Philippine Agrarian Law: A Short-term Solution for

a Long-term Agony

GONZALES, VICTORIA A.

A thesis submitted

In partial fulfilment of the requirements for the degree of

Juris Doctor

Jose Rizal University

School of Law

2017
 ABSTRACT

This study is commissioned to undertake the importance of the Agrarian

laws in the country and deeply scrutinize the present Agrarian Reform Law in the

country, RA 6657, also known as the Comprehensive Agrarian Reform Program.

This seeks to highlight some errors that limit the supposed and anticipated

success of the program. It is in accord to the objectives of the legislation the aim

towards social justice, equity, equal distribution of resources, economic progress

and development all bucketed in one messianic theme: land for the landless.

Nevertheless, our existing agrarian reform law and its extended forms are

crippled by certain provisions which, as to be pointed out in this paper, cripples

and defeats the very spirit of the agrarian law.

The beneficiaries sought to be aided in raising their standard of living, by

then have no means to sustain the production and pay the required amortizations

of the value of the land awarded to them. Now, these farmers had to fend for

themselves and face the burden of risks and losses because of their insufficient

resources. They have to strategize, and market the products they produce by

themselves, which often results in losses due to their lack of entrepreneurial

skills. Unfortunately, in most cases, if not all, this does not materialize. The

farmers, despite the aid of the government in terms of technology and support,

end up neglecting their obligation accorded by this law, either by choice or by

necessity, in order to sustain their primary needs more than anything else. A
farmer tills the land for its sustenance, and it will be purpose-defeating if he and

his family famish just to allot money and pay for the cost of the land.

It is like giving guns without bullets to fight poverty or vehicles with

empty gas tanks. Naturally, theyll decide to sell the guns and

vehicles. -philstar.com

Conversely relevant, a farm will not flourish if not for the farmers tilling it.

However, this is a sad reality until today. The beneficiaries of the Comprehensive

Agrarian Reform Law assume the obligation of paying the amortization for the

compensation of the land and the land taxes thereon as stated under the law. As

provided in Section 26 of Republic Act 6657 provides, the farmers shall pay for

the land acquired for a fixed period of time, at a fix rate with annual interest.

While it seems to let farmers afford the agricultural lands, the same is not the

case in reality, as farmers tend to give up their rights over the lands. In some

cases, even upon acquisition after a period of ten years, they tend to sell these

lands to private persons for a lump sum. Thus, this makes the purpose of the law

futile.

The amortization tenet of the law is, on its face and in practice, a form of

sale which contradicts the distribution of the land for the landless since not all

farmer beneficiaries are capable of paying. The contention that land distribution

is an exercise of the states power of eminent domain is untenable: expropriation

is applied only to land acquisition and not in distribution.

While an agrarian reform should be essential in every society serving as

sentinels of rights of the farmers, the Comprehensive Agrarian Reform Law

defeats the same. The law is self-defeating. Instead, it traps our farmers in a

situation where either they continue the burdensome payment of amortization

without raising their standard of living, or they cease the payment and forfeit the

benefits of the law, leaving them not only landless, but jobless in both cases,

they havent escape the tendrils of poverty. The evil of feudalism that was sought

to be avoided has been transformed into a bigger problem that cripples the

economic progress of farmers, in the guise of equal and just distribution of

opportunities.

Therefore, it is the objective of this paper to show the failure of CARP on

its plight in uplifting the poverty of local farmers and improving their standard of

living. The proponent will focus on the buy and sell scheme of the law which

defeats the very essence of social justice that this law seeks to promote; and

provide recommendation for its improvement.

 INTRODUCTION

BACKGROUND OF THE STUDY

Feudalism as a socio-political structure

During the medieval age, a socio-political structure became prominent and

dominant across western civilizations. Feudalism, or the feudal system, in a nut

shell, portrays a hierarchical system controlling not only the material aspects of

the society (produce, economy, exchange), but also the abstract concepts of

justice, rights, and liberty, to mention a few. This has traces of the Socratic

(Platonic) concept of the myth of metals that in an ideal society exists the

division of labor: gold representing the guardians; silver representing the

auxiliaries; and bronze representing the merchants and laborers. This idea

evolves into a more concrete, structural archetype. In fact, its actualization

became the glorious Roman Empire which marks the start of the legendary

dominance of the western civilization all over the world. This imposition of

hierarchy in the society became the sole foundation of the Medieval Europes

Feudalism.

Feudalism was based on the exchange of land for military service. The

society is subdivided in sub-lands owned and administered by the so-called

landlords. Politically speaking, landlords are the ruling class governing not only

the vast agricultural and economic resources, but also dominate the imminent

landlord-peasant relationship. In this binary, the peasants were obliged to live on

their landlords land to give him homage, labor and share of the produce in

exchange for a living and (military) protection. The pyramid of power which was

the Feudal system ran to a strict 'pecking' order - during the Medieval period of

the Middle Ages everyone knew their place. The emergence of the Medieval

Feudal System of the Middle Ages affected all spheres of Medieval society: a

land-based economy, the judicial system and the rights of the feudal lords under

the feudal system and the lack of rights for the serfs and peasants. The events

led to the decline of the feudal system.

Feudalism in the Philippines

In his article, Feudal Work Systems and Poverty: The Philippine

Experience, Bonifacio Macaranas, an academe in the University of the

Philippines School of Labor and Industrial Relations, discusses the roots of

feudalism in our history. He noted:

[] Feudal relations thus characterized the administrative machinery of the

Spanish colonizers. This system had similarities with the European feudal rules,

for example, the natives held the pueblo lands by assignment from the king.

And this landholding arrangement, the encomienda system, where the extensive

tracts of land were awarded by the king to the church, pious organizations and

conquistadores evolved as hacienda agriculture, prevailing up to the end of the

Spanish regime.

This feudalistic relation created an inequitable, exploitative, and oppressive

social relation of production providing more wealth and more profits for the local
landowners at the expense of the laborers or peons who had to survive as tillers

of the soil.

Even with the termination of the American occupation after World War II,

feudalism as an institution of aristocracy flourished under the succeeding

Filipino presidencies. Despite the emergence of the labor movements in the

towns and cities, starting off as early as at the start of the American colonization

in 1902 with the founding by Isabelo de los Reyes of the first labor trade union,

the Union Democratica Obrero, feudal practices of exploitative wages and

oppressive working conditions in the shipyards, printing companies and banks

were the main reasons for strikes and other workplace disturbances. Similar

unfavorable conditions of work in the farms and plantations spurred the agrarian

unrests that have plagued the administrations of all the Filipino leaders up to the

present.

It is however questionable that even after the colonial period, feudalism as

a political structure still exists. At present, as subtle as it may seem, the

determinate structures of feudalism is very apparent: there are the landlords in

the person of the oligarch or the ruling class who owns the land; and the

peasants in the person of the land tenants or tillers who labors in the land for the

landlords. This is the very evil that prominent agrarian reform legislations seek to

address. As echoed by Macaranas: With the overwhelming elite control of the

livelihoods of majority of the Filipinos a feudal industrial relations in the agri-

based workplaces and in businesses at the local and national levels, plus strong
allies in the government bureaucracy how can the little people feel empowered

to be economically independent, and politically strong to create for themselves

and their families an increasingly improved quality of life, much less to sustain a

decent standard of living?

THESIS STATEMENT

The Comprehensive Agrarian Reform Law, for the longest time of its

effectivity including its extensions, was not able to serve its main purpose of

uplifting the standard of living of the poor Filipino Farmers to whom the land
parcels were distributed due to defects primarily on the amortization section of

the legislation. It further cripples and disempower the farmers, and leads them to

forfeiture of said benefit.

SCOPE AND DELIMITATION

The study focuses on the provisions of RA 6657, the recent agrarian law in

the country, that tackles the distribution and amortization of the lands and

together discuss it with the concept of sale. The study will present other

academician works on Agrarian Reforms in the Philippines; data from competent

government agencies and jurisprudence pertaining to the legal issue at hand.

METHODOLOGY

The proponent used the Document Analysis or Content analysis of written

data.

Document analysis is a form of qualitative research in which documents

are interpreted by the researcher to give voice and meaning around an

assessment topic (Bowen, 2009).

DISCUSSION

The Comprehensive Agrarian Reform Program (RA 6657)

CARP, or the Comprehensive Agrarian Reform Program, is the redistribution of

public and private agricultural lands to farmers and farmworkers who are
landless, irrespective of tenurial arrangement. CARPs vision is to have an

equitable land ownership with empowered agrarian reform beneficiaries who can

effectively manage their economic and social development to have a better

quality of life. Its primary step subsequent to the pre-work laid down by the law is

the acquisition of the lands, both public and private.

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 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.
 In the case of Association of Small Land Owners in the Philippines vs.

Secretary of Agrarian Reform, this provision of the Republic Act 6657 is a valid

exercise of the States Power of Eminent Domain. The State, through this

provision, appropriates private lands through compulsory acquisition. It is

noteworthy that the power of expropriation applies only to land owners who do

not voluntarily subject their lands to the agrarian reform program. It is only where

the owner is unwilling to sell, or cannot accept the price or other conditions

offered by the vendee, that the power of eminent domain will come into play to

assert the paramount authority of the State over the interest of the property

owner.

CARP compulsorily takes from the land owners parcels of land and

distribute these to beneficiaries declared qualified by law. This stage is the

daybreak for the farmers the State, with the agrarian reform law, finally

distributes the lands to those have actually tilled and worked hard for the land.

The farmers finally have the acquired the supposedly right to property, the land of

their own which they can use for their living. However, what was overlooked in

the provisions of the law is the section pertaining to amortization, which is

another bar for acquisition of the land. This concept now becomes a game-

changer, as the right of the beneficiaries becomes mere privilege.

Buy-and-sell Scheme

Section 26 of RA 6657 provides the manner of amortization by

acknowledged beneficiaries for the lands.

 SECTION 26. Payment by Beneficiaries. Lands awarded

pursuant to this Act shall be paid for by the beneficiaries to the LBP

in thirty (30) annual amortizations at six percent (6%) interest per

annum. The payments for the first three (3) years after the award

may be at reduced amounts as established by the PARC:

Provided, That the first five (5) annual payments may not be more

than five percent (5%) of the value of the annual gross production

as established by the DAR. Should the scheduled annual payments

after the fifth year exceed ten percent (10%) of the annual gross

production and the failure to produce accordingly is not due to the

beneficiarys fault, the LBP may reduce the interest rate or reduce

the principal obligations to make the repayment affordable. The

LBP shall have a lien 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 three (3) annual amortizations.

The LBP shall advise the DAR of such proceedings and the latter

shall subsequently award the forfeited landholdings to other

qualified beneficiaries. A beneficiary whose land, as provided

herein, has been foreclosed shall thereafter be permanently

disqualified from becoming a beneficiary under this Act.

A quick read of the provision will give us an idea that the amortization is

indeed a payment, payment to acquire the land which they are entitled as

beneficiaries to acquire. In the Declaration of Principles and Policies of RA

6657, it mentioned 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. Reconciling these two

provisions would give us the conclusion that the rights of the farmers to become

the full owner of the land, in order to be exercised, lies to a suspensive condition

of payment. Unless the farmers were able to fulfill the condition of full payment of

the amortization, they cannot be declared the rightful owners of the land. In fact,

default of payment leads to forfeiture of the right to own. To emphasize:

[] The LBP shall have a lien 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 three (3) annual

amortizations.

Furthermore, upon foreclosure, the beneficiary shall be

permanently disqualified from becoming a beneficiary under RA 6657. The

nature of such benefit now becomes a commodity. Seemingly, the land

becomes an object of Sale. Under the New Civil Code of the Philippines:

Art. 1458. By the contract of sale one of the contracting parties

obligates himself to transfer the ownership and to deliver a

determinate thing, and the other to pay therefor a price certain in

money or its equivalent.

In the case of the land distribution we have today, we can

substitute the elements of the sale:

 The Farmer Beneficiary, as the Vendee, is obliged to pay the price

of the land, in which case the State has already appraised. Failure

to pay will not grant the vendee the transfer of ownership. This is a

conditional sale.

The State, as the Vendor, is obliged to deliver the thing sold upon

the payment of the purchase price.

The Purchase Price shall be paid through amortization as

appraised by the State.

The Object of the Contract is the parcel of land, delivered by

transfer of title to the beneficiary upon full payment of amortization.

On its face, the amortization clause in the law provides for a sale of

the land to the farmer beneficiaries acknowledged by law. It is no

different from an internal agreement of sale between the landowner

and the farmer. If this is the case, then for what purpose the act of

expropriation was? Wouldnt it be more practical to just legislate an act

that would govern and regulate the compulsory sale of private lands to

farmer beneficiary? Or more so, does the agrarian reform law really

uplifted the farmers living, or did it just impose another burden to the

farmers?
 KEY FINDINGS AND ANALYSIS

The redistribution of lands through CARP is a genuine move of the

government in order to defeat the social injustice brought by the unequal

distribution of resources. It is shown that implementing CARP vests the farmer

beneficiaries the chance to improve their lives; and status in the community.

However, it must not be overlooked that such issue is entangled with different

distinct and separate yet equally relevant issues. The solution to give land to the

landless in order to arrest poverty is superficial. It is a band aid solution a short

term remedy which resulted to a bigger problem which is now apparent after

decades of struggle.

The distribution component of the program is a form of sale, and the same

is a burden to the farmers. It can be argued that the payment of amortization

provides for a longer period which gives opportunity for beneficiaries to comply.

However, not to mention that according to the wordings of the law, the said

amortization is a payment made by the farmers to acquire the right of ownership,

the burden that it imposes suggests that the spirit of the law requires

consideration from the farmers for there to be a transfer of ownership the

farmer pays to own the land. This is contradicting to the very essence of

becoming a beneficiary, and the ownership of the land as a right.

The redistribution of lands stated under CARP is not redistribution after

all it is re-selling. The government redistributes the lands to the qualified

beneficiaries with cause or consideration, a purchase price in the form of an

amortization. The farmer beneficiaries are now entrapped with the obligation to

maintain the productivity of the land and at the same time, pay amortizations of

its value. Failure of which results to confiscation of the land and be labeled as

unqualified beneficiary.

This is the same flaw pointed out by the legislators formulating the House

Bill No. 555. As exactly echoed:

What had actually transpired in the three decades of CARP had

been nothing but the institutionalized buy-and-sell transaction

between the government, the DAR and the DENR, and the

supposed farmer beneficiary.

 CONCLUSION AND RECOMMENDATION

CONCLUSION

CARP failed to uplift the life of the farmers

To conclude, there is a need to improve on our Agrarian Reform Laws

should there be new legislations to continue the move for change in the

agricultural arena of the Philippine industry, primarily the poverty of the Filipino

farmers. It is not enough that lands be just given to the landless. Other factors

should also be considered: market value of agricultural products, ability of the

farmers to compete in the market, capacity to capitalize on the lands they acquire

in order to be productive, and many more. Looking at the bigger picture, our

farmers are incapable of making any payment that would involve their assets for

living. Farmers cannot be obliged to pay the amortizations and taxes given the

current economic and market status of every farmer in the country. Thus, the
government must not give the burden of payment to the farmers. Applying the

principle of Parens Patriae, it is the obligation of the State to subsidize the

farmers or any individual within its jurisdiction in order to enjoy and protect any

right that supposedly is inherent to them.

RECOMMENDATION

Stop the distribution of poverty

As quoted from the study of Raul Fabella on the effects of CARP to the

farmers, the distribution of the lands led to a burden carried by farmers for

decades. Hence, this paper recommends the re-visitation of the guidelines on

amortization; if possible, the same should be removed from the whole

mechanism of distribution. The intentions of CARP are noble, but as the poor

farmers hardly benefit at all due to some flaws of the law, the program may

continue but has to cure its own errors. Specifically, the error pointed out in this

study, the buy-and-sell scheme. The government has to formulate another

agrarian reform or amend the provisions that requires the farmer beneficiaries to

pay the amortizations and taxes of the value of the land awarded to them. There

has to be an overall study of the status of the country in terms of agro-economic

standing. As consistently reiterated, the country should capitalize on its land and

water resources which can only be done through a revolutionized and

modernized agrarian reform law. By this, the State can uplift the status, not only

of the farmers, but of the whole country for a long term with a long-lasting

solution.