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REPUBLIC ACT No.

2263 harvest is obtained from one planting,


the words "agricultural year" shall mean
AN ACT AMENDING CERTAIN SECTIONS OF the period of time from the preparation
REPUBLIC ACT NUMBERED ONE of the land to the first harvest and
THOUSAND ONE HUNDRED NINETY-NINE, thereafter from harvest to harvest. In
OTHERWISE KNOWN AS THE both cases, the period of time may be
AGRICULTURAL TENANCY ACT OF THE shorter or longer than a calendar year.
PHILIPPINES.
"(c-1) Beginning of the agricultural year
Section 1. The last paragraph of section four of is the time the first farm operation for the
Republic Act Numbered One thousand one production of the principal crop is
hundred ninety-nine is hereby amended to read performed, such as, seed-bed
as follows: preparation in the case of rice.

"Sec. 4. Systems of Agricultural Tenancy: Their "(g-1) Broadcasting is the strewing or


Definitions. the scattering of seeds directly to the
landholding in lieu of transplanting.
xxx xxx xxx
"(g-2) Ratooning as the cutting of the
straw close to the ground at harvesting
"Leasehold tenancy exists when a person who,
time after all the standing water has
either personally or with the aid of labor
been drained out to allow the young
available form members of his immediate farm
household, undertakes to cultivate a piece of tillers to sprout out the rootstocks and
agricultural land susceptible of cultivation by a develop into mature normal bearing
plants in three or four months with the
single person together with members of his
aid of fertilizer, manure or compost.
immediate farm household, belonging to or
legally possessed by, another in consideration of
a fixed amount in money or in produce or in xxx xxx xxx
both,"
"(r) Auxiliary crop is any product raised
Section 2. Subsections (c) and (r) of section five other than the crop to which the
of the same Act are hereby amended to read as cultivation of the land is principally
follows hereinbelow; and said section five is devoted in each agricultural year; and
further amended by inserting a new subsection excluding the produce of the lot referred
between subsections (c) and (d) to be known as to in section twenty-two, paragraph
subsection (c-1), two new subsections between three.
subsections (g) and (h) to be known as
subsections (g-1) and (g-2) and by adding a new "(s) Suited for mechanization shall mean
subsection after subsection (r) to be known as that more than 60% of the tenants' labor
subsection (s) to read as follows: as provided for in this Act shall be
displaced by farm machinery and that
"Sec. 5. Definition of Terms. As used in this Act: the employment of mechanized
implements will lower the cost of
xxx xxx xxx production."

Section 3. Section nine of the same Act is


"(c) Agricultural year is the period of
hereby amended to read as follows:
time necessary for the arising of
seasonal agricultural products, including
the preparation of the land, and the "Sec. 9. Severance of Relations. The tenancy
sowing, planting harvesting and, relationship is extinguished by the voluntary
whenever applicable, threshing of the surrender or abandonment of the land by, or the
crop: Provided, however, That in the death or incapacity of, the tenant: Provided, That
case of coconuts, citrus, coffee, ramie, in case of the tenant's death or incapacity, the
and other crops where more than one tenancy relationship shall continue between the
landholder and one member of the tenant's on time subject to the provisions of
immediate farm household who is related to the section fourteen of this Act.
tenant within the second degree by
consanguinity and who shall cultivate the land "(3) The tenant shall have the right to
himself personally unless the landholder shall demand for a home lot suitable for
cultivate the land himself personally or through dwelling with an area of not more than 3
the employment of mechanical farm implements, per cent of the area of his landholding
in accordance with section fifty hereof. Should provided that it does not exceed one
the deceased or incapacitated tenant have two thousand square meters and that it shall
or more members of his immediate farm be located at a convenient and suitable
household qualified to succeed him, the place within the land of the landholder to
landholder shall have the right to choose from be designated by the later where the
among them who should succeed. The tenant shall construct his dwelling and
expiration of the period of the contract as fixed may raise vegetables, poultry, pigs and
by the parties, or the sale, alienation or transfer other animals and engage in minor
of legal possession of the land does not of itself industries, the products of which shall
extinguish the relationship. In the latter case, the accrue to the tenant exclusively. The
purchaser or transferee shall assume the rights Tenant's dwelling shall not be removed
and obligations of the former landholder in from the lot already assigned to him by
relation to the tenant, In case of death of the the landholder, except as provided in
landholder, his heir or heirs shall likewise section twenty-six unless there is a
assume his rights and obligations." severance of the tenancy relationship
between them as provided under
Section 4. Section fourteen of Republic Act section nine, or unless the tenant is
Numbered Eleven hundred ninety-nine is hereby ejected for cause, and only after the
amended to read as follows: expiration of forty-five days following
such severance of relationship or
"Sec. 14. Change of System. The tenant shall dismissal for cause.
have the right to change the tenancy contract
from one of share tenancy to leasehold tenancy xxx xxx xxx
and vice versa and from one crop sharing
arrangement to another of the share tenancy. If Section 6. Subsections (1) and (2) of Section
the share tenancy contract is in writing and is twenty-five of the same Act are hereby amended
duly registered, the right to change from one to read as follows:
crop sharing arrangement to another or from
one tenancy system to another may be "Sec. 25. Rights of the Landholder:
exercised at least one month before the
beginning of the next agricultural year after the
expiration of the period of the contract, the right "(1) The landholder shall have the right
may be exercised at least one month before the to choose the kind of crop and the
agricultural year when the change shall be seeds which the tenant shall plant in his
effected." holdings: Provided, That if the tenant
should object, the court shall settle the
conflict according to the best interest of
Section 5. Subsections (2) and (3) of section
both parties: Provided, further, That in
twenty-two of the same Act are hereby amended
no case shall a tenant be ejected as a
to read as follows: consequence of a change in crop.

"Sec. 22. Rights of the Tenant:


"(2) The landholder shall have the right
to require the tenant to follow those
xxx xxx xxx proven farm practices which have been
found to contribute towards increased
"(2) The tenant shall, aside from his agricultural production and to use
labor, have the right to provide any of fertilizer of the kind or kinds shown by
the contributions for production proven farm practices to be adopted to
whenever he can do so adequately and the requirements of the land: Provided,
That in case of disagreement thereto by "Sec. 28. Expenses for Seeds; Fertilizers; Pest
the tenant, the court shall settle the and Weed Control Expenses:
conflict according to the best interest of
both parties." xxx xxx xxx

xxx xxx xxx (2) The cost of fertilizer and expenses


for pest and disease control, as
Section 7. Subsection (a) of section twenty-six evidenced by sales invoices and/or
of the same Act is hereby amended to read as receipts, as well as the cost of weeding
follows: beyond the customary practice in the
locality shall be paid out of the gross
"Sec. 26. Obligations of the Landholder: harvest and returned to the party who
advanced the cost expenses. In case of
disagreement as to the cost of weeding,
(a) The landholder shall furnish the tenant with a
home lot as provided in section 22 (3): Provided, the court shall determine the same.
That should the landholder designated another
site for such home lot than that already occupied Section 10. Section thirty-one of the same Act is
by the tenant, the former shall bear the hereby amended to read as follows:
expenses of transferring the existing house and
improvements from the home lot already "Sec. 31. Cost of Fertilizer, Etc.; When to be
occupied by the tenant to the site newly Advanced by the Landholder. Whenever the use
designated by the former: Provided, further, That of fertilizer, the application of insect, disease and
if the tenant disagrees to the transfer of the rodent control measures or weeding beyond the
home lot, the matter shall be submitted to the customary practice in the locality is directed by
court for determination." the landholder, he shall advance their cost,
which shall be deducted from the gross
xxx xxx xxx produce."

Section 8. Section twenty-seven of the same Section 11. Section thirty-two of the same Act is
Act is hereby amended by inserting the following hereby amended to read as follows:
subsections to be known as subsections (4) and
(5): "Sec. 32. Share Basis. The parties shall, on
ricelands which produce a normal average of
"Sec. 27. Prohibition to the Landholder: more than forty cavans per hectare for the three
agricultural years next preceding the current
harvest, receive as shares in the gross produce,
"(4) The landholder shall not mortgage
the share of the tenant in the crop, and after setting aside the same amount of palay
any mortgage executed by the used as seed, and after deducting the cost of
fertilizer, pest and weed control, irrigation fees,
landholder on the land and/or its crop
reaping of not more than ten per centum of the
shall not affect the share of the tenant in
gross harvest, threshing and, whenever
such crop.
applicable, broadcasting or other farm
operations not listed in this Act as contributions
"(5) The landholder shall not discourage, or labor of tenant, the amount corresponding to
directly or indirectly, the formation, the total equivalent of their individual
maintenance or growth of a union or contributions, computed as follows:
organization of tenants in his
landholding, but he shall not initiate,
dominate, assist or interfere in the Participation
Contributions
formation or administration of any such Per cent
union or organization."
1. Land 30
Section 9. Subsection (2) of section twenty- 2. Labor 30
eight of the same Act is hereby amended to read
as follows: 3. Farm Implements 5
4. Work Animals 5 "Sec. 46. Consideration for the Use of Land.

5. Final harrowing of the field 5 "(a) The fixed consideration for the use
immediately before the of ricelands, shall not be more than the
transplanting equivalent of twenty-five per centum in
6. Transplanting 25: case of first class land and twenty per
centum in case of second class land of
the average gross produce after
Provided, however, That the participation of any deducting the same amount of palay
of the contributions enumerated above which used as seed and the cost of harvesting
are not actually contributed because of the and threshing of the past three normal
nature of the farming culture followed, shall be harvest: Provided, That if the landholder
divided between the landholder and tenant in the introduced improvements on the farm
same proportion as their total contribution to the which will increase its productivity, he
production." may demand for an increase in the
rental proportionate to the increase in
Section 12. Subsection (4) of section thirty- production resulting from such
seven of the same Act is hereby amended to improvements. In case of disagreement
read as follows: the court shall determine the reasonable
increase in rental. Classification of
"Sec. 37. Further Rights of the Landholder: ricelands shall be determined by
productivity; first class lands being those
which yield more than forty cavans per
xxx xxx xxx hectare and second class lands being
those which yield forty cavans or less,
"(4) The date of threshing which should not be the same to be computed upon the
beyond one month from the date of stacking of normal average harvest of the three
the harvest into big stacks. preceding years.

xxx xxx xxx "(b) The fixed consideration for


agricultural land where exist fruit trees
Section 13. Section thirty-nine of the same Act and other useful trees, crops and plants,
is amended to read as follows: from which the whole or any portion of
the produce of the said land is taken,
"Sec. 39. Prohibition on Pre-Threshing. It shall shall not be more than twenty-five per
be unlawful for either the tenant or landholder, cent of the average gross produce of the
without mutual consent, to reap or thresh a past three normal harvests: Provided,
portion of the crop at any time previous to the however, That additional considerations
date set, for its threshing: Provided, That if the for the enjoyment of said trees and
tenant needs food for his family and the useful plants, if the principal product is
landholder does not or cannot furnish such and rice or other crops, shall be decided and
refuses to allow the tenant to reap or thresh a specified by negotiation between the
portion of the crop previous to the date set for its landholder-lessor and the tenant-
threshing, the tenant can reap or thresh not lessee: Provided, further, That when the
more than ten per cent of his net share in the tenant-lessee, during the period of the
last normal harvest after giving notice thereof to lease and/or in consideration thereof,
the landholder or his representative. Any plants and/or takes care of said trees
violation of this section by either party shall be and plants, with the consent of the
treated and penalized in accordance with this landholder-lessor, the tenant-lessee
Act and/or under the general provisions of law shall be compensated by the latter in the
applicable to the act committed." manner agreed between them.

Section 14. Subsections (a) and (b) of section Section 15. The following new subsection is
forty-six of the same Act is hereby amended to added to section forty-six of the same Act:
read as follows:
"(d) In case the landholding is planted to dispossession: Provided, further, That
auxiliary crops, the landholder-lessor the landholder-owner or the aforesaid
and tenant-lessee shall divide the same relative shall, at least one year but not
in accordance with the provision of more than two years prior to the date of
section thirty of this Act." his petition to dispossess the tenant
under this sub-section, file notice with
Section 16. Section forty-nine of the same Act is the court and shall inform the tenant in
hereby amended to read as follows: writing in a language or dialect known to
the latter of his intention to cultivate the
land himself, either personally or
"Sec. 49. Ejectment of Tenant. Notwithstanding
through the employment of mechanical
any agreement or provision of law as to the
implements: Provided, That in the latter
period or future surrender of the land, in all
case, the notice to the tenant and to the
cases where land devoted to any agricultural
purpose is held under any system of tenancy, court should be accompanied by a
the tenant shall not be dispossessed of his certification of the agricultural tenancy
commission that the land is suited for
holdings by the landholder except for any of the
mechanization and by a certification by
causes hereinafter enumerated and only after
the manager of the national resettlement
the same has been proved before and the
and rehabilitation administration that it
dispossession is authorized by the court.
will be able to provide immediate
resettlement to the tenants in case their
It shall likewise be unlawful for any third party to dispossession is authorized by the
dispossess the tenant of his holding except by court: Provided, further, That in case
order of the Court. Any violation of this provision any dispossessed tenant is not willing to
shall be penalized in accordance with section be resettled, his possession shall not be
fifty-seven of this Act and/or under the general enforced until the lapse of one year from
provisions of law applicable to the act the date the decision becomes
committed." final: Provided, further, That the
dispossessed tenant and the members
Section 17. Subsection (a) of section fifty of the of the immediate household who were
same Act. is hereby amended to read as follows: not resettled shall be preferred in the
employment of necessary laborers
"Sec. 50. Causes for the Dispossession of under the new set-up: Provided finally,
Tenant. Any of the following and no other, shall That a landholder may mechanize
be sufficient cause for the dispossession of a certain farm operations in a tenanted
tenant from his holdings: farm without ejecting any tenant by filing
a petition with the court accompanied by
(a) The bona fide intention of the a certification of the farm operations
landholder-owner or his relative within applied for will lower the cost of
the first degree by consanguinity to production and will improve the farm
cultivate the land himself personally or culture, in which case the increase in
through the employment of farm the share of the landholder shall be
machinery and implements: Provided, fixed by the Court in proportion to the
however, That should the landholder- labor of the tenant that will be displaced
owner or the aforesaid relative not by the farm machine.
cultivate the land himself for at least
three years or the landholder-owner and xxx xxx xxx
his successor in interest should fail to
employ mechanical farm implements for "(e) When a share-tenant fails to follow these
a period of at least five years after proven farm practices which, as determined by
dispossession of the tenant, it shall be the court of agrarian relations, will contribute
presumed that he acted in bad faith and towards the proper care of the land and
the tenant shall have the right to increased agricultural production in case of
demand possession of the land and conflict as to whether the margate or any other
damages for any loss incurred by him accepted scientific system is a proven farm
because of said
practice for any particular land, the conflict shall In case of juridical persons, the manager or the
be decided by the court taking the testimony of person who has charge of the management or
the proper government officials." administration of the property or, in their default,
the person acting in their stead, shall be liable
Section 18. The first paragraph of section fifty- under this section."
two of the same Act is hereby amended to read
as follows: Section 22. The provisions of this Act shall be
applicable to all cases pending in any Court at
"Sec. 52. Duties of the agricultural Tenancy the time of the approval of this Act.
Commission. It shall be the duty of the
Agricultural Tenancy Commission to: Section 23. If for any reason any section of
provision of this Act shall be questioned in any
xxx xxx xxx Court, and shall be held to be unconstitutional or
invalid, no other section or provision of this Act
Section 19. Section fifty-three of the same Act is shall be affected thereby.
hereby amended to read as follows:
Section 24. This Act shall take effect upon its
"Sec. 53. Duties of Secretary of Justice. The approval.
Secretary of Justice, acting through a tenancy
mediation commission shall carry out a rational Approved, June 19, 1959.
enforcement program, which shall include
among other things, mediation of tenancy
disputes."

Section 20. Section fifty-four of the same act is


hereby amended to read as follows:

"Sec. 54. Representation by Counsel. In all


cases herein a tenant cannot afford to be
represented by counsel, it shall be the duty of
the trial attorney of the tenancy mediation
commission to represent him, upon proper
notification by the party concerned, or the court
of competent jurisdiction shall assign or appoint
counsel de oficio for the indigent tenant.

Section 21. Section fifty-seven of the same Act


is hereby amended to read as follows:

"Sec. 57. Penal Provision. Violation of the


provisions of subsections one and three, section
twenty-seven and of sections thirty-nine and
forty-nine of this Act shall be punished by a fine
not exceeding two thousand pesos or
imprisonment not exceeding one year, or both,
in the discretion of the Court. Any person who in
bad faith shall induce or cause anybody to
violate the aforesaid sections of Republic Act
numbered one thousand one hundred ninety-
nine shall be punished with a fine not exceeding
four thousand pesos or imprisonment not
exceeding two years, or both, at the discretion of
the court.
REPUBLIC ACT No. 1199 August 30, members of his immediate farm household, and
1954 the produce thereof to be divided between the
landholder and the tenant in proportion to their
AN ACT TO GOVERN THE RELATIONS respective contributions.
BETWEEN LANDHOLDERS AND TENANTS
OF AGRICULTURAL LANDS (LEASEHOLDS Leasehold tenancy exists when a person who,
AND SHARE TENANCY) either personally or with the aid of labor
available from members of his immediate farm
PART I household, undertakes to cultivate a piece of
agricultural land susceptible of cultivation by a
GENERAL PROVISIONS single person together with members of his
immediate farm household, belonging to or
legally possessed by, another in consideration of
SECTION 1. Title. - This Act shall be known as a price certain or ascertainable to be paid by the
the "Agricultural Tenancy Act of the person cultivating the land either in percentage
Philippines." of the production or in a fixed amount in money,
or in both.
Section 2. Purposes. - It is the purpose of this
Act to establish agricultural tenancy relations Section 5. Definitions of Terms. - As used in
between landholders and tenants upon the this Act:
principle of school justice; to afford adequate
protection to the rights of both tenants and
(a) A tenant shall mean a person who,
landholders; to insure an equitable division of
the produce and income derived from the land; himself and with the aid available from
to provide tenant- farmers with incentives to within his immediate farm household,
cultivates the land belonging to, or
greater and more efficient agricultural
possessed by, another, with the latter's
production; to bolster their economic position
consent for purposes of production,
and to encourage their participation in the
development of peaceful, vigorous and sharing the produce with the landholder
democratic rural communities. under the share tenancy system, or
paying to the landholder a price certain
or ascertainable in produce or in money
Section 3. Agricultural Tenancy Defined. - or both, under the leasehold tenancy
Agricultural tenancy is the physical possession system.
by a person of land devoted to agriculture
belonging to, or legally possessed by, another
(b) A landholder shall mean a person,
for the purpose of production through the labor
natural or juridical, who, either as owner,
of the former and of the members of his
lessee, usufructuary, or legal possessor,
immediate farm household, in consideration of
lets or grants to another the use or
which the former agrees to share the harvest
with the latter, or to pay a price certain or cultivation of his land for a consideration
ascertainable, either in produce or in money, or either in shares under the share tenancy
system, or a price certain or
in both.
ascertainable under the leasehold
tenancy system.
Section 4. Systems of Agricultural Tenancy;
Their Definitions. - Agricultural tenancy is
classified into leasehold tenancy and share (c) Agricultural year is the period of time
necessary for the raising of seasonal
tenancy.
agricultural products, including the
preparation of the land, and the sowing,
Share tenancy exists whenever two persons planting and harvesting of the crop:
agree on a joint undertaking for agricultural Provided, however, That in the case of
production wherein one party furnishes the land coconuts, citrus, coffee, ramie, and
and the other his labor, with either or both other crops where more than one
contributing any one or several of the items of harvest is obtained from one planting,
production, the tenant cultivating the land the words "agricultural year" shall mean
personally with the aid of labor available from the period of time from the preparation
of land to the first harvest and thereafter (m) Fair rental value is an amount of
from harvest to harvest. In both cases, money not in excess of allowable
the period of time may be shorter or depreciation plus six per cent interest
longer than a calendar year. per annum on the investment computed
at its market value: Provided, however,
(d) Farm implements include hand tools That the fair rental value for the work
or machines ordinarily employed in a animal or animals and farm implements
farm enterprise. required to produce the crop shall not
exceed five per cent of the gross
harvest for the animal or animals and
(e) Work animals include animals
five per cent for implements: And,
ordinarily employed in a farm enterprise.
provided, further, That whenever a
The words include carabaos, horses,
tractor or power and the necessary
bullocks, etc.
implements are utilized interchangeably
with work animals in the same holding
(f) Pulling of the seedlings is a phase of during the same agricultural year the
farm work in which seedlings are rental shall not exceed ten per cent for
uprooted from the seed beds the combined services.
immediately before transplanting.
(n) Immediately after as used in this Act
(g) Final harrowing in the last stage in shall be inclusive of the last day of
pulverizing the soil into fine particles in harvesting, threshing or processing and
readying the field for the transplanting of the next five days thereafter.
the seedlings.
(o) Immediate farm household includes
(h) Reaping is the cutting of rice stalks. the members of the family of the tenant,
and such other person or persons,
(i) Harvesting shall mean the gathering whether related to the tenant or not, who
of the fruits or produce of a crop other are independent upon him for support
than rice. and who usually help him operate the
farm enterprise.
(j) Piling into small stacks used as a
term in rice share tenancy shall mean (p) Incapacity means any cause or
the piling into several small stacks within circumstances which prevents the
the tenant's holdings of reaped and tenant from fulfilling his contractual
bundled stalks containing the grain, obligations and those imposed by this
preparatory to their transportation to the Act.
place designated for their threshing.
(q) Inspect means to examine and
(k) Piling into big stacks used as a term observe. However, such examinations
in rice share tenancy shall mean the and observations shall not include any
piling into one huge stack of the several acts of intimidation or coercion.
small stacks of reaped and bundled
stalks containing grain, which constitute (r) Auxiliary crop is any product raised
the entire harvest of the tenant from his other than the crop to which the
holdings, preparatory to threshing. cultivation of the land is principally
devoted; and excluding the produce of
(l) Proven farm practices include those the lot referred to in Section twenty-six.
sound farming practices which have
attained general acceptance through Section 6. Tenancy Relationship; Its
usage or are officially recommended by Definition. - Tenancy relationship is a juridical
the Department of Agriculture and tie which arises between a landholder and a
Natural Resources. tenant once they agree, expressly or impliedly,
to undertake jointly the cultivation of land
belonging to the former, either under the share
tenancy or leasehold tenancy system, as a public policy. Except in case of fraud, error,
result of which relationship the tenant acquires force, intimidation or undue influence, when
the right to continue working on and cultivating such contract is reduced to writing and
the land, until and unless he is dispossessed of registered as hereinafter provided, the latter
his holdings for any of the just causes shall be conclusive evidence of what has been
enumerated in Section fifty or the relationship is agreed upon between the contracting parties, if
terminated in accordance with Section nine. not denounced or impugned within thirty days
after its registration.
Section 7. Tenancy Relationship; How
established; Security of Tenure. - Tenancy Said contract shall be contrary to law, morals
relationship may be established either verbally and public policy;
or in writing, expressly or impliedly. Once such
relationship is established, the tenant shall be A. In Share Tenancy
entitled to security of tenure as hereinafter
provided.
(a) If the tenant is to receive less than
the corresponding share for the different
Section 8. Limitations of Relation. - The contributions be made to the production
relation of landholder and tenant shall be limited of the farm as hereinafter provided.
to the person who furnishes land, either as
owner, lessee, usufructuary, or legal possessor,
(b) If it is stipulated that the tenant or
and to the person who actually works the land
any member or his immediate farm
himself with the aid of labor available from within
household shall without compensation
his immediate farm household.
perform any work or render any service
not connected with the tenant's duties
Section 9. Severance of Relationship. - The and obligations provided under this Act.
tenancy relationship is extinguished by the
voluntary surrender of the land by, or the death
B. In Leasehold Tenancy
or incapacity of, the tenant, but his heirs or the
members of his immediate farm household may
continue to work the land until the close of the (a) If the tenant-lessee is to pay to the
agricultural year. The expiration of the period of landholder, lessor, as a consideration
the contract as fixed by the parties, and the sale for the use of the land, an amount in
or alienation of the land do not of themselves excess of that hereinafter provided for
extinguish the relationship. In the latter case, the the kind and class of land involved.
purchaser or transferee shall assume the rights
and obligations of the former landholder in (b) If the tenant-lessee is to pay the
relation to the tenant. In case of death of the landholder-lessor a consideration in
landholder, his heir or heirs shall likewise excess of the amount prescribed as fair
assume his rights and obligations. rental value, as determined pursuant to
the provisions of this Act, for the use of
Section 10. Contracts; Nature and Continuity work animals, services and/or farm
of Conditions. - The terms and conditions of implements belonging to the landholder-
tenancy contracts, as stipulated by the parties or lessor, in case it is agreed between the
as provided by law, shall be understood to parties that the latter shall furnish any or
continue until modified by the parties. all of these items of production.
Modifications of the terms and conditions of
contracts shall not prejudice the right of the (c) If it is stipulated that, as a condition
tenant to the security of his tenure on the land precedent to the commencement or
as determined in Section six, seven, and forty- continuance of the lease, the tenant-
nine. lessee shall rent work animals, services
or farm implements, or shall make use
Section 11. Freedom to Contract in General. - of any store or services operated by the
The landholder and the tenant shall be free to landholder-lessor or any other person,
enter into any or all kinds of tenancy contract, as or that the landholder-lessor may
long as they are not contrary to law, morals or impose fines, deductions and/or
assessments, or that the tenant-lessee annotations on said registry of all subsequent
shall, without compensation, perform acts relative to each contract, such as its
any work or render any service not renewal, novation, cancellation, etc.: Provided,
connected with the tenant's duties and That the municipal treasurer shall not charge
obligations provided under this Act. any fee for the registration of said contracts or of
any subsequent acts relative thereto, none of
Section 12. Form and Registration of which shall be subject to the documentary stamp
Contract. - A contract of tenancy in writing, in tax.
order to be conclusive as evidence, shall be
drawn in quadruplicate in the language or dialect Section 14. Change of System. - The tenant
known to all the parties thereto and signed or shall have the right to change the tenancy
thumb-marked both by the landholder or his contract from one of share tenancy to the
authorized representative, and the tenant leasehold tenancy and vice versa and from one
himself, before two witnesses, one to be chosen crop-sharing arrangement to another of the
by each party. If any of the parties does not share tenancy. If the share tenancy contract is in
know to read, one of the witnesses, to be writing and is duly registered, the right may be
chosen by him, shall read the contents of the exercised at the expiration of the period of the
document to him. Each of the contracting parties contract. In the absence of any written contract,
shall retain a copy of the contract and the third the right may be exercised at the end of the
and fourth copies shall be delivered to the agricultural year. In both cases the changed to
municipal treasurer of the municipality where the the leasehold system shall be effective one
land which is the subject-matter of the contract agricultural year after the tenant has served
is located, who shall file and register the third notice of his intention to change upon the
copy in his office and forward the fourth copy to landholder.
the court: Provided, That in order that a tenancy
contract may be registered, it shall be the duty of Section 15. Interest on Loans or Advances. -
the municipal treasurer and tenant, respectively, On all loans or advances obtained by the tenant
and to place an annotation on each copy of the from the landholder in connection with the
fact of registration in his office, stating the date, cultivation, planting, harvesting and other
time and place of registration as well as the incidental expenses for the improvement of the
entry or registration number. crop planted, as well as loans or advances for
the subsistence of the tenant and his family, the
The form of contract shall be uniform and shall interest which may be stipulated shall not
be prepared and furnished by the court. The exceed eight per centum per calendar year:
contracting parties shall acknowledge the Provided, That on all loans or advances other
execution of the contracting before the municipal than money, such as grain or other agricultural
treasurer or justice of the peace or the mayor of products, made computed on the basis of the
the municipality where the land is situated. No current price of the produce at the time it was
fees or stamps of any kind shall be paid or loaned. Violation of the provisions of this section
required. shall be punished in accordance with the Usury
Law.
When one of the parties is unable to read, in
case of doubt the burden of proof to show that Section 16. Memorandum of Loans or
he understood the terms of the contract shall Advances. - Any obligation referring to any
rest upon the other party who is able to read. amount either in money or in kind, including the
payment of interest, which the tenant may have
Section 13. Registry of Tenancy Contracts. - received from time to time as loan or advance
For the purposes of this Act, the municipal from the landholder, shall be void unless the
treasurer of the municipality wherein the land same, or some note or memorandum thereof, be
which is the subject-matter of a tenancy contract in writing in a language or dialect known to the
is situated shall keep a record of all such party charged, and subscribed by said party, or
contracts entered into within his jurisdiction, to by his authorized agent.
be known as "Registry of Tenancy Contracts."
He shall keep this registry together with a copy Section 17. Form of Final Accounting. - The
of each contract entered therein, and make final accounting between landholder and tenant
at the end of each agricultural year shall be however, be paid in money or in agricultural
effected within ten days after the threshing in products appraised at the local current market
case of rice and within the same period of time price at the time of payment.
after the harvest or gathering of the fruits in the
case of crops. In case of crops which have to be Section 19. Exemption from Lien and/or
said in processed form, the final accounting shall Attachment. - Twenty-five per centum of the
be within five days after the sale is tenant's share of the produce of the land in
consummated and the sales receipt shall be share tenancy, or of the entire produce in
exhibited to the tenant. leasehold tenancy, one work animal and one of
each kind of farm implement belonging to the
The accounting shall be made to appear in a not tenant, provided that the value of such work
or memorandum written in a language or dialect animal and implements do not exceed five
known to the tenant and signed by both parties hundred pesos, shall be exempt from lien and
in the presence of two witnesses who shall be attachment.
selected by each party. Each of the contracting
parties shall be furnished with a copy of said Section 20. Use of Official Weights and
note or memorandum and such final accounting, Measures. - In all transactions entered into
once duly signed by both parties and two between the landholder and the tenant
witnesses, shall be deemed conclusive evidence concerning agricultural products the official
of its contents, except in case of fraud, error, weights and measures of the Government shall
force, intimidation or undue influence. When one be used.
of the parties is unable to read, the burden of
proof, in case of doubt, to show that he Section 21. Ejectment: Violation;
understood the accounting, shall rest upon the Jurisdiction. - All cases involving the
other party who is able to read. dispossession of a tenant by the landholder or
by a third party and/or the settlement and
In the absence of a written accounting in disposition of disputes arising from the
accordance with the preceding paragraph, the relationship of landholder and tenant, as well as
tenant may, within three years from the date of the violation of any of the provisions of this Act,
the threshing of the crop in question, petition the shall be under the original and exclusive
Court to compel the landholder to render an jurisdiction of such court as may now or
accounting of the same in accordance with this hereafter be authorized by law to take
section. cognizance of tenancy relations and disputes

Section 18. Settlement of Debts. - Once the PART II


accounting is made, any amount of money
which the landholder may have advanced to the THE SHARE SYSTEM
tenant for expenses of cultivation, harvesting or
gathering of the crop or for his own private use,
as well as any amount of grain or agricultural CHAPTER I - Common Provisions
products advanced for his subsistence and that
of his family, shall be paid by the tenant out of SECTION 22. Rights of the Tenant. -
his share either in grain or in money, at the
option of the latter; Provided, That such grain or (1) The tenant shall be free to work
agricultural products shall be appraised in elsewhere whenever the nature of his
money according to their current market value at farm obligation warrants his temporary
the place where the land is located at the time of absence from his holdings.
their delivery to the tenant: Provided, further,
That in case his share is not sufficient, his (2) The tenant shall, aside from his
outstanding debt shall be reduced to money and labor, have the right to provide any of
shall bear an interest of not more than ten per the contributions for production
cent per annum: And provided, finally, That the whenever he can do so adequately and
remaining debts of the tenant once converted on time.
into money shall not again be converted into
kind. Said outstanding debt money may,
(3) The tenant's dwelling shall not, The tenant shall not abandon or surrender his
without his consent, be removed from holdings and leave the farm and growing crop
the lot assigned to him by the and other improvements unattended during the
landholder, unless there is a severance watch season, except for just and reasonable
of the tenancy relationship between cause. In case of such unjustified abandonment
them as provided under Section nine, or or surrender, any or all of his expected share in
unless the tenant is ejected for cause, the crop may, in the discretion of the court, be
and only after the expiration of forty-five forfeited in favor of the landholder to the extent
days following such severance of of the damage caused thereby.
relationship or dismissal for cause.
Any of the following shall be considered just and
If the tenant is dismissed without just reasonable cause for the tenant to terminate the
cause and he is constrained to work tenancy relationship;
elsewhere, he may choose either to
remove his dwelling at the landholder's (a) Cruel, inhuman or offensive
cost or demand the value of the same treatment on the part of the landholder
from the landholder at the time of the of his representative toward the tenant
unjust dismissal. or any member of his immediate farm
household.
(4) The tenant shall have the right to be
indemnified for his labor and expenses (b) Non-compliance on the part of the
in the cultivation, planting, or harvesting landholder with any of the obligations
and other incidental expenses for the imposed upon him by the provisions of
improvement of the crop raised in case this Act or by the contract.
he is dispossessed of his holdings,
whether such dismissal is for a just
(c) If the landholder or his representative
cause and not, provided the crop still
compels the tenant or any member of
exists at the time of the dispossession.
his immediate farm household to do any
work or render any service not in any
Section 23. Obligations for the tenant. - It way connected with his farm work, or
shall be the obligation of the tenant: even without compulsion if no
compensation is paid.
(1) To cultivate and take care of the
farm, the growing crop and other (d) Commission of a crime by the
improvements entrusted to him as a landholder or his representative against
good father of a family, by doing all the the tenant or any member of his
work necessary in accordance with immediate farm household.
proven farming practices.
Section 24. Prohibitions to Tenant: -
(2) To inform the landholder at once of
any trespass committed by a third
(1) It shall be unlawful for the tenant,
person upon the farm.
whenever the area of his holdings is five
hectares or more, or is sufficient size to
(3) To take reasonable care of the work make him and the members of his
animals and farm implements used in immediate farm household fully
the point undertaking. He shall not use occupied in its cultivation, to contract to
the work animals and farm implements work at the same time on two or more
entrusted to him by the landholder for separate holdings belonging to different
purposes other than those intended, or landholders under any system of
allowed their use by other persons tenancy, without the knowledge and
without the knowledge and consent of consent of the land-holder with whom he
the landholder. first entered into tenancy relationship.
(2) It shall be unlawful for a share-tenant (a) The landholder shall furnish the
to employ a sub-tenant to furnish labor tenant an area of not less than one
or any phase of the work required of him thousand square meters where the latter
under this Act, except in cases of illness may construct his dwelling, raise
or any temporary incapacity on his part, vegetables, poultry, pigs, and other
in which eventuality the tenant or any animals and engage in minor industries,
member of his immediate farm the products of which shall accrue to the
household is under obligation to report tenant exclusively.
such illness or incapacity to the
landholder. Payment to the sub-tenant, (b) The landholder shall keep the tenant
in whatever form, for services rendered in the peaceful possession and
on the land under this circumstance, cultivation of his landholdings which are
shall be for the account of the tenant. the subject matter of the contract.

(3) Subject to provisions of the next Section 27. Prohibitions to the Landholder:
preceding paragraph, land entrusted for
cultivation to a leasehold tenant shall
(1) The landholder shall not dispossess
not be sub-let nor shall the lease be
the tenant of his holdings except for any
assigned by the tenant to another of the causes enumerated in Section
person, except with the written consent fifty, and without the cause having been
of the lessor.
proved before, and the dispossession
authorized by, the court; otherwise, he
Section 25. Rights of the Landholder: - shall, aside from the penalty of fine
and/or imprisonment provided for any
(1) The landholder shall have the right to violation of this Act, be liable to the
choose the kind of crop and the seeds tenant for damages to the extent of the
with the tenant shall plant in his landholder's right under Section twenty-
holdings: Provided, however, That if the two of this Act.
tenant should subject, the court shall
settle the conflict, according to the best (2) The landholder shall be responsible
interest of both parties. for the payment of taxes levied by the
Government upon the land which is the
(2) The landholder shall have the right to subject-matter of the contract and it
require the use of fertilizer of the kind or shall be unlawful to make the tenant
kinds shown by proven farm practices to bear in part of all of the same, either
be adapted to the requirements of the directly or indirectly.
land.
(3) The landholder shall not require the
(3) The landholder shall have the right to tenant to bear, directly or indirectly, any
inspect and observe the extent of part of the rent, "canon" or other
compliance on the part of the tenant consideration which he, the former, may
with the terms and conditions of their be under obligation to pay to a third
contract and the provisions of this Act. person for the use of the land.

(4) In cases where the crop has to be Section 28. Expenses for Seeds; Fertilizer;
sold in processed form before division Pest and Weed Control Expenses.
and the tenant has no representative,
the landholder, shall have the right to (1) The same amount of seeds or
deal with millers or processors in seedlings used in the production of any
representation of the tenant. crop shall be deducted from the gross
harvest and returned to the party who
Section 26. Obligations of the Landholder: furnished the same.
(2) The cost of fertilizer and expenses 4. Work Animals 5%
for pest and weed control as evidenced
by sales invoices shall be paid out of the Final harrowing of the field immediately before
gross harvest and returned to the party 5. transplanting 5%
who advanced the cost and expenses. 6. Transplanting 25%

Section 29. Irrigation System. - The cost of the Section 33. Share basis on Second Class
construction of an irrigation system, including Land. - On ricelands, which produce a normal
the distributory canals, shall be borne average of forty cavans or less per hectare for
exclusively by the landholder. The cost of the three agricultural years next preceding the
maintenance and operation of the system shall, current harvest, the participation for the
however, be borne by the landholder and the contribution of the land shall be twenty-five per
tenant in proportion to their respective shares in centum and that of labor, thirty-five per centum.
the harvest.
Section 34. Reimbursement Not Allowed. -
Section 30. Auxiliary Crop. - In case the land Contributions or shares in the contribution to the
is planted to an auxiliary crop, the tenant shall production of the crop in the form of cash, grain
receive eighty per centum and the landholder or services, once shouldered or rendered alone
twenty per centum of the net produce, provided by one party may not be reimbursed by the other
all expenses of production are borne by the party after the phase or phases of work required
tenant. in the joint undertaking shall have been
completed.
Auxiliary crops shall, not, however, be construed
to include the crops or products raised from the Section 35. Sharing of Expenses. - In case the
garden, poultry and other industries carried on landholder and the tenant agree to share equally
the lot specifically provided for the tenant under in the expenses of final harrowing of field and
Section 26(a) hereof. transplanting, the latter may engage the services
of persons or helpers to perform these phases of
Section 31. Cost of Fertilizer, etc.; when to be farm work, provided the rates for each shall
Advanced by the landholder. - Whenever the have been previously determined and agreed
use of fertilizer or the application of insect, upon between the landholder and the tenant. In
disease and rodent control measures is directed case of disagreement upon said rates, the party
by the landholder, he shall advance their cost, who undertakes to the corresponding share in
which shall be deducted from the gross produce. the harvest, after deducting the expenses of
reaping.
CHAPTER II - Rice Share Tenancy
Section 36. Further Rights of the Tenant. - In
SECTION 32. Share Basis. - The parties shall, addition to the provision of Section twenty-two,
on ricelands which produces a normal average the tenant shall have the right to:
of more than forty cavanes per hectare for the
three agricultural years next preceding the 1. Determine when to scatter the seeds,
current harvest, receive as shares in the gross to transplant the seedlings, and to reap
produce, after setting aside the same amount of the harvest, provided they shall be in
palay used as seed, and after deducting the cost accordance with proven farm practices
of fertilizer, pest and weed control, reaping and and after due notice to the landholder.
threshing, the amount corresponding to the total
equivalent of their individual contributions, 2. Choose the thresher which shall
computed as follows; thresh the harvest whenever it is the
best available in the locality and the best
Contribution suited to the landholder's and tenant's
Participation
needs and provided the rate charged is
1. Land 30%
equal to or lower than the rate charged
2. Labor by the owner of other threshers under
30%
3. Farm implements 5%similar circumstances: Provided, further,
That in cases where there are more Section 38. Labor; What It Constitutes. - The
than tenant the selection of the majority tenant shall perform the following as the labor
of the tenants shall prevail: Provided, contributed by him under Section thirty-two;
finally, That if the landholder is the
owner of a thresher and is ready and 1. The preparation of the seedbed which
willing to grant equal or lower rates shall include plowing, harrowing, and
under the same conditions, the use of watering of the seedbed, the scattering
the landholder's thresher shall be given of the seeds, and the care of the
preference. seedlings.

3. Apply appropriate pest, insect, 2. The plowing, harrowing, and watering


disease and rodent control measures of the area he is cultivating, except final
whenever in his judgment such action is harrowing of the field as an item of
necessary: Provided, however, That if a contribution specified in Section thirty-
tenant fails to apply any of the above two of this Act.
control measures after the landholder
has made a request in writing for such
3. The maintenance, repair and weeding
action, he shall be liable for any loss
of dikes, paddies, and irrigation canals
resulting from such failure. in his holdings.

4. Apply fertilizer of the kind or kinds


4. The pulling and bundling of the
shown by proven farm practices to be
seedlings preparatory to their
adapted to the requirements of the land,
transplanting.
provided the landholder has not
exercised his right under Section
twenty-five to require the use of such 5. Care of the growing plants.
fertilizer.
6. Gathering and bundling of the reaped
Section 37. Further Rights of the harvest.
Landholder. - In addition to the provisions of
Section twenty-five, the landholder, by himself or 7. The piling of the bundles into small
through his representative, may determined: stacks.

1. The proper height of pilapils or dikes 8. The preparation of the place where
according to the local practices. the harvest is to be stacked.

2. The location and size of irrigation 9. Gathering of the small stacks and
canals. their transportation to the place where
they are to be stacked.
3. The site for the stacking of the
harvest, provided it shall not be farther 10. Piling into a big stack preparatory to
than one kilometer from the center of threshing.
the area cultivated by a majority of the
tenants. Section 39. Prohibition on Pre-Threshing. - It
shall be unlawful for either the tenant or the
4. The date of threshing. landholder, without mutual consent, to reap or
thresh a portion of the crop at any time previous
Provided, however, That in case of to the date set for its threshing. Any violation by
disagreement by the tenant in any of the either party shall be treated and penalized in
foregoing instances, the court shall determine accordance with this Act and/or under the
whatever may be in the interest or both parties. general provisions of law applicable to the act
committed.
Section 40. Place of Crop Division. - The premises of the land, and to the adequate and
division of the crop shall be made in the same peaceful enjoyment thereof. He shall have the
place where the harvest has been threshed and right to work the land according to his best
each party shall transport his share to his judgment, provided this manner and method of
warehouse or barn, unless the contrary is cultivation and harvest are in accordance with
stipulated by the parties. proven farm practices. Upon termination of the
relationship, he shall be entitled to one half of
CHAPTER III - Share Tenancy on Crops other the value of the improvements made by him,
than Rice provided they are reasonable and adequate to
the purposes of the lease.
SECTION 41. Basis of Shares in Crops other
than Rice. - The landholder and the tenant on The tenant-lessee shall pay the consideration
lands which produce crops either than rice shall stipulated in the lease contract provided it shall
be free to enter into any contract stipulating the not exceed the limit fixed in Section forty-six. In
ratio of crop division. In the absence of a the absence of stipulation, the consideration
stipulation, the customs of the place shall shall be that established in said Section forty-six.
govern: Provided, That whether the basis of He shall make proper use of the land and the
division of the crop is the contract between the improvements thereon and shall be under
parties or the customs of the place, the share of obligation to cultivate it as a good father of a
the tenant for his labor in the production shall family, by doing all the work considered
not less than thirty per cent of the harvest or reasonable and necessary in accordance with
produce, after deducting the expenses for proven farm practices. He is likewise obliged to
harvesting and/or initial processing: Provided, take reasonable care of the work animals and
further, That in cases where the share of the farm implements that may be delivered to him by
tenant is, according to local practices or customs the land-holder, in case it is agreed between the
prevailing at the time of the approval of this Act, parties that the landholder-lessor shall furnish
more than the minimum herein set, the tenant's any or all of them.
share thus established by local practices or
customs shall prevail and be considered the Section 44. Rights of Landholder-lessor. -
minimum. The landholder-lessor or his duly authorized
representatives shall have the right to inspect
PART III the premises of the land which is the subject of
the lease for the purpose of ascertaining the
THE LEASEHOLD TENANCY tenant's compliance with the provisions of the
contract and of this Act, but in no case shall he
exercise any coercion, intimidation or violence in
SECTION 42. Landholder-Lessor and Tenant- word or deed.
Lessee, Defined. Any person, natural or
juridical, either as owner, lessee, usufructuary or
Section 45. Manner of Rental Payment. -
legal possessor or agricultural land, who lets,
leases or rents to another said property for Payment of the consideration for the use of land
purposes of agricultural production and for a may be made either in an amount certain or
ascertainable in money or in produce, or both.
price certain or ascertainable either in an
amount of money or produce, shall be known as
the landholder-lessor; and any person who, with Section 46. Consideration for the Use of
the consent of the former, tills, cultivates or Land. -
operates said land, susceptible of cultivation by
one individual, personally or with the aid of labor (a) The consideration for the use of
available from among his own immediate farm ricelands, shall not be more than thirty
household, is a tenant-lessee. per centum of the gross produce for first
class lands and not more than twenty-
Section 43. Rights and Obligations of five per centum for second class lands.
Tenant-Lessee. - With the creation of the Classification of ricelands shall be
tenancy relationship arising out of the contract determined by productivity: first class
between the landholder-lessor and tenant- lands being those which yield more than
lessee, the latter shall have the right to enter the forty cavanes per hectare and second
class lands being those which yield forty prejudicing the right of the borrower to repay his
cavanes or less, the same to be obligation before the date of maturity. The loan,
computed upon the normal average unless it is otherwise stipulated, shall be payable
harvest of the three preceding years. in money at not more than eight per cent interest
per annum, computed from the date of the
(b) The consideration for agricultural indebtedness was contracted up to and
land where exist fruit trees and other including the date of payment. A note or
useful trees and plants, from which the memorandum to evidence such indebtedness
whole or any portion of the produce of shall be executed in accordance with the
the said land is taken, shall not be more provisions of Section sixteen.
than what have been specified in the
preceding section: Provided, however, PART IV
That additional considerations for the
employment of said trees and useful SECURITY OF TENURE
plants, if the principal product is rice or
other crops, shall be decided and SECTION 49. Ejectment of Tenant. -
specified by negotiation between the
Notwithstanding any agreement or provision of
landholder-lessor and the tenant-lessee;
law as to the period, in all cases where land
Provided, further, That where the devoted to any agricultural purpose is held
tenant-lessee, during the period of the under any system of tenancy, the tenant shall
lease and/or in consideration thereof,
not be dispossessed of his holdings except for
plants and/or takes care of said trees
any of the causes hereinafter enumerated and
and plants, with the consent of the
only after the same has been proved before, and
landholder-lessor, the tenant-lessee
the dispossession is authorized by, the court.
shall be compensated by the latter in the
manner agreed between them.
Section 50. Causes for the Dispossession of
a Tenant. - Any of the following shall be a
(c) The consideration for the use of
sufficient cause for the dispossession of a tenant
sugar lands, fishponds, saltbeds and of from his holdings:
lands devoted to the raising of livestock
shall be governed by stipulation
between the parties. (a) The bona fide intention of the
landholder to cultivate the land himself
personally or through the employment of
Section 47. Rental of Work Animals, etc., and
farm machinery and implements:
Applicability of Schedules. - Upon agreement
Provided, however, That should the
of the parties, the tenant- lessee may make use
landholder not cultivate the land himself
of such work animals, farm implements or
or should fail to employ mechanical farm
services belonging to the landholder-lessor as
implements for a period of one year
are available for hire, the consideration of which
after the dispossession of the tenant, it
shall be based on their fair rental value. shall be presumed that he acted in bad
faith and the land and damages for any
The rates on the fair rental value for the use of loss incurred by him because of said
work animals, farm implements and services, dispossession: Provided, further, That
belonging to the landholder-lessor shall be those the land-holder shall, at least one year
provided in Schedules "A", "B", and "C", which but not more than two years prior to the
shall apply upon approval of this Act and shall date of his petition to dispossess the
remain in force, unless the Secretary of tenant under this subsection, file notice
Agricultural and Natural Resources revises the with the court and shall inform the
same in accordance with Section fifty-two. tenant in wiring in a language or dialect
known to the latter of his intention to
Section 48. Loans and Interests. - Loans, cultivate the land himself, either
either in money or in kind, obtained by a tenant- personally or through the employment of
lessee from the landholder lessor shall be mechanical implements, together with a
payable at the time stipulated: Provided, certification of the Secretary of
however, That this shall not be construed as Agriculture and Natural Resources that
the land is suited for mechanization: be the duty of the Secretary of Agriculture and
Provided, further, That the dispossessed Natural Resources to:
tenant and the members of his
immediate household shall be preferred 1. Conduct such educational programs
in the employment of necessary as circumstances may require
laborers under the new set-up. adequately to acquaint tenants and
landholders with their rights and
(b) When the current tenant violates or responsibilities under this Act.
fails to comply with any of the terms and
conditions of the contract or any of the 2. Revise the rental rates provided for in
provisions of this Act: Provided, Schedules "A", and "B", whenever such
however, That this subsection shall not revision is made necessary by changes
apply when the tenant has substantially in values and prices, so that the rental
complied with the contract or with the rates shall conform to the standard of
provisions of this Act. fair rental value as defined in Section
5(m).
(c) The tenant's failure to pay the agreed
rental or to deliver the landholder's 3. Facilities the preparation and
share: Provided, however, That this registration of land- holder-tenant
shall not apply when the tenant's failure contracts through the distribution of
is caused by a fortuitous event or force appropriate printed forms and
majeure. instructions to guide the interested
parties in drafting and executing rental
(d) When the tenant uses the land for a agreements. The forms of contracts
purpose other than that specified by must bear the approval of the court.
agreement of the parties.
4. Conduct surveys and researches to
(e) When a share-tenant fails to follow determine the extent of compliance,
those proven farm practices which will adaptability to different crops and areas
contribute towards the proper care of and the fairness of this Act to all parties
the land and increased agricultural affected by its implementation.
production.
5. Submit an annual report to the
(f) When the tenant through negligence President containing an analysis
permits serious injury to the land which showing the progress made toward
will impair its productive capacity. attaining the objectives enumerated in
Section two of this Act and
(g) Conviction by a competent court of a recommendations concerning methods
tenant or any member of his immediate of improving the implementation and
family or farm household of a crime general effectiveness of this Act. Copies
against the landholder or a member of of this report shall be provided to
his immediate family. members of the Congress.

Section 51. Burden of Proof. - The burden of Section 53. Duties of Secretary of Justice. -
proof to show the existence of a lawful cause for The Secretary of Justice, through the Executive
the ejectment of a tenant shall rest upon the Judge of the Court, shall be responsible for
landholder. formulating a national enforcement program,
among other things, through the assignment of
PART V judges and personnel, which will insure the full
enforcement of the provisions of this Act.
SPECIAL PROVISIONS
Section 54. Representation by Counsel. - In
all cases wherein a tenant cannot afford to the
SECTION 52. Duties of the Secretary of represented by counsel, it shall be the duty of
Agriculture and Natural Resources. - It shall
the Public Defender of the Department of Labor The rental value of work animals and farm
to represent him, upon proper notification by the implements other than machinery, shall not
party concerned, or the court of competent exceed the allowable depreciation charges plus
jurisdiction shall assign or appoint counsel de six per cent (6%) interest per annum computed
oficio for the indigent tenant. on the market value of the said work animals
and farm implements not fixed in this Schedule
Section 55. Applicability of General Laws. - shall be those prevailing in the locality where the
The provisions of existing laws which are not said animals and implements are rented.
inconsistent herewith shall apply to the contracts
governed by this Act as well as to acts or Item Market Period of Allowable
omissions by either party against each other Value depreciation depreciat
during, and in connection with, their relationship. years

Section 56. Doubts to Be Solved in Favor of


Carabao P300.00 10 P30.00
the Tenant. - In the interpretation and
enforcement of this Act and other laws as well Bullock 600.00 7 85.91
as of the stipulations between the landholder Horse, native 150.00 8 18.75
and the tenant, the courts and administrative
officials shall solve all grave doubts in favor of Cattle 200.00 7 28.57
the tenant. Plow, iron 40.00 5 8.00
Plow wooden 25.00 2 12.50
Section 57. Penal Provision. - Violation of any
of the provisions of this Act shall be punished Harrow iron 18.00 5 3.60
with a fine not exceeding two thousand pesos or
Carreton (native 400.00 10 40.00
imprisonment not exceeding one year, or both in
cart)
the discretion of the Court.

Section 58. Separability of Provisions. - If for


any reason, any section or provision of this Act
shall be questioned in any court, and shall be SCHEDULE "B"
held to be unconstitutional or invalid, no other
section or provision of this Act shall be effected The rental value for farm machineries inclusive
thereby. of tractors, tractor equipment, engines, motors,
and pumps shall not exceed the allowable
Section 59. Repealing Provisions. - Public Act depreciation equal to one-tenth (1/10) of the
Numbered Four thousand fifty-four, as amended current market value plus interest at six per cent
by Republic Act Numbered Thirty-four, (6% per annum.
Commonwealth Act Numbered Fifty-three,
Commonwealth Act Numbered Four hundred
sixty-one as amended by Republic Act
Numbered Forty- four, and all laws, rules and
regulations inconsistent herewith are hereby SCHEDULE "C"
repealed.
The amounts to be charged by the landholder
Section 60. Effective Date. - This Act shall take when he performs services in the operation of
effect upon its approval. the farm enterprise shall not current the rates in
the locality where such services are rendered.
Approved: August 30, 1954

SCHEDULE "A"
REPUBLIC ACT No. 3844 Section 3. Composition of Code - In pursuance
of the policy enunciated in Section two, the
AN ACT TO ORDAIN THE AGRICULTURAL following are established under this Code:
LAND REFORM CODE AND TO INSTITUTE
LAND REFORMS IN THE PHILIPPINES, (1) An agricultural leasehold system to
INCLUDING THE ABOLITION OF TENANCY replace all existing share tenancy
AND THE CHANNELING OF CAPITAL INTO systems in agriculture;
INDUSTRY, PROVIDE FOR THE NECESSARY
IMPLEMENTING AGENCIES, APPROPRIATE (2) A declaration of rights for agricultural
FUNDS THEREFOR AND FOR OTHER labor;
PURPOSES
(3) An authority for the acquisition and
PRELIMINARY CHAPTER equitable distribution of agricultural land;

TITLE (4) An institution to finance the


DECLARATION OF POLICY AND acquisition and distribution of
COMPOSITION OF CODE agricultural land;

Section 1. Title - This Act shall be known as the (5) A machinery to extend credit and
Agricultural Land Reform Code. similar assistance to agriculture;

Section 2. Declaration of Policy - It is the policy (6) A machinery to provide marketing,


of the State: management, and other technical
services to agriculture;
(1) To establish owner-cultivatorship
and the economic family-size farm as (7) A unified administration for
the basis of Philippine agriculture and, formulating and implementing projects
as a consequence, divert landlord of land reform;
capital in agriculture to industrial
development;
(8) An expanded program of land
capability survey, classification, and
(2) To achieve a dignified existence for registration; and
the small farmers free from pernicious
institutional restraints and practices;
(9) A judicial system to decide issues
arising under this Code and other
(3) To create a truly viable social and related laws and regulations.
economic structure in agriculture
conducive to greater productivity and CHAPTER I
higher farm incomes; AGRICULTURAL LEASEHOLD SYSTEM

(4) To apply all labor laws equally and Section 4. Abolition of Agricultural Share
without discrimination to both industrial Tenancy - Agricultural share tenancy, as herein
and agricultural wage earners;
defined, is hereby declared to be contrary to
public policy and shall be abolished: Provided,
(5) To provide a more vigorous and That existing share tenancy contracts may
systematic land resettlement program continue in force and effect in any region or
and public land distribution; and locality, to be governed in the meantime by the
pertinent provisions of Republic Act Numbered
(6) To make the small farmers more Eleven hundred and ninety-nine, as amended,
independent, self-reliant and until the end of the agricultural year when the
responsible citizens, and a source of National Land Reform Council proclaims that all
genuine strength in our democratic the government machineries and agencies in
society. that region or locality relating to leasehold
envisioned in this Code are operating, unless agricultural lessee the right to continue working
such contracts provide for a shorter period or the on the landholding until such leasehold relation
tenant sooner exercise his option to elect the is extinguished. The agricultural lessee shall be
leasehold system: Provided, further, That in entitled to security of tenure on his landholding
order not to jeopardize international and cannot be ejected therefrom unless
commitments, lands devoted to crops covered authorized by the Court for causes herein
by marketing allotments shall be made the provided.
subject of a separate proclamation that
adequate provisions, such as the organization of Section 8. Extinguishment of Agricultural
cooperatives, marketing agreements, or other Leasehold Relation - The agricultural leasehold
similar workable arrangements, have been relation established under this Code shall be
made to insure efficient management on all extinguished by:
matters requiring synchronization of the
agricultural with the processing phases of such (1) Abandonment of the landholding
crops: Provided, furthermore, That where the without the knowledge of the agricultural
agricultural share tenancy contract has ceased
lessor;
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, (2) Voluntary surrender of the
therefore, null and void, and the tenant landholding by the agricultural lessee,
continues in possession of the land for written notice of which shall be served
cultivation, there shall be presumed to exist a three months in advance; or
leasehold relationship under the provisions of
this Code, without prejudice to the right of the (3) Absence of the persons under
landowner and the former tenant to enter into Section nine to succeed to the lessee, in
any other lawful contract in relation to the land the event of death or permanent
formerly under tenancy contract, as long as in incapacity of the lessee.
the interim the security of tenure of the former
tenant under Republic Act Numbered Eleven Section 9. Agricultural Leasehold Relation Not
hundred and ninety-nine, as amended, and as Extinguished by Death or Incapacity of the
provided in this Code, is not impaired: Provided, Parties - In case of death or permanent
finally, That if a lawful leasehold tenancy incapacity of the agricultural lessee to work his
contract was entered into prior to the effectivity landholding, the leasehold shall continue
of this Code, the rights and obligations arising between the agricultural lessor and the person
therefrom shall continue to subsist until modified who can cultivate the landholding personally,
by the parties in accordance with the provisions chosen by the agricultural lessor within one
of this Code. month from such death or permanent incapacity,
from among the following: (a) the surviving
Section 5. Establishment of Agricultural spouse; (b) the eldest direct descendant by
Leasehold Relation - The agricultural leasehold consanguinity; or (c) the next eldest descendant
relation shall be established by operation of law or descendants in the order of their age:
in accordance with Section four of this Code Provided, That in case the death or permanent
and, in other cases, either orally or in writing, incapacity of the agricultural lessee occurs
expressly or impliedly. during the agricultural year, such choice shall be
exercised at the end of that agricultural year:
Section 6. Parties to Agricultural Leasehold Provided, further, That in the event the
Relation - The agricultural leasehold relation agricultural lessor fails to exercise his choice
shall be limited to the person who furnishes the within the periods herein provided, the priority
landholding, either as owner, civil law lessee, shall be in accordance with the order herein
usufructuary, or legal possessor, and the person established.
who personally cultivates the same.
In case of death or permanent incapacity of the
Section 7. Tenure of Agricultural Leasehold agricultural lessor, the leasehold shall bind his
Relation - The agricultural leasehold relation legal heirs.
once established shall confer upon the
Section 10. Agricultural Leasehold Relation Not Section 14. Right of Pre-emption and
Extinguished by Expiration of Period, etc. - The Redemption Not Applicable to Land to be
agricultural leasehold relation under this Code Converted into Residential, Industrial and
shall not be extinguished by mere expiration of Similar Purposes - The right of pre-emption and
the term or period in a leasehold contract nor by redemption granted under Sections eleven and
the sale, alienation or transfer of the legal twelve of this Chapter cannot be exercised over
possession of the landholding. In case the landholdings suitably located which the owner
agricultural lessor sells, alienates or transfers bought or holds for conversion into residential,
the legal possession of the landholding, the commercial, industrial or other similar non-
purchaser or transferee thereof shall be agricultural purposes: Provided, however, That
subrogated to the rights and substituted to the the conversion be in good faith and is
obligations of the agricultural lessor. substantially carried out within one year from the
date of sale. Should the owner fail to comply
Section 11. Lessee's Right of Pre-emption - In with the above condition, the agricultural lessee
case the agricultural lessor decides to sell the shall have the right to repurchase under
landholding, the agricultural lessee shall have reasonable terms and conditions said
the preferential right to buy the same under landholding from said owner within one year
reasonable terms and conditions: Provided, That after the aforementioned period for conversion
the entire landholding offered for sale must be has expired: Provided, however, That the tenure
pre-empted by the Land Authority if the of one year shall cease to run from the time the
landowner so desires, unless the majority of the agricultural lessee petitions the Land Authority to
lessees object to such acquisition: Provided, acquire the land under the provisions of
further, That where there are two or more paragraph 11 of Section fifty-one.
agricultural lessees, each shall be entitled to
said preferential right only to the extent of the Section 15. Agricultural Leasehold Contract in
area actually cultivated by him. The right of pre- General - The agricultural lessor and the
emption under this Section may be exercised agricultural lessee shall be free to enter into any
within ninety days from notice in writing which kind of terms, conditions or stipulations in a
shall be served by the owner on all lessees leasehold contract, as long as they are not
affected. contrary to law, morals or public policy. A term,
condition or stipulation in an agricultural
Section 12. Lessee's Right of Redemption - In leasehold contract is considered contrary to law,
case the landholding is sold to a third person morals or public policy:
without the knowledge of the agricultural lessee,
the latter shall have the right to redeem the (1) If the agricultural lessee is required
same at a reasonable price and consideration: to pay a rental in excess of that which is
Provided, That the entire landholding sold must hereinafter provided for in this Chapter;
be redeemed: Provided, further, That where
these are two or more agricultural lessees, each (2) If the agricultural lessee is required
shall be entitled to said right of redemption only to pay a consideration in excess of the
to the extent of the area actually cultivated by fair rental value as defined herein, for
him. The right of redemption under this Section the use of work animals and/or farm
may be exercised within two years from the implements belonging to the agricultural
registration of the sale, and shall have priority lessor or to any other person; or
over any other right of legal redemption.
(3) If it is imposed as a condition in the
Section 13. Affidavit Required in Sale of Land agricultural leasehold contract: (a) that
Subject to Right of Pre-emption - No deed of the agricultural lessee is required to rent
sale of agricultural land under cultivation by an work animals or to hire farm implements
agricultural lessee or lessees shall be recorded from the agricultural lessor or a third
in the Registry of Property unless accompanied person, or to make use of any store or
by an affidavit of the vendor that he has given services operated by the agricultural
the written notice required in Section eleven of lessor or a third person; or (b) that the
this Chapter or that the land is not worked by an agricultural lessee is required to perform
agricultural lessee. any work or render any service other
than his duties and obligations provided denounced or impugned within thirty days after
in this Chapter with or without its registration.
compensation; or (c) that the agricultural
lessee is required to answer for any fine, Section 18. Registration of Leasehold Contract -
deductions and/or assessments. The municipal treasurer shall, upon receipt of his
copy of the contract, require the agricultural
Any contract by which the agricultural lessee is lessee and agricultural lessor to present their
required to accept a loan or to make payment respective copies of the contract, and shall
therefor in kind shall also be contrary to law, cause to be annotated thereon the date, time
morals or public policy. and place of registration as well as its entry or
registration number.
Section 16. Nature and Continuity of Conditions
of Leasehold Contract - In the absence of any Section 19. Registry of Agricultural Leasehold
agreement as to the period, the terms and Contracts - The Municipal Treasurer of the
conditions of a leasehold contract shall continue municipality wherein the land is situated shall
until modified by the parties: Provided, That in keep a record of all such contracts drawn and
no case shall any modification of its terms and executed within his jurisdiction, to be known as
conditions prejudice the right of the agricultural "Registry of Agricultural Leasehold Contracts".
lessee to the security of his tenure on the He shall keep this registry together with a copy
landholding: Provided, further, That in case of a of each contract entered therein, and make
contract with a period an agricultural lessor may annotations on said registry of all subsequent
not, upon the expiration of the period increase acts relative to each contract, such as its
the rental except in accordance with the renewal, novation, cancellation, etc. No
provisions of Section thirty-four. registration fees or documentary stamps shall be
required in the registration of said contracts or of
Section 17. Form and Registration of Contract - any subsequent acts relative thereto.
Should the parties decide to reduce their
agreement into writing, the agricultural leasehold Section 20. Memorandum of Loans - No
contract shall be drawn in quadruplicate in a obligation to pay money on account of loans
language or dialect known to the agricultural including interest thereon obtained by the
lessee and signed or thumb-marked both by the agricultural lessee from the agricultural lessor or
agricultural lessee personally and by the his representative shall be enforceable unless
agricultural lessor or his authorized the same or a memorandum thereof be in writing
representative, before two witnesses, to be in a language or dialect known to the agricultural
chosen by each party. If the agricultural lessee lessee, and signed or thumb-marked by him, or
does not know how to read, the contents of the by his agent.
document shall be read and explained to him by
his witness. The contracting parties shall Section 21. Exemption from Lien and/or
acknowledge the execution of the contract Execution - The following shall be exempt from
before the justice of the peace of the lien and/or execution against the agricultural
municipality where the land is situated. No fees lessee:
or stamps of any kind shall be required in the
preparation and acknowledgment of the
(1) Twenty-five per centum of the entire
instrument. Each of the contracting parties shall
produce of the land under cultivation;
retain a copy of the contract. The justice of the
and
peace shall cause the third copy to be delivered
to the municipal treasurer of the municipality
where the land is located and the fourth copy to (2) Work animals and farm implements
the Office of the Agrarian Counsel. belonging to the agricultural lessee:
Provided, That their value does not
exceed one thousand pesos. But no
Except in case of mistake, violence, intimidation, article or species of property mentioned
undue influence, or fraud, an agricultural
in this Section shall be exempt from
contract reduced in writing and registered as
execution issued upon a judgment
hereinafter provided, shall be conclusive
recovered for its price or upon a
between the contracting parties, if not
judgment of foreclosure of a mortgage Section 26. Obligations of the Lessee - It shall
thereon. be the obligation of the agricultural lessee:

Section 22. Use of Accepted Standards of (1) To cultivate and take care of the
Weights and Measures - In all transactions farm, growing crops, and other
entered into between the agricultural lessee and improvements on the landholding as a
the agricultural lessor concerning agricultural good father of a family and perform all
products the official or, upon agreement of the the work therein in accordance with
parties, the accepted standards of weights and proven farm practices;
measures shall be used.
(2) To inform the agricultural lessor
Section 23. Rights of Agricultural Lessee in within a reasonable time of any trespass
General - It shall be the right of the agricultural committed by third persons upon the
lessee: farm, without prejudice to his direct
action against the trespasser;
(1) To have possession and peaceful
enjoyment of the land; (3) To take reasonable care of the work
animals and farm implements delivered
(2) To manage and work on the land in to him by the agricultural lessor and see
a manner and method of cultivation and that they are not used for purposes
harvest which conform to proven farm other than those intended or used by
practices; another without the knowledge and
consent of the agricultural lessor:
(3) To mechanize all or any phase of his Provided, however, That if said work
animals get lost or die, or said farm
farm work; and
implements get lost or are destroyed,
through the negligence of the
(4) To deal with millers and processors agricultural lessee, he shall be held
and attend to the issuance of quedans responsible and made answerable
and warehouse receipts for the produce therefor to the extent of the value of the
due him. work animals and/or farm implements at
the time of the loss, death or
Section 24. Right to a Home Lot - The destruction;
agricultural lessee shall have the right to
continue in the exclusive possession and (4) To keep his farm and growing crops
enjoyment of any home lot he may have attended to during the work season. In
occupied upon the effectivity of this Code, which case of unjustified abandonment or
shall be considered as included in the leasehold. neglect of his farm, any or all of his
expected produce may, upon order of
Section 25. Right to be Indemnified for Labor - the Court, be forfeited in favor of the
The agricultural lessee shall have the right to be agricultural lessor to the extent of the
indemnified for the cost and expenses incurred damage caused thereby;
in the cultivation, planting or harvesting and
other expenses incidental to the improvement of (5) To notify the agricultural lessor at
his crop in case he surrenders or abandons his least three days before the date of
landholding for just cause or is ejected harvesting or, whenever applicable, of
therefrom. In addition, he has the right to be threshing; and
indemnified for one-half of the necessary and
useful improvements made by him on the
landholding: Provided, That these improvements (6) To pay the lease rental to the
agricultural lessor when it falls due.
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 Section 27. Prohibitions to Agricultural Lessee -
determined for the purpose of the indemnity for It shall be unlawful for the agricultural lessee:
improvements.
(1) To contract to work additional (5) Voluntary surrender due to
landholdings belonging to a different circumstances more advantageous to
agricultural lessor or to acquire and him and his family.
personally cultivate an economic family-
size farm, without the knowledge and Section 29. Rights of the Agricultural Lessor - It
consent of the agricultural lessor with shall be the right of the agricultural lessor:
whom he had entered first into
household, if the first landholding is of (1) To inspect and observe the extent of
sufficient size to make him and the compliance with the terms and
members of his immediate farm
conditions of their contract and the
household fully occupied in its
provisions of this Chapter;
cultivation; or
(2) To propose a change in the use of
(2) To employ a sub-lessee on his the landholding to other agricultural
landholding: Provided, however, That in
purposes, or in the kind of crops to be
case of illness or temporary incapacity
planted: Provided, That in case of
he may employ laborers whose services
disagreement as to the proposed
on his landholding shall be on his
change, the same shall be settled by the
account. Court according to the best interest of
the parties concerned: Provided, further,
Section 28. Termination of Leasehold by That in no case shall an agricultural
Agricultural Lessee During Agricultural Year - lessee be ejected as a consequence of
The agricultural lessee may terminate the the conversion of the land to some other
leasehold during the agricultural year for any of agricultural purpose or because of a
the following causes: change in the crop to be planted;

(1) Cruel, inhuman or offensive, (3) To require the agricultural lessee,


treatment of the agricultural lessee or taking into consideration his financial
any member of his immediate farm capacity and the credit facilities
household by the agricultural lessor or available to him, to adopt in his farm
his representative with the knowledge proven farm practices necessary to the
and consent of the lessor; conservation of the land, improvement
of its fertility and increase of its
(2) Non-compliance on the part of the productivity: Provided, That in case of
agricultural lessor with any of the disagreement as to what proven farm
obligations imposed upon him by the practice the lessee shall adopt, the
provisions of this Code or by his contact same shall be settled by the Court
with the agricultural lessee; according to the best interest of the
parties concerned; and
(3) Compulsion of the agricultural lessee
or any member of his immediate farm (4) To mortgage expected rentals.
household by the agricultural lessor to
do any work or render any service not in Section 30. Obligations of the Agricultural
any way connected with farm work or Lessor - It shall be the obligation of the
even without compulsion if no agricultural lessor:
compensation is paid;
(1) To keep the agricultural lessee in
(4) Commission of a crime by the peaceful possession and cultivation of
agricultural lessor or his representative his landholding; and
against the agricultural lessee or any
member of his immediate farm
(2) To keep intact such permanent
household; or
useful improvements existing on the
landholding at the start of the leasehold
relation as irrigation and drainage
system and marketing allotments, which to the resultant increase in production: Provided,
in the case of sugar quotas shall refer That if the agricultural lessor refuses to bear the
both to domestic and export quotas, expenses of construction the agricultural lessee
provisions of existing laws to the or lessees may shoulder the same, in which
contrary notwithstanding. case the former shall not be entitled to an
increase in rental and shall, upon the termination
Section 31. Prohibitions to the Agricultural of the relationship, pay the lessee or his heir the
Lessor - It shall be unlawful for the agricultural reasonable value of the improvement at the time
lessor: of the termination: Provided, further, That if the
irrigation system constructed does not work, it
shall not be considered as an improvement
(1) To dispossess the agricultural lessee
within the meaning of this Section.
of his landholding except upon
authorization by the Court under Section
thirty-six. Should the agricultural lessee Section 33. Manner, Time and Place of Rental
be dispossessed of his landholding Payment - The consideration for the lease of the
without authorization from the Court, the land shall be paid in an amount certain in money
agricultural lessor shall be liable for or in produce, or both, payable at the place
damages suffered by the agricultural agreed upon by the parties immediately after
lessee in addition to the fine or threshing or processing if the consideration is in
imprisonment prescribed in this Code for kind, or within a reasonable time thereafter, if
unauthorized dispossession; not in kind.

(2) To require the agricultural lessee to In no case shall the agricultural lessor require
assume, directly or indirectly, the the agricultural lessee to file a bond, make a
payment of the taxes or part thereof deposit or pay the rental in advance, in money
levied by the government on the or in kind or in both, but a special and
landholding; preferential lien is hereby created in favor of the
agricultural lessor over such portion of the gross
(3) To require the agricultural lessee to harvest necessary for the payment of the rental
assume, directly or indirectly, any part of due in his favor.
the rent, "canon" or other consideration
which the agricultural lessor is under Section 34. Consideration for the Lease of
obligation to pay to third persons for the Riceland and Lands Devoted to Other Crops -
use of the land; 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
(4) To deal with millers or processors
the average normal harvest during the three
without written authorization of the
agricultural years immediately preceding the
lessee in cases where the crop has to
date the leasehold was established after
be sold in processed form before
payment of the rental; or deducting the amount used for seeds and the
cost of harvesting, threshing, loading, hauling
and processing, whichever are applicable:
(5) To discourage, directly or indirectly, Provided, That if the land has been cultivated for
the formation, maintenance or growth of a period of less than three years, the initial
unions or organizations of agricultural consideration shall be based on the average
lessees in his landholding, or to initiate, normal harvest during the preceding years when
dominate, assist or interfere in the the land was actually cultivated, or on the
formation or administration of any such harvest of the first year in the case of newly-
union or organization. cultivated lands, if that harvest is normal:
Provided, further, That after the lapse of the first
Section 32. Cost of Irrigation System - The cost three normal harvests, the final consideration
of construction of a permanent irrigation system, shall be based on the average normal harvest
including distributory canals, may be borne during these three preceding agricultural years:
exclusively by the agricultural lessor who shall Provided, furthermore, That in the absence of
be entitled to an increase in rental proportionate any agreement between the parties as to the
rental, the maximum allowed herein shall apply: year after the dispossession of the
Provided, finally, That if capital improvements tenant, it shall be presumed that he
are introduced on the farm not by the lessee to acted in bad faith and the tenant shall
increase its productivity, the rental shall be have the right to demand possession of
increased proportionately to the consequent the land and recover damages for any
increase in production due to said loss incurred by him because of said
improvements. In case of disagreement, the dispossessions.
Court shall determine the reasonable increase in
rental. (2) The agricultural lessee failed to
substantially comply with any of the
Section 35. Exemption from Leasehold of Other terms and conditions of the contract or
Kinds of Lands - Notwithstanding the provisions any of the provisions of this Code unless
of the preceding Sections, in the case of his failure is caused by fortuitous event
fishponds, saltbeds, and lands principally or force majeure;
planted to citrus, coconuts, cacao, coffee,
durian, and other similar permanent trees at the (3) The agricultural lessee planted crops
time of the approval of this Code, the or used the landholding for a purpose
consideration, as well as the tenancy system other than what had been previously
prevailing, shall be governed by the provisions agreed upon;
of Republic Act Numbered Eleven hundred and
ninety-nine, as amended.
(4) The agricultural lessee failed to
adopt proven farm practices as
Section 36. Possession of Landholding; determined under paragraph 3 of
Exceptions - Notwithstanding any agreement as Section twenty-nine;
to the period or future surrender, of the land, an
agricultural lessee shall continue in the
(5) The land or other substantial
enjoyment and possession of his landholding
permanent improvement thereon is
except when his dispossession has been
substantially damaged or destroyed or
authorized by the Court in a judgment that is has unreasonably deteriorated through
final and executory if after due hearing it is the fault or negligence of the agricultural
shown that:
lessee;

(1) The agricultural lessor-owner or a


(6) The agricultural lessee does not pay
member of his immediate family will the lease rental when it falls due:
personally cultivate the landholding or Provided, That if the non-payment of the
will convert the landholding, if suitably
rental shall be due to crop failure to the
located, into residential, factory, hospital
extent of seventy-five per centum as a
or school site or other useful non-
result of a fortuitous event, the non-
agricultural purposes: Provided; That
payment shall not be a ground for
the agricultural lessee shall be entitled dispossession, although the obligation
to disturbance compensation equivalent to pay the rental due that particular crop
to five years rental on his landholding in
is not thereby extinguished; or
addition to his rights under Sections
twenty-five and thirty-four, except when
the land owned and leased by the (7) The lessee employed a sub-lessee
agricultural lessor, is not more than five on his landholding in violation of the
hectares, in which case instead of terms of paragraph 2 of Section twenty-
disturbance compensation the lessee seven.
may be entitled to an advanced notice of
at least one agricultural year before Section 37. Burden of Proof - The burden of
ejectment proceedings are filed against proof to show the existence of a lawful cause for
him: Provided, further, That should the the ejectment of an agricultural lessee shall rest
landholder not cultivate the land himself upon the agricultural lessor.
for three years or fail to substantially
carry out such conversion within one
Section 38. Statute of Limitations - An action to For the purpose of this and the preceding
enforce any cause of action under this Code Section, it shall be the duty of the farm employer
shall be barred if not commenced within three or manager to allow the farm workers, labor
years after such cause of action accrued. leaders, organizers, advisers and helpers
complete freedom to enter and leave the farm,
CHAPTER II plantation or compound at the portion of the
BILL OF RIGHTS FOR AGRICULTURAL same where said farm workers live or stay
LABOR permanently or temporarily.

Section 39. Rights for Agricultural Labor - To Section 42. Right to Minimum Wage -
enable the farm workers to enjoy the same Notwithstanding any provision of law or contract
rights and opportunities in life as industrial to the contrary, farm workers in farm enterprises
workers, they shall enjoy the following: shall be entitled to at least P3.50 a day for eight
hours' work: Provided, That this wage may,
however, be increased by the Minimum Wage
(1) Right to self-organization;
Board as provided for in Republic Act Numbered
Six hundred and two.
(2) Right to engage in concerted
activities;
Section 43. Right to Eight Hours' Work -
Notwithstanding the provision of existing laws to
(3) Right to minimum wage; the contrary, farm workers shall not be required
to work for more than eight hours daily. When
(4) Right to work for not more than eight the work is not continuous, the time during which
hours; the farm worker is not working and can leave his
working place and can rest completely shall not
(5) Right to claim for damages for death be counted.
or injuries sustained while at work;
Work may be performed beyond eight hours a
(6) Right to compensation for personal day in case of actual or impending emergencies
injuries, death or illness; and caused by serious accidents, fire, flood,
typhoon, epidemic, or other disaster or calamity,
(7) Right against suspension or lay-off. or in case of urgent work to be performed on
farm machines, equipment or installations in
order to avoid a serious loss which the farm
Section 40. Right to Self-Organization - The
employer or manager would otherwise suffer, or
farm workers shall have the right to self-
some other just cause of a similar nature, but in
organization and to form, join or assist farm
all such cases the farm workers shall be entitled
workers' organizations of their own choosing for
to receive compensation for the overtime work
the purpose of collective bargaining through
performed at the same rate as their regular
representatives of their own choosing: Provided,
wages, plus at least twenty-five per centum
That this right shall be exercised in a manner as
additional, based on their daily wages.
will not unduly interfere with the normal farm
operations. Individuals employed as supervisors
shall not be eligible for membership in farm No farm employer or manager shall compel a
workers' organizations under their supervision farm worker to work during Sundays and legal
but may form separate organizations of their holidays: Provided, however, That should the
own. farm worker agree to work on said days, he shall
be paid an additional sum of at least twenty-five
per centum of his regular compensation;
Section 41. Right to Engage in Concerted
Provided, further, That the farm employer or
Activities - The farm workers shall also have the
manager shall not be held liable for any claim for
right to engage in concerted activities for the
overtime work which he had not previously
purpose of collective bargaining and other
authorized, except if the work rendered was to
mutual aid or protection.
avoid damages to crops, produce, work animals
or implements, buildings or the like.
Any agreement or contract between the farm and farm labor and the functions of the
employer or manager and the farm worker Department of Labor and other agencies.
contrary to the provisions of this Section shall be
null and void. Section 48. Exceptions to Preceding Section -
The preceding Sections of this Chapter, except
Section 44. Right of Action for Damages - Sections forty, forty-one, forty-two and forty-
Notwithstanding the provisions of existing laws three shall not apply to farm enterprises
to the contrary, Act Numbered Eighteen hundred comprising not more than twelve hectares.
and seventy-four, as amended, entitled "An Act
to extend and regulate the responsibility of CHAPTER III
employers for personal injuries and death LAND AUTHORITY
suffered by their employees while at work", shall
apply to farm workers insofar as it may be
applicable.
ARTICLE I
Section 45. Right to Compensation for Personal Organization and Functions of the Land
Injuries, Death, or Illness - Notwithstanding the Authority
provisions of existing laws to the contrary, Act
Numbered Thirty-four hundred and twenty-eight, Section 49. Creation of the Land Authority - For
as amended, entitled "An Act prescribing the
the purpose of carrying out the policy of
compensation to be received by employees for
establishing owner-cultivatorship and the
personal injuries, death or illness contracted in
economic family-size farm as the basis of
the performance of their duties", shall apply to
Philippine agriculture and other policies
farm workers insofar as it may be applicable. enunciated in this Code, there is hereby created
a Land Authority, hereinafter called the
Section 46. Right Against Suspension of Lay- Authority, which shall be directly under the
off - The landowner, farm employer or farm control and supervision of the President of the
manager shall not suspend, lay-off or dismiss Philippines. The Authority shall be headed by a
any farm worker without just cause from the time Governor who shall be appointed by the
a farm workers' organization or group of farm President with the consent of the Commission
workers has presented to the landowner a on Appointments.
petition or complaint regarding any matter likely
to cause a strike or lockout and a copy thereof
He shall be assisted by two Deputy Governors
furnished with the Department of Labor, or while who shall be appointed by the President with the
an agricultural dispute is pending before the consent of the Commission on Appointments,
Court of Agrarian Relations. If it is proved during
each of whom shall head such operating
the said period that a worker has been
departments as may be set up by the Governor.
suspended or dismissed without just cause, the
The Governor and the Deputy Governors shall
Court may direct the reinstatement and the
hold office for five years.
payment of his wage during the time of his
suspension or dismissal or of any sum he should
have received had he not been suspended or Section 50. Qualifications and Compensation of
dismissed, without prejudice to any criminal Governors - No person shall be appointed
liability of the landowner, farm employer or farm Governor or Deputy Governor of the Authority
manager as prescribed by Section twenty-four of unless he is a natural-born citizen of the
Commonwealth Act Numbered One hundred Philippines, with adequate background and
and three, as amended. experience in land reform here and/or
elsewhere, and at least thirty-five years of age.
Section 47. Other Applicable Provisions - All
other existing laws applicable to non-agricultural The Governor shall receive an annual
workers in private enterprises which are not compensation of twenty-four thousand pesos;
inconsistent with this Code shall likewise apply the Deputy Governors shall each receive an
to farm workers, farm labor organizations and annual compensation of eighteen thousand
agrarian disputes as defined in this Code, as pesos.
well as to relations between farm management
Section 51. Powers and Functions - It shall be necessary for the
the responsibility of the Authority: implementation of the provisions
of this Code, the following order
(1) To initiate and prosecute of priority shall be observed:
expropriation proceedings for the
acquisition of private agricultural lands 1. idle or abandoned
as defined in Section one hundred sixty- lands;
six of Chapter XI of this Code for the
purpose of subdivision into economic 2. those whose area
family-size farm units and resale of said exceeds 1,024
farm units to bona fide tenants, hectares;
occupants and qualified farmers:
Provided, That the powers herein 3. those whose area
granted shall apply only to private exceeds 500 hectares
agricultural lands subject to the terms
but is not more than
and conditions and order of priority
1,024 hectares;
hereinbelow specified:
4. those whose area
a. all idle or abandoned private exceeds 144 hectares
agricultural lands, except those
but is not more than 500
held or purchased within one
hectares; and
year from the approval of this
Code by private individuals or
corporations for the purpose of 5. those whose area
resale and subdivision into exceeds 75 hectares
economic family-size farm units but is not more than 144
in accordance with the policies hectares.
enunciated in this Code:
Provided, That the subdivision (2) To help bona fide farmers without
and resale shall be substantially lands or agricultural owner-cultivators of
carried out within one year from uneconomic-size farms to acquire and
the approval of this Code; own economic family-size farm units;

b. all private agricultural lands (3) To administer and dispose of


suitable for subdivision into agricultural lands of the public domain
economic family-size farm units, under the custody and administration of
owned by private individuals or the National Resettlement and
corporations worked by lessees, Rehabilitation Administration prior to the
no substantial portion of whose approval of this Code and such other
landholding in relation to the public agricultural lands as may
area sought to be expropriated, hereafter be reserved by the President
is planted to permanent crops of the Philippines for resettlement and
under labor administration, in sale, in accordance with such terms and
excess of seventy-five hectares conditions as are set forth under this
except all private agricultural Chapter: Provided, That the exercise of
lands under labor administration the authority granted herein, as well as
and lands acquired under in the preceding sub-paragraph, shall
Section seventy-one of this not contravene public policy on the
Code; and permanency of forest reserves or other
laws intended for the preservation and
c. in expropriating private conservation of public forests;
agricultural lands declared by
the National Land Reform (4) To develop plans and initiate actions
Council or by the Land Authority for the systematic opening of alienable
within a land reform district to be and disposable lands of the public
domain for speedy, distribution to and of settlers and farmers on lands under
development by deserving and qualified its administration;
persons or corporations;
(11) To acquire for agricultural lessees
(5) To recommend to the President, exercising their right of pre-emption
from time to time after previous under Chapter I of this Code, any
consultation with the Secretary of landholdings mentioned thereunder;
Agriculture and Natural Resources, what
portion of the alienable or disposable (12) To conduct land capability survey
public lands shall be reserved for and classification of the entire country
settlement or disposition under this and print maps;
chapter;
(13) To make such arrangements with
(6) To give economic family-size farms the Land Bank with respect to titles of
to landless citizens of the Philippines agricultural lands of the public domain
who need, deserve, and are capable of under its administration as will be
cultivating the land personally, through necessary to carry out the objectives of
organized resettlement, under the terms this Code;
and conditions the Authority may
prescribe, giving priority to qualified and
(14) To expropriate home lots occupied
deserving farmers in the province where
by agricultural lessees outside their
such lands are located;
landholdings for resale at cost to said
agricultural lessees; and
(7) To reclaim swamps and marshes,
obtain titles thereto whenever feasible
(15) To submit to the President of the
and subdivide them into economic
Philippines and to both Houses of
family-size farms for distribution to
Congress through their presiding
deserving and qualified farmers; officers, to the Secretary of Finance and
to the Auditor General within sixty days
(8) To undertake measures which will of the close of the fiscal year, an annual
insure the early issuance of titles to report showing its accomplishments
persons or corporations who have during the year; the expropriation
actually settled and cultivated proceedings it has undertaken; the
disposable alienable lands of the public expenditures it has incurred and other
domain; financial transactions undertaken with
respect thereto.
(9) To survey, subdivide and set aside
lands or areas of landholdings under its Section 52. Appointment of Subordinate
administration for economic family-size Officials and Employees - The Governor shall
farms, large-scale farm operations, town organize the personnel in such departments,
sites, roads, parks, government centers divisions and sections of the Authority as will
and other civic improvements as insure their maximum efficiency. He shall
circumstances may warrant and to appoint, subject to civil service rules and
submit subdivision survey plans regulations, fix the compensation, subject to
conducted either by the government or WAPCO rules and regulations, and determine
private surveyors on parcels of lands the duties of subordinate officials and
under its administration for verification employees as the exigencies of the service may
and approval either by the Director of require.
Lands or by the Land Registration
Commission; ARTICLE II
Expropriation of Private Agricultural Lands
(10) To inform the Agricultural
Productivity Commission and the Office Section 53. Compulsory Purchase of
of the Agrarian Counsel of the problems Agricultural Lands - The Authority shall, upon
petition in writing of at least one-third of the the Land Bank and pursuant to an arrangement
lessees and subject to the provisions of Chapter herein authorized.
VII of this Code, institute and prosecute
expropriation proceedings for the acquisition of Section 57. Duty of Court in Expropriation
private agricultural lands and home lots Proceedings - In expropriation proceedings, it
enumerated under Section fifty-one. In the event shall be the duty of the Court to include in its
a landowner agrees to sell his property under resolution or order of expropriation a provision
the terms specified in this Chapter and the that the Land Authority shall, after taking
National Land Reform Council finds it suitable possession of the land and after the subdivision
and necessary to acquire such property, a joint thereof, allow the Land Bank to have the title
motion embodying the agreement, including the thereto for the purpose of paying the owner the
valuation of the property, shall be submitted by just compensation therefor.
the Land Authority and the land-owner to the
Court for approval: Provided, That in such case, Section 58. Issuance of Certificates of Title for
any person qualified to be a beneficiary of such Parcel or Lot - After the payment of just
expropriation or purchase may object to the
compensation on the land expropriated the Land
valuation as excessive, in which case the Court
Bank shall cause the issuance of separate
shall determine the just compensation in
certificates of titles for each parcel or lot in
accordance with Section fifty-six of this Code.
accordance with the subdivision survey made
under Section fifty-five.
Section 54. Possession of the Land;
Procedure - The Authority, after commencing
Section 59. Prohibition Against Alienation and
the expropriation suit, may take immediate Ejectment - Upon the filing of the petition
possession of the land upon deposit with the
referred to in Section fifty-three the landowner
Court that has acquired jurisdiction over the may not alienate any portion of the land covered
expropriation proceedings in accordance with
by such petition except in pursuance of the
the Rules of Court, of money, and bonds of the
provisions of this Code, or enter into any form of
Land Bank, in accordance with the proportions
contract to defeat the purposes of this Code,
provided for under Section eighty of this Code,
and no ejectment proceedings against any
equal to the value as determined by the Court in lessee or occupant of the land covered by the
accordance with the provisions of Section fifty- petition shall be instituted or prosecuted until it
six hereof.
becomes certain that the land shall not be
acquired by the Authority.
Section 55. Expeditious Survey and
Subdivision - Immediately after the Authority Section 60. Disposition of Expropriated Land -
takes possession of lands to be acquired by it After separate certificates of titles have been
under this Code, it shall undertake a subdivision
issued in accordance with Section fifty-eight, the
survey of the land into economic family-size
Land Authority, on behalf of the Republic of the
farms which shall be immediately assigned to
Philippines and in representation of the Land
beneficiaries selected in accordance with
Bank as the financing agency, shall allot and sell
Section one hundred and twenty-eight subject to each parcel or lot to a qualified beneficiary
such rules and regulations as it may prescribe. selected under Section fifty-five of this Code,
subject to uniform terms and conditions imposed
Section 56. Just Compensation - In determining by the Land Bank: Provided, That the resale
the just compensation of the land to be shall be at cost which shall mean the purchase
expropriated pursuant to this Chapter, the Court, price not more than six per centum per annum,
in land under leasehold, shall consider as a which shall cover administrative expenses, and
basis, without prejudice to considering other actual expenses for subdivision, surveying, and
factors also, the annual lease rental income registration: Provided, further, That such cost
authorized by law capitalized at the rate of six shall be paid on the basis of an amortization
per centum per annum. plan not exceeding twenty-five years at the
option of the beneficiary.
The owner of the land expropriated shall be paid
in accordance with Section eighty of this Act by In case some agricultural lessees working
portions of agricultural lands acquired by the
government under this Code prefer to remain as lending institution or individual for an amount not
lessees thereof, which preference shall be exceeding his equity on said landholding upon a
expressed in writing and attested by a guaranty by the Land Bank.
representative of the Office of Agrarian Counsel,
the resale and redistribution to them shall be Section 63. Inscription of Specific Prohibition
deferred until such time that such lessees are Against Resale and Subdivision of Landholding -
ready and willing to assume the obligations and Certificates of titles of landholdings acquired by
responsibilities of independent owners, which the Land Authority and resold to purchasers
shall be manifested by a written notice to this shall contain therein a specific inscription
effect by the lessees and which shall oblige the prohibiting further subdivision and the resale,
Land Authority forthwith to allot and sell such transfer or encumbrance of said landholdings
portions to such lessees under the same uniform except as provided in the preceding Section.
terms and conditions. Pending the sale, such
lessees shall continue to work on their Section 64. Exemption from Attachment - Lands
landholdings and receive the produce thereof, acquired under the provisions of this Chapter
subject, however, to the requirement that they
shall be exempt from execution and attachment,
pay the Land Bank the allowable rental
except when the land itself is the property
established in Section thirty-four. The Land Bank
mortgaged, in accordance with Section sixty-two
shall apply the rental to the six percent added to
of this Code.
the acquisition price and credit the balance to
the acquisition cost in the name of the lessee as
partial payment for the land. Section 65. Precedence of Expropriation
Cases - Expropriation cases filed by the
Authority under provisions of this Chapter shall
The Land Authority shall administer said parcels
take precedence over all other civil cases
of land during the period they are under lease. pending before the Court and shall be
Competent management and adequate
terminated within a period not exceeding six
production credit shall be provided in
months from the date of filing.
accordance with the program developed by the
Land Reform Project Team for such area.
ARTICLE III
Distribution of Agricultural Lands of the
Section 61. Organization of Cooperative
Public Domain
Associations - For the purpose of more efficient
management, adoption of modern farm methods
and techniques, and spreading risk, either Section 66. Title to Public Agricultural Land -
through diversification of farm projects or mutual Upon reservation by the President of the
assumption of risks the farmer beneficiaries may Philippines of public agricultural land available
organize themselves into cooperative for disposition by the Land Authority, such land
associations with the advice or assistance of the shall be surveyed, titled and transferred to the
Agricultural Productivity Commission and in Land Bank, which shall reduce said title into
accordance with the guidelines established by individual titles for specific parcels or lots in
said Commission for such associations. accordance with the subdivision survey
conducted by the Land Authority under
paragraph 9 of Section fifty-one: Provided,
Section 62. Limitation on Land Rights - Except
however, That existing laws governing the
in case of hereditary succession by one heir,
acquisition of public lands shall have been
landholdings acquired under this Code may not
complied with.
be resold, mortgaged, encumbered or
transferred until after the lapse of ten years from
the date of full payment and acquisition and after The Land Authority shall thereupon distribute in
such ten-year period, any transfer, sale or accordance with the provisions of this Code,
disposition may be made only in favor of each parcel or lot, subject to the terms and
persons qualified to acquire economic family- conditions of the Land Bank, to a beneficiary
size farm units in accordance with the provisions selected pursuant to Section seventy-one or in
of this Code: Provided, That a purchaser who accordance with paragraph 3 of Section fifty-
acquired his landholding under a contract to sell one, to a beneficiary selected pursuant to
may secure a loan on the same from any private paragraph 3 of Section one hundred twenty-
eight.
Section 67. Census of Settlements - The Health, the Bureau of Public Schools and other
Authority shall take a census of all settlements pertinent agencies of the Government, in
already made or started by farmers on their own providing services necessary for the proper
initiative on public agricultural lands, forest establishment of community facilities.
lands, and on private titled lands which had
been cleared, occupied and cultivated wholly or Section 71. Power of the Land Authority to Sell
partially by them, with or without legal sanction. to Holders of Bonds Issued to Former
The census shall include, among other things, Landowners Whose Lands Have Been
the bona fide character of the settlements, the Purchased for Redistribution - The Land
character of the settlers or farmers, the exact Authority shall sell, for a price not less than the
status of the lands settled, the feasibility of appraised value, any portion not exceeding one
enlarging the settlements, particularly in hundred forty-four hectares in the case of
connection with the resources of the land individuals or one thousand twenty-four hectares
occupied and the neighboring areas, actual and in the case of corporations of the public
potential accessibility to markets, as well as agricultural lands transferred to the Land Bank
strategic location of the settlement with respect which is suitable for large-scale farm operations
to national security. to any holder, who is qualified to acquire
agricultural lands through purchase, of bonds
Section 68. Assistance to Settlers in issued to former landowners whose lands have
Transporting Themselves and Their been purchased for redistribution under this
Belongings - The Authority may, in certain Code, subject to the condition that the purchaser
projects, assist settlers in transporting shall, within two years after acquisition, place
themselves, their belongings, work animals and under cultivation at least thirty per centum of the
farm equipment, if any, from the communities entire area under plantation administration and
from which they are migrating to the settlement the remaining seventy per centum within five
areas reserved for the purpose and for years from the date of acquisition. The Governor
subsistence necessary until credit can be of the Land Authority shall issue the title of said
provided by government financing agencies, or land upon showing that the purchaser has
by any other credit institution by loaning to them begun the development and cultivation of his
the full amount required for such purposes. land under plantation administration: Provided,
These loans from the Land Authority shall be That public agricultural land sold as hereinabove
non-interest bearing, shall constitute a lien upon specified shall not be the object of any
the land, and shall be amortized over a period of expropriation as long as the same shall be
ten years, payable annually beginning with the developed and cultivated for large-scale
end of the third year, after the date of arrival in production under farm labor management,
the settlement areas, subject to the right of the except as allowed by the Constitution.
borrower to pay in the full at any time prior to the
maturity of the loan. The selling price of the portion of the public
agricultural land sold under this Section shall be
Section 69. Assistance to Settlers in Securing credited to the Government's subscription to the
Equipment - The Authority may assist the Land Bank. As payment for the land sold under
settlers in securing equipment, supplies and this Section, the Land Bank shall accept as sole
materials needed; or assist the cooperative instruments of payment the bonds issued
associations of the new settlers in securing the pursuant to Section seventy-six. Issued bonds
most advantageous prices or terms on farm accepted as payment for the land sold shall be
implements and supplies needed. cancelled to the extent of the amount paid.

Section 70. Providing Housing and All sales under this Code shall be subject to the
Accommodations to Settlers - The Authority may provision of Chapter V of the Public Land Act
help provide housing and other accommodations covering sales of public agricultural lands insofar
for the new settlers upon their arrival in the as they are not inconsistent with the provisions
settlement areas by the stationing them in of this Code.
properly surveyed and subdivided lots reserved
for the purpose: help them organize community Section 72. Duplicate Records to be Furnished
activities; and cooperate with the Bureau of the Bureau of Lands - The Land Authority shall
furnish the Bureau of Lands with the duplicate Section 75. Powers in General - To carry out
records of proceedings on applications for the this main purpose, the Bank shall have the
sale or other disposition of public agricultural power:
lands under its administration.
(1) To prescribe, repeal, and alter its
Section 73. Transfer of Appropriations, Powers, own by laws, to determine its operating
Functions, etc - The National Resettlement and policies, and to issue such rules and
Rehabilitation Administration and the Land regulations as may be necessary to
Tenure administration are hereby abolished and achieve the main purpose for the
their powers and functions not inconsistent with creation of the Bank;
this Code, balances of all appropriations, funds,
equipment, records and supplies, as well as (2) To adopt, alter and use a corporate
agricultural lands, public and private, under their seal;
administration, are hereby transferred to the
Authority: Provided, That the function of the
(3) To acquire and own real and
Land Tenure Administration with respect to the
personal property and to sell, mortgage
expropriation of urban lands as provided by
or otherwise dispose of the same;
existing laws is hereby transferred to and all
hereafter be undertaken by the People's
Homesite and housing Corporation. (4) To sue and be sued, make contracts,
and borrow money from both local and
foreign sources. Such loans shall be
In addition to the appropriations herein
subject to approval by the President of
transferred there is hereby appropriated from the
the Philippines and shall be fully
general funds in the National Treasury not guaranteed by the Government of the
otherwise appropriated the sum of five million
Philippines;
pesos, or so much thereof as may be necessary,
to carry out the purposes of this Code.
(5) Upon recommendation of the
Committee on Investments, to hold,
To carry out the land capability survey and own, purchase, acquire, sell or
classification mentioned in paragraph 12 of
otherwise invest, or reinvest in stocks,
Section fifty-one and Section one hundred thirty-
bonds or other securities capable of
two of this Code, there is hereby appropriated
giving the Bank a reasonably assured
out of the unappropriated funds of the National
income sufficient to support its financing
Treasury the amount of ten million pesos. activities and give its private
stockholders a fair return on their
CHAPTER IV holdings: Provided, however, That
LAND BANK pending the organization of the
Committee on Investments, the Bank
Section 74. Creation - To finance the acquisition may exercise the powers herein
by the Government of landed estates for division provided without the recommendation of
and resale to small landholders, as well as the said Committee on Investments:
purchase of the landholding by the agricultural Provided, further, That in case of the
lessee from the landowner, there is hereby dissolution of the Land Bank all unsold
established a body corporate to be known as the public lands transferred to it which may
"Land Bank of the Philippines", hereinafter be allocated to the Government of the
called the "Bank", which shall have its principal Philippines in the course of liquidation of
place of business in Manila. The legal existence the business of the Bank shall revert to
of the Bank shall be for a period of fifty years the Department of Agriculture and
counting from the date of the approval hereof. Natural Resources; and
The Bank shall be subject to such rules and
regulations as the Central Bank may from time (6) To provide, free of charge,
to time promulgate. investment counselling and technical
services to landowners whose lands
have been acquired by the Land Bank.
For this purpose, the Land Bank may
contract the services of private The shares of stock issued under the authority
consultants. of this provision shall be guaranteed a rate of
return of six per centum per annum. In the event
Section 76. Issuance of Bonds - The Land Bank that the earnings of the Bank for any single fiscal
shall, upon recommendation by the Board of year are not sufficient to enable the Bank, after
Trustees and approval of the Monetary Board of making reasonable allowance for administration,
the Central Bank, issue bonds, debentures and contingencies and growth, to declare dividends
other evidences of indebtedness at such terms, at the guaranteed rate, the amount equivalent to
rates and conditions as the Bank may determine the difference between the Bank's earnings
up to an aggregate amount not exceeding, at available for dividends and that necessary to
any one time, five times its unimpaired capital pay the guaranteed rate shall be paid by the
and surplus. Such bonds and other obligations Bank out of its own assets but the Government
shall be secured by the assets of the Bank and shall, on the same day that the Bank makes
shall be fully tax exempt both as to principal and such payment, reimburse the latter in full, for
income. Said income shall be paid to the which purpose such amounts as may be
bondholder every six (6) months from the date of necessary to enable the Government to make
issue. These bonds and other obligations shall such reimbursements are hereby appropriated
be fully negotiable and unconditionally out of any moneys in the National Treasury not
guaranteed by the Government of the Republic otherwise appropriated. The Bank shall give
of the Philippines and shall be redeemable at sufficient notice to the Budget Commissioner
the option of the Bank at or prior to maturity, and the President of the Philippines in the event
which in no case shall exceed twenty-five years. that it is not able to pay the guaranteed rate of
These negotiable instruments of indebtedness return on any fiscal period. The guaranteed rate
shall be mortgageable in accordance with of return on these shares shall not preclude the
established banking procedures and practices to holders thereof from participating at a
government institutions not to exceed sixty per percentage higher than six per centum should
centum of their face value to enable the holders the earnings of the Bank for the corresponding
of such bonds to make use of them in fiscal period exceed the guaranteed rate of
investments in productive enterprises. They return. The Board of Trustees shall declare and
shall also be accepted as payments for distribute dividends within three months after the
reparation equipment and materials. close of each fiscal year at the guaranteed rate
unless a higher rate of return in justified by the
Bank's earnings after making reasonable
The Board of Trustees shall have the power to
allowance for administration, contingencies and
prescribe rules and regulations for the
growth, in which case dividends shall be
registration of the bonds issued by the Bank at
declared and distributed at a higher rate. The
the request of the holders thereof.
capital gains derived from the sale or transfer of
such shares and all income derived therefrom in
Section 77. Issuance of Preferred Shares of the form of dividends shall be fully exempt from
Stock to Finance Acquisition of Landed Estates - taxes.
The Land Bank shall issue, from time to time,
preferred shares of stock in such quantities not
Section 78. Special Guaranty Fund - In the
exceeding six hundred million pesos worth of
event that the Bank shall be unable to pay the
preferred shares as may be necessary to pay
bonds, debentures, and other obligations issued
the owners of landed estates in accordance with
by it, a fixed amount thereof shall be paid from a
Sections eighty and eighty-one of this Code. The
special guaranty fund to be set up by the
amount of shares that the Bank may issue shall
not exceed the aggregate amount need to pay Government, to guarantee the obligation of the
for acquired estates in the proportions Land Bank, and established in accordance with
this Section, and thereupon, to the extent of the
prescribed in said Section eighty of this Code.
amounts so paid, the Government of the
The Board of Trustees shall include as a
Republic of the Philippines shall succeed to all
necessary part of the by-laws that it shall issue
the rights of the holders of such bonds,
under Section seventy-five of this Code, such
formula as it deems adequate for determining debentures or other obligations: Provided,
the net asset value of its holdings as a guide however, That for the next four years after the
establishment of the Bank, the payment to the
and basis for the issuance of preferred shares.
special guaranty fund should not exceed one
million pesos per year, after which period, the The profits accruing from payment shall be
Government shall pay into the guaranty fund the exempt from the tax on capital gains.
sum of five hundred thousand pesos each year
until the cumulative total of such guaranty fund Section 81. Capital - The authorized capital
is no less than twenty percent of the outstanding stock of the Bank shall be one billion five
net obligation of the Land Bank at the end of any hundred million pesos divided into ninety million
single calendar year. shares with a par value of ten pesos each, which
shall be fully subscribed by the Government and
The guaranty fund shall be administered by the sixty million preferred shares with a par value of
Central Bank of the Philippines in the manner ten pesos each which shall be issued in
most consistent with its charter. For the purpose accordance with the provisions of Sections
of such fund, there shall be appropriated seventy-seven and eighty-three of this Code. Of
annually the sum of one million pesos out of any the total capital subscribed by the Government,
moneys in the National Treasury not otherwise two hundred million pesos shall be paid by the
appropriated, until the total amount of twenty Government within one year from the approval
million pesos shall have been attained. of this Code, and one hundred million pesos
every year thereafter for two years for which
Section 79. Receiving Payments and Time purpose the amount of two hundred million
Deposits - The Bank, under the supervision of pesos is hereby appropriated upon the effectivity
the Monetary Board and subject to the of this Code, and one hundred million pesos
provisions of the General Banking Act, shall every year for the next two years thereafter, out
receive savings and time deposits from the small of the funds in the National Treasury not
landholders in whose favor public lands or otherwise appropriated for the purpose:
landed estates acquired by the Land Authority Provided, That if there are not enough funds in
have been sold and, for this purpose, establish, the National Treasury for the appropriation
and maintain branches and offices in such areas herein made, the Secretary of Finance, with the
as may be necessary to service such deposits. approval of the President of the Philippines,
The Monetary Board shall supervise and shall issue bonds or other evidence of
authorize the Bank to receive savings and time indebtedness to be negotiated either locally or
deposits from the public in areas where facilities abroad in such amount as may be necessary to
for such a service do not exist or cannot be cover any deficiency in the amount above-
adequately provided by other deposit appropriated but not exceeding four hundred
institutions. million pesos, the proceeds of which are hereby
appropriated: Provided, further, That the bonds
Section 80. Making Payment to Owners of to be issued locally shall not be supported by the
Landed Estates - The Land bank shall make Central Bank: Provided, finally, That there is
payments in the form herein prescribed to the automatically appropriated out of the
unappropriated funds in the National Treasury
owners of land acquired by the Land Authority
such amounts as is necessary to cover the
for division and resale under this Code. Such
losses which shall include among other things
payment shall be made in the following manner:
loss of earnings occasioned by the limitation of
ten per centum in cash and the remaining
balance in six percent, tax-free, redeemable the resale cost herein provided such that said
amount together with the administrative
bonds issued by the Bank in accordance with
expenses mentioned in Section ninety hereof
Section seventy-six, unless the landowner
shall not exceed in the aggregate the equivalent
desires to be paid in shares of stock issued by
of two and one-half per centum of its assets
the Land Bank in accordance with Section
seventy-seven in an amount not exceeding thirty limited therein.
per centum of the purchase price.
Section 82. Government Shares - All shares of
stock in the Bank subscribed or owned by the
In the event there is an existing lien on
Government shall not be entitled to participate in
encumbrance on the land in favor of any
Government institution at the time of acquisition the income earned by the Bank from its
by the Land Bank, the bonds and/or shares, in investments and other operations, whether in
the form of cash or stock dividends or otherwise.
that order, shall be accepted as substitute
Amounts expended for the administration of the
collaterals to secure the indebtedness.
Bank shall not be deemed as a participation of be preferred. If no price is acceptable to
the Government in income. the corporation, the same shall be
determined by a Committee of
Section 83. Preferred Shares - All preferred Appraisers composed of three
shares of stock issued under Section seventy- members, one to be appointed by the
seven of this Code shall be entitled to the corporation, another by the bondholder
income earned by the Bank on its investments making the highest or only offer, and the
and other operations and shall have a limited third by the two members so chosen.
right to elect annually one member of the Board The expenses of appraisal shall be
of Trustees and one member of the Committee borne equally by the corporation and the
on Investments: Provided, That the holders of successful purchaser.
such preferred shares of stock shall not bring
derivative suits against the Bank. Such preferred Should the Government offer for sale to
shares shall be fully transferable: Provided, the public any or all of the shares of
further, That upon the liquidation of the Bank, stock or the assets of any of the
the redemption of such preferred shares shall be Government owned or controlled
given priority and shall be guaranteed at par corporations enumerated herein, the
value. bidder who offers to pay in bonds of the
Land Bank shall be preferred provided
Section 84. Voting of Shares - The voting power that the various bids be equal in every
of all the shares of stock of the Land Bank respect except in the medium of
owned or controlled by the Government shall be payment.
vested in the President of the Philippines or in
such person or persons as he may from time to (3) Surety or performance bonds in all
time designate. cases where the Government may
require or accept real property as
Section 85. Use of Bonds - The bonds issued bonds; and
by the Land Bank may be used by the holder
thereof and shall be accepted in the amount of (4) Payment for, reparations goods.
their face value as any of the following:
Section 86. Board of Trustees - The affairs and
(1) Payment for agricultural lands or business of the Bank shall be directed, its
other real properties purchased from the powers exercised and its property managed and
Government; preserved by a Board of Trustees. Such Board
shall be composed of one Chairman and four
(2) Payment for the purchase of shares members, one of whom shall be the head of the
of stock of all or substantially all of the Land Authority who shall be an ex-officio
assets of the following Government member of such Board and another to be
owned or controlled corporations: The elected by the holders of preferred shares. The
National Development Company; Cebu Chairman and two members of the Board of
Portland Cement Company; National Trustees shall serve on full-time basis with the
Shipyards and Steel Corporation; Manila Bank. With the exception of the head of the
Gas Corporation; and the Manila Hotel Land Authority and the member elected by the
Company. holders of preferred shares, the Chairman and
all members of the Board shall be appointed by
the President with the consent of the
Upon offer by the bondholder, the
Commission on Appointments for a term of
corporation owned or controlled by the
seven years, except that the first Chairman and
Government shall, through its Board of
members to be appointed under this Code shall
Directors, negotiate with such
bondholder with respect to the price and serve for a period of three, five and seven years,
other terms and conditions of the sale. such terms to be specified in their respective
appointments. Thereafter the Chairman and
In case there are various bondholders
members, with the exception of the ex-officio
making the offer, the one willing to
member, appointed after such initial
purchase under terms and conditions
appointment shall serve for a term of seven
most favorable to the corporation shall
years including any Chairman or member who is Committee on Investments shall recommend to
appointed in place of one who resigns or is the Board of Trustees the corporations or
removed or otherwise vacates his position entities from which the Land Bank shall
before the expiration of his seven-year term. The purchase shares of stock.
Chairman and the two full-time members of the
Board shall act as the heads of such operating The Land Bank shall not invest in any
departments as may be set up by the Board corporation, partnership or company wherein
under the authority granted by Section eighty- any member of the Board of Trustees or of the
seven of this Code. The Chairman shall have Committee on Investments or his spouse, direct
authority, exerciseable at his discretion, to descendant or ascendant has substantial
determine from time to time the organizational pecuniary interest or has participation in the
divisions to be headed by each member serving management or control of the enterprise except
full time and to make the corresponding shifts in with the unanimous vote of the members of the
designations pursuant thereto. The Board of Trustees and of the Committee on
compensation of the Chairman and the Investments, excluding the member interested,
members of the Board of Trustees serving full in a joint meeting held for that purpose where full
time shall be twenty-four thousand and eighteen and fair information of the extent of such interest
thousand pesos, respectively. The other or participation has been adequately disclosed
members of the Board shall receive a per diem in writing and recorded in the minutes of the
of one hundred pesos for each session of the meeting: Provided, That such interested
Board that they attend. member shall not in any manner participate in
the deliberations and shall refrain from exerting
Section 87. The Chairman and Vice-Chairman - any pressure or influence whatever on any
The Chairman of the Board shall be the chief official or member of the Bank whose functions
executive officer of the Bank. He shall have bear on or relate to the investment of the funds
direct control and supervision of the business of of the Bank in the enterprise: Provided, further,
the Bank in all matters which are not by this That the total investment in any single
Code or by the by-laws of the Bank specifically corporation, partnership, company, or
reserved to be done by the Board of Trustees. association shall not exceed five per centum of
He shall be assisted by an Executive Vice- the total investible funds.
Chairman and one or more vice-chairman who
shall be chosen and may be removed by the Section 90. Personnel; Cost of Administration -
Board of Trustees. The salaries of the Vice- The Administrative expenses of the Bank during
Chairmen shall be fixed by the Board of any single fiscal year shall not in any case
Trustees with the approval of the President of exceed two and one-half per centum of its total
the Philippines. assets. The Board of Trustees shall provide for
an organization and staff of officers and
Section 88. Qualifications of Members - No employees necessary to carry out the functions
person shall be appointed Chairman or member of the Bank, fix their compensation, and appoint
of the Board unless he is a man of accepted and remove such officers and employees for
integrity, probity, training and experience in the cause. The Bank officers and employees shall
field of banking and finance, at least thirty-five be subject to the rules and regulations issued by
years of age and possessed of demonstrated the Civil Service Commission but shall not fall
administrative skill and ability. under the Wage and Position Classification
Office. The Board of Trustees shall recommend
Section 89. Committee on Investments - There to the Civil Service Commission rules and
shall be a Committee on Investments composed regulations for the recruitment, appointment,
of three members; the member of the Board of compensation, administration, conduct,
Trustees elected by the holders of preferred promotion and removal of all Bank officers and
shares as Chairman, one member to be employees under a strict merit system and
appointed by the President of the Philippines prepare and conduct examinations under the
from among the government members of the supervision of said Commission.
Board of Trustees, and another member to be
selected by the holders of preferred shares Section 91. Legal counsel - The Secretary of
under Section eighty-three of this Code. The Justice shall be ex-officio legal adviser of the
Bank. Any provision of law to the contrary (1) Mismanagement, grave abuse of
notwithstanding, the Land Bank shall have its discretion, infidelity in the conduct of
own Legal Department, the chief and members fiduciary relations, or gross neglect in
of which shall be appointed by the Board of the performance of duties;
Trustees. The composition, budget and
operating expenses of the Office of the Legal (2) Dishonesty, corruption, or any act
Counsel and the salaries and traveling expenses involving moral turpitude; and
of its officers and employees shall be fixed by
the Board of Trustees and paid by the Bank. (3) Any act or performance tending to
prejudice or impair the substantial rights
Section 92. Auditor - The Auditor General shall of the stockholders.
be the ex-officio auditor of the Bank and shall
appoint a representative, who shall be the Conviction of the Chairman or a member for a
auditor in charge of the auditing office of the crime carrying with it a penalty greater than
Bank. The Auditor General shall, upon the
arresto mayor shall cause the removal of such
recommendation of the auditor of the Bank,
Chairman or member without the necessity of
appoint or remove the personnel of the auditing
Presidential action.
office. The compensation, budget and operating
expenses of the auditing office and the salaries
and traveling expenses of the officers and The Chairman or member may, in any of the
employees thereof shall be fixed by the Board of above cases, be civilly liable for any damage
Trustees and paid by the Bank notwithstanding that may have been suffered by the
any provision of law to the contrary. stockholders.

Section 93. Report on Condition of Bank - The Section 96. Transfer of Claims and Liabilities -
representative of the Auditor General shall make The assets of the former Land Tenure
a quarterly report on the condition of the Bank to Administration and the National Resettlement
the President of the Philippines, to the Senate and Rehabilitation Administration in the form of
through its President, to the House of claims and receivables arising from the sale or
Representatives through its Speaker, to the transfer of private and public lands, agricultural
Secretary of Finance, to the Auditor General and equipment, machinery, tools and work animals,
to the Board of Trustees of the Bank. The report but excluding advances made for subsistence,
shall contain, among other things, a statement of to small landholders shall, after an exhaustive
the resources and liabilities including earnings evaluation to determine their true asset value,
and expenses, the amount of capital stock, be irrevocably transferred to the Bank under
surplus, reserve and profits, as well as losses, such arrangements as the Land Authority and
bad debts, and suspended and overdue paper the Bank shall agree upon. Thereafter, the Bank
carried in the books as assets of the Bank, and shall have authority and jurisdiction to administer
a plantilla of the Bank. the claims, to collect and make adjustments on
the same and, generally, to do all other acts
properly pertaining to the administration of
Section 94. Auditing Rules and Regulations -
claims held by a financial institution. The Land
The Auditor General shall, with respect to the
Authority, upon request of the Bank, shall assist
Bank, formulate improved and progressive
the latter in the collection of such claims. The
auditing rules and regulations designed to
Land Authority shall be entitled to collect from
expedite the operations of the Bank and prevent
the Bank no more than the actual cost of such
the occurrence of delays and bottlenecks in its collection services as it may extend. The claims
work.
transferred under this Section shall not be
considered as part of the Government's
Section 95. Removal of Members - The subscription to the capital of the Bank.
President of the Philippines may, at any time,
remove the Chairman or any member of the Section 97. Regulation - The Bank shall not be
Board appointed by him if the interest of the
subject to the laws, rules and regulations
Bank so requires, for any of the following
governing banks and other financial institutions
causes:
of whatever type except with respect to the
receipt of savings and time deposits in
accordance with Section seventy-nine of this Section 103. Privilege of Rediscounting - The
Code, in which case the legal reserve and other Agricultural Credit Administration is hereby
requirements prescribed by the Central Bank for granted the privilege of rediscounting with the
such deposits shall apply. The Bank shall be Central Bank of the Philippines, the
operated as an autonomous body and shall be Development Bank of the Philippines and the
under the supervision of the Central Bank. Philippine National Bank eligible evidence of
indebtedness acquired by it in carrying on its
Section 98. Tax Exemption - The operations, as authorized activities, at an interest rate equal to
well as holdings, equipment, property, income the lowest charged by the above financing
and earnings of the Bank from whatever sources institution on any private person or entity.
shall be fully exempt from taxation.
Section 104. Power to Obtain Additional
Section 99. Organization of Bank - The Bank Funds - Nothing in this Section shall limit the
shall be organized within one year from the date power of the Agricultural Credit Administration to
that this Code takes effect. obtain from the Central Bank of the Philippines,
the Development Bank of the Philippines, the
Section 100. Penalty for Violation of the Philippine National Bank and other financing
Provisions of this Chapter - Any trustee, officer, institutions, such additional funds as may be
employee or agent of the Bank who violates or necessary for the effective implementation of
permits the violation of any of the provisions of this Act: Provided, That such additional funds
are to be utilized as loans to farmers and/or
this Chapter, or any person aiding or abetting
farmers' cooperatives.
the violations of any of the provisions of this
Chapter, shall be punished by a fine not to
exceed ten thousand pesos or by imprisonment Section 105. Loaning Activities - Loaning
of not more than five years, or both such fine activities of the Agricultural Credit Administration
and imprisonment at the discretion of the Court. shall be directed to stimulate the development
and operation of farmers' cooperatives. The term
CHAPTER V "Farmers' Cooperatives" shall be taken to
AGRICULTURAL CREDIT ADMINISTRATION include all cooperatives relating to the
production and marketing of agricultural
products and those formed to manage and/or
Section 101. Reorganization of ACCFA to Align own, on a cooperative basis, services and
Its Activities - The administrative machinery of facilities, such as irrigation and transport system,
the Agricultural Credit and Cooperative established to support production and/or
Financing Administration created under Republic marketing of agricultural products.
Act Numbered Eight hundred twenty-one, as
amended by Republic Act Numbered Twelve
Under such rules and regulations in accordance
hundred and eighty-five, shall be reorganized to
with generally accepted banking practices and
enable it to align its activities with the
procedures as may be promulgated by the
requirements and objectives of this Code and
shall be known as the Agricultural Credit Agricultural Credit Administration, Rural Banks
Administration. and Development Banks may, in their respective
localities, be designated to act as agents of the
Agricultural Credit Administration in regard to its
Section 102. Financing - To finance the loaning activities.
additional credit functions of the Agricultural
Credit Administration as a result of the land
Section 106. Credit to Small Farmers -
reform program laid down in this Code, there is
Production loans and loans for the purchase of
hereby appropriated the sum of one hundred
work animals, tillage equipment, seeds,
fifty million pesos out of funds in the National
fertilizers, poultry, livestock, feed and other
Treasury not otherwise appropriated in addition
to existing appropriations for the Agricultural similar items, may be extended to small farmers
Credit and Cooperative Financing as defined in Republic Act Numbered Eight
hundred twenty-one, based upon their paying
Administration.
capacity and such securities as they can
provide, and under such terms and conditions as
the Agricultural Credit Administration may
impose, provided the amount thereof does not impairment of the capitalization of the
exceed two thousand pesos, or such amount as Agricultural Credit Administration is imminent by
may be fixed by the President, but in no case reason of the limitation of the interest rate herein
shall the amount of loan exceed eighty per provided, there is automatically appropriated out
centum of the value of the collateral pledged. In of the unappropriated funds in the National
instances where credit is extended for items Treasury such amounts as is necessary to cover
which are not consumed in their use, such items the losses of the Agricultural Credit
may be pledged as security therefor. The Administration, but not exceeding six million
Agricultural Credit Administration shall pesos for any one year.
promulgate such rules and regulations as may
be necessary in the extension of the loans Section 111. Institution of Supervised Credit -
herein authorized so as to assure their To provide for the effective use of credit by
repayment: Provided, That such rules and farmers, the Agricultural Credit Administration
regulations shall follow and be in accordance may institute a program of supervised credit in
with generally accepted financing practices and cooperation with the Agricultural Productivity
procedures. Commission.

Section 107. Security for Loans - The Section 112. Guidance to Cooperatives - The
production of the borrower, after deducting the Agricultural Credit Administration shall have the
lease rental and/or liens thereon, shall be power to register and provide credit guidance or
accepted as security for loans: Provided, That assistance to all agricultural cooperatives
said production is pledged to the Agricultural including irrigation cooperatives and other
Credit Administration with appropriate cooperative associations or fund corporations.
safeguards to insure against its unauthorized
disposition: Provided, further, That the amount Section 113. Auditing of Operations - For the
of loan shall not exceed sixty per centum of the
effective supervision of farmers' cooperatives,
value of the estimated production.
the head of the Agricultural Credit Administration
shall have the power to audit their operations,
Section 108. Loans to Cooperatives - The records and books of account and to issue
Agricultural Credit Administration is hereby subpoena and subpoena duces tecum to compel
authorized to extend such types of loans as it the attendance of witnesses and the production
may deem necessary for the effective of books, documents and records in the conduct
implementation of this Code, to eligible farmers' of such audit or of any inquiry into their affairs.
cooperatives as herein defined, under such Any person who, without lawful cause, fails to
terms and conditions as it may impose and with obey such subpoena or subpoena duces tecum
such securities as it may require. A farmers' shall, upon application of the head of Agricultural
cooperative that has been registered with the Credit Administration with the proper court, be
Securities and Exchange Commission and liable to punishment for contempt in the manner
affiliated with the Agricultural Credit provided by law and if he is an officer of the
Administration shall be eligible for loans if, in the association, to suspension or removal from
judgment of the latter, its organization, office.
management and business policies are of such
character as will insure the safety and effective Section 114. Prosecution of Officials - The
use of such loans.
Agricultural Credit Administration, through the
appropriate provincial or city fiscal, shall have
Section 109. Loans for Construction or the power to file and prosecute any and all
Acquisition by Purchase of Facilities - Loans for actions which it may have against any and all
the construction or acquisition by purchase of officials or employees of farmers' cooperatives
facilities of farmers' cooperatives may be arising from misfeasance or malfeasance in
granted by the Agricultural Credit Administration. office.

Section 110. Interest on Loans - The total Section 115. Free Notarial Services - Any
charges including interest and insurance fees on justice of the peace, in his capacity as notary ex-
all kinds of loans shall not be more than eight officio, shall render service free of charge to any
per centum per annum: Provided, That if an person applying for a loan under this Code
either in administering the oath or in the responsibilities, files, records supplies,
acknowledgment of instruments relating to such equipment, personnel and unexpended balance
loan. of appropriations, is hereby placed under the
Agricultural Productivity Commission as a
Section 116. Free Registration of Deeds - Any separate office thereof.
register of deeds shall accept for registration,
free of charge any instrument relative to a loan Section 120. Commissioner of the Agricultural
made under this Code. Productivity Commission - The Agricultural
Productivity Commission shall be administered
Section 117. Writing-off Unsecured and by an Agricultural Productivity Commissioner
Outstanding Loans - Subject to the approval of who shall be appointed by the President with the
the President upon recommendation of the consent of the Commission on Appointments
Auditor General, the Agricultural Credit and who shall have a compensation of sixteen
Administration may write-off from its books, thousand pesos per annum. No person shall be
unsecured and outstanding loans and accounts appointed as a Agricultural Productivity
receivable which may become uncollectible by Commissioner unless he be a holder of at least
reason of the death or disappearance of the a Bachelor of Science degree in Agricultural
debtor, should there be no visible means of from a reputable school or college of agriculture
collecting the same in the foreseeable future, or and shall have practiced agriculture for at least
where the debtor has been verified to have no five years, and who is of recognized
income or property whatsoever with which to competence in agricultural economics or any of
effect payment. In all cases, the writing-off shall its equivalents.
be after five years from the date the debtor
defaults. Section 121. Powers and Duties - The
Agricultural Productivity Commissioner shall
Section 118. Exemption from Duties, Taxes and exercise the same powers and duties vested in
Levies - The Agricultural Credit Administration is the Director of the Bureau of Agricultural
hereby exempted from the payment of all duties, Extension.
taxes, levies, and fees, including docket and
sheriff's fees, of whatever nature or kind, in the Section 122. Division on Cooperatives - In
performance of its functions and in the exercise addition to the existing divisions of the Bureau of
of its powers hereunder. Agriculture Extension, herein renamed as
Agricultural Productivity Commission, there shall
CHAPTER VI be a Division of Cooperatives and such other
AGRICULTURAL PRODUCTIVITY divisions and sections as the Agricultural
COMMISSION Productivity Commissioner may deem
necessary to organize in order to carry out the
Section 119. Creation of the Agricultural promotional and educational activities of the
Productivity Commission - For the purpose of Commission.
accelerating progressive improvement in the
productivity of farms, the advancement of Section 123. Recruitment, Selection and
farmers and the strengthening of existing Training of Extension Workers - The extension
agricultural extension services through the workers shall be recruited and selected from
consolidation of all/promotional, educational and graduates of agricultural college with adequate
informational activities pertaining to agriculture, practical experience and training in actual crop,
the present Bureau of Agricultural Extension of tree, poultry and livestock farming: Provided,
the Department of Agriculture and Natural however, That in the event there are no
Resources is hereby placed directly under the graduates of agricultural colleges available,
executive supervision and control of the graduates of agricultural high schools may be
President and hereinafter renamed Agricultural temporarily employed. Training of extension
Productivity Commission. workers shall be done in conjunction with
research institutions to insure their maximum
efficiency.
Upon the effectivity of this Code, the Agricultural
Tenancy Commission of the Department of
Justice, together with its powers, duties,
Section 124. Functions of Extension Workers - the sum of five million pesos, or so much thereof
In addition to their functions under Republic Act as may be necessary to carry out the purposes
Numbered Six hundred eighty, it shall be the of this Chapter.
duty of extension workers:
CHAPTER VII
(1) To reside in the locality where they LAND REFORM PROJECT ADMINISTRATION
are assigned, to disseminate technical
information to farmers, and to Section 126. Creation of National Land Reform
demonstrate improved farm Council - There is hereby created a National
management practices and techniques; Land Reform Council, hereinafter called the
Council, which shall be composed of the
(2) To work with individual farmers in Governor of the Land Authority, who shall act as
farm planning and budgeting, guide Chairman, the Administrator of the Agricultural
them in the proper conduct of farm Credit Administration, the Chairman of the Board
business and work out schedules of re- of Trustees of the Land Bank, the Commissioner
payment of loans obtained by farmers; of the Agricultural Productivity Commission and
another member appointed by the President
(3) To assist farmers in securing the upon recommendation of the minority party
services or assistance of other receiving the second largest number of votes in
agencies, or their personnel, having to the last Presidential election who shall hold
do with relevant activities and problems office at the pleasure of such minority party,
of farmers; unless sooner removed for cause by the
President as members and the Agrarian
(4) To visit newly-established Counsel as legal counsel: Provided, That the
Council shall not be considered fully constituted
independent farm operators either singly
and ready to function until after the member
or collectively at least once a month;
representing the minority party has been
appointed by the President of the Philippines:
(5) To conduct educational activities that Provided, further, That the minority party shall
will acquaint leaseholders and other submit its recommendation to the President
independent farm operators with their within sixty days from the approval of this Code,
rights and responsibilities under this in the absence of which the Council shall be
Code; deemed to be so constituted even without such
member from the minority party: Provided,
(6) To encourage the formation and finally, That the minority representative shall
growth of private associations, study receive a per diem of fifty pesos for each day he
clubs, committees and other organized attends a council meeting, chargeable to the
groups of farmers, familiarize them with appropriations of the Land Authority.
modern methods of farming and interest
them to actively participate, collaborate Section 127. Meetings; Resolutions - The
or take the initiative in agricultural Chairman of the Council shall convoke the
research, experimentation and Council as its responsibilities enumerated in
implementation of projects in Section one hundred twenty-eight may warrant,
cooperation with the Agricultural and shall preside over its meetings.
Productivity Commissioner and other
agencies; and
It shall be the duty of the members to attend any
meeting of the Council upon the call of the
(7) To promote, stimulate and assist in Chairman. In case of inability, a member may
the organization of farmers' require the officer next in rank in his agency to
cooperatives. attend the meeting in his behalf.

Section 125. Appropriation - In addition to the A majority vote of the members present if there
funds herein transferred, there is hereby is a quorum shall be necessary for the approval
appropriated from the general funds in the of a resolution. Upon such approval the
National Treasury not otherwise appropriated resolution shall be final and binding upon all
members of the Council and their respective (4) To revise, approve, or reject any
agencies insofar as their functions, powers and land reform proposal or project; and
duties required under this Code are concerned.
(5) To proclaim in accordance with the
The refusal of any member to implement any provisions of this Code, which
resolution or part thereof falling within the scope proclamation shall be considered as
of the powers granted to his agency shall be having been promulgated immediately
sufficient ground for the President of the after three successive weekly
Philippines to remove said member from office publications in at least two newspapers
or to impose upon him disciplinary or of general circulation in the region or
administrative sanctions. locality affected by the proclamation,
preference being given to local
Section 128. Functions of National Land Reform newspapers, if any, that all the
Council - It shall be the responsibility of the government machineries and agencies
Council: in any region or locality relating to
leasehold envisioned in this Code are
operating: Provided, That the
(1) To construct the general program of
conversion to leasehold in the
land reform contemplated by this Code;
proclaimed area shall become effective
at the beginning of the next succeeding
(2) To establish guidelines, plans and agricultural year after such
policies for its member-agencies relative promulgation: Provided, further, That the
to any particular land reform project; proclamation shall be made after having
considered factors affecting feasibility
(3) To formulate such rules and and fund requirements and the other
regulations as may be necessary to factors embodied in Sections one
carry out the provisions of this Code for hundred twenty-nine, one hundred thirty
(a) the selection of agricultural land to and one hundred thirty-one.
be acquired and distributed under this
Code; (b) the determination of sizes of Section 129. Creation of Land Reform Districts -
family farms as defined in Section one The Council shall exercise the functions
hundred sixty-six; and (c) the selection enumerated in the preceding Section for
of beneficiaries to family farms available particular areas which the Council shall select
for distribution: Provided, That priority and designate as land reform districts. A district
shall be given in the following order: shall constitute one or more reform projects,
First, to members of the immediate each project to comprise either a large landed
family of the former owner of the land estate or several areas within small estates. In
within the first degree of consanguinity the selection of a district, the Council shall
who will cultivate the land personally consider factors affecting the feasibility of
with the aid of labor available within his acquiring for redistribution the areas within the
farm household; Second, to the actual district, including:
occupants personally cultivating the land
either as agricultural lessees or
(1) The productivity of the area;
otherwise with respect to the area under
their cultivation; Third, to farmers falling
under the preceding category who are (2) Its suitability for economic family-size
cultivating uneconomic-size farms with farms;
respect to idle or abandoned lands;
Fourth, to owner-operators of (3) The tenancy rate in the area;
uneconomic-size farms; and Fifth, to
such other categories as may be fixed (4) The minimum fixed capital outlay
by virtue of this Code, taking into required to develop the area;
consideration the needs and
qualifications of the applicants:
(5) The proximity of the area to
resettlement projects; and
(6) The number of farmers that cultivate thus established in a development program for
uneconomic-size farms, the ability and the area concerned to be submitted in the form
readiness of such farmers to be of a consolidated report to the Committee.
resettled, and the availability of idle or
abandoned lands that may be acquired CHAPTER VIII
or expropriated as well as of other LAND CAPABILITY SURVEY AND
resettlement facilities. CLASSIFICATION

Section 130. Regional Land Reform Section 132. Land Survey to Conform to Legal
Committee - For the purpose of implementing Requirements - To provide the necessary basis
the program and policies of the Council on the for the implementation of the land reform
local level, the Council shall establish in each program formulated under this Code, the Land
region of the Philippines a Regional Land Authority is hereby authorized to undertake a
Reform Committee which shall be composed of land capability survey and classification in
the representatives of the agencies composing cooperation with the relevant agencies that will
the National Land Reform Council and shall be be directly benefited by such survey and
under the chairmanship of the representative of classification. The survey shall be made to
the Land Authority. The committee shall conform to the requirements of the Department
recommend to the Council such plans for of Agriculture and Natural Resources for
projects of land reform in its jurisdiction as it may implementation of Agricultural programs and
deem appropriate. The Committee shall conduct forestry inventory, of the Board of Technical
public hearings, gather and analyze data, Surveys and Maps, and of the National
estimate the essentials of such plans for projects Economic Council and other agencies for
or programs and consolidate its findings in a agricultural planning and other purposes.
report to be submitted to the Council for its
consideration. The decision of the Council upon Section 133. Cadastral Survey - To resolve the
such projects or programs shall be returned to
rights of landholders holding unregistered
the Committee, within thirty days from the
property, the Bureau of Lands is directed to
submission thereof, for early implementation or
undertake an expanded cadastral survey and
execution by said Committee and the agencies land registration program commencing within
represented therein. three months from the passage of this Code.

Section 131. Land Reform Project Team - The


Section 134. Costs of Fees and Charges -
Regional Land Reform Committee shall direct
Notwithstanding any provisions of law to the
and assign a Land Reform Project Team for any contrary, the following rules shall apply with
project or projects within the region, to be respect to the costs, fees and charges in the
composed of an appropriate number of
survey, monumenting, and registration of lands
personnel from the member-agencies. The team
of whatever description and nature had in
shall be headed by a representative of the Land
relation to cadastral proceedings undertaken by
Authority designated by the Committee, but
the National Government, either alone through
each agency shall, in every case, be duly its offices, agencies and instrumentalities, or in
represented by at least one member in the conjunction with provincial and municipal
Team. On the basis of national, regional, and
governments.
local policies and programs formulated and
approved by the Council through the Committee,
the Team shall determine (a) the suitability of Section 135. Apportionment of Cost of Survey -
any area for redistribution into economic family- One-half of the cost of survey and monumenting
size farms; (b) the economic size of farm units; and registration proceedings shall be fully
(c) the feasibility of acquiring and distributing the assessed and collected against each and all of
area; (d) the willingness of the lessees to the lots included in cadastral proceedings and
assume the responsibilities of ownership; and shall be apportioned in accordance with the area
(e) the financial and other requirements of the thereof, but in no case shall less than ten pesos
project. For this purpose, it shall gather data, be charged against each lot, the other half being
obtain opinions, conduct surveys, pursue chargeable to the National Government. The
investigations, and incorporate any information amounts taxed against each of the lots or
parcels of land shall be considered as a special
assessment of taxes against the respective deed for such sale, transfer, or conveyance of
parcels, shall constitute a first lien upon the land said property, that he exhibit a receipt signed by
and shall be collected by the Director of Lands the Director of Lands or his duly authorized
or his duly authorized representatives in equal representative showing that such encumbrance
installments within a period of three years, or lien has been paid.
bearing interest at the rate of six per centum per
annum. The first installment shall become due Section 137. Costs of Registration
and payable at the same time as the general Proceedings - The costs of the registration
land taxes for the year next succeeding the year proceedings under the provisions of this Code
in which the assessment of the cost shall be shall consist of a sum equivalent to ten per
received by the Provincial Treasurer, and shall centum of the costs of the survey and
be collected in the same manner as such monumenting of the land. The amount of the
general taxes. Each succeeding installment shall costs of the proceeding so taxed shall be for all
become due and payable at the same time as services rendered by the Land Registration
the general land taxes for the corresponding Commission and the clerk or his deputies in
current year and shall be collected in the same each cadastral proceeding, and the expense of
manner. The Director of Lands shall for this publication, mailing, and posting notice, as well
purpose send to the officer in charge of such as the notices of the decision and the order
collection a copy of said assessment of costs: apportioning the cost shall be borne by the Land
Provided, however, That the amounts Registration Commission.
representing the proportional shares of the costs
taxed against lots surveyed at the request and Section 138. Laws Covering Survey and
expense of their owner and for which a plan Registration of Land in Forces - Unless
other than the cadastral plan has been made by
otherwise provided in this Chapter, all provisions
a duly authorized surveyor prior to the decision of law covering the survey and registration of
in the cadastral proceeding, or which have been land shall remain in full force and effect.
registered in accordance with the provisions of
Act Numbered Four hundred ninety-six, entitled
"The Land Registration Act", or surveyed, Section 139. Revolving Fund - All amounts
patented, or leased under the Public Land and collected by the Bureau of Lands or its duly
Mining Laws, prior to the decision in the authorized representatives from the owners of
cadastral proceeding, or have been declared to the various lots as costs of proceedings, survey,
the public lands by the Court, shall not constitute and monumenting in relation to the cadastral
a lien against said lot nor shall be collected from survey program herein described shall be paid
the owner thereof: Provided, further, That the into a Special Cadastral Program Revolving
owner of any lot may, if he so desires, pay any Fund to finance the cadastral land survey and
installment of the costs taxed against his lot at registration of other unregistered lands.
any time before the same becomes due.
Section 140. Appropriation - To finance and
Section 136. Payment of Costs of Land in Its support the expanded cadastral land survey and
Entirety in Case of Transfer of Land - In case of registration program set forth herein, the amount
the sale, transfer, or conveyance, for a of one hundred million pesos is hereby
pecuniary consideration, of any property, or part appropriated out of funds in the National
thereof, registered by virtue of a decree issued Treasury not otherwise appropriated, which
in a cadastral proceeding, prior to the payment amount shall be paid into a "Special Cadastral
of the total amount of the costs taxed against Program Revolving Fund", to finance the
such property in accordance with the preceding cadastral land survey and registration of other
Section endorsed as an encumbrance or lien unregistered areas.
upon each cadastral certificate of title, the
vendor or his legal representative shall pay such CHAPTER IX
costs in their entirety in case the order COURTS OF AGRARIAN RELATIONS
apportioning the costs has already been issued
in the cadastral proceeding in which the property Section 141. Creation - Courts of Agrarian
being sold, transferred, or conveyed is included, Relations are hereby organized and established
and the register of deeds concerned shall throughout the Philippines in conformity with the
demand of the vendor, before registering the provisions of this Chapter.
Section 142. Regional Districts - Regional Batangas for Branch II and in
districts for the Courts of Agrarian Relations in Mamburao, Mindoro Occidental for
the Philippines are constituted as follows: Branch III;

The first Regional District shall consist The eight Regional District, of the
of the provinces of Cagayan, Batanes, province of Quezon, the subprovince of
Isabela and Nueva Vizcaya, with seat in Aurora, the City of Lucena, and the
Tuguegarao, Cagayan for Branch I and province of Camarines Norte, with seat
in Ilagan, Isabela for Branch II; in the City of Lucena for Branch I and in
Daet, Camarines Norte for Branch II;
The second Regional District, of the
provinces of Ilocos Norte, Ilocos Sur, The ninth Regional District, of the
Abra, Mountain Province, La Union and province of Camarines Sur, Naga City,
the City of Baguio, with seat in Laoag, Legaspi City and the provinces of Albay,
Ilocos Norte for Branch I and in San Catanduanes, Sorsogon and Masbate,
Fernando, La Union for Branch II; with seat in Naga City for Branch I, in
Legaspi City for Branch II and in
The third Regional District of the Sorsogon, Sorsogon for Branch III;
provinces of Pangasinan and Zambales,
and the City of Dagupan, with seat in The tenth Regional District, of the
Lingayen, Pangasinan for Branch I, in province of Capiz, Roxas City, the
Tayug, Pangasinan for Branch II and in provinces of Aklan, Romblon,
Iba, Zambales for Branch III; Marinduque and Iloilo, the City of Iloilo,
and the province of Antique, with seat in
The fourth Regional District, of the the City of Iloilo for Branch I and in
provinces of Nueva Ecija and Tarlac, Roxas City for Branch II;
and Cabanatuan City, with seat in
Cabanatuan City for Branch I, in The eleventh Regional District, of the
Guimba, Nueva Ecija for Branch II, in province of Occidental Negros, the
Tarlac, Tarlac for Branch III and in Cities of Bacolod and Silay, the province
Moncada, Tarlac for Branch IV; of Oriental Negros, Dumaguete City,
and the subprovince of Siquijor, with
The fifth Regional District, of the seat in Bacolod City for Branch I, in
provinces of Pampanga, Bataan and Dumaguete City for Branch II and in San
Bulacan, with seat in Malolos, Bulacan Carlos City for Branch III;
for Branch I, in San Fernando,
Pampanga for Branch II, in Angeles, The twelfth Regional District, of the
Pampanga for Branch III and in province of Samar, the City of Calbayog,
Balanga, Bataan for Branch IV; the province of Leyte, and the Cities of
Ormoc and Tacloban, with seat in
The sixth Regional District, of the City of Catbalogan, Samar for Branch I and in
Manila, Quezon City, Pasay City, the Ormoc City for Branch II;
province of Rizal, the City of Cavite, the
province of Cavite, the City of Tagaytay, The thirteenth Regional District, of the
Trece Martires City, and the province of province of Cebu, the City of Cebu, and
Palawan, with seat in Manila for Branch the province of Bohol, with seat in the
I (Executive Judge), in Cavite City for City of Cebu for Branch I and in
Branch II and in Pasig, Rizal for Branch Tagbilaran, Bohol for Branch II;
III; The seventh Regional District, of the
province of Laguna, the City of San The fourteenth Regional District, of the
Pablo, the province of Batangas, the provinces of Surigao and Agusan,
City of Lipa, and the provinces of Butuan City, the province of Oriental
Oriental Mindoro and Occidental Misamis, Cagayan de Oro City, the
Mindoro, with seat in Los Baños, provinces of Bukidnon, Lanao del Sur
Laguna for Branch I, in Batangas,
and Lanao del Norte, and the Cities of admission to the practice of law in the
Iligan and Marawi, with seat in Cagayan Philippines as an indispensable requisite.
de Oro City for Branch I and in Iligan
City for Branch II; Regional District Judges shall be appointed to
serve during good behavior, until they reach the
The fifteenth Regional District, of the age of seventy years or become incapacitated to
province of Davao the City of Davao, the discharge the duties of their office, unless
provinces of Cotabato and Occidental sooner removed in accordance with law.
Misamis, Ozamiz City, the provinces of
Zamboanga del Norte and Zamboanga The judges may be suspended or removed in
del Sur, Zamboanga City, Basilan City the same manner and upon the same grounds
and the province of Sulu, with seat in as judges of the Court of First Instance:
the City of Davao for Branch I, Cotabato
City for Branch II and Ozamiz City for The Executive Judge shall receive an annual
Branch III.
compensation which shall be equal to that
allowed or may hereafter be allowed for judges
Section 143. Judges of Agrarian Relations - The of the Court of First Instance and the Regional
judicial function of the Courts of Agrarian District Judges shall receive an annual
Relations shall be vested in an Executive Judge compensation of one thousand pesos less than
and the Regional District Judges, who shall be that of the Executive Judge.
appointed from time to time, depending on the
need for their services, by the President of the Section 145. Leave Privileges; Traveling
Philippines with the consent of the Commission Expenses - Judges of the Courts of Agrarian
on Appointments: Provided, however, That the Relations shall be entitled to same retirement
Executive Judge and the eight Associate
and leave privileges now granted or may
Judges, at the time of the approval of this Code,
hereafter be granted to judges of the court of
of the Court of Agrarian Relations established
First Instance. They shall be entitled to traveling
and organized under Republic Act Numbered
expenses when performing their duties outside
Twelve hundred and sixty-seven, shall continue official stations.
as Agrarian Judges without need of new
appointments by the President of the Philippines
and new confirmation of the Commission on Section 146. Vacation of Courts of Agrarian
Appointments: Provided, further, That upon the Relations - The yearly vacation of Courts of
approval of this Code, the said Executive Judge Agrarian Relations shall begin with the first of
shall continue as such with authority to exercise April and close with the first of June each year.
the usual administrative functions over the Court
of Agrarian Relations not incompatible with the Section 147. Assignment of Judges to Vacation
provisions of this Chapter and shall have his Duty - During the month of January of each year
office in Manila without prejudice to his holding the Executive Judge shall issue an order naming
court in any district where the requirements of the judges who are to remain on duty during the
the service so warrant, and the eight Associate court vacation of that year; and, consistently with
Judges shall be assigned as Regional District the requirements of the judicial service, the
Judges by the Executive Judge to any of the assignment shall be so made that no judge shall
regional districts as constituted in the preceding be assigned to vacation duty, unless upon his
Section. own request, with greater frequency than once
in two years.
Section 144. Qualifications of Judges; Tenure of
Office; Compensation - No person shall be Such order shall specify, in the case of each
appointed as Executive Judge or Regional judge assigned to vacation duty, the territory
District Judge unless he has been a citizen of over which in addition to his own district his
the Philippines for ten years and has practiced authority as vacation judge shall extend.
law in the Philippines for a period of not less
than ten years or has held during a like period, The Executive Judge may from time to time
within the Philippines, an office requiring modify his order assigning the judges to
vacation duty as newly arising conditions or Section 153. Time and Place of Holding Court -
emergencies may require. Sessions of the Court shall be convened on all
working days when there are cases ready for
A judge assigned to vacation duty shall not trial or other court business to be dispatched.
ordinarily be required to hold court during such The hours for the daily session of the Court shall
vacation; but the Executive Judge may, when in be from nine to twelve in the morning, and from
his judgment the emergency shall require, direct three to five in the afternoon, except on
any judge assigned to vacation duty to hold Saturdays, when a morning session only shall
during the vacation a special term of court in any be required: but the judge may extend the hours
district. of session whenever in his judgment it is proper
to do so. The judge, in his discretion, may order
Section 148. Judges of Regional Districts - Four that but one session per day shall be held
instead of two, at such hours as he may deem
judges shall be commissioned for each of the
fourth and fifth Regional Districts; three judges expedient for the convenience both of the Court
shall be commissioned for each of the third, and of the public; but the number of hours that
the Court shall be in session per day shall be not
sixth, seventh, ninth, eleventh and fifteenth
less than five.
Regional Districts; and two judges for each of
the other Regional Districts.
Sessions of the Court shall be held at the places
Section 149. Oath of Office - Before entering of the official station of the respective judges:
Provided, however, That whenever necessary in
upon the discharge of the duties of their office,
the interest of speedy and inexpensive justice
the judges shall take and subscribe to an oath of
and litigation, a judge shall hold court in the
office in accordance with the provisions of
municipality where the subject matter of the
Section twenty-three of the Revised
Administrative Code. dispute is located, utilizing the sala of the local
justice of the peace court for this purpose.
Section 150. Division of Business Between
Branches - All business appertaining to the A brief monthly report which shall be submitted
Courts of Agrarian Relations of each Regional within the first five days of the succeeding month
District shall be equitably distributed among the showing the number and nature of the cases
tried in his sala, the place of hearing in each
judges of the branches in such manner as shall
case, the progress of the litigation with
be agreed upon by the judges themselves.
corresponding dates and the disposition made
Should the judges fail to agree on the
thereon shall be rendered by every judge under
distribution of business, then the Executive
Judge shall make the distribution. his signature and copies thereof shall be
furnished the Executive Judge, who shall
compile and report in an appropriate form the
Section 151. Judges' Certification as to Work decisions promulgated in important cases. A
Completed - The judges of the Courts of judge who fails or neglects to make his report
Agrarian Relations shall certify at the end of shall, upon first offense, be liable to warning by
each month that all petitions and motions in all the Executive Judge, and upon repeated failure
cases pending decision or resolution for a period or neglect may be suspended or removed from
of thirty days from submission by the parties office.
have been determined and decided before the
date of the making of the certificate. No leave
Section 154. Jurisdiction of the Court - The
shall be granted and no salary shall be paid
without such certificate. Court shall have original and exclusive
jurisdiction over:
Section 152. Official Station of Regional District
Judges - Within thirty days after the approval of (1) All cases or actions involving
this Code, the Executive Judge shall issue an matters, controversies, disputes, or
order designating the official station of the money claims arising from agrarian
relations: Provided, however, That all
judges of the branches of each of the Regional
cases still pending in the Court of
Districts.
Agrarian Relations, established under
Republic Act Numbered Twelve hundred
and sixty-seven, at the time of the any judge of the Court of Agrarian Relations
effectivity of this Code, shall be whose docket permits his temporary absence
transferred to and continued in the from said Court, to hold session in the Court
respective Courts of Agrarian Relations needing such assistance or where such vacancy
within whose district the sites of the exists.
cases are located;
Whenever a judge appointed or assigned in any
(2) All cases or actions involving branch of the Court shall leave his district by
violations of Chapters I and II of this transfer or assignment to another Court of equal
Code and Republic Act Number Eight jurisdiction without having decided a case totally
hundred and nine; and heard by him and which was duly argued or
opportunity given for argument to the parties of
(3) Expropriations to be instituted by the their counsel, it shall be lawful for him to prepare
Land Authority: Provided, however, That and sign his decision in said case anywhere
expropriation proceedings instituted by within the Philippines and send the same by
the Land Tenure Administration pending registered mail to the clerk of court to be filed in
in the Court of First Instance at the time the Court as of the date when the same was
of the effectivity of this Code shall be received by the clerk, in the same manner as if
transferred to and continued in the the judge had been present in the Court to direct
respective Courts of Agrarian Relations the filing of the judgment: Provided, however,
within whose district the subject matter That if a case has been heard only in part, the
or property is located. Supreme Court, upon petition of any of the
interested parties to the case and the
Section 155. Powers of the Court; Rules and recommendation of the respective district judge,
Procedures - The Courts of Agrarian Relations may also authorize the judge who has partly
heard the case to continue hearing and to
shall have all the powers and prerogatives
decide said case notwithstanding his transfer or
inherent in or belonging to the Court of First
appointment to another court of equal
Instance.
jurisdiction.
The Courts of Agrarian Relations shall be
Section 158. Personnel of the Courts of
governed by the Rules of Court: Provided, That
Agrarian Relations -
in the hearing, investigation and determination of
any question or controversy pending before
them, the Courts without impairing substantial (1) Court Commissioners; Qualifications
rights, shall not be bound strictly by the technical and Compensation - There shall be
rules of evidence and procedure, except in twenty-four Court Commissioners who
expropriation cases. shall receive an annual compensation of
nine thousand pesos each and shall be
Section 156. Appeals - Appeals from an order appointed by the President with the
or decision of the Courts of Agrarian Relations consent of the Commission on
may be taken to the Court of Appeals on Appointments. A Court Commissioner
shall be a member of the Philippine Bar
questions of fact and of fact and law or to the
and must have been engaged in the
Supreme Court on pure questions of law, as the
practice of law for five years or must
case may be, in accordance with rules
have held a position in the government
governing appeals from the Court of First
Instance as provided in the Rules of Court. requiring the qualifications of a lawyer
for the same period. A Court
Commissioner may be assigned by the
Section 157. Detail of Judges to Another Executive Judge to assist in the hearing
District - Whenever any judge in any of the Court and investigation of cases. Subject to
shall certify to the Executive Judge that the the latter's direction and supervision, he
condition of the docket in his Court is such as to may hear evidence for the Court on any
require the assistance of an additional judge, or disputed point or issue in any given
when there is any vacancy in any Court, the case or cases and shall after said
Executive Judge may, in the interest of justice, hearing submit a report of all the cases
with the approval of the Supreme Court, assign
heard by him together with the records time of the approval of this Code, shall continue
thereof within the period prescribed by as such without the need of new appointment by
the Court. During the hearing he may the President of the Philippines and new
rule upon questions of pleading and confirmation by the Commission on
procedure but not on the merits of the Appointments.
case.
Section 159. Appropriation - There is hereby
(2) Clerks of Court; Qualifications, appropriated the sum of three million five
Duties, Compensation and Bond - There hundred thousand pesos, or so much thereof as
shall be as many Clerks of Court as may be necessary, out of the unappropriated
there are judges, who shall be funds in the Philippine Treasury for expenses for
appointed by the President of the courtrooms and court offices, including
Philippines with the consent of the equipment for the Courts and their personnel, for
Commission on Appointments. Deputy salaries, and for other necessary expenses that
Clerks of Court and such other may be incurred in carrying out the provisions of
employees as may be required shall be this Chapter. The amount appropriated shall be
appointed by the Executive Judge, carried in succeeding appropriations for the
subject to Civil Service law, rules and Courts of Agrarian Relations.
regulations.
CHAPTER X
No person shall be eligible for appointment as OFFICE OF AGRARIAN COUNSEL
Clerk of Court unless he is duly authorized to
practice law in the Philippines. Section 160. Creation of Office of Agrarian
Counsel - To strengthen the legal assistance to
Before entering upon the discharge of the duties agricultural lessees and agricultural owner-
of his office, he shall file a bond in the amount of cultivators referred to in this Code, the Tenancy
ten thousand pesos in the same manner and Mediation Commission is hereby expanded and
form as required of the Clerk of the Supreme shall hereafter be known as the Office of the
Court, such bond to be approved by, and filed Agrarian Counsel. The head of the Office shall
with, the Treasurer of the Philippines and shall hereafter be known as Agrarian Counsel and
be subject to inspection by interested parties. shall have the rank, qualifications and salary of
The Clerk of Court shall require his deputy to First Assistant Solicitor General. He shall be
give an adequate bond as security against loss assisted by a Deputy Agrarian Counsel, who
by reason of his wrong-doing or gross shall have the rank, qualifications and salary of
negligence. Assistant Solicitor General. The Agrarian
Counsel and Deputy Agrarian Counsel shall be
The Clerks of Court shall each receive an appointed by the President with the consent of
annual compensation of seven thousand two the Commission on Appointments of Congress
hundred pesos. They shall exercise the same and shall be under the direct supervision of the
powers and perform the same duties on all Secretary of Justice.
matters within the jurisdiction of the Courts as
those exercised by the Clerks of Court of the Section 161. Special Attorneys - There is
Courts of First Instance. hereby created in the Office of the Agrarian
Counsel eighty additional positions of Special
Clerks of Courts and other subordinate Attorneys, who shall be appointed by the
employees of the Courts of Agrarian Relations President upon recommendation of the
shall, for administrative purposes, belong to the Secretary of Justice and with the consent of the
Department of Justice; but in the performance of Commission on Appointments. They shall have
their duties, they shall be subject to the the rank, qualifications and salary provided by
supervision of the judges of the Court to which law for a solicitor in the Office of the Solicitor
they respectively pertain. General with the lowest rank.

The Commissioners, otherwise known as Section 162. Appointment of Subordinate


Hearing Officers of the Court of Agrarian Officials - The Agrarian Counsel shall appoint
Relations, as well as the Clerks of Court at the the subordinate officials and employees of the
Office of Agrarian Counsel, subject to civil defined in paragraphs 18 and 19 of this
service rules and regulations, fix their Section, respectively.
compensation and prescribe their duties. The
compensation of special attorneys transferred to (2) "Agricultural lessee" means a person
the Office of Agrarian Counsel shall be fixed on who, by himself and with the aid
salary scales corresponding to solicitors of the available from within his immediate farm
Office of the Solicitor General: Provided, That in household, cultivates the land belonging
the fixing of their salary seniority in rank shall be to, or possessed by, another with the
taken into account. latter's consent for purposes of
production, for a price certain in money
The Agrarian Counsel shall have the power to or in produce or both. It is distinguished
organize such divisions and sections as will from civil lessee as understood in the
insure maximum efficiency of the Office. Civil Code of the Philippines.

Section 163. Functions of the Office of Agrarian (3) "Agricultural lessor" means a person,
Counsel - It shall be the responsibility of the natural or juridical, who, either as owner,
Office of the Agrarian counsel, upon proper civil law lessee, usufructuary, or legal
notification by the party concerned or by the possessor, lets or grants to another the
association or organization to which belongs, to cultivation and use of his land for a price
represent agricultural lessees, agricultural farm certain.
workers and agricultural owner-cultivators
referred to in this Code who cannot engage the (4) "Agricultural year" means the period
services of competent private counsel in cases of time required for raising a particular
before the Court of Agrarian Relations. agricultural product, including the
preparation of the land, sowing, planting
Section 164. Authority to Administer Oath - The and harvesting of crops and, whenever
Agrarian Counsel, the Deputy Agrarian Counsel applicable, threshing of said crops:
and the Special Attorneys of the Office of Provided, however, That in case of
Agrarian Counsel are hereby authorized to crops yielding more than one harvest
administer oaths free of charge. from planting, "agricultural year" shall be
the period from the preparation of the
Section 165. Appropriations - There is hereby land to the first harvest and thereafter
appropriated, in addition to the appropriation of from harvest to harvest. In both cases,
the Tenancy Mediation Commission for Fiscal the period may be shorter or longer than
Year 1964, the sum of three million pesos, or so a calendar year.
much thereof as may be necessary, out of the
unappropriated funds in the National Treasury, (5) "Court" means the Court of Agrarian
for salaries, wages, purchase of motor vehicles, Relations.
supplies, equipment, and other sundry
expenses. The amount appropriated herein shall (6) Fair rental value" means the value
be carried in the appropriations for the Office of not in excess of allowable depreciation
the Agrarian Counsel in the General plus six per cent interest per annum on
Appropriations Acts for succeeding fiscal years. the investment computed at its market
value: Provided, That the fair rental
CHAPTER XI value for work animal or animals and
GENERAL PROVISIONS farm implements used to produce the
crop shall not exceed five per cent of the
Section 166. Definition of Terms - As used in gross harvest for the work animal or
Chapter I of this Code: animals and five per cent for
implements.
(1) "Agricultural Land" means land
devoted to any growth, including but not (7) "Farm implements" means hand
limited to crop lands, salt beds, fish tools or machines ordinarily employed in
ponds, idle land and abandoned land as a farm enterprise.
(8) "Immediate farm household" means current agrarian dispute or an unfair
the members of the family of the lessee labor practice and who has not obtained
or lessor and other persons who are a substantially equivalent and regular
dependent upon him for support and employment.
who usually help him in his activities.
Whenever the term "farm worker" is
(9) "Incapacity" means any cause or used in this Code, it shall be understood
circumstance which prevents the lessee to include farm laborer and/or farm
from fulfilling his contractual and other employee.
obligations under this Code.
(16) "Farm workers' organization"
(10) "Inspect" means to enter, examine includes any union or association of
and observe. Under no circumstance, farm workers which exists, in whole or in
however, shall such entrance, part, for the purpose of collective
examination and observation be utilized bargaining or dealing with farm
to commit any act of intimidation or employers concerning terms and
coercion nor shall it be utilized to impair conditions of employment.
the civil rights of the individuals affected.
(17) "Agrarian dispute" means any
(11) "Proven farm practices" means controversy relating to terms, tenure or
sound farming practices generally conditions of employment, or concerning
accepted through usage or officially an association or representation of
recommended by the Agricultural persons in negotiating, fixing,
Productivity Commission for a particular maintaining, changing, or seeking to
type of farm. arrange terms or conditions of
employment, regardless of whether the
(12) "Work animals" means animals disputants stand in the proximate
ordinarily employed in a farm enterprise, relation of farm employers and
such as carabaos, horses, bullocks, etc. employees.

(13) "Personal cultivation" means As used in Chapter III of this Code:


cultivation by the lessee or lessor in
person and/or with the aid of labor from (18) "Idle lands" means land not devoted
within his immediate household. directly to any crop or to any definite
economic purpose for at least one year
As used in Chapter II: prior to the notice of expropriation
except for reasons other than force
(14) "Farm employer" includes any majeure or any other fortuitous event
person acting directly or indirectly in the but used to be devoted or is suitable to
such crop or is contiguous to land
interest of a farm employer whether for
devoted directly to any crop and does
profit or not, as well as a labor
not include land devoted permanently or
contractor, but shall not include any
regularly to other essential and more
labor organization (otherwise than when
acting as a farm employer) or anyone productive purpose.
acting in the capacity of an officer or
agent of such labor organization. (19) "Abandoned lands" means lands
devoted to any crop at least one year
prior to the notice of expropriation, but
(15) "Farm worker" includes any
agricultural wage, salary or piece but is which was not utilized by the owner for
his benefit for the past five years prior to
not limited to a farm worker of a
such notice of expropriation.
particular farm employer unless this
Code explicitly states otherwise and any
individual whose work has ceased as a (20) "Economic family-sized farm units"
consequence of, or in connection with, a means an area of farm land that permits
efficient use of labor and capital Bank as payment for acquired private
resources of the farm family and will agricultural land shall mean all
produce an income sufficient to provide government taxes, except gift tax and
a modest standard of living to meet a inheritance tax.
farm family's needs for food, clothing,
shelter, and education with possible Section 167. Penal Provisions -
allowance for payment of yearly
installments on the land, and reasonable (1) Violation of the provisions of Section
reserves to absorb yearly fluctuations in thirteen and twenty-seven and
income.
paragraph 1 of Section thirty-one of this
Code shall be punished by a fine not
(21) "Suitably for economic family-size exceeding one thousand pesos or
farm" refers to situations where a parcel imprisonment not exceeding one year or
of land whose characteristics, such as both in the discretion of the court. In
climate, soil, topography, availability of case of juridical persons, the manager
water and location, will support a farm or the person who has charge of the
family if operated in economic family- management or administration of the
size farm units and does not include property or, in his default, the person
those where large-scale operations will acting in his stead, shall be liable under
result in greater production and more this Section.
efficient use of land.
(2) Any person, natural or juridical, who
(22) "Agricultural owner-cultivator" induces another, as tenant, to execute
means any person who, providing or enter into a share tenancy contract
capital and management, personally with himself or with another in violation
cultivates his own land with the aid of of this Code shall be punished by a fine
his immediate family and household. not exceeding five thousand pesos with
subsidiary imprisonment in accordance
(23) "Owner-manager" means the owner with the Revised Penal Code: Provided,
of a parcel of land devoted to That the execution of a share tenancy
agricultural production who provides the contract shall be considered prima facie
capital and management in the farm evidence of such inducement as to the
enterprise. owner, civil law lessee, usufructuary or
legal possessor. In case of juridical
(24) "Labor administration" means cases persons, the manager or the person
where farm workers are employed who has charge of the management or
wholly in the agricultural production. administration of the property or, in his
default, the person acting in his stead,
shall be liable under this Section.
(25) "Share tenancy" as used in this
Code means the relationship which
exists whenever two persons agree on a (3) Any person who executes an
joint undertaking for agricultural affidavit as required by Section thirteen
production wherein one party furnishes of Chapter I, knowing the contents
the land and the other his labor, with thereof to be false, shall be punished by
either or both contributing any one or a fine not exceeding one thousand
several of the items of production, the pesos or imprisonment of not more than
tenant cultivating the land personally one year, or both, in the discretion of the
with the aid of labor available from court.
members of his immediate farm
household, and the produce thereof to (4) Any person who wilfully violates the
be divided between the landholder and provisions of Sections forty and forty-
the tenant. one of this Code shall be punished by a
fine of not less than one hundred pesos
(26) "Tax free" in reference to bonds nor more than one thousand pesos or
and shares of stock issued by the Land by imprisonment of not less than one
month nor more than one year, or both to all benefits to which they are entitled under
such fine and imprisonment, in the existing laws and regulations.
discretion of the court. If any violation of
Sections forty and forty-one of this Code To carry out the provisions of this Section, there
is committed by a corporation, is hereby appropriated the sum of five hundred
partnership or association, the manager thousand pesos out of the unappropriated funds
or, in his default, the person acting as in the National Treasury.
such when the violation took place shall
be criminally responsible. Section 170. Budgeting and Disbursing of
Appropriated Funds - Any provision of this Code
(5) Any person who wilfully violates the or of any existing law to the contrary
provisions of Section forty-two of this notwithstanding, not more than sixty per centum
Code shall, upon conviction thereof, be of the specific appropriations provided in this
subject to a fine of not more than two Code for operating expenditures shall be used
thousand pesos, or upon second for personnel services: Provided, That in the
conviction, to imprisonment of not more case of the appropriations for the Agricultural
than one year or both such fine and Productivity Commission not more than twenty
imprisonment, in the discretion of the per centum shall be spent for office personnel
court. If any violation of the provisions of and other administrative expenses thereof:
Section forty-two of this Code is Provided, further, That the total operating
committed by a corporation, partnership expenditures of the Agricultural Credit
or association, the manager or, in his Administration shall not exceed three per
default, the person acting as such when centum of its total capitalization in addition to the
the violation took place shall be allowance for losses under Section one hundred
criminally responsible. ten: Provided, furthermore, That all unexpended
balances of all appropriations provided in this
Section 168. Pending Application for Code for operating expenditures shall revert to
Mechanization - Any provision of this Code to the National Treasury at the end of the fiscal
the contrary notwithstanding, any application for year in conformity with the provisions of Section
mechanization where corresponding twenty-three of Republic Act Numbered Nine
certifications for suitability for mechanization and hundred ninety-two: And provided, finally, That
for availability for resettlement by the Agricultural all the financial requirements of the various
Tenancy Commission and the National agencies established in this Code for their
Resettlement and Rehabilitation Administration, operation except the Land Bank and the
respectively, have been issued and proper Agricultural Credit Administration shall be
notices served on the tenants at least two proposed in the President's budget in order that
months prior to the approval of this Code shall such appropriation as may be necessary
be given due course and decided in accordance therefor may be provided in the General
with the pertinent provisions and requirements of Appropriation Acts for the succeeding fiscal
Republic Act Numbered Eleven hundred and years.
ninety-nine, as amended.
Section 171. Separability of Provisions - If, for
Section 169. Personnel of Reorganized or any reason, any section or provision of this
Abolished Agencies - Permanent officials and Code shall be questioned in any court, and shall
employees of all existing government agencies be held to the unconstitutional or invalid, no
which are abolished or reorganized under this other section or provision of this Code shall be
Code, subject to Civil Service Rules and affected thereby.
regulations, shall be absorbed and shall not be
divested of their positions except presidential Section 172. Prior Inconsistent Laws - All laws
appointees: Provided, That those presidential or parts of any law inconsistent with the
appointees who cannot be absorbed and such provisions of this Code are hereby repealed.
officials and employees who prefer to be laid-off
shall be given gratuity equivalent to one month Section 173. Effective Date - This Code shall
salary for every year of service but in no case
take effect upon its approval.
more than twenty-four month's salary, in addition
March 15, 2006 share-crop tenants were automatically converted
into agricultural lessees as of 15 June 1988,
DAR ADMINISTRATIVE ORDER NO. 02-06 whether or not a leasehold agreement has been
executed; and

4. Leaseholders' security of tenure shall be


SUBJECT : Revised Rules and Procedures
respected and guaranteed.
Governing Leasehold Implementation in
Tenanted Agricultural Lands In accordance with these developments of the
law, Sec. 12 of R.A. No. 6657 mandates the
Department of Agrarian Reform (DAR) to
I. PREFATORY STATEMENTS determine and fix the lease rentals within
retained areas and areas not yet acquired for
The evolution of the law on leasehold has been agrarian reform in accordance with Section 34 of
a great challenge to both government and civil R.A. No. 3844.
society stakeholders as it progressed from one
of election and limited operation to one of Additionally, Section 6 of R.A. No. 6657
compulsion and comprehensive application. recognizes the right of the farmer to elect
whether to become a farmer-beneficiary or a
Republic Act (R.A.) No. 1199, which became leaseholder in the retention area of the
operative on 30 August 1954, was enacted to landholder. Section 67 of the same Act directs
govern share tenancy. Section 14 of the said law the Registrar of Deeds to "register . . . patents,
recognized the rights of the tenants to choose titles, and documents required for the
for leasehold tenancy agreement. R.A. No. implementation of the CARP."
3844, which took effect on 8 August 1963, as
amended by RA No. 6389, finally declared Pursuant to the DAR's mandate to protect the
agricultural share tenancy as contrary to public rights and improve the tenurial and economic
policy and was, thereby, abolished. Section 4 of status of farmers in tenanted lands, and its
RA 6389 automatically converted share tenancy efforts to provide for an effective mechanism
throughout the country into agricultural that shall implement leasehold and improve the
leasehold relationship. method for determining and fixing lease rentals,
as well as deal with external factors such as the
The Comprehensive Agrarian Reform Law prevailing practice and stance of landowners to
(CARL) or R.A. No. 6657, which took effect on deny the existence of tenancy relations
15 June 1988, expressly repealed Section 35 of whenever possible, the rules and procedures
R.A. No 3844 which exempted fishponds, governing agricultural leasehold tenancy and
saltbeds, and lands principally planted to citrus, leasehold implementation are hereby modified
coconut, cacao, coffee, durian and other similar and amended as follows. CEDHTa
permanent crops. The significant implications of
this evolution of the law are as follows: II. COVERAGE

1. The abolition of share tenancy now These rules and procedures shall apply to all
covers all agricultural landholdings without tenanted agricultural lands, regardless of crop
exceptions; HCDAac produced and tenancy relations established.
These lands may belong to any of the following
2. The conversion of share tenancy into categories:
leasehold is mandated by law;
1. Retained areas;
3. Agricultural leasehold can be a
preliminary step to land ownership. Hence, all 2. Tenanted agricultural lands not yet
acquired for distribution under the
Comprehensive Agrarian Reform Program 3. Agricultural Leasehold Relation — It is
(CARP); limited to the person who furnishes the
landholding, either as owner, civil law lessee,
3. All other tenanted lands which may be usufructuary, or legal possessor, and the person
validly covered under the existing laws, including who personally cultivates the same (R.A. No.
but not limited to: 3844, section 6).

3.1 Tenanted landholdings that may be 4. Agricultural Lessee — A person who, by


within the purview of Department of Justice himself and with the aid available from within his
(DOJ) Opinion No. 44-1990 but actual use immediate farm household, cultivates the land,
remains agricultural and; belonging to or possessed by another, with the
latter's consent for purposes of production, for a
3.2 All other tenanted landholdings that may
price certain in money or in produce or both. It is
otherwise qualify for exemption or exclusion
distinguished from civil lessee as understood in
from CARP coverage or land use conversion, for
the Civil Code of the Philippines. (R.A. No. 3844,
as long as actual use remains agricultural.
Section 166 (2)).
III. DEFINITION OF TERMS
5. Agricultural Lessor — A person, natural
1. Agricultural land — As one of the six or juridical, who, either as owner, civil law
essential elements of agricultural tenancy, it lessee, usufructuary, or legal possessor, lets or
means "land devoted to any growth, including grants to another the cultivation and the use of
but not limited to crop lands, salt beds, fish his land for a price certain. (R.A. 3844, Section
ponds, idle land and abandoned land" (R.A. No. 166 (3)).
3844, Section 166 (1)). It refers to "lands
devoted to or suitable for the cultivation of the
6. Agricultural Year — The period of time
soil, planting of crops, growing of trees, raising
required for raising a particular agricultural
of livestock, poultry, fish or aquaculture
product, including the preparation of the land,
production, including the harvesting of such farm
sowing, planting and harvesting of crops and,
products, and other farm activities and practices
whenever applicable, threshing of said crops:
performed in conjunction with such farming
Provided, however, That in case of crops
operations by persons whether natural or
yielding more than one harvest from planting,
juridical. HAEDIS
"agricultural year" shall be the period from the
2. Agricultural Leasehold Contract — A preparation of the land to the first harvest and
tenurial arrangement, whether written or oral, thereafter, from harvest to harvest. In both
express or implied, between the lessor- cases, the period may be shorter or longer than
landholder and lessee-farmer where the former the calendar year. (R.A. No. 3844, Section 166
consents to the latter's personal cultivation of (4)).
piece of agricultural land in consideration of a
7. Principal crop — Any product raised from
fixed rental either in money or produce or
dominant cultivation or use of the land and
bother. Nevertheless, for purposes of leasehold
harvested on a regular basis.
implementation under this Administrative Order,
"agricultural leasehold contract" refers to a 8. Auxiliary crop — Any product raised
written tenurial arrangement, in the form other than the crop to which the cultivation of the
prescribed by the DAR, between the lessor- land is principally devoted in each agricultural
landholder and lessee-farmer containing year, and excluding the produce of the homelot
aforesaid terms/agreement. (R.A. No. 2263, Section 2 (5) (r)). DCcSHE
9. Crop Diversification — The practice of affected by any fortuitous event like drought,
growing two or more different kinds of crops in earthquake, volcanic eruption, and the like.
one area for a given period to maximize the
whole area. 17. Proven Farm Practices — Sound farming
practices generally accepted through usage or
10. Deductible Items — Allowable list of officially recommended by the Department of
costs subtracted from the computed gross Agriculture (R.A. No. 3844, Section 166(11)).
normal harvests and which costs are utilized for
seeds and the cost of harvesting, threshing, 18. Share Tenancy — The relationship
loading, hauling, and processing, whichever is which exists whenever two persons agree on a
applicable. joint undertaking for agricultural production
wherein one party furnishes the land and the
11. Homelot — A lot suitable for dwelling other his labor, with either or both contributing
with an area of not more than three percent (3%) any one or several of the items of production,
of the area of the landholding provided that it the tenant cultivating the land personally with the
does not exceed one thousand (1,000) square aid of labor available from members of his
meters and that it shall be located at a immediate farm household, and the produce
convenient and suitable place within the land of thereof to be divided between the landholder
the landholder to be designed by the latter, and the tenant (R.A. No. 3844, Section 166
where the tenant shall construct his dwelling. (25)).
However, incomes from vegetables, poultry,
pigs, other animals, minor industry products 19. Tenant — A person himself and with the
raised or produces within the homelot, shall aid available from within his immediate farm
accrue to the tenant exclusively. household, cultivates the land belonging to, or
possessed by another, with the latter's consent
12. Immediate Farm Household — The for purposes of production, sharing the produce
members of the family of the lessee and other with the landholder under the share tenancy
persons who are dependent upon him for system, or paying to the landholder a price
support and who usually help him in his farming certain or ascertainable in produce or in money
activities. or both, under the leasehold tenancy system
(R.A. No. 1199, section 5 (a)).
13. Indiscriminate Cutting — The felling of
trees that tends to materially affect the IV. GOVERNING POLICIES AND
productivity of the farm. PRINCIPLES

14. Inter-cropping — The practice of Pursuant to Section 12 of R.A. No. 6657, and in
simultaneously growing two or more crops in order to fully implement the provisions ofR.A.
between the principal crop. No. 3844, as amended, on agricultural
leasehold, the following policies and principles
15. Landholder — A person, natural or are hereby issued:
juridical, who, either as owner, civil law lessee,
usufructuary, or legal possessor, lets or grants 1. Agricultural leasehold shall be based on
to another the use of cultivation of his land for a a tenancy relationship. The following are
consideration either in shares under the share essential elements of agricultural tenancy:
tenancy system, or price certain or ascertainable
under the leasehold tenancy system. CacISA 1.1. The parties are the landholder and the
tenant;
16. Normal Harvest — The usual or regular
produce obtained from the land when it is not 1.2. The object of the relationship is an
agricultural land;
1.3. There is consent freely given either orally the land was actually cultivated, or on the
or in writing, express or implied; harvest of the first year in the case of newly
cultivated lands, if that harvest is normal (R.A.
1.4. The purpose of the relationship is No. 3844, Section 34, 1st proviso).
agricultural production;
For auxiliary crops, the lease shall not be
1.5. There is personal cultivation; more than the equivalent of 20% following the
principles provided for principal crops on the use
1.6. There is consideration given to the lessor
of average normal harvest provided that all
either in a form of share of the harvest or
expenses shall be born by the tenant pursuant
payment of fixed amount in money or produce to
to Sec. 30, R.A. 1199, as amended
or both.
After the lapse of the first three (3)
2. Agricultural leasehold relation shall not
normal harvests, the final consideration shall be
be extinguished by mere expiration of the term
based on the average normal harvest during
of period in a leasehold contract nor by the sale,
these three (3) preceding agricultural years
alienation or transfer of the legal possession of
(R.A. No. 3844, Section 34, 2nd proviso).
the land. In case the agricultural lessor sells,
alienates or transfers the legal possession of the 5. The lease rental shall cover the whole
landholding, purchaser or transferee thereof farmholding attended to by the lessee.
shall be subrogated to the rights and substituted Computation of lease rental shall include
to the obligations of the agricultural lessor as principal and/or auxiliary crops existing in the
provided for under Sec. 10, R.A. 3844, as area as of the time the leasehold was
amended. HDTSCc established.

3. Cultivation is not limited to the plowing 6. Where the rental has been fixed,
and harrowing of the land, but also the whether in cash or in kind, such rental shall
advancing of the ground to forward the products constitute the consideration for the use of the
of the earth by general industry, taking care of land and the lessee may diversify and/or plant
the land and fruits growing thereon, fencing of auxiliary crops. The right to diversify shall be
certain areas, and the cleaning thereof by provided in the leasehold contract.
gathering of coconuts, their pilings, husking, and
harvesting as well as the proceeding thereof go 7. In the homelot, where the tenant may
into copra, although at times with the aid of hired raise vegetables, poultry, pigs, other animals, or
laborers. engage in minor industries, the products shall
accrue to the tenant exclusively. The tenant's
4. The consideration for the lease shall not dwelling shall not be removed from the lot
be more than the equivalent of 25% of the already assigned to him by the landholder
average normal harvest (ANH) during the three unless there is severance of tenancy
(3) agricultural years immediately preceding the relationship between them as provided under
date the lease was established. If the land has Section 9 of R.A. No. 1199 or unless the tenant
been cultivated for less than 3 years, the initial is ejected for cause, and only after the expiration
consideration shall be based on the average of forty-five (45) days following such severance
normal harvest of the preceding year/s when the of relationship or dismissal for cause. (R.A. No.
land was actually cultivated. 2263, Section 5).

If the land has been cultivated for a 8. As a general rule, tenancy is indivisible
period of less than three (3) years, the initial and dual tenancy/co-tenancy is not allowed. This
consideration shall be based on the average rule is however subject to the following
normal harvest during the preceding years when exceptions: aSITDC
8.1 As among the heirs of a deceased 12. If capital improvements are introduced
tenant-farmer, the landowner has recognized the on the farm by the landholder to increase its
children as the tenant's successor to the tenancy productivity, the rental shall be increased
of the landholding. proportionately to the consequent increase in
production due to said improvements. The cost
8.2 A common law wife is recognized as a of the capital improvement, including interest
co-tenant by the landowner and is entitled to thereon, will be determined, and the number of
cultivation of the same after the common-law years shall be fixed within which the increase in
husband had left the landholding. rental shall be paid. In case of disagreement, the
Adjudicator shall determine the reasonable
8.3 When co-tenancy exists with the consent
increase in rental. (R.A. No. 3844, Section 34,
of the landowners.
4th proviso).
The DAR adheres to the policy of
13. The lease rental determined by the
"indivisibility of tenancy", hence, only the
MARO in accordance with law and existing
foregoing exceptions are recognized.
policies of the DAR shall be binding and
9. Where there are two tenants on the immediately executory upon execution of the
same lot (when divisibility of tenancy is allowed), leasehold contract by both the lessor and the
each producing a different crop, they may lessee and affirmation by the MARO.
decide to have a joint leasehold agreements
14. Leasehold agreements under this Order
with the landholder, whichever is feasible. This
shall be in writing, using the prescribed
provision applies only to tenancy relationship
leasehold contract, duly notarized and registered
existing as of the effectivity of this Order and
with the Municipal Treasurer's Office. Refusal of
shall not be countenanced prospectively.
the landholder to sign a leasehold contract shall
10. An agricultural lessee shall continue the not affect the tenant's status as lessee.
enjoyment and possession of his landholding
15. Existing leasehold agreements shall be
except when his dispossession has been
respected provided that the agreed lease rentals
authorized by the proper tribunal in a judgment
do not exceed the maximum provided by law
that is final and executory for causes provided
and the other stipulations therein are not
by law (R.A. No. 3844, Section 36(6)). To avoid
contrary to law. For the purpose of determining
compounded rents, it shall be the duty of the
compliance with the terms and conditions written
Municipal Agrarian Reform Officer (MARO) to
therein, these agreements shall be subject to the
encourage farmers to avail of the crop insurance
MARO's periodic review.
program of the government.
16. All issues related to the implementation
11. In case a prospective agricultural lessee
of this Administrative Order and the Leasehold
is under serious threat of eviction as a
Contract shall, as much as possible, be resolved
consequence of the leasehold coverage
within the level of the MARO and/or the PARO, if
implementation (not as a consequence of
still necessary, pursuant to the rule on
execution of a lawful order), the matter shall be
exhaustion of administrative remedies.
immediately reported, with the assistance of the
MARO, to the nearest police or law enforcement 17. If the landowner refuse to accept the
agency for documentation. Such report may Provisional Lease Rental (PLR), the lessee shall
later be necessary in guiding the DAR in deposit the contested lease rental with the
resolving questions pertaining to existence or nearest Land Bank of the Philippines (LBP)
non-existence of tenancy relationship. TIHDAa Office, or any duly authorized banking institution
in the locality, in a trust account in the name of
the landholder if the payment is in cash or in a
bonded warehouse if the payment is in kind. The V. SPECIFIC POLICIES FOR LANDS
lessee shall notify the MARO and the landholder PRIMARILY DEVOTED TO SUGARCANE AND
on the payment made. COCONUT

The same rule shall apply to A. SUGARCANE LANDS


landholdings covered by leasehold contracts
where the landowner refuses to accept the lease In the implementation of the leasehold system,
rental. particularly in sugarcane lands, the following
policies shall apply:
18. In case of disagreement over the issue
on the fixing of lease rentals, the PLR issued by 1. In order to progressively improve the
the MARO shall be reviewed and affirmed by the condition of the lessee, and as part of the
PARO. If no action is taken by the PARO after leasehold arrangement, the lessee shall have
the lapse of fifteen (15) days from receipt of a the following rights to be exercised by him
copy thereof, the PLR shall be deemed personally or through a duly registered
approved and shall govern the leasehold cooperative/farmers' association of which he is a
relation. SCDaET bonafide member:

19. Any party who disagrees with the 1.1 To enter into a contract with the sugar
MAROs decision must submit within 15-day central millers for the milling of the sugarcane
period an original complaint before the grown on the leased property. Any milling
Provincial Agrarian Reform Adjudicator contract existing between the landholder and the
(PARAD). Notwithstanding the filing of the case sugar millers shall be deemed to have been
before the PARAD, the MARO's decision shaft amended, with the lessee/s assuming all the
be provisionally observed as provided in the rights of the landholder in such contract, until the
preceding paragraph until and unless the lessee/s and the miller shall have entered into a
PARAD rules otherwise after adjudicating the new milling agreement under the reasonable
lease rental on the merits. terms and conditions.

20. The Adjudicator shall decide the case 1.2 To be issued a warehouse receipt
within thirty (30) days from the last day of the (quedan) or molasses storage certificate by the
filing date of the last responsive pleading, sugar central for the manufactured sugar,
pursuant to the first sentence of Section 51 R.A. molasses and other by-products.
No. 6657.
1.3 To have free access to the sugar
21. In case of disagreement over the issue central/s factory, facilities, and laboratory for
of existence of tenancy relationship and the purposes of checking and/or verifying records
MARO's finding is in favor of its existence, and and procedures in the processing of sugarcane
later a party files a case before the Adjudicator, through professional representation.
the distribution of the proceeds from the
1.4 To be furnished a weekly statement of
intervening harvest shall be as follows:
cane and sugar account showing, among other
21.1. Release 50% to the party claiming to be things, the tonnage of the delivered cane and
tenant: analysis of the crusher juice. CEDHTa

21.2. Release 25% to the landholder; 1.5 To be given thirty (30) days notice in
writing before the sugar and other by-products
21.3. Deposit the cash equivalent of the are sold through public auction. These rights
remaining 25% in a bank account in the name of shall bind the DAR Sheriff or person designated
the Department of Agrarian Reform in trust for by the Adjudicator to have custody of the
the parties concerned. unliquidated harvest to observe the process of
public auction and shall not be allowed a 6. The lease rental of the land shall be paid
negotiated sale of the sugar and other in an amount certain, in money or in produce, or
byproducts. both, as may be agreed upon by the parties.
Such rental shall be paid after the exact produce
1.6 To be provided with the standard shall have been determined using the Certificate
tonnage allocation by the miller/sugar central. of Quedan and molasses storage certificate
issued by the sugar central/miller, unless
2. The lease rental for sugarcane lands
otherwise agreed upon by the parties under
shall be not more than twenty five percent (25%)
reasonable terms and conditions. CHcTIA
of average normal harvest less the value of the
cost of seeds/cane points, harvesting (cutting), 7. The agricultural lessees shall not be
loading, hauling, and/or trucking fee, and cost of required to assume, directly or indirectly, any
processing, pursuant to Section 34 of R.A. No. part of the rent, or other considerations which
3844. (See Annex "A" on sample computation) the agricultural lessor is under obligation to pay
third persons for the use of the land (R.A. No.
3. The determination of the average normal
3844, Section 31).
harvest to be used in computing the lease rental
in sugarcane lands shall be based on the 8. Any contract by which the agricultural
following: lessee is required to accept a loan or to make
payment(s) in kind shall be contrary to law,
3.1 If the leasehold relationship existed
moral or public policy (R.A. No. 3844, Section
before 15 June 1988, the effectivity ofR.A. No.
15).
6657, the average normal harvests of the three
(3) agricultural years immediately before the 9. The agricultural lessor may mortgage
date of the leasehold relationship was expected rentals (R.A. No. 3844, Section 29)
established shall be used.
10. Notwithstanding the above provisions of
3.2 If the leasehold relationship was the law and any contract of mortgage existing
established on 16 June 1988 by operation of between the landholder-planter and financial
R.A. No. 6657, the average normal harvest of institutions to the contrary, it is unlawful for the
the three (3) agricultural years immediately landholder-planter to mortgage to any entity
preceding the said date shall be used. (such as banks or financial institutions) that part
of produce which is due to the agricultural
3.3 If the land has been cultivated for less
lessee.
than three (3) years prior to the ate the
leasehold was established, the estimated normal 11. If the landholder incurred loans from a
harvest during the three (3) agricultural years bank or any financial institution, such bank can
immediately preceding the said date shall be only attach the fixed lease rental due to the
considered as a normal harvest. landholder. It is unlawful for the bank or any
financial institution to withhold the quedan
4. An agricultural year for sugarcane shall
covering the portion of the crop due to the
be understood to mean the period from land
lessee.
preparation to harvesting. Ratooning (from trash
burning to harvesting) shall likewise be 12. The DAR shall encourage sugarcane
considered as one agricultural year. farmer-lessees to establish associations or
cooperatives which shall assist them or directly
5. The leasehold agreement shall include
deal with the millers, processors, transport
both the sugarcane products (sugar) and by
operators, and financial and banking institutions.
products (molasses).
The DAR shall likewise assist farmer-lessees in
securing milling accommodations or 3.2 If the final product is green nuts, the
membership in sugar planters associations. deductible items above shall be used except for
the cost of processing.
B. COCONUT LANDS
3.3. The final product is husked nuts, the cost
In the implementation of the leasehold system, in items 3.1.1 and the cost of husking in 3.1.2
particularly in coconut lands, the following shall be deducted.
policies shall apply:
4. The lease rental for the coconut lands
1. The indiscriminate or substantial cutting shall not be more than twenty-five percent (25%)
of coconut trees by the landholder or his assigns of the average normal harvest for a specific area
is prima facie evidence of dispossession of the for the preceding three (3) calendar years less
tenant-lessee from his farmholding. The the value of production cost. (See Annex "B" on
following documents may, however, rebut the sample computation)
presumption:
5. In case there is large-scale replanting in
1.1 Written consent of the lessee; and the coconut area initiated by the lessor which
may affect the normal coconut production in
1.2 A permit to cut coconut trees from the
particular and the leasehold arrangement in
Philippine Coconut Authority, in accordance with
general, a new lease rental may be computed
R.A. No. 8048 (Coconut Preservation Act of
proportionate to the decrease in production.
1995) and its implementing rules and
regulations. 6. In the computation of lease rentals,
principal crops already existing within the
2. Consistent with the state policy to
homelot when the same was established shall
provide for the growth of the coconut industry
be considered as included in the leasehold.
through a sustainable replanting program, as
enunciated in R.A. No. 8048, and in consonance VI. RIGHTS AND OBLIGATIONS
with the preceding paragraph, it shall be the duty
of the MARO assigned in the area to encourage A. Rights of Agricultural Lessees. — It shall
replanting of coconut trees and the maximization be the right of the agricultural lessee to:
of the landholding especially the area in
between the coconut trees. He/She shall assist 1. Have possession and peaceful
the parties in coordinating with proper enjoyment of the land;
government agencies and institutions. IHCDAS
2. Manage and work on the land in a
3. The application of the allowable manner and method of cultivation and harvest
deductible items in coconut shall depend on the which conform to proven farm practices;
final product as defined in this AO.
3. Mechanize all or any phase of his farm
3.1 If the final product is copra, the work;
deductible items are the:
4. Deal with millers and processors and
3. 1.1 cost of harvesting, which shall include attend to the issuance of quedans and
picking and piling; and warehouse receipts for the produce due him;

3.1.2 cost of processing, which shall include 5. To be afforded and/or continue the
husking, splitting, scooping, and drying. exclusive possession and enjoyment of a
homelot;

6. Be indemnified for the cost and


expenses incurred in the cultivation, planting or
harvesting and other expenses incidental to the 9. Redeem the landholding at a reasonable
improvement of his crop in case he surrenders price and consideration in case the agricultural
or abandons his landholding for just cause or lessor sold the same to a third person without
ejected therefrom. In addition, he has the right to the agricultural lessee's knowledge pursuant to
be indemnified for one-half of the necessary and Section 12 of R.A. No. 3844.
useful improvements made by him on the
landholding. Provided, That these improvements B. Obligations of Agricultural Lessee. — It
are tangible an have not yet lost their utility at shall be the obligation of the agricultural lessee
the time of surrender and/or abandonment of the to:
landholding, at which time their value shall
1. Cultivate and take care of the farm,
determined for the purpose of the indemnity for
growing crops, and other improvements on the
improvements;
landholding as a good father of a family and
7. Terminate the leasehold during the perform all the work therein in accordance with
agricultural year for any of the following causes: proven farm practices; TcIAHS

7.1 Cruel, inhuman or offensive, treatment of 2. Inform the agricultural lessor within a
the agricultural lessee or nay member of his reasonable time of any trespass committed by
immediate farm household by the agricultural third persons upon the farm, without prejudice to
lessor or his representative with the knowledge his direct action against the trespasser;
and consent of the lessor;
3. Take reasonable care of the work
7.2 Non-compliance on the part of the animals and farm implements delivered to him
agricultural lessor with any of the obligations by the agricultural lessor and see that they are
imposed upon him by the provisions of R.A. No. not used for purposes other than those intended
3844 or by his contact with the agricultural or used by another without the knowledge and
lessee; consent of the agricultural lessor: Provided,
however, That if said work animals get lost or
7.3 Compulsion of the agricultural lessee or die, or said farm implements get lost or are
any member of his immediate farm household destroyed, through the negligence of the
by the agricultural lessor to do any work or agricultural lessee, he shall be held responsible
render any service not, in any way connected and made answerable therefore to the extent of
with farm work or even without compulsion if no the value of the work animal and/or farm
compensation is paid; implements at the time of the loss, death or
destruction;
7.4 Commission of a crime by the
agricultural lessor or his representative against 4. Keep his farm and growing crops
the agricultural lessee or any member of his attended to during the work season in case of
immediate farm household; or unjustified abandonment or neglect of hi farm,
any or all of his expected produce may, upon
7.5 Voluntary surrender due to order of the Court, be forfeited in favor of the
circumstances more advantageous to him and agricultural lessor to the extent of the damage
his family. caused thereby; ADSIaT

8. Have the preferential right to buy the 6. Pay the lease rental to the agricultural
agricultural landholding under reasonable terms lessor when it falls due. Provided, that the non-
and conditions in case the agricultural lessor payment of the rental due to crop failure to the
decides to sell the same (Sec. 11R.A. No. extent of 75% as a result of a fortuitous event
3844). shall not be a ground for dispossession,
although the obligation to pay the rental due that according to the best interest of the parties
particular crop is not thereby extinguished. concerned; and

C. Prohibitions on Agricultural Lessees. — It 4. Mortgage expected rentals.


shall be unlawful for the agricultural lessee to:
E. Obligations of Agricultural Lessors. — It
1. Contract to work additional landholdings shall be the obligation of the agricultural lessor
belonging to a different agricultural lessor or to to:
acquire and personally cultivate an economic
family-size farm, without the knowledge and 1. Keep the agricultural lessee in peaceful
consent of the agricultural lessor with whom he possession and cultivation of his landholding;
had entered first into leasehold, if the first and
landholding is of sufficient size to make him and
2. Keep intact such permanent useful
the members of his immediate farm household
improvements existing on the landholding at the
fully occupied in its cultivation; or
start of the leasehold relation as irrigation and
2. Employ a sub-lessee on his landholding: drainage system and marketing allotments,
Provided, however, That in case of illness or which in the case of sugar quotas shall refer
temporary incapacity, he may employ laborers both to domestic and export quotas, provisions
whose services on hi landholding shall be on his of existing laws to the contrary notwithstanding.
account. HaECDI

D. Rights of Agricultural Lessors. — It shall F. Prohibitions on Agricultural Lessors. — It


be the right of the agricultural lessor to: shall be unlawful for the agricultural lessor to:

1. Inspect and observe the extent of 1. Dispossess the agricultural lessee of his
compliance with the terms and conditions of landholding except upon authorization by
their contract and the provisions of this Chapter; DARAB. Should the agricultural lessee be
dispossessed of his landholding without
2. Propose a change in the use of the authorization from the DARAB, the agricultural
landholding to other agricultural purposes, or in lessor shall be liable for damages suffered by
the kind of crops to be planted: Provided, That in the agricultural lessee in addition to the fine or
case of disagreement as to the proposed imprisonment prescribed inR.A. 3844 for
change, the same shall be settled by the Court unauthorized dispossession;
according to the best interest of the parties
concerned. Provided, further, That in no case 2. Require the agricultural lessee to
shall an agricultural lessee be ejected as a assume, directly or indirectly, the payment of the
consequence of the conversion of the land to taxes or part thereof levied by the government
some other agricultural purpose or because of a on the landholding;
change in the crop to be planted;
3. Require the agricultural lessee to
3. Require the agricultural lessee, taking assume, directly or indirectly; any part of the
into consideration his financial capacity and the rent, "canon" or other consideration which the
credit facilities available to him, to adopt in his agricultural lessor is under obligation to pay to
farm proven farm practices necessary to the third persons for the use of the land;
conservation of the land, improvement of it
4. Deal with millers or processors without
fertility and increase of its productivity. Provided,
written authorization of the lessee in case where
That in case of disagreement as to what proven
the crop has to be sold in processed form before
farm practice the lessee shall adopt, the same
payment of the rental; or
shall be settled by the Adjudicator or PARO
5. Discourage, directly or indirectly, the necessary documents, within fifteen (15) days
formation, maintenance or growth of unions or upon receipt thereof, such as: production data,
organizations or agricultural lessees in his cost of production, type or kind of crops planted
landholding, or to initiate, dominate, assist or (principal and auxiliary), any evidence as proof
interfere in the formation of administration of any of the average normal harvest, including the cost
such union or organization. of deductible item(s), during the three (3)
agricultural years immediately preceding and
VII. OPERATING PROCEDURES other relevant information, i.e., receipt of
payments, affidavit or any proof from
A. Identification Phase
disinterested persons/parties attesting to the
The MARO shall, motu propio, or at the instance existence of leasehold relationship between the
of either the landholder or the tenant, identify all landholder and his/her tenants. .
landholdings still under the tenancy as of the
2. Review and evaluate the documents or
effectivity of R.A. No. 6657, and list the
pieces of evidence submitted by the parties,
landowner and the tenants thereon, with the
including, if any, report of threat or eviction of
assistance of the Barangay Agrarian Reform
prospective lessees.
Committee (BARC), and people's
organization/non-government organization C. Meeting and Mediation Conference
(POs/NGOs) that are present in the area. The
MARO shall then prepare the list of identified The MARO, with the assistance of the BARC or
landholdings subject of agricultural leasehold in the absence thereof, the Barangay Council
and prepare the individual profile of the concerned, shall jointly conduct the mediation
landholdings with its corresponding landholders conference on the scheduled date between the
and tenants. landowner(s) and the lessee(s) for the purpose
of fixing the lease rental. The MARO shall
This activity, however, shall be considered explain in local dialect to the parties concerned
independent from the determination and fixing of the salient features of the leasehold system,
lease rental as it is assumed to be a regular particularly on the following:
function of the MARO.
1.1 security of tenure;
B. Notice of Conference
1.2 rights and obligations;
After identification of all tenanted agricultural
.lands in the community/barangay, the MARO 1.3 grounds for dispossession;
shall: aTHASC
1.4 prohibitions and limitations;
1. Send an invitation letter, through
personal service or registered mail, to the tenant 1.5 terms and conditions; and
and to the landholder, or his administrator or
1.6 other related information.
overseer for the farm, for a mediation
conference, copy furnished the BARC and the The Minutes of the Mediation/Meeting shall be
Barangay Captain/Council. Priority shall be signed by the parties concerned.
given to those represented by peasant's
organization. The voluntary application by any In the event any party fails to appear during the
lessor for the fixing of the rental shall likewise be scheduled conference despite notice, the
immediately acted upon. MARO, in addition to mailing the notice at the
last known address of the parties, shall cause
The invitation letter shall indicate the the posting of the notice within seven (7) days at
date or schedule of the conference, between the any conspicuous place in the
parties and require them to submit the
barangay/municipality where the property is 2 In case of disagreement as to the issue
located. Compliance with these requirements is of existence of tenancy and fixing of lease
sufficient for the MARO to fix the Provisional rental.
Lease Rental (PLR) based on data presented by
the other party and those gathered by him/her. 2.1.1 The MARO shall gather additional
evidence and complete the corresponding LDF
D. Determination and fixing of Rental which shall contain all information/data
pertaining to the disputed matter. On the basis
On the basis of the documents and/or evidence of the documents submitted and gathered,
presented or as gathered, the MARO with the determine if there exist a tenancy relationship
assistance of the BARC, shall proceed with the and compute for the lease rental and thereafter
computation of the lease rental applying the issue a Provisional Lease Rental (PLR) within
formula prescribed under these Rules. SaHIEA seven (7) days upon manifestation of
disagreement by any of the parties. For this
1. In case of agreement, the MARO shall:
purpose, the PLR and the corresponding LDF
1.1 assist the parties in executing the shall be submitted immediately to the PARO for
agricultural leasehold contract which shall automatic review, whenever warranted, and
become immediately binding and executory affirmation. Simultaneously, copies of the PLR
upon signing thereof. The rental to be paid as shall be sent to the tenant and the landholder.
consideration for the lease of the land shall be
2.2. The PARO shall act on the PLR within
embodied in the prescribed leasehold
fifteen (15) days upon receipt thereof. If no
agreement from which shall be drawn up in five
action is taken by the PARO within the 15-day
(5) copies in the language or dialect known to
period, said PLR is deemed approved and
the parties or their duly authorized
executory and shall, henceforth, govern the
representatives before two witnesses;
tenancy relation until and unless ordered
1.2 affirm the agreements stipulated in the otherwise by a court of competent jurisdiction
leasehold contract and require the parties to after due hearing on the merits.
cause the notarization of the affirmed LHC by
Any party may challenge the PLR by
the DAR commissioned notary public or in his
filing an original action before the Adjudicator
absence, any notary public within the area;
where the landholding is situated within fifteen
1.3 register the leasehold agreement with (15) days upon receipt of a copy thereof.
the Municipal Treasurer and furnish each party a Provided, that where the PLR was determined
copy of the registered Leasehold by the MARO in a situation where the landholder
Agreement/Contract; failed to appear at the mediation conference, the
latter shall be deemed to have waived the right
1.4 prepare a Leasehold Documentation to adduce evidence on the existence of tenancy
Folder (LDF) that would contain the contract and relation and production data, as the case may
all relevant evidence and document gathered by be.
the MARO or submitted by the parties for the
purpose. The filing or pendency of an action
before the adjudicator, shall not affect the
1.5 transmit the LDF to the PARO for implementation of the PLR unless and until the
monitoring and proper annotation of the PARAD rules otherwise after due hearing on the
Leasehold Contract at the back of the LOs' title. merits. The PARAD may not enjoin the
The annotation shall not hinder the execution of implementation of the PLR and shall not subject
the leasehold contract. the same to injunction or Temporary Restraining
Order.
2.3 In case the MARO's finding and shall be forwarded to the PARO for
determination denies the existence of tenancy consolidation and submission of appropriate
relationship, no PLR shall be issued and the report to the DARCO-BLAD, copy furnished the
only legal remedy available to the party alleging DARRO.
existence of tenancy relationship is an original
action before the Adjudicator. The PAROs shall ensure the conduct of periodic
review of all existing leasehold contracts and the
The annotation of the leasehold arrangement at proper adjustment thereof, if warranted, based
back of the Original Copy of Certificate of Title on the changes in production, income and other
on file with the Register of Deeds (ROD) shall be essential agricultural and transactional activities
required for landholdings where existence of significantly affecting the lessor and the lessee
tenancy is not questioned. of the agricultural land. All subsequent changes
in the contracts shall be properly reflected in the
VIII. SUPERVISION OF HARVEST LDF of every particular landholding. HaIESC

A. When crops are ready for harvesting Both the PAROs and the MAROs concerned
during the pendency of the proceeding but shall likewise document and consolidate all
before the leasehold contract is executed by the cases, issues and concerns relating to the
parties, or before the issues in dispute implementation of leasehold for submission to
particularly the lease rental are resolved by the DAR Central Office, attention: the Bureau of
MARO, the following arrangement shall govern Land Acquisition and Distribution, for
the supervision of harvest: appropriate action and/or proper disposition.

a. 75% goes to the lessee claiming to be X. SANCTIONS


tenant; and
Any person who willfully prevents or obstruct the
b. 25% goes to the landholder implementation or enforcement of the policies
and instructions contained herein shall be held
The above proportions shall, however,
liable in accordance with Section 74 of R.A. No.
be released after deducting the cost or amount
6657.
of deductible items as defined in Section III (10)
of this A.O. Administrative sanctions shall be imposed on
DAR personnel, without prejudice to the filing of
B. In case, however, a PLR has been
criminal and civil actions, who have willfully,
issued by the MARO and the party
feloniously, and/or erroneously processed
rejects/contests the same before the Adjudicator
leasehold folders, and circumvented the
or request for a supervision of the intervening
provisions of this A.O. resulting to the
harvest/s, the provisional lease rental shall
dispossession or transfer of agricultural lands to
govern the supervision of intervening harvest
individuals who are not actual tenants under
from date of issuance until the Adjudicator rules
CARP.
otherwise.
XI. TRANSITORY PROVISIONS
IX. MONITORING AND REPORTING
Upon the effectivity of this Administrative Order,
All MAROs shall maintain an annually updated
all DAR offices concerned shall undertake a
crop-based inventory of all tenanted
massive information dissemination campaign on
landholdings in their areas of responsibility. The
leasehold system. All existing leasehold
inventory should reflect accurate information as
contracts shall be reviewed and updated
to the extent of the leasehold implementation in
accordingly. Existing leasehold agreements shall
the area including the landholdings they have
be respected provided that the agreed lease
actually covered. The updated inventory report
rentals do not exceed the maximum provided by
law and the other stipulations therein are not
contrary to law.

All pending leasehold documentation shall be


processed and acted upon in accordance with
the procedures set forth in this Order.

XII. REPEALING CLAUSE

This Order modifies and/or repeals DAR A.O. 6,


S. 2003, A.O. 4, S. 1997, M.C. 11, S. 1994,A.O.
5, S. 1993, A.O. 9, S. 1991 and A.O. 4, S. 1989
and all other issuances inconsistent herewith.
The unrepealed provisions of R.A. No. 1199, as
amended, R.A. No. 3844, as amended and
applicable provisions of R.A. No. 6657 are
hereby adopted and made an integral part of this
Administrative Order and shall constitute as
guides in the implementation of this A.O.

XIII. EFFECTIVITY

This Order shall take effect ten (10) days after


its publication in two (2) newspapers of general
circulation, pursuant to Section 49 of R.A. No.
6657.

Diliman, Quezon City, March 15, 2006.

(SGD.) NASSER C. PANGANDAMAN

OIC-Secretary