Title
Amendments to Agrarian Land Reform Code
Law
Republic Act No. 6389
Decision Date
Sep 10, 1971
The Code of Agrarian Reforms of the Philippines amends the Agricultural Land Reform Code and establishes systems and institutions to implement agrarian reform, including the conversion of share tenancy to leasehold, granting rights to agricultural lessees, addressing irrigation system costs, and establishing considerations for land lease and rental payments.

Law Summary

Code Composition and Landholding System

  • Replacement of share tenancy with agricultural leasehold system.
  • Credit rental paid on land as amortization toward purchase price.
  • Declaration of agricultural labor rights.
  • Creation of institutional supports like financing, marketing, cooperative development machinery, and a judicial system handling agrarian disputes.

Conversion of Share Tenancy to Leasehold

  • Automatic conversion of all agricultural share tenancy to leasehold upon effectivity.
  • Credit assistance by landowners or lenders with capped charges at 14% per annum.
  • Tenants can purchase work animals or equipment from landowners on installment.
  • Share tenancy contracts remain temporarily valid under current laws until new Department of Agrarian Reform organization.
  • Agricultural tenants who do not opt for leasehold must notify landowners and accept one agricultural year to comply, else face ejectment.

Lessee's Rights: Pre-emption and Redemption

  • Lessees given preferential right to buy their landholding on reasonable terms if lessor sells.
  • Pre-emption rights exercised within 180 days from notice; disputes resolved by the Court of Agrarian Relations.
  • Right of redemption granted if land is sold to third party without lessee's knowledge; redemption price is reasonable market price.
  • Department of Agrarian Reform facilitates acquisition; Land Bank finances purchase.

Irrigation System Costs and Management

  • Cost of permanent irrigation system borne by lessor, allowing rental increase proportional to productivity gains.
  • Lessees can shoulder construction cost to avoid rental increase; lessor must reimburse on relationship termination.
  • Lessees manage irrigation systems unless operated by government; lessees allocate up to 25% of irrigation rentals to government if obligations exist.
  • Department and Land Bank to acquire irrigation systems installed by lessor and transfer ownership to lessees.

Lease Consideration and Rental Credit

  • Lease rental capped at 25% of average normal harvest after deducting production costs.
  • Provisional rental fixed by Court of Agrarian Relations pending final determination.
  • Capital improvements by lessor increase rental proportionally.
  • Rental payments credited towards purchase price upon expropriation or redemption.
  • Land registration procedures adjusted to facilitate issuance of titles to amortizing owners.
  • Amortizing owners may use title as collateral for loans guaranteed by the Land Bank.
  • Default provisions for nonpayment include government takeover and substitution of owners.

Expropriation and Land Acquisition Priorities

  • Department of Agrarian Reform empowered to expropriate private lands for subdivision into six-hectare family farms.
  • Priority to acquire idle or abandoned lands, then by size thresholds.
  • Acquisition also allowed by negotiated purchase and through resettlement programs.
  • Exclusion applies to lands reserved for forests and cultural minorities.

Organization of the Department of Agrarian Reform

  • Establishment of Department under the President with a Secretary and Undersecretary.
  • Secretary and Undersecretary must be natural-born citizens with land reform experience.
  • Creation of bureaus: Farm Management, Land Acquisition/Distribution, Resettlement, and Agrarian Legal Assistance.
  • Regional offices correspond to ten designated regions with defined responsibilities and coordination with local governments.
  • Personnel appointed under civil service rules; offices structured to maximize field presence.

Abolition and Transfer of Prior Agencies

  • Land Reform Project Administration, National Land Reform Council, and Land Authority abolished.
  • Functions and personnel transferred to the Department of Agrarian Reform.

Attachment of Land Bank and Agricultural Credit Administration

  • Land Bank attached as land financing arm.
  • Agricultural Credit Administration tasked with cooperative credit support.
  • Regional and field offices coordinate with Department for agrarian finance and credit.

Land Bank Financing and Bond Issuance

  • Land Bank authorized to issue bonds for land acquisition financing.
  • Bonds are tax-exempt, guaranteed by government, negotiable, and redeemable.
  • Land Bank payments for landowners are 20% cash and remainder in bonds or shares.
  • Bonds usable for acquisition of government properties, loan securities, and other financial instruments.

Agricultural Credit and Cooperative Support

  • Credit to small farmers and cooperatives regulated with interest rate caps.
  • Loan caps established; extension of credit based on capacity and collateral.
  • Agricultural Credit Administration empowered to register, finance, and supervise agricultural cooperatives.

Extension Workers and Farmer Support Services

  • Extension workers duty-bound to reside locally and provide technical assistance, promote farmers' organizations, and support cooperative development.

Local Government Involvement

  • Local governments to be involved in all aspects of agrarian reform implementation.
  • Department tasked to provide technical assistance to local governments to support reform.

Court of Agrarian Relations Authorities

  • Courts of Agrarian Relations exercise powers akin to Court of First Instance.
  • Less strict procedural rules except in expropriation cases.
  • Authorized to conduct compulsory arbitration in agrarian disputes.
  • Agricultural tenants entitled to pauper litigant privileges and legal assistance.

Office of Agrarian Counsel

  • Provides free legal representation to agrarian tenants and lessees unable to hire counsel.
  • Authorized to administer oaths and acknowledgments.

Penal Provisions

  • Criminal penalties for collusion to simulate contracts or loans under Agrarian Reform Program.
  • Penalties include imprisonment up to five years and fines up to five thousand pesos.

Financial Obligations of Lending Institutions

  • Mandates lending institutions to allocate at least 25% of loans to agricultural credit for lessees, owners, and cooperatives.

Demonstration Farms and Pilot Projects

  • Department authorized to set aside up to 3,000 hectares as demonstration or pilot farms for communal agricultural models.

Personnel Rights and Appropriations

  • Personnel of abolished or reorganized agencies retain rights and privileges under the Agrarian Land Reform Code.
  • Appropriation of one million pesos established for staff reorganization expenses.

Repeal and Severability

  • Repeals inconsistent laws and references.
  • Provides that invalidity of any provision does not affect the rest of the Act.

Effectivity

  • Act takes effect immediately upon approval.

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