No date supplied
MEMORANDUM
TO : All Regional Directors
Department of Agrarian Reform
SUBJECT : Clarification on Land Valuation and Compensation under the LTPA scheme
It has been observed that most Landowner-Tenant Production Agreements (LTPA's) forwarded to the Center for Operation Land Transfer (COLT), in support of land transfer claims for compensation by landowners reflect the value per hectare in pesos agreed upon by both landowners and tenants but the manner of computing the value of the land appears to be at variance with the pertinent provisions of PD No. 27 which base the land value on the average production of the land for the three (3) normal crop years immediately preceding October 21, 1972, to quote: IDTcHa
"For the purpose of determining the cost of the land to be transferred to the tenant-farmer pursuant to this Decree, the value of the land shall be equivalent to two and one half (2 1/2) times the average harvest of three normal crop years immediately preceding the promulgation of this Decree."
A careful scrutiny of some LTPAs indicate that the value of the land was arrived at between the landowner and the farmers upon their "mutual agreement" only, and not in consideration of the actual production of the land. Furthermore, there are instances wherein it was stated that the average production was based on the land valuation agreed upon by both landowners and tenants. However, indicated at the bottom of the LTPA form is a certification to be signed by the Team Leader certifying that the average gross production agreed upon is in accordance with Presidential Decree No. 27. Likewise, it is stated in some Regional Directors' certification that such valuation, is based on the production as provided by law. An inconsistency, therefore, arises between the notations on the LTPA and that of the aforesaid certifications.
Previous memoranda regarding the land valuation and compensation state among other things, that "if the landowner and tenants have agreed on the value of the land in pesos per hectare, proper care should be exercised in the conversion of such value into average gross production by dividing the agreed land value by P35 (palay) or P31 (corn) and the result will be the equivalent number of cavans of 50 kilos each, then divide this number of cavans by 2.5, the result shall be the computed average gross production per hectare." This has been viewed as an approach adopted by some landowners and tenants concerned only as a means to facilitate the determination of the average gross production of the subject farmholding pursuant to the requirements of P.D. No. 27 in cases where production records are not available However, this does not mean that the agreed land value will be reflected on the LTPA since this form required data on average gross production in cavans. Therefore, in order to avoid inconsistencies, you are reminded to refrain from placing unnecessary notations on the LTPA such as:
Average Production was based on agreed price per hectare.
Agreed price per hectare is P ___________________
Average Production per hectare has been adjusted to the agreed price of P _________________
Price per hectare agreed upon by both landowner and tenants P ______
Price per cavan at 50 kilos computed at P50 per cavan.
Lease rentals paid by the farmers had been paid to their back rentals and personal loan to the landowner.
Lease rentals were condoned.
Etc.
In all cases where there is a necessity of clarifying certain matters on the LTPA or in case of corrections/erasures made in the LTPA, a certification or clarifying remarks pertinent thereto by the personnel concerned should always be attached to the affected LTPA to be forwarded to the DAR Central Office.
In view of the foregoing and so as to avoid unnecessary delays and backtracking of documents, notations on the LTPA forms should clearly indicate that the production per hectare as appearing therein is in accordance with the provisions of PD No. 27.
Please notify all parties concerned.
FOR THE SECRETARY:
(SGD.) BENJAMIN R. LABAYEN, CESO I
Assistant Secretary