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.