AGRARIAN LAW

Comprehensive Report on the Coverage of the Comprehensive Agrarian Reform Law

R.A 6657 as amended by R.A 7900 SECTION 4

Scope - The Comprehensive Agrarian Reform Law of 1989 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture: Provided, that landholdings of landowners with a total area of five (5) hectares and below shall not be covered for acquisition and distribution to qualified beneficiaries.

More specifically the following lands are covered by the CARP:

A) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until congress taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain;

B) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph;

C) All other lands owned by the Government devoted to or suitable for

D) agriculture; and

E) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon.

A comprehensive inventory system in consonance with the national land use plan shall be instituted by the Department of Agrarian Reform (DAR), in accordance with the Local Government Code, for the purpose of properly identifying and classifying farmlands within one (1) year from effectivity of this Act, without prejudice to the implementation of the land acquisition and distribution.

How is the scope or coverage of CARP defined by DAR?

By outlining in its Statement of Policies in its Administrative Order No. 02 of 2009 the topic on Notice of Coverage which shows the following pertinent details regarding the coverage of CARP:

1. The acquisition and distribution of agricultural lands under CARP shall be completed by June 30, 2014.

2. However, landholdings which were issued Notice of Coverages on or before June 30, 2013 shall continue even after June 30, 2014 until the lands have been awarded to qualified beneficiaries.

3. All landholdings of landowners owning more than 24 hectares which have been issued NOCs as of December 10, 2008 shall be subject to immediate acquisition and shall be completed by June 30, 2012. The landholdings of landowners owning more than 50 hectares shall be prioritized for coverage within this same period

4. All private agricultural lands voluntarily offered before July 1, 2009 by the landowner for agrarian reform shall be subjected to immediate acquisition and distribution under voluntary offer to sell (VOS) and shall be completed by June 30, 2012

5. Lands under voluntary land transfer (VLT) received by DAR before July, 1, 2009 shall be subjected to immediate acquisition and distribution and shall be completed by June 30, 2012

6. All landholdings of landowners owning more than 24 hectares but have not been issued with NOC as of December 10, 2008 shall be subject to land acquisition and distribution (LAD) by July 1, 2012 and completed by June 30, 2013.

7. All landholdings of landowners owning more than 10 hectares up to 24 hectares in so far as the excess hectarage above 10 hectares is concerned shall be covered under land acquisition and distribution starting July 1, 2012 and be completed by June 30, 2013

8. All landholdings of landowners owning more than 5 hectares up to 10 hectares shall be covered under land acquisition and distribution starting July 1, 2013 and be completed by June 30, 2014. Notwithstanding this schedule, coverage of more than 5 hectares up to 10 hectares may commence when the LAD balance of the concerned province, reckoned as of January 1, 2009 is already 90% complete, as certified to by the Provincial Agrarian Reform Coordination Committee (PARCCOM) under existing guidelines of the Presidential Agrarian Reform Council (PARC)

9. For provinces declared by the PARC as priority land reform areas, the acquisition and distribution of private agricultural lands therein under advanced phases may be implemented ahead of the above

schedules on the condition that prior phases in these provinces have completed pursuant to the PARC implementing rules and regulations on the matter

10. Landholdings subject of expropriation or acquisition by the Local Government Units (LGUs) or any portions thereof not actually, directly and exclusively used for non-agricultural purposes are subject to CARP coverage if one or more of the following conditions apply: 1. There is agricultural activity2. The land is suitable for agriculture or3. The land is presently occupied and tilled by farmers

11. The following type of lands shall likewise be subject of immediate acquisition and distribution under CARP and shall be completed by June 30, 2012:4. Rice and corn lands under P.D No. 27 5. All idle and abandoned lands6. All lands foreclosed by government financial institutions7. All lands acquired by the PCGG8. All other lands owned by the government

What are the lands excluded from the coverage?

Lands which are actually, directly and exclusively used and found to be necessary for the following purposes:1. Parks2. Wildlife3. Forest reserves4. Reforestation5. Fish sanctuaries and breeding grounds6. Water sheds7. Mangroves8. national defense9. school sites and campuses including experimental farm stations

operated by public or private schools for educational purposes10. seeds and seedlings research and pilot production centers11. Church sites and Islamic centers appurtenant thereto

Communal burial grounds and cemeteries Penal colories and penal farms actually worked by the inmates Government and private research and quarantine centers All undeveloped lands with 18% slope and over; All lands actually, directly and exclusively used for commercial,

industrial or residential purposes and classified as such before June 15, 1988;

Fish ponds and prawn farms; All lands actually, directly and exclusively used for livestock

raising; Ancestral lands and domain and Retention areas granted to landowners

R.A 6657 as amended by R.A 7900 SECTION 5

SCHEDULE OF IMPLEMENTATION - The distribution of all lands covered by this Act shall be implemented immediately and completed within 10 years from the effectivity thereof.

May it be argued that distribution of all lands covered by this Act shall be implemented and covered within the original 10 year period rather than the extended period?

YES, because section 5 and section 7 of the CARL are clearly mandatory.

• The following authorities support the view that sections 5 and 7 are mandatory: – “statutes or rules prescribing the time for litigants to take certain

actions or to appeal from an adverse decision is generally mandatory.”1

- “where a statute provides for the doing of some act which is required by justice or public duty or where it invests a public body, municipality, or officer with power and authority to take some action which concerns the public interest or rights of individuals, though the language of the statute be merely permissive in form, yet it will be construed as mandatory, and the execution of the power may be insisted upon as a duty”2

Moreover, the word "shall" in the phrase "shall be acquired and distributed" is also mandatory.

- In common or ordinary parlance and in its ordinary significance, the term "shall" is a word of command, and one which has always and which must be given a compulsory meaning, and it is generally imperative or mandatory.3

Public policy favors an imperative or mandatory construction. Public interest is also involved, and there are beneficiaries of agrarian reform with rights which ought to be exercised or enforced and no contrary intent appears or will justify a different meaning.

1 Statutory Construction, Agpalo2 Black, Henry Campbell, Interpretation of the Laws 3 Gonzales vs. Chavez (205 SCRA 816)

- “where a statute provides for the doing of some act which is required by justice or public duty or where it invests a public body, municipality, or officer with power and authority to take some action which concerns the public interest or rights of individuals, though the language of the statute be merely permissive in form, yet it will be construed as mandatory, and the execution of the power may be insisted upon as a duty”4

In section 5 and 7 of the CARL, time is of the essence. The designation of time is a limitation of the power and authority to act of the DAR. And the phrase "to be completed within a period of not more than four years" are negative words. Authorities consider provisions worded thus as mandatory.

- “Statutes Regulating Time of Official Action. – When a statute specifies the time at or within which an act is to be done by a public officer or body, it is generally held to be directory only as to the time, and not mandatory, unless time is of the essence of the thing to be done, or the language of the statute contains negative words, or shows that the designation of the time was intended as a limitation of power, authority, or right.” 5

R.A 6657 – SECTION 6

Retention Limits - Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any public or private agricultural land, the size of which shall vary according to factors governing a viable family-size farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm: provided, that landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the areas originally retained by them thereunder: provided, further, that original homestead grantees or their direct compulsory heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead.

4 Black, Henry Campbell, Interpretation of the Laws5 Ibid.

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner: provided, however, that in case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain therein or be a beneficiary in the same or another agricultural land with similar or comparable features.n case the tenant chooses to remain in the retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act.n case the tenant chooses to be a beneficiary in another agricultural land, he loses his right as a leaseholder to the land retained by the landowner. The tenant must exercise this option within a period of one (1) year from the time the landowner manifests his choice of the area for retention.

In all cases, the security of tenure of the farmers or farmworkers on the land prior to the approval of this Act shall be respected.

Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of possession of private lands executed by the original landowner in violation of the Act shall be null and void: provided, however, that those executed prior to this Act shall be valid only when registered with the Register of Deeds within a period of three (3) months after the effectivity of this Act. Thereafter, all Registers of Deeds shall inform the Department of Agrarian Reform (DAR) within thirty (30) days of any transaction involving agricultural lands in excess of five (5) hectares

SECTION 6-A – Exception to Retention Limits

SECTION 6-B – Review of Limits of Land Size

Retention rights of Landowners:In no case shall retention by the landowner exceed 5 hectares.

1. All landholdings 5 hectares and below shall not be subject to CARP coverage except for landholdings submitted for voluntary offer to sell before July 1, 2009 wherein the retention right has been waived.

2. Landowners who own lands 5 hectares or less may file a request for the issuance of Certification of Retention.

3. 3 hectares may be awarded to each child of the landowner, provided:

a. He is at least 15 years old; andb. He is actually tilling the land or directly managing the farm.

4. For landholdings under compulsory acquisition, the landowner shall choose his retained area within 30 days from receipt of Notice of Coverage or its publication. Failure to exercise the right will give DAR through Municipal Agrarian Reform Officer (MARO) to choose for the landowner his area.

5. The following are the factors in choosing their retention area in case of waiver:

a. Commodity produced;b. Terrain;c. Infrastructure available;d. Soil fertility.

In case the Certificate of Land Transfer has been issued, it is discovered that the landowner has been illegally denied his right of retention; the said certificate may be cancelled by the Secretary of Agrarian Reform.6

6. In the absence of an agreement for the judicial separation of property, spouses who own only conjugal properties may retain of not more than 5 hectares from such properties.If either or both of them are landowners in their own rights they may retain not more than 5 hectares from their respective landholdings.

HOMESTEAD – the house, outbuildings, and adjoining land owned and occupied by a person or family as a residence.7 It may be classified into business homestead, constitutional homestead and probate homestead.

A homestead shall not be subject to compulsory coverage if the following conditions are present, to wit:

a. The original homestead grantee or his direct compulsory heir still owns the original homestead at the time of the effectivity of the CARL;

b. The original homestead grantee or his direct compulsory heir(s) was cultivating the homestead as of the effectivity of the CARL on June 18, 19898

7. In case the retained land is tenanted, the tenant shall have the following options:

a. Remain in the area and be considered as leaseholder and shall lose the right to be a beneficiary;

6 Tenants of the Estate of Dr. Sison v. CA, 210 SCRA 5457 Black’s Law Dictionary (Third Pocket Edition)8 DAR Memo Circular No. 4 [1991]

b. Be a beneficiary in another agricultural land.Requisites:b.1.) Actual tiller of land;b.2.) Tenant/lessee or regular farm worker.

The law requires a legal relationship to exist between the landowner and the tiller.

Elements of a tenancy relationship: (Jeremias v. Estate of Mariano, G.R. No. 174649, September 26, 2008)

1. That the parties are the landowner and the tenant;2. The subject matter of the relationship is an agricultural

land;3. There is consent between the parties;4. The purpose is to bring agricultural production;5. There is personal cultivation on the part of the tenant;

and6. The harvest is shared between them.

Giving the land to all landless tillers or potential tillers would violate Article XIII, Section 4 of the 1987 Philippine Constitution which specifies the benefit for each category of qualified beneficiary.

8. In all cases, the security of tenure of the farmers on the retained land shall be respected.

9. Personal cultivation is not mandatory condition for retention.

The landowner does not have to cultivate the retained and exempted areas, unless the tenants, as agricultural lessees, would voluntarily relinquish the task of cultivation and vacate and surrender the said areas to the landowner.Hence, personal cultivation by the landowner is not a mandatory precondition for them to be entitled to their retention right.9

SECTION 6-A – Exception

10. Local Government Units acquiring private agricultural lands by expropriation or other modes shall not be subject to the 5 hectares retention limit.

“DOUBLE – EXPROPRIATION” process:a. Land will be subject to CARP coverage and acquired by the

national government, through DAR;9 Association of Small Landowners in the Philippines, Inc et al. v. Secretary of Agrarian Reform

b. Title will transfer to the national government upon just compensation to the landowner;

c. It will be distributed to agrarian reform beneficiaries;d. Land will now be expropriated by the LGU by just

compensation to the beneficiaries.

R.A 6657 – SECTION 7

Priorities - Lands shall be acquired and distributed as follows:

Phase One: July 1, 2009 – June 30, 2012a. All lands above 50 hectares;b. All lands in excess of 50 hectares already issued Notice of

Coverage on or before December 31, 2008;c. All rice and corn landsd. PCGG, GOCC and Government Financial Institution’s acquired

lands.Phase two:

a. Lands above 24 up to 50 hectares issued notice of coverage to be completed by June 30, 2012.

b. All remaining private agricultural lands with aggregate area in excess of 24 hectares to be completed by June 30, 2013.

Phase three:a. Lands in excess of 10 hectares up to 24 hectares to be

completed by June 30, 2013.b. Lands in excess of retention limit up to 10 hectares to be

completed by June 30, 2014.

Only farmers and regular farm workers actually tilling the lands as certified under oath by the Barangay Agrarian Reform Council and attested by the landowner shall be qualified as beneficiaries.

Land Acquisition and Distribution to be completed on a province-by-province basis to be completed by June 30, 2014.

Succeeding phase of LAD to commence only upon completion of at least 90% of the immediately preceding phase.

R.A 6657 – SECTION 8

Multinational Corporations – All lands of the public domain leased, held or possessed by multinational corporations or associations, and other lands owned by the government or by government-owned or controlled corporations, associations, institutions, or entities, devoted to existing and

operational agri-business or agro industrial enterprises, operated by multinational corporations and associations, shall be programmed for acquisition and distribution immediately upon the effectivity of this Act, with the implementation to be completed within three (3) years.

Lands covered by the paragraph immediately preceding, under lease, management, grower or service contracts, and the like, shall be disposed of as follows:

(a) Lease, management, grower or service contracts covering such lands covering an aggregate area in excess of 1,000 hectares, leased or held by foreign individuals in excess of 500 hectares are deemed amended to conform with the limits set forth in Section 3 of Article XII of the Constitution.

(b) Contracts covering areas not in excess of 1,000 hectares in the case of such corporations and associations, and 500 hectares, in the case of such individuals, shall be allowed to continue under their original terms and conditions but not beyond August 29, 1992, or their valid termination, whichever comes sooner, after which, such agreements shall continue only when confirmed by the appropriate government agency. Such contracts shall likewise continue even after the lands has been transferred to beneficiaries or awardees thereof, which transfer shall be immediately commenced and implemented and completed within the period of three (3) years mentioned in the first paragraph hereof.

(c) In no case will such leases and other agreements now being implemented extend beyond August 29, 1992, when all lands subject hereof shall have been distributed completely to qualified beneficiaries or awardees.

Such agreements can continue thereafter only under a new contract between the government or qualified beneficiaries or awardees, on the one hand, and said enterprises, on the other.

Lands leased, held or possessed by multinational corporations owned by private individuals and private non-governmental corporations, associations, institutions and entities, citizens of the Philippines, shall be subject to immediate compulsory acquisition and distribution upon the expiration of the applicable lease, management, grower or service contract in effect as of August 29, 1987, or otherwise, upon its valid termination, whichever comes sooner, but not later than after ten (10) years following the effectivity of the Act. However, during the said period of effectivity, the government shall take steps to acquire these lands for immediate distribution thereafter.

In general, lands shall be distributed directly to the individual worker-beneficiaries. In case it is not economically feasible and sound to divide the land, then they shall form a workers' cooperative or association which will deal with the corporation or business association or any other proper party, for the purpose of entering into a lease or growers agreement and for all other legitimate purposes.  Until a new agreement is entered into by and between the workers' cooperative or association and the corporation or business association or any other proper party, any agreement existing at the time this Act takes effect between the former and the previous landowner shall be respected by both the workers' cooperative or association and the corporation, business association or such other proper party.  In no case shall the implementation or application of this Act justify or result in the reduction of status or diminution of any benefits received or enjoyed by the worker-beneficiaries, or in which they may have a vested right, at the time this Act becomes effective.

The provision of Section 32 of this Act, with regard to production and income-sharing shall apply to farms operated by multinational corporations.

During the transition period, the new owners shall be assisted in their efforts to learn modern technology in production. Enterprises which show a willingness and commitment and good faith efforts to impart voluntarily such advanced technology will be given preferential treatment where feasible.

In no case shall a foreign corporation, association, entity or individual enjoy any right or privileges better than those enjoyed by a domestic corporation, association, entity or individual.

What is Multinational Corporation?

Section 1, Administrative Order No. 11

“Multinational corporation (NMC) – an international or transnational corporation with headquarters in one country but has branch offices in a wide range of both developed and developing countries.”

Article 80, Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987:

“any foreign business entity formed, organized and existing under any laws other than those of the Philippines whose purpose, as expressed in its organizational documents or by resolution of its Board of

Directors, or its equivalent, is to supervise, superintend, inspect or coordinate its own affiliates, subsidiaries or branches in the Asia-Pacific Region may establish a regional or area headquarters in the Philippines, after securing a license therefore from the Securities and Exchange Commission upon favorable recommendation of the Board of Investments.”

What is an Agribusiness?

It is the sum total of all operations involved in the manufacture and distribution of farm supplies, production activities on the farm; and the storage, processing, and distribution of farm commodities and items made from them.

It, therefore, includes all activities involved in growing agricultural produce and making them readily usable by consumers.10

What are Agro-industrial enterprises?

It cover enterprises that process farm products into final consumer goods (such as food and clothing) and into industrial raw materials.11

Implementation to be completed within three (3) years.

All lands of the public domain leased, held or possessed by multinational corporations or associations, and other lands owned by the government or by government-owned or controlled corporations, associations, institutions, or entities, devoted to existing and operational agri-business or agro-industrial enterprises, operated by multinational corporations and associations, shall be programmed for acquisition and distribution immediately upon the effectivity of the Act on June 15, 1988, with the implementation to be completed within three (3) years.12

Implementation not later than ten (10) years

Lands leased, held or possessed by multinational corporations, owned, by private individuals and private non-governmental corporations, associations, institutions and entities, and Filipino citizens shall be subject to immediate compulsory acquisition and distribution upon the expiration of the applicable lease, management, grower or service contract in effect as of August 29, 1987, or otherwise, upon its valid termination, whichever come sooner, but not later than 10 years following the effectivity of the Act.

10 DAR Adm. Order No. 11[1988]11 Ibid.12 Textbook on Agrarian Reform and Taxation, De Leon [2000]

However, during the said period of effectivity, the government shall take steps to acquire those lands for immediate distribution thereafter.13

Distribution; formation of workers’ cooperative or association

In general, lands shall be distributed directly to the individual worker-beneficiaries. In case it is not economically feasible and sound to divide the land, then they shall form a workers’ cooperative or association which will deal with the corporation or business association or any other proper party for the purpose of entering into a lease or growers agreement and for all other legitimate purposes.

Until a new agreement is entered into by and between the workers’ cooperative or association and the corporation or business association or any other proper party, any agreement existing at the time the Act takes effect between the former and the previous landowner shall be respected by both the workers’ cooperative or association and the corporation and the corporation, business association or such other proper party.

In no case, however, shall the implementation or application of the Act justify or result in the reduction of status or diminution of any benefits received or enjoyed by the worker-beneficiaries, or in which they may have a vested right, at the time the Act becomes effective.14

Production and income-sharing

The provisions of Section 32 of the Act, with regard to production and income sharing shall apply to farms operated by multinational corporations.15

Section 32. Production-Sharing. —

Pending final land transfer, individuals or entities owning, or operating under lease or management contract, agricultural lands are hereby mandated to execute a production-sharing plan with their farm workers or farmworkers' reorganization, if any, whereby three percent (3%) of the gross sales from the production of such lands are distributed within sixty (60) days of the end of the fiscal year as compensation to regular and other farmworkers in such lands over and above the compensation they currently receive: provided, that these individuals or entities realize gross sales in excess of five million pesos

13 Textbook on Agrarian Reform and Taxation, De Leon [2000]14 Ibid.15 Ibid.

per annum unless the DAR, upon proper application, determines a lower ceiling.

In the event that the individual or entity realizes a profit, an additional ten percent (10%) of the net profit after tax shall be distributed to said regular and other farmworkers within ninety (90) days of the end of the fiscal year.

To forestall any disruption in the normal operation of lands to be turned over to the farmworker-beneficiaries mentioned above, a transitory period, the length of which shall be determined by the DAR, shall be established.

During this transitory period, at least one percent (1%) of the gross sales of the entity shall be distributed to the managerial, supervisory and technical group in place at the time of the effectivity of this Act, as compensation for such transitory managerial and technical functions as it will perform, pursuant to an agreement that the farmworker-beneficiaries and the managerial, supervisory and technical group may conclude, subject to the approval of the DAR.16

Modern technology in production

During the transition period, the new owners shall be assisted in their efforts to learn modern technology in production. Enterprises which show a willingness and commitment and good faith efforts to impart voluntarily such advanced technology will be given preferential treatment where feasible.

In no case shall a foreign corporation, association, entity or individual enjoy any rights or privileges better than those enjoyed by a domestic corporation, association, entity or individual.17

R.A 6657 – SECTION 9

Ancestral Lands - For purposes of this Act, ancestral lands of each indigenous cultural community shall include, but not be limited to, lands in the actual, continuous and open possession and occupation of the community and its members: Provided, That the Torrens System shall be respected.

The right of these communities to their ancestral lands shall be protected to ensure their economic, social and cultural well-being. In line with the other principles of self-determination and autonomy, the systems of land

16 Repbulic Act No. 665717 Textbook on Agrarian Reform and Taxation, De Leon [2000]

ownership, land use, and the modes of settling land disputes of all these communities must be recognized and respected.

Any provision of law to the contrary notwithstanding, the PARC may suspend the implementation of this Act with respect to ancestral lands for the purpose of identifying and delineating such lands: Provided, That in the autonomous regions, the respective legislatures may enact their own laws on ancestral domain subject to the provisions of the Constitution and the principles enunciated in this Act and other national laws.

What is an Ancestral Land?

Ancestral lands, as defined in the Indigenous Peoples Rights Act (IPRA) is the,

“occupied, possessed and utilized by individuals, families and clans who are members of the Indigenous Cultural Communities (ICCs)/Indigenous Peoples (IPs) since time immemorial, by themselves or through their predecessors-in-interest, under claims of individual or traditional group ownership, continuously, to the present except when interrupted by war, force majeure or displacement by force, deceit, stealth or as a consequence of government projects and other voluntary dealings entered into by government and private individuals/corporations, including, but not limited to, residential lots, rice terraces or paddies, private forests, swidden farms and tree lots.”

For ancestral lands, in particular, IPs have the right to transfer land/property rights to/among members of the same ICCs/IPs and the right to redeem the property in case of transfers that raise questions on consent given by IPs and transfers made with unjust considerations and/or prices.18

How to claim lands?

IPs in the Philippines can claim ownership in three ways: a) by virtue of a native title;b) getting formal recognition of ownership by acquiring a certificate of

ancestral domain title (CADT) or certificate of ancestral land title (CALT) from the National Commission on Indigenous Peoples (NCIP)-Ancestral Domains Office (ADO); or

c) by securing a certificate of title by virtue of “Commonwealth Act 141, as amended, or the Land Registration Act 496.19

18 Protecting IPs’ Rights to Ancestral Domains and Lands, Romualdo, UP Forum

What is a Native title?

A native title, according to RA No. 8371,

“refers to pre-conquest rights to land and domains, which , as far back as memory reaches, have been held under a claim of private ownership by ICCs/IPs, have never been public lands and are thus indisputably presumed to have been held that way since before the Spanish Conquest.”

What is a CALT or CADT?

A Certificate of Ancestral Lands Title (CALT) or Certificate of Ancestral Domain Title (CADT) is,

“granted by the government and is provided for by law to those IPs who wish to obtain these titles. The IPRA, specifically Section 12, also states that IPs have the option to acquire certificates of title under the provisions of the amended Commonwealth Act No. 141. This Act follows the Torrens System of land registration5 and titles issued under this system are called Torrens titles.”20

SECTION 12. Option to Secure Certificate of Title Under Commonwealth Act 141, as amended, or the Land Registration Act 496.

— Individual members of cultural communities, with respect to their individually-owned ancestral lands who, by themselves or through their predecessors-in-interest, have been in continuous possession and occupation of the same in the concept of owner since time immemorial or for a period of not less than thirty (30) years immediately preceding the approval of this Act and uncontested by the members of the same ICCs/IPs shall have the option to secure title to their ancestral lands under the provisions of Commonwealth Act 141, as amended, or the Land Registration Act 496.

Jurisdiction over the Ancestral Lands of the Indigenous Communities

It is the Department of Natural Resources (DENR) that is tasked with prescribing the rules and regulations, as provided under section 13 of RA 7586, which reads:

”SECTION 13. Ancestral Lands and Rights over Them. –

19 Protecting IPs’ Rights to Ancestral Domains and Lands, Romualdo, UP Forum

20 Republic Act No. 8371

Ancestral lands and customary rights and interest arising therefrom shall be accorded due recognition. The DENR shall prescribe rules and regulations to govern ancestral lands within protected areas: Provided, that the DENR shall have no power to evict indigenous communities from their present occupancy nor resettle them to another area without their consent: Provided, however, that all rules and regulations, whether adversely affecting said communities or not, shall be subjected to notice and hearing to be participated in by members of concerned indigenous community.”

Protection of rights of indigenous cultural communities

The right of these communities to their ancestral lands shall be protected to ensure their economic, social and cultural well-being. In line with the principles of self-determination and autonomy, the systems of land ownership, land use, and the modes of settling land disputes of all these communities must be recognized and respected. However, the Torrens System shall be respected.21

Suspension of implementation

Any provision of law to the contrary notwithstanding, the PARC may suspend the implementation of the Act with respect to ancestral lands for the purpose of identifying and delineating such lands.22

Enactment of regional laws

In the autonomous regions, the respective legislatures may enact their own laws on ancestral domain subject to the provisions of the Constitution and the principles enunciated in the Act and other national laws.23

R.A 6657 – SECTION 10

Exemptions and Exclusions –

a) Lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves shall be exempt from the coverage of this Act.

21 Textbook on Agrarian Reform and Taxation, De Leon [2000]22 Ibid.23 Textbook on Agrarian Reform and Taxation, De Leon [2000]

b) Private lands actually, directly and exclusively used for prawn farms and fishponds shall be exempt from the coverage of this Act: Provided, That said prawn farms and fishponds have not been distributed and Certificate of Land Ownership Award (CLOA) issued under the Agrarian Reform Program.

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

In cases where the fishponds or prawn farms have not been subjected to the Comprehensive Agrarian Reform Law, the consent of the farmworkers shall no longer be necessary; however, the provision of Section 32-A hereof on incentives shall apply.

c) Lands actually, directly and exclusively used and found to be necessary for 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 center, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent (18%) slope and over, except those already developed, shall be exempt from the coverage of this Act.(As amended by R. A. 7881)

In addition to the exclusion provided for in section 10, it has been held that also Lands devoted to raising of livestock, swine and poultry are excluded from the coverage of CARP. Before its amendment by RA 7881, Sec. 3(b) of RA 6657 included in its definition of agricultural activity the "raising of livestock, poultry or fish". Likewise, the original Sec. 11 of RA 6657on commercial farming provided that "lands devoted to commercial livestock, poultry and swine raising shall be subject to compulsory acquisition within ten (10) years from the effectivity of the Act."

However, the Supreme Court in Luz Farms vs. Secretary of Agrarian Reform, supra, held that Sec. 3 (b) and Sec. 11 of RA 6657(along with Sec. 13and 32) are unconstitutional in far as they include the raising of livestock and swine in the coverage of CARP.

LUZ FARMS CASE

Facts: 

Petitioner Luz Farms is a corporation engaged in livestock and poultry business. It seeks to nullify Sec. 3 (b) and Sec. 11 of RA6657 in so far as they apply to livestock and poultry business.

 Held:

 Sec. 3 (b) and Sec. 11 of RA 6657 are unconstitutional in so far as they include lands devoted to raising livestock, swine and poultry within its coverage. The use of land is incidental to but not the principal factor or consideration of productivity in this industry. The Supreme Court held that:

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

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

 The Supreme Court noted that the intention of the Committee to limit the application of the word "agriculture" is further shown by the proposal of Commissioner Jamir to insert the word "arable" to distinguish this kind of agricultural land from such lands as commercial and industrial lands and residential properties. The proposal, however, was not considered because the Committee contemplated that agricultural lands are limited to arable and suitable agricultural lands and therefore, do not include commercial, industrial and residential lands24.Moreover, in his answer to Commissioner Regalado's interpellation, Commissioner Tadeo clarified that the term "farmworker" was used instead of "agricultural worker" in order to exclude therein piggery, poultry and livestock workers25

  DAR Administrative Order No. 9 (1993)

Imposes two (2) conditions in order that these lands may be exempted:

24Record, CONCOM, 7 August 1986, Vol. III, p. 3025Record, CONCOM, August 2, 1986, Vol. II, p. 621

a) That the land or portion thereof is exclusively, directly, or actually used for livestock, poultry and swine raising as of 15 June 1988; and

b) The farm must satisfy the ratios of land, livestock, poultry and swine

As for paragraph B of section 10, Fishponds and prawn ponds

With the amendment of Sec. 3 (c), 10 and 11 of RA 6657 by RA 7881,fishponds and prawn ponds are also exempted from the coverage of CARP, provided that said lands have not been distributed to ARBs and no CLOA shave been issued.

 To be exempted, the agricultural land must have been actually, directly and exclusively used for prawn farms and fishponds as of 12 March 1995, the date of effectivity of RA 7881. To avail of the exemption, a landowner or his authorized representative still has to file a written application for land exemption/exclusion with the DAR Provincial Office (DAR Adm. O. No. 3[1995]).In cases where the fishponds or prawn farms have been subjected to CARP, by voluntary offer to sell, commercial farms deferment or notice of compulsory acquisition, they can be exempt from CARP if a simple and absolute majority of the actual regular workers or tenants consent to the exemption within one (1) year from the effectivity of RA 7881or on 12 March 1995. In cases where the fishponds or prawn ponds have not been subjected to CARP, the consent of the farm workers shall no longer be necessary26

  Sec. 4 of RA 7881 also amended RA 6657

It introduced a new provision mandating the introduction of an incentive plan for employees of all fishponds and prawn farms. Operators and entities owning or operating fishponds and prawn farms are directed to execute within six (6) months from its effectivity an incentive plan with their regular fishpond or prawn farm worker's organization, if any, whereby seven point five percent (7.5%) of net profits before tax from the operation of the fishpond or prawn farms are distributed within sixty (60) days at the end of the fiscal year as compensation to regular and other pond workers over and above their current compensation. This incentive plan requirement, however, does not apply to agricultural lands subsequently converted to fishponds or prawn farms provided that the size of the land converted does not exceed the retention limit of the landowner.

As for paragraph C of section 10

26 Republic Act No. 6657 [1988], sec.10[b], as amended

May a state college claim that part of its property being cultivated by farmers cannot be covered under CARP because it is reserved for the future expansion of the campus?

Yes, that area being cultivated by farmers can still be exempted from the CARP coverage. It has been held in Central Mindanao University vs. DARAB, the university has the prerogative to determine whether a particular part of the school property is necessary for educational purposes.

Central Mindanao University vs. Department of Agrarian Reform Adjudication Board, 215 SCRA 86 (1992)

 Facts:On 16 January 1958, President Carlos Garcia issued Proclamation No. 467 reserving for the Mindanao Agricultural College, now the CMU, a piece of land to be used as its future campus. In 1984, CMU embarked on a project titled "Kilusang Sariling Sikap" wherein parcels of land were leased to its faculty members and employees. Under the terms of the program, CMU will assist faculty members and employee groups through the extension of technical know-how, training and other kinds of assistance. In turn, they paid the CMU a service fee for use of the land. The agreement explicitly provided that there will be no tenancy relationship between the lessees and the CMU.

 When the program was terminated, a case was filed by the participants of the "Kilusang Sariling Sikap" for declaration of status as tenants under the CARP. In its resolution, DARAB, ordered, among others, the segregation of 400 hectares of the land for distribution under CARP. The land was subjected to coverage on the basis of DAR's determination that the lands do not meet the condition for exemption, that is, it is not "actually, directly, and exclusively used" for educational purposes.

 Issue:

 Is the CMU land covered by CARP? Who determines whether lands reserved for public use by presidential proclamation is no longer actually, directly and exclusively used and necessary for the purposefor which they are reserved?

 Held:

 The land is exempted from CARP. CMU is in the best position to resolve and answer the question of when and what lands are found necessary for its use. The Court also chided the DARAB for resolving this issue of exemption on the basis of "CMU's present needs." The Court stated that the

DARAB decision stating that for the land to be exempt it must be "presently, actively exploited and utilized by the university in carrying out its present educational program with its present student population and academic faculty" overlooked the very significant factor of growth of the university in the years to come.

Is application of exemption the same as an application for retention?

No, there are different in the sense that they have different requisites. In the case of DAEZ vs. CA27, it stated that under PD 27, which implemented that operation land transfer program covers tenanted rice or corn lands. The requisites for coverage under OLT are: 1) land must be a system of share crop or lease tenancy obtaining therein. If either requisite is absent, a landowner may apply for exemption. If either of these requisite, the land is not covered under OLT. Hence, a landowner need not apply for retention where his ownership over the entire landholding is intact and undisturbed.

PD 27 grants each tenant of covered land 5 hectares lot or in case the land is irrigated, a 3 hectare lot constituting a family size farm, however, said law allows a covered landowner to retain not more than 7 hectares of his land if his aggregate landholding does not exceed 24 hectares. Otherwise, his entire landholding is covered without him being entitled to any retention right.

On the other hand, the requisites for the exercise by the landowner of his right of retention are:

1) The land must de voted to rice or corn crops. There must be a system of share crop or lease tenancy obtaining therein; and

2) The size of the landholding must not exceed 24 hectares or it could be more than 24 hectares provided that atleast 7 hectares thereof are covered lands and more than 7 hectares of it consists of other agricultural lands

R.A 6657 – SECTION 11

Commercial Farming. - Commercial farms which are private agricultural lands devoted to salt beds, fruit farms, orchards, vegetable

27 GR NO.133507, Febuary 17,2000

and cut-flower farms, and cacao, coffee and rubber plantations, shall be subject to immediate compulsory acquisition and distribution after ten (10) years from the effectivity of this Act.  In the case of new farms, the ten-year period shall begin from the first year of commercial production and operation, as determined by the DAR. During the ten-year period, the Government shall initiate steps necessary to acquire these lands, upon payment of just compensation for the land and the improvements thereon, preferably in favor of organized cooperatives or associations, which shall thereafter manage the said lands for the workers-beneficiaries.(As amended by R.A. 7881)

This definition excludes private agricultural lands devoted to commercial livestock, poultry, and swine raising. Such lands are not covered by the agrarian reform law28. There are alternative methods available to commercial farms other than distributions of land most commercial farms are the most modern mechanized farms with processing plants. Such farms pay the highest wages. Hence, the workers themselves prefer to remain as employees as it would be uneconomic to dismantle the farming operation.

Thus, the DAR, under its AO No.9 series of 1998, allows commercial farms certain options subject to approval by DAR and workers. Such as: 1) joint venture, 2) lease-back, 3) growership arrangements and 4) direct payment scheme. These are aside from the usual voluntary offer sale and compulsory coverage. In general, therefore, the DAR encourages the workers or farmer-beneficiaries to keep intact the commercial farm by organizing themselves into cooperatives which will hold the collective CLOA to the land. Further, it will finance and operate the commercial farm. However, if it is economically viable or feasible as determined by DAR/DA, they will allow partition of the commercial farm if a majority of the workers prefer physical partition. In case of portion, the DAR requires a minimum of 1 hectare and maximum of 3 hectares for each worker.

ADMISTRATIVE POLICIES COVERING EXPIRATION OF DEFERMENTS OF COMMERCIAL FARMS

All commercial farms whose deferment expired last June 15, 1998 are subject to immediate acquisition and distribution under the CARP.

Deferments have yet to expire will be acquired and distributed only upon expiration of their respective deferment periods.

28 Luz Farms vs. Secretary of DAR

GENERAL RULE: Acquired commercial farms shall be distributed to qualified beneficiaries based on the order of priority prescribed under section 22 of RA 6657. Those who have worked longest on the land shall be given preference.

Landowner, whether individual or corporate, shall have the right to retention pursuant to section 6 of RA 6657. all infrastructure facilities and improvements including buildings, roads, machinery receptacles, instruments or implements permanently attached to the land, which are necessary and beneficial to the operations of the farm as determined by the DAR, shall be subject to acquisition upon the recommendation of the agrarian reform beneficiaries.

Portion of lands devoted to livestock covered by DAR’s compulsory acquisition are not included in the definition of agricultural lands. In the case of DAR vs. SUTTON29, it was held that the constitutionality of DAR AO No.9, series of 1993, which prescribes a maximum retention limit for owners of land devoted to livestock raising was raised. Pursuant to such AO, DAR exempted 1,200 hectares for grazing and a maximum of 102, 5635 hectares for infrastructures while the rest was subject to compulsory acquisition. The Supreme Court said that DAR has no power to regulate livestock farms which have been exempted by the constitution from the coverage of agrarian reform. Moreover, lands devoted to livestock, poultry and swine have been classified as industrial and not agricultural lands and thus exempt from agrarian reform.

MODES ACQUISITION OF COMMERCIAL FARMS

Voluntary offer to sell-in order that acquisition of deferred commercial farm through voluntary offer to sell may be allowed, the offer to sell must have been submitted before the expiration of the deferment period, otherwise, the property shall be placed under compulsory acquisition.

Compulsory Acquisition

Direct Payment Scheme-upon mutual agreement of both the land owner and the majority of all qualified agrarian reform beneficiaries and approved by the DAR direct payment of deferred commercial farms placed under CARP coverage may be allowed.

Likewise, the area of the land to be transferred to the beneficiaries shall not be less than the area which the government would otherwise acquire for redistribution through CA or VOS.

29 GR NO.162070,October 19,2005

The terms and conditions of the DPS shall include the immediate transfer of possession and ownership of the land in favor of the identified beneficiaries. The CLOAs shall be issued to the individual ARBs, or their cooperative or association, as may be appropriate, with proper annotations.

TYPES OF AGRIBUSINESS VENTURES ALLOWED BY DAR

Joint Venture Arrangement- agribusiness venture whereby a company is organized and co-owned by an investor and the agrarian reform beneficiaries through their cooperatives through their associations. The investor may provide the management and marketing skills, technology infrastructure and capital while the ARBs’ contribution/participation in the joint venture includes labor, the usufructuary rights to the land, and capital infusion, if available.30

Lease Arrangement- agribusiness scheme whereby the ARBs’ through their cooperatives of farmworkers’ association, enter into a contract of lease with the landowner/investor. The lessee shall have farm control and operations within an agreed period of time but not to exceed 10 years, subject to extension upon mutual agreement of both parties. The lease rental shall not be less than the amortization to be paid by the ARBs to the Land Bank of the Philippines pursuant to DAR AO No.6, series of 1998, and other pertinent laws, rules and regulation.31

Contract Growing/Growership Arrangement- ARBs own the land and commit, either collectively through their cooperative or individually, to produce certain crops for an investor or agribusiness firm that contract to buy the produce at pre-arranged terms.32

Management Contract- arrangement whereby the ARBs, or their cooperative/organization, hire the services of the landowner or an investor to manage and operate the farm in exchange for fixed wages or commission.33

Build-Operate-Transfer Scheme- contractual agreement entered into pursuant to R.A No.6957, as amended, whereby the project proponent undertakes the construction, including financing of a given infrastructure facility and the operation and maintenance

30Textbook on Agrarian and Taxation, De Leon,2000 Edition31 Ibid.32 Textbook on Agrarian and Taxation, De Leon,2000 Edition33 Textbook on Agrarian and Taxation, De Leon,2000 Edition

thereof for an agreed period of time but not to exceed 25 years, subject to extension.34

Qualified ARBs or their cooperative/association may also opt for the combination of two or more of the above schemes they may choose in collaboration with the proposed investor. Lease arrangement shall be the least preferred scheme.

ESSENTIAL ELEMENTS OF AGRIBUSINESS VENTURE ARRANGEMENTS

Only qualified ARBs who have been awarded title to distribute area subject of the agribusiness venture arrangement.

Any qualified investor or former landowner may enter into an agribusiness venture provided, that they are able to prove their financial and technical capacity to meet ties and obligations under the proposed arrangement as evidenced by the relevant financial and income statements and further that the former landowner of the commercial farm shall be given priority.

Qualified investor may be any individual, partnership, or corporation with established financial and technical capabilities duly registered with the SEC.

In joint ventures, the contract shall provide only for the usufructuary rights on the land but not the transfer of ownership of the land itself, valued at the prevailing market rates, but not lower than the amortization cost thereof.

FORMULAS FOR JOINT VENTURES, LEASE BACK AND CONTRACT GROWERSHIP ARRANGEMENTS

Joint Venture agreement scheme must be approved by the DAR and by the majority farmer-beneficiaries. In this case, it is required that the title be ultimately be transferred to the workers.35

Lease-back arrangements shall be approved only when after the issuance of the CLOAs to the workers either individually or collectively to a cooperative. Lease may not exceed 10 years subject to extension by mutual agreement and rental should not be less than the amortization to be paid by the workers.36

34 Ibid.

35 Textbook on Agrarian and Taxation, De Leon,2000 Edition36 Ibid.

Contract Growership shall be approved after the issuance of the

CLOAs and the workers farm the land and agree to pre-sell their produce, individually or collectively to any party including the former landowner who may have all the equipment and processing plant.37

In direct payment scheme, DAR allows the landowner and workers to negotiate the sale of the land and/or equipment. The contract must be approved by the DAR and majority of its workers. Also, DAR requires that the CLOAs be issued collectively.

37 Ibid.