HANDBOOK FOR CARP IMPLEMENTORS

CHAPTER 1
AGRARIAN REFORM CONCEPTS AND PRINCIPLES
1.1 MEANING OF AGRARIAN REFORM
What is Agrarian Reform?
Section 3 of RA 6657 has defined agrarian reform as:

"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 arrangements alternative to the physical redistribution of lands, such as production
or profit-sharing, labor administration and the distribution of shares of stock, which will allow
beneficiaries to receive a just share of the fruits of the land they work." (Section 3, RA 6657)

Basically, agrarian reform is land reform the transfer of control and ownership of agricultural land to the actual
tillers plus a package of support services: economic and physical infrastructure support services (ECOPISS), (e.g.,
credit, extension, irrigation, roads and bridges, marketing facilities), and human resource and institutional
development or social infrastructure building and strengthening (SIBS).
What is being "Reformed" in Agrarian Reform?
Agrarian reform seeks to correct numerous defects in the country's agrarian structure. Foremost among these is the
concentration of land ownership in only a few people, such that the huge majority of the population does not have
access to land.
According to the 1980 Census of Agriculture, farms less than three hectares in size predominate in the Philippines,
representing nearly 70% of the 3.4 million total number of farms. However, they cover only 30% of the country's 9.7
million hectares total farm area. In contrast, farms with areas of more than 10 hectares are very few, constituting only
3.5% of the number of farms. Yet they cover 26% of the farm area.
So what's wrong with that?
The concentration of the ownership of lands in the hands of a very few means that the majority is deprived of the
opportunity to use land as a basic production resource. The failure to access land results in unemployment, low
incomes, low productivity, poor purchasing power, and sluggish rural economies.
 A more equitable distribution of land ownership, on the other hand, promotes a more equitable distribution of
income which, in turn, promotes greater economic activity. More producers and income earners, require more
services and goods which other sectors of the economy produce. The increase in domestic demand and production
results in broadbased, sustainable economic growth. And that's only the economic side of it.
With improved standards of living, greater people participation in the community's affairs is expected. This will
lead to a more dynamic and genuine democracy.
1.2 AGRARIAN REFORM ISSUES: LAND TENURE IMPROVEMENT vs.SUPPORT SERVICES DELIVERY
Land redistribution is so costly, why don't we just use the money for credit, extension, infrastructure, post harvest
facilities, etc., for greater productivity?
Such a strategy would benefit those who own or control the land. It is not surprising, therefore, that more often
than not, it is a strategy propounded by those who already own land.
For the benefits of agricultural investments to seep down and reach the lower economic strata, inequitable land
ownership structure will have to be dismantled first. Broadening the land ownership base makes agricultural
development more quickly and easily felt by the majority.
1.3 AGRARIAN REFORM ISSUES: BIG FARMS vs. SMALL FARMS
Aren't small farms less efficient and less productive? Instead of breaking up the lands, shouldn't we consolidate them
into plantations to achieve economies of scale?
The argument that large farms are more efficient than small farms is usually invoked by those who own export and
cash crop plantations as an excuse to exclude their landholdings from agrarian reform. The issue can be answered by
examining whether economies of scale do exist. A study made on coconut and other tree crops did not show any
increasing yield per hectare as farm size increases. In the case of sugar, another study has shown that average
production cost per hectare, in fact, tends to be higher for larger farms. (Adriano, Quisumbing, and Hayami, Toward an
Alternative Land Reform Paradigm, 1990).

Furthermore, if breaking up the lands would not be economically viable, then this need not be done. Agrarian
reform can be undertaken by breaking up the land ownership pattern but farming can be done collectively.
1.4 AGRARIAN REFORM ISSUES: PUBLIC vs. PRIVATE LANDS
Why don't we just distribute public and government-owned lands? Why are we covering the private farms which are
productive?
Productive private lands are covered under agrarian reform for various reasons. These include:
a. Public and government-owned lands already have occupants and claimants. The sheer extent of
landlessness makes coverage of private lands inevitable;
 b. One of the pillars of agrarian reform is the principle that the tiller of the land has the primacy of the right
to own it;
c. It is in productive private lands, particularly where the necessary investments have been made, where
the beneficiary has greatest chances of success.
1.5 AGRARIAN REFORM: COUNTER-INSURGENCY TOOL?
Will agrarian reform cure all of the country's ills?

No, although it is a step in the right direction. The country has too many problems. But attempts to solve them will
not yield sustainable results unless the root cause is addressed inequitable distribution of resources. Since the
Philippines is basically an agricultural country, land is the most important resource. By addressing the problem of
inequitable distribution of the land, agrarian reform is a major step towards resolving the country's problems.
Is agrarian reform an anti-insurgency tool?
No, agrarian reform is not being carried out to solve the insurgency problem. However, agrarian reform answers
the clamor for social justice and the upliftment of the socio-economic status of the landless. It provides a peaceful
means for radical social change and liberation from poverty.
CHAPTER 2
COMPREHENSIVE AGRARIAN REFORM PROGRAM
What is the constitutional mandate for agrarian reform?
Agrarian reform derives its mandate from basic principles enshrined in the Constitution. The Philippine
Constitutions of 1935, 1973 and 1987 all attest to this.
The 1935 Constitution mandated a policy of social justice to insure the well-being and economic security of the
people.
The 1973 Constitution provided that "The State shall formulate and implement an agrarian reform program aimed
at emancipating the tenant from the bondage of the soil."
The 1987 Constitution contains more specific provisions on agrarian reform.
Article II, Declaration of Principles and State Policies, Section 21 "The State shall promote comprehensive rural
development and agrarian reform."
Article XII, National Economy and Patrimony, Section 21 "The State shall promote industrialization and full
employment based on sound agricultural development and agrarian reform, . . ."
 Article XIII, Social Justice and Human Rights, Section 4 "The State shall, by law, undertake an agrarian reform
program 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 ."
"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 prescribe, taking into account ecological, development or equity
considerations, and subject to the payment of just compensation.
"In determining the retention limits, the State shall respect the right of small landowners.The State shall further
provide incentives for voluntary landsharing."
Article XIII, Section 6 "The State shall apply the principles of agrarian reform, whenever applicable in accordance
with law."
What presidential issuances and legislations provide the legal mandate for the Comprehensive Agrarian
Reform Program?
Various administrations, from the Commonwealth to the Philippine Republic have issued decrees and passed
legislations on agrarian reform.
Under the previous administration, Proclamation No. 131 and Executive Order No. 229, both dated 22 July 1987
were issued when then President Corazon C. Aquino still exercised legislative powers. These instituted the
Comprehensive Agrarian Reform Program (CARP) and provided the mechanism for its implementation.
Republic Act No. 6657: An Act Instituting a Comprehensive Agrarian Reform Program to Promote Social Justice and
Industrialization, Providing the Mechanisms for its Implementation and/or other Purposes, was subsequently passed by
Congress, signed into law on 10 June 1988 and became effective on 15 June 1988. This is now known as the
Comprehensive Agrarian Reform Law (CARL) of 1988. (By tradition, the anniversary of CARP is commemorated on
this date).
CHAPTER 3
CARP COVERAGE
3.1 CARP SCOPE
What is the scope of CARP?
The ownership or control of about 10.3 million hectares 1 of agricultural land, representing about one-third of the
total land area of the Philippines shall be transferred over a ten-year period to an estimated 3.9 million beneficiaries.
 What lands are covered by CARP?
The CARP covers, regardless of tenurial arrangement and commodity produced, all public and private lands
devoted to or suitable for agriculture and not classified as mineral, forest, residential, commercial or industrial' land.
The two criteria for coverage, therefore, are (1) suitability of the land for agriculture; and (2) its classification.
Specifically, the following lands are covered by CARP:
a. all alienable and disposable lands of the public domain devoted to or suitable to agriculture;
b. all lands of the public domain in excess of the specific limits as determined by Congress;
c. all other lands owned by the government devoted to or suitable to agriculture; and
d. all private lands devoted to or suitable to agriculture regardless of the agricultural products raised or
that can be raised therein. (Section 4 RA 6657)
Other major issuances on CARP are:
Executive Order No. 228 dated 17 July 1987 declared full land ownership to qualified farmer-beneficiaries covered
by Presidential Decree No. 27 determined the value of remaining unvalued rice and corn lands subject to PD 27, and
provided for the manner of payment by the farmer-beneficiaries and the mode of compensation to the landowners.
Executive Order No. 129-A dated 26 July 1987 provided for the strengthening of the Department of Agrarian Reform
as the lead agency responsible for the implementation of CARP.
3.2 IMPLEMENTATION SCHEDULE
When are these lands covered?
All lands within the scope of CARP have been covered by the program beginning 15 June 1988, the date of CARP's
effectivity.
However, in consideration of the capacity of the Government to implement the program, the acquisition and
distribution of agricultural lands covered by the program have been prioritized as follows:
 Phase I This started immediately upon effectivity of the law and is programmed to be completed within four
years (1988-1992)

* rice and corn lands which are covered by PD 27;

* idle or abandoned;
* voluntarily offered;
* foreclosed by government financial institutions (GFIs);
* acquired by the Presidential Commission on Good Government (PCGG); and
* owned by the Government

Phase II This also started in 1988 and is programmed to be completed in four years (1988-1992).

* all public agricultural lands which are to be opened for new development and resettlement; and
* private agricultural lands with areas above 50 hectares in so far as the excess over 50 hectares is concerned

Phase III-A This started on the fourth year and is programmed completed within three years (1992-1995)
* private agricultural lands with areas from 24 to 50 hectares, in so far as the excess over the retention
limit.
Phase III-B This is programmed to start on the sixth year and to be completed within four years (1994-1998)
* private agricultural lands with areas above the retention limit up to 24 hectares
Public lands and other lands owned by the government and government-owned or controlled corporations which
are leased and operated by multinational corporations or associations were programmed for immediate acquisition
and distribution right after the effectivity of the law for completion within three years (1988-1991). (Sections 6 and
8, RA 6657)
Does the order of priority mean that all areas under Phase II must first be acquired and distributed before those in
Phase III can be covered?
Strictly speaking, no. Starting 15 June 1994, Phase III-B lands can already be acquired and distributed even if not all
Phase II lands have been covered. However, given DAR's backlog in covering even those private agricultural lands 50
hectares and above, and the backlog in voluntary offer to sell, for practical purposes, priority should be given to the
completion of backlog in the earlier phases.
Given such phasing, how many hectares can now (1994) be acquired if a landowner's property has an area of?
a. 40 has > 40 less 5 35 has.
 b. 70 has > 70 less 5 65 has.
c. 20 has > 20 less 5 15 has. *
* if there is a backlog, unless voluntarily offered, it is advised that this land not be covered yet. Instead, give
priority to the completion of the backlog.
This example considers only the landowner's retention right but does not take into account the award to qualified
children.
The opinion of some that in the case of (a) in the example, only 16 hectares can be compulsorily acquired (40 less
24 has.) has been taken by DAR to have no legal basis. This has been clarified under Memorandum Circular No. 4,
Series of 1993.
CHAPTER 4
EXEMPTIONS AND EXCLUSIONS
4.1. EXCLUSIONS
What lands are not covered by CARP?
The following lands are not covered by CARP:
a. those which are not suitable for agriculture, and those which are classified as mineral,
forest, residential, commercial or industrial land;
b. those which have been classified and approved as non-agricultural prior to 15 June 1988
as ruled under Department of Justice Opinion No. 44, Series of 1990;
c. those which are exempt pursuant to Sec. 10, RA 6657;
d. those which are devoted to poultry, swine, or livestock raising as of June 15, 1988
pursuant to the Supreme Court ruling on Luz Farms vs. The Honorable Secretary of Agrarian
Reform (G.R. No. 86889, 4 December 1990); and
e. those which are retained by the landowner (not covered insofar as land acquisition and
distribution but covered with respect to other provisions, particularly leasehold).
4.1.1 POULTRY, LIVESTOCK AND SWINE RAISING
What was the basis of the Supreme Court in ruling that poultry, swine and livestock farms are not covered
by CARP?
The Supreme Court checked the intent of the framers of the Constitution and determined that poultry,
swine, and livestock farms are not included in the scope of the agrarian reform program constitutionally
mandated to be implemented.

Are all agricultural lands devoted to livestock, poultry and swine raising now automatically excluded from
CARP coverage?
No. To qualify for exclusion, the following requirements must be met:
1. The land or portions thereof must have been exclusively, directly and actually used for
livestock, poultry and swine raising as of 15 June 1988.
 2. The farm devoted to the above purposes must satisfy the animal/land ratio, as well as
animal/infrastructure ratio as provided for in Section III-B of Administrative Order No. 09, Series
of 1993 entitled "Rules and Regulations Governing the Exclusion of Agricultural Lands Used for
Livestock, Poultry and Swine Raising from the Coverage of CARP".
Can a landowner now convert his crop land to a poultry farm and then apply for exclusion from CARP?
No, as stated in AO 03-93, the land must already be devoted to livestock, poultry and swine raising as of
15 June 1988. Nevertheless, the landowner who wishes to convert his crop land for this purpose must apply for
conversion, the processing of which shall be governed by AO Nos. 1 and 2, Series of 1990. Among other
requirements, there should be:
1. the consent of agrarian reform beneficiaries and/or their waiver of rights; and,
2. certification from the Regional Director of the Department of Agriculture that the poultry,
livestock or swine project is of greater economic value than the present agricultural use.
Conversion of the crop land without the benefit of conversion approval will be construed as an intent to
avoid application of RA 6657 and shall be considered as invalid and illegal. The land will be covered under CARP
without prejudice to the filing of charges against the landowner.
Suppose a landowner has been granted exclusion from CARP for his landholding devoted to livestock raising
but subsequently, he/she stopped its operations and went into crop production, can the land still be subject to CARP?
Yes, the area or portion no longer used for livestock raising purpose shall automatically revert to the
category of agricultural land and shall be covered by CARP.
What are the procedures in applying for exclusion of a landholding devoted to livestock, poultry and swine
raising?
1. Landowner files the application for exclusion with the DAR Provincial Agrarian Reform
Office, together with the documentary requirements;
2. The PARO, with the assistance of the BARC, the MARO, the Municipal Livestock Inspector,
and a livestock/poultry and swine specialist of the DA shall conduct a field investigation, and
prepare report of findings and recommendations for submission to the Regional Director.
3. Regional Director undertakes final review and evaluation of the application and issues the
Order of Exclusion or Denial.
4.2 EXEMPTIONS
What lands are exempted from CARP coverage?
The following are exempted from the coverage of CARP:
a. 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, and government and private research and
quarantine centers; and
b. Lands with eighteen percent (18%) slope and over, except those already developed as of
15 June 1988. (Sec. 10, RA 6657)
What is the scope of the exemption that may be granted?
The exemption means that the subject parcel of land will not be acquired and distributed under the CARP
for as long as the reasons for the exemption continue to exist. However, the other components of the program,
e.g., leasehold and the Integrated Social Forestry Program may be implemented where applicable.
A state college claims that although part of its property is cultivated by farmers, that area cannot be
covered under CARP because it is reserved for the future expansion of the campus. Is that parcel exempted?
The area reserved for future expansion appears not to be actually and directly used for a campus.
Unfortunately, in the case of the Central Mindanao University vs. DARAB (CA-G.R. No. 19174 dated 23 August
1990), the Supreme Court ruled that the University has the prerogative to determine whether a particular part of
the school property is necessary for educational purposes. Therefore, in this case, that parcel is exempted.
 A landowner claims that his agricultural land is exempted because he has recently developed it into a pilot
production center for hybrid seeds. Is the landholding exempted?
No. The four conditions must have been all present as of 15 June 1988.

A landowner was granted exemption because his agricultural land was found to be a qualified private
research center for corn breeding. Subsequently, he gave up his breeding operations and went into commercial
production of feed grains. May the landholding be covered?
Yes. For the exemption to continue, the reason for which the exemption was granted must continue to
exist.
A parcel of land cultivated by farmers is found to be within a forest reserve. May it be immediately covered
by DAR under CARP?
No. Coverage while possible, will have to wait until Congress, taking into account ecological,
developmental and equity considerations, shall have determined by law the specific limits of the public domain.
Thereafter, a reclassification of the said areas as alienable and disposable land will also have to be done. (Sec.
4, RA 6657)
Why are lands with 18% slope and undeveloped exempt from CARP coverage?
The exemption is specifically mentioned in Section 10, RA 6657 and is based on the Forestry Code which
provides that such lands should not be disposed of and developed for agriculture because this type of land is
highly susceptible to soil erosion. The principle is debated in the light of cultural practices which could make the
preservation of the ecological balance in such areas feasible. However, until and unless the laws are changed, such
lands are not covered by CARP.

Since lands 18% slope or over if developed are not exempt from CARP, can DAR subject these lands to
acquisition and distribution?
Such lands can be allocated to qualified occupants but the manner of acquisition and distribution
depends on the following:
1. If classified as forest land, they shall be allocated by the DENR under the Integrated Social
Forestry Program;
2. If classified as alienable and disposable, they shall be allocated by DENR and DAR
pursuant to the provisions of the Public Land Act and the Joint DAR-DENR AO No. 2, Series of
1988; and
 3. If private agricultural land, then, they shall be acquired in accordance with the provisions
of RA 6657.
What Administrative Orders govern the exemption of lands from CARP?
1. DAR Administrative Order No. 10, Series of 1994, "Amending AO No. 13, Series of 1990
entitled Rules and Procedures Governing Exemption of Lands from CARP Coverage under
Section 10 of RA No. 6657, to Authorize all Regional Directors to Hear and Decide Applications
for Exemption for All Land Sizes"
2. DAR Administrative Order No. 06, Series of 1994, "Guidelines for the Issuance of
Exemption Clearances based on Sec. 3 (c) RA 6657 and the department of Justice (DOJ) Opinion
No. 44 Series of 1990"
4.3 PROCEDURES GOVERNING EXEMPTION OF LANDS UNDER SEC. 10,RA 6657
What are the procedures followed in securing exemption of lands under Sec. 10 ofRA 6657 from CARP
coverage?
The person/s or representative/s owning, administering or managing the landholdings may file for
exemption of the lands from CARP coverage at the Municipal Agrarian Reform Office.

1. The MARO shall prepare an Application for Land Exemption Folder (ALEF) which contains
the following documents:
* written application
* ownership documents and other muniments of title
* evidence to support application
* copy of proclamation, topographic map, sketch map, area development plan,
affidavit, certification from government agency, etc.
2. MARO conducts investigation of the land with the assistance of the BARC and prepares
report of findings and recommendations and forwards them together with the ALEF to the
Provincial Agrarian Reform Officer.
3. The PARO reviews and evaluates the ALEF and prepares comments, findings and
recommendations. If all documents are in order, forwards them to the Regional Director.
4. The RD reviews and evaluates the ALEF and the findings and recommendations of the
PARO and the MARO. If documents are in order, issues an Order of Approval or Order of Denial.
This applies to applications for exemption for all land sizes.
5. The RD forwards the Order to the PARO for distribution to the contending parties and
counsel, if any, copy furnished the Office of the Secretary, Undersecretary for Field Operations,
Legal Affairs Office and the Management Information Service within 15 days from the release of
the Order. The Order becomes final 15 days from receipt of the same, unless an appeal is made to
the DAR Secretary.
 6. In case of denial of the application, DAR shall cause the acquisition and distribution of the
property.
What is the recourse of a party who disagrees with the decision of the Regional Director?
Any party who disagrees with the RD's decision may file a written motion for reconsideration within 15
days from receipt of the Order. The RD shall then rule on the motion for reconsideration. Should the motion for
reconsideration be deemed, the aggrieved party could appeal to the DAR Secretary within the balance of the 15
day period. The Secretary shall render a decision within 30 days after receipt of the appeal.
4.4 PROCEDURES FOR ISSUANCE OF EXEMPTION CLEARANCE BASED ONDOJ OPINION NO. 44
What are the procedures for the issuance of exemption clearances based on DOJ Opinion No. 44?
1. The landowner or his duly authorized representative files the application for exemption
with the Regional Office of the DAR where the land is located. The application should be
accompanied by the following documents:
a. duly notarized Special Power of Attorney, if the applicant is not the landowner
himself;
b. certified true copies of the list of the land which is the subject of the application;
c. current tax declaration covering the property;
d. location or vicinity map;
e. certification from the Deputized Zoning Administration that the land has been
reclassified to residential, industrial or commercial use prior to 15 June 1988;
f. certification from the HLRB that the pertinent zoning ordinance has been
approved by the Board prior to 15 June 1988;
g. certification from the National Irrigation Administration that the land is not
covered by AO No. 20, Series of 1992, i.e., that the area is not irrigated, nor scheduled for
irrigation rehabilitation nor irrigable with firm funding commitment, and
h. proof of payment of disturbance compensation, if the area is presently being
occupied by farmers, or waiver/undertaking by the occupants that they will vacate the
area whenever required.
2. The Regional Office conducts joint investigation with the duly authorized representatives
of the DAR provincial and municipal offices that have jurisdiction over the property, and a report
prepared within thirty (30) days from the filing of completed application.
The joint investigation report shall contain information on:
a. presence of potential beneficiaries;
b. payment of disturbance compensation;
c. initial activities related to coverage;
d. certification from the MARO on whether or not the land has been placed under PD
27 or whether a CLOA or EP has been issued over said property.
3. The investigation report is submitted to the Regional Director who prepared the Order for
Denial or Grant of the Exemption Clearance not later than fifteen (15) days from the receipt of
the report. IaEScC
4. The exemption folder, together with the draft order is forwarded to the Legal Affairs Office
of the DAR Central Office which shall review the same and upon proper review forwards the
folder to the Office of the Secretary not later than fifteen (15) days from receipt of the folder.
5. The Secretary signs the Order for Denial or Grant and a copy of the order is furnished to
the Land Use Conversion Committee for purposes of monitoring and statistical information.
CHAPTER 5
LAND ACQUISITION
5.1 REQUISITES IN LAND ACQUISITION
What lands are acquired under CARP?
 Only the private lands devoted to or suitable for agriculture, regardless of the agricultural products
raised or can be raised therein, are subject of land acquisition. The lands of the public domain suitable for
agriculture already belong to the State and are just distributed through either Free Patents for Alienable and
Disposable (A&D) lands or Certificates of Land Ownership Awards (CLOAs) for resettlement sites. In addition,
stewardship contracts are awarded for public lands covered by the Integrated Social Forestry Program (ISFP).
It must be noted that the private agricultural lands include those owned by private entities and those
owned or held by government agencies, corporations, and instrumentalities.
Specifically, the following lands may be acquired under CARP:
a. rice and corn lands under PD 27/EO 228;
b. idle or abandoned lands;
c. lands foreclosed by private and government financial institutions;
d. private agricultural lands
e. public lands suitable for agriculture;
f. lands acquired by PCGG;
g. lands used by multinational corporations

What are the requisites in land acquisition?

The following requirements must be met for land acquisition to be completed:
a. That the land is privately owned and found suitable for agriculture;
b. That there are beneficiaries willing to take over the ownership of the land and make it
productive;
c. That the landowner is paid just compensation; or a trust deposit is made in his/her name if
the value is contested; and
d. That title to the land is transferred in the name of the Republic of the Philippines.
However, full payment of just compensation and transfer of title to the Republic of the Philippines are not
requisites in VLT/DPS. Moreover, under EO 407, the payment of just compensation to the government
instrumentality as landowner may come even after land distribution.
5.2 MODES OF ACQUISITION
What are the modes of acquiring lands for distribution under CARP?
Private agricultural lands covered by CARP are acquired through any of the following modes:
a. Compulsory Acquisition (CA);
b. Voluntary Offer to Sell (VOS);
c. Voluntary Land Transfer/Direct Payment Scheme (VLT/DPS);
 d. Operation Land Transfer (OLT) under PD 27 and EO 228; and
e. Executive Order No. 407, as amended by EO 448 and EO 506
What are the basic differences among these modes?
a. OLT is governed by PD 27 and EO 228 and has been in operation since 1972. It follows a
different set of procedures, particularly in land valuation.
b. Land acquisition under OLT and CA is done through the mandate of the law whether or
not the landowner disagrees to part with his property.
c. CA follows the schedule of CARP implementation based on the area of the landowner's
landholdings. In contrast VOS may be done even for lands not yet scheduled by law to be
acquired.
d. EO 407 as amended pertains only to government agencies as landowners in a propriety
capacity, or to public A & D lands under their administration by virtue of presidential
proclamation.
e. VLT/DPS, on the other hand, is a voluntary arrangement entered into by a landowner and
a qualified farmer-beneficiary to directly transfer the land to the beneficiary under terms and
conditions mutually agreed by them but with payment terms not less favorable to the farmer
than if it were the government purchasing the land and transferring it to the beneficiary.
5.2.1 COMPULSORY ACQUISITION
What are the existing administrative orders on compulsory acquisition of lands?

These Administrative Orders are:

a. Administrative Order No. 11, Series of 1994 Revising the Rules and Regulations
Covering the Valuation of Lands Voluntarily Offered or Compulsorily Acquired as Embodied in
Administrative Order No. 06, Series of 1992;
b. Administrative Order No. 01, Series of 1993 An Order Amending Certain Provisions of
Administrative Order No. 09, Series of 1990, entitled "Revised Rules Governing the Acquisition of
Agricultural Lands subject to Voluntary Offer to Sell and Compulsory Acquisition Pursuant to RA
6657"
[This AO supersedes AO No. 12, Series of 1989, AO No. 09, Series of 1990, and AO No. 10, Series of
1991]
c. Administrative Order No. 12, Series of 1990 Policy Guidelines and Operating
Procedures in the Identification and Acquisition of Idle and Abandoned Lands.
What lands are covered by compulsory acquisition?
Except in the case of tenanted rice and corn lands under PD 27, which are acquired following a different
set of rules, compulsory acquisition (CA) is done for all private agricultural lands which become due for coverage
following the phasing of implementation earlier discussed. However, CA is suspended in those cases where the
landowners opt for other modes of compliance, e.g., voluntary land transfer or stock distribution option. CA is
resumed once the negotiations in these other modes fail.
Compulsory acquisition is also done in idle and abandoned lands regardless of their size and phasing, and
in lands whose commercial farm deferment is revoked.
What are idle or abandoned lands?
Idle or abandoned lands refer to agricultural lands 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 government as provided under RA 6657. They do not, however, include the
following:
a. those that have become permanently or regularly devoted to non-agricultural purposes;
b. those that have 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. (Section 3, RA 6657)
Can the DAR compulsorily acquire a landholding whose ownership is under litigation or judicial
proceedings?
Yes, if it is clear that no matter what the outcome of the litigation may be, the land is still covered under
CARP. In such case, the DAR shall select the retained area and the compensation for the land shall be held in trust
pending the resolution of the disputes.
However, if one or both of the parties to the case are groups of individuals, the hectarage involved in the
possible exercise of the right of retention should be considered in the acquisition of the land.
However, in the case of PCGG/APT acquired assets whose ownership is contested in court, the DAR and
the PCGG have an understanding that a proper motion will be filed in court to allow DAR to acquire such property,
even pending litigation.
What if the person who is declared by the court as the lawful owner subsequently disagrees with the area
chosen by DAR for retention? What if he has exercised retention in another property?
The CLOA could be amended by the DAR or the landowner filing a petition with the DARAB. However, if
the landowner is no longer entitled to retention, then the area previously set aside for retention may also be
covered.
A couple owning only 30 hectares died in January 1988 leaving as heirs six children with ages ranging 25-
40. No partition of the property has been done and the children do not own other agricultural lands. How many
hectares may be compulsorily acquired?
None. Even if the title is still in the name of the couple, ownership automatically transferred to the
children upon their parent's death. The six children are already the owners. Thus, at five hectare retention per
landowner, the entire 30 hectares may be retained.
AO-01, Series of 1989 allows the registration of a deed of extra-judicial partition of the property of a
deceased who died prior to 15 June 1988.
Note, however, that if the parents died after 15 June 1988, the land may be entirely acquired and
distributed if the children are neither actual tillers or direct farm managers. If they are, they will each be entitled to
an award of three (3) hectares. Otherwise, they will only be entitled to the compensation for the land. But the land
will be acquired and distributed under CARP. Moreover, the DAR and the ROD will no longer allow the partition of
the property except in favor of the qualified farmer-beneficiaries. This is in line with the fact that as of 15 June
1988, by operation of the law, all lands in excess of the retention limit are already covered by CARP.
If in the course of CARP coverage, the owner alleges that the land is exempted under Sec. 10, RA 6657, what
should you do?
Exception under Section 10 of RA 6657 is not automatic. Under AO-13, Series of 1990, persons or
representatives of persons owning, administering or managing lands believed to be actually, directly and
exclusively used and are necessary for any of the purposes under Section 10 should file a written application with
DAR. This application should be approved by the Regional Director.
The MARO should, therefore, check if an application has been filed and if the application has been duly
approved. Otherwise, the MARO should treat the matter as a CARP protest and let the Regional Director rule on
the matter. (AO-09, series of 1994).
 If in the course of coverage, the owner alleges that the property is already reclassified as residential since
1986, what should you do?
The MARO should determine if the property is covered by DOJ Opinion No. 44and whether an application
for exemption has been filed by the landowner. He should also investigate the actual land use and whether the
land is irrigated, irrigable or is programmed for irrigation. He should also check the zoning plan or municipal/city
ordinance approved by the HLURB. Only if it is clear that the said landholding does not fall within any of the
above, should the MARO proceed with the acquisition of the property.
If in the course of coverage, the owner alleges that about one year before the notice of acquisition, he has
filed an application for conversion, what should you do?
The MARO should check the allegation, i.e., whether there really was an application for conversion filed a
year ago. If there is none, conversion is not possible because the notice of acquisition has already been issued. If
there is, the issue of conversion should first be resolved.
5.2.2 VOLUNTARY OFFER TO SELL (VOS)
What is the VOS scheme?
VOS is a scheme wherein landowners come forward and voluntarily offer their agricultural lands for
coverage regardless of the phasing. The DAR encourages this mode because VOS generally ensures the
cooperation of the landowners.

What are the existing policy guidelines governing VOS?

The implementing policy guidelines on VOS are:
a. Administrative Order No. 11, Series of 1994 Revising the Rules and Regulations
Covering the Valuation of Lands Voluntarily Offered or Compulsorily Acquired as Embodied in
Administrative Order No. 06 Series of 1992;
b. Administrative Order No. 01, Series of 1993 An Order Amending Certain Provisions of
Administrative Order No. 09, Series of 1990 Entitled "Revised Rules Governing the Acquisition of
Agricultural Lands Subject to Voluntary Offer to Sell and Compulsory Acquisition Pursuant to RA
6657";
[This AO supersedes AO No. 03, Series of 1989, AO No. 14-A and AO No. 19, Series of 1989, AO No. 09,
Series of 1990, and AO No. 10, Series of 1991]
c. Administrative Order No. 05, Series of 1992 Clarificatory Guidelines and Amendments to
AO No. 09, Series of 1990.
Where should the landowner file the application for VOS?
Application for VOS can be filed either at the Central Office, or at any field office of DAR. However, the
receiving office should forward the application to the MARO of the municipality where the land is located.
 What incentives are given to landowners who offer their lands under VOS?
The cash portion of the compensation to the landowner is increased by five percent (5%), while the LBP
bond portion is correspondingly decreased by five percent. However, this incentive is not available to banks and
other financial institutions.
It should be noted that the total compensation is not increased, only the proportion of the cash
component.
May an agricultural land which has been mortgaged also be voluntarily offered under CARP?
Yes. In this case, the MARO should secure a statement of account from the creditor and recommend the
settlement of the obligation through payment in LBP bonds.
Can government financial institutions voluntarily offer foreclosed but redeemable properties which are not
yet transferred to them?
No. The GFIs have to wait for the expiration of the redemption period.
Are landowners allowed to withdraw lands offered under the VOS scheme?
No. The exceptions are the instances provided in Administrative Order No. 05, Series of 1992, namely:
a. If the subject landholding is part of the landowner's retained area, provided the landowner
has not yet received any payment;
b. If the landowner wants to shift the mode of acquisition from VOS to VLT/DPS;
c. If the offered land is to be covered in 1994 and the landowner wants to wait for the
compulsory coverage under Phase III-B. If the Notice of Valuation has been served, however, the
withdrawal may no longer be allowed.
d. If the DAR determines the landholding to be more suitable for a town site, resettlement or
institutional site to address a calamity situation. It should be noted that this case is limited to
calamity situations. Further, the approval of the withdrawal of the VOS does not automatically
authorize the land use conversion of the land. The owner must still apply for conversion.
What are the instances in which the DAR may reject a VOS application?
The DAR may reject a voluntary offer to sell in the following instances:
a. If the land is not suitable for agriculture, or has more than 18% slope and is
underdeveloped;
b. If there are no takers or beneficiaries of the land for valid reasons (e.g., peace and order
situation) without prejudice to future coverage of the area under CARP; and
c. If the only identified agrarian reform beneficiaries (ARBs) are the qualified children of the
landowner.
5.2.3 VOLUNTARY LAND TRANSFER/DIRECT PAYMENT SCHEME (VLT/DPS)
What is the VLT/DPS mode?
VLT/DPS is a scheme wherein a landowner of an agricultural land covered by CARP and the qualified
beneficiaries of such land agree to the direct transfer of the ownership of the land, as provided for under Sections
20 and 21 of RA 6657. The area to be transferred should not, however, be less than the area which the
government through compulsory acquisition would otherwise acquire. Administrative Order No. 13, Series of
1991, embodies the rules and procedures governing VLT/DPS.

May a landowner unilaterally decide to distribute his land through the VLT/DPS scheme?
No. An agreement between the landowner and the qualified ARBs as approved by the DAR is necessary.
What is the basic requirement in VLT/DPS?
It is imperative that the ARBs give their informed consent to the landowner's VLT/DPS proposal.
Specifically, this means that the ARBs should be made aware of their rights and options under the law,
particularly, the terms and conditions of land transfer under the "regular" compulsory acquisition mode.
 Among others, the field implementor (Municipal Agrarian Reform Officer or Agrarian Reform Program
Technologist MARO or SARPT/ARPT) must explain to the ARBs: (1) that the land will sooner or later be
acquired under CA subject to the phasing; and (2) about how much they will have to pay under the CA mode.
VLT/DPS is a scheme favorable to the Government for two reasons. First, Government does not have to
pay for the land. Second, the agreement between the two parties facilitates land acquisition and distribution. The
DAR, however, ought to ensure that the beneficiaries know what they are entering into and that terms and
conditions of the VLT/DPS are not disadvantageous to the ARBs.
Who are the qualified beneficiaries under VLT/DPS?
The qualified beneficiaries are the same as those who would be beneficiaries if the land were to be
covered under compulsory acquisition or voluntary offer to sell. (See Sec. 22, RA 6657).
What is the prescribed period for the completion of VLT/DPS negotiations?
Negotiations for VLT/DPS between the landowner and the beneficiaries must be completed and the
agreement arrived at must be submitted within one (1) year from the time the DAR receives the notice of
application for VLT/DPS.
What if negotiations for VLT/DPS are not resolved after one year?
If VLT/DPS negotiations remain unresolved after one year, the land shall be covered under compulsory
acquisition.
When should the transfer of possession and land ownership of the land be done?
The transfer of possession and ownership should be done immediately after the submitted VLT/DPS
agreement is approved by the DAR. Certificates of Land Ownership Award (CLOA) with the proper annotations to
protect the landowner shall be issued to the beneficiaries.
May an agricultural land mortgaged to a bank be the subject of a VLT/DPS?
No. Land titles with existing liens and encumbrances shall not be covered under the VLT/DPS scheme.
This is a ruling made by DAR to simplify VLT/DPS transactions, particularly to facilitate the immediate transfer of
title to the ARBs.
5.3 EXECUTIVE ORDER NO. 407 AS AMENDED
What is the significance of EO 407?
Executive Order No. 407 dated 14 June 1990, entitled "Accelerating the Acquisition and Distribution of
Agricultural Lands, Pasture Lands, Fishponds, Agro-Forestry Lands and Other Lands of the Public Domain Suitable
for Agriculture" directs all government instrumentalities, including government financial institutions (GFIs) and
government-owned or controlled corporations (GOCCs) to immediately transfer to DAR all their landholdings
suitable for agriculture for immediate distribution to qualified beneficiaries under CARP.
EO 407 is a concrete act of the Government to divest itself of its agricultural landholdings as an example
for private landowners to follow. Moreover, inasmuch as the landowners involved are also Government
agencies, EO 407 has facilitated the acquisition by the DAR of thousands of hectares of agricultural lands for
distribution under CARP.
What lands may be acquired for distribution pursuant to EO 407 as amended byEO 448 Series of
1991 and EO 506 Series of 1992?
EO 407 covers the following:
* all agricultural lands owned or controlled by government departments, agencies or
instrumentalities, including lands foreclosed by government financing institutions;
* lands covered by cancelled or expired Timber License Agreements (TLAs) and Pasture
Lease Agreements (PLAs) for redistribution by the DENR, in coordination with the DAR, to
qualified ARBs identified by the DAR; and
* lands covered by cancelled or expired Fishpond Lease Agreements (FLAs) for
redistribution by the Department of Agriculture (DA), in coordination with the DAR to qualified
ARBs identified by the DAR.
EO 448 included within the coverage of EO 407 all reservations or portions thereof, which are suitable
for agriculture and are no longer needed for the purpose for which they were established.
EO 506, however, further amended EO 407 to exclude:
 * all existing and proposed national parks, game refuge, bird sanctuaries wildlife reserves,
wilderness areas and other protected areas, including old growth or virgin forests and all forests
above 1,000 meters elevation or above 50 percent slope until such time that they are segregated for
agricultural purposes or retained under the National Integrated Protected Areas System (NIPAS) of
DENR.
5.4 PROCEDURES IN LAND ACQUISITION
What are the basic steps in land acquisition?

a. Identification and documentation of the landholdings, landowners and beneficiaries;

b. Land survey;
c. Review and completion of data/documents;
d. Land valuation and compensation; and
e. Transfer of title from the landowner to the Republic of the Philippines.
What are the changes in procedures for land acquisition contained in AO-01, Series of 1993?
a. The number of steps has been reduced by transferring from the DAR Regional Office to the
Provincial Office the review and completion of documents before submission of the claim folder
to the Land Bank of the Philippines.
b. The conduct of the field investigation can proceed even if the LBP representative is
unavailable. This was made possible by dividing the Field Investigation Report into two parts.
Part I contains data on the landholding and its suitability to agriculture. Part II, on the other
hand, provides data inputs for the determination of the land valuation. Part I can be
accomplished even without the presence of the LBP representative although the data are subject
to review by LBP.
c. The conduct of public hearing was deleted. In lieu thereof, the Notice of Coverage, Field
Investigation Report and the Notice of Land Acquisition and Valuation shall be posted for a
period of one week on the bulletin boards of the barangay/municipal/provincial halls where the
property is located.
d. CARP forms were simplified and reduced in number.
e. The acquisition process has been facilitated by requiring the LBP to immediately open a
trust account in the name of the landowner, whether the landowner accepts or rejects the land
valuation. Actual release, however, shall be effected only after the landowner's compliance of all
the requirements.
What is the first step in land acquisition?
Land acquisition, regardless of the mode, begins with the identification of landowners, landholdings and
beneficiaries covered by CARP.
Under the Land Acquisition and Distribution Tracking System (LADTRACKS) and the CARP Scope
Validation project, field offices have been tasked to prepare a master list or inventory of landholdings in their area
of coverage. This inventory is derived from the LISTASAKA statements, as verified or complemented by the
records of the Register of Deeds and Assessor's Offices, review of the municipal town plan and zoning ordinances,
field surveys, interview and community consultations, and general knowledge of the land ownership pattern in
the barangays or municipalities.
With these basic tools, the landowners who own agricultural lands in excess of the retention limit may be
easily determined and their lands classified according to the implementation phase or order of priority of CARP.
5.5 PRIORITIZATION OF LANDS FOR COVERAGE
What are the criteria for prioritizing the coverage of landholdings in the master list?
Quality land distribution cannot be overemphasized. More than just meeting the targets, land distribution
should be done with the end in mind of uplifting the farmer beneficiaries' living condition. Priority should,
therefore, be given to areas where success of beneficiaries development is paramount. The following should be
the basic considerations in the prioritization of covered areas:
a. Barangays covered by identified ARCs;
b. Level of organization of the farmers Consistent with the people-centered development
thrust of the DAR, the higher the level of organization of farmers, the greater should be the
priority. This will not only facilitate the land acquisition and distribution process but also hasten
the development of viable agrarian reform communities in the area;
c. Incidence of agrarian unrest The greater the incidence of unrest, the higher should be
the priority to promote the resolution of the agrarian disputes. Utmost care should however, be
made to ensure that the landholding is indeed covered by CARP;
d. Number of farmers to be benefitted The higher the number, the greater should be the
priority, again in line with people-centered development;
e. Size of the landholding Inasmuch as nearly the same efforts will have to be expended
for either big or small landholdings, it makes sense to put higher priority on the larger
landholding;
f. Presence of support factors Areas with cooperative landowners, supportive community
leaders and local government executives, active BARCs and POs/NGOs, etc. should receive higher
priority because it is in these areas where agrarian reform implementation will have greater
chances of success;
g. Presence of a title over the property Titled properties are easier to acquire because, as
it is the norm under our Torren's Title System, the title is the strongest proof of the land
ownership. Untitled properties require much more difficult documentation to ensure that the
land actually exists and that the current landowner is being addressed. Thus, all other
considerations being equal, titled properties should receive higher priority.
5.6 RECONSTITUTION OF TITLE
What can be done in case the original title of the land got lost or was destroyed due to fire, flood or force
majeure in the register of deeds?
In general, lost or destroyed original copies of certificates of title are reconstituted through judicial
proceedings pursuant to Section 110 of the Property Registration Decree (PD No. 1529). The procedure is
prescribed in Republic Act No. 26 and implemented in LRA Circular No. 35 dated 13 June 1983.
However, RA 6732 as implemented by LRA Circular No. 13 dated 26 July 1989, allows for administrative
reconstitution when the original copies of the certificates of title in the Office of the Register of Deeds are
destroyed due to fire, flood, or other force majeure as determined by the LRA administrator, where the destroyed
records constitute at least ten percent (10%) of the total number of titles but in no case shall these be less than
500. Thus, administrative reconstitution is allowed in Batangas City, Malolos, Bulacan, and in the provinces of
Eastern Samar, Camarines Sur, Isabela, and Oriental Mindoro where the Offices of the Register of Deeds were
destroyed by fire.
The law also covers administrative reconstitution of copies of original certificates of title destroyed by
fire, flood or other force majeure which occurred fifteen years before its effectivity in 1989.
What if it is the owner's duplicate copy which is lost while the original is still on file?
Then a petition for the issuance of a new owner's duplicate copy shall be filed with the Regional Trial
Court. (Sec. 109, PD 1529)
Who should file the petition for reconstitution of title?
 LRA Circular No. 35, Series of 1983 provides that the landowner or an interested party should file a
petition for reconstitution with the Clerk of Court of the Regional Trial Court having jurisdiction of said property,
in case of judicial reconstitution; or with the Register of Deeds concerned, in the case of administrative
reconstitution.
However, in order not to delay acquisition and distribution, the DAR issuedMemorandum Circular No. 05,
Series of 1994 which provides that the duly authorized DAR lawyer can file the petition in the Regional Trial
Court in case of judicial reconstitution, or with the Register of Deeds concerned in case of administrative
reconstitution, provided that a Notice of Coverage has already been issued covering the property. However, the
DAR shall endeavor to secure a written permission from the registered owner/s of lost or destroyed titles.
What are the procedures for judicial reconstitution?
1. The petition is filed with the Clerk of Court of the Regional Trial Court which has
jurisdiction over the property. Such petition is accompanied by a plan and technical description
of the subject land, and a certification from the ROD that the original copy of the title was
burned, lost, mutilated, etc. Photocopies of the Notice of Coverage shall also be submitted if the
DAR is the petitioner.
2. The Office of the Solicitor General, Office of the Prosecutor for the City or Province, DENR-
LMB, LRA, and ROD concerned are furnished with copies of the petition.
3. Publication (twice) in the Official Gazette and posting in the bulletin boards of the
respective municipality of the notice of initial hearing. Adjoining owners and interested parties
are also furnished copies of the notice.
4. Processing in the Land Registration Authority.
5. Court proceedings and court decision.
6. Surrender of the owner's duplicate Certificate of Title to the ROD.
7. Reconstitution proper of a new Original and Owner's Duplicate Certificate of Title by the
ROD.
What are the procedures for administrative reconstitution?
1. The petition accompanied by three (3) photocopies of the owner's authenticated duplicate
certificate of title; latest tax declaration and Notice of Coverage (if DAR is the petitioner) and an
affidavit regarding circumstances of the property are filed with the ROD concerned;
2. Publication and posting requirements;
3. Processing by the Reconstituting Officer designated by the LRA Administrator;
4. Issuance of Order to Reconstitute by the Reconstituting Officer;
5. Review by the LRA Administrator of the Order of Reconstitution and affirmation thereof, if
proper;
6. Surrender of the Owner's or Co-Owner's duplicate Certificate of Title to the ROD; and
7. Issuance of reconstituted title and delivery of owner's or co-owner's duplicate Certificate
of Title by the ROD concerned to the landowners or to DAR.
Who will shoulder the cost of the reconstitution proceedings?
Administrative reconstitution normally does not cost anything, except for incidental costs like
photocopies. However, judicial reconstitution requires publication which could be substantial (around P1,500 at
1993 prices). If the petition was filed by DAR, then it shall shoulder this cost chargeable against CARP funds.
Otherwise, it will have to be borne by the farmer-beneficiary or the cooperative or farmers association.
5.7 UNTITLED PRIVATE PROPERTIES
Can untitled private properties be placed under CARP?
DAR's petition on the issue of placing untitled or unregistered private agricultural lands under CARP is
that if there is no adverse claimant over the subject landholding (e.g., there is no court case), then submission of
documentary and/or testimonial evidence shall be conclusive proof of ownership. The landholding may be
acquired under CARP and the landowner entitled to payment in accordance with pertinent laws and DAR rules
and regulations as resolved under DOJ Opinion No. 176, Series of 1992.
 What if there are two or more claimants and there is a pending court case, to whom shall payment be made?
If there are two or more claimants and there is a pending court case, coverage of the land under CARP
should proceed and the processing of claim folder should continue without interruption. But payment of said
property shall only be effected to the claimant who has been declared by the Court as the lawful owner.
What safeguards have been instituted to ensure that untitled and unregistered private agricultural lands
being covered by the program are properly supported by adequate documents?
Under Administrative Order No. 01, Series of 1993, seven items are listed as documentary requirements
for processing claim folders of untitled properties. These are:
1. Survey plan of the property duly approved by the Land Management Bureau, and if not
available, a sketch plan certified to by said office, and technical description thereof;
2. Certified copy of the present Tax Declaration in the name of claimant with correct lot
number/s and area per approved plan;
3. Instruments of acquisition covering the subject property, such as Deed of Sale, Donation,
Transfer, etc. in favor of claimant and those of his/her predecessor/s interest;
4. Certification of the Assessor concerned showing the Tax Declaration issued, the
declarant/s, the area covered, and the basis for the issuances and cancellations thereof
pertaining to the property/ies from the first declaration up to the tax declaration issued in the
name of the claimant;
5. Certification from the Clerk of Court concerned whether or not the property/ies identified
in the plan is/are covered by land registration proceedings or civil case, and if the same is used
as bond or bail in other court actions;
6. Certificates of the DENR-LMS stating the year the property/ies identified in the plan may
already be considered as private agricultural land, and the persons having the best claim of
ownership thereof; and
7. Certification from the Office of the Register of Deeds and Assessor concerned to the effect
that as per their records, the property/ies as appearing in the approved survey plan is/are free
from all liens and encumbrances.
5.8 FIELD INVESTIGATION

How will the landowner know that his or her land is being covered by CARP?
A landowner who has been identified should be notified by the MARO that his or her landholding is now
covered by issuing a Notice of Coverage personally delivered or sent by registered mail. In that Notice, the
landowner is also informed of his or her right to select the retained area and of the field investigation which will
be conducted on the landholding.
A copy of the Notice shall also be posted for at least one week on the bulletin board of the municipal and
barangay halls where the land is located.
After identifying and documenting the ownership of the land, what must be done next?
The suitability of the land covered under CARP should next be established. This is done primarily by
undertaking the field investigation of the property to ascertain its suitability, productivity, and tenurial
characteristics.
Who are involved in the field investigation?
 Aside from the MARO or ARPT and the landowner concerned, representatives from the Department of
Environment and Natural Resources (DENR), Department of Agriculture (DA) and Land Bank of the Philippines
(LBP), as well as the BARC and prospective agrarian reform beneficiaries should be invited to participate in the
conduct of the field investigation.
What if the invited representatives are not available?
The field investigation can proceed provided they were given due notice of the time and date of the
investigation to be conducted, i.e., they were sent copies of Notice of Conduct of Field Investigation. If it is the LBP
representative who is not available, the DAR field implementor(s), together with the other parties shall conduct
the field investigation and accomplish Part I of the Field Investigation Report. Such report shall be forwarded to
the LBP representative for validation.
What if there is a difference in the findings of the DAR and the LBP?
In the event that there is a difference or variance in the findings of the DAR and the LBP as to the
propriety of coverings the land under CARP, whether in whole or in part, on the issue of suitability to agriculture,
degree of development or slope, and on the issue affecting idle lands, the conflict shall be resolved by a composite
team composed of DAR, DA, DENR, and LBP representatives which shall jointly conduct further investigation
thereon. The team shall submit its written report of findings within five days from the conclusion of the
inspection. Such findings shall be binding to both DAR and LBP pursuant to the Joint Memorandum Circular of the
DAR, LBP, DENR, and DA dated 27 January 1992. If the issue involved is on the suitability to agriculture and its
development, the chairperson shall be the DA representative. If it is on the percentage slope, the DENR
representative shall be the chairperson of the team.
Why must the BARC and prospective ARBs be involved in the field investigation?
It is important to involve not only the other concerned CARP implementing agencies but also the BARC
and the prospective beneficiaries because the people from the locality have a wealth of information on the
physical, agricultural and tenurial characteristics of the land. It is also wise to involve them from the beginning to
generate their support and encourage their crucial participation in the development process.
CHAPTER 6
AGRARIAN REFORM BENEFICIARIES
6.1 QUALIFICATIONS OF BENEFICIARIES

What are the qualifications of an agrarian reform beneficiary?

To be an agrarian reform beneficiary, one must:
a. be landless;
b. be at least 15 years old or head of the family at the time the property was transferred in
the name of the Republic of the Philippines; and
c. have the willingness, ability and aptitude to cultivate the land and make it as productive as
possible. (Section 23, Republic Act No. 6657)
Items (b) and (c) above are meant to ensure that the recipients of the land will judiciously use it and
make it a productive agricultural land.
 What is the definition of landless?
A landless person is defined by Section 25, RA 6657 as one who owns less than three (3) hectares of
agricultural land. Section 7, RA 6657 also provides that an owner-tiller may still be a beneficiary of another land
he or 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 hectares.
Thus, a tenant who owns one hectare of agricultural land may still qualify as a beneficiary for two
hectares of land.
Who are disqualified from becoming beneficiaries?
a. Those who fail to meet the qualifications as provided for under Section 22 of RA 6657.
b. Beneficiaries who have culpably sold, disposed or abandoned their lands.
c. Beneficiaries whose lands have been foreclosed by the LBP or repossessed by the
landowner (in the case of VLT/DPS) for non-payment of an aggregate of three annual
amortizations.
d. Beneficiaries who have converted their land to non-agricultural use without prior
approval by DAR.
6.2 ORDER OF PRIORITY
What is the order of priority among the possible beneficiaries?
Section 22 of RA 6657 provides that lands covered by 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.
The order of priority then starts with:
a. Qualified children. The qualified children of the landowner are the first group entitled to be
beneficiaries of the land. They are entitled to receive three hectares each.
b. Tenants and Lessees. The next group is composed of the agricultural lessees and share
tenants. These farmers are entitled to receive the area of their tillage but not to exceed three (3)
hectares, he or she may be awarded an additional area representing the difference, subject to the
availability of land.
c. The order of priority then goes down as follows:
* regular farmworkers;
* seasonal farmworkers;
* other farmworkers;
* actual tillers or occupants of public lands;
* collectives or cooperatives of the beneficiaries; and
* others directly working on the land.
Given such order of priority, must all farmers in a class be allocated three hectares each before anyone in the
next class can be identified as also a beneficiary of the land? For example, all regular farmworkers must first be
allocated three hectares before any seasonal farmworker can be identified?
Strictly speaking, that would be a correct interpretation.
The CARP, however, seeks to help as many farmers as possible and make them beneficiaries of the
program. Thus, a more liberal interpretation is often better, provided the economic viability of the award is not
sacrificed. In this regard, a series of mediation conferences among the possible beneficiaries may be conducted to
allow the participatory determination of how many beneficiaries there ought to be and what each beneficiary will
receive.
6.3 FARMWORKER BENEFICIARIES
Who is considered a farmworker?
Farmworker is defined as a natural person who renders service for value as an employee or laborer in an
agricultural enterprise or farm regardless of whether his/her compensation is paid on a daily, weekly, monthly
or "pakyaw" basis.
 What are the different categories of farmworkers?
Regular farmworker is a natural person who is employed on a permanent basis by an agricultural
enterprise or farm.
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.
Other farmworker is a farmworker who is neither a regular nor a seasonal farmworker. Example is a
farmworker who does several farm activities but is not paid for his/her labor.
Technical farmworker is a natural person employed by an agricultural enterprise or farm, who is highly
educated and trained and performs functions in scientific, engineering, medical, teaching and other fields, but
who is not vested with managerial or supervisory functions (e.g., chemists, agronomists, veterinarians, soil
analysts).
Managerial or Supervisory farmworker is a natural person who is employed by an agricultural enterprise
or farm vested with powers or prerogatives: (1) to lay down and execute management policies; (2) to hire,
transfer, suspend, layoff, recall, discharge, assign or discipline employees; and/or (3) to effectively recommend
such managerial actions.
Who among these farmworkers can qualify as beneficiaries?
They are those found to be directly working on the land, whether as regular, seasonal or other
farmworkers at the time the field implementors conduct actual investigation and documentation. However, other
workers (such as technical farmworkers) who are directly employed by the agri-business enterprise or
corporation, except those holding managerial or supervisory positions may be considered as beneficiaries
provided they meet the basic qualifications in Section 22, RA 6657.
Even a farmworkers who has ceased to work as a result of pending agrarian or labor dispute but is
willing to be an awardee of the agricultural land may be considered a beneficiary provided he/she has filed an
appeal for reinstatement and has not yet obtained a substantially equivalent and regular farm employment. (AO-
02, Series of 1993).
What if a farmworker who has already been identified as qualified beneficiary gets promoted to managerial
or supervisory position prior to land transfer?
The farmworker may still qualify as awardee of the land provided he/she gives up the managerial or
supervisory position. (AO-02, Series of 1993)
What is meant by an agrarian or labor dispute?
It refers to any controversy relating to tenurial arrangements, whether leasehold, tenancy, stewardship,
or otherwise, over land devoted to agriculture, including disputes concerning farmworkers, associations or
representation of persons in negotiation, fixing, maintaining, changing or seeking to arrange terms and conditions
of such tenurial arrangements.
It also includes controversy relating to compensation of lands acquired under RA 6657 and other terms
and conditions of transfer of ownership from landowners to farmworkers, tenants and other ARBs, whether the
disputants stand in proximate relation of farm operator and beneficiary, landowner and tenant, or lessor and
lessee.
Can farmworkers who are husband and wife each receive three hectares?
 Yes, they may be entitled to three hectares each provided that their vested rights to the land have been
duly established, in which case, they shall be issued separate CLOAs. (AO-02, Series of 1993)
6.4 SCREENING OF BENEFICIARIES
Is it the landowner who selects the beneficiaries of his/her landholding?
No. The landowner does not have the right to select who the beneficiaries should be. Except in the case of
Voluntary Land Transfer or Direct Payment Scheme, land acquisition and distribution involves two separate
transactions. First, the government buys the land from the landowner and then sells it to the farmer-beneficiaries. It
is not the landowner, therefore, who is selling the landholding to the farmer-beneficiaries.
It is the Municipal Agrarian Reform Officer (or the Agrarian Reform Program Technologist), together with
the BARC who screens the beneficiaries.
Even in the case of VLT/DPS, the landowner cannot just select a beneficiary. The beneficiary must qualify
and it is still the MARO and the BARC who will do the screening.
What is the recourse of farmers who claim they have a priority over those who have been identified by the
MARO as the beneficiaries of the land?
The farmers can file a protest with the MARO or the PARO who is currently processing the claim folder.
Once a written protest is filed, the MARO or PARO shall comment on the said protest and submit the same to the
Regional Director who shall rule on the protest. If the parties disagree with the RD's decision, they can file a
written motion for reconsideration. If the motion is denied, the farmers can file an appeal to the DAR Secretary.
(AO-09, Series of 1994)
What can be done in case the tenants or tillers refuse to be interviewed and identified as beneficiaries?
The MARO and the BARC should advise the potential ARBs about the consequences of their refusal. If
they still refuse, the MARO and BARC should execute a certification to this effect and post it in conspicuous places
for 30 days. Thereafter, new ARBs may be instituted. The MARO should, however, exercise great care under this
situation. Refusal to be identified as beneficiaries can be due to several reasons, such as lack of assurance of
support services which used to be provided by the landowner, fear of the landowner especially if the farmers are
unorganized. That is why, MAROs should not overlook the importance of social preparation activities prior to
land distribution.
What can be done in case the occupants of an idle and abandoned agricultural land are found to have
prematurely entered the landholding?
Premature entry is strongly discouraged. Should it happen, however, the first consideration should be
whether the occupants are the qualified beneficiaries of the land, or some other persons have superior rights to
receive the land. In the latter case, the occupants should be ejected from the land and disqualified to be
beneficiaries thereof.
The second consideration is whether or not the landowner consents or has no objections to the
occupancy and under what terms and conditions. The landowner and the occupants may agree on a lease
arrangement in the meantime that acquisition of the land under CARP has not been completed.
On the other hand, what can be done if no one is willing to be a beneficiary of the land?
The DAR cannot yet acquire the agricultural land if it has no takers. The DAR must distribute all lands it
acquires and is not in the business of warehousing land. What can be done is note such lands with no takers and
offer it to those who may later on be interested or those who could not be accommodated in the distribution of
other areas.
What can be done if FBs have been erroneously identified but still their names have been entered and
registered in the CLOAs?
If the CLOA is already registered with the ROD, then an appropriate exclusion proceeding could be filed
with the DARAB. (AO-02, Series of 1994)
CHAPTER 7
LANDOWNERS' RETENTION AND AWARD TO CHILDREN
7.1 RETENTION LIMIT
What is the retention right of landowners under the CARP?
 No less than the Constitution grants landowners the right to retain a portion of their lands covered by
agrarian reform. Under the CARP, this retention right is limited to a maximum of five hectares per landowner. The
only exceptions are as follows:
a. Landowners whose lands have been covered by PD 27 are allowed to keep the area they
originally retained thereunder. Thus, if a landowner retained seven hectares under OLT, he/she
is allowed under CARP to keep the said area.
b. Original homestead grantees or their direct compulsory heirs who still own the original
homestead as of 15 June 1988 are allowed to retain the same areas as long as they continue to
cultivate the same homestead. Thus, a landowner may, for example, continue to keep his/her 12-
hectare homestead.
7.2 LAND OWNERSHIP CEILING
What is the land ownership ceiling?
The land ownership ceiling is likewise five hectares. A person who does not own agricultural land may
not buy more than five hectares. A person who already owns two hectares of agricultural land may buy only up to
three hectares more. This is in line with the State's objective of controlling and democratizing the ownership of
land as a natural resource.
7.3 QUALIFICATIONS FOR THE EXERCISE OF THE RIGHT OF RETENTION
Who may apply for retention?
All owners of private agricultural lands with a total area of more than five hectares, except those who
have already been granted full retention (7 hectares) under PD 27.
May a corporation also retain five hectares?
Yes. The law grants both natural and juridical persons the right of retention. Note that juridical persons
include corporations, partnerships, cooperatives, or other bodies with separate legal personality.
Note also that a corporation is a person separate and distinct from its stockholders and incorporators.
Thus, a corporation may retain only five hectares and not five hectares for each incorporator.
Are co-owners allowed to retain five hectares only?
Persons owning an agricultural land under a co-ownership may retain five hectares each. This is because
the co-owners remain as separate persons each entitled to retain five hectares.
Thus, in the earlier case of a 30-hectare property owned by a couple who died before 15 June 1988, the
six children were the co-owners of the land upon the effectivity of RA 6657. Even if the title has not been
transferred to their names, the six children are entitled to retain the 30 hectares at five hectares each.
A married couple claims that as husband/wife they are entitled to five hectares each. Should the claim be
granted?
It depends.
The criterion is the property relations between the husband and wife. If the property relations are
governed by the system of complete separation of property as evidenced by a valid ante nuptial marriage
settlement then the spouses are separate landowners and may, therefore, retain five hectares each from their
respective properties.
The spouses should submit evidence that they are entitled to retain more than five hectares. On the part
of the DAR, it is important to note the date of the marriage. If the marriage was solemnized before 03 August
1988, then it is governed by the Civil Code. In the absence of an agreement for the separation of property, spouses
who own only conjugal properties may retain a total of not more than five hectares from such properties.
However, if either or both of them are landowners in their own respective rights (whether capital or
paraphernal), they may retain not more than five hectares each from their respective landholdings.
On the other hand, if the marriage was contracted on or after 03 August 1988, or under the New Family
Code, a husband owning capital property and/or a wife owning paraphernal property may retain five hectares
each, if they executed a judicial separation of properties prior to the marriage. In the absence of such
contract/agreement, all properties, whether capital, paraphernal, and conjugal shall be considered to be held in
absolute community, i.e., the ownership relationship is one. Therefore, only a total of five hectares may be
retained. (AO-11, Series of 1990)
In no case, however, shall the total retention of the couple exceed ten hectares.
7.4 AWARD TO LANDOWNERS' CHILDREN
Is the award to children part of the landowner's retention?
No. The landowner is entitled to retain only five hectares. Any award to the qualified children is a result
of the children being qualified beneficiaries of the program.

Is the award to children automatic?

No. The law only grants the children a preferential right to be awarded the land of their parents. They
must still qualify as beneficiaries.
What qualifications must the child of a landowner meet in order to qualify for a three-hectare award?
To qualify, the child of a landowner must be:
a. At least fifteen years old as of 15 June 1988, the effectivity of RA 6657; and
b. Actually tilling the land or directly managing the farm from 15 June 1988 up to the time of
land acquisition.
What is the meaning of the phrase "directly managing the farm"?
"Directly managing" refers to the cultivation of the land through personal supervision under the system
of labor administration. (DAR Memo Circular No. 04-1994) It should be interpreted along the lines of farm
management as an actual major activity being performed by the landowner's child from which he or she derives
income. Farm management should likewise be the child's primary occupation.

If the land is tenanted, can a landowner's child qualify for an award on the basis of a claim that he is directly
managing the farm?
As of 15 June 1988, tenants on the land should have become lessees. As lessees, they have the obligation
to pay the lease rental but they have the right to directly manage the land. The child cannot, therefore, claim that
he is managing the land. Hence, he cannot qualify for an award.
What if the child meets the qualifications above but already owns ten hectares?Must he or she still be
awarded three hectares?
 As earlier said, the child is to be awarded land not because he or she is a child of the landowner but
because he or she is a qualified beneficiary. (However, the preferencecomes from his or her being a child of the
landowner.) Therefore, in addition to the qualifications above, the child must meet all other requirements to be a
beneficiary. Not being landless, he or she does not qualify for an award.
If a landowner's child qualifies as preferred beneficiary, will Land Bank pay the landowner for the area to be
awarded to the child? In turn, will the child amortize the property?
No, the rules on landowner's compensation and amortization by beneficiaries will not apply, except if the
child awardee is a tenant in his/her own right. In which case, the Land Bank will finance the acquisition. However,
tenancy between the landowner and the child must have already been established prior to 15 June 1988. (Memo
Circular No. 04, Series of 1994)
7.5 SELECTION OF RETAINED AREA
What are the criteria in the selection of the retained area?
The area chosen for retention should be compact and contiguous. It should also be least prejudicial to the
entire landholding and the majority of the farmers thereon. (Sec. 6, RA 6657 and AO 11, Series of 1990)
Can a landowner who owns properties in different locations choose separate areas totaling five hectares
from among the said properties?
No. The law provides that the area to be retained should be compact and contiguous.
7.6 PROCEDURES FOR THE EXERCISE OF THE RIGHT OF RETENTION AND AWARD TO QUALIFIED CHILDREN
Where should the landowner file the application for retention and award to qualified children?
The landowner should file the application using DAR's Retention Form No. 1 in any DAR office, whether
at the Central, Regional, Provincial or Municipal Office. If filed in an office other than the MARO where the
landholding is located, the receiving office should forward the application to the MARO concerned.
What are the requirements in applying for retention or award to children?
The landowner should execute an affidavit as to the total area of his/her landholding. If applying for
award to qualified children, the landowner should submit a list of his/her children who were at least fifteen (15)
years old as of 15 June 1988 and who have been actually cultivating or directly managing the farm.
What happens after the MARO receives the application for retention or award?
The MARO, with the assistance of the BARC shall conduct a field verification and investigation to:
1. determine total landholding in relation to the retention and award applied for;
2. in the case of homestead, to determine whether the original homestead grantee or the
direct compulsory heirs still own and actually cultivate the homestead;
3. determine qualifications of the applicants and their children applying for retention and/or
award; and
4. identify affected tenants and determine whether they opt to become lessees in the
retained area or to become land transfer beneficiaries in another landholding.
The MARO then prepares the Retention Folder containing the documentation of the field investigation
and the findings and recommendations. The folder is then submitted to the PARO for review.
Who approves the application?
The Regional Director approves or disapproves the application after reviewing and evaluating the report
and recommendations submitted by the Provincial Agrarian Reform Officer (PARO).
What happens after the Regional Director has approved the application for retention?
1. If the application for retention is approved, the Regional Director shall issue Certificate of
Retention (Retention Form No. 3) and forward this, together with the retention folder to the
PARO.
2. The PARO, in coordination with the Land Management Bureau of the DENR, shall
segregate the appropriate retained area.
3. The DENR shall furnish the DAR Regional Office four copies of the approved segregation
plan and technical description.
 4. On the basis of the owner's duplicate copy of the title, the approved segregation plan and
technical description, the PARO shall request the Register of Deeds to prepare two separate titles
all in the name of the landowner:
a. for the landholding covered by compulsory acquisition, voluntary offer to sell or
voluntary land transfer/direct payment scheme; and
b. the landowner's retained area
What is the recourse of the landowner whose application for retention is disapproved?
The landowner should make an appeal to the DAR Secretary within fifteen (15) days upon receipt of the
decision. Otherwise, the decision by the Regional Director disapproving the application for retention becomes
final.
7.7 WHEN TO EXERCISE THE RIGHT OF RETENTION
When may the right of retention be exercised?
A landowner whose agricultural land is covered by CARP may exercise his or her right of retention
anytime before the land is compulsorily acquired.
If the land is already the subject of compulsory acquisition, the landowner must apply for retention
within sixty (60) days from the date of receipt of the Notice of Coverage. If the landowner does not respond
despite due notice, he or she will be deemed to have waived the right to choose the retained area and the DAR
shall be the one to choose.
Note that the waiver is on the right to choose; the landowner still has the right to retain.
If the land is voluntarily offered for sale, the landowner may exercise right of retention at the time of the
voluntary offer.
When may qualified children apply for an award of not more than three hectares each?
The application must be filed within a period of thirty (30) days from date of receipt by the landowner of
the Notice of Coverage or from the date of the Voluntary Offer to Sell.
However, for those areas for which notices of coverage have already been sent to the landowners,
qualified children have at least one (1) year to file an application reckoned from 31 March 1994 (date of
effectivity of DAR Memo Circular No. 04, Series of 1994). In case of failure of the children to file their application
within the specific period, the property shall be distributed to qualified beneficiaries pursuant to Section 22 of RA
6657.
7.8 OBLIGATIONS OF LANDOWNERS AND LIMITS TO THE DISPOSITION OF THE RETAINED AREAS
What is the obligation of the landowner with respect to his or her retained area?
The landowner has the obligation to cultivate the retained area directly or through labor administration
in order to make it productive. This is in line with the CARP principle that land has a social function and land
ownership has a social responsibility. (AO No. 11, Series of 1990)
What are the limits to the disposition of the retained area?
1. A landowner may sell the land even to one not qualified to be a beneficiary, provided that
after the sale, the buyer will not own more than five hectares of agricultural land.
2. The landowner may not eject the tenants in the retained area. The retained area is not
covered by the land acquisition components of CARP but may still be covered by the leasehold
provisions.
3. The landowner may not convert the use of the land from agricultural to non-agricultural
use without the approval of the DAR.
7.9 TENANTS IN RETAINED AREAS
What options are available to a tenant in the retained area?
 The tenant may choose to remain in the retained area as a lessee, in which case, he or she waives the
right to be awarded land under the CARP. The tenant may alternatively opt to be a beneficiary in other lands that
may be available for distribution. The tenant must decide within one year from the time the landowner manifests
his or her choice of the area for retention. (Sec. 6, RA 6657)
If the tenant chooses the first option, his or her security of tenure shall be respected and he or she may
not be ejected from the land.
7.10 RETENTION UNDER PD 27
Who among the OLT landowners are not entitled to retain seven hectares?
1. Those who as of 21 October 1972 owned more than 24 hectares tenanted rice or corn
lands; or
2. Those who as of the above date, owned less than 24 hectares of tenanted rice or corn
lands but additionally owned the following:
a. more than seven (7) hectares of other agricultural lands, whether tenanted or not,
whether cultivated or not; or
b. lands used for residential, commercial, industrial or other urban purposes.
In both cases, the landowner should derive adequate income to support his/her
family. This was provided for under Letter of Instruction No. 474 whose
constitutionality and validity was upheld as decided in the case of Zurbano vs. Estrella
(137 SCRA 334). Guidelines were further clarified in MAR Memo Circular No. 18 dated
29 December 1981.
3. Those who filed their applications for retention after 27 August 1985 (the deadline set
by AO-01, Series of 1985) and did not comply with the requirements.
The above landowners shall only be entitled to a maximum of five hectares as retention area. (AO No. 04,
Series of 1991)
Who among the OLT landowners are still entitled to the seven-hectare retention?
1. Landowners who complied with the requirements of either LOI 41,45 or 52.
2. Those who filed their applications before the deadline set (27 August 1985), whether or
not they complied with Letter of Instruction (LOI) Nos. 41, 45, and 52.
3. Those who filed their applications after the deadline but complied with the requirements
of the LOI cited above.
4. Heirs of a deceased landowner who manifested while still alive the intention to exercise
the right of retention prior to 23 August 1990 (the finality of the Supreme Court decision on the
Association of Small Landowners vs. The Honorable Secretary of DAR). Heirs must show proof of
the original landowner's intention. (AO No. 04, Series of 1991)
A landowner who retained seven hectares of rice land under PD 27 now wants to retain an additional five
hectares of coconut land under RA 6657. Should the landowner's claim be granted?
No. The landowner may not retain a total of twelve (12) hectares. He/she may, however, voluntarily offer
the seven-hectare rice land and apply for the retention of five hectares of coconut land. Following the decision on
the Association of Small Landowners case, the landowner shall keep the seven hectares originally retained in PD
27 while the five-hectare coconut land shall be covered under CARP.
Note also that if a landowner retained only two (2) hectares of rice land under PD 27, he/she may still
retain three hectares under RA 6657.
When is landowner deemed to have waived his/her right of retention under PD 27?
As provided in DAR Administrative Order No. 04, Series of 1991, the performance of any of the following
acts signifies waiver:
1. signing of the Landowner-Tenant Production Agreement and Farmer's Undertaking
(LTPA-FU) covering the subject property;
2. entering into a direct payment scheme agreement as evidenced by a Deed of Transfer over
the subject property; and
3. signing/submission of other documents indicating consent to have the subject property
covered, such as the form-letter of the Land Bank on the disposition of the cash and bond
portions of a land transfer claim for payment, the Deed of Assignment, Warranties and
Undertaking executed in favor of the LBP.
Other similar acts may likewise be construed as waiver. The above list is not exclusive.
7.11 HOMESTEAD LANDS
What is DAR's policy in the case of homestead lands?
Under Section 6, RA 6657, agricultural lands covered by Homestead Patents shall not be covered under
CARP if the following conditions are present:
1. The original homestead grantee or his/her direct compulsory heirs still own the land on
15 June 1988; and
2. The original homestead grantee or his/her direct compulsory heirs cultivate the land as of
15 June 1988 and continue to cultivate the same.
In the absence of these conditions, the homestead land will not be exempted from OLT or CARP coverage.
However, the grantee or the heirs can retain seven or five hectares, as the case may be The excess areas shall be
covered by CARP. The Alita Case, notwithstanding, it is the mandate of the law that in all cases, the security of
tenure of the farmers and farmworkers on the land shall be respected.
CHAPTER 8
LAND SURVEY
What should be done in the case of titles/landholdings covered by CARP but with defective technical
descriptions or no available survey records?
The Provincial Agrarian Reform Officers (PAROs) should turn over to their counterpart Provincial
Environment and Natural Resources Officers (PENROs) of DENR, all titles/landholdings covered by CARP with
defective technical descriptions or where no available survey records could be found. This is an agreement
reached between the DAR and DENR last 23 July 1992.

PAROs should immediately conduct an inventory of these records. If in spite of previous exhaustive
research conducted, the defect could not be remedied, then they should turnover the records (xerox copies of
titles, survey plans, sketch plans, etc.). The PENROs are under instructions to check these records with the
existing records available at the Land Management Bureau, the National Archives, or the Land Registration
Authority.
If, however, after another exhaustive research, the correct technical description cannot be recovered,
then a resurvey of the subject landholding will have to be executed as provided for in the Joint DAR-DENR
Circular No. 06, Series of 1991.
What sort of defects are covered by this agreement?
The defects may fall under any of the following categories:
1. Polygon does not close;
2. Titled but title is not available;
3. Title available but without technical description;
4. Surveyed untitled private property but survey plan or technical description is not
available;
5. Awarded to survey contractor but not submitted due to non-payment of contractor;
6. Surveyed by administration but not submitted in spite of request to submit the survey;
and
7. Other defects.
CHAPTER 9
LAND VALUATION AND LANDOWNERS' COMPENSATION
What is the basic requirement in the acquisition of private agricultural lands?
The Constitution itself provides landowners two basic rights the right to retention and the right to be
paid just compensation. Payment of just compensation is required before a title can be transferred from the
landowner to the Republic of the Philippines.

9.1 JUST COMPENSATION

What is just compensation?
In various Supreme Court rulings, just compensation in general has been defined as "fair market value". It
is the price which a buyer will pay without coercion and a seller will accept without compulsion.
There are those who argue that since agrarian reform is a social justice program, it is not correct to
interpret just compensation as the price which the land will bring in the open market. If two contracting parties
with unequal powers are allowed to determine and agree on the value of the land in the open market, the party
with less power would tend to be on the losing end.
For properties covered by CARP, however, just compensation cannot be an absolute amount disregarding
particularities of productivity, distance to the market place, etc. Hence, land valuation is not an exact science but
an exercise fraught with inexact estimates. This requires integrity, conscientiousness and prudence on the part of
those responsible for determining its value. What is important ultimately is that the land value approximates as
closely as possible, what is broadly considered by the community to be just. (AO 06, Series of 1992)
Does full payment mean payment in cash directly to the landowner?
No. Full payment need not all be in cash directly to the landowner. Payment can be partly in cash and
partly in bonds. Also for those cases where the landowner contests the valuation of the property, Section 16, RA
6657 and AO 01-93 provide that full payment of just compensation may be considered achieved upon the Land
Bank's deposit of the value of the land in a trust account in the name of the landowner. Once this deposit is made,
the title can be transferred in the name of the Republic of the Philippines.
9.2 LAND VALUATION FACTORS
What does the law provide as the factors to be considered in the valuation of lands under CARP?
Section 17, RA 6657 enumerates ten (10) factors to be considered in the determination of just
compensation:
a. cost of acquisition
b. current value of like properties
c. nature of the land
d. actual use
e. income
f. sworn valuation by the landowner
g. tax declaration
h. assessment made by government assessors
i. the social and economic benefits contributed by the farmers and farmworkers and by the
government
j. non-payment of taxes or loans secured from any government financing institution on the
land.
9.3 NEW LAND VALUATION FORMULA
What Administrative Orders govern land valuation under CARP?
AO No. 11, Series of 1994, "Revising the Rules and Regulations Covering the Valuation of Lands Voluntarily
Offered or Compulsorily Acquired as Embodied in AO No. 06, Series of 1992"; and
AO No. 06, Series of 1992, "Rules and Regulations Amending the Valuation of Lands Voluntarily Offered and
Compulsorily Acquired as Provided for Under AO 17, Series of 1989 as Amended, Issued Pursuant to RA 6657".
AO 06-92 supersedes AO No. 05, Series of 1988; AO No. 06, Series of 1989, AO No. 17, Series of 1989,
and AO No. 03, Series of 1991.
What can be considered as a major improvement in the latest Administrative Orders on land valuation?
By giving more weight on the net income from the land in the formula, AO No. 06-92 has substantially
raised the land value. Furthermore, AO No. 11-94 has dropped the landowner's LISTASAKA declaration from the
formula. These are expected to lessen landowners' rejection of the offered price and facilitate the acquisition of
the land.
What is now the basic formula for the valuation of lands covered by VOS and CA?
The basic formulation for the valuation of lands covered by VOS and CA regardless of the date of offer or
coverage of the claim is:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
where:
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
Capitalized Net Income refers to the difference between the gross sales (AGP x SP) and the cost of
operations (CO) capitalized at 12%. In equation form, this is expressed as:
CNI = (AGP x SP) - CO
__________________
12
where:
 AGP = latest available 12 month's gross production immediately preceding the date of offer in case of VOS
or date of notice of coverage in case of CA.
SP = the average of the latest available 12-month's selling prices prior to the date of receipt of the claim
folder by LBP for processing, such prices to be secured from the Department of Agriculture (DA) and other
appropriate regulatory bodies or, in their absence, from the Bureau of Agricultural Statistics. If possible, SP data
shall be gathered from the barangay or municipality where the property is located. In the absence thereof, SP may
be secured within the province or region.
CO = Cost of Operations
When the cost of operations could not be obtained or verified, an assumed new income rate (NIR) of 20%
shall be used. Landholdings planted to coconut which are productive at the time of offer/coverage shall continue
to use the 70% NIR.
This formula shall be used if all three factors are present, relevant and applicable.
When the CS factor is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI 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
In no case shall the value of idle land using the above formula exceed the lowest value of a land within the
same estate under consideration or within the same barangay or municipality (in that order) approved by LBP
within one (1) year from receipt of claim folder.
In case of VOS, however, the land value which will be adopted will be whichever is lower of the computed
value using the formula and the landowner's offer. The LO's offer, however, shall be grossed up from the date of
the offer up to the date of receipt of claim folder by LBP from DAR for processing.
The date of receipt of claim folder by LBP from DAR shall mean the date when the claim folder is
determined by LBP to be completed with all the required documents and valuation inputs duly verified and
validated, and is ready for final computation/processing.
Why are there only three factors in the formula when the law states ten factors to be considered in
determining just compensation?
Although the formula contains only three factors, a study of the formula would show that all ten factors
are actually considered in its application.
Who is responsible for computing land values?
Executive Order No. 405 dated 14 June 1990 transferred the responsibility for land valuation from the
DAR to the Land Bank of the Philippines.
9.4 SUMMARY ADMINISTRATIVE PROCEEDINGS
Is the land valuation done by Land Bank final?
The final determination of just compensation is a judicial function. The Land Bank merely conducts
administrative valuation which may be contested in the court of proper jurisdiction. (Magana vs. Paitan, G.R. No.
60269 dated 13 September 1990)
If the landowner accepts the value offered by Government, then the administrative valuation is final and
serves as the basis of the landowner's compensation. However, if the landowner rejects or does not respond to
the Government's offer, the DAR itself will advise the DAR Adjudication Board, through the Provincial
Adjudicator, to conduct summary administrative proceedings to determine the value of the land. The value
determined in these proceedings are then re-offered to the landowner. The landowner may still reject or not
respond to this offer and instead file a case before the Special Agrarian Courts.
In the meantime that the landowner is contesting the valuation of the land or is not responding to the
Government's offer, the Government may proceed to distribute the property upon deposit in a trust account of
the initial value offered.
Where will the summary administrative proceedings be conducted? Will a landowner residing in Mindanao
be required to go to the central office?
Not necessarily. It would depend on the total amount of compensation in question. If the government's
offer does not exceed two million pesos (P2,000,000), the proceedings shall be conducted by the Provincial
Agrarian Reform Adjudicator concerned. If the compensation offered is more than two million pesos but does not
exceed five million (P5,000,000) then the case will be handled by the Regional Agrarian Reform Adjudicator
(RARAD). But if the amount in question exceeds five million pesos, then the proceedings shall be conducted by the
DAR Adjudication Board (DARAB). (AO No. 08, Series of 1993)
Is the Adjudication Board's decision final and executory?
Although the final determination of the value of the land is a judicial function, unless the landowner or
any party-in-interest files a case with the Special Agrarian Court within fifteen (15) days from receipt of the
decision, then the decision of the adjudicator/s becomes final and executory.
9.5 CONCERNED PARTIES' INVOLVEMENT IN THE LAND VALUATION PROCESS
Are landowners and agrarian reform beneficiaries involved in the process of valuation?
Yes. The process of land valuation must involve the agrarian reform beneficiaries, their organizations, the
BARC, and the landowner concerned. Their involvement is ensured in various provisions of the law.
Section 3, EO 129-A declares that . . . "partnership between government and organization of farmers and
farmworkers in agrarian reform policy formulation, program implementation and evaluation shall be
institutionalized. . . . "
Section 47, RA 6657 specifies that the BARC shall, among other things, "assist in initial determination of
the value of the land".
Section 18, RA 6657 further states that "The LBP shall compensate the landowners in such amount as may
be agreed upon by the landowner and the DAR and the LBE. . . "
9.6 MODES OF COMPENSATION
How will landowners be compensated?
Under Voluntary Land Transfer, the landowner will be paid directly in cash or in kind by the farmer-
beneficiary under terms mutually agreed upon by them subject to DAR approval.
Under Compulsory Acquisition, the Land Bank of the Philippines shall compensate the landowner in the
following mode:
a. Cash payment which shall vary according to land size;
b. LBP bonds or other government financial instruments.
Under Voluntary Offer to Sell, the landowner will be paid under the same mode as CA except that the cash
portion is higher by five percent (5%).
What proportion of the total compensation is in cash?
 Cash portion shall vary according to the size of the landholdings. The larger the landholding, the smaller
the cash portion. The underlying principle is that small landowners are presumed to have greater need for cash to
aid them in their bid to shift their capital from agriculture to industry.
Payment shall be under the following terms and conditions:
a. Lands above 50 has. 25% cash; 75% bonds
b. Lands above 24-50 has. 30% cash; 70% bonds
c. Lands 24 has. & below 35% cash; 65% bonds
Cash portion is increased by 5% for VOS.
Why not pay the landowners the full amount in cash?
The compensation package under CARP is already much improved compared to the compensation
schemes of past land reform programs. This is so, precisely to make the program more acceptable to landowners
and facilitate the shift of their capital from agriculture to industry.
Full payment in cash is not feasible. This will tremendously increase the current funding requirements
for CARP which the government can ill afford at present. Furthermore, this will infuse a large amount of money
into the economy which could result in inflation.
9.7 LAND BANK BONDS
What are the features of the new LBP-bonds?
Compared with previous LBP bonds, the present bonds are definitely more attractive.
a. Past LBP bonds have a maturity of 25 years. This means, bond holders can only get the
principal at the end of 25 years. On the other hand, the new LBP bonds mature in ten years, and
one-tenth of the face value of the new bonds matures every year from the date of issue until the
tenth year.
b. The new LBP bonds also bear market rates of interest the same as those of 91-day
treasury bills. Old LBP bonds have a fixed six percent (6%) interest rate.
c. Finally, these bonds have alternative uses. They may be used by the landowner, his
successors in interest, or his assignees, for any of the following:
* acquisition of land or other real properties of the government, including assets
under the Asset Privatization Trust, and other assets foreclosed by government financial
institutions;
* acquisition of shares of stock of government owned or controlled corporations, or
shares of stocks owned by the government in private corporations;
* substitution for surety or bail bonds for the provisional release of accused
persons, or for performance bonds;
* security for loans with some government financial institutions, provided the
proceeds are invested in an economic enterprise, preferably in a small-and-medium
scale industry;
* payment for various taxes and fees to government, up to a certain percentage of
the outstanding balance of the financial instrument, and provided further that the PARC
shall have determined the allowable percentage mentioned;
* payment for tuition fees of the immediate family of the original landholder in
government universities, colleges, trade schools, and other institutions;
* payment of bills in public hospitals; and
* other uses as the PARC may allow from time to time.
9.8 PD 27 LANDS
Are PD 27 lands also covered by this valuation formula?
No, they are governed by Executive Order No. 228. Under this EO, the valuation formula under PD 27 is
retained. Valuation shall be based on the Average Gross Production (AGP) determined by the Barangay
Committee on Land Production (BCLP). Land value is computed using the following formula:
 Rice Lands LV = AGP x 2.5 x P35 *
Corn Lands LV = AGP x 2.5 x P31 **
* government support price for one cavan of 50 kilos of palay on 21 October 1972
** government support price for one cavan of 50 kilos of corn on 21 October 1972
Lease rentals paid to the landowner by the farmer-beneficiary after 21 October 1972 shall be considered
as advance payment for the land and shall, therefore, be deducted from the cost.
Aren't PD 27 lands grossly undervalued since 1972 support prices are still being used?
The Presidential Agrarian Reform Council (PARC) has recognized this problem. Many of the landowners
covered by PD 27 have not yet been paid. Had these landowners been paid at the time of the taking of their lands
and the proceeds of the compensation deposited in a bank, the money would have earned the same interest rate
compounded annually as authorized under the banking laws, rules and regulations.
To address these problems, the PARC in its resolution dated 25 October 1994, approved the grant of an
increment of six percent (6%) yearly interest compounded annually based on the land value as determined under
existing valuation formula, instead of revising the formula itself.
Guidelines for this have been issued under Administrative Order No. 13, Series of 1994, "Rules and
Regulations Governing the Grant of Increment of Six Percent (6%) Yearly Interest Compounded Annually on Lands
Covered by Presidential Decree No. 27 and Executive Order No. 228".
Under these guidelines, owners of OLT lands shall be compensated based on the following:
(Computed land value using the original formula) x (1.06) n
where n = number of years from date of tenancy up to effectivity date.
Who are the landowners qualified to receive compensation based on this increment formula?
1. Landowners whose lands are actually tenanted as of 21 October 1972 or thereafter and
covered by OLT;
2. Landowners who opted for Government financing through Land Bank of the Philippines as
the mode of compensation; and
3. Landowners who have not yet been paid for the value of their land.
In the case of landowners who were partially paid, the yearly interest of six percent (6%) compounded
annually shall be applied to the unpaid balance.
What is the reckoning date in computing the interest?
For lands tenanted as of 21 October 1972 and covered under OLT, the date shall be reckoned from 21
October 1972 up to the date of effectivity of AO 13-94.
For lands tenanted after 21 October 1972 and covered under OLT, the date shall be reckoned from the
date when the land was actually tenanted up to the effectivity date of AO 13-94.
What will happen to the claims of landowner-payees which were previously approved for payment by Land
Bank?
The landowners shall still be entitled to the difference.
What happens to the 25-years LBP bonds under PD 27?
All outstanding LBP bonds that are retained by the original landowner-payee, or by his heir, shall be paid
by the Bank to the extent of their matured portion. One-twenty fifth (1/25) of their face value times the number
of years from their date of issue to July 17, 1988 (date of EO 228) are deemed to have matured.
How can the original landowner-payee claim payment for the matured portion of his/her bond holding?
He/she should surrender the old LBP bonds to Land Bank which pays cash for the matured portion and
convert the unmatured portion to 10-year LBP bonds.
Are outstanding old LBP bonds in the hands of bondholders other than the original landowner-payee
entitled to the same right?
No. Old LBP bonds in the hands of bondholders other than the original landowner-payee are not entitled
to the same right.
9.9 EO 407 LANDS
What are EO 407 lands?
These refer to lands suitable to agriculture owned by all government instrumentalities, including but not
limited to government agencies, government owned and controlled corporations or financial institutions which
have been ordered to be surrendered to the Department of Agrarian Reform under Executive Order No. 407
issued on 14 June 1990 by then President Corazon C. Aquino.
Will these lands be covered by the same valuation guidelines as the private lands covered under CARP?
No, separate valuation guidelines for properties covered by EO 407 have been issued applicable to claims
of government financial institutions which have signed jointly with LBP a Memorandum of Agreement dated 28
August 1992.
9.10 MT. PINATUBO AFFECTED AREAS
Will landowners in lahar affected areas whose landholdings were originally subject of acquisition and
distribution be compensated?
Joint DAR-LBP Administrative Order No. 03, Series of 1994 provided the policy guidelines governing the
acquisition and distribution of agricultural lands affected by the Mt. Pinatubo eruptions.

Under this guideline, agricultural lands affected by Mt. Pinatubo eruptions have been classified into three
based on the NEDA Region III Geographic Information System database. These are:
Category I (actually affected)
These are agricultural lands actually covered with lahar and pyroclastic deposits, including those areas
which have become silted, eroded or continuously flooded for an indefinite period of time.
Category II (not yet affected)
These are agricultural lands not falling under Category I but have the possibility of being actually
affected.
Category III (lands covered by ashfall)
These are agricultural lands actually covered or affected by ashfall but which remain to be productive.
As a general rule, lands under Category III shall be acquired and landowners compensated.
Compensation of lands under Category I and II shall be effected under the following conditions:
1. Claims have been approved by LBP and:
a. Landowner has executed a Deed of Assignment, Warranty and Undertaking on or
before the issuance of the Joint DAR-LBP AO 03-94; or,
b. Transfer Certificate of Title was already registered in the name of RP on or before
the issuance of the same AO; or
c. Partial payment was already effected.
 2. Emancipation Patents/Certificates of Land Ownership Award have been registered on or
before 12 June 1991 regardless of whether or not the claim folder is with the LBP.
CHAPTER 10
LAND DISTRIBUTION
10.1 BASIC PRINCIPLES IN LAND DISTRIBUTION
What are the basic principles in land distribution?
Land distribution is governed by the following basic principles and policies:
a. The CARP seeks to promote the establishment of owner-cultivatorship of economic-size
farms as the basis of Philippine agriculture;

b. DAR's primary mandate is to distribute agricultural lands to as many tenants and

farmworkers as possible. If the agricultural land is untenanted or does not have farmworkers, it
is the responsibility of the DAR to locate qualified beneficiaries pursuant to Section 22 and
Section 7 of RA 6657;
c. In general, lands shall be distributed directly to the individual beneficiaries;
d. The award of three hectares to the beneficiaries is in line with the objective of forming and
maintaining economic-size family farms.
What Administrative Orders govern land distribution?
a. Administrative Order No. 10, Series of 1990 entitled, "Rules and Procedures in the
Distribution of Private Agricultural Lands Agrarian Reform Beneficiaries under RA 6657"; and
b. Administrative Order No. 02, Series of 1992 entitled, "Supplemental Guidelines on AO No.
10, Series of 1990, and Other Issuances the Rights of Farmworkers".
When does land acquisition end and when does land distribution begin?
The cut-off point in the land acquisition process is the transfer of title from the landowner to the Republic
of the Philippines as evidenced by the Transfer Certificate of Title (TCT) issued by the ROD. Immediately upon
receipt of the TCT, the DAR shall take possession of the land and proceed with land distribution.
May distribution occur before the end of acquisition?
Yes. The cut-off point above is for compulsory acquisition cases where landowner refuses to cooperate.
Operationally, distribution can begin earlier, particularly if the landowner is cooperative and is willing to let the
identified beneficiaries cultivate the land.
What proof of land ownership is given to beneficiaries?
Beneficiaries receive the following titles:
a. Emancipation Patents (EPs) for OLT lands;
 b. Certificates of Land Ownership Award (CLOAs) for CA, VOS, and 407 lands, resettlement
areas and landed estates; and
c. Free Patents for public lands.
Beneficiaries of the Integrated Social Forestry Program covering agro-forestry public lands whose
ownership cannot be transferred, received Certificates of Stewardship Contract (CSCs) which are good for 25
years, renewable for another 25 years.
Is a Certificate of Land Transfer (CLT) an evidence of ownership of the land?
No. In the case of Magana vs. Paitan (G.R. No. 60269, 13 September 1990), it was held that the mere
issuance of CLT does not vest in the farmer-grantee, ownership of the land described therein. It merely provides
evidence of the government's recognition of the grantee as the part qualified to avail of the statutory
requirements for acquisition under PD 27. Failure of the farmer-beneficiary to comply with the requirements will
result in the cancellation of the said CLT. Thus, failure on the part of a farmer/grantee to pay lease/amortization
payment to the landowner or agricultural lessor when they fall due for a period of two years shall be a ground for
forfeiture of the CLT.
10.2 AWARD CEILING
How many hectares of land can an awardee get?
Individual beneficiaries may each receive the following maximum hectarages:

a. Three hectares under RA 6657 acquisition modes (CA, VOS, VLT/DPS, EO 407);
b. Three hectares for irrigated and five hectares for unirrigated rice and corn lands covered
under the OLT program of PD 27; and
c. Three hectares for awardees in settlement areas and landed estates.
Potential beneficiaries who own less than three hectares of agricultural land may still receive land under
CARP but only to the extent of the difference between the award limit of three hectares and their present land
ownership. For example:
Award Ceiling 3.0 has.
ARB owns 1.2 has.

Total Area that may be awarded to ARB 1.8 has.
Total Land ownership after the award 3.0 has.
In all cases, the aggregate award and the total land ownership of the ARB as a result of the award shall
not exceed three hectares.
Suppose the area actually occupied by a tenant slightly exceeds the three hectare award ceiling and there is
no other tenant in the landholding, how will the excess area be disposed?
Since there is no guideline governing the allocation of excess area over the allowable three-hectare
ceiling under RA 6657, the pertinent provision of the Ministry of Agrarian Reform Administrative Order No. 03-
85, Series of 1985 can be applied. This states that "The economic family size farm to be transferred to a bonafide
farmer beneficiary pursuant to PD 27 shall include a tolerable limit of not more than ten percent (10%) or 3.3
hectares if irrigated and 5.5 hectares if unirrigated."
Hence, if the excess area is within the 10% tolerable limit (or 3.3 hectares underRA 6657), then the total
aggregate area may be awarded to the qualified farmer-beneficiary.
10.3 LAND DISTRIBUTION PROCEDURES
What are the basic steps in the redistribution of lands under VOS, CA, and EO 407?
MARO
a. Upon completion of land acquisition, the first activity done is the validation of the list of
qualified ARBs. This is to ensure that those who were identified during the acquisition phase are
still present and qualified to receive the land.
b. Through a letter or through the CARP Beneficiary Certificate (CBC), the identified ARBs
are formally notified that they have been qualified to receive the land. The notice also grants the
ARBs the usufructuary rights and privileges and obliges them the duties and responsibilities
over the land.
c. The ARBs are consulted as to their preferred mode of distribution, i.e., individual,
collective or co-ownership. Then, Land Distribution Folders are prepared based on the ARBs'
preference and submitted to the PARO.
PARO
a. Reviews all documents and generates the Certificates of Land Ownership Awards (CLOAs).
b. If ARBs prefer individual parcels, then the PARO requests the DENR to conduct
subdivision survey.
c. Submits the CLOAs to the DAR Regional Office (DARRO) who causes them to be signed by
the Secretary.
d. Registers the CLOAs with the ROD and forwards them to the MARO for distribution.
e. The ARBs are allowed to take possession of the land and use it for production.
10.4 INDIVIDUAL VS. COLLECTIVE DISTRIBUTION
Is individual distribution always required?
No. According to Section 25, RA 6657, the beneficiaries may opt for collective ownership, such as co-
ownership or farmers cooperative or some other form of collective organization. However, the total area that may
be awarded shall not exceed the total number of beneficiaries multiplied by three hectares, except in meritorious
cases approved by the PARC. Thus, nine ARBs under a co-ownership may receive not more than 27 hectares.
Further, in case it is not economically feasible and sound to divide the land as determined by the DAR,
then it shall be owned collectively by the worker beneficiaries.
Finally, to expedite land distribution, lands may be initially awarded collectively and later distributed
individually after completion of the subdivision surveys.
This arrangement may be done for any CARP able land whether private land or public land within
proclaimed DAR settlement projects or public land turned over to the DAR by other government agencies and
institutions pursuant to EO No. 407, as amended by EO 448.
How can the individual beneficiaries be assured of their share in the collectively held landholding?
DAR shall ensure that the name of the cooperative or the association and their individual members are
properly annotated at the back of the collective CLOA to protect the farmer-member from possible summary and
unjust separation by the cooperative or association, and that the fractional share of each ARB shall be specified
opposite their names.
How will lands covered by collective CLOAs be subdivided?
Guidelines have been provided under AO No. 03, Series of 1993, "Rules and Procedures Governing the
Issuance of Individual Titles to Co-Owners", should the ARBs decide to subdivide lands held collectively.
If held on a co-ownership basis, lands covered by collective CLOA shall be subdivided in accordance with
the actual occupancy of the ARBs, provided the share of each shall not exceed three hectares.
 For landholdings in the name of cooperative or farmers association, subdivision shall be based on the
shares of each member under the same condition that this shall not exceed three hectares and provided that the
subdivision is determined by DAR to be economically feasible.
DAR may issue individual CLOAs in the name of the ARBs based on their request and the approved
subdivision plan of the landholding and supported by a Deed of Partition executed by all co-owners named in the
collective CLOA. Individual CLOAs generated by DAR under this subdivision shall be on Transfer Certificate of
Title (TCT) CLOA forms to be registered with the ROD.
However, if the ten-year period reckoned from the date of the issuance of the collective CLOA has already
elapsed, issuance of individual certificates of title shall already be subject to the procedures and requirements of
the Land Registration Authority (LRA) pursuant to the Land Registration Decree (PD 1529).
What are the procedures for subdividing landholdings previously covered by collective CLOAs on co-
ownership basis?
PARO
a. Any of the co-owners shall submit to the PARO, through channel, a written request for the
subdivision of the land.
b. The PARO shall endorse the request for subdivision to the DARRO for bidding and award
to private contractors or the DAR itself may instead execute the subdivision survey of the target
landholdings.
DARRO
a. The DARRO shall bid and award the survey to private contractors or cause the conduct of
the survey by DAR survey teams if available.
b. The survey returns shall be submitted to the DENR for verification and approval.
c. The approved subdivision plan shall be submitted to the PARO.
PARO
a. Prepare a Deed of Partition for the signature of all the co-owners, specifying the lot
number and the exact parcel intended for the co-owner concerned, based on the approved
subdivision plan. The Deed of Partition shall be duly notarized.
b. Retrieve the owner's duplicate certificate of title of the collective CLOA from the ARBs for
cancellation by the ROD.
c. Generate individual TCT-CLOAs for each co-owner based on the approved subdivision plan
and the duly notarized Deed of Partition.
d. Transmit the CLOAs, the Deed of Partition, and approved subdivision plan to the Register
of Deeds concerned for the registration. The owner's duplicate certificate of title of the collective
CLOA shall be surrendered to the ROD for cancellation.
e. Record the registered CLOAs and transmit the same to the MARO for redistribution to the
individual co-owners.
How will this generation of CLOAs be treated in reporting accomplishment?
Landholdings covered by collective CLOAs already reported as accomplishment by the DAR field office
concerned and subsequently subdivided and issued individual TCT-CLOAs to the owners shall be reported and
monitored separately in the monthly reporting of the field offices. However, the area covered by collective CLOA
should not be reported again as hectarage covered upon the issuance of the individual CLOAs.
Such activities shall be included in the program of the field office concerned for proper funding.
10.5 RIGHTS AND OBLIGATIONS OF BENEFICIARIES
What are the obligations of the beneficiary?
All ARBs shall exercise the diligence of a good father of the family in the use, cultivation, and maintenance
of the land including the improvements thereon. Negligence, misuse, or unauthorized sale of the land, or any
support extended to the ARB shall be a ground for the forfeiture of his or her rights as a beneficiary.
 May CARP beneficiaries sell the land awarded to them?
Section 27, RA 6657 provides that lands awarded to the ARBs may not be sold, transferred or conveyed
for a period of ten (10) years from the award. This may be seen as a means to encourage the ARBs to cultivate the
land and make it productive over a long term.
The exceptions to this rule are if the transfer is through:
a. hereditary succession;
b. to the Government;
c. to the Land Bank; or
d. to other qualified beneficiaries.
If the land has been transferred to the government or to LBP, the children of spouse of the ARB shall still
have the right to repurchase the land within two years.
Ownership of lands awarded under PD 27 or EO 228, however, may be transferred after full payment of
amortization by the beneficiary. (Section 6, EO 228) But there are guidelines now being formulated which will
determine where the ten-year prohibition period under Section 27 may be applicable, and will also provide for
additional safeguards to prevent abuse in the selling of PD 27 lands.
Does this mean that after ten years, under the CARP, the ARB may sell to anybody provided he or she has
fully paid for the land and the buyer will not have more than five hectares after the transaction?
Yes, the ARB may sell the land provided that the total landholdings of the buyer after the purchase does
not exceed five hectares.
What if the ARB no longer wants to farm?
The ARB has the option to transfer or convey the rights to the land to any of his or her qualified heirs or
to any other beneficiary, even if the land has not yet been fully paid. The conditions are that the transfer has the
prior approval of the DAR and that the transferee will personally cultivate the land.
What happens if the new ARBs fail to cultivate the land themselves?
Then the land shall be transferred to the LBP which shall give notice of availability of the land to the
BARC. The BARC in turn, shall notify the Provincial Agrarian Reform Coordinating Committee (PARCCOM).
Under such instances, the LBP shall reimburse the original ARB one lump sum for the amount of
amortizations made including payments for the value of the improvements on the land. The new ARB will have to
start amortizing anew.
Can an agrarian reform beneficiary subdivide in favor of his or her children the three hectares of land
awarded under CARP?
Strictly speaking, no. The three hectares, as the identified economic-sized family farm, should be
preserved as a single operating unit to promote the farm's economic viability.
 Should the beneficiary die or be incapacitated, succession to the farmholding shall be governed by the
pertinent provisions of the Civil Code, subject to the condition that the land shall not be fragmented. This means
that the land shall be transferred to the spouse of the ARB or in the absence or incapacity of the spouse, to the
eldest child who meets the qualifications to be a CARP beneficiary, particularly the requirement of willingness,
aptitude and ability to cultivate the land and make it productive. The heir who succeeds on the land shall pay the
other heirs their corresponding legal shares. In the absence of such children, e.g., if all the children are less than
15 years old, the land shall be transferred to the DAR which shall look for a new beneficiary on the land.
Aside from those already mentioned, what are the grounds for the cancellation of Emancipation Patents
(EPs) or Certificates of Land Ownership Award (CLOA)?
Violations of agrarian laws, rules and regulations are grounds for the cancellation of registered EPs or
CLOAs. These include but are not limited to the following:
1. Misuse or diversion of financial and support services extended to the ARB; (Section 37
of RA 6657).
2. Misuse of the land; (Section 22, RA 6657) This refers to any act causing substantial and
unreasonable damage on the land, and causing the deterioration and depletion of the soil fertility
and improvements thereon. It also includes the act of knowingly planting, growing, raising, or
permitting the planting, growing, raising of any plant which is the source of a dangerous drug, as
defined in PD No. 1683, as amended. (AO No. 02-94).
3. Material misrepresentation of the ARB's basic qualifications as provided under Sec. 22
of RA 6657, PD 27 and other agrarian laws;
4. Illegal conversion by the ARB's;
5. Sale, transfer, lease or other forms of conveyance by a beneficiary of the right to use or any
other usufructuary right over the land acquired by virtue of being a beneficiary in order to
circumvent the provisions of the different agrarian laws. (Lands awarded under PD 27/EO 228,
however, may be transferred after full payment of amortization).
6. Default in the obligation to pay an aggregate of three (3) consecutive amortizations in case
of VLT/DPS, except in cases of fortuitous events and force majeure;
7. Failure of the ARBs to pay for at least three (3) annual amortizations to the LBP, except in
cases of fortuitous events and force majeure;
8. Neglect or abandonment of the awarded land continuously for a period of two (2)
calendar years as determined by the Secretary or his authorized representative (Section 22, RA
6657);
9. The land is found to be exempted/excluded from PD 27/EO 228 or CARP coverage or to be
part of the landowner's retained area as determined by the Secretary or his authorized
representative;
10. Other grounds that will circumvent laws related to the implementation of the agrarian
reform program (see AO No. 02, Series of 1994).
Who can order the cancellation of a registered EP/CLOA?
The Provincial or Regional Adjudicator which has jurisdiction over the property may order the
cancellation of a registered EP/CLOA in accordance with the DARAB Rules and Regulations.
Aside from cancellation, the PARAD/RARAD may decide to include other sanctions for violations of
agrarian laws such as forfeiture of amortization, ejectment of ARB, reallocation of the land to qualified
beneficiary, perpetual disqualification to become an ARB.
What will happen to a tenant who became a beneficiary under PD 27 but whose EP is now being cancelled
on the ground that the area awarded is part of the landowner's retained area?
The farmer will revert to being an agricultural lessee. He/she, however, will have security of tenure and
cannot be ejected from the land. Amortization payments will be credited as lease rentals and excess payments
shall be reimbursed.
Who has the authority to correct an error in the CLOA such as the omission of the name of the spouse, typing
error in the name of the beneficiary or in the technical description of the property?
 It is still the PARAD or the RARAD having jurisdiction over the property who can order the correction of
the title.
CHAPTER 11
PAYMENT BY BENEFICIARIES
11.1 PAYMENT UNDER RA 6657
Must the landowner first agree to the land valuation before the beneficiaries can receive the land?
No. Learning from the lessons in the previous agrarian reform programs the CARP now separates
acquisition from distribution. These are now two separate transactions. The former is a transaction between the
government and the landowner, while the latter is a transaction between the government and the agrarian reform
beneficiaries. The landowner may still be contesting the land valuation but title to the land may already be
transferred first to the Republic of the Philippines then to the beneficiaries.
Will the beneficiaries have to pay the government the same amount that government paid to the
landowner?
No. DAR Administrative Order No. 6, Series of 1993 entitled, "Revised Implementing Guidelines and
Procedures Governing Payment of Land Amortization by Agrarian Reform Beneficiaries" provides the operating
guidelines for Section 12 of EO 229 and Section 26 of RA 6657. This AO revised DAR Administrative Order No. 3,
Series of 1992 entitled, "Implementing Guidelines and Procedures Governing Payment of Land Amortization by
Farmer-Beneficiaries Pursuant to Section 26 of RA 6657".

Under AO No. 06-93, lands awarded pursuant to EO 229, RA 6657 and lands acquired under EO 407 shall
be repaid by the ARBs to Land Bank in 30 annual amortizations at six percent (6%) interest per annum based on
the cost of the land and permanent improvements. These are the regular annual amortizations.
However, to make payments affordable, amortization shall be reduced to:
* 2.5% of AGP for the first three years;
* 5.0% of AGP on the fourth and fifth year; and to
* 10.0% of AGP from the sixth to the thirtieth year if this amortization ceiling is lower than
the regular amortization.
Simulation:
Annual Gross Production (AGP) established
during land valuation (AO-06-92): P15,000.00
Cost of Awarded land covered by VOS/CA: P22,706.38
Capital Recovery Factor of 6% for 30 years: 0.07265
Annual Regular Amortization: P 22,706.38 x 0.07265 = P1,849.57
 Annual Amortization Ceiling:
1st - 3rd Year : P15,000 x .025 = P375.00
4th - 5th Year : P15,000 x .050 = P750.00
6th - 30th Year : P15,000 x .100 = P1,500.00
Compare annual regular amortization (P1,849) with the schedule of amortization ceiling shown earlier.
Since the ceiling is lower than the annual regular amortization, the ARB will pay based only on the ceiling. The
difference represents the government's subsidy.
What is the "assistance" to farmers?
Assistance to farmers refers to:
a. the difference between the regular annual amortization (based on the amount paid or
approved for payment to the landowner) and the affordable amount during the first five years
after the award of the land to the ARBs; and
b. the difference between the regular amortization and ten percent (10%) of the AGP during
the 6th to the 30th year whenever such 10% of AGP is lower than the regular amortization.
After making payments for 30 years, the beneficiary stops paying. The difference between what the
Government paid to the landowner and what it was able to collect from the ARB is the Government subsidy or the
assistance to farmers.
It may be noted that aside from the difference in the total amounts, there is also a huge difference in the
present value of the total amount including market rate of interest that the Government will pay the landowner
and what it will receive from the ARB annually for 30 years.
Will the average gross production have to be computed annually?
No. In the case of already productive lands, the AGP shall be computed once, during the valuation
process, based on the peso value of the annual yield/produce per hectare of the land awarded to farmer-
beneficiaries as established jointly by the DAR and the LBP which is reflected in the valuation portion of the
Claims Valuation and Processing Form.
If only for this reason, it is imperative to involve the BARC and the beneficiaries as early as possible to
inform them about the data gathered on the AGP of the land and get their comments and reactions.
How about in newly cultivated lands?
In the case of newly cultivated lands without established AGP, the terms of repayment shall be as follows:
1. For lands planted to either perennial or short term (seasonal) crops, the initial annual
repayments by the ARBs shall be equivalent to 2.5% based on the cost of the land or 2.5% of the
imputed AGP, whichever is lower, until such time that the AGP has been established or
determined.
Imputed AGP shall be determined using industry data obtained from government/private
entities in the barangay. In the absence thereof, AGP for the municipality, province or region in
that order, shall be considered.
2. For idle and abandoned lands, initial annual repayments shall be equivalent to 2.5% based
on the cost of the land until such time that the AGP has been established/determined.
In both cases, the average of the first three (3) years production shall be the basis in establishing the
permanent AGP. The first three (3) years amortization and all subsequent amortizations shall be adjusted and
based on the permanent AGP established.
What if the ARB later on increases his or her production?
The computed annual payments will not change. The benefits of increased production should all go to the
beneficiary's pocket as his or her incentive.
 What if a typhoon or other natural calamity reduces the beneficiary's production?
The LBP shall formulate guidelines to assist ARBs affected by natural calamity or force majeure which
may include, among others, suspension of payment, deferment of payment or restructuring of account.
What if the courts grant the landowner a higher valuation?
Under AO No. 06-92, this will hardly have an effect on the amount to be paid by the beneficiaries in view
of the assistance to farmers. The government's subsidy will increase but the ARBs' amortization will not change.
When will the ARB start paying the amortization?
The ARB shall start paying one year after the land has been awarded to him/her, i.e., the date of
registration of the CLOA.
What happens if the ARB defaults in his or her payments?
Although the land has been titled in the name of the beneficiary, the Land Bank has a lien by way of
mortgage on the land. This mortgage may be foreclosed by the LBP if the ARB does not pay a total of three annual
amortizations, except where the cause of such failure to pay is brought about by natural calamity or force
majeure.
Should LBP foreclose on any awarded land, it shall advise DAR of such proceedings and the DAR shall
subsequently award the land to other qualified beneficiaries. A beneficiary whose land has been foreclosed shall
thereafter be permanently disqualified from being a recipient of land under CARP.
11.2 PAYMENT IN OLT LANDS
Will beneficiaries of OLT lands pay under the same amortization scheme?
No. Payment by OLT beneficiaries is governed by Section 6 of EO 228. This section provides that the
beneficiaries shall pay for the total cost of the land including six percent (6%) interest per annum with a two
percent (2%) interest rebate for prompt payments. Payment shall be made by the farmer-beneficiary or his heirs
to the Land Bank over a period of 20 years in 20 equal annual amortizations, where:
Annual Amortization = Land Value x 0.087185 *
* Capital Recovery Factor at 6% per annum for 20 years
How about in lands already valued and financed by LBP for which beneficiaries have started amortizing?
Under PD 27, the period of repayment is 15 years.
LBP shall extend the period of payment to twenty years.
How will the grant of increment of six percent (6%) yearly interest compounded annually on OLT lands
affect the amortization payment by OLT beneficiaries?
Although this grant effectively raises compensation to owners of OLT lands, agrarian reform beneficiaries
will not be affected. They shall continue to amortize the land on the basis of the original land value.
PD 27 provides that lease rental payments made by the farmer-beneficiary to the landowner after 21
October 1972 shall be considered as advance payment for the land. What documents are required to serve as
evidence of payment?
 Allegations of lease rental payment on the sole basis of affidavits ("pagpapatotoo") executed by the
farmer-beneficiaries concerned shall not be sufficient. DAR Memorandum Circular No. 11, Series of 1994 provides
that such affidavits must be supported by additional evidence. The Memo Circular states that the FB's affidavit
must be confirmed by the landowner and that there should be other corroborative evidence to substantiate the
allegation that payment of lease rental had been paid to the landowner (e.g., affidavit of BARC members/farmers).
What are the procedures for determining sufficiency of lease rental payments as advance amortization and
consequently, the issuance of certificate of full payment to the farmer-beneficiary?
1. MARO shall serve a copy of the FB's affidavit to the landowner through either:
* personal delivery
* registered mail with return card
In either case, there should be proof of service.
2. Simultaneous to the delivery of the affidavit to the landowner, the MARO shall also post
the affidavit for fifteen (15) days in the barangay hall, and other conspicuous places where the
property is situated.
3. MARO shall verify from the records whether or not lease rentals paid by the FB are
sufficient to cover the land value. The MARO shall likewise validate the veracity of the
landowner's objection if any and submit a report and recommendation to the PARO within ten-
days from the date service is completed.
4. PARO issues Certificate of Full Payment if it is found that rentals paid sufficiently cover the
cost of the land and furnishes photocopies to landowner and FB not later than ten (10) days from
receipt of the MARO's report.
5. Landowner may file an appeal to the Regional Director within ten (10) days from receipt
of the photocopy. In turn, the RD decides within ten (10) days from receipt of the appeal. The
RD's decision is final in so far as the DAR is concerned.
6. The ROD registers the Emancipation Patent (EP) on the basis of the PARO's Certificates of
Full Payment and the RD's Order (in case of appeal).
11.3 PAYMENT UNDER VLT/DPS
Is there also a ceiling on payments under VLT/DPS?
Yes, in effect there is a ceiling since the law provides that although the terms and conditions of the
VLT/DPS shall be mutually agreed upon by the landowner and the ARB, these should not be less favorable to the
ARB than those that would prevail if it were the government acquiring the land from the landowner and selling it
to the beneficiary.
Can lands transferred under VLT/DPS be repossessed if the agrarian reform beneficiary defaults in his/her
payment?
Yes. The VLT/DPS agreement shall contain sanctions for non-compliance by either party and such shall
be duly recorded and its implementation monitored by the DAR.
Should the beneficiary, for reason other than those brought about by force majeure or fortuitous events
default in his/her obligations for three (3) consecutive installments to pay the land amortization, he/she shall be
replaced as beneficiary and be permanently disqualified from being a beneficiary under CARP. DAR shall cancel
the CLOA which had been issued and transfer the land to either:
a. Qualified heir of the beneficiary who shall assume the balance of the value of the land; or
b. In the absence of a qualified heir, a new qualified beneficiary who, as a condition for such
transfer, is willing to abide by the terms of the existing VLT/DPS agreement and who will pay for
the entire value of the land.
What will happen to the payments made by the previous beneficiary who has defaulted?
In case of (b) above, the landowner shall refund the previous beneficiary in one lump sum or on
installment basis for the amounts already paid and for the improvements made by the latter, less the computed
lease rental for the duration of the previous beneficiary's use of the land and other charges provided by law.
11.4 PAYMENT IN LAHAR AFFECTED AREAS
 Are the farmer-beneficiaries in lands affected by the Mt. Pinatubo eruptions required to continue paying
their amortization?
The Joint DAR-LBP Administrative Order No. 03, Series of 1994 provides the policy guidelines and
procedures to be followed under this situation.
Payment of amortization shall be deferred if subject landholding falls under Category I actually
affected areas (see Page 78 ) until such time that the land becomes productive again, without prejudice to the
farmer's voluntary payment of amortization. The farmer, however, should first notify the Land Bank in writing of
his/her intention of deferring payment and this must be approved by Land Bank.
If the landholding falls either under Category II not yet affected or Category III lands covered by
ashfall, the farmer shall continue to pay the amortization.
Will payment also be deferred if the land is under Category I but acquisition was through voluntary land
transfer or direct payment scheme?
Yes, but instead of notifying the Land Bank, the farmer-beneficiary concerned shall notify the landowner
in writing with the assistance of DAR of his/her intention to defer payment.
CHAPTER 12
SUPPORT SERVICES
12.1 SUPPORT SERVICES TO LANDOWNERS
What support services shall be provided to the affected landowners?
The support services provided to landowners are:
a. investment information, financial and counseling assistance;
b. facilities, programs and arrangements for exchange and marketing of LBP bonds; and
c. other services intended to assist landowners in productively utilizing the proceeds of the
sales of the land for rural industrialization.
What specific investment incentives are offered to landowners?
If they invest in rural industries, they will be entitled to 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 other incentives which may be provided by PARC, LBP, or other government financial institution.
If the landowners invest the proceeds in a Board of Investment (BOI) registered company or in any agri-
business or agri-industrial enterprise in the region, the LBP shall redeem the LBP bonds up to thirty percent
(30%) of their face value. (Section 38, RA 6657)

What specific action has been done by DAR to facilitate assistance to landowners?
Special Order No. 172, Series of 1993 mandated the creation of a Landowner's Desk in every DAR
provincial office. This desk will be handled by one full-time staff with the position of at least a Supervising
Agrarian Reform Program (SUARPO). This LO's Desk shall handle exclusively and specifically landowners'
problems, issues and concerns.
 The LO's Desk Officer shall have the following responsibilities:
1. Answer landowners' queries and receive complaints and other concerns brought by the
landowners to the attention of DAR;
2. Refer these concerns to appropriate DAR units or to the LBP-Land Valuation Office, or
other government agencies for resolution;
3. Monitor the action taken on the referrals; and
4. Assist landowners in close coordination with LBP, with investment requirements,
especially in recycling land transfer payments back to the countryside.
12.2 SUPPORT SERVICES TO AGRARIAN REFORM BENEFICIARIES
What are the support services provided to the agrarian reform beneficiaries?
Appropriate support services should be provided to the ARBs. These services include:

a. land surveys and titling;

b. liberalized terms on credit facilities and production loans;
c. education and extension services,
d. institutional development;
e. marketing and management assistance and support to cooperatives and farmers
organizations; and
f. infrastructures
CHAPTER 13
AGRICULTURAL LEASEHOLD
13.1 LAWS AND ISSUANCES ON LEASEHOLD
What are the laws governing leasehold relationship between landowners and lessees?
Various laws have been passed governing leasehold tenancy. A review of such laws would reveal a
progression from one of election and limited operation to one of compulsion and comprehensive application.
 a. RA 1199 (An Act to Govern the Relations Between Landholders and Tenants of
Agricultural lands.) (Leasehold and Share Tenancy) 30 August 1954. Under this law, the tenant
was given the right to choose a leasehold tenancy arrangement.
b. RA 3844 An Act known as Agricultural Land Reform Code Instituting Land Reform in the
Philippines, including the Abolition of Tenancy and the Channeling of Capital Into Industry, 08
August 1963. This law declared agricultural share tenancy to be contrary to public policy and
was, thereby, abolished.
c. RA 6389 An Act Amending RA 3844, otherwise Known as the Agricultural Land Reform
Code, and for Other Purposes, 10 September 1971. This provided for the automatic conversion of
agricultural share tenancy to agricultural leasehold but with Section 35 of RA 3844 retained.
This section allowed the exemption of certain landholdings from leasehold fishponds, salt
beds and lands principally planted to citrus, coconut, cacao, coffee and other similar permanent
trees.
d. RA 6657 (Section 12) mandated the DAR to determine and fix immediately the lease
rentals in accordance with Section 34 of RA 3844, but expressly repealed Section 35 of RA 3844.
This, therefore, abolished the exemptions and made all tenanted agricultural lands subject to
leasehold.
What are the significant implications of these changes in the laws?
The significant implications are as follows:
a. abolition of share tenancy and conversion to agricultural leasehold now covers all
agricultural lands without exception;
b. leasehold is no longer just an option, it exists by operation of the law; and
c. leasehold can be a preliminary step to land ownership.
All share crop tenants were therefore, automatically converted into agricultural lessees as of 15 June
1988 whether or not a leasehold agreement has been executed.
WHAT ADMINISTRATIVE ORDER COVERS LEASEHOLD IMPLEMENTATION?
DAR Administrative Order No. 05, Series of 1993, "Rules and Procedures Governing Agricultural Leasehold
and the Determination of Lease Rental for Tenanted Lands".
This AO supersedes the following AOs:
AO No. 04, Series of 1989, "Rules and Procedures Governing Agricultural Leasehold and
the Determination of Lease Rental for Tenanted Lands";
AO No. 09, Series of 1991, "Rules and Procedures on Leasehold Operations in Tenanted
Coconut Lands; and
AO No. 04, Series of 1992, "Rules and Procedures on Leasehold Operations on Tenanted
Sugarcane Lands"
Why is there a need to institute leasehold in the retained areas of landowners?
The DAR should institute leasehold to protect and improve the tenurial and economic status of tenant-
tillers in agricultural lands within the retained areas and in areas not yet covered.
 Leasehold would improve the hold of the tenant on the land because the lessee shall have physical
possession and enjoyment, as well as management of the land. Furthermore, with the fixing of the lease rental, the
lessee would get more for his or her labor and other inputs.
13.2 TENANCY RELATIONSHIP
What are the conditions set for a tenancy relationship to exist?
All the following conditions must be present for tenancy relationship to exist:
a. That the parties are the landholder and the tenant;
b. That the subject is agricultural land;
c. That there is consent by the landowner for tenant to work on the land, given either orally
or in writing, expressly or impliedly;
d. That the purpose is agricultural production;
e. That there is personal cultivation or with the help of the immediate farm household; and
f. That there is compensation in terms of payment of a fixed amount in money and/or
produce
What is meant by personal cultivation?
There is personal cultivation if the tenant cultivates the land himself/herself or with the aid of the
immediate farm household. Immediate farm household refers to the members of the family of the lessee and
other persons who are dependent upon him/her for support and who usually help him/her in the activities.
Why should there be leasehold even in coconut lands or other permanent crops when there is practically no
"cultivation" involved?
Cultivation has been defined in separate court rulings as:
"not limited to the plowing and harrowing of the land, but also husbanding of the ground
to forward the products of the earth by general industry, the taking care of the land and fruits
growing thereon, fencing of certain areas, and the clearing thereof by gathering dried leaves and
cuffing of grasses. In coconut lands, cultivation includes the clearing of the landholding, the gather
of coconuts, their piling, husking and handling, as well as the processing thereof into copra,
although at times with the aid of hired laborers" (Coconut Cooperative Marketing Association, Inc.
vs. Court of Appeals, Nos. L-4681-83, August 19, 1988, 164 SCRA 568; Wenceslao Hernandez vs.
Hon. Intermediate Appellate Court et al, G.R. No. 74323, September 21, 1990, 189 SCRA 758).
Clearly, there is cultivation involved in coconut lands.
Does a tenancy relationship exist in cases where squatters are allowed by the landowner to cultivate the
land for free?
No, agricultural tenancy does not exist in this case since there is no expressed or implied agreement to
undertake the cultivation of the land belonging to the landholder. No agreement exists in terms of share in
harvest or payment in a fixed amount. It is, however possible for the parties to subsequently enter into a
leasehold relationship.
When shall a tenancy relationship cease to exist?
The agricultural leasehold relation is extinguished by any of the following:
a. abandonment of the landholding without the knowledge of the agricultural lessor;
b. voluntary surrender of the landholding by the tenant-lessee after giving notice to the
lessor three months in advance (Sec. 8, RA 3844); or
c. absence of an heir to succeed the lessee in the event of his/her death or permanent
incapacity. (RA 3844, as amended, Sec. 7 and 8)
The leasehold relation is likewise extinguished when the lessee's dispossession of the land is authorized
by the DAR Adjudication Board or by the proper court in a judgment that is final and executory, for violations of
the leasehold agreement or pertinent provisions of agrarian laws on leasehold.
On what grounds may a tenant-lessee be dispossessed of his/her tillage?
An agricultural lessee may be dispossessed of his/her tillage on the following grounds:
 a. He/she failed to substantially comply with the terms and conditions of the leasehold
contract or with laws governing leasehold relations, unless the failure is caused by a fortuitous
event or force majeure;
b. He/she planted crops or used the land for a purpose other than what had been previously
agreed upon. AO No. 05-93, however, now allows the lessee to intercrop or plant secondary
crops after the rental has been fixed, provided he/she shoulders the expenses;
c. He/she failed to adopt proven farm practices necessary to conserve the land, improve its
fertility, and increase its productivity (with due consideration of his/her financial capacity and
the credit facilities available to him/her);
d. His/her fault or negligence resulted in the substantial damage, destruction, or
unreasonable deterioration of the land or any permanent improvement thereon;
e. He/she does not pay the lease rental when it falls due except when such non-payment is
due to crop failure to the extent of 75 percent as a result of a fortuitous event; or
f. He/she employed a sublessee. (Section 36, RA 3844, as amended)
The dispossession shall be by a final and executory judgment.
What if a lessee employed hired labor but religiously pays the lease rental to the landowner?
The lessee can only employ hired labor if he/she is temporarily incapacitated and has no immediate
family household who will do the cultivation.
Is the agricultural leasehold relation extinguished by the death or permanent incapacity of any of the
parties?
No. In case the tenant-lessee dies or is permanently incapacitated, the leasehold relation shall continue
between the agricultural lessor and the member of the lessee's immediate farm household who can personally
cultivate the land. Such person shall be chosen by the lessor within one month from such death or permanent
incapacity from among the following:
a. the surviving spouse;
b. the eldest direct descendant by consanguinity; or
c. the next eldest descendent or descendants in the order of their age.
If the death or personal incapacity of the lessee occurs during the agricultural year, the choice by the
lessor shall be done at the end of that agricultural year. If the lessor fails to exercise his choice within the
prescribed period, the above mentioned order of priority shall be followed. In case of death or permanent
incapacity of the lessor, the leasehold relation shall bind his/her legal heirs.
What is the effect of transfer of legal ownership of the land?
Leasehold is not extinguished with the transfer of legal ownership of the land from one landowner to
another. Section 10 of RA 3844, as amended, provides that the purchaser or transferee shall be subrogated to the
rights and substituted to the obligations of the agricultural lessor.
13.3 RIGHTS AND RESPONSIBILITIES OF LESSEE
What are the rights of the lessee?
a. To have possession and peaceful enjoyment of the land;
b. To manage and work on the land in a manner and method of cultivation and harvest which
conform to proven farm practices;
c. To mechanize all or any phase of his farm work;
d. To deal with millers and processors and attend to the issuance of quedans and warehouse
receipts of the produce due him/her;
e. To continue in the exclusive possession and enjoyment of any homelot the lessee may
have occupied upon the effectivity of RA 3844;
f. To be indemnified for the costs and expenses incurred in the cultivation and for other
expenses incidental to the improvement of the crop in case the lessee surrenders, abandons or is
ejected from the landholding;
 g. To have the right of pre-emption and redemption; and
h. To be paid disturbance compensation in case the conversion of the farmholding has been
approved.
What are the duties and responsibilities of the lessee?
The lessee shall at all times perform the following pursuant to Section 26 of RA 3844, as amended:

a. Cultivate and take care of the farm, growing crops, and other improvements on the land
and perform all the work therein in accordance with proven farm practices;
b. Inform the lessor within a reasonable time of any trespass committed by third persons on
the farm, without prejudice to his/her direct action against the trespasser;
c. Take reasonable care of the work animals and farm implements delivered to him/her by
the lessor and see to it that they are not used for purposes other than those intended, or used by
another without the knowledge and consent of the lessor;
If any of such work animals or farm implements get lost or damaged due to the lessee's
negligence, he/she shall pay the lessor the equivalent value of the work animals or farm
implements at the time of the loss or damage;
d. Keep the farm and growing crops attended to during the work season. In case of
unjustified abandonment or neglect of his/her farm, any or all of the expected produce may,
upon order of the appropriate body or court, be forfeited in favor of the lessor to the extent of
the damage caused thereby; and
e. To pay the lease rental to the lessor when it falls due.
Under RA 3844, as amended, the lessee has also the responsibility to notify the lessor at least three days
before the date of harvesting, or whenever applicable, the date of threshing. As decided in a Supreme Court ruling,
however, this is no longer required from the lessee.
Is there a limit in the area a lessee under CARP may cultivate?
No. Since RA 6657 only speaks of the three (3) hectare limit with respect to the award that may be given
to the ARB, this ceiling does not apply under the leasehold system. The tenant, however, must render personal
cultivation on the entire area leased.
Can a lessee be a tenant in a separate landholding?
Section 27 of RA 3844 includes as one of the prohibited acts of an agricultural lessee, entering into a
contract to work additional landholdings belonging to a different agricultural lessor to acquire and personally
cultivate an economic family size farm without the knowledge and consent of the lessor with whom he/she had
first entered into leasehold, if the first landholding is of sufficient size to make him/her and the members of the
immediate farm household fully occupied in its cultivation.
Based on this provision, it is still possible for a lessee to be a tenant in another landholding. The
prohibition applies if the land presently cultivated is already of sufficient size to fully occupy the lessee or his/her
immediate household in the cultivation. Even if the size is already sufficient, cultivation of other landholdings is
still possible if there is consent of the original lessor.
What is meant by "economic family size" farm?
 RA 3844 has defined economic family size farm as an area of farm land that permits efficient use of labor
and capital resources of the farm family and will produce an income sufficient to provide a modest standard of
living to meet a farm family's need for food, clothing, shelter and education with possible allowance for payment
of yearly installments on the land, and reasonable reserves to absorb yearly fluctuations in income.
Is the lessee compelled to pay additional rent for the secondary crops raised by his/her after the execution of
the contract?
No, after the rental has been fixed, such rental shall serve as payment for the use of the land. The lessee
may diversify and/or plant secondary crops without paying additional rent, provided that all expenses are
shouldered by him/her.
What are the specific rights of the lessees in sugarcane lands which should be part of the leasehold
agreement?
The lessees in sugar cane lands shall have rights which can be exercised by them personally or through a
duly registered cooperative or farmers' association of which they are members. These are to:
1. enter into a contract with the sugar central or millers for the milling of sugar cane grown
on the leased property;
2. be issued a warehouse receipt (quedan) or molasses storage certificate by the sugar
central for the manufactured sugar, molasses and other by-products.
3. have free access to the sugar central's factory, facilities and laboratory for purposes of
checking and/or verifying records and procedures;
4. be furnished a weekly statement of cane and sugar account showing, among other things,
the tonnage of the delivered cane and analysis of the crusher juice;
5. be given thirty (30) days notice in writing before the sugar and other by products are sold
through public auction; and
6. be provided with the standard tonnage allocation by the miller/sugar central.
What if the sugar central/miller refuses to recognize the rights of the lessee?
In cases of such refusal by the sugar/miller, then the lessee with the assistance of DAR and/or the
cooperative of which he/she is a member of, should file a petition with the DARAB.
What if the land under lease is subject of an approved land use conversion applications?
The lessee may be dispossessed of his/her tillage if such land is subject of an approved land use
conversion application, provided the lessee is given a disturbance compensation equivalent to five (5) times the
average of the gross harvests on his/her land during the last five (5) preceding calendar years, and such other
benefits he/she is entitled to as provided for by law.
13.4 RIGHTS AND RESPONSIBILITIES OF LESSOR
What are the rights of the lessor?
Section 29 of RA 3844 provides that it shall be the right of the lessor to:
 a. Inspect and observe the extent of compliance with the terms and conditions of the
leasehold contract;
b. Propose a change in the use of the landholding to other agricultural purposes, or in the
kind of crops planted;
c. Require the lessee, taking into consideration his/her financial capacity and the credit
facilities available to him/her, to adopt proven farm practices necessary to the conservation of
the land, improvement of the fertility and increase in productivity; and
d. Mortgage expected rentals.
What are the duties and responsibilities of a lessor?
The lessor shall, at all times, keep the agricultural lessee in peaceful possession and cultivation of his/her
landholding. In addition, he/she shall keep intact useful improvements existing on the landholding at the start of
the leasehold relationship such as irrigation and drainage systems and marketing allotments, which in the case of
sugar quotas shall refer both to domestic and export quotas, provisions of existing laws to the contrary
notwithstanding.
What are the prohibition on the lessor?

a. To dispossess the lessee of his/her landholding except upon authorization by the Court
under Section 36, RA 3844;
b. To require the lessee to assume, directly or indirectly, the payment of the taxes or part
thereof levied by the government on the landholding;
c. To require the lessee to assume, directly or indirectly any rent or obligation of the lessor to
a third party;
d. To deal with millers or processors without written authorization of the lessee in cases
where the crop has to be sold in processed form before payment of the lease rental;
e. To discourage, directly or indirectly, the formation, maintenance or growth of unions or
organizations of lessees in his/her landholding;
f. For coconut lands, indiscriminate cutting of coconut trees will be deemed a prima facie
evidence to dispossess the tenant of his/her landholding unless there is written consent of the
lessee and there is certification by the Philippine Coconut Authority (PCA), copy of the findings
and recommendations of which shall be furnished to affected tenants or lessees, or a resolution
from the Municipal Board allowing the cutting for valid reasons. (AO-05, Series of 1993 and AO 16,
Series of 1989)
Is indiscriminate cutting of coconut trees prohibited only in tenanted coconut lands?
No, even in lands cultivated by farmworkers.
Should the landowner execute two (2) separate leasehold contracts with the same lessee, one for the
principal crop and the other for the secondary crop?
 No. As a general rule, the landowner and lessee shall only execute one contract for their leasehold
relation. The execution of two contracts is no longer necessary since the lease rental shall cover the whole
farmholding cultivated by the lessee. Hence, secondary crops shall form part of the leasehold contract.
There are, however, certain qualifications: the secondary crop must have already been planted as of 15
June 1988 and the area covered is more than half a hectare.
What if there are two or more tenants?
If there are two or more tenants on the same lot, each producing a different crop, they may decide to have
a joint leasehold agreements, whichever is feasible.
What are the liabilities of a lessor if he/she ejects his/her tenant-lessee without the court's authorization?
A lessor shall be liable for:
a. fine or imprisonment;
b. damages suffered by the agricultural lessee in addition to the fine or imprisonment for
unauthorized dispossession;
c. payment of attorney's fees incurred by the lessee; and
d. the reinstatement of the lessee.
Can the lessor order the lessee to change crops?
No. Section 29 of RA 3844 provides that the lessor may propose a change in the use of the landholding to
other agricultural purposes, or in the kind of crops to be planted. The change, however, shall be agreed upon by
both the landowner and the lessee. In case of disagreement, the matter shall be settled by the Provincial Agrarian
Reform Adjudicator (PARAD) or in his/her absence, the Regional Agrarian Reform Adjudicator (RARAD)
according to the best interest of the parties concerned.
13.5 LEASE RENTAL
How much lease rental should the lessees pay?
The lease rental to be paid by all agricultural lessees shall not be more than the equivalent of twenty-five
percent (25%) of the average normal harvest during the three (3) agricultural years immediately preceding the
following dates:
* 10 September 1971 the date of effectivity of RA 6389 for tenanted rice and corn lands;
* date the tenant opted to enter into leasehold agreement or as of 15 June 1988, whichever
is sooner, for tenanted sugar lands; or
* date of leasehold agreement by the parties concerned or 15 June 1988, whichever is
sooner, for all other agricultural lands after deducting the amount used for seeds and the cost of
harvesting, threshing, loading, hauling and processing whichever is applicable.
For example, in coconut, the deductible items would depend on the final product. If the final product is
green nuts, then there is no cost of processing included. If the final product is copra, then the deductible items
would include cost of harvesting, loading and hauling, and the cost of husking, splitting, scooping and drying.
Can fertilizer be included in the list of allowable deductions for any particular crop?
No, only those enumerated under Section 34 of RA 3844 as cited above can be included as a deductible
item. However, DAR shall study the effect of the use of fertilizer and other related expenses as a cost of production
and its impact on the rental structure. This shall be taken into account in the periodic review and adjustment of
the rental structure.
How do you compute for the lease rental of newly cultivated land?
In the case of newly cultivated land or land cultivated for a period less than three years the initial rental
shall be based on the harvest of the first agricultural year, if such harvest is normal, or on the average harvest
during the preceding agricultural years. If there had been no normal harvest, then the estimated normal harvest
when the land was actually cultivated shall be used. cCAaHD
Once the three normal harvest have been established, the final rental shall be based on the average
normal harvest of these three preceding agricultural years.
Why is the lessor given only 25% while the lessee retains 75% of the net produce from the land?
 These percentages were provided for under RA 3844 on the premise that the lessee largely contributes to
the production of crops or fruits; while the lessor's only contribution is the land.

What is the normal harvest?

The normal harvest is the usual or regular produce obtained from the land when it is not affected by any
fortuitous event or force majeure such as typhoon, flood, drought, earthquake, volcanic eruption, and the like.
What is an agricultural year?
This is the period of time required for raising a particular agricultural product, including land
preparation, sowing, planting and harvest of crops, and whenever applicable, threshing of said crops.
In case of crops yielding more than one harvest from one planting (e.g., sugar cane), the agricultural year
shall be the period from the preparation of the land to the first harvest and thereafter from harvest to harvest. For
sugar cane, ratooning (from thrash burning to harvesting) shall likewise be considered as one agricultural year.
An agricultural year, therefore, may be shorter or longer than a calendar year. (AO 05-93).
If there is already an existing leasehold agreement, is there a need to negotiate another one?
No, the existing leasehold agreement will be respected provided that the agreed lease rental does not
exceed the maximum rental allowed by law. Furthermore, this agreement shall be subject to the periodic review
of the MARO for purposes of determining compliance.
Can the landowner demand for an increase in the agreed or fixed rental on the ground that there is an
increase in yield or production?
The landowner can only demand for an increase in the fixed or agreed lease rental if he/she introduced
capital improvements on the farm. In such a case, the rental shall be increased proportionately to the resulting
increase in production due to said improvements. The cost of capital improvement, including the interest thereon,
will be determined, and the number of years shall be fixed within which the increase in rental shall be paid.
What is capital improvement?
Capital improvement refers to any permanent and tangible improvement on the land that will result to
increased productivity. If done with the consent of the lessee, then the lease rental shall be increased
proportionately.
What will happen if there is a decrease in production as a result of large scale replanting in coconut
lands? Can the lease rental be reduced?
Yes, if the lessor initiates large scale replanting and the normal coconut production is affected, a new
lease rental may be computed proportionate to the decrease in production.
What happens to the lease rental should the tenant-lessee suffer crop failure due to a fortuitous event or
force majeure?
The lessee may defer payment of the lease rental due for the agricultural year affected by a fortuitous
event or force majeure causing crop failure to the extent of 75 percent. The lease rental shall be paid on a
staggered basis subject to the agreement of both parties.
Normally, such rental is paid in installments every harvest time beginning the next agricultural year and
to continue until the lessee is fully paid.
13.6 FIXING THE LEASE RENTAL
 What is the role of the MARO in the implementation of agricultural leasehold?
With the assistance of the Barangay Agrarian Reform Committee (BARC) and the POs/NGOs present in
the area, the MARO shall:
1. Identify all landholdings still under share tenancy and list the landowner and share-
tenants thereon;
2. Together with the PARO, undertake massive information dissemination on leasehold;
3. Prioritize areas for leasehold implementation taking into account presence of strong
people's organizations and/or voluntary application by any lessor or lessee;
4. Require submission by parties concerned of documents on production data, normal
harvest, and cost of deductible items during the three immediately preceding agricultural years.
If these are not available, gather production data released by the proper government agency;
5. Conduct mediation conference (with the assistance of the Barangay Council, if there is no
BARC) between the landowner and the lessee for the purpose of fixing the lease rental.
If any party fails to attend the conference despite notice, mail notice at the last known
address of the parties and post two successive notices at seven days apart at the municipal,
barangay halls and the place where the land is located. The MARO shall proceed with the
computation of the lease rental. The second notice should be posted at least ten days prior to the
scheduled conference;
6. In case of disagreement, accomplish the prescribed leasehold form in five copies in the
language or dialect known to the lessees, explain the contents and have it signed or thumb
marked by the parties or duly authorized representative before two witnesses;
7. Register the Leasehold Agreement with the Municipal Treasurer and furnish each party a
copy of the registered agreement. The PARO, on the other hand, will have the leasehold
agreement annotated at the back of the Transfer Certificate of Title on file with the Register of
Deeds.
What if there is no agreement reached during the mediation conference?
If no agreement is reached despite the mediation conferences, the MARO shall fix the provisional lease
rental and prepare the Leasehold Documentation Folder. Copies of the Order for Provisional Lease Rental shall be
sent to the landowner, lessee and the PARO. The Leasehold Documentation Folder shall then be transmitted to
the PARAD.
The PARAD shall review the provisional lease rental within 30 days from the receipt of the
documentation folder and issue the order of lease rental.
Pending the review of the provisional lease rental, the PARAD upon motion of the landowner shall order
the lessee to deposit the provisional lease rental with the nearest LBP Office in a trust account in the name of the
landowner, if the payment is in cash, or in a designated bonded warehouse if the payment is in kind and give a
written notice to the MARO and the landowner.
What if either or both the parties concerned disagree with the order of lease rental made by the PARAD?
Any party who disagrees with the Order of Lease Rental issued by the PARAD may bring the matter to the
DARAB within 15 days from receipt thereof. Otherwise, the Order shall become final and executory.
3.7 OTHER RELATED LAWS AND ISSUANCES
1. Presidential Decree (PD) No. 152, promulgated on 31 March 1973, prohibited the
employment or use of share-tenants in complying with the requirements of the law regarding
entry, occupation, improvement and cultivation of public lands.
2. PD No. 583, promulgated on 10 November 1974, prescribed penalty for the unlawful
ejectment, exclusion, removal or ouster of tenant farmers from their landholdings.
3. PD No. 816 promulgated on 21 October 1975, penalized any agricultural lessee of rice and
corn lands under PD 27 who deliberately refuses or continues to refuse to pay rentals or
amortization payments when they are due and remain unpaid within a period of two years.
4. PD No. 1425, promulgated on 10 June 1978, strengthened the prohibition against the
practice of share tenancy and provided penalties thereof. Under this Decree, any tenant who
 refuses to enter into leasehold contract may be prosecuted before the Court of Agrarian
Relations.
5. PD No. 1040 promulgated on 21 October 1976, prohibited and penalized the contracting
of share-tenants in all agricultural lands covered by PD 27.
CHAPTER 14
PRODUCTION AND PROFIT SHARING
14.1 COVERAGE
What is production and profit sharing?
This is a mandate under Section 16 of EO 229 and Sections 13 and 32 of RA 6657 which requires
individuals or entities owning or operating under lease or management contract, agricultural lands to execute
production and profit sharing plan with their farmworkers or farmworkers' organization, pending final
distribution of the land or implementation of the stock distribution scheme.

What are the existing Administrative Orders governing production and profit sharing?
a. Administrative Order No. 08, Series of 1988, "Guidelines and Procedures Implementing
Production and Profit Sharing Under RA 6657"
b. Administrative Order No. 09, Series of 1988, "Guidelines and Procedures Implementing
Production Sharing Under EO 229"
It will be observed that EO 229 mandated only production sharing while RA 6657 included profit sharing
on top of the production sharing.
Who are required to execute production and profit sharing plan?
The following employers are required to execute Production and Profit Sharing Plan with their
farmworkers if their annual gross sales exceed Five Million Pesos (P5M):
a. Any enterprise owning or operating agricultural lands under lease, management contract,
production venture or other similar arrangement;
b. Multinational Corporations engaged in agricultural activities; and
c. Commercial farms devoted to aquaculture including salt beds, fishponds and prawn ponds,
fruit farms, orchards, vegetable and cut flower farms, and cacao, coffee and rubber plantation.
Why are these employers required to execute production and profit sharing plan with their farmworkers?
Section 2 of RA 6657 declared that agrarian reform program is founded on the right of the farmers and
regular farmworkers, who are landless, to own directly or collectively the lands they till, or in the case of other
farmworkers, to receive a just share of the fruits thereof.
This mandated production and profit sharing plan is in pursuit of this avowed principle of agrarian
reform. While awaiting for final land or stock distribution until the end of the deferment period in the case of
commercial farms, or full control of the land in the case of lease back arrangements, farmworkers can realize an
improvement in their farm income.
Who are the employees covered?
 All farmworkers of covered employers, regardless of duration, who are directly working on the land of
the corporation or other entities, whether classified as regular, seasonal, technical or other farmworkers are
covered in the mandated Production and Profit Sharing Plan. They should not, however, own more than three (3)
hectares of agricultural land.
14.2 DAR's AUTHORITY
What is the power given to the DAR in the implementation of production and profit sharing plan under the
CARP?

The DAR through its Secretary or authorized representatives has the following powers:
1. To order and administer compliance with the Production Sharing provisions of EO
229 and Production/Profit Sharing provisions of RA 6657;
2. To require covered employers to submit report on the distributed production/profit
shares;
3. To compel the production of books and documents of covered employers;
4. To compel answers to questions needing clarifications to shed light on problems
encountered in the implementation;
5. To issue subpoena; and
6. To enforce its writs through sheriffs or other duly deputized officers.
14.3 MAIN FEATURES
What are the main features of the mandated plan?
EO 229
Under EO 229 and its implementing guideline, AO No. 09, Series of 1988, covered employers who realize
a gross sales in excess of five million pesos per annum, shall prepare and execute a Production Sharing Plan
whereby at least 2.5 percent of the gross sales from the production/cultivation of the agricultural lands are
distributed as compensation to their farmworkers over and above the compensation they currently receive. The
employers are not, however, compelled to pay more than one hundred percent of the regular annual
compensation of the farmworkers.
Regular annual compensation includes all cash remunerations or earnings regularly paid to an employee
by an employer for services rendered within a year, such as salaries, wages, 13th month pay, bonus, allowances,
commissions and paid leaves, and other income of similar nature, whether mandated by law or provided by
collective bargaining agreement or established company practices, but excludes payment arising from the
Production and Profit Sharing provided under EO 229 and RA 6657.
The Plan should cover the period from 29 August 1987 (date of effectivity of EO 229) and 14 June 1988
(date prior to the effectivity of RA 6657).
 Fifty percent (50%) of the Production Share should have been paid not later than 12 February 1989 and
the balance on or before 2 April 1989.
RA 6657
They are required to pay the following Production and Profit Shares to be given over and above the
compensation currently received by their farmworkers, which shall be distributed based on the following
schedules:
Amount of Production Share:
Three percent (3.0%) of Annual Gross Sales from 15 June 1988, until final land or corporate stock
transfer to the farmworker-beneficiaries is effected, provided that the employer is not obligated to pay more than
one hundred percent (100%) of the regular annual compensation of the farmworker-beneficiaries.
* Fifty percent (50%) of the estimated Production Share (based on unaudited financial
statements) shall be distributed within sixty (60) days at the end of the accounting year, with the
balance (based on audited financial statement) payable not more than sixty (60) days thereafter.
Amount of Profit Share:
Ten Percent (10%) of net profit after tax, provided that in cases where the retention right is allowed, the
amount to be distributed shall be reduced by an amount equivalent to the proportion of the retained area to the
total land area.
* Fifty (50%) of estimated Profit Share (based on unaudited financial statements) shall be
distributed within 90 days at the end of the accounting year, with the balance based on audited
financial statements payable not more than 60 days thereafter.
For lands to be turned over to the farmworker-beneficiaries, a transitory period whose length shall be
determined by DAR, shall be established. During this period, farmworkers will be trained to manage the
enterprise. The managerial and supervisory group in place during this transitory period shall receive at least one
percent (1%) of the gross sales of the entity based on the agreement concluded by the farmworker-beneficiaries
and this group, subject to the approval of DAR.
What is the effect on existing production/profit sharing granted by employer prior to the promulgation
of EO 229 and RA 6657?
It shall be credited as compliance with the mandated production and profit sharing plan. Provided,
however, that where the benefit under the existing Production and Profit Sharing Plan is less than the applicable
amount required in Administrative Order Nos. 08and 09, Series of 1988, the employer shall pay the difference.
What is the DAR's policy on undistributed and unclaimed production and profit sharing?
All undistributed or unclaimed Production and Profit Shares shall be deposited by the employer with the
nearest Land Bank of the Philippines branch in the name of the Secretary of Agrarian Reform for payment to the
workers to whom they are due. The employer shall immediately report such deposits to the nearest DAR Office
and sends notices to the farmworker-beneficiaries. If the money remains undistributed or unclaimed after two
years from the date of deposit, the same shall be considered forfeited and shall be turned over to the Agrarian
Reform Fund pursuant to Administrative Order, No. 08, Series of 1988.
Who are required to submit a report on the distributed production and profit sharing?
All covered employers are required to submit a report on the Production and Profit Shares distributed,
including the special payrolls, under oath signed by the employer or his duly authorized representative, not later
than 30 days after completion of the distribution of the workers' shares.
14.4 ROLE OF THE MARO
Can the MARO compel covered employers to execute production and profit sharing plan?
Yes, as long as they realize gross sales in excess of five million pesos and a net profit after the tax.
In case a covered employer who was granted a deferment refuse to execute a production and profit sharing
plan, what sanction can the MARO enforce?
A report should immediately be submitted by the MARO to the PARO. Non-compliance with the
provisions on production and profit sharing is a violation covered by the provisions on Prohibited Acts and
Omissions, and Penalties (Sections 73 and 74 ofRA 6657, respectively).
 Violation of the provisions on production and profit sharing is punishable by imprisonment of not less
than one month to not more than three years or a fine of not less than one thousand pesos (P1,000.00) and not
more than fifteen thousand pesos (P15,000.00), or both, at the discretion of the court.
The MARO may also initiate the cancellation of the Order of Deferment issued by the DAR Regional
Director and subject his land to compulsory acquisition.
What should the MARO do in case of disputes arising from production and profit sharing?
The MARO, together with the BARC should mediate and conciliate. They should convince both parties to
settle the dispute voluntarily. In case there is no success in settling the dispute, this shall be forwarded to the
PARO and if still unsolved, it shall be submitted to the PARAD for adjudication.
CHAPTER 15
COMMERCIAL FARM DEFERMENT
15.1 MEANING OF COMMERCIAL FARMS AND COMMERCIAL FARM DEFERMENT
What are commercial farms?

Commercial farms are private agricultural lands over five hectares in size devoted to commercial aqua
culture including salt beds, fishponds and prawn ponds fruit farms, orchards, vegetable and cut flower
farms, and cacao, coffee, and rubber plantations.
It should be noted that the definition is limited to these commodities produced. Thus, other farms
although commercial in nature are not covered by the definition.
Further, Section 11, RA 6657 actually includes in the list lands devoted to commercial livestock, poultry
and swine raising. The Supreme Court decision in Luz Farms vs. the Secretary of Agrarian Reform (128 SCRA
568), however, has removed these farms from the coverage of CARP.
What is commercial farm deferment?
Section 11, RA 6657 as implemented by AO 16-88 provides that the acquisition and distribution of
qualified commercial farms shall be deferred for ten (10) years from 15 June 1988. In case of new farms, the ten
year deferment period shall begin from the first year of commercial production and operation, as determined by
DAR.
15.2 RATIONALE FOR DEFERMENT
Why is coverage of these farms deferred?
The CARP provides for the deferment of the coverage of the farms mentioned earlier, to allow them to
recover their investments and insulate them from possible disruptions in operations and productivity during land
acquisition and distribution. The commercial farm deferment provision of RA 6657, which runs counter to the
general rule of immediate land transfer, particularly of large estates, reflects the numerous compromises that had
to be forged by the legislators in the crafting of the law.
15.3 REQUIREMENTS
Is the deferment automatic?
No. The farm should already be planted to commercial crops or devoted to commercial farming
operations before 15 June 1988. It should likewise be applied for deferment with the DAR, which shall approve
the application based on whether or not the farm meets the requirements enumerated in Annex A of AO 16-88.
These criteria are on the density of planting (number of plants or trees per hectare) and infrastructure and
facilities of the farm.
When is the deadline for filing of applications for commercial farm deferment?
The extended deadline for applying deferment was 02 May 1989. Deadline for application was originally
set on 20 March 1989 but was extended.
A total of 4,620 commercial farms applied as of November 30, 1994. The applications of 1,546 farms have
been approved, covering 54,837 hectares. The rest are still being evaluated and processed.
15.4 DEFERMENT PERIOD
When is the start of the ten-year deferment period?
For farms already in commercial production as of 15 June 1988, the deferment period began as of that
date.
For farms already established before 15 June 1988 but were not yet in commercial production as of that
date, the deferment starts from the first year of commercial production and operations, or at the end of the
gestation period provided inAO 16-88 based on the crop planted or commodity produced. This is to give the
landowner the chance to recover and profit from his or her investments.
How about for farms with one crop of varying ages?

For farms divided into two or more area planted to a crop, the deferment period of each area has to be
determined, following the same rules above. Thus, deferment of those areas which were already in commercial
production as of the effectivity of RA 6657 began as of 15 June 1988. Deferment of those areas not yet in
commercial production as of 15 June 1988 began or will begin at the end of the gestation period of the crop.
On the other hand, for farms with commercial crops intercropped with other commercial crops, the start
of the deferment is based on the status of the main crop.
What is the gestation period?
The gestation period is the period beginning from the time the crop or commodity is first planted or
raised until the time the crop bears fruit or the produce are harvested. The end of the gestation period is the start
of commercial production.
The gestation periods listed in Annex A of AO 16-88 were recommended by the Department of
Agriculture.
15.5 DAR's ROLE DURING DEFERMENT PERIOD
Is a farm granted deferment completely out of CARP coverage for ten years?
No, for two basic reasons: First, the deferment may be lifted and the farm subjected to immediate
redistribution of the DAR determines that the purposes for which the deferment is granted no longer exist. The
reason for deferment must be continuously present for the farm to be continuously deferred. Thus, a deferred
vegetable farm may be compulsorily acquired if the landowner decides to devote the area to sugar cane
production, instead.
The other reason is that a farm granted commercial farm deferment is required to pay production and
profit shares (PPS), if it realizes gross sales exceeding five million pesos. This is to allow the farmworkers to
receive a just share of the fruits of the farm during the deferment. The production and profit shares shall be paid
upon the start of the deferment period.
What shall the DAR do during the deferment period?
Aside from monitoring the farm as to compliance with the CFD and PPS regulations, the DAR shall
undertake the necessary steps towards the acquisition and distribution of the property. These include valuation
of the land, and, more importantly, facilitating the organization of the farmers by partner NGOs/POs in the area.
Organizing the farmers during the deferment period will smoothen the transfer of land ownership and prevent
disruption of operation.
May a landowner with an approved commercial farm deferment application change his or her commercial
crop?
Yes, provided the total deferment period reckoned from the date of first approval is not extended.
What happens if a farm which has been granted commercial farm deferment suffers from a calamity or
force majeure? If the crops were destroyed, will the farm be immediately covered under compulsory acquisition?
In cases where the crop planted or commodity raised in the area is destroyed by force majeure and the
farm owner wants to replenish the crop or commodity, the DAR may continue to grant the deferment provided
the following conditions are present:
a. The landowner can immediately resume commercial operations;
b. The employment of the workers or beneficiaries is not affected; and
c. The ten-year deferment period is not extended.
Who will monitor compliance by landowner with the rules and regulations on commercial farm deferment?
The DAR Regional Office shall maintain records of the landowner's operations to monitor compliance
with the rules and regulations on deferment. It is also the Regional Director who signs the Order of Deferment.
For these purposes, the landowner shall make available to DAR the farm's premises for ocular inspection,
the personnel for interview and the records for examination during normal business hours.
CHAPTER 16
LAND USE CONVERSION
16.1 DEFINITION
WHAT IS LAND USE CONVERSION?

Conversion the act of changing the current use of a piece of land into some other use. Specifically for the
DAR, land use conversion refers to the change from agricultural to non-agricultural land use (residential,
commercial, industrial, etc.). From a more technical perspective, conversion is defined as the act of authorizing
the change of the current use of a piece of land into some other use.
16.2 DAR's STAND ON CONVERSION
Is the DAR against land use conversion?
 No. The DAR recognizes that land use conversion is necessary, even inevitable in the country's march to
progress. Many agricultural lands will have to be given up in favor of industrial estates, commercial centers,
residential subdivisions, etc. Moreover, CARP is not the only program of Government. Other important programs
on tourism, housing, and industrialization, among others, are being pursued and these all require land. What the
DAR is against is indiscriminate and wasteful land use conversion. What the DAR wants is to direct land use
conversion such that the productive agricultural lands are preserved for agriculture and the other programs are
implemented in the marginal agricultural areas.
It should be noted that agriculture can be carried out only in certain types of land. Thus, prime
agricultural lands should rightfully be considered a finite natural resource, further depletion of which would
threaten national food security. In contrast, housing and industrialization, for example, require land merely for
space and may therefore be implemented in lands marginal for agriculture.
When conversion of agricultural lands coincides with the objectives of the Comprehensive Agrarian
Reform Law to promote social justice, industrialization, and the optimum use of land as a national resource for
public welfare, it shall be pursued in a speedy and judicial manner.
16.3 DAR's LEGAL MANDATE
What is the DAR's legal mandate in land use conversion?
Executive Order No. 129-A, Section 4 mandates the DAR to "approve or disapprove the conversion,
restructuring or readjustment of agricultural lands into non-agricultural uses".
Section 5 of the same EO authorizes the DAR to "have exclusive authority to approve or disapprove
conversion of agricultural land for residential, commercial, industrial, and other land uses as may be provided for by
law".
Section 65 of RA 6657 likewise empowers the DAR to authorize under certain conditions, the
reclassification or conversion and the disposition of lands awarded to agrarian reform beneficiaries.
Finally, Section 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President, provides
that "action on application for land use conversion on individual landholdings shall remain as the responsibility of
the DAR, which shall utilize as its primary reference, documents on the comprehensive land use plans and
accompanying ordinances passed upon and approved by the local government units concerned, together with the
National Land Use Policy, pursuant to RA No. 6657 and EO-129-A."
What is the Department of Justice Opinion No. 44 and how does this affect DAR's authority to approve or
disapprove conversions?
Under the Department of Justice Opinion No. 44, Series of 1990, a parcel of land is considered non-
agricultural and, therefore, beyond the coverage of CARP if it has been classified as residential, commercial,
or industrial in the City or Municipality Land Use Plan or Zoning Ordinance approved by the Housing and Land
Use Regulatory Board (HLURB) before 15 June 1988, the date of effectivity of CARL.
Under this Opinion, a parcel of land which is planted to coconut cannot be covered by CARP if it has been
reclassified into the town's industrial zone prior to 15 June 1988.
If a parcel of land is covered by this DOJ opinion, must its landowner still file an application for conversion
with the DAR?
No. All lands falling under this category, i.e., those lands already classified as commercial, industrial or
residential before 15 June 1988 no longer need any conversion clearance. What the landowner or his duly
authorized representative needs is an exemption clearance from the DAR. Application for such clearance should
be filed with the Regional Office of the DAR where the land is located. (The procedures and requirements are
detailed in AO No. 06, Series of 1994).
What policy guidelines govern land use conversion?
To operationalize the provisions of various laws, the Department of Agrarian Reform has issued several
policy guidelines to regulate land use conversion. The latest,Administrative Order No. 12, Series of 1994,
"Consolidated and Revised Rules and Procedures Governing Conversion of Agricultural Lands to Non-Agricultural
Uses", now consolidates and revises all existing implementing guidelines issued by the DAR, taking into
consideration other Presidential Issuances and national policies related to land use conversion.
Thus, AO No. 12-94 repeals AO Nos. 8 and 15, Series of 1990 and 1988, General Order No. 01, Series of
1989, AO Nos. 15, 16, and 18, Series of 1989, AO No. 07, Series of 1992 and amends AO Nos. 1 and 2, Series of
1990.
 The provisions of this latest Administrative Order, shall however, be applicable only to all application
filed on or after its date of effectivity on 10 November 1994. All other applications filed previous to this AO shall
be governed by the pertinent administrative orders or issuances in force at the time of the filing of the
applications, and shall be processed accordingly.
On the other hand, conversion for selected Regional Agro-Industrial Centers, Tourism Development Area
and sites for socialized housing shall be processed under Joint NEDA-DAR Memorandum Circular No. 01, Series of
1993 issued pursuant toExecutive Order No. 124, Series of 1993 of the Office of the President.
16.4 DAR's ROLE IN CONVERSION
Operationally, what is the DAR's role in land use conversion?

Aside from being the final approving authority, the DAR basically performs the following functions:
a. Evaluate the documents submitted for completeness and veracity;
b. Determines whether or not the subject land is covered by CARP;
c. Determines whether or not the application should be approved based on the criteria set
for land use conversion;
d. Ensures that the potential agrarian reform beneficiaries are consulted on the proposed
land use conversion and are properly given their disturbance compensation and other benefits;
e. Monitors approved application for compliance with the requirements;
f. Together with the DOJ, monitors illegal conversions and recommends and files criminal
cases against landowners and developers who undertake illegal conversions.
16.5 MECHANICS OF LAND USE CONVERSION: APPLICATION, APPROVAL, MONITORING
Who may apply for land use conversion?
The following may apply for conversion:
a. Owners of private agricultural lands or other persons duly authorized by the landowner;
b. Farmer beneficiaries of the Agrarian Reform Program after the lapse of five (5) years from
award, reckoned from the date of registration of their landholdings, and who have fully paid
their obligations and are qualified, or persons duly authorized by them.
c. Government agencies, including government-owned or controlled corporations.
When may an application for conversion be granted?
Conversion may be allowed under the following situation:
1. If at the time of the application, the lands are reclassified as commercial, industrial and
residential in the new or revised town plans promulgated by the Local Government Unit (LGU)
and approved by the HLRB or by the Sangguniang Panlalawigan (SP) after 15 June 1988, in
accordance with Section 20 of RA 7160 (The New Government Code), as implemented
by Malacaang Memorandum Circular No. 54, Executive Order No. 72, Series of 1993.
2. If at the time of the application, the land still falls within the agricultural zones but:
a. the land has ceased to be economically feasible and sound for agricultural
purposes, as certified by the Regional Director of the Department of Agriculture (DA); or
 b. the locality has become highly urbanized and the land will have a greater
economic value for residential, commercial or industrial purposes, as certified by the
local government unit.
3. If the city/municipality does not have a comprehensive development plan and zoning
ordinance duly approved by HLRB/SP but the dominant use of the area surrounding the land
subject of the application for conversion is no longer agricultural, or if the proposed land use is
similar to; or compatible with the dominant use of the surrounding areas as determined by the
DAR.
In all cases, conversion shall be allowed only if the DENR issues a certification that the conversion is
ecologically sound.
May conversion be granted for lands covered by a notice of acquisition?
No. No application for conversion shall be given due course if the subject land has been covered by any of
the following:
a. Notice of Acquisition under compulsory acquisition or voluntary offer to sell;
b. Application for stock distribution duly received by DAR; or
c. Perfected VLT/DPS agreement between the landowner and the beneficiaries.
What other lands are non-negotiable for conversion?
Pursuant to Administrative Order No. 20, Series of 1992 (Interim Guidelines on Agricultural Land Use
Conversion and Memo Circular No. 54, Series of 1993 both of the Office of the President, the following are non-
negotiable for conversion.
1. All irrigated lands where water is available to support rice and other crop production.
2. All irrigated lands where water is not available for rice and other crop production but
within areas programmed for irrigation facility rehabilitation by the Department of Agriculture
(DA) and the National Irrigation Administration (NIA).
3. All irrigable lands already covered by irrigation projects with firm funding commitments
at the time of the application for land use conversion or reclassification.
May conversion be granted for lands with qualified beneficiaries?
Yes. However, for the application for conversion to be approved, the beneficiaries must first be paid a
disturbance compensation which should not be less than five (5) times the average of the annual gross value of
the harvest on their actual landholdings during the last five (5) preceding calendar years.
In addition to ensuring that the ARBs are properly paid the disturbance compensation, the DAR shall
exert all efforts to see to it that free homelots and assured employment for displaced beneficiaries are provided
by the applicant/developer.
Are farmworkers also entitled to disturbance compensation?
Yes. The DAR rules in AO 01-90 that payment of disturbance compensation is not limited to tenant who
will be displaced but also includes farmworkers.

What shall the DAR do in case the ARBs are asking for a disturbance compensation above the level
prescribed by law?
 The DAR's principal responsibility in such case is to explain the provisions of the law to the farmers. The
DAR may try to persuade the parties, particularly the landowner, to a compromise but any increase beyond the
legal requirement is at the discretion of the landowner.
May conversion be granted for any proposed project?
No. To prevent circumvention of coverage under the CARP, conversion shall be granted only upon
evidence that the project to be established therein is viable and beneficial to the community affected.
How fast should the project be implemented?
Again to prevent circumvention of CARP, the land development phase of the project should be completed
within one year from the issuance of the Order of Conversion where the area is five hectares or less. Should the
area exceed five hectares, an additional year shall be allowed for every five hectares or a fraction thereof but in no
case shall the completion of development extend beyond five years from the issuance of the Order of Conversion.
Thus, a twelve (12) hectare area may be developed within three years, but a 50-hectare landholding should be
developed within five (5) years.
May the DAR cancel or withdraw its approval for land use conversion?
Yes. The DAR may cancel or withdraw authorization for land use conversion, based on the following
grounds:
a. Misrepresentation or concealment of material facts in the application, e.g. capacity of the
developer to undertake the project;
b. Failure to implement and complete the land development of the area within the specified
time; and
c. Any other violation of the rules and regulations which are material to the grant of the
conversion order.
What will happen to the lands covered by disapproved petitions for conversion or cancelled or withdrawn
conversion order?
Lands covered by a petition for conversion which had been disapproved or those covered by a
conversion order which had been cancelled or withdrawn shall be placed under CARP compulsory coverage, in
accordance with the schedule of implementation prescribed in Section 7 of RA 6657 and be distributed to all
qualified beneficiaries.
Where should the application for conversion be filed and what are the procedures to be followed?
Under the new guidelines, while forms can be obtained from any of the field offices, filing should be done
at the Regional Office with the DAR Regional Center for Land Use Policy, Planning and Implementation (RCLUPPI).
The application should contain the documentary requirements enumerated in Section 7 of AO-12, Series of 1994.
Application with incomplete documents will not be acted upon and the applicant will be informed accordingly.
There are also new procedures to be followed which clearly distinguish the role of various offices.
1. The Regional Center for Land Use Policy, Planning and Implementation (RCLUPPI):
* receives the application and reviews the required documents for completeness
and compliance with all the requisites;
* sends Notice of Land Use Conversion to the DAR Municipal Office (DARMO) for
posting;
* conducts field investigation and dialogues with affected parties and validates
information in the documents;
* prepares findings and recommendations;
* prepares land use conversion folder for every application attaching all the
required documents submitted by the applicant and endorse it to the Center for Land
Use Policy, Planning and Implementation (CLUPPI) through the Regional Director,
except:
applications for conversion involving five (5) hectares or less of land that are
within the non-agricultural zone per Land Use Plan approved by the HLRB/Sangguniang
Bayan which shall be submitted to the Regional Director.
 Subsequent applications by the same landowners or his representative, however, on a portion of the
same shall be forwarded to CLUPPI for resolution.
2. DAR Regional Director
* Approves or disapproves applications covering lands within the non-agricultural
zones with areas of five (5) hectares or less on an aggregate or project basis;
* Forwards applications already acted upon to the RCLUPPI for proper disposition;
* Submits monthly report on approved or disapproved applications, including
pending applications to the CLUPPI, copy furnished the DARPO and DARMO.
3. Center for Land Use Policy, Planning and Implementation (CLUPPI)
* reviews and evaluates all land use conversion folders received from RCLUPPI;
* whenever necessary, conducts field investigation on the area and holds dialogues
with government officials and entities, accredited NGOs and affected farmers and
farmworkers with the assistance of the MARO;
* for lands fifty (50) hectares or less, prepares the draft order recommending
approval or denial and forwards the same to the Undersecretary for Policy and Planning
who shall act on it within 45 working days from the date of receipt of folder from the
RCLUPPI;
* for areas above 50 hectares, prepares fact sheet and accomplishes the findings
and recommendations and forwards these to the PARC Land Use Technical Committee
(PLUTC) for further review within ten (10) days from receipt of the folder from
RCLUPPI;
* submits quarterly report on the status of all applications to the Secretary, through
the Undersecretary for PPO, copy furnished the PARC Secretariat.
4. Undersecretary for Policies and Planning:
* reviews and approves or disapproves application for conversion of lands not
exceeding fifty (50) hectares within five (5) working days from receipt of the folder
from CLUPPI;
* forwards the signed Order to CLUPPI.
5. PARC Land Use Technical Committee (PLUTC):
* reviews completeness and consistency of all folders received from CLUPPI,
requires submission of additional documents or information and conducts field
investigation (if necessary);
* recommends approval or disapproval of applications for conversion of lands
above fifty (50) hectares and forwards the same to the Secretary for his consideration.
6. DAR Secretary:
* approves or disapproves land use conversion applications involving above 50
hectares within five (5) working days from receipt of folder; and
* forwards the signed order to CLUPPI.
What is the recourse of an applicant or any aggrieved party who does not agree with the Regional Director's
decision?
A motion for reconsideration of the decision of the Regional Director can be filed within fifteen (15) days
from receipt of the order or decision. DCIEac
Running of the period is suspended once the motion is filed. If the motion is denied, the aggrieved party
can still make an appeal to the DAR Secretary.
An appeal to the Secretary shall be made in the form of a memorandum and upon payment of P500.00 as
appeal fee.
On the other hand, appeal from the decision of the Undersecretary shall be made to the Secretary, and
from the Secretary to the Office of the President or the Court of Appeals, as the case may be. The mode of
appeal/motion for reconsiderations, and the appeal fee, from the Undersecretary to the Office of the Secretary
shall be the same as that of the Regional Director to the Office of the Secretary.
Are there mechanisms installed to ensure that the terms and conditions of the approved conversion are
complied with?
Yes, there will be monitoring of compliance. The RCLUPPI shall monitor compliance by the
applicant/developer based on the terms and conditions stipulated under AO No. 12-94, including the required
posting of the approved order in a conspicuous place of the project area. The AO provides that failure to post such
notice in the project area shall be a ground for the suspension of the development of the area and for possible
cancellation of the conversion order. The RCLUPPI shall submit monthly reports to the Undersecretary for Policy
and Planning through the CLUPPI of all land use conversion transactions, copy furnished the DARPO and the
DARMO.
In turn, the CLUPPI shall evaluate the reports submitted by the RCLUPPI and render quarterly reports on
the status of all land use conversion to the Secretary, copy furnished the PARC Secretariat.
16.6 LGU's AUTHORITY TO RECLASSIFY
Does RA 7160, otherwise known as the Local Government Code of 1991 give the cities and municipalities the
authority to convert agricultural lands to non-agricultural uses?
No, what the Code provides is the authority of cities and municipalities to reclassify lands into uses
within their jurisdiction subject to certain limitations and conditions.
How does reclassification differ from land use conversion?
Reclassification is the act of specifying how agricultural lands shall be utilized for non-agricultural uses
such as residential, industrial, commercial, as embodied in the land use plan. It also includes the reversion of non-
agricultural lands to agricultural use. On the other hand, land use conversion is the actual change of agricultural
land to non-agricultural uses.
Although reclassification and conversion are similar in that they both determine whether a parcel of land
should be used for agricultural or other purposes, they are different in approach reclassification is done
through the town planning process taking into account the needs of the inhabitants for space for housing,
industrial, commercial and other non-agricultural uses, while conversion goes through the DAR's evaluation
process which takes into account the tenants and farmworkers, if any, on the landholding, the ascertainment of
disturbance compensation, and on who will pay said disturbance compensation. Furthermore, although land
reclassification can be indicative of which agricultural areas can be converted to non-agricultural uses, it does not
involve an actual change in land use.
What agencies are involved in land reclassification?
Land reclassification is a power exercised by municipal or city governments through the town planning
process, subject to review and approval by the Provincial Sanggunian through the Provincial Land Use Council
(PLUC). DAR's participation is in the issuance of a certification that lands for reclassification are either not
distributed, not covered by a Notice of Coverage, or not voluntarily offered for coverage under CARP.
What does the Local Government Code provide with respect to land reclassification?
Section 20 of RA 7160 and Malacaang Memo Circular No. 54 dated 08 June 1993 prescribing the
guidelines governing Section 20, state that a city or municipality may, through an ordinance passed by the
Sanggunian after conducting public hearings, authorize the reclassification of agricultural lands and provide for
the manner of their utilization or disposition in the following case:
a. when the land ceases to be economically feasible and sound for agriculture as certified by
the DA; or
b. where the land shall have substantially greater economic value for residential,
commercial, or industrial purposes.
The reclassification shall be based on the following percentage of the total agricultural land area at the
time of the approval of the Code:
o for highly urbanized and independent component cities 15%
o for component cities and first to third class municipalities 10%
o for fourth to sixth class municipalities 5%
In addition, the following types of agricultural lands shall not be covered by the said reclassification:
 a. agricultural lands distributed to agrarian reform beneficiaries subject to Section 65 of RA
6657;
b. agricultural lands already issued a notice of coverage or voluntarily offered for coverage
under CARP;
c. agricultural lands identified under Malacaang AO No. 20-92 andMC 54 as non-negotiable
for conversion:
1. All irrigated lands where water is available to support rice and other crop
production;
2. All irrigated lands where water is not available for rice and other crop production
but within areas programmed for irrigation facility rehabilitation by the Department of
Agriculture (DA) and the National Irrigation Administration (NIA).
3. All irrigable lands already covered by irrigation projects with firm funding
commitments at the time of the application for land use conversion or reclassification.
Is the percentage ceiling on the land area which the LGUs can reclassify absolute?
No, the President may, when public interest so requires and upon recommendation of the National
Economic and Development Authority (NEDA) authorize a city or municipality to reclassify lands in excess of the
limits as cited above.
What are the requirements and procedures for reclassification?
a. The city or municipal development council shall recommend to the Sangguniang
Panglunsod or Sangguniang Bayan, as the case may be, the reclassification of agricultural lands
within its jurisdiction.
b. Before enacting the ordinance reclassifying agricultural lands, the Sanggunian concerned
must first secure the following certificates:
1. Certification from DA indicating the total area of existing agricultural lands in the
city or municipality, that such lands are not classified as non-negotiable for conversion
or reclassification; and that the land has ceased to be economically feasible and sound
for agricultural purposes.
2. Certification from DAR indicating that such lands are not distributed, or not
covered by a notice of coverage or not voluntarily offered for coverage under CARP.
c. The application shall be submitted to the HLRB which upon receipt shall conduct initial
review to determine if:
1. the city or municipality has an existing comprehensive land use plan reviewed
and approved in accordance with Executive Order No. 72 (1993); and
2. the proposed reclassification complies with the limitations prescribed under
Section 1 of Memo Circular No. 54.
d. The Sanggunian shall conduct public hearings for the purpose.
e. Upon receipt of the required certification from the government agencies, the Sanggunian
concerned may now enact an ordinance authorizing the reclassification of agricultural lands and
providing for the manner of their utilization or disposition.
After the enactment of the ordinance reclassifying the land, does this mean the agricultural land can now be
converted for non-agricultural uses?
No. Approval of applications for land use conversions remains the responsibility of DAR. Hence,
individual landholders of the affected areas should still file an application for conversion. DAR shall utilize as its
primary reference in deciding on the application, the comprehensive land use plans, and the ordinance passed
upon and approved by the Sanggunian, together with the National Land Use Policy.
CHAPTER 17
LAND TRANSACTION
17.1 LAWS AND ISSUANCES GOVERNING AGRICULTURAL LAND TRANSACTIONS
What are the laws governing land transaction?
 17.1.1 RA 6657 contains several specific provisions on land transactions. They are the following:
a. Section 6 provides that upon effectivity of the law, any sale, disposition, lease, management
contract or transfer of possession of private lands executed by the original landowner in
violation of the Comprehensive Agrarian Reform Law (CARL) shall be null and void.
However, those transactions executed prior to the enactment of the law shall be valid if
registered with the Register of Deeds within a period of three (3) months after the effectivity of
the law, or on 13 September 1988;
b. Section 70 allows the sale or disposition of agricultural lands retained by a landowner
provided that the total landholding, including the land being acquired by the buyer/transferee
shall not exceed the landholding ceiling of five (5) hectares, subject, however, to the right of pre-
emption and/or redemption of tenant/lessee under Sections 11 and 12 of RA 3844, as amended

c. Section 73 prohibits the sales, 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 RA 6657;
The same section also prohibits the sale, transfer or conveyance by a beneficiary of the
right to use or any other usufructuary right over the land he/she acquired by virtue of being a
beneficiary, in order to circumvent the provisions of CARL;
d. Section 27 of RA 6657 further provides that the lands acquired by beneficiaries may not be
sold, transferred or conveyed except through hereditary succession or to the government or to
other qualified beneficiaries for a period of ten 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; and
e. Presidential Decree No. 27 originally prohibited the transfer of title to land acquired
pursuant to this Decree except by hereditary succession or to the government in accordance
with the provisions of PD 27, the Code of Agrarian Reform and other existing laws and
regulations.
However, Section 6 of Executive Order No. 228 now allows the transfer of ownership of
lands acquired by farmer-beneficiaries after full payment of amortization.
What are the relevant AOs on land transaction?
a. Administrative Order No. 01, Series of 1989 entitled "Rules and Procedures Governing Land
Transactions" provided the implementing guidelines for RA 6657's provisions on land
transaction.
b. Administrative Order No. 04, Series of 1994 entitled "Guidelines on the Development of
Agro-Tourism Areas in Accordance with the Tourism Master Plan".
Under this new AO, DAR allows in meritorious cases, the lease or joint venture arrangement of lands
acquired by agrarian reform beneficiaries under CARP for agro-tourism development purposes. This is in line
with the general objective of agrarian reform in terms of uplifting the quality of life of the ARBs. Guidelines and
safeguards should, however, be adhered to strictly.
17.2 LAND TRANSACTIONS INVOLVING AGRO-TOURISM DEVELOPMENT
 What are the conditions which must be present to allow lease or joint venture arrangements for agro-
tourism development involving lands distributed under CARP?
The following conditions must be present:
1. The area has been identified by government as priority development area under the
Medium Term Philippine Development Plan, or certified by the Department of Tourism as a
priority area for tourism development;
2. The dominant use of the area should still be agricultural such that the area to be
developed for tourism shall be less than 50% of the total area subject to CARP. Irrigated or
irrigable lands are further ineligible for these purposes;
3. The agricultural area of the project shall be continuously maintained by the ARBs who
shall supply the tourism project with agricultural products;
4. The ARBs or their direct descendants shall be given preference in employment in the
tourism project;
5. All improvements related to tourism shall accrue to the ARBs or their association at the
expiry of the lease period;
6. Profit-sharing and other benefits may be negotiated by DAR in behalf of the ARBs,
depending on the exigencies of the situation;
7. The lease agreement shall specify the time frame for development of the subject property
but not to exceed five (5) years reckoned from the date of approval of the lease or joint venture
agreement;
8. The agreements shall contain provisions for the violations of the agreements, including
cancellations, penalties/sanctions and the like within the ten-year period pursuant to Section 27
of RA 6657. (AO 04, Series of 1994).
What kind of arrangements can be entered into by the ARBs if the above conditions are fulfilled?
1. Direct lease to the investor/developer under RA 7652;
2. Lease to a responsible government entity, who in turn may sublease the property to the
investor/developer;
3. Lease back to the former landowner, who in turn will develop the area for tourism
purposes; or
4. Joint venture agreement whereby ARB's lease rights shall be exchanged for shares of
stocks, provided the ARBs shall organize into a farmers cooperative.
17.3 LAND TRANSACTIONS AFTER 15 JUNE 1988
A vendee bought a parcel of agricultural land consisting of fifty (50) hectares prior to 15 June 1988.
However, the deed of sale was not registered within the three-month period as provided for in Section 6 of RA 6657.
The vendee now wants to have the transaction registered and is willing to have the land covered by CARP. Should the
ROD register the transaction?
Yes, the transaction should be registered even if beyond the prescribed period. Anyway, the vendee is
willing to have it covered under CARP. To disallow registration and rescind the contract will result in a legal
nightmare to the prejudice of the vendee/transferee. DAR can give clearance for the registration. (DOJ Opinion No.
41, Series of 1992).
Can agricultural lands be mortgaged to guarantee any loan obligation secured to develop or to improve
such lands?
Yes, there are lands that may be the subject of mortgage, lien or encumbrance. These are the following:
a. Lands not yet acquired by DAR in accordance with the schedule of acquisition mentioned
in Section 7 of RA 6657.
b. Those lands chosen by the landowners as their retention areas; and
c. Lands already awarded/allocated to the agrarian reform beneficiaries.
Can banks and other financial institutions acquire title to agricultural lands subject of a mortgage right or
interest?
 Banks and other financial institutions allowed by law to hold mortgage right or security interest in
agricultural lands may acquire title to those mortgaged properties, regardless of areas, subject to existing laws on
compulsory transfer of foreclosed assets and acquisition as prescribed under Section 16 of RA 6657.
Can government financing institutions and government-owned or controlled corporations sell or dispose
their lands which are suitable for agriculture directly to private individuals?
No. Executive Order No. 360, Series of 1989 enjoins them to grant the DAR the right of first refusal in the
sale or disposition of their lands which are suitable for agriculture. This was further amended by EO
407 which mandates all government instrumentalities to surrender to the DAR all landholdings suitable for
agricultureincluding all pertinent documents in their custody. In certain instances, they may avail of the VLT
mode of transferring ownership of agricultural lands to qualified beneficiaries subject to the review and approval
of DAR.
17.4 RIGHT OF PRE-EMPTION
What is the right of pre-emption?
Under Section 11 of RA 3844, in case the landowner/lessor decides to sell his tenanted/leased land,
he/she must first offer to sell the landholding to the tenant or lessee thereof who has the preferential right to buy
the same under reasonable terms and conditions imposed therein.
If the land has two or more agricultural tenants or lessees in the same landholding, how will they exercise
their right of pre-emption?
Section 11 of RA 3844 provides that if there are two or more agricultural tenants or lessees, each shall be
entitled to said preferential right only to the extent of the area actually cultivated by him/her.
What is the prescribed period imposed by law in the exercise of the right of pre-emption?
The right of pre-emption may be exercised within one hundred eighty (180) days from notice in writing,
which shall be served by the owner to all tenants or lessees affected.
17.5 RIGHT OF REDEMPTION
What is the right of redemption?
Under Section 12 of RA 3844, in case the landholding is sold to a third person without the knowledge of
the tenant or agricultural lessee, the latter shall have the right to repurchase said landholding at a reasonable
price and consideration.
If there are two or more tenants or agricultural lessees in the same landholding, how will they exercise their
right of redemption?
If there are two or more tenants or agricultural lessees in the same landholding, each shall be entitled to
said right of redemption only to the extent of the area actually cultivated by him/her.
What is the prescriptive period imposed by law in order to avail of the right of redemption?
The right of redemption may be availed of within one hundred eighty (180) days from notice in writing
which shall be served by the buyer on all tenants/lessees affected and the DAR upon the registration of the sale,
and shall have priority over any other right of legal redemption.
17.6 VALID TRANSACTIONS
What are the valid transactions under the CARP?
The following transactions are valid:
a. Those executed by the original landowner in favor of a qualified beneficiary from among
those certified by DAR;
b. Those in favor of the government, DAR or the LBP;
c. Those covering lands retained by the landowner under Section 6 ofRA 6657, executed in
favor of the transferee whose total landholdings inclusive of the land to be acquired do not
exceed five hectares, subject, however, to the right of pre-emption and/or redemption of
tenant/lessee under Sections 11 and 12 of RA 3844, as amended;
d. Those executed by ARBs covering lands acquired under any agrarian law in favor of the
government, DAR, LBP or other qualified beneficiaries certified by DAR; and
 e. Those executed after ten (10) years from the issuance and registration of the
Emancipation Patent (EP) or Certificate of Land Ownership Award (CLOA).
17.7 INVALID TRANSACTIONS
What are the invalid transactions under CARP?
The following transactions are not valid:
a. Sale, disposition, lease, management contract or transfer of possession of private lands
executed by the original landowner prior to 15 June 1988, which are not registered on or before
13 September 1988, or those executed after 15 June 1988 covering an area in excess of the five
(5) hectare retention limit in violation of RA 6657;
b. Those covering lands acquired by the beneficiary under RA 6657and executed within ten
(10) years from the issuance and registration of the Emancipation Patent (EP) or Certificate of
Land Ownership Award (CLOA) except through hereditary succession, to the DAR, LBP or to
other qualified beneficiaries;
c. Those executed in favor of a person or persons not qualified to acquire land under Section
22 of RA 6657;
d. Sale, transfer, conveyance or change of nature of land outside of urban centers and city
limits either in whole or in part after 15 June 1988, except as provided for under the rules on
land conversion; and
e. Sales, transfer or conveyance by an ARB 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 law.
What are the transactions that may be registered with the Register of Deeds without clearance from the
DAR?
The following are the transactions that can be registered without clearance from the DAR:
a. Deed of extra-judicial partition of the property of a deceased who died before 15 June
1988;
b. Deed of partition of property owned in common by co-owners prior to 15 June 1988;
c. Subdivision of title without change of ownership; and
d. Deed of Real Estate Mortgage executed by the original landowner or beneficiary.
CHAPTER 18
PUBLIC LANDS
18.1 PUBLIC ALIENABLE AND DISPOSABLE LANDS
How are public alienable and disposable lands to be distributed?
In general, all alienable and disposable public lands suitable to agriculture shall be distributed by the
DENR to qualified citizens of the Philippines. Agrarian reform beneficiaries may be considered by the DENR
provided that they are certified by DAR and DENR as still qualified to acquire public lands pursuant to the Joint
DAR-DENR Administrative Order No. 07, Series of 1991.
Areas subject to adverse claims by persons other than the applicant-tillers cannot be distributed until
such claims are settled.
Who are the qualified applicants?
The following are generally qualified to apply for patents to public lands which are suitable to
agricultural purposes and who satisfy additional existing requirements as prescribed by the Public Land Law (CA
141, as amended):
1. a Filipino citizen;
2. occupant-tiller of the land;
3. does not own other landholdings, the aggregate area of which does not exceed the limits
allowed for the particular type of public land application;
4. is not an illegal entrant/occupant
 What are the procedures followed in the distribution of public A & D lands to qualified applicants?
1. Filing of public land application shall be done at the Community Environment and Natural
Resources Office (CENRO) having jurisdiction over the subject land. (Note: only lands covered by
approved surveys may be the subject of a public land application).
2. Processing of the application, including verification of qualifications and compliance with
all the requirements of residence, cultivation, payment of required fees, etc., are done at the
CENRO and the Provincial Environment and Natural Resources Office (PENRO) levels.
3. Signing of the land patent by the PENRO (up to five hectares for homestead and free
patents), and by the Regional Environment Director (RED) (up to ten hectares) and by the DENR
Secretary, if in excess of ten hectares.
18.2 INTEGRATED SOCIAL FORESTRY PROGRAM
Are forest lands suitable for agro-forestry also covered by CARP?
Yes, but only under the non-land transfer component of CARP called the "Integrated Social Forestry
Program (ISFP)". Forest lands suitable for agro-forestry may be allocated to forest occupants under the principle
of stewardship. They cannot be distributed for titling to agrarian reform beneficiaries in order to protect the
forest.

ISFP involves the issuance of long-term tenurial agreements through Certificates of Stewardship
Contracts or Community Forest Stewardship Agreements effective for twenty (25) years renewable for another
25 years and the provision of technical, social, material and other support services to individual forest occupants
and forest communities. With these support services, the DENR hopes to reforest denuded lands to improve the
socio-economic conditions of the occupants.
What is the maximum land size which can be availed of by qualified applicants under ISFP?
Seven (7) hectares shall be the maximum size of land that can be availed of under ISFP.
18.3 SETTLEMENT AREAS
Do the guidelines for public A & D lands suitable to agriculture apply to DAR settlement areas?
No. All DAR Settlement Projects covered by a Presidential Proclamation issued before the effectivity
of RA 6657 are deemed to have been classified as alienable and disposable under the powers of the Chief
Executive to classify lands of the public domain and by virtue of the expressed provisions in the proclamation
authorizing the DAR to dispose of the lands described in such proclamation.
What rules govern the manner and mode of disposition and titling of lots in the DAR settlement projects?
a. Administrative Order No. 09, Series of 1989 entitled "Rules and Procedures Governing
Titling and Distribution of Lots in DAR Settlement Projects"; and
b. Administrative Order No. 01, Series of 1992 entitled "Revised Rules and Procedures
Governing the Disposition of Homelots and Other Lots in Barangay Sites and Residential,
 Commercial and Industrial Lots in Town Sites Within DAR Settlement Projects and Similar Other
Areas Under DAR Jurisdiction".
How much should the ARBs pay for lands distributed in DAR settlement areas?
None. All lots (agricultural or non-agricultural) shall be distributed free of cost. No survey fees or other
costs relative to the distribution of the land shall be charged to the beneficiary.
What are the functions of the MARO under these procedures?
1. Conduct a physical inventory and perform the following:
a. Review and evaluate the list of allocatees and conduct lot verification to
determine whether the ARB allocatees still occupy and till the lots covered by the
Certificates of Allocation;
b. Require the occupant/tiller to accomplish the Farmer Beneficiary Application
Form (SP Form No. 01);
2. Evaluate application forms and recommend appropriate action. Recommendation shall be
based on the following guides:
For applicant with Certificate of Allocation (CA):
a. If applicant is living and is the actual cultivator/occupants:Issue CLOA
b. If deceased but the heirs are actual cultivators/occupants:Issue CLOA to qualified
heirs
c. If not an actual cultivator: Cancel CA and Issue CLOA to qualified beneficiary
d. If occupying the wrong lot: Issue CLOA for lot actually occupied and cancel CA for
the corresponding lot
e. If absentee CA holder: Consider land covered by CA abandoned and apply
procedures for cancellation of allocation
If applicant has no CA but is a qualified actual occupant/transferee:Issue CLOA for not more
than three hectares of his/her own choice and preference. Area in excess shall be distributed with
preference to his/her qualified children.
3. Consolidate SP Form No. 1 and prepare Summary FB Data Sheet (SP Form No. 02) for
those applicants recommended for issuance of CLOA. This shall constitute the Land Distribution
Folder.
4. Endorse the LDF to PARO for review and CLOA preparation.
5. Prepare a summary list of vacant and unallocated lots and lots with certificates of
allocation recommended for cancellation.
What are the grounds for cancellation of allocation?
1. Absence of the settler/allocatee from the settlement for more than six (6) months without
written permission of the DAR;
2. Transfer of rights by transferor without written consent and approval of the DAR Regional
Director concerned;
3. Voluntary renunciation or waiver of rights in writing;
4. Failure to cultivate the lot for a period of more than six (6) consecutive months from the
date of allocation of said lot; and
5. Death of settler/allocatee if he/she has no qualified heir.
What is the award ceiling for qualified beneficiaries?
The award ceiling shall not be more than three hectares. However, qualified beneficiaries who have
occupied and cultivated the land and established their vested rights prior to 15 June 1988, in accordance with the
Public Land Law and other existing laws, shall be awarded the legal limits allowed by said laws.
Who are the qualified beneficiaries?
1. landless;
 2. Filipino citizen;
3. Actual occupant/tiller who is at least 18 years of age or head of the family at the time of
filing of application; and
4. Has the willingness, ability and aptitude to cultivate and make the land productive.
Preferential assistance shall be given to:
1. Qualified women members of the agricultural labor force;
2. War veterans and veterans of military campaign;
3. Retirees of AFP and INP;
4. Returnees/surrenderees; and
5. Graduates of agricultural school
What other types of lots can be distributed in the settlement areas?

Homelot refers to a parcel of land which is intended for farm residence in a barangay site.
Residential Lot refers to a parcel of land which is intended for residence in a town site.
Town Site Lot refers to a parcel of land in the town site of a settlement which is intended either for
residential, commercial, or industrial use.
Industrial Lot refers to a parcel of land in the town site intended as a site for processing of products and
for other industrial purposes.
Who are qualified applicants for these lands?
1. Filipino citizen;
2. At least 15 years of age or head of the family at the time of filing of application; and
3. Applicant or his/her spouse is not the owner-awardee or allocatee of another homelot,
residential, commercial or industrial lot.
What is the award ceiling for such types of lands within settlement areas?
A qualified applicant is entitled to acquire only one homelot or one residential/commercial or industrial
lot with an area not more than one thousand (1,000) square meters. However, an awardee or allocatee of a
homelot or residential lot may still be allowed to acquire one commercial or industrial lot following the
provisions of AO No. 01, Series of 1992.
What are the modes of disposition of homelots and other types of lots?
 1. Homelots and residential, commercial and industrial lots shall be disposed of by direct
sale to qualified actual occupants. If the occupant is not qualified, the lot may be sold to the
qualified members of the family. If there is none, then the lot shall be considered vacant and shall
be disposed of.
2. Vacant homelots in barangay sites shall be disposed of through public raffle to qualified
applicants.
3. Vacant residential, commercial and industrial lots shall be disposed of through public
bidding, to the highest qualified bidder. However, no bid should be less than the appraised value
of the lot.
4. Lots allotted to or intended for public use, whether within barangay sites or town sites
shall be turned over by the DAR to the particular government entity or agency concerned.
5. An allocatee occupying the lot allocated or awarded to him/her before the effectivity of
said AO 01-92 shall be issued a CLOA upon payment of the cost of the land.
6. An allocatee or awardee occupying a different lot allocated or awarded to him/her before
effectivity of the above mentioned AO shall be awarded the correct lot and issued a CLOA upon
full payment the lot.
7. Awards/allocations of absentee beneficiaries shall be cancelled and the lot shall be
awarded and titled to the actual occupants.
How much is the cost of these lots?
For homelots, the cost should not be less than three pesos (P3.00) per square meter; for residential, ten
pesos (P10) per square meter; and fifteen pesos (P15) for industrial and commercial lots allocated or awarded
prior to AO No. 01-92.

18.4 PUBLIC AGRICULTURAL LANDS TURNED OVER BY THE NATIONAL LIVELIHOOD AND SUPPORT FUND
What rules govern public agricultural lands turned over by the National Livelihood and Support Fund
(NSLF) to the Department of Agrarian Reform for distribution under CARP?
These are governed by Memorandum Circular No. 07, Series of 1993 entitled "Implementing Guidelines on
the Distribution and Titling of the Public Agricultural Lands Turned Over by the National Livelihood and Support
Fund to the Department of Agrarian Reform for Distribution Under the CARP Pursuant to EO 407, Series of 1990, as
Amended by EO 448, Series of 1991 and as Clarified under Memorandum Order No. 107 of the President of the
Philippines dated 23 March 1993"
Under MO 107, the DAR and the DENR were directed to jointly determine which areas were classified as
alienable and disposable agricultural lands previous to the effectivity of Proclamation No. 2282 for disposition by
the DAR through the issuance of CLOAs to qualified beneficiaries. DaScHC
Who are the qualified beneficiaries?
1. In general, the farmer-tiller or actual occupant shall be given preference in the
distribution of the lands occupied by him/her provided that the area will not exceed three
 hectares per farmer-beneficiary. Areas in excess, if any, may be distributed to the qualified
children or relatives of the ARB designated by him/her.
2. Farmers organization may also be issued collective CLOAs, the total hectarage covered,
however, shall not exceed the number of co-owners or members of the farmers organization
multiplied by three, except in meritorious cases approved by the PARC.
3. Cultural communities or indigenous tribal groups located within the A & D areas with no
adverse claims shall be issued collective CLOA in the name of the community or the tribe
concerned, represented by the acknowledged leader. In case the total hectarage will exceed the
three hectare award ceiling per member, the approval of the PARC shall be secured.
What portions shall not be covered?
1. Lands with adverse claims until the adverse claims are resolved administratively or
judicially.
2. Parcels or lots already titled, except when their area exceeds the five hectare retention
limit, in which case they shall be covered following the schedule of priorities.
3. Parcels or lots covered by public land applications filed with the DENR or the DA. The
applicant concerned shall be allowed to pursue the application with the DENR. Applicants who
wish to instead acquire their lots through CARP may be allowed to do so provided that they
present proof that they have already requested the DENR to cancel or reject their applications
and that they possess all the qualifications of an ARB.
4. Lands which have been proclaimed as reservations in favor of other government agencies
or instrumentalities. Portions which are not being used for the purpose of the reservation or not
needed by the agency or instrumentality concerned may be acquired under separate
negotiations initiated by the DAR.
5. Poblacions, town sites, barangay sites, and similar sites actually used for residential or
non-agricultural purposes. Their titling shall be pursued under other government programs
under the responsibility of other government agencies.
6. All lands utilized as government sites in addition to those lands specified in Section 10
of RA 6657 (on exemptions).
7. Lands intended for or devoted to public use such as highways, roads, railroads, foreshores,
public right of way and other similar uses, as well as lands under bodies of water such as rivers,
creeks, lakes, bays, natural springs, irrigation canals, reservoirs, and similar areas under water.
8. Lands where the actual occupant or claimant may already be entitled to a free patent
under RA 6940 (continuous occupation and cultivation by himself or through his predecessors-
in-interest for at least thirty (30) years prior to 16 April 1990, among other requirements). The
claimant may be allowed to perfect his/her rights through the DENR. However, occupants or
claimants who prefer to become ARBs instead shall be included in the CARP if qualified.
9. All lands that are unclassified or classified as Timberland or Forest Land, National Parks
or Mineral Lands, even if occupied and fully cultivated. Instead, the occupants shall be referred to
the DENR for possible inclusion in the ISFP program.
Will these lands be paid for by the beneficiaries?
No, except for the payment of the proportionate cadastral survey costs as determined by the DENR. If
such survey cost is not paid by the ARB at the time of the CLOA issuance, this shall be annotated as a lien on the
title.
18.5 LANDS OF THE PUBLIC DOMAIN COVERED BY CANCELLED OR EXPIRED PASTURE LEASE
AGREEMENTS (PLAs) AND TIMBER LICENSE AGREEMENTS (TLAs) PER EO 407
What rules govern the CARP coverage of lands of the public domain covered by expired PLAs and TLAs?
Joint DAR-DENR Administrative Order No. 02, Series of 1992 provided the rules and procedures on the
disposition of lands of the public domain covered by cancelled or expired Pasture Lease Agreements (PLAs) and
Timber License Agreements (TLAs), following the provisions of Executive Order No. 407 dated 14 June 1990.
 Are these lands acquired by the DAR?
No, under the Joint Administrative Order, the role of the DAR in lands covered by expired or cancelled
PLAs and TLAs is to screen and identify the ARBs. It is the DENR which, in coordination with DAR, distributes the
land under the ISF program.
How will these lands be allocated to ARBs?
These shall be distributed by the DENR in collaboration with the DAR, either individually or collectively
to ARBs who are duly verified and screened by the DAR.
What are the procedures in the distribution of lands covered by the expired and cancelled PLAs and TLAs?
What are the roles of the DAR and DENR?
1. DENR Secretary identifies and declares that certain expired/cancelled leases are available
for CARP.
2. DAR verifies if the actual occupants-cultivators within the subject area have been
registered as prospective and qualified beneficiaries pursuant to DAR Administrative Order No.
10, Series of 1989. If not, it conducts an inventory of the occupants/cultivators.
3. If there are registered prospective and qualified beneficiaries, the DAR reviews the
register and in coordination with DENR, verifies who among them are actual occupants and
prioritizes the allocation giving preference to actual occupants/cultivators;
4. The DENR conducts a survey of the parcels allocated to applicant/beneficiaries;
5. The applicant, assisted by DAR files the application for Certificate of Stewardship (CS) in
the prescribed form, together with the certification of the Municipal Agrarian Reform Officer
(MARO) at the DENR/CENRO Office concerned where the area applied for is located; and
6. The CENRO issues Certificate of Stewardship (CS) for areas up to three (3) hectares.
Are lands under cancelled or expired PLAs and TLAs subjected to titling under CARP?
No, public lands classified as forest lands are inalienable and are distributed only for stewardship and not
for titling through the DENR-Forest Management Sector (FMS).
What proof of award to agrarian reform beneficiaries will be issued under expired and cancelled PLAs and
TLAs covered by the public domain?
The DENR issues the Certificate of Stewardship Contract (CSC) after a Stewardship Agreement is signed
between the beneficiary and the DENR.
Can ARBs acquire title to lands under cancelled or expired PLAs and TLAs?
No. Under the law, these types of lands are inalienable or non-registrable and therefore cannot be titled
to the agrarian reform beneficiaries. They are however, covered by a long term twenty-five (25) year lease
contract which is renewable for another 25 years.
 Can the DENR through the Forest Management Sector (FMS) refuse to allocate portions of cancelled or
expired PLAs and TLAs which are unoccupied and uncultivated to DAR's selected ARBs?
Yes. The DENR, through the FMS may refuse to allocate, because RA 6657, Section 7, provides that only
pastures and agricultural leases already cultivated and planted to crops shall be covered. This is consistent with
the inalienable nature of forest lands.
Can occupant-cultivators within expired or cancelled PLAs and TLAs that are under the ISF program who
are not registered as potential ARBs be displaced, ejected or removed?
No. Under the law, actual occupant-tillers are given preferential rights in the distribution of lands of the
public domain. They shall not be displaced or removed from the land they till as long as they are directly working
and making their land productive. Qualified occupant-cultivators of public lands, though unregistered, shall be
given priority in the distribution thereof.
In case conflict arises between the rules of DAR and the DENR on the allocation and disposition of ISF lands,
which rules will be followed?
The DENR Forest Management Bureau rules will be followed. However, DAR's rules on the screening and
selection of ARBs shall be followed.
18.6 LANDS OF THE PUBLIC DOMAIN COVERED BY CANCELLED OR EXPIRED FISHPOND LEASE
AGREEMENTS (FLAs) PER EO 407
What rules govern the allocation of cancelled or expired Fishpond Lease Agreement (FLAs)?
Executive Order No. 407 as amended by EO 448 and as implemented by a Joint DAR-DA AO No. 05, Series
of 1991 govern the acquisition of cancelled or expired Fishpond Lease Agreement for distribution to agrarian
reform beneficiaries, either individually or collectively; and Presidential Decree No. 704 (Fisheries Decree of
1975).

What are the main roles of the DAR and DA in the allocation of cancelled or expired FLAs?
The DAR is responsible for the screening and identification of the ARBs. The DA verifies and identifies
through BFAR, fishpond areas covered by FLAs which are already expired or subject to cancellation. The DA also
subsequently processes the applications of ARBs identified by the DAR and issues the fishpond lease agreements.
What is the order of priority in the determination of ARBs on lands covered by cancelled or expired FLAs?
The ARBs are chosen according to the following order of priority specified in Section 22 of RA 6657:
1. agricultural lessees and share-tenants;
2. regular farmworkers;
3. seasonal farmworkers;
4. other farmworkers;
5. actual tiller or occupant of public lands;
6. collective or cooperative of the above beneficiaries; and
7. others directly working on the land.
 Why is the allocation of cancelled or expired FLAs being done by DA-BFAR and not by DAR?
Section 3 of EO 407 specifically provided that the DA and the DENR, in coordination with the DAR shall
redistribute and award fishponds, pasture lands and other lands of the public domain suitable for agriculture,
subject of cancelled or amended lease agreements, to qualified agrarian reform beneficiaries identified by the
DAR pursuant to Sections 18 and 22 of RA 6657.
Are lands under expired or cancelled FLAs subjected to titling under CARP?
Public lands suitable to agriculture are not subject to titling after 9 November 1972 per Sections 23 and
24 of PD No. 704 because they are disposable only through lease by the DA-BFAR after that date.
CHAPTER 19
LANDED ESTATES
What are landed estates?
Landed Estates are former haciendas or landholdings of private individuals or corporations which have
been acquired by the Government under different laws, for redistribution and resale to deserving tenants and
landless farmers.

What improvements have been made in the procedures for distribution and/or titling of lots, in agricultural
landed estates?
Administrative Order No. 03, Series of 1990, entitled "Revised Rules and Procedures Governing
Distribution and/or Titling of Lots in Landed Estates Administered by DAR" was issued to revise the tedious process
which has resulted in unnecessary delay in the distribution and titling of landed estates to qualified beneficiaries.
Under this AO, a CLOA shall immediately be issued to the qualified beneficiary, including those with
Deeds of Sale still pending with the DAR, provided that all outstanding accounts of an awardee shall be annotated
at the back of the CLOA and duly registered with the ROD.
Outstanding accounts include amortization payments for the land, farm implements and machineries, if
these are not covered by separate contracts, other loan assistance and accrued interests on overdue amortization
payments and unpaid rentals from 01 January 1988.
What are the terms of payment for the account balances annotated at the back of the CLOA?
Beneficiaries/allocatees whose amortization payments and unpaid rentals do not exceed one thousand
pesos (P1,000) have three (3) years starting from the registration of titles to pay their balances.
Those whose obligations exceed one thousand pesos (P1,000) have five (5) years to pay such obligations.
What will happen if the beneficiaries/allocatees fail to pay such balances?
Failure to pay the obligations annotated at the back of the CLOA shall lead to the forfeiture of the lots in
favor of the government for distribution to other qualified beneficiaries/allocatees.
What are the functions of the MARO under these revised procedures?
1. Conduct a physical inventory and perform the following:
a. Identify areas with approved, incomplete, erroneous and without subdivision
surveys. Recommend to the PARO, the completion/correction of subdivision surveys
within a period not to exceed one year from the issuance of AO No. 03, Series of
1990(date of effectivity 22 June 1990);
 b. Review and evaluate the list of allocatees/awardees and conduct lot verification
to determine whether said awardees/allocatees are still occupying and tilling the lots.
Prepare a master list of occupants/claimants with corresponding lot numbers, to be
posted simultaneously for a period of 15 days at the barangay hall, MARO Office and the
Municipal Building;
c. Assist all actual occupants/tillers who have not been issued either an Order of
Award (OA), Deed of Sale or Certificate of Land Transfer (CLT) in accomplishing the FB
Application Form;
d. Undertake the computation of all the obligations to be paid by the beneficiary.
2. Evaluate Application Forms and recommend appropriate action. Recommendation shall
be based on the following guide:
For applicant with OA/CLT:
a. If applicant is living and is the actual cultivator/occupant: Issue CLOA;
b. If deceased but the heirs are actual cultivators/occupants:Issue CLOA to the estate
of the deceased or to one of the qualified heirs upon the agreement of the others;
c. If not actual cultivator/occupant and employs tenants prior to full payment of the
cost of the land: Cancel OA/CLT and issue CLOA to qualified actual cultivator/occupant;
d. If permanently incapacitated: Issue CLOA provided that cultivator/occupant has
immediate members of the farm household who could assist him in farming;
e. If applicant mortgaged or sold his/her right and left the area:Cancel OA/CLT and
issue CLOA to qualified actual occupant/tiller;
f. If occupying the wrong lot: Issue CLOA for lot actually occupied and cancel
OA/CLT ;
g. If absentee OA/CLT holder: Cancel OA/CLT and issue CLOA to qualified actual
occupant/tiller.
If actual occupant has no OA/CLT:
a. and has no other supporting documents: Issue CLOA provided occupant is qualified
and there is no adverse claimant to the subject lot;
b. with transfer document (waiver of rights of previous awardee):Issue CLOA if with
DAR approval; and if without DAR approval, still, issue CLOA provided occupant is qualified
and there is no adverse claimant;
3. Prepare Land Distribution Folder for Landed Estates for applicants recommended for
issuance of CLOA.
4. Endorse the LDF to PARO for review and approval as a basis for CLOA preparation.
5. Prepare a list of vacant and unawarded lots and lots with awards recommended for
cancellation.
6. Post the list of vacant and unallocated lots and lots with awards recommended for
cancellation for 15 days at the MARO office and other conspicuous places within the landed
estate.
7. Identify and prioritize the list of farmer-beneficiaries in close coordination with the BARC
for consideration in the distribution of available lots.
8. Prepare separate Land Distribution Folders for new beneficiaries; and
9. Endorse LDF to PARO for review and consolidation.
What are the grounds for cancellation of orders of award?
1. Absence of the awardee from the landed estate for more than six (6) months without
doing any effort to make the land productive;
2. Willful transfer of rights and is no longer occupying the lot;
3. Voluntary renunciation or waiver of rights in writing; IHcTDA
 4. Failure to cultivate the lot for a period of six (6) consecutive months from the date subject
lot was awarded; and
5. Death of awardee if he/she has no qualified heir. (A.O. No. 3, Series of 1990)
What is the award ceiling for qualified beneficiaries?
The award ceiling shall not be more than three hectares. However, qualified beneficiaries who have
occupied and cultivated the land and established their vested rights prior to 15 June 1988 in accordance with
then existing laws shall be awarded the legal limits allowed by said laws.
In the case of homelots, the award ceiling shall be 1,000 square meters.
Who are the qualified beneficiaries?
1. Landless;
2. Filipino citizen;
3. Actual occupant/tiller who is at least 15 years of age or head of the family at the time of
filing of applicant; and
4. Has the willingness, ability and aptitude to cultivate and make the land productive.
CHAPTER 20
BARANGAY AGRARIAN REFORM COMMITTEE (BARC)
20.1 LAWS AND ISSUANCES ON BARC
What is BARC ?

BARC or Barangay Agrarian Reform Committee is a CARP implementing unit at the barangay level. Its
organization was first mandated by Executive Order No. 229 in 1987 and in 1988 by RA 6657.
Through the organization of the BARCs, the implementation of the CARP will become truly community
based where people at all levels participate in decision making because they are in a better position to know and
understand the realities in the community.
What are the laws governing the organization of BARC ?
Section 19 of EO 229 which enumerated the composition and functions of the BARC; and
Sections 46 and 47 of RA 6657 which further defined BARC functions in addition to those provided in EO
229.
What guidelines provide the procedures for the formation, organization and strengthening of the BARCs?
Administrative Order No. 14, Series of 1990 entitled, "Revised Implementing Guidelines in the Formation,
Organization and Operation of the Barangay Agrarian Reform Committee".
This Administrative Order amended AO 05-89 to provide detailed set of implementing rules for the
formation, organization, and operationalization of the BARC.
20.2 FUNCTIONS OF THE BARC
What are the functions of the BARC ?
 The BARC is intended to facilitate the land transfer program in the community. It also provides a
convenient forum for resolving agrarian issues, and allows the local farmer organizations the opportunity to
propose policies and coordinate the efficient delivery of support services.
Under EO 229, the BARC is tasked to perform the following functions:
1. Participate and give support to the implementation of programs on agrarian reform;
2. Mediate, conciliate or arbitrate agrarian conflicts and issues that are brought to it for
resolution; and
3. Perform such other functions that the Presidential Agrarian Reform Council (PARC), its
Executive Committee, or the DAR Secretary may delegate from time to time.
In addition, RA 6657 further delineated these functions as:
1. Assist in the identification of qualified beneficiaries and landowners within the barangay;
2. Attest to the accuracy of the initial parcellary mapping of the beneficiary's tillage,
3. Assist in the initial determination of the value of the land;
4. Coordinate the delivery of support services to beneficiaries;
5. Assist qualified beneficiaries in obtaining credit from lending institutions;
6. Assist the DAR representative in the preparation of periodic reports on CARP
implementation for submission to the DAR.
20.3 BARC COMPOSITION
Who compose the BARC ?
AO No. 14-90 revised the composition of the BARC, following the rule of proportionate sectoral
representation based on the land-to-the-tiller principle. Hence, sectors are defined on the basis of one's access or
lack of access to the land. The BARC is now composed of 13 members who are representatives of sectors and
organizations, as well as government agencies.
Membership is divided into two groups: seven regular voting members and six ex-officio non-voting
members.
Regular Voting Members
1. farmer and farmworker beneficiaries (4)
2. non-beneficiary farmers and farmworkers (1)
3. agricultural cooperatives and other farmer organizations (1)
4. landowners (1)
It should be noted that the voting members are all residents of the barangay. This residency requirement
ensures that agrarian reform implementation will indeed be community based. Regular activities of the BARC can
be better ensured when majority of its members are residents of the community.
Ex-Officio Non-Voting Members:
5. municipal or provincial based non-government organizations (1)
6. barangay council (1)
7. Land Bank of the Philippines (1)
8. Department of Agriculture official assigned in the area (1)
9. Department of Environment and Natural Resources
official assigned in the area (1)
10. DAR Agrarian Reform Program Technologist
assigned in the area (1)
What is meant by "proportionate" sectoral representation and why should this principle be followed in the
composition of the BARC ?
 Proportionate sectoral representation means bigger sectors shall have bigger representation. This
ensures democratic participation of the intended beneficiaries of the CARP and wider participation of farmers in
planning, organization and management of agrarian reform activities.
Who comprise the farmer and farmworker beneficiaries sector?
This sector is composed of the following:
landless workers;
share tenants;
agricultural lessees, including ISF beneficiaries; and
amortizing owners.
Who compose the non-beneficiary farmer and farmworkers sector?
The non-beneficiary farmers and farmworkers sector is composed of the small owner-cultivators who
own and till not more than five (5) hectares of agricultural lands, either by personal cultivation or with the help of
the immediate household.
Since membership in the BARC is based on sectoral representation, i.e., land tenure classification, what
sector shall be represented by a farmer leader who is a leaseholder and farmworker at the same time, or a farmer-
beneficiary who is also a member of a farmer organization?
A farmer with mixed tenure shall represent a sector where he/she primarily derives his/her regular
income. This consideration is based on the experience that one cannot compel any individual or a group into
action if he/they are not directly affected by the issues or problems being raised.
20.4 BARC OFFICERS
Who are the BARC officers and how are they elected?
There are three elected positions in the BARC. These are the Chairperson, Vice Chairperson, and an
Assistant Secretary (The BARC Secretary is automatically the DAR ARPT).
These three officers are elected by the sectoral representatives the regular voting members. Hence, all
BARC officers are residents of the barangay.
The thirteen-member BARC shall form different committees based on need and priority activities. They
shall select the committee heads deemed as appropriate.

Can a barangay chairperson be an officer of the BARC even if he is not a beneficiary of the CARP?
Yes. A barangay chairperson may be elected as regular officer (with voting power) of the BARC if he/she
represents any of the four sectors composing the BARC (e.g., ARBs, non-ARBs, farmer organization or cooperative,
or landowners), provided, however that he is not appointed ex-officio member representing the barangay council.
What is the length of tenure of BARC member official?
The elected BARC representatives will serve a maximum of two (2) years while the BARC officers will
serve at the pleasure of the committee.
When can a BARC member/official be terminated?
 A BARC member may be removed by a simple majority vote or upon serving a maximum period of two
years.
Who replaces a terminated BARC member?
A BARC member who is unable to complete his/her term of office for some reasons is replaced by an
alternate member who will serve the remaining tenure of the original member.
20.5 FORMATION OF BARC
Should BARCs be organized in all the barangays nationwide?
No. They should be organized where they are needed. The MARO/ARPT together with partner POs/NGOs
should jointly identify and prioritize where BARCs should be organized and/or strengthened.
The BARC Manual established the following criteria:
1. High farmers discontent and desire for agrarian reform;
2. Wide hectarage covered by CARP;
3. Large number of actual and potential beneficiaries; and
4. Willingness of the ARBs in the community to organize/strengthen the BARC.
These criteria are very similar to the criteria set for ARC selection. Given the ARC development thrust of
the Department, priority should therefore be given to ARC areas.
When should BARCs be organized?
BARCs are organized or should be reorganized if the community is fully aware of and feels the need for it.
BARCs are formed out of the people's willingness to address agrarian reform issues and problems. Its formation
cannot be forced, otherwise, the spirit of volunteerism will not be present. If its formation is forced, the people
will perceive it as a burden and members will expect DAR to financially support them as compensation for their
work.
Should a BARC be organized even if there are no farmer organizations, associations or cooperatives in the
barangay?
Initial efforts of DAR and partner NGOs should be focused on encouraging the organization of ARBs
instead of the formation of a BARC.
What are the processes involved in the organization of the BARC ?

There are four stages in the organization of the BARC. These are:
1. Pre-Organization Stage. This is the process by which the MARO prepares the sectors
concerned in the organization of BARC. He/she performs the following functions:
a. coordinates with the FOs and/or NGOs;
b. briefs the FOs and/or NGOs about BARC;
c. identifies the areas where the BARC will be organized in coordination with the
FOs/NGOs; and
d. identifies together with the FO/NGO the respective responsibilities of each sector.
 In areas where there is no existing FO/NGO, the MARO takes a more active role in the formation
of base groups.
2. BARC Organization. When the sectors are fully aware of the need to organize BARC, the
MARO, together with the FOs and/or NGOs, convene the representatives of the sectors
concerned to discuss with them the CARL, the functions of the BARC, the schedule of the first
meeting and the schedule of election of officers. After discussing the intent of the committee, the
election of the BARC officers and the planning workshop are conducted.
3. BARC Operation and Management. After the BARC is formally organized, the committee
prepares plans and mechanisms for the performance of its duties.
4. Alliance Building. The BARC coordinates with other entities within and outside the
community for its identified needs. Simultaneously, it establishes a network to sustain itself as a
people's organization.
20.6 MEDIATION AND CONCILIATION
Is BARC a quasi-judicial body?
No, the BARC is only mandated to mediate and conciliate agrarian disputes at the barangay level.
Mediation and conciliation refers to the process whereby the contending parties are persuaded by the BARC to
settle their disputes amicably. The BARC does not render a decision. (See page 48)
What does settlement of disputes at the lowest possible level mean?
The capability of the BARC and the community must be harnessed to resolve local agrarian conflicts at
the barangay level and avoid as much as possible passing this responsibility to outside entities or to higher levels.
This will promote the speedy and cost-free administration of justice; alleviate the congestion of court and DARAB
dockets, and develop a sense of commitment among landowner and farmer-beneficiaries to comply with their
agreements, thus ensuring the successful implementation of CARP.
As the first structure for conflict management, at what levels will agrarian disputes be resolved?
Agrarian conflicts settlement could be done at the following levels:
1. BARC chairperson or his/her duly authorized representative;
2. BARC panel; and
3. BARC en banc.
Who decides on the mechanism to be followed in the settlement of disputes?
The BARC Chairman after evaluating the case may decide at which level settlement will be initiated.
Who shall compose the panel of mediators/conciliators/arbitrators?
The panel shall be composed of three (3) BARC members designated by the BARC Chairperson.
Who selects the members of the panel of mediators/conciliators/arbitrators?
Members of the panel of mediators/conciliators/arbitrators are designated by the BARC chairperson
upon recommendation of other members.
What happens if a member of the panel fails to attend the mediation/conciliation conference?
The presence of two members in any panel constitutes a quorum to do business. The chairperson may
also replace any member who is absent or incapacitated.
What are the procedures to be followed in the settlement of disputes by the BARC?
Administrative Order No. 08, Series of 1994 spelled out the procedures for the settlement of agrarian
disputes.
1. A written or verbal complaint shall be lodged with the BARC. Written complaints shall be
in Mediation and Conciliation M/C Form 1 while verbal complaint shall be reduced in writing by
the BARC Chairperson or Secretary.
2. The BARC Chairperson interviews the complainant regarding vital information.
3. The BARC Chairperson issues a Notice of Meeting to both the complainant and defendant.
 4. The BARC en banc, panel or the Chairperson then endeavors to have the contending
parties agree to an amicable settlement. All agreements are written down and signed by the
contending parties.
How long will the BARC resolve disputes lodged with them?
The BARC shall endeavor to mediate, conciliate and settle agrarian disputes lodged before it within thirty
(30) days from the time it takes cognizance of the dispute.
What will happen if the BARC fails to resolve agrarian disputes within thirty days?
If the BARC fails to settle the dispute within thirty days, it shall issue a certification that the dispute has
not been settled, together with a copy of the proceedings and furnish a copy to the concerned parties within seven
(7) days after the expiration of the 30 day period. This certification must be attested by the BARC Chairperson
and endorsed by the MARO to the PARAD or to the PARO for appropriate action.
Is the MARO allowed to resolve disputes or problems presented before him/her without the presence of the
BARC chairman and members?
Yes. The MARO can immediately resolve disputes or problems presented before him/her even in the
absence of the BARC Chairperson and its members. Although the BARC would be the ideal forum for the
resolution of disputes and problems, this must not limit or prevent the MARO from performing his/her duties.
Delays in the resolution of cases may result in further complications.
Does the BARC have any jurisdiction over criminal offenses under RA 6657?
No. Only the Special Agrarian Court (a branch of the Regional Trial Court) has the original and exclusive
jurisdiction of all criminal offenses under RA 6657 (including petitions for determination of just compensation for
landowners).
CHAPTER 21
DAR ADJUDICATION BOARD
21.1 DARAB JURISDICTION
What is the jurisdiction of the DARAB?
The DARAB has primary and exclusive jurisdiction, both original and appellate, to determine and
adjudicate all agrarian disputes involving the implementation of the CARP under RA 6657, EO Nos. 228, 229,
and 129-A, RA 3844 as amended by RA 6389, PD 27 and other agrarian laws and their implementing rules and
regulations.
Specifically, such jurisdiction shall include but not limited to cases involving the following:

1. Cases involving the rights and obligations of persons engaged in the management,
cultivation and use of all agricultural lands covered by the CARP and other agrarian laws;
2. Cases involving the valuation of land and preliminary determination and payment of just
compensation, fixing and collection of lease rentals, disturbance compensation, amortization
payments and similar disputes concerning the functions of the Land Bank of the Philippines
(LBP);
3. Cases involving the annulment or cancellation of lease contracts or deeds of sale or their
amendments involving lands under the administration and disposition of the DAR or LBP;
 4. Cases arising from, or connected with membership or representation in compact farms,
farmers' cooperatives and other registered farmers' associations or organizations, related to
lands covered by the CARP and other agrarian laws;
5. Cases involving the sale, alienation, mortgage, foreclosure, pre-emption and redemption of
agricultural lands under the coverage of the CARP or other agrarian laws;
6. Cases involving the issuance, correction and cancellation of Certificates of Landownership
Award (CLOAs) and Emancipation Patents (EPs) which are registered with the Land Registration
Authority;
7. Cases previously falling under the original and exclusive jurisdiction of the defunct Court
of Agrarian Relations under Section 12 of Presidential Decree No. 946, except sub-paragraph (2)
thereof and Presidential Decree No. 815; and
8. Such other agrarian cases, disputes, matters or concerns referred to it by the DAR
Secretary.
However, matters involving strictly the administrative implementation of the CARP and agrarian laws
and regulations, shall be the exclusive prerogative of and cognizable by the DAR Secretary.
Is the rule that the DARAB cannot take cognizance of any agrarian dispute unless there is a certification of
the BARC where the land is located that the dispute has not been successfully settled absolute?
No. Rule III of the DARAB Revised Rules of Procedure allows the DARAB to take cognizance of an agrarian
dispute even without the BARC certification if:
1. The dispute does not fall under any of the exceptions enumerated;
2. 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. The PARO shall
conduct mediation and conciliation proceedings and issue a certification to that effect;
3. It involves resolving and disposing of preliminary incidents related to the case, such as
motion for the issuance of status quo orders, temporary restraining orders, preliminary
injunctions and such similar motions necessitating immediate action.
However, the lack of the required certification cannot be made a ground for the dismissal of the action.
Every opportunity will be given the complainant to secure the certification.
What are the exceptions referred to in No. 1 above?
BARC certification shall not be required in the following cases:
1. Where the issue involves the valuation of land to determine just compensation for its
acquisition;
2. Where one party is a public or private corporation, partnership, association or juridical
person, or a public officer or employee and the dispute relates to the performance of his official
functions;
3. Where the matter at issue involves merely the administrative implementation of agrarian
reform law, rule, guideline, or policy; and
4. Such other cases where the Secretary of Agrarian Reform may determine that the matter
at issue is beyond the pale of mediation, conciliation or compromise.

Footnotes

1. CARP scope is presently being validated.