December 23, 1996

DAR OPINION NO. 146-96

Mr. Manuel Q. Lim, Jr.

President

Hijo Plantation, Inc.

Madaum, Tagum

Davao del Norte

Dear Mr. Lim:

This refers to your letter seeking the opinion of this Office relative to the following queries, to wit:

1.         DAR's preference in the manner of titling the land. If there is no preference, our lawyers think the cooperative would be better since it would be easier to change co-owners should there be a need.

2.         Is the approach of breaking down the plantation into smaller farms and "parcelas" but to be worked by the beneficiaries, to avoid the corporate farm mentality, an approach that would create taxable income at interface between smaller farms and the cooperative?

3.         Eligibility of workers where the enterprise was discontinued during the deferment period for economic or other reasons.

Anent your first query, CARP lands are generally distributed directly to individual worker-beneficiaries. However, for purposes of facilitating the distribution of all private agricultural lands to agrarian reform beneficiaries, these are preferably transferred collectively to groups of farmers. This collective ownership either by option of the beneficiaries pursuant to Section 25 of CARL, or because the DAR has determined that it is not economically feasible and sound to divide the land among the beneficiaries, as provided under Section 29 of the same Act.

Anent your second query, it is believed that breaking down the plantation into smaller farms to be worked by the beneficiaries themselves will not in any way affect the taxable income between smaller farms and the cooperative. This is so because whatever income that may be derived from smaller farms would still redound to the cooperative, and the worker beneficiaries will still be receiving whatever fair share they may get from the operations of the plantation.

As regards the eligibility of workers where the enterprise was discontinued during the deferment period, those workers who have qualified as ARBs even prior to the grant of Commercial Farm Deferment (CFD), remain as qualified ARBs even if the farm ceases to operate, since what is suspended only is the acquisition and distribution aspect of the commercial farm. On the other hand, workers who are not qualified as of 15 June 1988 but possess the basic qualifications enumerated under RA 6657 may be eligible as ARBs if upon determination by DAR they possess the qualifications laid down vender RA 6657 and provided that the area to be distributed is enough for all the qualified beneficiaries.

We hope to have clarified the matters with you.

Very truly yours,

(SGD.) LORENZO R. REYES

OIC-Undersecretary
LAFMA