A.

Philippine Constitution

1. Article II, Section 21

Section 21. The State shall promote comprehensive rural development and agrarian reform.

2. Article XII Section 1

ARTICLE XII

National Economy and Patrimony

SECTION 1. The goals of the national economy are a more equitable distribution of opportunities, income, and
wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the
people; and an expanding productivity as the key to raising the quality of life for all, especially the
underprivileged.

The State shall promote industrialization and full employment based on sound agricultural development and
agrarian reform, through industries that make full and efficient use of human and natural resources, and
which are competitive in both domestic and foreign markets. However, the State shall protect Filipino
enterprises against unfair foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum
opportunity to develop. Private enterprises, including corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the base of their ownership.

3. Article XIII, Sections 3 to 6 and 8

Labor

SECTION 3. The State shall afford full protection to labor, local and overseas, organized and unorganized, and
promote full employment and equality of employment opportunities for all.

It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to
security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be provided by law.

The State shall promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.

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

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 Agrarian and Natural Resources Reform

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. To this end, the State shall encourage and
undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention
limits as the Congress may prescribe, taking into account ecological, developmental, or equity considerations,
and subject to the payment of just compensation. In determining retention limits, the State shall respect the
right of small landowners. The State shall further provide incentives for voluntary land-sharing.

SECTION 5. The State shall recognize the right of farmers, farmworkers, and landowners, as well as
cooperatives, and other independent farmers organizations to participate in the planning, organization, and
management of the program, and shall provide support to agriculture through appropriate technology and
research, and adequate financial, production, marketing, and other support services.

SECTION 6. The State shall apply the principles of agrarian reform or stewardship, whenever applicable in
accordance with law, in the disposition or utilization of other natural resources, including lands of the public
domain under lease or concession suitable to agriculture, subject to prior rights, homestead rights of small
settlers, and the rights of indigenous communities to their ancestral lands.

The State may resettle landless farmers and farmworkers in its own agricultural estates which shall be
distributed to them in the manner provided by law.

SECTION 7. The State shall protect the rights of subsistence fishermen, especially of local communities, to the
preferential use of local marine and fishing resources, both inland and offshore. It shall provide support to
such fishermen through appropriate technology and research, adequate financial, production, and marketing
assistance, and other services. The State shall also protect, develop, and conserve such resources. The
protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion.
Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources.

SECTION 8. The State shall provide incentives to landowners to invest the proceeds of the agrarian reform
program to promote industrialization, employment creation, and privatization of public sector enterprises.
Financial instruments used as payment for their lands shall be honored as equity in enterprises of their
choice.

B. Republic Act No. 6657, as amended

1. Section 2

2. Section 3 (a), (b), (c), and (e)

3. Section 4 to 5

4. Section 7 to 11

Section 2. Declaration of Principles and Policies. It is the policy of the State to pursue a Comprehensive
Agrarian Reform Program (CARP). The welfare of the landless farmers and farmworkers will receive the
highest consideration to promote social justice and to move the nation toward sound rural development and
industrialization, and the establishment of owner cultivatorship of economic-size farms as the basis of
Philippine agriculture.

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To this end, a more equitable distribution and ownership of land, with due regard to the rights of landowners
to just compensation and to the ecological needs of the nation, shall be undertaken to provide farmers and
farmworkers with the opportunity to enhance their dignity and improve the quality of their lives through
greater productivity of agricultural lands.

The agrarian reform program is founded on the right of farmers and regular farmworkers, who are landless,
to own directly or collectively the lands they till or, in the case of other farm workers, to receive a just share of
the fruits thereof. To this end, the State shall encourage and undertake the just distribution of all agricultural
lands, subject to the priorities and retention limits set forth in this Act, having taken into account ecological,
developmental, and equity considerations, and subject to the payment of just compensation. The State shall
respect the right of small landowners, and shall provide incentives for voluntary land-sharing.

The State shall recognize the right of farmers, farmworkers and landowners, as well as cooperatives and
other independent farmers' organizations, to participate in the planning, organization, and management of
the program, and shall provide support to agriculture through appropriate technology and research, and
adequate financial production, marketing and other support services.

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

The State may resettle landless farmers and farmworkers in its own agricultural estates, which shall be
distributed to them in the manner provided by law.

By means of appropriate incentives, the State shall encourage the formation and maintenance of economic-
size family farms to be constituted by individual beneficiaries and small landowners.

The State shall protect the rights of subsistence fishermen, especially of local communities, to the preferential
use of communal marine and fishing resources, both inland and offshore.t shall provide support to such
fishermen through appropriate technology and research, adequate financial, production and marketing
assistance and other services. The State shall also protect, develop and conserve such resources. The
protection shall extend to offshore fishing grounds of subsistence fishermen against foreign intrusion.
Fishworkers shall receive a just share from their labor in the utilization of marine and fishing resources.

The State shall be guided by the principles that land has a social function and land ownership has a social
responsibility. Owners of agricultural lands have the obligation to cultivate directly or through labor
administration the lands they own and thereby make the land productive.

The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to
promote industrialization, employment and privatization of public sector enterprises. Financial instruments
used as payment for lands shall contain features that shall enhance negotiability and acceptability in the
marketplace.

The State may lease undeveloped lands of the public domain to qualified entities for the development of
capital-intensive farms, and traditional and pioneering crops especially those for exports subject to the prior
rights of the beneficiaries under this Act.

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Section 3. Definitions. For the purpose of this Act, unless the context indicates otherwise:

(a) Agrarian Reform means 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 stocks, which will allow beneficiaries
to receive a just share of the fruits of the lands they work.

(b) Agriculture, Agricultural Enterprise or Agricultural Activity means the cultivation of the soil,
planting of crops, growing of fruit trees, raising of livestock, poultry or fish, including the harvesting
of such farm products, and other farm activities and practices performed by a farmer in conjunction
with such farming operations done by person whether natural or juridical.

(c) Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not
classified as mineral, forest, residential, commercial or industrial land.

(d) Agrarian Dispute refers to any controversy relating to tenurial arrangements, whether leasehold,
tenancy, stewardship or otherwise, over lands devoted to agriculture, including disputes concerning
farmworkers' associations or representation of persons in negotiating, fixing, maintaining, changing,
or seeking to arrange terms or conditions of such tenurial arrangements.

It includes any controversy relating to compensation of lands acquired under this Act and other
terms and conditions of transfer of ownership from landowners to farmworkers, tenants and other
agrarian reform beneficiaries, whether the disputants stand in the proximate relation of farm
operator and beneficiary, landowner and tenant, or lessor and lessee.

(e) Idle or Abandoned Land refers to any agricultural land 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 the government as provided
under this Act, but does not include land that has become permanently or regularly devoted to non-
agricultural purposes.t does not include land which has 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.

(f) Farmer refers to a natural person whose primary 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 a leasehold or share
tenancy agreement or arrangement with the owner thereof.

(g) Farmworker is a natural person who renders service for value as an employee or laborer in an
agricultural enterprise or farm regardless of whether his compensation is paid on a daily, weekly,
monthly or "pakyaw" basis. The term includes an individual whose work has ceased as a
consequence of, or in connection with, a pending agrarian dispute and who has not obtained a
substantially equivalent and regular farm employment.

(h) Regular Farmworker is a natural person who is employed on a permanent basis by an

agricultural enterprise or farm.

(i) 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.

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 (j) Other Farmworker is a farmworker who does not fall under paragraphs (g), (h) and (i).

(k) Cooperatives shall refer to organizations composed primarily of small agricultural producers,
farmers, farmworkers, or other agrarian reform beneficiaries who voluntarily organize themselves
for the purpose of pooling land, human, technological, financial or other economic resources, and
operated on the principle of one member, one vote. A juridical person may be a member of a
cooperative, with the same rights and duties as a natural person.

CHAPTER II
Coverage

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.

More specifically the following lands are covered by the Comprehensive Agrarian Reform Program:

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

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

(c) All other lands owned by the Government devoted to or suitable for agriculture; and

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

Section 5. Schedule of Implementation. The distribution of all lands covered by this Act shall be
implemented immediately and completed within ten (10) years from the effectivity thereof.

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.

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.

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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 7. Priorities. The Department of Agrarian Reform (DAR) in coordination with the Presidential
Agrarian Reform Council (PARC) shall plan and program the acquisition and distribution of all agricultural
lands through a period of ten (10) years from the effectivity of this Act. Lands shall be acquired and
distributed as follows:

Phase One: Rice and corn lands under Presidential Decree No. 27; all idle or abandoned lands; all private
lands voluntarily offered by the owners for agrarian reform; all lands foreclosed by the government financial
institutions; all lands acquired by the Presidential Commission on Good Government (PCGG); and all other
lands owned by the government devoted to or suitable for agriculture, which shall be acquired and
distributed immediately upon the effectivity of this Act, with the implementation to be completed within a
period of not more than four (4) years;

Phase Two: All alienable and disposable public agricultural lands; all arable public agricultural lands under
agro-forest, pasture and agricultural leases already cultivated and planted to crops in accordance with
Section 6, Article XIII of the Constitution; all public agricultural lands which are to be opened for new
development and resettlement; and all private agricultural lands in excess of fifty (50) hectares, insofar as the
excess hectarage is concerned, to implement principally the rights of farmers and regular farmworkers, who
are the landless, to own directly or collectively the lands they till, which shall be distributed immediately
upon the effectivity of this Act, with the implementation to be completed within a period of not more than
four (4) years.

Phase Three: All other private agricultural lands commencing with large landholdings and proceeding to
medium and small landholdings under the following schedule:

(a) Landholdings above twenty-four (24) hectares up to fifty (50) hectares, to begin on the fourth
(4th) year from the effectivity of this Act and to be completed within three (3) years; and

(b) Landholdings from the retention limit up to twenty-four (24) hectares, to begin on the sixth (6th)
year from the effectivity of this Act and to be completed within four (4) years; to implement
principally the right of farmers and regular farmworkers who are landless, to own directly or
collectively the lands they till.

The schedule of acquisition and redistribution of all agricultural lands covered by this program shall be made
in accordance with the above order of priority, which shall be provided in the implementing rules to be
prepared by the Presidential Agrarian Reform Council (PARC), taking into consideration the following; the
need to distribute land to the tillers at the earliest practicable time; the need to enhance agricultural
productivity; and the availability of funds and resources to implement and support the program.

In any case, the PARC, upon recommendation by the Provincial Agrarian Reform Coordinating Committee
(PARCCOM), may declare certain provinces or region as priority land reform areas, in which the acquisition
and distribution of private agricultural lands therein may be implemented ahead of the above schedules.

In effecting the transfer within these guidelines, priority must be given to lands that are tenanted.

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The PARC shall establish guidelines to implement the above priorities and distribution scheme, including the
determination of who are qualified beneficiaries: provided, that an owner-tiller may be a beneficiary of the
land he does not own but is actually cultivating to the extent of the difference between the area of the land he
owns and the award ceiling of three (3) hectares.

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.n 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.n 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

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enjoyed by the worker-beneficiaries, or in which they may have a vested right, at the time this Act becomes
effective.

The provisions 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 rights or privileges better
than those enjoyed by a domestic corporation, association, entity or individual.

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 Systems shall be respected.

The right of these communities to their ancestral lands shall be protected to ensure their economic, social and
cultural well-being.n 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.

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.

Section 10. Exemptions and Exclusions. 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, 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 the Act.

Section 11. Commercial Farming. Commercial farms, which are private agricultural lands devoted to
commercial livestock, poultry and swine raising, and aquaculture including saltbeds, fishponds and prawn
ponds, fruit farms, orchards, vegetable and cut-flower farms, and cacao, coffee and rubber plantations, shall
be subject to immediate compulsory acquisition and distribution after (10) years from the effectivity of the
Act.n 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 the 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 hereafter manage the said
lands for the worker-beneficiaries.

If the DAR determines that the purposes for which this deferment is granted no longer exist, such areas shall
automatically be subject to redistribution.

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The provisions of Section 32 of the Act, with regard to production-and income-sharing, shall apply to
commercial farms.

C. Cases

1. Luz Farms vs. Secretary of DAR, GR No. 86889. Dec. 4, 1990

2. Central Mindanao University vs. DAR, GR No. 10009, Oct. 22, 1992

3. Natalia Realty vs. DAR, GR No. 10302, Aug 12, 1993

4. Roxas & Co., Inc. vs. The Honorable Court Of Appeals, G.R. No. 127876 December 17, 1999

5. Department Of Agrarian Reform vs. Delia T. Sutton, Ella T. Sutton-Soliman And Harry T.
Sutton, G.R. No. 162070, October 19, 2005.

A. Republic Act No. 6657, as amended

1. Section 12

CHAPTER III

Improvement of Tenurial and Labor Relations

Section 12. Determination of Lease Rentals. In order to protect and improve the tenurial and economic
status of the farmers in tenanted lands under the retention limit and lands not yet acquired under this Act, the
DAR is mandated to determine and fix immediately the lease rentals thereof in accordance with Section 34 of
Republic Act No. 3844, as amended: provided, that the DAR shall immediately and periodically review and
adjust the rental structure for different crops, including rice and corn, or different regions in order to improve
progressively the conditions of the farmer, tenant or lessee.

B. Republic Act No. 3844, as amended

1. Sections 4 to 10

CHAPTER I
AGRICULTURAL LEASEHOLD SYSTEM

Section 4. Abolition of Agricultural Share Tenancy - Agricultural share tenancy, as herein defined, is hereby
declared to be contrary to public policy and shall be abolished: Provided, That existing share tenancy
contracts may continue in force and effect in any region or locality, to be governed in the meantime by the
pertinent provisions of Republic Act Numbered Eleven hundred and ninety-nine, as amended, until the end of
the agricultural year when the National Land Reform Council proclaims that all the government machineries
and agencies in that region or locality relating to leasehold envisioned in this Code are operating, unless such
contracts provide for a shorter period or the tenant sooner exercise his option to elect the leasehold system:
Provided, further, That in order not to jeopardize international commitments, lands devoted to crops covered
by marketing allotments shall be made the subject of a separate proclamation that adequate provisions, such
as the organization of cooperatives, marketing agreements, or other similar workable arrangements, have
been made to insure efficient management on all matters requiring synchronization of the agricultural with

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the processing phases of such crops: Provided, furthermore, That where the agricultural share tenancy
contract has ceased to be operative by virtue of this Code, or where such a tenancy contract has been entered
into in violation of the provisions of this Code and is, therefore, null and void, and the tenant continues in
possession of the land for cultivation, there shall be presumed to exist a leasehold relationship under the
provisions of this Code, without prejudice to the right of the landowner and the former tenant to enter into
any other lawful contract in relation to the land formerly under tenancy contract, as long as in the interim the
security of tenure of the former tenant under Republic Act Numbered Eleven hundred and ninety-nine, as
amended, and as provided in this Code, is not impaired: Provided, finally, That if a lawful leasehold tenancy
contract was entered into prior to the effectivity of this Code, the rights and obligations arising therefrom
shall continue to subsist until modified by the parties in accordance with the provisions of this Code.

Section 5. Establishment of Agricultural Leasehold Relation - The agricultural leasehold relation shall be
established by operation of law in accordance with Section four of this Code and, in other cases, either orally
or in writing, expressly or impliedly.

Section 6. Parties to Agricultural Leasehold Relation - The agricultural leasehold relation shall be limited to
the person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or legal possessor,
and the person who personally cultivates the same.

Section 7. Tenure of Agricultural Leasehold Relation - The agricultural leasehold relation once established
shall confer upon the agricultural lessee the right to continue working on the landholding until such leasehold
relation is extinguished. The agricultural lessee shall be entitled to security of tenure on his landholding and
cannot be ejected therefrom unless authorized by the Court for causes herein provided.

Section 8. Extinguishment of Agricultural Leasehold Relation - The agricultural leasehold relation established
under this Code shall be extinguished by:

(1) Abandonment of the landholding without the knowledge of the agricultural lessor;

(2) Voluntary surrender of the landholding by the agricultural lessee, written notice of which shall be
served three months in advance; or

(3) Absence of the persons under Section nine to succeed to the lessee, in the event of death or
permanent incapacity of the lessee.

Section 9. Agricultural Leasehold Relation Not Extinguished by Death or Incapacity of the Parties - In case of
death or permanent incapacity of the agricultural lessee to work his landholding, the leasehold shall continue
between the agricultural lessor and the person who can cultivate the landholding personally, chosen by the
agricultural 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 descendant or
descendants in the order of their age: Provided, That in case the death or permanent incapacity of the
agricultural lessee occurs during the agricultural year, such choice shall be exercised at the end of that
agricultural year: Provided, further, That in the event the agricultural lessor fails to exercise his choice within
the periods herein provided, the priority shall be in accordance with the order herein established.

In case of death or permanent incapacity of the agricultural lessor, the leasehold shall bind his legal heirs.

Section 10. Agricultural Leasehold Relation Not Extinguished by Expiration of Period, etc. - The agricultural
leasehold relation under this Code shall not be extinguished by mere expiration of the term or period in a
leasehold contract nor by the sale, alienation or transfer of the legal possession of the landholding. In case the
agricultural lessor sells, alienates or transfers the legal possession of the landholding, the purchaser or
transferee thereof shall be subrogated to the rights and substituted to the obligations of the agricultural
lessor.

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 2. Sections 15 to 16

Section 15. Agricultural Leasehold Contract in General - The agricultural lessor and the agricultural lessee
shall be free to enter into any kind of terms, conditions or stipulations in a leasehold contract, as long as they
are not contrary to law, morals or public policy. A term, condition or stipulation in an agricultural leasehold
contract is considered contrary to law, morals or public policy:

(1) If the agricultural lessee is required to pay a rental in excess of that which is hereinafter provided
for in this Chapter;

(2) If the agricultural lessee is required to pay a consideration in excess of the fair rental value as
defined herein, for the use of work animals and/or farm implements belonging to the agricultural
lessor or to any other person; or

(3) If it is imposed as a condition in the agricultural leasehold contract: (a) that the agricultural
lessee is required to rent work animals or to hire farm implements from the agricultural lessor or a
third person, or to make use of any store or services operated by the agricultural lessor or a third
person; or (b) that the agricultural lessee is required to perform any work or render any service
other than his duties and obligations provided in this Chapter with or without compensation; or (c)
that the agricultural lessee is required to answer for any fine, deductions and/or assessments.

Any contract by which the agricultural lessee is required to accept a loan or to make payment therefor in kind
shall also be contrary to law, morals or public policy.

Section 16. Nature and Continuity of Conditions of Leasehold Contract - In the absence of any agreement as to
the period, the terms and conditions of a leasehold contract shall continue until modified by the parties:
Provided, That in no case shall any modification of its terms and conditions prejudice the right of the
agricultural lessee to the security of his tenure on the landholding: Provided, further, That in case of a
contract with a period an agricultural lessor may not, upon the expiration of the period increase the rental
except in accordance with the provisions of Section thirty-four.

3. Sections 23 to 38

Section 23. Rights of Agricultural Lessee in General - It shall be the right of the agricultural lessee:

(1) To have possession and peaceful enjoyment of the land;

(2) To manage and work on the land in a manner and method of cultivation and harvest which
conform to proven farm practices;

(3) To mechanize all or any phase of his farm work; and

(4) To deal with millers and processors and attend to the issuance of quedans and warehouse
receipts for the produce due him.

Section 24. Right to a Home Lot - The agricultural lessee shall have the right to continue in the exclusive
possession and enjoyment of any home lot he may have occupied upon the effectivity of this Code, which shall
be considered as included in the leasehold.

11
Section 25. Right to be Indemnified for Labor - The agricultural lessee shall have the right to be indemnified
for the cost and expenses incurred in the cultivation, planting or harvesting and other expenses incidental to
the improvement of his crop in case he surrenders or abandons his landholding for just cause or is ejected
therefrom. In addition, he has the right to be indemnified for one-half of the necessary and useful
improvements made by him on the landholding: Provided, That these improvements are tangible and have
not yet lost their utility at the time of surrender and/or abandonment of the landholding, at which time their
value shall be determined for the purpose of the indemnity for improvements.

Section 26. Obligations of the Lessee - It shall be the obligation of the agricultural lessee:

(1) To cultivate and take care of the farm, growing crops, and other improvements on the
landholding as a good father of a family and perform all the work therein in accordance with proven
farm practices;

(2) To inform the agricultural lessor within a reasonable time of any trespass committed by third
persons upon the farm, without prejudice to his direct action against the trespasser;

(3) To take reasonable care of the work animals and farm implements delivered to him by the
agricultural lessor and see that they are not used for purposes other than those intended or used by
another without the knowledge and consent of the agricultural lessor: Provided, however, That if
said work animals get lost or die, or said farm implements get lost or are destroyed, through the
negligence of the agricultural lessee, he shall be held responsible and made answerable therefor to
the extent of the value of the work animals and/or farm implements at the time of the loss, death or
destruction;

(4) To keep his farm and growing crops attended to during the work season. In case of unjustified
abandonment or neglect of his farm, any or all of his expected produce may, upon order of the Court,
be forfeited in favor of the agricultural lessor to the extent of the damage caused thereby;

(5) To notify the agricultural lessor at least three days before the date of harvesting or, whenever
applicable, of threshing; and

(6) To pay the lease rental to the agricultural lessor when it falls due.

Section 27. Prohibitions to Agricultural Lessee - It shall be unlawful for the agricultural lessee:

(1) To contract to work additional landholdings belonging to a different agricultural lessor or to

acquire and personally cultivate an economic family-size farm, without the knowledge and consent of
the agricultural lessor with whom he had entered first into household, if the first landholding is of
sufficient size to make him and the members of his immediate farm household fully occupied in its
cultivation; or

(2) To employ a sub-lessee on his landholding: Provided, however, That in case of illness or
temporary incapacity he may employ laborers whose services on his landholding shall be on his
account.

Section 28. Termination of Leasehold by Agricultural Lessee During Agricultural Year - The agricultural lessee
may terminate the leasehold during the agricultural year for any of the following causes:

(1) Cruel, inhuman or offensive, treatment of the agricultural lessee or any member of his immediate
farm household by the agricultural lessor or his representative with the knowledge and consent of
the lessor;

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 (2) Non-compliance on the part of the agricultural lessor with any of the obligations imposed upon
him by the provisions of this Code or by his contact with the agricultural lessee;

(3) Compulsion of the agricultural lessee or any member of his immediate farm household by the
agricultural lessor to do any work or render any service not in any way connected with farm work or
even without compulsion if no compensation is paid;

(4) Commission of a crime by the agricultural lessor or his representative against the agricultural
lessee or any member of his immediate farm household; or

(5) Voluntary surrender due to circumstances more advantageous to him and his family.

Section 29. Rights of the Agricultural Lessor - It shall be the right of the agricultural lessor:

(1) To inspect and observe the extent of compliance with the terms and conditions of their contract
and the provisions of this Chapter;

(2) To propose a change in the use of the landholding to other agricultural purposes, or in the kind of
crops to be planted: Provided, That in case of disagreement as to the proposed change, the same shall
be settled by the Court according to the best interest of the parties concerned: Provided, further, That
in no case shall an agricultural lessee be ejected as a consequence of the conversion of the land to
some other agricultural purpose or because of a change in the crop to be planted;

(3) To require the agricultural lessee, taking into consideration his financial capacity and the credit
facilities available to him, to adopt in his farm proven farm practices necessary to the conservation of
the land, improvement of its fertility and increase of its productivity: Provided, That in case of
disagreement as to what proven farm practice the lessee shall adopt, the same shall be settled by the
Court according to the best interest of the parties concerned; and

(4) To mortgage expected rentals.

Section 30. Obligations of the Agricultural Lessor - It shall be the obligation of the agricultural lessor:

(1) To keep the agricultural lessee in peaceful possession and cultivation of his landholding; and

(2) To keep intact such permanent useful improvements existing on the landholding at the start of
the leasehold relation as irrigation and drainage system 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.

Section 31. Prohibitions to the Agricultural Lessor - It shall be unlawful for the agricultural lessor:

(1) To dispossess the agricultural lessee of his landholding except upon authorization by the Court
under Section thirty-six. Should the agricultural lessee be dispossessed of his landholding without
authorization from the Court, the agricultural lessor shall be liable for damages suffered by the
agricultural lessee in addition to the fine or imprisonment prescribed in this Code for unauthorized
dispossession;

(2) To require the agricultural lessee to assume, directly or indirectly, the payment of the taxes or
part thereof levied by the government on the landholding;

13
 (3) To require the agricultural lessee to assume, directly or indirectly, any part of the rent, "canon" or
other consideration which the agricultural lessor is under obligation to pay to third persons for the
use of the land;

(4) 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 rental; or

(5) To discourage, directly or indirectly, the formation, maintenance or growth of unions or

organizations of agricultural lessees in his landholding, or to initiate, dominate, assist or interfere in
the formation or administration of any such union or organization.

Section 32. Cost of Irrigation System - The cost of construction of a permanent irrigation system, including
distributory canals, may be borne exclusively by the agricultural lessor who shall be entitled to an increase in
rental proportionate to the resultant increase in production: Provided, That if the agricultural lessor refuses
to bear the expenses of construction the agricultural lessee or lessees may shoulder the same, in which case
the former shall not be entitled to an increase in rental and shall, upon the termination of the relationship,
pay the lessee or his heir the reasonable value of the improvement at the time of the termination: Provided,
further, That if the irrigation system constructed does not work, it shall not be considered as an improvement
within the meaning of this Section.

Section 33. Manner, Time and Place of Rental Payment - The consideration for the lease of the land shall be
paid in an amount certain in money or in produce, or both, payable at the place agreed upon by the parties
immediately after threshing or processing if the consideration is in kind, or within a reasonable time
thereafter, if not in kind.

In no case shall the agricultural lessor require the agricultural lessee to file a bond, make a deposit or pay the
rental in advance, in money or in kind or in both, but a special and preferential lien is hereby created in favor
of the agricultural lessor over such portion of the gross harvest necessary for the payment of the rental due in
his favor.

Section 34. Consideration for the Lease of Riceland and Lands Devoted to Other Crops - The consideration for
the lease of riceland and lands devoted to other crops shall not be more than the equivalent of twenty-five per
centum of the average normal harvest during the three agricultural years immediately preceding the date the
leasehold was established after deducting the amount used for seeds and the cost of harvesting, threshing,
loading, hauling and processing, whichever are applicable: Provided, That if the land has been cultivated for a
period of less than three years, the initial consideration shall be based on the average normal harvest during
the preceding years when the land was actually cultivated, or on the harvest of the first year in the case of
newly-cultivated lands, if that harvest is normal: Provided, further, That after the lapse of the first three
normal harvests, the final consideration shall be based on the average normal harvest during these three
preceding agricultural years: Provided, furthermore, That in the absence of any agreement between the
parties as to the rental, the maximum allowed herein shall apply: Provided, finally, That if capital
improvements are introduced on the farm not by the lessee to increase its productivity, the rental shall be
increased proportionately to the consequent increase in production due to said improvements. In case of
disagreement, the Court shall determine the reasonable increase in rental.

Section 35. Exemption from Leasehold of Other Kinds of Lands - Notwithstanding the provisions of the
preceding Sections, in the case of fishponds, saltbeds, and lands principally planted to citrus, coconuts, cacao,
coffee, durian, and other similar permanent trees at the time of the approval of this Code, the consideration,
as well as the tenancy system prevailing, shall be governed by the provisions of Republic Act Numbered
Eleven hundred and ninety-nine, as amended.

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Section 36. Possession of Landholding; Exceptions - Notwithstanding any agreement as to the period or future
surrender, of the land, an agricultural lessee shall continue in the enjoyment and possession of his
landholding except when his dispossession has been authorized by the Court in a judgment that is final and
executory if after due hearing it is shown that:

(1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the
landholding or will convert the landholding, if suitably located, into residential, factory, hospital or
school site or other useful non-agricultural purposes: Provided; That the agricultural lessee shall be
entitled to disturbance compensation equivalent to five years rental on his landholding in addition to
his rights under Sections twenty-five and thirty-four, except when the land owned and leased by the
agricultural lessor, is not more than five hectares, in which case instead of disturbance compensation
the lessee may be entitled to an advanced notice of at least one agricultural year before ejectment
proceedings are filed against him: Provided, further, That should the landholder not cultivate the
land himself for three years or fail to substantially carry out such conversion within one year after
the dispossession of the tenant, it shall be presumed that he acted in bad faith and the tenant shall
have the right to demand possession of the land and recover damages for any loss incurred by him
because of said dispossessions.

(2) The agricultural lessee failed to substantially comply with any of the terms and conditions of the
contract or any of the provisions of this Code unless his failure is caused by fortuitous event or force
majeure;

(3) The agricultural lessee planted crops or used the landholding for a purpose other than what had
been previously agreed upon;

(4) The agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of
Section twenty-nine;

(5) The land or other substantial permanent improvement thereon is substantially damaged or
destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural lessee;

(6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-
payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result
of a fortuitous event, the non-payment shall not be a ground for dispossession, although the
obligation to pay the rental due that particular crop is not thereby extinguished; or

(7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of
Section twenty-seven.

Section 37. Burden of Proof - The burden of proof to show the existence of a lawful cause for the ejectment of
an agricultural lessee shall rest upon the agricultural lessor.

Section 38. Statute of Limitations - An action to enforce any cause of action under this Code shall be barred if
not commenced within three years after such cause of action accrued.

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C. Administrative Order No. 6, Series of 2003

D. Cases

1. Guerrero, et. al. vs. Court of Appeals, GR No. L-44570, May 30,

1986.

2. People vs. Adillo, G.R. No. L-23785 November 27, 1975.

3. Gabriel vs. Pangilinan, G.R. No. L-27797. August 26, 1974.

4. Coconut Cooperative Marketing Association vs. Court of

Appeals, et. al., GR No. 46281-83, August 19, 1988.

Republic Act No. 6657, as amended

Section 20

Section 20. Voluntary Land Transfer. Landowners of agricultural lands subject to acquisition under this
Act may enter into a voluntary arrangement for direct transfer of their lands to qualified beneficiaries subject
to the following guidelines:

(a) All notices for voluntary land transfer must be submitted to the DAR within the first year of the
implementation of the CARP. Negotiations between the landowners and qualified beneficiaries
covering any voluntary land transfer which remain unresolved after one (1) year shall not be
recognized and such land shall instead be acquired by the government and transferred pursuant to
this Act.

(b) The terms and conditions of such transfer shall not be less favorable to the transferee than those
of the government's standing offer to purchase from the landowner and to resell to the beneficiaries,
if such offers have been made and are fully known to both parties.

(c) The voluntary agreement shall include sanctions for non-compliance by either party and shall be
duly recorded and its implementation monitored by the DAR.

2. Section 16 to 19.

CHAPTER V
Land Acquisition

Section 16. Procedure for Acquisition of Private Lands. For purposes of acquisition of private lands, the
following procedures shall be followed:

(a) After having identified the land, the landowners and the beneficiaries, the DAR shall send its
notice to acquire the land to the owners thereof, by personal delivery or registered mail, and post the
same in a conspicuous place in the municipal building and barangay hall of the place where the

16
property is located. Said notice shall contain the offer of the DAR to pay a corresponding value in
accordance with the valuation set forth in Sections 17, 18, and other pertinent provisions hereof.

(b) Within thirty (30) days from the date of receipt of written notice by personal delivery or
registered mail, the landowner, his administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.

(c) If the landowner accepts the offer of the DAR, the Land Bank of the Philippines (LBP) shall pay the
landowner the purchase price of the land within thirty (30) days after he executes and delivers a
deed of transfer in favor of the government and surrenders the Certificate of Title and other
muniments of title.

(d) In case of rejection or failure to reply, the DAR shall conduct summary administrative
proceedings to determine the compensation for the land requiring the landowner, the LBP and other
interested parties to submit evidence as to the just compensation for the land, within fifteen (15)
days from the receipt of the notice. After the expiration of the above period, the matter is deemed
submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for
decision.

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. The DAR shall thereafter proceed with the
redistribution of the land to the qualified beneficiaries.

(f) Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.

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 CHAPTER VI
Compensation

Section 17. Determination of Just Compensation. In determining just compensation, the cost of
acquisition of the land, the current value of the like properties, its nature, actual use and income, the sworn
valuation by the owner, the tax declarations, and the assessment made by government assessors shall be
considered. The social and economic benefits contributed by the farmers and the farmworkers and by the
Government to the property as well as the non-payment of taxes or loans secured from any government
financing institution on the said land shall be considered as additional factors to determine its valuation.

Section 18. Valuation and Mode of Compensation. The LBP shall compensate the landowner in such
amounts as may be agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria
provided for in Sections 16 and 17, and other pertinent provisions hereof, or as may be finally determined by
the court, as the just compensation for the land.

The compensation shall be paid on one of the following modes, at the option of the landowner:

(1) Cash payment, under the following terms and conditions;

(a) For lands above fifty (50) hectares, Twenty-five percent (25%) cash, the
insofar as the excess hectarage is balance to be paid in government
concerned. financial instruments negotiable at any
time.

(b) For lands above twenty-four (24) Thirty percent (30%) cash, the balance
hectares and up to fifty (50) hectares. to be paid in government financial
instruments negotiable at any time.

(c) For lands twenty-four (24) hectares Thirty-five percent (35%) cash, the
and below. balance to be paid in government
financial instruments negotiable at any
time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical
assets or other qualified investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the
face value of the bonds shall mature every year from the date of issuance until the tenth
(10th) year: provided, that should the landowner choose to forego the cash portion, whether
in full or in part, he shall be paid correspondingly in LBP bonds;

(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his
successors in interest or his assigns, up to the amount of their face value, for any of the
following:

(i) Acquisition of land or other real properties of the government, including assets
under the Asset Privatization Program and other assets foreclosed by government

18
 financial institutions in the same province or region where the lands for which the
bonds were paid are situated;

(ii) Acquisition of shares of stock of government-owned or -controlled corporations

or shares of stocks owned by the government in private corporations;

(iii) Substitution for surety or bail bonds for the provisional release of accused
persons, or performance bonds;

(iv) Security for loans with any government financial institution, provided the
proceeds of the loans shall be invested in an economic enterprise, preferably in a
small-and medium-scale industry, in the same province or region as the land for
which the bonds are paid;

(v) Payment for various taxes and fees to government; provided, that the use of
these bonds for these purposes will be limited to a certain percentage of the
outstanding balance of the financial instruments: provided, further, that the PARC
shall determine the percentage mentioned above;

(vi) Payment for tuition fees of the immediate family of the original bondholder in
government universities, colleges, trade schools, and other institutions;

(vii) Payment for fees of the immediate family of the original bondholder in
government hospitals; and

(viii) Such other uses as the PARC may from time to time allow.

In case of extraordinary inflation, the PARC shall take appropriate measures to protect the economy.

Section 19. Incentives for Voluntary Offers for Sales. Landowners, other than banks and other financial
institutions, who voluntarily offer their lands for sale shall be entitled to an additional five percent (5%) cash
payment.

3. Section 66 to 67

Section 66. Exemptions from Taxes and Fees of Land Transfers. Transactions under this Act involving a
transfer of ownership, whether from natural or juridical persons, shall be exempted from taxes arising from
capital gains. These transactions shall also be exempted from the payment of registration fees, and all other
taxes and fees for the conveyance or transfer thereof; provided, that all arrearages in real property taxes,
without penalty or interest, shall be deductible from the compensation to which the owner may be entitled.

Section 67. Free Registration of Patents and Titles. All Registers of Deeds are hereby directed to
register, free from payment of all fees and other charges, patents, titles and documents required for the
implementation of the CARP.

19
4. Section 20: Voluntary Offer to Sell

Section 20. Voluntary Land Transfer. Landowners of agricultural lands subject to acquisition under this
Act may enter into a voluntary arrangement for direct transfer of their lands to qualified beneficiaries subject
to the following guidelines:

(a) All notices for voluntary land transfer must be submitted to the DAR within the first year of the
implementation of the CARP. Negotiations between the landowners and qualified beneficiaries
covering any voluntary land transfer which remain unresolved after one (1) year shall not be
recognized and such land shall instead be acquired by the government and transferred pursuant to
this Act.

(b) The terms and conditions of such transfer shall not be less favorable to the transferee than those
of the government's standing offer to purchase from the landowner and to resell to the beneficiaries,
if such offers have been made and are fully known to both parties.

(c) The voluntary agreement shall include sanctions for non-compliance by either party and shall be
duly recorded and its implementation monitored by the DAR.

5. Sections 18 and 19: Mode of Payment

6. Sections 66 and 67: Exemptions from Taxes and Fees

20