November 14, 1997

DAR OPINION NO. 125-97

Director Eugenio B. Bernardo

DAR — Region IV

Capitol Compound, Pasig City

Dear Director Bernardo:

This has reference to the request of PARO Rodolfo B.M. Bueno regarding the issuance of guidelines on whether or not excess areas which are undeveloped can be considered at the free disposal of landowners without securing a DAR exemption order.

As gleaned from the Memorandum of PARO Bueno, the landholding subject of a request for a DAR clearance involves 5.1056 hectares owned by Andres Ortilla; that while the area subject of the transaction is more than the landownership ceiling allowed under R.A. No. 6657 which is beyond the retention area which a landowner can freely dispose of, the MARO and the Legal Division recommended the issuance of a DAR clearance on the ground of tolerable limits; that while PARO Bueno would like to agree with the said recommendation, he is of the opinion that the term "tolerable limits" applies to award to farmer beneficiaries and not to dispositions of property by registered owners. Likewise, he believes that the effect of allowing the disposition of the excess area, while insignificant or tolerable, is in effect a grant of exemption, which even for undeveloped properties above eighteen percent (18%) slope is within the authority of DAR Central Office pursuant to MC Circular No. 9, Series of 1997.

We are in accord with the opinion of PARO Bueno. The term "tolerable limits" applies only to award to farmer beneficiaries and not to dispositions of property by registered owners. Neither can it be legally inferred from the provision of MAR A.O. No. 3, Series of 1985 which explicitly provides that "The economic family size farm to be transferred to a bonafide farmer beneficiary pursuant to PD No. 27 shall include a tolerable limit of not more than ten percent (10%) or 3.3 hectares if irrigated and 5.5 hectares if unirrigated. Accordingly, the same cannot be made to apply on the retention limit of a landowner provided under CARL because the mandate of the law is clearly to distribute CARP-covered lands to the landless or to qualified farmer-beneficiaries who have the aptitude, willingness and ability to make the lands as productive as possible. To increase the retention limit would defeat the purpose for which the law (R.A. No. 6657) was enacted.

With specific reference to the request that a land transaction clearance should likewise be inclusively issued instead of a DAR exemption order on the 1,056 sq. m. excess lands which are undeveloped and more than 18% slope, a DAR exemption order would be necessary pursuant to Section 10 of R.A. No. 6657 in relation to DAR Administrative Order No. 13, Series of 1990. It bears stressing here, moreover, that while it is admitted that a DAR order of exemption signifies that a parcel of land cannot be acquired and distributed under CARP, this does not render total exemption from the application of the Comprehensive Agrarian Reform Law. Meaning to say, exemption order is still required in order to facilitate a valid transfer of the property from the landowner to a vendee. Likewise, other components of the program, like leasehold and the Integrated Social Forestry Program, may also be implemented where applicable.

As regards the sale of the retention area of a landowner, Section 70 of CARL provides: "Disposition of Private Agricultural Lands. — The sale or disposition of agricultural lands retained by a landowner as a consequence of Section 6 hereof shall be valid as long as the total landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall not exceed the landholding ceilings provided for in this Act". Under the aforequoted provision, the DAR Clearance signifies that the sale is not in violation of CARL and may therefore be registered in the name of the vendee. The application for DAR Clearance must be supported however by proofs that the property sold is within the retained area of the landowner and that the vendee's agricultural lands do not exceed the five-hectare landownership ceiling, inclusive of the property acquired. Further, it is noteworthy to mention that the vendee should maintain the agricultural productivity of the land and the same could not be converted without the approval of the DAR.

Please be guided accordingly.

Very truly yours,

(SGD.) ARTEMIO A. ADASA, JR.

Undersecretary for Legal Affairs, and Policy and Planning

Copy furnished:

PARO Rodolfo B.M. Bueno

DAR Provincial Office

Trece Martirez City, Cavite

Socorro Z. Niro

Chief, Finance Officer

KAMRAZ Agriculture Inc.

2nd Floor, Mary Bachrach Bldg.,

Port Area, Manila