Agricultural activity – cultivation of the soil, planting of crops, growing of fruit trees, including the

harvesting of such farm products, and other farm activities and practices performed by a farmer in
conjunction with such farming operations done by persons whether natural or juridical.

Section 4 - The Comprehensive Agrarian Reform Law shall cover, regardless of tenurial arrangement
and commodity produced, all public and private agricultural lands as provided in Proc. 131 and EO 229,
including other lands of the public domain suitable for agriculture. Provided, that landholdings of
landowners with a total area of 5 hectares and below shall not be covered for acquisition and
distribution to qualified beneficiaries.

More specifically, the following lands are covered by the CARP:

a.) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No
reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of
this act until Congress, taking into account ecological, developmental, equity considerations, shall have
determined by law, the specific limits of the public domain.

b.) All lands of the public domain in excess of the specific limits as determined by Congress in the
preceding paragraph

c.) All other lands owned by the government devoted to or suitable for agriculture

d.) All private lands devoted or suitable for agriculture regardless of the agricultural products raised or
that can be raised thereon.

Alfonso vs LDP and DAR

Palomar is the registered owner of 2 parcel of lands in Sorsogon City. Upon effectivity of RA 6657, the
DAR wanted to acquire the lands of Palomar, but they did not agree on the valuation of the said land.
Palomar then sold his rights over the land to Alfonso. A land valuation case was filed before the DAR
Provincial Adjudication Board. After the determination of the just compensation made by the DAR
provincial Adjudication Board, the LDP and Alfonso both filed separate actions for judicial determination
of just compensation with the RTC. Alfonso presented as evidence the Cuervo Report of Commissioner
Chua in which he used the Market Data Approach and the Capitalized Income Approach. The average of
the two approaches reasonably represented the fair market value of the lands.

The RTC ruled that the valuation made by LDP and the Board was unrealistically low and that it applied
the valuation made by commissioner Chua in the Cuervo report.

The CA ruled that the RTC sitting as a SAC errored in not observing the DAR AO NO. 5. The CA granted
the petitions of LDP and DAR and remanded the case back to the SAC for determination of just
compensation using the DAR basic formula.

Issue is whether the courts are obliged to apply the DAR formula in cases where they are asked to
determine the just compensation of properties under RA 6657

Ruling
Sec 4 Art 13 – The State shall, by law, undertake an agrarian reform program founded on the rights of
farmers and regular farmworkers, who are landless, to own directly and collectively the land they till or,
in the case of other farmworkers, to receive a just share of the fruits thereof. To this end, the State shall
encourage and undertake a just distribution of all agricultural lands, subject to such priorities and
reasonable retention limits, as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations, and subject to the payment of just compensation. In
determining retention limits, the State shall respect the rights of small landowners. The State shall
further provide an incentive for voluntary land sharing.

History

1955 – RA 1400 or The Land Reform Act of 1955 – Scope was limited to the expropriation of private
agricultural lands in excess of 300 hectares of contiguous are if held by natural persons, and those in
excess of 600 hectares if owned by corporations.

1963 - RA 3844 or The Agricultural Land Reform Code of 1963 – the scope was limited by an order of
priority based on utilization and area

1972 – PD 27 – Covers all rice and corn lands. Just compensation is determined using a fixed
mathematical formula provided within the law itself. Such formula was based on the production of the
land. Land Value = Average harvest for 3 crop years x 2.5

1987 – EO 228 – Valued the remaining unvalued rice and corn lands. Average Gross production x 2.5 x
Government Support Price

1988 – RA 6657 or The Comprehensive Agrarian Reform Program – Includes all public and private
agricultural lands. First Computation for Land Value = the average of market value, assessor’s market
value, and declared value of the landowner.

LAND VALUE = (Comparable Sales x 0.3) + (Capitalized Net Income x 0.4) + (Market Value x 0.3)

DAR AO No. 5 – Gave landowners the opportunity to take part in the valuation process. When the
landowner fails to submit the statement or the claimed value cannot be validated from actual inspection
of the property, the DAR and LDP are allowed to adopt any applicable industry data or to conduct an
industry study on the specific crop that will be used in determining the production, cost, and net income
of the subject landholding.

Assoc of small landowners vs Dar

This case challenges the constitutionality of PD 27 and EO 228 and 229. They argue that the just
compensation contemplated in the bill of rights must be made in the form of money or cash and not in
the form of bonds. PD 27 and EO 228 and 229 were then repealed by RA 6657 or the Comprehensive
Agrarian Reform Program but petitioners argue that it is still unconstitutional because it suffers the
same infirmaries

Section 18 of CARP – States that the just compensation may be paid in the following modes at the
option of the landowner
For cash

- The land in excess of 50 hectares – 25% cash then balance shall be paid in government financial
instruments negotiable at any time
- Lands above 24 hectares but below 50 hectares – 30% cash balance to be paid by government
financial instrument negotiable at any time
- Lands below 24 hectares – 35% cash balance to be paid by government financial instrument
negotiable at any time

Shares of stock in gocc

Tax credit

LBP Bonds

Issue: Whether it is unconstitutional to force landowners to accept just compensation in less than
money or in any other forms.

Ruling: No. In a traditional expropriation case the just compensation should be made in the form of
money and nothing more. But in the case at bar, this is not a traditional expropriation case but rather a
revolutionary kind of expropriation. The expropriation in the case at bar includes all private agricultural
lands which are in excess of the maximum allowable area to be owned. This theory is also supported by
the fact that an owner of a smaller land is given a higher amount in money and therefore not unduly
oppressive to the landowners.