Guidelines on Lease of AGRARIAN Land under AVA

Applies to all lands under the Comprehensive Agrarian Reform Program (CARP) in agribusiness ventures.
Also covers retained small landowner areas and ARBs' fully paid lands where ten-year prohibition has lapsed but opted under lease agreements.

Average Household Size - ratio of population to households estimated by NSO.
Comparable Lands - lands in same area with similar features (crops, terrain, soil, accessibility).
Economic Family-Size Farm Unit - farm area sufficient to provide modest living and absorb income fluctuations.
Land Amortization Value (LAV) - annual amortization per hectare paid by ARBs.
Lease Rental - payment to owner for agricultural use.
Lease Agreement - AVA scheme where ARBs lease lands to investor with management control for certain period.
Lessee-Investor - operator of leased land with lessor consent.
Lessor-ARB - ARB individual or cooperative leasing land to investor.
Poverty Threshold - minimum income to meet basic needs established by NSCB.

Leasing terms must be mutually agreed and approved by PARC / PARC ExCom after recommendation by PARCCOM and NAEC review.
Amendments or renegotiations require the same approval.
No approval by PARC or PARC ExCom renders agreement null and void.
DAR through NAEC monitors lease agreements especially long-term (≥ 25 years) and renegotiations.
Lease rental negotiation formula: LR = (PT + LAV + RPT) / 3, where PT is annual poverty threshold, LAV land amortization value, RPT real property tax.
Computed lease rental must be documented and reviewed by NAEC.
Renegotiations mandated every 5 years or earlier if inflation, price fluctuation, calamity, or meritorious reasons occur; renegotiated rental cannot be lower.
Conflicts resolved per DAR A.O. No. 09, with lessee required to continue rent payments during arbitration.
Lease contracts must provide sanctions for non-compliance; DAR monitors implementation.

Entitled to lease rentals and agreed benefits.
Responsible for amortization and realty taxes (segregated from rent).
Must keep lessee in peaceful possession; cannot partition leased land among members.
Own permanent improvements upon lease termination unless otherwise agreed.
May buy non-permanent improvements by agreement.
Lease agreement may be annotated in Registry of Deeds and Memorandum on CLOA.

Manage and operate leased land per agreement; pay rent and benefits.
Provide capital, technical and management services; bear agricultural risks.
Pay property taxes on buildings and improvements.
Remit tax and amortization payments on behalf of lessor ARB and provide receipts.
Construct necessary improvements with lessor consultation; must not reduce agricultural area.
Apply sound agricultural, financial, business, and environmental practices.
Bear production and operational expenses including business taxes and fees.
Pay lease rent timely; late payments incur 12% or prevailing interest.
Obtain lessor consent before experimental projects not related to production.
May remove movable improvements with written lessor consent at lease end if lessor does not purchase.
Collaborate with DAR for technology and management transfer to ARBs within one year.
Maintain ecological balance and ensure worker safety during operations.

Lessor-ARB cannot dispossess lessee during pending nullification petition without due process; liable for damages.
Lessee cannot use land for unauthorized crops or purposes.
Illegal to plant or grow plants defined as dangerous drugs under R.A. No. 9165.
Lessee must not cause substantial land damage or fertility depletion.
Sub-leasing or assigning lease rights to others is prohibited.

Filing, review, approval, cancellation, reporting, and monitoring of lease agreements shall follow DAR A.O. No. 09, series of 2006.

This A.O. governs lease applications and renegotiations after effectivity including pending ones.
Existing lease agreements under DAR A.O. 02, series of 1999, may be renegotiated following its provisions.

Previous inconsistent administrative orders, circulars, memoranda, rules, and regulations are revoked or modified accordingly.