock
workers (Record, CONCOM, August , 1986, Vol. II,
p. 621).

"It is evident from the foregoing discussion that

Section 11 of RA 6657 which includes "private
agricultural lands devoted to commercial livestock,
 24

poultry and swine raising" in the definition of

"commercial farms" is invalid, to the extent that the
aforecited agro-industrial activities are made to be
covered by the agrarian reform program of the State.
There is simply no reason to include livestock and
poultry lands int he coverage of agrarian reform.
(Rollo, p. 21).

"PREMISES CONSIDERED, the instant petition is

hereby GRANTED. Sections 3(b), 11, 13 and 32 of
R.A. No. 6657 insofar as the inclusion of raising of
livestock, poultry and swine in its coverage as well as
the Implementing Rules and Guidelines promulgated
in accordance therewith, are hereby DECLARED null
and void for being unconstitutional and the writ of
preliminary injunction issued is hereby MADE
permanent."

III. Schedule of Implementation

A. Period for Implementation [Section 5]

1. The DAR, in coordination with the Presidential

 25

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.

B. Priorities [Section 7]

1. Guiding Principle: In effecting the transfer, priority

must be given to lands that are tenanted.

2. Factors to consider in the Implementation

a. Need to distribute lands to the tillers at the earliest

practical time;
b. Need to enhance agricultural productivity; and
c. Availability of funds and resources to implement
and support the program

3. Phases of Implementation

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
 26

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
 27

land to make it productive and to assume the obligation

of paying the amortization for the compensation of the
land and the land taxes thereon; all lands foreclosed by
government financial institutions; all lands acquired by
the Presidential Commission on Good Government
(PCGG); and all other lands owned by the government
devoted to or suitable for agriculture, which shall be
acquired and distributed immediately upon the
effectivity of this Act, with the implementation to be
completed by June 30, 2012.
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
 28

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

 29

from the retention limit up to ten (10) hectares, to

begin on July 1, 2013 and to be completed by June
30, 2014; to implement principally the right of
farmers and regular farmworkers who are landless, to
own directly or collectively the lands they till.

The schedule of acquisition and redistribution of all

agricultural lands covered by this program shall be
made in accordance with the above order of priority,
which shall be provided in the implementing rules to be
prepared by the PARC, taking into consideration the
following: the landholdings wherein the farmers are
organized and understand ,the meaning and obligations
of farmland ownership; the distribution of lands to the
tillers at the earliest practicable time; the enhancement
of agricultural productivity; and the availability of funds
and resources to implement and support the program:
Provided, That the PARC shall design and conduct
seminars, symposia, information campaigns, and other
similar programs for farmers who are not organized or
not covered by any landholdings. Completion by these
farmers of the aforementioned seminars, symposia,
and other similar programs shall be encouraged in the
implementation of this Act particularly the provisions of
this Section.
 30

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.

C. Exceptions from the Implementation Phases

1. Land acquisition and distribution shall be completed

by June 30, 2014 on a province-by- province basis. In
 31

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. PARC, upon
recommendation of the Provincial Agrarian Reform
Coordinating Committee (PARCCOM), may declare
certain provinces or regions as priority land reform
areas, in which case the acquisition and distribution
of private agricultural lands therein may be imple-
mented ahead of schedule. [Section 7]
 32

2. The PARC may suspend the implementation of CARL

with respect to ancestral lands for purpose of
identifying and delineating such lands. [Section 9]

IV. Improvement of Tenurial and Labor Relations

A. Leasehold Tenancy

1. Tenancy in General

a. Definition: Agricultural tenancy is the physical

possession by a person of land devoted to agricul-
ture, belonging to or legally possessed by another
for the purpose of production through the labor of
the former and of the members of his immediate
farm household in consideration of which the
former agrees to share the harvest with the latter
or to pay a price certain or ascertainable, either in
produce or in money, or in both [Section 3 of RA
1199, Guerrero v. CA4]

b. Types of Tenancy Relation

4
142 SCRA 136.
 33

i. Sharehold Tenancy; and

ii. Leasehold Tenancy

2. Leasehold vs. Sharehold Tenancy

* The two tenancy systems are distinct and different

form each other. In sharehold, the tenant may
choose to shoulder, in addition to labor, any one or
more of the items of contributions (such as farm
implements, work animals, final harrowing,
transplanting), while in leasehold, the tenant or
lessee always shoulders all items of production
except the land. Under the sharehold system, the
tenant and the landholder are co-managers,
whereas in leasehold, the tenant is the sole
manager of the farmholding. Finally, in sharehold
tenancy, the tenant and the landholder divide the
harvest in proportion to their contributions, while
in leasehold tenancy, the tenant or lessee gets the
whole produce with the mere obligation to pay a
fixed rental. [People v. Adillo5]

Sharehold Leasehold
5
68 SCRA 90.
 34

Expenses of Tenant and Tenant

Production Landowner
Management Tenant and Tenant
Landowner
Payment Tenant and Tenant gets the
landowner whole produce
divide the with the mere
harvest in obligation to
proportion to pay rent.
their contribu-
tions.

3. Leasehold vs. Civil Lease

* There are important differences between a leasehold

tenancy and a civil law lease. The subject matter of
leasehold tenancy is limited to agricultural lands; that
of civil law lease may be either rural or urban
property. As to attention and cultivation, the law
requires the leasehold tenant to personally attend to,
and cultivate the agricultural land, whereas the civil
law lessee need not personally cultivate or work the
thing leased. As to purpose, the landholding in
leasehold tenancy is devoted to agriculture, whereas
 35

in civil law lease, the purpose may be for any other

lawful pursuit. As to the law that governs, the civil
law lease is governed by the Civil Code, whereas
leasehold tenancy is governed by special laws.
[Gabriel v. Pangilinan6]

Leasehold Civil Law Lease

Tenancy
Subject Matter Agricultural Both rural and
lands only urban proper-
ties
Attention and Tenant must Lessee does not
Cultivation personally culti- have to per-
vate sonally cultivate
Purpose Agriculture only Any lawful
purpose
Governing Law Special laws Civil Code

4. Purpose of the Leasehold Relation: To protect and

improve the tenurial and economic status of the
farmers in tenanted lands. [Section 12]

6
58 SCRA 590.
 36

5. Application [Section 12]

a. Tenanted lands under the retention limit; and

b. Tenanted lands not yet acquired under the CARL

B. Production Sharing Plan

1. Application [Section 13]

a. Any enterprise adopting the scheme provided for

in Section 32;
b. Any enterprise operating under a production
venture, lease, management contract or other
similar arrangement;
c. Any farm covered by Section 8 (Private agricultural
lands leased by Multinational corporations) and
Section 11 (Commercial farming); and
d. Corporate farms pending final land transfer.

2. Period for Compliance: Within ninety (90) days from

effectivity of CARL

3. Scheme (Applies to those individuals or enterprises

 37

realizing gross sales in excess of five million pesos per

annum, unless the DAR sets a lower ceiling) [Section
32]

a. Three percent (3%) of the gross sales from the

production of such lands;
b. Distributed within sixty (60) days of the end of the
fiscal year;
c. Treated as additional compensation to regular and
other farmworkers of such lands;
d. During the transitory period (before the land is
turned over to the farmworker-beneficiaries), at
least one percent (1%) of the gross sales shall be
distributed to the managerial, supervisory and
technical group; and
e. If profit is realized, an additional ten percent (10%)
of the net profit after tax shall be distributed to the
regular and other farmworkers within ninety (90)
days of the end of the fiscal year.

V. Registration

A. Within 180 days from the effectivity of CARL,

 38

landowners, natural or juridical, shall file a sworn

statement in the assessor's office the following
information:

a. the description and area of the property;

b. the average gross income from the property for at
least 3 years;
c. the names of all tenants and farmworkers therein;
d. the crops planted in the property and the area
covered by the crop as of June 1, 1987;
e. the terms of mortgages, leases and management
contracts subsisting as of June 1, 1987; and
f. the latest declared market value of the land as deter-
mined by the city or provincial assessor. (Section 14)

B. The DAR, in coordination with the Barangay Agrarian

Reform Committee (BARC) shall register all agricultural
lessees, tenants and farmworkers who are qualifies to
be beneficiaries under the CARL. These potential
beneficiaries shall provide the following data:

a. names and members of their immediate farm

household;
b. owners and administrators of the lands they work on
 39

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.

VI. Private Land Acquisition

A. Retention Limit [Section 6]

1. Five hectares is the retention limit. 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-sized
farm, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC), but in
no case shall the retention limit exceed five (5)
hectares.

2. Additional three hectares may be awarded to each

child, subject to the following qualifications:
 40

a. That the child is at least fifteen (15) years of age;

and
b. That the child is actually tilling the land or directly
managing the farm.

3. Exceptions to the retention limit of five hectares.

a. Landowners whose lands have been covered by PD

27; and
b. Original homestead grantees or direct compulsory
heirs who still own the original homestead at the
time of the approval of CARL, as long as they
continue to cultivate said homestead.
C. 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
 41

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-A].

4. Right to choose the area to be retained.

The right to choose the area to be retained, which

shall be compact or contiguous, shall pertain to the
landowner. If the land retained 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. In case the tenant chooses
to remain in the retained area, he shall be considered
a leaseholder and shall lose his right to be a
beneficiary under this Act. In case the tenant
chooses to be a beneficiary in another agricultural
land, he loses his right as a leaseholder to the land
retained by the landowner. The tenant must exercise
this option within a period of one (1) year from the
time the landowner manifest his choice of the area
for retention.
 42

B. Procedure

1. Voluntary Land Transfer (VLT) [Section 20]

a. Must be submitted to the DAR within one year

from effectivity of the CARl;
b. Must not be less favorable to the transferee than
those of the government's standing ; and
c. Shall include sanctions for non-compliance by
either party and shall be duly recorded and its
implementation monitored by the DAR.
D. Only those submitted by June 30, 2009 shall be
allowed.

2. Compulsory Acquisition [Section 16]

a. Notice to acquire the land shall be sent to the land-

owner and the beneficiaries. The notice shall also
be posted in a conspicuous place in the municipal
building and the barangay hall of the place where
the property is located.
b. Within thirty (30) days from receipt of the written
notice, the landowner shall inform the DAR of his
 43

acceptance or rejection of the offer.

c. If the offer is accepted, the LBP pays the
landowner and within thirty (30) days, the
landowner executes and delivers a deed of transfer
to 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. If he does concur
with the compensation determined by the DAR, he
can the matter to the Courts.
e. Payment of the just compensation as determined
by the DAR or the Court.
f. Registration with the Register of Deeds for the
issuance of Transfer Certificate of Title in the name
of the Republic of the Philippines.
g. Standing Crops: The landowner shall retain his
share of any standing crops unharvested at the
time the DAR shall take possession of the land and
shall be given reasonable time to harvest the same
(Section 28).

C. Compensation
 44

1. 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 t o 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 [Section 17].

2. Under EO 405 (1990), Land Bank of the Philippines

shall be primarily responsible for the determination
of the land valuation and compensation.

3. Mode of Payment [Section 18]

 45

a. Cash under the following scheme:

i. For lands above 50 hectares : 25%

ii. For lands above 24 and up to 50 : 30%
iii. For lands 24 and below : 35%

* In case of VOS, the landowner shall be entitled

to an additional 5% cash payment. [Section 19]

b. Balance in any of the following:

i. Shares of stock in government-owned or con-

trolled corporations, LBP preferred shares,
physical assets or other qualified investments;
ii. Tax credits which can be used against any tax
liability;
iii. Land Bank of the Philippines Bonds which shall
have the following features:
* 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 year; and
* Transferability and negotiability
 46

c. Set-off

* All arrearages in real property taxes, without

penalty or interest, shall be deductible from the
compensation to which the owner is entitled.
[Section 66]

D. Exemptions from Taxes and Fees

1. Transactions under CARL involving a transfer of

ownership, whether from natural or juridical persons,
shall be exempted from taxes arising from capital
gains. These transactions shall also be exempted
from the payment of registration fees, and all other
taxes and fees for the conveyance or transfer
thereof; Provided, That all arrearages in real property
taxes, without penalty or interest, shall be deducted
from the compensation to which the owner may be
entitled. [Section 66]

2. All Registers of Deeds are hereby directed to register,

free from payment of all fees and other charges,
patents, titles and documents required for the
 47

implementation of CARP. [Section 67]

VII. Land Redistribution

A. Beneficiaries [Section 22]

Beneficiaries, in their order of priority, are:

1. Agricultural lessees and share tenants;

2. Regular Farmworkers: a natural person who is
employed on a permanent basis by an agricultural
enterprise or farm [Section 3(h)];

a. 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 [Section 3(f)].
b. Farmworker is a natural person who renders
service for value as an employee or laborer in an
 48

agricultural enterprise or farm regardless of

whether his compensation is paid on a daily,
weekly, monthly or "pakyaw" basis. It 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 [Section 3(g)].

3. Seasonal farmworkers: a natural person who is

employed on a recurrent, periodic or intermittent
basis by an agricultural enterprise or farm, whether
as a permanent or an non-permanent laborer, such
as "dumaan", "sacada", and the like [Section 3(i)];

4. Other farmworkers: a farmworker who is not a

regular nor a seasonal farmworker [Section 3(j)];

5. Actual tillers or occupants of public lands;

6. Collective or cooperatives of the above beneficiaries;

and

* Cooperatives shall refer to organizations composed

primarily of small agricultural producers, farmers,
 49

farmworkers, or other agrarian reform

beneficiaries who voluntarily organize themselves
for the purpose of pooling land, human, technolog-
ical, 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 [Section 3(k)].

7. Others directly working on the land.

Before any award is given to a farmer, the qualified

children of the landowner must receive their three
hectare award.

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 [Section 3(l)].

B. Disqualifications of Beneficiaries [Section 22]

 50

1. Beneficiaries under Presidential Decree No. 27 who

have culpably sold, disposed of, or abandoned their
land;

2. Beneficiaries guilty of negligence or misuse of the

land or any support extended to them;

* The mere fact that the expected quantity of har-

vest, as visualized and calculated by agricultural
experts, is not actually realized, or that the harvest
did not increase, is not a sufficient basis for
concluding that the tenants failed to follow proven
farm practices. [Belmi v. CAR7]

3. Beneficiaries with at least three (3) hectares of

agricultural land; and

* Under the CARL, a beneficiary is landless if he owns

less than three (3) hectares of agricultural land.
[Section 25]

4. Beneficiaries whose land have been the subject of

foreclosure by the Land Bank of the Philippines.
[Section 26]
7
7 SCRA 812.
 51

* Under the CARL, the LBP may foreclose on the

mortgage for non-payment of the beneficiary of an
aggregate of three (3) annual amortizations. [Sec-
tion 26]

C. Awards

1. Emancipation Patents (EPs) are issued for lands

covered under Operation Land Transfer (OLT) of
Presidential Decree No. 27.

2. Certificates of Land Ownership Award (CLOAs) are

issued for private agricultural lands and resettlement
areas covered under Republic Act No. 6657,
otherwise known as the Comprehensive Agrarian
Reform Law of 1988.

3. Free Patents are issued for public agricultural lands.

* Under Section 15 of EO 229 (1987), all alienable

and disposable lands of the public domain suitable
for agriculture and outside proclaimed settlements
shall be redistributed by the Department of Envi-
 52

ronment and Natural Resources (DENR).

4. Certificates of Stewardship Contracts are issued for
forest areas under the Integrated Social Forestry
Program.

D. Manner of Payment [Section 26]

1. Lands awarded shall be paid by the beneficiaries to

the LBP in thirty (30) annual amortizations at six
percent (6%) interest per annum. The payments for
the first three (3) years after the awards may 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 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 may reduce the interest rate or reduce the
principal obligation to make the repayment
affordable.

2. Payment shall be:

 53

a. Thirty (30) annual amortizations (First 3 years may

be at reduced amounts);
b. Six percent (6%) interest per annum; and
c. First five (5) annual payments may not be more
than five percent (5%) of the value of the annual
gross production.

E. Ownership Limitations on the Awarded Lands

1. Transferability of Awarded Lands. - Lands acquired by

beneficiaries may not be sold, transferred or
conveyed except through hereditary succession, or to
the government, or to the Land Bank of the
Philippines, or to other qualified beneficiaries for a
period of ten (10) years. [Section 27]

* If the land is sold to the government or to the LBP,

the children or the spouse of the transferee shall
have a right to repurchase within a period of two
(2) years.

2. Conversions of Lands. - An application for conversion

 54

may be entertained only after the lapse of five (5)

years from the 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 purpose.
[Section 66]

VIII. Corporate Farms

A. Definition

* Corporate farms are farms which are owned or oper-

ated by corporations or other business associations.
[Section 29]

B. Distribution

1. Land Transfer (Voluntarily Offer to Sell or Compulsory

Acquisition)

a. General rule: Lands shall be distributed directly to

 55

the individual farmworker-beneficiaries.

b. Exception: However, if it is not economically feasi-
ble and sound to divide the land, then it shall be
owned collectively by the farmworker-beneficiaries
through a workers' cooperative or association.
[Section 29]
c. In case the land is transferred to a cooperative or
association, the individual members of the
cooperatives shall be provided with homelots and
small farmlots for their family use, to be taken
from the land owned by the cooperative. [Section
30]

2. Capital Stock Transfer [Section 31]

a. This is a non-land transfer. Corporations or

associations which voluntarily divest a proportion
of their capital stock, equity or participation in
favor of their workers or other qualified beneficia-
ries shall be deemed to have complied with CARL.
b. Amount to be divested: Corporations owning
agricultural lands may give their qualified
beneficiaries the right to repurchase such
proportion of the capital stock of the corporation
that the agricultural land, actually devoted to
 56

agricultural activities, bears in relation to the

company's total assets.

* Agricultural activity means the cultivation of the

soil, planting of crops, growing of fruit trees,
raising of 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 persons
whether natural or juridical [Section 3(b)].

c. Conditions of the Capital Stock Transfer.

i. The books of the corporation shall be subject to

periodic audit by certified public accountants
chosen by the beneficiaries;
ii. 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;
iii. Any share acquired by the beneficiaries shall
have the same rights and features as all other
shares; and
iv. Any transfer of shares of stock by the original
 57

beneficiaries shall be void ab initio unless said

transaction is in favor of a qualified and
registered beneficiary within the same
corporation.

d. Period for Compliance: If within TWO (2) YEARS

from the approval of CARL or from the approval of
the PARC of the plan for stock distribution, the
stock transfer is not made or realized, the
agricultural land shall be subject to compulsory
coverage of the CARL.

IX. Support Services

A. General Support and Coordinative Services [Section 35]

1. Irrigation facilities;
2. Infrastructure development and public works pro-
jects in areas and settlements that come under
agrarian reform;
3. Government subsidies for the use of irrigation
facilities;
4. Price support and guarantee for all agricultural
 58

produce;
5. Extending the necessary credit;
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. Undertaking research, development and
dissemination of information on agrarian reform and
low-cost and ecologically sound farm inputs and
technologies to minimize reliance on expensive and
imported agricultural inputs;
9. Development of cooperative management through
intensive training;
10. Assistance in the identification of ready markets
for agricultural produce and training in other various
aspects of marketing; and
11. Administration, operation, management and
funding of support service programs and projects
including pilot projects and models related to
agrarian reform.

B. Support Services to Beneficiaries [Section 37]

 59

1. Land surveys and titling;

2. Liberalized terms on credit facilities and production
loans;
3. 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;
4. Infrastructure such as access trail, mini-dams, public
utilities, marketing and storage facilities; and
5. Research, production and use of organic fertilizers
and other local substances necessary in farming and
cultivation.

C. Support Services to Landowners [Section 38]

1. Investment information, financial and counselling

assistance;
2. 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 Central Bank and other
government institutions and instrumentalities;
3. Marketing of LBP bonds, as well as promoting the
marketability of said bonds in traditional and non-
 60

traditional financial markets and stock exchanges;

4. Other services designed to utilize productively the
proceeds of the sale of such lands for rural indus-
trialization;
5. Incentives granted to a registered enterprise engaged
in a pioneer or preferred area of investment as
provided for in the Omnibus Investment Code or
granted by the PARC, the LBP or other government
financial institutions for those who invests in rural-
based industries; and
6. Redemption by the LBP of up to thirty percent (30%)
of the face value of the its bonds for landowners who
will invest the proceeds of the redemption in a BOI-
registered company or in any agri-business or agro-
industrial enterprise in the region where they have
previously made investments.

D. Funding

* At least twenty-five percent (25%) of all appropri-

ations for agrarian reform shall be immediately set
aside and made available for support services. In
addition, the DAR shall be authorized to package
proposals and receive grants, aid and other forms of
 61

financial assistance from any source. [Section 36]

X. Special Areas of Concern [Section 40]

A. Subsistence Fishing: Small fisherfolk, including seaweed

farmer, shall be assured of greater access to the utiliza-
tion of water resources.

B. Logging and Mining Concessions: Subject to the

requirement of a balanced ecology and conservation of
water resources, suitable areas in logging, mining and
pasture areas, shall be opened up for agrarian
settlements whose beneficiaries shall be required to
undertake reforestation and conservation production
methods.

* Certificates of Stewardship Contracts are issued for

forest areas under the Integrated Social Forestry
Program.

C. Sparsely Occupied Public Agricultural Lands: Sparsely

occupied agricultural lands of the public domain shall
 62

be surveyed, proclaimed and developed as farm

settlements for qualified landless people.

* Agricultural land allocations shall be made for ideal

family-size farms.

* Uncultivated lands of the public domain shall be

made available on a lease basis to interested and
qualified parties. Priority shall be given to those who
will engage in the development of capital-intensive,
traditional or pioneering crops.

D. Idle, Abandoned, Forecloses and Sequestered Lands:

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

E. Rural Women: All qualified women members of the

agricultural labor force must be guaranteed and
assured equal rights to ownership of the land, equal
shares of the farm's produce, and representation in
advisory or appropriate decision-making bodies.
 63

F. Veterans and Retirees: Landless ware veterans and

veterans of military campaigns, their surviving spouses
and orphans, retirees of the Armed Forces of the
Philippines and the Integrated National Police,
returnees, surrenderees and similar beneficiaries shall
be given due consideration in the disposition of
agricultural lands of the public domain.

G. Agriculture Graduates: Graduates of agricultural

schools who are landless shall be assisted by the
government in their desire to own and till agricultural
lands.

XI. Program Implementation

A. Presidential Agrarian Reform Council (PARC)

1. Composition [Section 41]

a. Chairman: President of the Philippines

b. Vice-Chairman: Secretary of Agrarian Reform
c. Members:
 64

i. Secretary of Agriculture;
ii. Secretary of Environment and Natural Resources;
iii. Secretary of Budget and Management;
iv. Secretary of Local Government;
v. Secretary of Public Works and Highways;
vi. Secretary of Trade and Industry;
vii. Secretary of Finance;
viii. Secretary of Labor and Employment;
ix. Director-General of National Economic and
Development Authority;
x. President of Land Bank of the Philippines;
xi. Administrator of National Irrigation Authority;
xii. Three (3) representatives of affected landowners
to represent Luzon, Visayas and Mindanao; and
xiii. Six (6) representatives of agrarian reform
beneficiaries, two (2) each from Luzon, Visayas
and Mindanao, provided that one of them shall
be from cultural communities.

2. Functions and Duties [EO 229, 1987]

a. Formulate and implement policies, rules and

regulations necessary to implement the CARP;
b. Recommend small farm economy areas;
c. Schedule the acquisition and distribution of
 65

specific agrarian reform areas; and

d. Control mechanisms for evaluating the owner's
declaration of current fair market value.

3. Executive Committee (EXCOM) of the PARC [Section

42]

a. There shall be an Executive Committee of the PARC

which shall meet and decide on any and all matters
in between meetings of the PARC: Provided,
however, That its decision must be reported in the
PARC immediately and not later than the next
meeting.
b. Composition: The Secretary of Agrarian Reform
shall be the Chairman and its members shall be
designated by the President, taking into account
Article XIII, Section 5 of the Constitution (Rights of
farmers to participate in the planning, organization
and management of the CARP).

4. PARC Secretariat [Section 43]

a. A PARC Secretariat is established to provide

general support and coordinative services such as
inter-agency linkages, program and project
 66

appraisal and evaluation and general operations

monitoring for the PARC.
b. Composition: 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.

B. Provincial Agrarian Reform Coordinating Committee

(PARCCOM)

1. Composition (Section 44)

a. Chairman: an appointee of the President upon

recommendation of the PARC EXCOM;
b. Executive Officer: Provincial Agrarian Reform Offi-
cer;
c. Members:
i. Representative from the Department of Agricul-
ture;
ii. Representative for the Department of Environ-
ment and Natural Resources;
iii. Representative for the Land Bank of the Phil-
ippines;
 67

iv. One representative each from existing

farmers' organizations, agricultural cooperatives
and non-governmental organizations in the
province;
v. Two representatives from the landowners, at
least one of whom shall be a producer repre-
senting the principal crop of the province;
vi. Two representatives from farmers and farm-
worker beneficiaries, at least one of whom shall
be a farmer or farmworker representing the
principal crop of the province; and
vii. In areas where there are cultural
communities, there shall be one representative
from them.

2. Functions and Duties

a. Coordinate and monitor the implementation of the

CARP in the province;
* The PARC shall provide the guidelines for a
province-by-province implementation of the
CARP. The ten-year program of distribution of
public and private lands in each province shall be
adjusted from year to year by the province's
PARCCOM, in accordance with the level of
 68

operations previously established by the PARC,

in every case ensuring that support services are
available or have been programmed before
actual distribution is effected. [Section 45]
b. Provide information on the following:
i. Provisions of the CARP;
ii. Guidelines issued by the PARC; and
iii. Progress of the CARP in the province.

C. Barangay Agrarian Reform Committee (BARC)

1. Composition [EO 229, 1987]

* The BARC shall be operated on a self-help basis

and will be composed of the following:

a. Representatives of farmer and farmworker

beneficiaries;
b. Representatives of farmer and farmworker non-
beneficiaries;
c. Representatives of agricultural cooperatives;
d. Representatives of other farmer organizations;
e. Representatives of the Barangay Council;
f. Representatives of non-governmental organization
 69

(NGOs);
g. Representatives of landowners;
h. Department of Agriculture official assigned to the
area;
i. Department of Environment and Natural Resources
official assigned to the area;
j. DAR Agrarian Reform Technologist assigned to the
area; and
k. Land Bank of the Philippines representative.

2. Functions [EO 229, 1987 and Section 47]

* The BARC shall have the following functions:

a. Mediate and conciliate between parties involved in

an agrarian dispute;
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 n the initial determination of the value of
the land;
f. Assist the DAR representative in the preparation of
 70

periodic reports on the CARP implementation;

g. Coordinate the delivery of support services to
beneficiaries;
h. Participate and give support in the implementation
of CARP; and
i. Perform such other functions as may be assigned
by the PARC and DAR.

D. Others

1. No injunction, restraining order, prohibition or

mandamus shall be issued by the lower courts
against the DAR, DA, DENR and DOJ in their
implementation of CARP. [Section 68]

* This does not apply to the Supreme Court.

2. The PARC, in the exercise of its functions, is hereby

authorized to call upon the assistance and support of
other government agencies, bureaus and offices,
including government-owned or controlled
corporations. [Section 69]
 71

XII. Administrative Adjudication

A. Jurisdiction

1. The Department of Agrarian Reform is hereby vested

with primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have exclusive
original jurisdiction over all matter involving the
implementation of agrarian reform, except those
falling under the exclusive jurisdiction of the
Department of Agriculture and the Department of
Environment and Natural Resources. [Section 50]

2. DAR Adjudicator

a. Department of Agrarian Reform Adjudication

Board (DARAB)
i. Exercises both original and appellate jurisdiction
ii. Exercises functional supervision over the
RARADs and PARADs

b. Regional Agrarian Reform Adjudicator (RARAD)

 72

i. Executive Adjudicator in his region

ii. Receives, hears and adjudicates cases which the
PARAD cannot handle because the latter is dis-
qualified or inhibits himself or because the case
is complex or sensitive

c. Provincial Agrarian Reform Adjudicator (PARAD)

3. Exclusive Jurisdiction of the Secretary of Agrarian

Reform

* Matter involving strictly the administrative

implementation of the CARP and agrarian laws and
regulations shall be the exclusive prerogative of
and cognizable by the Secretary of Agrarian
Reform

B. BARC Certification Requirement

1. The DAR shall not take cognizance of any agrarian

dispute of 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. [Section 53]
 73

* Failure to present a BARC certification is not a

ground for dismissal of the action. The
complainant or petitioner will be given every
opportunity to secure the BARC certification. [Rule
III, Section 1(c) of the DARAB Rules]

2. Exceptions to the BARC Certification Requirement:

a. Failure of the BARC to issue a certification within
thirty (30) days after a matter or issue is submitted
to it;
b. The required certification cannot be complied with
for valid reasons like the non-existence or non-
organization of the BARC or the impossibility of
convening it. A certification to that effect may be
issued by the proper agrarian reform officer in lieu
of the BARC certification; [Rule III, Section 1(b) of
DARAB Rules]
c. The issue involves the valuation of the land to
determine just compensation; [Rule III, Section 2 of
DARAB Rules]
d. The parties reside in different barangays, unless
they adjoin each other;
* Where the lands involved in the dispute strad-
dles two or more barangays, the BARC of the
 74

Barangay where the biggest portion lies, shall

have the authority to conduct the mediation or
conciliation proceeding.
e. One of the party is a public or private corporation,
a partnership, association or juridical person, or a
public officer or employee and the dispute relates
to the performance of his official functions;
f. The issue involves merely the administrative
implementation of agrarian reform law, rule,
guideline or policy; and
g. The issue is beyond the pale of mediation, concilia-
tion or compromise, as determined by the
Secretary of Agrarian Reform.

C. Rules of Procedure

1. 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. [Section 50]

2. Responsible leaders shall be allowed to represent

 75

themselves, their fellow farmers, or their organi-

zations in any proceedings before the DAR [Section
50]

3. To discourage frivolous or dilatory appeals from the

decision or order on the local or provincial levels, the
DAR may impose reasonable penalties, including but
not limited to fines or censures upon erring parties.
[Section 52]

D. Enforcement Powers

1. It shall have the power to summon witnesses, admin-

ister oaths, take testimony, require submission of
reports, compel the production of books and docu-
ments and answers to interrogatories and issue
subpoena, and subpoena duces tecum and to
enforce its writs through sheriffs or other duly depu-
tized officers. It shall likewise have the power to
punish direct and indirect contempt in the same
manner and subject to the same penalties as provid-
ed in the Rules of Court. [Section 50]

2. The DAR has executed a Memorandum of Agreement

 76

with the Philippine National Police, in order that the

latter may assist the DAR in the enforcement of its
orders.

E. Judicial Review

1. 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 the CARL and other pertinent laws
on agrarian reform may be brought to the Court of
Appeals by certiorari within fifteen (15) days from
receipt of a copy thereof. [Section 54]

2. The findings of fact of the DAR shall be final and

conclusive if based on substantial evidence.

3. Notwithstanding an appeal to the Court of Appeals,

the decision of the DAR shall be immediately execu-
tory. [Section 50]

XIII. Special Agrarian Court

 77

A. Jurisdiction [Section 57]

1. The Special Agrarian Courts (Regional Trial Courts)

shall have original and exclusive jurisdiction over:

a. All petitions for the determination of just

compensation to landowners; and
b. The prosecution of all criminal offenses under the
CARL.

2. 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.

B. Appeals

1. Appeal from the Decision of the Special Agrarian

Court

* Within fifteen (15) days from the receipt of the

 78

decision of the Special Agrarian Court, an appeal may

be taken by filing a petition for review with the Court
of Appeals.

2. Appeal from the Decision of the Court of Appeals

* Within a non-extendible period of fifteen (15) days

from the receipt of the decision of the Court of
Appeals, an appeal may be taken by filing a petition
for review with the Supreme Court.

XIV. Prohibited Acts and Omissions

A. Prohibited Acts and Omissions

1. Section 73. The following are prohibited.

a. The ownership or possession, for the purpose of

circumventing the provisions of CARL, of
agricultural lands in excess of the total retention
limits or award ceilings by any person, natural or
juridical, except those under collective ownership
by farmer-beneficiaries.
 79

b. The forcible entry or illegal detainer by persons

who are not qualified beneficiaries to avail
themselves of the rights and benefits of the CARP.
c. The conversion by any landowner of his
agricultural land into non-agricultural uses with
intent to avoid the application of CARL to his
landholdings and to dispossess his tenant farmers
of the land tilled by them.
d. The willful prevention or obstruction by any
person, association or entity of the
implementation of the CARP.
e. The sale, transfer, conveyance or change of the
nature of lands outside of urban centers and city
limits either in whole or in part after the effectivity
of CARL.
i. Upon the effectivity of CARL, any sale,
disposition, lease, management contract or
transfer of possession of private lands executed
by the original landowner in violation of CARL
shall be null and void; Provided, however, that
those executed prior to CARL shall be valid only
when registered with the Register of Deeds
within a three (3) months after the effectivity of
CARL. [Section 6]
 80

* Exception: Banks and other financial

institutions allowed by law to hold mortgage
rights or security interests in agricultural lands to
secure loans and other obligations of borrowers,
may acquire title to these mortgaged properties,
regardless of area, subject to existing laws on
compulsory transfer of foreclosed assets and
acquisition as prescribed under Section 16 of
CARL [Section 71]

ii. Disposition of private lands is in violation of

CARL if it is over the retention limit.

iii. The date of registration of the deed of

conveyance in the Register of Deeds with
respect to title lands and the date of the
issuance of the tax declaration to the transferee
of the property with respect to untitled lands
shall be conclusive for this purpose.

f. The sale, transfer of conveyance by a beneficiary of

the right to use or any other usufructuary right
over the land he acquired by virtue of being a
beneficiary, in order to circumvent the provisions
of CARL. [Refer to VII(E) of this Outline]
 81

2. Any person who knowingly or willfully violates the

provisions of CARL shall be punished by
imprisonment of not less than one (1) month to not
more than three (3) years or a fine of not less than
one thousand pesos (P 1,000.00) and not more than
fifteen thousand pesos (P 15,000.00), or both at the
discretion of the court.
If the offender is a corporation or association, the
officer responsible therefor shall be criminally liable.

B. Conversions

1. Authority to Allow Conversion of Agricultural Land for

Non-agricultural Uses

a. Under Executive Order No. 129-A, Series of 1987,

the Department of Agrarian Reform is authorized
to:
i. Approve or disapprove the conversion,
restructuring or readjustment of agricultural
lands into non-agricultural uses; [Section 4(j)]
ii. Have exclusive authority to approve or
disapprove conversion of agricultural lands for
 82

residential, commercial, industrial and other

land uses as may be provided for by law.
[Section 5(l)]

b. The Comprehensive Agrarian Reform Law provides

that the DAR ... may authorize the reclassification
or conversion on the land and its disposition.
[Section 65]

2. Conversion

a. 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 highly urbanized and the land will
have greater economic value for residential,
commercial or industrial purposes, the DAR, upon
application of the beneficiary or the landowner,
may authorize the reclassification or conversion on
the land and its disposition: Provided, That the
beneficiary shall have fully paid his obligation.
[Section 65]

b. Grounds for conversion

 83

i. Five (5) years had lapsed from the award of the

land;
ii. The land ceases to be economically feasible and
sound for agricultural purposes, or the locality
has become highly urbanized and the land will
have greater economic value for residential,
commercial or industrial purposes; and
iii. Beneficiary shall have fully paid his obligation.

c. Administrative Order No. 20, Series of 1992 [Took

effect on 30 December 1992]

* President Fidel V. Ramos directed the

observance by all agencies and local government
units the following interim guidelines on
agricultural land use conversion.

i. All irrigated or irrigable agricultural lands

shall not be subject to and non-negotiable for
conversion;
ii. All other agricultural lands may be converted
only upon strict compliance with existing laws,
rules and regulations.

3. Disturbance Compensation
 84

* Section 36(1) of Republic Act No. 3844, as

amended provides: the agricultural lessee shall be
entitled to disturbance compensation equivalent
to five years rental on his landholding.

* Displaced farmers are entitled to disturbance

compensation which varies depending on the
agreement between the farmers and the
landowners.

XV. Relation to Other Laws

A. Suppletory Application: The provisions of Republic Act

No. 3844, as amended, Presidential Decree Nos. 27 and
266, as amended, Executive Order Nos. 228 and 229,
both Series of 1987; and other laws not inconsistent
with this Act shall have suppletory effect. [Section 75]

B. Repealing Clause: Section 35 of Republic Act No. 3844,

Presidential Decree No. 316, the last two paragraphs of
Section 12 of Presidential Decree No. 946, Presidential
 85

Decree No. 1038, and all other laws, decrees, executive

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

XVI. Effectivity

* CARL takes effect immediately after publication in at

least two (2) national newspapers of general
circulation. CARL was printed 15 June 1988.

Prepared by: Atty. Ferdinand M. Casis