Agrarian Reform

Fe Atanacio-Blas
Institute of Education
R. A. 6657
The Comprehensive Agrarian Reform Law
or CARL– now CARP
Signed into law by President Corazon C.
Aquino

Agrarian Reform in the Philippines

Because it covers not only private lands
but also public lands and other lands of
the public domain which are classified as
agricultural, regardless of the crops
planted thereon, the growing fruit trees,
farm products, and other farm activities
performed and/or done by persons,
whether natural or judicial.

Why comprehensive?
‘the state shall promote a just and
dynamic social order that will ensure the
prosperity and independence of the nation
and free the people from poverty through
policies that provide adequate social
services, promote full employment, a
rising standard of living, and improved
quality of life for all.’

Art. II, Sec. 21 1987 Constitution

History of Agrarian
Reform
Big tracts of lands were owned by the
Friars or Religious Orders
Distribution of land as form of rewards—
loyalty and faithful service to the Spanish
Crown
Reduccion

Spanish Time
Lands were sold to peasants to resolve
social unrest
Some farmers bought big tracts of lands
This has encouraged haciendas

American Time
1963 – a Land Reform Code was passed
Only applied to rice lands
Ensuring a more definite transition from
tenancy to owned – operated farms

Macapagal Administration
1972 – Pres. Marcos issued a decree
declaring the whole country as a land
reform area – ambiguous in nature
another law was enacted to explain the
former
In this law, tenants were allowed to own
through amortization five hectares of land
planted with rice or corn

Marcos Administration
Full implementation of the Land Reform
E.O. No. 229 – providing the Mechanism
for the Implementation of the
Comprehensive Agrarian Reform Program

Aquino Administration
Land Reform – refers to the improvement
of the farmers’ relationship to the land
they cultivate.
Agrarian Reform – concerned with the
total development of farmers on
economic, social, and political
transformation.

Land Reform vs. Agrarian Reform

Social Justice – democratization of income
and wealth by equalizing access to land
as the basic productive resource.
Just Compensation – fair market value is
primarily considered in the land valuation
process

Principles of Agrarian Reform

Coverage of Agrarian
Reform (R.A. 6657)
Allpublic and private lands provided in
Proclamation No. 131 and other lands of
the public domain suitable for agriculture
At the onset, 10.3 million hectares of
agricultural lands to distribute in 10 years
63% -- under DENR
37% -- under DAR
DAR – distribution of private agricultural
lands (compensable lands) and non-
private agricultural lands (mostly non-
compensable such as settlements, landed
estates, KKK lands)
DENR – distribution of public alienable
and disposable lands and those covered
by the Integrated Social Forestry (ISF)
Program
a. All alienable and disposable lands of the
public domain devoted to or suitable for
agriculture
b. All lands of public domain in excess of
the specific limits as determined by the
Congress

Lands Covered by the CARP

c. All lands owned by the government
devoted to or suitable for agriculture; and
d. All private lands devoted to or suitable
for agriculture regardless of the
agricultural products raised or that can be
raised thereon.
Procedure of Land
Acquisition
After identifying the land, landowners and
beneficiaries – DAR shall publish its
decision together with the offer of the
DAR to pay for the land
Within 15 days from publication and
notice – landowner shall signify to the
DAR his acceptance or rejection of the
offer
If offer was accepted, the Land Bank of
the Philippines (LBP) shall pay within 15
days after the owner surrenders the
Certificate of Title and other pertinent
documents required by the DAR and LBP
If offer was rejected, the DAR shall
conduct administrative summary
proceedings
A fifteen-day period is given again to
determine the compensation for the land,
then the matter is submitted
Within 15 days, the LBP shall establish a
trust for the landowner of the amount
decided together with the DAR
The DAR shall take immediate possession
of the land
The Register of Deeds shall issue a
Transfer Certificate of Title (TCT) in the
name of RP as Trustee for and in behalf of
the beneficiaries
Awardees-owners are then given as
attested by a certificate of Land ownership
Award
Price shall be based on the owner’s
declaration of current fair market value
but subject to certain controls by the
Presidential Agrarian Reform Council
(PARC)
a. Bond payment over ten (10) years, with
10% of the value of the land payable
immediately in cash and the balance in
the form of LBP bonds bearing market
rates of interest that are aligned with 91-
day treasury bill rates, net of applicable
final withholding tax

Modes of Compensation
b. Direct payments in cash or kind by the
farmer-beneficiaries with the terms to be
mutually agreed upon by the beneficiaries
and landowners and subject to the
approval of DAR
c. Other modes of payments as may be
described or approved by the PARC
The cost of acquisition of the land (the
cost acquired land before)
The current value of like property (the
current value of land at present time)
Its nature (physical characteristics of
land)
Actual use and income (either agricultural
or non-agricultural land and the annual
income per hectare)

Factors in determining Just

Compensation
The sworn valuation by the land owner
(the declaration of the land owner in
terms of nature, use and income)
The tax declaration (the declared tax
payment of the land owner)
The assessment of the government
assessors (the actual assessment of the
government in terms of the value of land
per hectare)
A. Cash payment
1. for lands above 50 has. – 25% in cash, the
remaining to be paid in government financial
instruments negotiable at any time.
2. for lands above 24% has. and up to 50 has
– 30% in cash, the remaining balance to be
paid in government financial instruments
negotiable at any time.

Modes of Compensation (option of

the landowner)
 3. for lands 24 has. and below – 35%
in cash, the remaining balance to be
paid in government financial instruments
negotiable any time.
B. Share of Stocks in government-owned or
controlled corporations like NAPOCOR,
GSIS, SSS, PAGCOR and the like; LBP
prefers shares, physical assets or other
qualified investments in accordance with
guidelines set by the PARC.
C. Tax Credits which can be used against
any tax liability.
D. LBP Bonds, which shall have the ff.
features :
1. Acquisition of land or other real
properties of the government, including
assets under Asset Privatization Program
and assets foreclosed by the government
financial institutions
 2. Acquisition of shares of stock of the
government-owned and controlled
corporations or shares of stock owned
by the government in private
corporations.
3. Substitution for surety or bail bonds
for the provisional release of accused
persons, or for performance bonds
4. Security for loans with any government
financial institution, provided the proceeds
of the loans shall be invested in an
economic enterprise (SME’s).
5. Payments for tuition fees of the
immediate family of the original
bondholder in government universities,
colleges, trade schools and other
institutions
 6. Payment for fees of the immediate
family of the original bondholder in
government hospitals
7. Such other uses as the Presidential
Agrarian Reform Council (PARC) may
allow from time to time
1. Rates – for the interest rate on the 10-
year plan, LBP is based on the 91-day
treasury bills, representing the
transactions consummated in the auction
sale immediately preceding land bank
interest setting dates, as follows : Feb28,
May 31, Aug 31 and Nov 30 of every year

Interest Payment
2. Dates – for bonds issued as a result of
the conversion of 25-year bonds, the LB
pays interest on Feb 18 and Aug 18 of
every year. For those issued after Aug 18,
1987 under the CARP, this interest is
payable 6 months from date of issue and
every 6 months thereafter.
1. Notice to be sent to the DAR regarding
VLT
2. The terms and conditions shall not be
less favorable to the tenants
3. The agreement shall include sanctions in
case of non-compliance

Voluntary Land Transfer (VLT)

Guidelines
The transfer of land ownership from the
original landowner to the tenants may
also be done in the form of stocks, upon
which the said tenants will become one of
the stockholders thereof.

Transfer of Stocks Instead of

Actual Land Transfer
1. Cash Tenants – these farmers pay inn
cash as rent for their use of the land.
The rent is usually computed per hectare
of land.
2. Share-of-produce tenants – these
farmers give the owner of the land a
share of their harvest

Kinds of Tenant Practices

3. Cash and share-of-produce tenants –
these farmers pay the landowner a
combination of cash payments and a fixed
portion of the harvest agreed beforehand
by both parties
4. Fixed-amount-of produce tenants –
these farmers pay rent in the form of a
fixed quality of the harvest agreed upon
by the owner and the tenant. The tenant
is obliged to pay the rent whether the
harvest is bountiful or not.
5. Cash and fixed-amount-of-produce
tenants – these farmers pay rent for using
the land in a combination of cash
payments and a fixed portion of the
harvest agreed beforehand whether the
harvest is bountiful or not
6. Rent-Free Tenants – these farmers till
the land with the consent of the land
owner without having to pay rent in cash
or in kind.
1. Agricultural lessees and share tenants
2. Regular farm workers
3. Seasonal farm workers
4. Other farm workers
5. Actual tillers or occupants of public lands
6. Collectives or cooperatives of the above
beneficiaries
7. Others directly working on land

Land Distribution of CARP

Refers to a natural person whose primary
or livelihood is cultivation of land or the
production of agricultural crops, either by
himself, or primarily with the assistance of
his immediate farm household, whether
the land is owned by him, or by another
person under leasehold or shared tenancy
agreement or arrangement with the
owner thereof.

Farmer
A natural person who renders service for
value as an employee or laborer in an
agricultural land enterprise or farm
regardless of whether his compensation is
paid on a daily, weekly, monthly or
“pakyaw” basis.

Farm Worker
A natural person who is employed on a
permanent basis by an agricultural
enterprise or farm

Regular Farm Worker

A natural person who is employed on
recurrent, periodic or intermittent basis by
an agricultural enterprise or farm,
whether as a permanent laborer, or not,
such as “dumaan”, “sacada”, and the like.

Seasonal Farm Worker

A farm worker who does not fall under
any of the farm workers mentioned
above.

Other Farm Worker

Lands awarded shall be paid for by the
beneficiaries to the LBP in 30 days annual
amortization at 6% interest rate per
annum
The payments for the first three years
after the award may be at reduced
amounts as established by the PARC

Payment by Beneficiaries
The first 5 annual payments may not be more
than 5% of the value of the annual gross
production as established by the DAR
Should the scheduled annual payments after
the 5th year exceed 10% of the annual gross
production and the failure to produce
accordingly is not due to the beneficiaries
fault, the LBP may reduce the interest rate or
reduce the principal obligation to make the
repayment affordable.

Provided that…
The LBP shall have the right by way of
mortgage on the land awarded to the
beneficiary; and this mortgage may be
foreclosed by the LBP for non-payment of
an aggregate of 3 months annual
amortizations
The LBP shall advise the DAR of such
proceedings and the latter shall
subsequently award the forfeited
landholding to other qualified beneficiaries
A beneficiary whose land has been
foreclosed shall thereafter be permanently
disqualified from becoming a beneficiary
under this Act.
No beneficiaries shall sell, transfer, or
convey the land awarded to him within
the period of 10 years except to his heirs,
to the government, or to LBP
Any violation of said provision is
considered null and void

Prohibition on Awarded Lands

If the land has not yet been fully paid for
the beneficiary, the rights to the land may
be transferred or conveyed, with prior
approval of the DAR, to any heir of the
beneficiary who, as a condition for such
transferor conveyance, shall cultivate the
land himself
Failing compliance, land shall be
transferred to the LBP which shall give
due notice of the availability of the land
In the event of such transfer to the LBP,
the latter shall compensate the
beneficiary in one lump sum for the
amounts the latter has already paid,
together with the value of improvements
he has made on the land
a. Proceeds of sales of Assets Privatization
Trust
b. All receipts from assets recovered and
from sales of ill-gotten wealth recovered
through PCGG
c. Proceeds of disposition of the properties
of the government in foreign countries

Funding Sources of CARP (E.O.

229)
d. Portion of amounts accruing to the
Philippines from all sources of official
foreign aid grants and concessional
financing from all countries
e. Other government funds not otherwise
appropriated
1. Land surveys and titling
2. Liberalized terms on credit facilities and
production loans
3. Extension services by way of planting,
cropping, production, and post-harvest
technology transfer, as well as
marketing and management assistance
and support to cooperatives and farmer’s
organizations;

Government Funding for Support

Services to the Beneficiaries
4. Infrastructure such as access trails, mini
dams, public utilities, marketing and
storage facilities
5. Research, production and use of organic
fertilizers and other local substances
necessary to farming cultivation
1. Participate and give support to the
implementation of the programs on
agrarian reform
2. Mediate and conciliate or arbitrate
between parties involved in agrarian
disputes
3. Assist in the identification of qualified
beneficiaries and landowners within the
barangay

Functions of BARC
4. Attest to the accuracy of the initial
parcellary mapping of the beneficiary’s
tillage
5. Assist in the initial determination of the
value of the land
6. Assist the DAR representative/s in the
preparation of periodic reports on the
CARP implementation for submission to
the DAR
7. Coordinate the delivery of support
services to the beneficiaries
8. Perform such other functions as may be
assigned by the DAR
1. A representative/s of farmer and farm
worker-beneficiaries
2. Non-beneficiaries
3. Agricultural cooperatives
4. Other farmers’ organizations
5. Barangay council
6. NGO’s
7. Landowners

Composition of BARC
8. LBP
9. DA official assigned by the barangay
10. DENR official assigned to the barangay
11. DAR Technologist assigned to the area,
who shall act as the secretary
1. LMB
2. DAR
3. DA
4. LBP
5. RD
6. BOI
7. RTC
8. EMB

Government agencies Involved in

the Implementation of CARP
9. DOJ
10. DENR
11. PCGG
12. ARC
13. ExCom
14. BARC
15. BKKK
16. PARCCom