Amendments to Comprehensive Agrarian Reform Law

Scope through definitions and coverage

Section 1 amends Section 3(b) of RA No. 6657 by defining “Agriculture, Agricultural Enterprise or Agricultural Activity” as the cultivation of the soil, planting of crops, growing of fruit trees (including harvesting), and other farm activities and practices performed by a farmer in conjunction with such operations by persons whether natural or juridical.
Section 2(a) exempts from RA No. 6657 lands actually, directly and exclusively used for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves.
Section 2(b) exempts private lands actually, directly and exclusively used for prawn farms and fishponds, subject to stated conditions on whether those fishponds or prawn farms have been distributed under the Comprehensive Agrarian Reform Program (CARP) and whether worker/tenant consent is obtained.
Section 2(c) exempts lands actually, directly and exclusively used and found necessary for national defense, school sites and campuses (including experimental farm stations operated by public or private schools for educational purposes), seeds and seedlings research and pilot production center, church sites and appurtenant convents, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by inmates, and government and private research and quarantine centers, and all lands with eighteen percent (18%) slope and over, except those already developed.

Commercial farming timing and compulsory acquisition

Section 3 amends Section 11(a) of RA No. 6657 by providing that commercial farms (saltbeds, fruit farms, orchards, vegetable and cut-flower farms, and cacao, coffee and rubber plantations) are subject to immediate compulsory acquisition and distribution after ten (10) years from the effectivity of RA No. 7881 (as the amended scheme is applied to the CARP timeline under RA No. 6657).
For new farms, the ten-year period begins from the first year of commercial production and operation, as determined by the Department of Agrarian Reform (DAR).
During the ten-year period, the Government must initiate steps to acquire these lands, with just compensation for the land and improvements, preferably in favor of organized cooperatives or associations, which then manage the lands for the workers-beneficiaries.

Incentives for fishpond and prawn farm workers

Section 4 inserts Section 32-A into RA No. 6657 and mandates that individuals or entities owning or operating fishponds and prawn farms execute, within six (6) months from the effectivity of RA No. 7881, an incentive plan with their regular fishpond or prawn farm workers or their organization (if any).
The incentive plan must distribute seven point five percent (7.5%) of net profit before tax from fishpond or prawn farm operations.
The distribution is required within sixty (60) days at the end of the fiscal year as compensation to regular and other pond workers in such ponds, over and above their compensation at the time of the plan’s operation.
Owners’ books must be subject to periodic audit or inspection by certified public accountants chosen by the workers to safeguard workers’ rights under the incentive plan.
The incentive obligation does not apply to agricultural lands subsequently converted to fishponds or prawn farms if the converted land size does not exceed the retention limit of the landowner.

Limits and approval for fishpond conversion

Section 5 inserts Sections 65-A to 65-D into RA No. 6657, governing conversions into fishponds and prawn farms and related requirements.
Section 65-A(a) provides that no conversion of public agricultural lands into fishponds and prawn farms shall be made unless the provincial government, with the concurrence of the Bureau of Fisheries and Aquatic Resources (BFAR), declares a coastal zone suitable for fishpond development.
When such a coastal zone declaration is made, DENR must allow the lease and development of such areas, subject to environmental restrictions tied to Proclamation No. 2146 (including the enumerated titles and sub-paragraphs) to protect river systems, aquifers and mangrove vegetations from pollution and environmental degradation.
Approval under Section 65-A(a) must follow guidelines drawn up and promulgated by the DAR and the BFAR.
Section 65-A(a) requires that small-farmer cooperatives and organizations receive preference in awarding Fishpond Lease Agreements (FLAs).
Section 65-A(b) sets a private-land ceiling: no conversion of more than five (5) hectares of private lands to fishponds and prawn farms is allowed after the passage of RA No. 7881, except if BFAR certifies that fishpond and/or prawn farm use is more economically feasible and sound and a simple and absolute majority of regular farm workers or tenants consent to the conversion.
Under Section 65-A(b), the Department of Agrarian Reform may approve applications for change of use when the stated BFAR certification and worker/tenant majority consent requirements are satisfied.
Section 65-A(b) prohibits piecemeal conversion to circumvent RA No. 7881; where a change of use is approved, Section 32-A incentives apply.

BFAR inventory, sustainability rules, and leasing freeze

Section 65-B requires BFAR to undertake and finish an inventory of all government and private fishponds and prawn farms within one (1) year from the effectivity of RA No. 7881.
BFAR must also undertake a program to promote the sustainable management and utilization of prawn farms and fishponds.
Section 65-B prevents leasing: no lease under Section 65-A may be granted until after completion of the BFAR inventory.
Sustainable management and utilization must be consistent with effluent standards, pollution charges, and other pollution-control measures, including limits and measures on the quantity of fertilizers, pesticides and other chemicals used, as established by the Fertilizer and Pesticide Authority (FPA), the Environmental Management Bureau (EMB), and other appropriate regulatory bodies.
Section 65-B also requires compliance with existing regulations governing water utilization, referencing Presidential Decree No. 1067, titled “A Decree Instituting A Water Code, Thereby Revising and Consolidating the Laws Governing the Ownership. Appropriation, Utilization, Exploitation, Development, Conservation and Protection of Water Resources.”

Mangrove buffer zone and penalties

Section 65-C requires that, in existing FLAs and those issued after effectivity of RA No. 7881, a portion of the fishpond area fronting the sea, sufficient to protect the environment, shall be established as a buffer zone.
The buffer zone must be planted to specified mangrove species to be determined in consultation with the regional office of the DENR.
The Secretary of Environment and Natural Resources must provide penalties for violations of the mangrove buffer requirement and issue rules for implementation.

Crop changes not treated as conversion

Section 65-D provides that change of crops to commercial crops or high value crops is not considered a conversion in the use or nature of the land.
The crop change must not prejudice the rights of tenants or leaseholders should any exist.
Where affected workers exist, a simple and absolute majority of affected farm workers must consent to the crop change before it is recognized under Section 65-D.

Foreclosure transfers exception

Section 6 inserts Section 73-A into RA No. 6657 and permits sale and/or transfer of agricultural land when the sale/transfer/conveyance is necessary due to a bank’s foreclosure of the mortgaged land.
Section 73-A states that this permission applies notwithstanding the contrary effect of Section 73(e) of RA No. 6657.

Separability

Section 7 provides that if any section or provision of RA No. 7881 is declared null and void, the remaining sections or provisions continue in full force and effect.