Agricultural Tecy Act of 1954

Key definitions and tenancy classification

Section 3 defines “agricultural tenancy” as the physical possession of agricultural land devoted to production where the land belongs to, or is legally possessed by, another, and cultivation is through the tenant’s labor and members of the tenant’s immediate farm household, in consideration of sharing the harvest or paying an ascertainable price (produce, money, or both).
Section 4 classifies agricultural tenancy into:
- Share tenancy, where one party furnishes land and the other furnishes labor (with contributions to production possible), with personal cultivation by the tenant using labor from the immediate farm household, and division of produce in proportion to contributions.
- Leasehold tenancy, where the cultivator (personally or with aid of immediate farm household labor) undertakes to cultivate the land susceptible of cultivation by a single person in consideration of a price certain or ascertainable in money and/or percentage of production.
Section 5 defines:
- “Tenant” as the person who cultivates the land with labor available from the tenant’s immediate farm household, with the landholder’s consent, under share tenancy (sharing produce) or under leasehold tenancy (paying ascertainable consideration in produce or money or both).
- “Landholder” as the person (natural or juridical) who lets or grants use/cultivation of land for consideration in shares (share tenancy) or a price (leasehold tenancy), as owner, lessee, usufructuary, or legal possessor.
- “Agricultural year” as the time needed for seasonal agricultural products including land preparation, sowing/planting, and harvesting; for crops (including coconuts, citrus, coffee, ramie, and other multi-harvest crops) it is from land preparation to first harvest and thereafter from harvest to harvest, and may be shorter or longer than a calendar year.
- “Farm implements” as hand tools or machines ordinarily employed in a farm enterprise; “work animals” as animals ordinarily employed (including carabaos, horses, bullocks, etc.).
- Terms defining phases/stages and concepts used in tenancy operations (including “pulling of the seedlings,” “final harrowing,” “reaping,” “harvesting,” “piling into small stacks,” “piling into big stacks,” and “proven farm practices”).
- “Fair rental value” as an amount of money not in excess of allowable depreciation plus six percent (6%) interest per annum computed at market value, with specific caps for work animals and farm implements (not to exceed five percent (5%) of the gross harvest for each).
- “Immediately after” as inclusive of the last day of harvesting/threshing/processing and the next five days thereafter.
- “Immediate farm household” as family members of the tenant and other dependent persons (related or not) who usually help operate the farm enterprise.
- “Incapacity” as any cause or circumstance that prevents the tenant from fulfilling contractual and statutory obligations.
- “Inspect” as examination/observation that must not include intimidation or coercion.
- “Auxiliary crop” as any product raised other than the principal crop, excluding produce covered by Section 26.

How tenancy relationship arises and ends

Section 6 provides that a tenancy relationship is a juridical tie arising once parties expressly or impliedly agree to undertake joint cultivation of land under share or leasehold tenancy, giving the tenant the right to continue working until dispossession for just causes or until termination under Section 9.
Section 7 states that the tenancy relationship may be established verbally or in writing, expressly or impliedly.
Once established under Section 7, the tenant is entitled to security of tenure under the Act.
Section 8 limits the relation of landholder and tenant to:
- the person who furnishes land (as owner, lessee, usufructuary, or legal possessor), and
- the person who actually works the land personally with labor available from the immediate farm household.
Section 9 extinguishes the tenancy relationship by:
- voluntary surrender by the tenant, or
- tenant’s death or incapacity.
Section 9 also provides that, despite death or incapacity, the tenant’s heirs or immediate farm household members may continue to work the land until the close of the agricultural year.
Section 9 provides that expiration of the contract period, and sale or alienation of the land, do not of themselves extinguish the relationship; the purchaser or transferee assumes rights and obligations of the former landholder.
Section 9 provides that if the landholder dies, the landholder’s heirs assume rights and obligations.
Section 10 states that stipulated tenancy contract terms continue until modified by the parties, and modifications must not prejudice the tenant’s security of tenure under Sections 6, 7, and 49.

Contract rules, registration, and evidence

Section 11 gives the landholder and tenant freedom to enter into any tenancy contract types, so long as contracts are not contrary to law, morals, or public policy.
Section 11 provides that, except for fraud, error, force, intimidation, or undue influence, a written and registered contract reduced to writing is conclusive evidence of what was agreed if not denounced or impugned within thirty days after registration.
Section 11 declares contracts contrary to law, morals and public policy under both systems:
- Share tenancy is void if the tenant receives less than the corresponding share for contributions as later provided, or if the tenant/immediate farm household performs without compensation any work or service not connected with tenant duties under the Act.
- Leasehold tenancy is void if the tenant-lessee pays more than the limits for consideration in the Act (Section 46), or if additional consideration is charged beyond fair rental value for work animals/services/implements when the landholder furnishes them, or if the tenant must rent animals/services/implements from the landholder or must use stores/services operated by the landholder or another person as a condition precedent to lease, or if the landholder may impose fines/deductions/assessments, or if the tenant must perform uncompensated work unrelated to tenant duties.
Section 12 requires that for a tenancy contract to be conclusive evidence, it must be drawn in quadruplicate, signed or thumb-marked by landholder (or authorized representative) and tenant before two witnesses, one chosen by each party.
Section 12 requires reading/understanding safeguards when a party cannot read: one witness chosen by that party must read the document to the illiterate party.
Section 12 directs that contracting parties retain copies; the third and fourth copies must be delivered to the municipal treasurer of the municipality where the land is located for filing and registration of the third copy and forwarding the fourth copy to court.
Section 12 mandates the municipal treasurer to annotate each copy with registration facts including date, time and place and entry/registration number.
Section 12 prohibits payment or requirement of fees or stamps of any kind.
Section 12 provides that when one party cannot read, the burden of proof to show the illiterate party understood the contract rests on the other party who can read, in case of doubt.
Section 13 establishes a “Registry of Tenancy Contracts” maintained by the municipal treasurer for tenancy contracts within municipal jurisdiction.
Section 13 requires keeping registry with a copy of each contract and annotating subsequent acts (renewal, novation, cancellation, etc.).
Section 13 prohibits the municipal treasurer from charging any fee for registration of contracts or subsequent acts, and provides that such acts are not subject to documentary stamp tax.
Section 14 grants the tenant the right to change the tenancy contract:
- from share to leasehold and vice versa,
- and from one crop-sharing arrangement to another in share tenancy.
Section 14 sets timing:
- if share tenancy is in writing and registered, change is exercised at the expiration of the contract period;
- if no written contract exists, change is exercised at the end of the agricultural year.
Section 14 states that the change to leasehold becomes effective one agricultural year after the tenant serves notice of intention to change on the landholder.
Section 15 limits interest on loans/advances from landholder to tenant connected with cultivation and crop improvement, as well as loans for subsistence, to not exceeding eight percent (8%) per calendar year.
Section 15 provides that for loans/advances other than money (e.g., grain or agricultural products), interest is computed based on the current price of the produce at the time of loan.
Section 15 provides that violations are punished under the Usury Law.
Section 16 provides that obligations evidencing amounts received as loans/advances (money or in kind, including interest) are void unless in writing in a language or dialect known to the party charged and subscribed by that party or by an authorized agent.
Section 17 requires final accounting for each agricultural year:
- within ten days after threshing for rice;
- within the same period after harvest/gathering for other crops;
- within five days after sale when crops must be sold in processed form, with the sales receipt shown to the tenant.
Section 17 requires the accounting note/memorandum to be written in a language or dialect known to the tenant, signed by both parties, and witnessed by two witnesses selected by each party.
Section 17 makes a properly signed accounting conclusive evidence, except for fraud, error, force, intimidation, or undue influence.
Section 17 provides a three-year right: if no written accounting is provided as required, the tenant may within three years from the date of threshing petition the court to compel accounting.
Section 18 governs debt settlement after accounting: advances of money and/or grain/agricultural products for cultivation and subsistence are paid out of the tenant’s share in grain or money at the tenant’s option.
Section 18 requires that grain/agricultural products be appraised in money based on current market value at the place of delivery.
Section 18 provides that when the tenant’s share is not sufficient, the outstanding debt is reduced to money and bears interest of not more than ten percent (10%) per annum.
Section 18 states remaining converted money debt cannot again be converted into kind; it may be paid in money or in agricultural products appraised at local current market price at time of payment.
Section 19 provides an exemption from lien and/or attachment of:
- twenty-five percent (25%) of the tenant’s share of produce in share tenancy, or the entire produce in leasehold tenancy;
- one work animal and one of each kind of farm implement belonging to the tenant,
- if the value of work animal and implements does not exceed five hundred pesos.

Landholder–tenant operational rights and duties

Section 20 requires the use of the official weights and measures of the Government in transactions between landholder and tenant concerning agricultural products.
Section 21 places under original and exclusive jurisdiction of the proper tenancy court all cases involving dispossession and disputes arising from landholder-tenant relationship and violations of the Act, in accordance with courts authorized by law.
Section 22 grants tenant rights including:
- freedom to work elsewhere when farm obligations warrant temporary absence;
- right to provide contributions for production besides labor when adequately and on time;
- protection of dwelling from removal without tenant consent, unless severance under Section 9 or ejection for cause, and only after expiration of forty-five days after severance or dismissal for cause;
- in unjust dismissal forcing work elsewhere, option to remove dwelling at landholder’s cost or demand value at the time of unjust dismissal;
- indemnification for labor and expenses in cultivation/planting/harvesting and incidental expenses in case of dispossession whether for just cause or not, if the crop still exists at the time of dispossession.
Section 23 imposes tenant obligations including:
- cultivating/taking care as a good father of a family using proven farm practices;
- informing landholder at once of third-party trespass;
- reasonable care of work animals and farm implements; prohibiting use for other purposes or allowing other persons to use without landholder knowledge and consent;
- not abandoning/surrendering or leaving farm and growing crop unattended during work season except for just and reasonable cause, with court discretion to forfeit expected share to extent of damage caused by unjust abandonment/surrender.
Section 23 enumerates just and reasonable causes for the tenant to terminate the relationship:
- cruel, inhuman or offensive treatment by landholder or representative toward tenant or immediate farm household;
- landholder non-compliance with obligations imposed by the Act or contract;
- landholder compels tenant or household members to do any work or render services not connected with farm work (or even without compulsion if no compensation is paid);
- crime committed by landholder or representative against tenant or immediate farm household.
Section 24 prohibits tenant conduct including:
- contracting to work simultaneously on two or more separate holdings of different landholders when holding area is five hectares or more or otherwise large enough to fully occupy tenant and immediate farm household, without landholder knowledge and consent of the first tenancy;
- share-tenant employing a sub-tenant to furnish labor on any phase required under the Act except in illness or temporary incapacity, which must be reported to the landholder; payments to sub-tenant in that circumstance are for tenant’s account;
- for leasehold tenants, prohibiting subletting or assigning the lease without the lessor’s written consent (subject to earlier paragraph’s provisions).
Section 25 grants landholder rights including:
- choosing the kind of crop and seeds, subject to court settlement of objections based on best interest of both parties;
- requiring use of fertilizers shown by proven farm practices appropriate to land requirements;
- inspecting/observing tenant compliance with contract and Act provisions;
- representing tenant in processed-form crop sales if tenant has no representative, allowing landholder to deal with millers/processors in representation of tenant.
Section 26 imposes landholder obligations including:
- furnishing tenant an area of not less than one thousand square meters for dwelling and minor enterprises (vegetables, poultry, pigs, other animals, minor industries) with products accruing exclusively to the tenant;
- keeping tenant in peaceful possession and cultivation of holdings.
Section 27 prohibits landholder conduct including:
- dispossessing tenant except for causes enumerated in Section 50, and only after cause is proved before and dispossession authorized by court; otherwise landholder is liable for damages to the extent of landholder’s participation in the harvest plus tenant’s rights under Section 22, aside from fine and/or imprisonment provided for Act violations;
- making tenant bear any part of taxes levied by government on the contract land, directly or indirectly;
- requiring tenant to bear any part of rent, canona, or other consideration landholder owes to a third person for use of land, directly or indirectly.
Section 28 provides deductions and returns from gross harvest:
- same amount of seeds/seedlings used are deducted from gross harvest and returned to the party who furnished them;
- cost of fertilizer and pest/weed control expenses evidenced by sales invoices are paid out of gross harvest and returned to the party who advanced them.
Section 29 governs irrigation:
- landholder bears exclusively construction costs of irrigation system including distributory canals/fools;
- landholder and tenant bear maintenance and operation costs proportionate to their shares in harvest.
Section 30 governs auxiliary crops:
- if land is planted to an auxiliary crop, tenant receives eighty percent (80%) and landholder twenty percent (20%) of net produce if all production expenses are borne by tenant;
- auxiliary crop excludes garden/poultry and other industries raised in the lot assigned under Section 26(a).
Section 31 requires that whenever landholder directs use of fertilizer or insect/disease/rodent control measures, landholder advances costs, deducted from gross produce.

Rice share tenancy: share computation and rules

Section 32 provides share basis on ricelands producing a normal average of more than forty cavanes per hectare for the three agricultural years next preceding current harvest.
Section 32 requires computing shares in gross produce after:
- setting aside the same amount of palay used as seed, and
- deducting the cost of fertilizer, pest and control, reaping and threshing,
- and then applying participation percentages for contributions:
  - Land 30%
  - Labor 30%
  - Farm implements 5%
  - Work animals 5%
  - Final harrowing 5%
  - Transplanting 25%
Section 33 provides a different participation on rice-lands producing a normal average of forty cavans or less per hectare for the three preceding agricultural years:
- Land 25%
- Labor 35%
Section 34 prohibits reimbursement: contributions rendered in cash, grain, or services once shouldered/rendered alone by one party may not be reimbursed by the other after the relevant phases of work are completed.
Section 35 governs sharing of expenses for final harrowing and transplanting when parties agree to share equally:
- tenant may engage helpers at previously determined and agreed rates;
- if rates are disagreed upon, the party who undertakes the work bears expenses and is entitled to corresponding share in harvest after deducting expenses of reaping.
Section 36 grants rice tenant additional rights including:
- deciding when to scatter seeds, transplant seedlings, and reap, consistent with proven farm practices and after due notice to landholder;
- selecting the thresher whenever it is best available in locality and best suited to both needs, with rates equal to or lower than other threshers under similar circumstances;
- selection rules when more than one tenant: majority decides;
- preference to landholder’s thresher if landholder owns one and offers equal or lower rates under same conditions;
- applying appropriate pest/insect/disease/rodent controls when necessary; if tenant fails after a written request by landholder, tenant is liable for losses resulting from failure;
- applying fertilizer per proven farm practices where landholder has not exercised the right under Section 25 to require specific fertilizers.
Section 37 grants additional landholder rights including determining:
- proper height of pilapils or dikes,
- location and size of irrigation canals,
- site for stacking harvest not farther than one kilometer from center of area cultivated by a majority of tenants,
- date of threshing;
- if the tenant disagrees on any, court determines what is in the interest of both parties.
Section 38 defines what constitutes rice tenant labor contribution (including preparation of seedbed, scattering and care of seedlings, plowing/harrowing/watering except final harrowing as specified in Section 32, maintenance of dikes/paddies/irrigation canals, pulling/bundling seedlings, care of growing plants, gathering/bundling reaped harvest, piling into stacks, stacking preparation, and transport to stacking place, and piling into big stacks preparatory to threshing).
Section 39 prohibits pre-threshing:
- it is unlawful without mutual consent for either tenant or landholder to reap or thresh any portion of the crop before the date set for threshing.
Section 40 provides where crop division is done:
- division occurs in the same place where harvest is threshed, and each party transports share to its own warehouse or barn unless contrary is stipulated.

Share tenancy on crops other than rice

Section 41 provides that for lands producing crops other than rice, landholder and tenant are free to stipulate the crop division ratio.
Section 41 provides that in the absence of stipulation, the customs of the place govern.
Section 41 sets a statutory minimum tenant share:
- tenant’s share for labor in production must not be less than thirty percent (30%) of harvest/produce after deducting harvesting and/or initial processing expenses.
Section 41 provides that if local practices or customs establish a higher tenant share than the statutory minimum, that established higher share prevails and is considered the minimum.

Leasehold tenancy: rights, rent limits, and rental rates

Section 42 defines landholder-lessor and tenant-lessee:
- landholder-lessor lets/leasses/rents agricultural land for production for a price certain or ascertainable in money or produce (or both).
- tenant-lessee, with lessor’s consent, tills/cultivates the land personally (or with labor from the immediate farm household) on land susceptible of cultivation by one individual.
Section 43 grants tenant-lessee rights including:
- right to enter premises and enjoy them adequately and peacefully,
- right to work land according to best judgment consistent with proven farm practices,
- upon termination, entitlement to one half of the value of reasonable and adequate improvements made for lease purposes.
Section 43 imposes tenant-lessee duties including:
- paying lease consideration as stipulated but not exceeding limits in Section 46; absent stipulation, consideration follows Section 46,
- proper use and cultivation as a good father of a family using proven farm practices,
- taking reasonable care of work animals and farm implements the landholder delivers if agreed that lessor furnishes them.
Section 44 grants the landholder-lessor the right to inspect the premises to ascertain compliance, but prohibits coercion, intimidation, or violence.
Section 45 provides payment may be made in money, produce, or both.
Section 46 sets consideration limits for use of land:
- for ricelands: not more than thirty percent (30%) of gross produce for first class lands and not more than twenty-five percent (25%) for second class lands;
- first class lands are those yielding more than forty cavanes per hectare; second class lands yield forty cavanes or less;
- classification is based on normal average harvest of the three preceding years.
Section 46 provides rules for fruit trees and other useful trees/plants taken as produce:
- consideration cannot exceed the limits in the preceding section;
- additional consideration for tree enjoyment (if principal product is rice or other crops) is decided and specified by negotiation;
- if tenant plants/takes care of trees/plants with lessor’s consent, tenant is compensated in the manner agreed.
Section 46 provides that sugar lands, fishponds, saltbods, and lands devoted to livestock are governed by stipulation between parties.
Section 47 governs rental of work animals, implements, and services:
- tenant-lessee may make use of lessor’s available items for hire based on fair rental value;
- rental rates are those in Schedules “A,” “B,” and “C,” effective upon approval of the Act and remain in force unless Secretary revises pursuant to Section 52.
Section 48 governs loans and interest:
- loans in money or kind are payable at stipulated time without prejudicing borrower’s right to repay early;
- loan interest (unless otherwise stipulated) is payable in money at not more than eight percent (8%) interest per annum computed from indebtedness up to and including payment date;
- evidence of indebtedness must follow Section 16.

Security of tenure and ejectment standards

Section 49 provides that notwithstanding any agreement or law on tenancy period, a tenant in agricultural tenancy is not dispossessed except for causes enumerated in Section 50 and only after causes are proved before and dispossession is authorized by court.
Section 50 enumerates sufficient causes for dispossession:
- Landholder’s bona fide intention to cultivate land himself personally or through employment of farm machinery and implements, with conditions:
  - if landholder does not cultivate or fails to employ mechanical farm implements for one year after dispossession, bad faith is presumed and tenant may demand possession and damages;
  - landholder must file notice with court at least one year but not more than two years prior to filing petition, and inform tenant in writing in language known to tenant, along with certification of the Secretary of Agriculture and Natural Resources that land is suited for mechanization;
  - dispossessed tenant and immediate household are preferred in employment of necessary laborers under the new set-up.
- tenant violation/failure to comply with contract terms or Act provisions, except when tenant has substantially complied.
- tenant’s failure to pay agreed rental or deliver landholder’s share, except when caused by fortuitous event or force majeure.
- tenant uses land for a purpose other than the agreed purpose.
- share-tenant fails to follow proven farm practices contributing toward proper care of land and increased production.
- tenant through negligence permits serious injury to land impairing productive capacity.
- conviction by competent court of tenant or immediate family/farm household member of a crime against the landholder or a member of immediate family.
Section 51 places the burden of proof on the landholder to show existence of a lawful cause for ejectment.

Enforcement duties and tenant protections

Section 52 assigns the Secretary of Agriculture and Natural Resources duties including:
- educational programs to acquaint tenants and landholders with rights and responsibilities,
- revising rental rates in Schedules “A” and “B” when needed so rental rates conform to fair rental value defined in Section 5,
- facilitating preparation and registration of contracts by distributing appropriate printed forms and instructions,
- requiring that contract forms bear court approval,
- conducting surveys and researches to determine compliance, adaptability to different crop areas, and fairness,
- submitting an annual report to the President analyzing progress toward objectives in Section 2 and recommending methods for improving implementation/effectiveness; providing copies to members of Congress.
Section 53 requires the Secretary of Justice, through the Executive Judge of the Court, to formulate a national enforcement program, including assignment of judges and personnel to ensure full enforcement.
Section 54 provides representation:
- where a tenant cannot afford counsel, the Public Defender of the Department of Labor must represent him upon proper notification, or
- the court appoints counsel de oficio for the indigent tenant