October 26, 1998
DAR OPINION NO. 101-98
MR. LUIS T . GUINGONA
c/o 702 Manere Bldg.
#18 Matahimik St., Cor. V. Luna Rd.
Teacher's Village, Diliman, Quezon City
Dear Mr. Guingona:
This has reference to your letter-request dated 10 September 1998 for a clearance to enter into a grower's contract with another corporation involving a 300 hectare land owned and operated by Dalwagan Development Corporation, Inc. (DDCI).
As gleaned from your letter, you were granted clearance in 1991 for the above purpose by then DAR Regional Director Anastacio Limbo and that you are requesting for a similar clearance pending the acquisition proceedings by DAR of said lands.
Please be informed that under Section 11 of Republic Act No. 6657, as amended by R.A. No. 7881 and as implemented by Administrative Order No. 16, Series of 1989, it provides that the acquisition and distribution of qualified commercial farms may be deferred for ten (10) years from the effectivity of R.A.. No. 6657 on 15 June 1988. In case of new farms, the ten (10) year deferment period, shall begin from the first year of commercial production and operation as determined by DAR. Said law categorically mandates that commercial farms shall be subject to compulsory acquisition and distribution immediately thereafter. During the ten (10) year deferment period, the government shall initiate steps necessary to acquire these lands, upon payment of just compensation for the land and improvements thereon, preferably in favor of organized cooperatives or associations, which shall thereafter manage the said lands for the worker-beneficiaries.
In the Memorandum-Report of DAR Region 10 Director Antonieta R. Borra addressed to the Undersecretary for Field Operations and Support Services dated 22 September 1998, it was stated, among others, that on 23 April 1998 the Regional Director in answer to your request for either exemption or conversion, you were furnished with copies of the existing guidelines involving these matters; that a portion of the subject area consisting of about 173.6934 hectares was issued a deferment order in 1989 but was revoked on 23 June 1995; that the same order of revocation was affirmed on 18 August 1995, and thereafter, an appeal was elevated to the Office of the Secretary; that on 25 September 1995, then Secretary Ernesto D. Garilao replied that his Office will review the merits of the Appeal; and that as of this time, the Regional Office has not received a copy of any order affirming or setting aside the orders of revocation, hence, the matter is still pending with the Central Office.
From all the aforegoing and considering that the 10-year period of deferment had already lapsed reckoned from 15 June 1988, and considering further that under paragraph 2 of Section 11 of R.A. No. 6657 it provides, quote:
"If the DAR determines that the purpose for which this deferment is granted no longer exist, such areas shall automatically be subject to redistribution."
the subject landholding may now therefore be immediately placed under CARP coverage. In view thereof, your request for the aforementioned clearance could not be given due course pending the final transfer of the landholding to qualified agrarian reform beneficiaries.
Be that as it may, the Program is not inflexible since the subsequent coverage of the subject property may possibly allow for a new business arrangement, this time between the agrarian reform beneficiaries (ARBs) and the DDCI subject, however, to the approval of the DAR and consent of the ARBs in the exercise of their right as new owners of the land. Thus, Joint-Venture Agreement and other schemes may be entered into as provided for under Section 3 of R.A. No. 7905 subject to existing laws, rules and regulations, and, more particularly, the provisions of PARC Executive Committee Policy Order No. 1, Series of 1997 (copy herewith attached). Finally, steps shall be taken during this transition period to develop and ensure the administrative, technical and operational capabilities of the ARBs or their cooperative should they later decide to operate and manage then farm themselves.
Thank you for communicating with us and we hope to have clarified the matters with you.
Very truly yours,
(SGD.) DANILO T. LARA
Undersecretary for Legal Affairs, and Policy and Planning
Copy furnished:
Antonietta Borra
Regional Director
DAR — Region X
Macanhan, Carmen
Cagayan de Oro City
PARO Norberto Amora
DAR — Provincial Office
Casisang, Malaybalay
Bukidnon
The Municipal Agrarian Reform Officer
DAR — Municipal Office
Cagayan de Oro City