Sunday, January 12, 2014

CARP; Lands devoted to livestock, poultry, and swine raising are classified as industrial, not agricultural lands and, thus, exempt from agrarian reform. As such, the DAR has no power to regulate livestock farms.

See - DAR v. CA, ET. AL., GR NO. 170018, SEPT. 23, 2913.

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Under RA 6657, the CARP shall cover all public and private agricultural lands, including other lands of the public domain suitable for agriculture, regardless of tenurial arrangement and commodity produced.75 Section 3(c) thereof defines “agricultural land” as land devoted to agricultural activity and not classified as mineral, forest, residential, commercial or industrial land. Lands devoted to livestock, poultry, and swine raising are classified as industrial, not agricultural lands and, thus, exempt from agrarian reform. As such, the DAR has no power to regulate livestock farms.76

Nevertheless, the determination of the land’s classification as either an agricultural or industrial land – and, in turn, whether or not the land falls under agrarian reform exemption – must be preliminarily threshed out before the DAR, particularly, before the DAR Secretary. Verily, issues of exclusion or exemption partake the nature of Agrarian Law Implementation (ALI) cases which are well within the competence and jurisdiction of the DAR Secretary.77 Towards this end, the latter is ordained to exercise his legal mandate of excluding or exempting a property from CARP coverage based on the factual circumstances of each case and in accordance with the law and applicable jurisprudence.78 Thus, considering too his technical expertise on the matter, courts cannot simply brush aside his pronouncements regarding the status of the land in dispute, i.e., as to whether or not it falls under CARP coverage. As held in DAR v. Oroville Development Corp.:79

We cannot simply brush aside the DAR’s pronouncements regarding the status of the subject property as not exempt from CARP coverage considering that the DAR has unquestionable technical expertise on these matters. Factual findings of administrative agencies are generally accorded respect and even finality by this Court, if such findings are supported by substantial evidence, a situation that obtains in this case. The factual findings of the Secretary of Agrarian Reform who, by reason of his official position, has acquired expertise in specific matters within his jurisdiction, deserve full respect and, without justifiable reason, ought not to be altered, modified or reversed. (Emphases supplied)

It is settled that in order to be entitled to exclusion/exemption, it must be shown that the land is exclusively devoted to livestock, swine or poultry raising.80 The land must be shown to have been used for such purposes as of the effectivity of RA 6657, or on June 15, 1988,81 in order to prevent any fraudulent declaration of areas supposedly used for these purposes as well as to protect the rights of agrarian beneficiaries therein. This is in consonance with Section 73(c) of RA 6657 which prohibits the conversion by any landowner of his agricultural land into any non-agricultural use with intent to avoid the application of RA 6657 to his landholdings and to dispossess his tenant farmers of the land tilled by them.

A thorough review of the records reveals no substantial evidence to show that the entirety of the subject lands were exclusively devoted to livestock production since June 15, 1988 so as to warrant their exclusion/exemption from CARP coverage and the consequent cancellation of MCFARMCO's certificates of title. In fact, contrary to its original submission that almost all of the entire 206.5694 has. landholding has been devoted to cattle and livestock production since their acquisition in 1987,82 BATCO subsequently admitted in its Supplemental Motion for Reconsideration of the Order dated 25 February 1999 83 supplemental motion for reconsideration) that only a portion of the subject lands was actually devoted to livestock raising, for which the exemption of not less than 100 has. was sought.84 On this score alone, the CA gravely abused its discretion in declaring the subject lands as exempt from CARP coverage and
ordering the cancellation of MCFARMCO's certificates of title and the issuance of new titles in BATCO's favor.

It must be further pointed out that the subject lands were offered by BATCO to the government under the VOS scheme on September 20, 1989,85 which offer was reiterated on January 6, 1993 86 without any claim of exemption, notwithstanding the existence of the Luz Farms ruling (which was promulgated on December 4, 1990). In fact, the subject portion was acquired by the government in 1992 and still BATCO never sought exemption under Luz Farms. While it protested the valuation of the DAR87 during its VOS, it did not, at that time, seek any exemption from CARP coverage. BATCO only raised the claimed exemption when it filed the petition for exemption before the DAR Regional Director on May 6, 1998.

However, the petition was filed on the basis of DAR AO 09-93,88 and accordingly denied by the DAR Regional Director 89 and the DAR Secretary90 for failing to meet the requirements set forth therein. While the Court struck down DAR AO 09-93 as unconstitutional in the case of DAR v
Sutton91 (Sutton) on October 19, 2005, the DAR Decisions and even the CA
Decision dated September 6, 2005 in CA-G.R. SP No. 55377 were all rendered at the time that the said AO was still subsisting and in full force and effect. Consequently, in view of the prospectivity principle of judicial decisions92 and the operative fact doctrine,93 the petition for exemption must be resolved under the provisions of the said AO.

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