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June 7, 1977



SUBJECT    :     Providing Rules and Regulations in the Implementation of P.D. No. 1066

          Pursuant to the provisions of P.D. No. 1066 dated 31 December 1976 and by virtue of Presidential Letter of Instructions No. 946 dated 14 January 1977 providing among others, for emergency measures to immediately carried out jointly or separately by the Department of Labor, Department of Agriculture and any department of government such as the Department of Agrarian Reform, all possible assistance to distressed sugar workers and planters and in order to effectively implement the crop diversification programs, the following Rules and Regulations are hereby promulgated:

          SECTION 1.   Only untenanted sugarlands shall be certified by the Department of Agriculture for exemption from Land Reform pursuant to P.D. No. 1066.

          SECTION 2.   All planters desiring to have their sugarlands converted from sugar production to the production of priority crops under the Decree viz: a) rice, b) corn, c) feedgrains (sorghum, yellow corn, soybean), d) cotton, e) fruits, f) vegetables and livestock production shall file an application for certification of previous cultivation of the area to sugarcane and its shift to priority crops rated above or livestock production, on ACS Form (See Annex "A"), the Provincial Agriculturist, Bureau of Agricultural Extension where the land is located, together with the affidavit of non-tenancy, copy furnished the DAR District Officer concerned.

          SECTION 3.   The Provincial Agriculturist concerned or his authorized representative upon receipt of the application, shall immediately order the ocular verification of the area covered by the application with the view to looking, into the following:

1)        Whether or not the land is sugarland or has been previously devoted to sugarcane;

In case the Provincial Agriculturist or his duly authorized representative cannot determine the previous planting to sugar of the land covered by an application, the applicant should be required instead to secure any of the following:

a)         Attestation from DAR District/Team Office, or

b)         Attestation of barangay officials/Samahang Nayon as to previous planting, or

c)         Certification from the Rural Workers Unit (DOL) in the area as to previous planting, or

d)         Certification from Banking Institutions as to the previous planting, or

e)         Other means sufficient to ascertain actual previous planting.

2)        Whether or not the land is actually worked by a tenant under a system of sharecrop or lease tenancy as herein defined, either wholly or only a portion thereof (if found to be partly worked by a share tenant/leaseholder, applicant should be required to present an affidavit stating that his/her application covers only the untenanted/not covered. by lease tenancy);

3)        Identity and location of land — should be verified against the muniment of title to the land; sketch or survey plan of the land if available;

4)        Whether the area covered by the application is suitable to the crops proposed to be grown thereon by farmer-applicant and in the negative what other crop(s) is/are suitable taking into account the nature of the soil, its location, topography, the local climate and the benefits it may contribute to the national economy.

          SECTION 4.   The Provincial Agriculturist shall submit to the Secretary a report on the findings of the ocular inspection of the area stated in the preceding paragraph, together with his comment and recommendation. The said report shall substantially include the following (See Form marked Annex "B"):

1)        All the findings during the ocular inspection of the project area applied for as required in items 1) to 4) of Sec. 3 hereof;

2)        The affidavit of non-tenancy and the certification by DAR District/Team Officer relative to its findings as to status of the land;

3)        Certification or attestation as to previous planting required in the preceding Section;

4)        Recommendation for or against the issuance of the certification applied for and the reasons therefor;

5)        Recommended alternative crops for the area if findings and recommendation are different from those designated/proposed by the farmer in his/her application.

          SECTION 5.   The Secretary of the Department of Agriculture or his authorized representative on the basis of the report and recommendation from the Provincial Agriculturist shall issue the appropriate certificate of exemption (copy furnished the DAR Secretary) if the Secretary finds from the report of the Provincial Agriculturist that the requirements under P.D. No. 1066 and of this guidelines has been substantially complied with; otherwise, the Secretary shall deny the application outright and notice shall be issued informing the planter-applicant concerned of such denial.

          SECTION 6.   Other Crops Covered. — Sugarcane planters shifting to other crops not enumerated in Section 2 hereof, maybe exempted from the coverage of the Land Reform Program as embodied in P.D. No. 27, subject to the same conditions of these rules, provided that such other crop(s) is/are among those that may be designated by the Secretary of Agriculture from time to time and approved by the President of the Philippines.

          SECTION 7.   Definition of Terms. —

1)        "Leasehold Tenancy" — The agricultural leasehold exists when a person who, either personally or with the aid of labor available from members of his immediate farm household, undertakes to cultivate a piece of agricultural land, belonging to or legally possessed by another in consideration of a fixed amount in money, in produce or in both.

2)        "Share Tenancy" — The share tenancy exists whenever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land, and the other his labor. Either or both parties contribute any one or several at the items of production, the tenant cultivating the land personally with the aid of labor available from members of his immediate farm household, the crops produced to be divided between the landholder and the tenant in proportion to their respective contribution.

3)        "Previously devoted to sugarcane production" — For purposes of the issuance of certification, shall refer to the immediate preceding crop year.

          SECTION 8.   The Rules and Regulations shall take effect immediately.

          DONE IN QUEZON CITY, PHILIPPINES this _____ 7th ____ day of June 1977.



           This Memorandum of Agreement entered into by and between the Department of Agrarian Reform, herein represented by Assistant Secretary Benjamin Labayen, hereinafter referred to as the DAR and the Bureau of Lands, herein represented by Director Ramon N. Casanova, hereinafter referred to as the BL


           WHEREAS, the DAR has already completed much of its field activities under the Land Reform Program of the government and is now in a position to rechannel some of its personal resources to other equally vital activities under the Land Reform Program;

           WHEREAS, BL is in a position to absorb additional manpower in its parcellary mapping activities under the Land Reform program of the government.

           NOW, THEREFORE, for and in consideration of the foregoing premises, the DAR and the BL hereby agree as follows:

1.         The DAR, through its regional offices, may assign or detail to the BL regional, offices concerned such number of personnel as can be dispensed with in DAR field activities.

2.         The BL regional office concerned shall accept these personnel to be detailed by DAR.

3.         The BL shall design a training program which shall include on-the-job training to orient and familiarize DAR personnel detailed with its regional offices on Parcellary mapping, including field work, final preparation of parcellary, map sheets, calculation of the areas of parcels and the documentations necessary for the PMS.

4.         The DAR shall defray all the expenses of its personnel detailed with BL and BL in turn shall continue to defray expenses of its personnel engaged in activities on the land reform program, provided, that the BL may grant additional incentives to the DAR personnel detailed.

5.         The detail of DAR personnel to BL shall be covered by special orders to be issued by the DAR regional director concerned and no DAR personnel shall be accepted by BL unless authorized by such special order.

6.         The BL shall exercise immediate and direct supervision over all DAR personnel detailed with BL for the period of the detail. For this purpose, the BL supervisor shall certify the time records and the traveling expense vouchers of the DAR personnel on detail before the salaries and vouchers of such personnel are approved and paid by the DAR.

7.         The DAR regional director shall have the option to recall any of his personnel from BL as the exigencies of the service demand and such recall shall be in writing.

8.         The BL regional director shall inform his DAR counterpart regularly about the accomplishments of DAR personnel on detail with BL.

Done in Quezon City this 25th day of October, 1977.


            BY:                                                                       BY:

         (SGD.) BENJAMIN R. LABAYEN, CESO I                         (SGD.) RAMON N. CASANOVA, CESO II
           Assistant Secretary                                                               Director of Lands

               WITNESSES:                                                           WITNESSES:



TO                :     All Field Officials and Personnel of the Department of Local Government and Community Development, Department of Agrarian Reform and Land Bank of the Philippines

SUBJECT     :     Farm Management Assistance/Take Over and Other Recourses of Samahang Nayon

          Basically, the Samahang Nayon operates on principles of mutual assistance and responsibility. Whatever a member does or fails to do, or whatever happens to this member, will have corresponding effects on all other members of the Samahang Nayon. If a member's crop fails, the Samahang Nayon will come to his assistance; if an amortizing owner fails to deliver the expected amortization for his land, the Samahang Nayon will advance the necessary amount from its accumulated Barrio Guarantee Funds. The manpower, savings and other resources at the command of the Samahang Nayon will be committed to help this member out of his difficulty even if this may be the result of delinquency on his part. This commitment applies to all members.

           In accordance with the By-laws of Samahang Nayon and membership agreement, the Samahang Nayon is given the right and power to take over the management of a member's farm. Management Assistance/take over may be supportive in nature; it is designed to help a farmer avoid problems either caused by unfulfilled contractual obligation or by unforeseen circumstances over which the farmer may have no control. In such instances, the farmer may even request the Samahang Nayon for direct assistance in terms of management, manpower and other resources.

           On the other hand, management assistance/take over may be disciplinary — it may be meant to penalize a member for culpable negligence or other failures on his part to discourage its recurrence or repetition by other members.

            In the final analysis, management assistance/take over is a development-oriented mechanism for enhancing farm income and productivity as well as accelerating the full emancipation of tenant-farmers from the bondage of the soil.

            Despite the presence of the management assistance/take over mechanism, field reports indicate that quite a number of Samahang Nayon members are remiss in their membership and financial obligations, resulting to a situation where financing institutions shy away from extending full credit support to the farm business of members of Samahang Nayon. It is, therefore, imperative to make the system fully operational at the Samahang Nayon level.

            Foregoing premises considered, the Department of Local Government and Community Development, Department of Agrarian Reform and the Land Bank of the Philippines hereby jointly promulgate the following guidelines and procedures governing farm management assistance/take over by Samahang Nayon, Recource or Payment of Claims against Barrio Guarantee Fund and other related matters.


1.1       Condition for Management Assistance/Take Over

1.1.1    Failure to pay any of the land amortization due, without any valid reason such as force majeure, serious family emergencies and similar causes;

1.1.2    Failure to pay past due production loans, including medium and/or long term loans, without any valid reason;

1.1.3    Refusal without any valid reason to follow improved farm practices;

1.1.4    Deliberate failure to contribute to the General Fund, Barrio Guarantee Fund and Barrio Savings fund;

1.1.5    Deliberate refusal to follow other rules and regulations of the Samahang Nayon;

1.1.6    In case of employment of a tenant, sublease, sale or transfer of right over the land by a holder of Certificate of Land Transfer or where a member voluntarily surrenders or abandons the farmholding, whether or not a Certificate of Land Transfer has been issued thereon so long as said land is covered by Operation Land Transfer, the DAR may authorize the Samahang Nayon to take over the management of the farm, subject to rules and regulations which shall hereafter be provided.

1.2       Who May Request for Farm Management Assistance/Take Over?

1.2.1    The Land Bank of the Philippines, in case of condition No. 1.1.1 where the amortization is not paid.

1.2.2    The lending institution concerned, in case of condition No. 1.1.2 where the loan is not paid.

1.2.3    The Department of Agriculture/National Food and Agriculture Council (DA/NFAC) or the Samahang Nayon, in case of condition No. 1.1.3.

1.2.4    The Board of Directors or the General Assembly (duly called for this purpose, composed of a majority of all the members of good standing in the samahang nayon) in case of condition Nos. 1.1.4 and 1.1.5.

A member in good standing is one who has complied with all the requirements of membership in the Samahang Nayon.

1.2.5    In case of failure of the agency concerned to initiate the action and/or in all cases that the Samahang Nayon has fully-paid the guaranteed obligation, the Board of Directors of the Samahang Nayon or any duly authorized officer thereof may initiate the action.

1.3       Where to File Request/Action and Resolution

The request shall be filed with the Secretary of the Samahang Nayon concerned, who shall furnish a copy thereof to the DLGCD, DAR and/or Land Bank.

The Samahang Nayon through its duly authorized official/representative shall act on the request within five (5) days from receipt by notifying the Samahang Nayon member concerned in writing, furnishing him a copy thereof and requiring him to submit within ten (10) days from such receipt, his comment, reply or answer thereto and/or his conformity to the request.

In the event that the member concerned is not agreeable to the requested farm management assistance/take over, he may submit his written formal answer or reply and request for an investigation.

Thereafter, the Board of Directors of the Samahang Nayon shall inquire into the reasons of the failure of the defaulting member to pay the annual amortization, and/or other obligations in a summary proceeding which shall be duly recorded and signed by the defaulting member(s) and majority of the Board of Directors conducting the inquiry.

Thereafter, the Samahang Nayon shall issue the appropriate resolution.

1.4       Duration of Farm Management Assistance/Take Over

Except as otherwise provided herein, farm management assistance/take over shall be for a period of at least one (1) complete cropping season; Provided that, such management assistance/s take over shall continue until all past due accounts/obligations of the delinquent member shall have been fully paid/satisfied or the conditions which brought about the management assistance/take over no longer exist.

Upon termination of the management assistance/take over, the affected member shall resume the management of his farm, through a resolution of the Board of Directors of the Samahang Nayon.

In cases where the management take over is authorized by the Department of Agrarian Reform the duration of the take over shall last until the farmholding is re-allocated by said Department, but in no case shall it be less than one cropping season.

Whenever necessary and warranted, the Samahang Nayon through the Department of Local Government and Community Development may recommend to the Department of Agrarian Reform, the cancellation of CLT and forfeiture of the farmlot and the allocation of the same to other qualified members.

1.5       Farm Manager

1.5.1    Appointment and Qualifications:

The Board of Directors shall appoint the Farm Manager who must possess the following qualifications: He must be a member of good standing in the Samahang Nayon; He must be a resident of the community where the farmholding under management is located; He must be proficient and knowledgeable in farming.

1.5.2    Duties: He shall control and supervise the management of the farm, including preparation of the necessary farm plan and budget; He shall avail of the farm labor of the assisted farmer and the members of his household whenever necessary, in the cultivation of the farm. In case of refusal or inability to provide the required labor, other Samahang Nayon members may be employed for the purpose. He shall keep and maintain an accurate record of all labor and other resources contributed by the assisted farmer and his household as well as that of other workers, including all expenses of cultivation, production and marketing, all crops and other products derived from the farm holding; and loans secured for production purposes; He shall disburse and pay all loans secured for production purposes and shall see to it that all expenses are duly receipted for; He shall liquidate the obligations in accordance with paragraph 1.10 hereof; He shall render a farm management report and full accounting of funds to the Board after each cropping season or as may be directed by the Board of Directors. He shall turn over the management of the farmholding to the affected member as herein provided.

1.6       Sources of Funds for Production:

1.6.1    Funds needed in production shall be provided by the Samahang Nayon from its available funds or through loans from recognized financing institutions. In case of necessity to borrow funds from lending institutions, the loan shall be secured and guaranteed by the Samahang Nayon.

1.6.2    All expenses in production, including loans by secured by Samahang Nayon shall be paid from the proceeds of sales of crops produced from the subject farmholding.

1.7       Marketing:

All the products harvested from the farmlot under management shall be marketed by the Samahang Nayon.

1.8       Management Fees and/or Commissions:

Management fees and/or commissions of Samahang Nayon amounting to 5% of the gross harvest but not to exceed 2-1/2 cavans of palay per hectare shall be deducted from the proceeds of the produce after the harvest in accordance with item 1.10. However, the Samahang Nayon may provide commissions and/or incentives to the appointed farm manager amounting to 10% of the net harvest.

He may further be granted a bonus chargeable against the excess of the expected produce in a particular cropping season, which shall be predetermined and agreed upon by the Board of Directors and the farm manager concerned.

1.9       Farm Management Reports and Accounting of Funds:

The Farm Manager shall, upon the termination of the management or as directed by the Board of Directors of the Samahang Nayon, submit a statement of the farm operations showing the following:

1.9.1    Itemization of harvests realized from the farmlot such as rice, corn, kind of vegetables, etc., and the quantity thereof;

1.9.2    Itemization of expenses in cultivation and production attaching receipts of such expenses;

1.9.3    Itemization of payments made by Samahang Nayon such as advances for guaranteed obligations including interest, contributions to Barrio Guarantee Fund (BGF), fines and other authorized financial obligations; and

1.9.4    Itemization of loans borrowed for production purposes attaching the contract of loans.

1.10     Liquidation of Debts:

In the disbursement of funds and/or income accruing to or derived from the farm lot under management, the Farm Manager under the direction of the Board of Directors shall be guided by the following preference of credit in the disposition of proceeds:

1.10.1  Absolute Preference

1.10.1  real estate taxes

1.10.2  Special Preference        current production loan/operating cost        land amortization        irrigation fees        other loans having a role in the realization of the farm, such as but not limited to loans for the purchase of farm implements/equipment, work animals and the like.

1.10.3  Common Preference        advance from BGF for defaulted land/loan amortization        other SN past dues        management fees and/or commission/incentives        past due production loan

1.10.4  Ordinary Preference        all other loans from institutional sources not hereinabove mentioned        share of affected member

If the funds and/or income is not sufficient to satisfy all the aforementioned obligations, the funds shall be applied first to Absolute Preference, then to Special Preference, then to Common Preference and lastly to Ordinary Preference. It is understood that funds shall be applied only to the next lower preference if the next higher preference has been satisfied in full. If a particular class of preference consist of two or more obligations and the funds remaining is not sufficient to satisfy all obligation, the funds shall be applied in proportion to the obligation of the same class.


2.1       Land Bank of the Philippines shall file with the Samahang Nayon its claim for payment of the guaranteed obligation of defaulting member supported by statement of accounts, copies of which shall be furnished the Bureau of Cooperatives Development and DLGCD.

2.2       The Board of Directors of the Samahang Nayon shall within thirty (30) days from receipt of claim for payment, resolve the claim, and if such board finds the same meritorious, shall direct the Samahang Nayon Treasurer to pay said claim from the Barrio Guarantee Fund of the Samahang Nayon. Existing procedures for the withdrawal of Barrio Guarantee Fund for land amortization payments shall be strictly observed.

2.3       The President of the Samahang Nayon shall furnish the Bureau of Cooperatives Development, Department of Local Government and Community Development; copy of the proceedings and evidence of payment made to the Land Bank of the Philippines.

          All orders/Memoranda inconsistent with this Memorandum-Circular are hereby revoked or repealed.

          This Memorandum-Circular shall take effect immediately and strict compliance by all concerned is enjoined.

                        (SGD.) JOSE A. RONO                                (SGD.) CONRADO F. ESTRELLA
Secretary                                                         Secretary


Department of Local Government Department of Agrarian Reform and Community Development 



Land Bank of the Philippines




Department of Agrarian Reform
Elliptical Road, Diliman
Quezon City, Philippines
Tel. No.: (632) 928-7031 to 39

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