Agricultural Land Reform Code of Philippines

Law Summary

Composition of Code

Establishes agricultural leasehold system to replace share tenancy.
Declares rights for agricultural labor.
Authorizes acquisition and equitable distribution of agricultural land.
Creates financing and credit assistance machinery for agriculture.
Provides marketing, management, and technical assistance machinery.
Establishes unified administration for land reform projects.
Implements land capability survey, classification, and registration.
Provides a judicial system for land reform disputes.

Abolition of Agricultural Share Tenancy

Declares share tenancy contrary to public policy and abolishes it.
Existing share tenancy contracts may continue until next agricultural year if leasehold system agencies operate.
Separate arrangements mandated for lands with marketing allotments.
Implied leasehold relationship arises where share tenancy ceases or is void.
Lawful leasehold contracts before Code’s effectivity continue until modified.

Agricultural Leasehold Relation: Establishment and Parties

Leasehold relation established by law or contract, oral or written.
Parties limited to land provider (owner, lessee, usufructuary) and person personally cultivating the land.

Tenure and Extinguishment of Leasehold

Lessee has right to continue cultivating land until leasehold extinguished.
Security of tenure guaranteed; ejection only by court authorization.
Extinguishment by abandonment, voluntary surrender with 3 months notice, or absence of successors upon death/incapacity.
Leasehold continues with successors chosen by lessor or legal heirs upon death/incapacity of lessee/lessor.
Leasehold not extinguished by contract expiration or sale of land; successor takes place of lessor.

Lessee's Rights of Pre-emption and Redemption

Lessee has preferential right to buy land if lessor sells, limited to area cultivated.
Right of pre-emption exercised within 90 days; Land Authority may pre-empt entire land with lessees’ consent.
Lessee may redeem land sold to third party at reasonable price within two years, limited to area cultivated.

Agricultural Leasehold Contract

Parties free to stipulate terms not contrary to law, morals, or public policy.
Prohibits excessive rental, forced hiring from lessor/third persons, forced services beyond farming duties, fines, or forced loans.
Written contracts are in quadruplicate, signed by parties and witnesses, acknowledged before justice of the peace, and registered.
Contract registration free of fees and conclusive if not contested within 30 days.

Lessee Property and Transactions

25% of produce and certain work animals/farm implements exempt from lien or execution.
Official or agreed weights and measures to be used in agricultural transactions.

Rights and Obligations of Lessee

Rights: Possession, management of land, mechanization, direct dealings with processors.
Right to exclusive possession of home lot included in leasehold.
Right to indemnity for labor and improvements if land is surrendered or abandoned.
Obligations: Cultivate with care, report trespass, care for lessor’s tools/animals, keep farm attended, prior notice for harvest, pay rental.
Prohibited from leasing additional lands if economically occupied, or employing sub-lessees except laborers during incapacity.

Termination of Leasehold by Lessee

Lessee may terminate lease during agricultural year for inhuman treatment, lessor’s non-compliance, forced non-farm work without pay, crime by lessor, or advantageous surrender.

Rights and Obligations of Lessor

Rights: Inspect farm operations, propose changes in land use or crops (court settles disputes), require proven farm practices, mortgage expected rentals.
Obligations: Ensure peaceful possession, maintain permanent useful improvements.
Prohibited: Unauthorized dispossession, tax passing, imposing third-party rents, dealing with processors without written consent, interfering with lessee organizations.

Cost and Payment of Irrigation Systems

Construction may be borne by lessor who can increase rental proportionately.
If lessor refuses, lessee may pay without rental increase but shall be compensated.
Non-functional irrigation systems not considered improvements.

Payment of Lease Rental

Rental payable in money or produce after harvest.
No advance payment or bonds required; lessor has special lien on produce for rental.

Rental Consideration Limits

Riceland and other crop lands rent not more than 25% of average normal harvest minus expenses.
Rental adjusted after three years, based on average harvest.
Rental increases allowed for capital improvements by lessor.

Exemptions and Exceptions

Fishponds, saltbeds, and lands with permanent trees governed by prior laws and tenancy systems.

Possession and Grounds for Ejectment

Lessee maintains possession despite lease expiration or land transfer.
Ejectment only by final court judgment for lawful causes including owner's personal cultivation or bona fide land conversion.
Lessee non-compliance, negligent damage, failure to pay rent, or prohibited subletting justify ejectment.

Proof, Limitations, and Penalties

Burden on lessor to prove lawful ejectment cause.
Actions under Code barred after three years.

Rights of Agricultural Labor

Includes self-organization, concerted activities, minimum wage, eight-hour workday, claim for injury damages, compensation, and protection against suspension or lay-off.
Supervisors excluded from farm labor organizations but may form separate ones.
Employers must allow free entry/exit for workers and their representatives.
Minimum daily wage fixed at P3.50, subject to increase.
Overtime pay rules and rest periods established.
Employers prohibited from compelling work on Sundays/legal holidays without extra pay.
Rights to reinstatement if unjustly suspended or dismissed.

Land Authority: Organization and Functions

Created under President's supervision with Governor and Deputies appointed for five-year terms.
Governor qualifications: natural-born citizen, 35 years old, experience in land reform.
Powers include initiating expropriation for land redistribution, administering public lands, resettlement, surveying, subdivision, financing arrangements, and reports.
Appropriations provided for operation and land capability surveys.

Land Authority: Expropriation Procedure

Expropriation initiated upon petition by one-third of lessees for private agricultural land.
Immediate possession upon deposit of estimated just compensation with court.
Prompt subdivision and allocation to beneficiaries.
Just compensation determined by lease rental capitalized at 6% interest.
Courts supervise issuance of titles for subdivided lots.
Landowner restricted from alienation or eviction before authority's acquisition.

Distribution and Sale of Expropriated Land

Land Authority sells subdivided lands at cost plus 6% annual interest over max 25 years.
Lessees may prefer to remain tenants; rent applied to purchase price.
Facilitation of cooperative associations encouraged.
Landholdings restricted from resale or encumbrance for ten years.
Titles carry inscriptions prohibiting transfer or subdivision.
Lands are exempt from attachment except in mortgage foreclosure.
Expropriation cases prioritized, to be resolved within six months.

Agricultural Lands of the Public Domain

Public agricultural lands surveyed, titled, and transferred to Land Bank for distribution.
Census of existing settlers conducted.
Assistance to settlers for transport, equipment, housing, and credit provided.
Lands suitable for large-scale farms may be sold to qualified bondholders with cultivation conditions.
Transfers and balances of abolished agencies shifted to Land Authority.
Appropriations granted for operational funds.

Land Bank: Creation and Powers

Established to finance acquisition and resale of landed estates and lessee purchases.
Has corporate powers including property transactions, contract authority, purchase/investment operations, and legal capacity.
Issues tax-exempt bonds and preferred shares guaranteed 6% returns.
Bonds can be used for payments to government corporations and reparations.
Governed by a Board of Trustees with specific appointment and compensation provisions.
Receives savings and time deposits under Central Bank supervision.
Exempt from taxation.
Criminal penalties for violations by officers or agents.

Agricultural Credit Administration

Reorganized to align with land reform objectives.
Funds appropriated for expanded credit functions.
Privilege to rediscount loans approved.
Credit directed to cooperatives, small farmers, and for construction/acquisition of facilities.
Loan caps and security provisions established.
Interest rates capped at 8% with government coverage of shortfalls.
Power to audit cooperatives, prosecute officials for malfeasance.
Free notarial and registration services for loans.
Authority to write off uncollectible loans after five years.
Exempt from duties and taxes.

Agricultural Productivity Commission

Bureau of Agricultural Extension renamed and placed under President’s supervision.
Powers of Agricultural Tenancy Commission transferred.
Headed by Agricultural Productivity Commissioner with specified qualifications.
Divisions created for cooperatives and others as needed.
Extension workers recruited, trained, and tasked with farmer assistance, education, and cooperative promotion.
Appropriations allocated for activities.

Land Reform Project Administration

National Land Reform Council created composed of heads of relevant agencies and minority party member.
Council formulates land reform programs, policies, guidelines, and rules.
Establishes land reform districts based on feasibility criteria.
Regional Land Reform Committees and Project Teams implement programs locally.
Project Teams conduct surveys, planning, and beneficiary selection.

Land Capability Survey and Classification

Land Authority authorized to conduct surveys and classifications with cooperation from relevant agen