A SURVEY OF RA 6657 OTHERWISE KNOWN AS THE COMPREHENSIVE AGRARIAN REFORM LAW (AS AMENDED BY RA 7881, 7905, 8532, AND 9700)

THE AGENCY TASKED TO IMPLEMENT RA 6657The agency tasked to implement RA 6657 is

the Department of Agrarian Reform.

M a n d a t eThe Department of Agrarian Reform (DAR) leads the implementation of the Comprehensive Agrarian Reform Program (CARP) through land tenure improvement, agrarian justice, and coordinated delivery of essential support services to client-beneficiaries.

THE AGENCY TASKED TO IMPLEMENT RA 6657 M i s s i o n

"To lead in the implementation of agrarian reform and sustainable rural development in the countryside through land tenure improvement and provision of integrated development services to landless farmers, farmworkers and small landowner-cultivators, and the delivery of agrarian justice".

THE AMENDMENTRA 9700 (An act strengthening the

Comprehensive Agrarian Reform Program, extending the acquisition and distribution of all agricultural lands, and instituting necessary reforms.

RA 9700 extended the acquisition and distribution of agricultural lands under the CARP until 2014. The budget for this extension is in the amount of Php 150,000,000,000.

WHAT IS THE COMPREHENSIVE AGRARIAN REFORM PROGRAM (CARP)? The CARP is a social justice and poverty

alleviation program which seeks to empower the lives of agrarian reform beneficiaries (ARBs) through equitable distribution and ownership of the land based on the principle of land to the tiller.

It likewise provides opportunities for a dignified and improved quality of life of the ARBs through the provision of adequate support services for sound rural development and the establishment of economic-size farms as the basis of Philippine agriculture.

WHAT IS THE BASIS OF CARP? RA 6657 or the Comprehensive Agrarian

Reform Law (CARL) of 1988, is the basis for the implementation of CARP. This law embodies the state policy of processing CARP aimed at liberating the vast potential wealth of Philippine agriculture by giving the majority of the Filipinos the real and rightful stake in the land.

WHAT IS THE ESSENCE OF CARP? The essence of CARP is asset reform, i.e.,

redistribution of wealth thus enabling the poor and marginalized to have access of capital resources (land, money, etc.); importation of agricultural products is more of the Department of Agriculture’s (DA) concern.

DEFINITION OF TERMSAgrarian Reform- the distribution of

agricultural land regardless of crops or fruits produced, to farmers and regular farmworkers who are landless, irrespective of tenurial arrangement, to include the totality of factors and support services designed to lift the economic status of the beneficiaries and all other arrangements alternative to the physical redistribution of lands, such as production or profit sharing, labor administration, and the distribution of shares of stock, which will allow beneficiaries to receive a just share of the fruits of the land they work.

DEFINITION OF TERMSAgriculture, agricultural enterprise, or

agricultural activity- means the cultivation of the soil, planting of crops, growing of fruit trees, including the harvesting of farm products, and other farm activities performed by the farmer.

DEFINITION OF TERMSAgricultural Land- land devoted to

agricultural activity and not classified as mineral, forest, residential, commercial or industrial land.

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.

DEFINITION OF TERMSFarmer- 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 tenancy agreement or arrangement.

DEFINITION OF TERMSFarmworker- 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.

DEFINITION OF TERMSRegular farmworker- a natural person who is

employed on a permanent basis by an agricultural enterprise or a farm.

Seasonal farmworker- is a natural person who is employed on a recurrent, periodic, or on an intermittent basis by an agricultural enterprise or a farm whether as permanent or non permanent laborer.

DEFINITION OF TERMS Other farmworker- is a farmworker who does

not fall under the definition of farmworker, regular farmworker, or seasonal farmworker.

Cooperatives- 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.”

THE COVERAGE OF CARPScope of the Program In general the CARL of 1988 covers, regardless of

tenurial arrangements and commodity produced, all public and private agricultural lands including other lands of the public domain suitable for agriculture.

All alienable and disposable lands devoted to or suitable for agriculture.

All lands of the public domain ( to include forest and mineral land reclassified to agricultural after the approval of the act) in excess of the specific limits as determined by Congress taking into account ecological development and equity consideration.

THE COVERAGE OF CARP All other lands owned by the government

devoted to or suitable for agriculture; and All private lands devoted to or suitable for

agriculture regardless of the agricultural products raised or can be raised.

SCHEDULE OF IMPLEMENTATIONThe implementation, as provided for by the

ACT is immediately after the passage of the ACT. This period specifically covers 10 years (1988-1998)

However, in 1998, not all lands covered by CARP have been distributed.

RA 9700 intends to achieve that by extending the implementation up to 2014. By that year all lands covered by CARP shall have been distributed.

CARP RECORD OF ACCOMPLISHMENT

01,000,0002,000,0003,000,0004,000,0005,000,0006,000,000

Note: Yellow bar represents the accomplishment of DAR as of 2010. GREEN: 5,153,857 HectaresYELLOW: 4,273,203 Hectares

RETENTION LIMITS AND EXCEPTIONSThe retention limit is the area of land that the

land owner can actually retain after government acquires his land.

As provided for in the law, the retention limit is 5 hectares

Three (3) hectares may be awarded to each child of the land owner provided:

1. That he is at least 15 years old.2. That he is actually tilling the land or directly

managing the farm.

EXCEPTIONS TO RETENTION LIMIT1. Land owners whose lands have been

covered by PD 27 shall be allowed the area originally retained by them.

2. Original homestead grantees or their direct compulsory heirs who still own the original homestead at the time of he approval of the law (RA 6657) shall retain the same area as long as they continue to cultivate the same homestead.

WHO ARE THE QUALIFIED BENEFICIARIES?The lands to be distributed shall be given to landless

residents belonging to the barangay where the land is located or landless residents belonging to the same municipality. Distribution shall be based on the following order of priority:

1. Agricultural lessees and share tenants2. Regular farm workers3. Seasonal farm workers4. Other farm workers5. Actual tillers or occupants of public lands6. Cooperatives of above-named beneficiaries7. Others directly working on landNote: The children of the land owner shall be given

preference in the distribution of the land of their parents.

THE LAND TO BE AWARDED TO BENEFICIARIES 1. Beneficiaries will be awarded land not

exceeding an area of 3 hectares which may cover a contiguous tract of land or several parcels of land cumulated up to the prescribed award limit.

2. Beneficiaries may opt for collective ownership. The size of the land shall not exceed the total number of co-owners multiplied by the award limit which is 3 hectares.

3. Ownership by beneficiaries shall be evidenced by CLOA (Certificate of land ownership)

PAYMENT BY BENEFICIARIES1. Payment by beneficiaries shall be made to

the LBP in 30 annual amortizations at 6% interest per annum.

2. The LBP shall have a lien (claim) by way of mortgage and that the land may be foreclosed by the LBP for non-payment of an aggregate of three (3) annual amortizations.

3. Beneficiaries whose awarded land shall have been foreclosed shall be permanently disqualified from becoming a beneficiary.

JUST COMPENSATION TO LANDOWNERSDetermination of Just Compensation shall

consider the following: 1. Cost of acquisition of the land2. Current value of like properties3. Its nature4. Value of standing crop5. Actual use and income6. Sworn valuation by the owner7. Tax declaration 8. Assessment made by government assessors

JUST COMPENSATION9. The social benefits contributed by the

farmer and the farm workers and by the government to the property as well as the non-payment of taxes or loans secured from any government financing institution on said land shall be considered.

10. The LBP shall compensate the landowner in such amount as may be agreed upon by the landowner and the DAR and the LBP or determined by the court.

MODES OF COMPENSATIONThe compensation to the landowner shall be

paid in one of the following modes at the option of the landowner:

1. Cash payment under the following terms and conditions.- for lands above 50 hectares, in so far as the excess hectarage is concerned: 25% cash, the balance to be paid in government financial instruments negotiable any time: ex. Bonds, treasury bills.

MODES OF COMPENSATIONb. For lands above 24 hectares and up to 50 hectares- 30% cash, the balance to be paid in government financial instruments negotiable any time.

c. For land 24 hectares and below- 35% cash, the balance to be paid in government financial instruments negotiable anytime.

2. Shares of stocks in GOCC’s, LBP preferred shares, or other investments in accordance with guidelines set by PARC.

MODES OF COMPENSATION3. Tax credits4. LBP Bonds

STOCK DISTRIBUTION SCHEMEThe stock distribution scheme, in simple terms,

allows corporations owning large land areas covered by agrarian reform to sell to their qualified beneficiaries a proportion of capital stock equivalent to what the beneficiary would have gotten in terms of land size.

STOCK OPTION SAFEGUARDS1. Books of accounts of the corporation shall

be subject to accounting and periodic audit by public accountants chosen by the beneficiaries.

2. Irrespective of the size of the shares the beneficiary owns, they shall be entitled a representative in the BOARD of DIRECTORS or in a management or executive committee.

3. Shares acquired by the beneficiaries shall have equal treatment with other shares.

4. Any transfer of shares of the beneficiary shall be void unless such transfer/transaction is in favor of a qualified beneficiary.

PRODUCTION SHARING PLAN1. It is necessary that the agricultural

corporation realizes gross sales in excess of 5 million pesos per year.

2. Three (3%) of the gross sales shall be distributed to regular farm workers or other farm workers within 60 days of the end of the fiscal year over and above the compensation they currently receive.

3. In an event that the individual or entity realizes a profit, an additional 10% of the net profit after tax shall be distributed to the said regular farm workers within 90 days of the end of the fiscal year.

EXCEPTION AND EXCLUSIONSThe following are exempt from the coverage of

the act:1.Lands actually, directly, and exclusively used

and found to be necessary for:a. parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves.

2. National defense3. School sites and campuses, including

experimental farm stations operated by public or private schools, for educational purposes, and seeds and seedlings, research and pilot production centers.

EXCEPTION AND EXCLUSIONS4. Church sites and convents appurtenant

thereto, mosque sites and Islamic centers appurtenant thereto.

5. Communal burial grounds and cemeteries.6. Penal colonies and penal farms, actually

worked by inmates.7. Government and private research and

quarantine centers. 8. All lands with 18% slope and over, except

those already developed.

COMMERCIAL FARMINGCommercial farms are private agricultural

lands devoted to agriculture including salt bed, fruit farms, orchards, vegetable and flower farms, and cacao, coffee, and rubber plantations.

Subject to immediate compulsory acquisition and distribution after 10 years from effectivity of the act.

Commercial farms may be distributed collectively or individually. Qualified beneficiaries shall be awarded a maximum of 3 hectares or a minimum of 1 hectare each in case the land is not enough to accommodate them.

Qualified ARB’s or their cooperative/association may enter into any of the following but not limited to:

COMMERCIAL FARMING (VENTURE) Joint Venture Arrangement Lease Arrangement Contract Growing/ Growership arrangement Management Contract B-O-T Scheme

IMPORTANT TERMS AND ACRONYMS Order of Award (OA) Certificate of Land Transfer (CLT) Certificate of Land Ownership Award (CLOA) Landless Person- under R.A. 6657, it is a

person who owns less than 3 hectares of land.

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