DAR ADMINISTRATIVE ORDER NO. 09, S. 1998, December 23, 1998

RULES AND REGULATIONS ON THE ACQUISITION, VALUATION, COMPENSATION AND DISTRIBUTION OF DEFERRED COMMERCIAL FARMS

National Administrative Register December 23, 1998

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Pursuant to Sections 11 and 49 of Republic Act (RA) No. 6657, the
“Comprehensive Agrarian Reform Law of 1988”, and in view of the
expiration on June 15, 1998 of the 10-year deferment period for commercial
farms, the rules and regulations governing their acquisition, valuation,
compensation and distribution are hereby promulgated as follows:

ARTICLE I
General Provisions

SECTION 1. Coverage. — This
Administrative Order shall apply to all commercial farms as defined under
Section II of RA 6657, as amended by Section 3 of RA 7881.

SECTION 2. Statement of Policies. — The acquisition, valuation, compensation distribution,
operation and management of deferred commercial farms shall be governed by the
following policies:

All commercial farms
whose deferment expired as of June 15,
1998 shall be subject to immediate acquisition and distribution
under the Comprehensive Agrarian Reform Program (CARP). Those whose
deferments have yet to expire will be acquired and distributed only upon
expiration of their respective deferment periods as originally determined by the
Department of Agrarian Reform (DAR), or earlier if the DAR determines that the
purpose for which it was deferred no longer exists and revokes its deferment;
As a general rule,
acquired commercial farms shall be distributed to qualified beneficiaries based
on the order of priority prescribed under Section 22 of RA 6657. Those
who have worked longest on the land shall be given preference;
The landowner,
whether individual or corporate, shall have the right to retention pursuant to
Section 6 of RA 6657;
All infrastructure
facilities and improvements including buildings, roads, machinery, receptacles,
instruments or implements permanently attached to the land, which are necessary
and beneficial to the operations of the farm as determined by the DAR, and
shall be subject to acquisition upon the recommendation of the agrarian reform
beneficiaries (ARBs);
In general, lands shall
be distributed directly to individual worker-beneficiaries. However, in case it
is not economically feasible and sound to divide the land, then it shall be
owned collectively by the worker-beneficiaries who shall form a workers
cooperative or association which will deal with the corporation or business
association;
Determination of just compensation for commercial farms shall include not only
the land but also the facilities and improvements introduced by the landowner.
It may take into account the type of commercial crops planted (e.g. banana,
pineapple, rubber) and such other relevant factors consistent with agrarian
laws, rules and regulations;
Lands acquired and
distributed under compulsory acquisition or voluntary offer to sell shall be
paid by the agrarian reform beneficiaries subject to the affordability
provisions of Section 26 of RA 6657 and other implementing rules and
regulations;
The landowner
shall retain his share of any standing crops unharvested
at the time the DAR shall take possession of the land and who shall be given
reasonable time to harvest the same; and
Beneficiaries of distributed commercial farms shall have full freedom to choose
the type of agribusiness venture arrangement that will maintain the economic
viability and productivity of the farm, the freedom to market their products or
enter into appropriate marketing arrangements, and the freedom to avail of the
services of individuals, associations or non-government organizations who will
assist them in negotiating for the most advantageous agribusiness venture
arrangement, enterprise development, and capability building.

SECTION 3. Definition of Terms. — As
used in this Order, the following terms shall be defined as follows:

Agricultural
Enterprise means the cultivation of the soil, planting of crops, growing of
fruit trees, including the harvesting of such farm products, and other farm
activities and practices performed by a farmer in conjunction with such farming
operations done by reasons another whether natural or judicial (Sec. 3 [b], RA
6657, as amended by Sec. 1, RA 7881).
Build-Operate-Transfer
(BOT) Scheme refers to a contractual arrangement entered into pursuant to
RA 6957, as amended, whereby the project proponent undertakes the construction,
including financing, of a given infrastructure facility and the operation and
maintenance thereof for an agreed period of time, but not to exceed twenty-five
(25) years, subject to extension.
Commercial Farms
are private agricultural lands devoted to salt beds, fruit farms, orchard,
vegetables and cut-flower farms, cacao, coffee and rubber plantations (Sec. 11,
R.A. 6657, as amended by Sec. 3, R.A. 7881).
Compulsory
Acquisition is the mandatory acquisition of agricultural lands, including
facilities and improvements necessary for agricultural production, as may be
appropriate, for distribution to qualified beneficiaries upon payment of just
compensation.
Contract Growing/Growership Arrangement is an agribusiness arrangement
whereby the ARBs own the land and commit, either
collectively through their cooperative or individually, to produce certain
crops for an investor or agribusiness firm that contracts to buy the produce at
pre-arranged terms.
Deferment
Period refers to the ten (10) year period counted from the start of commercial
production and operation as provided in Sec. 11 of R.A. 6657 whereby the
acquisition and distribution of commercial farms has been postponed.
Direct Payment Scheme
is a mode of acquiring land wherein direct payment in cash or in kind is made
by the ARB to the landowner under terms mutually acceptable to both parties and
approved by DAR.
Farmworker refers to a natural person who renders
service for value as an employee or laborer in an agricultural enterprise or
farm regardless of whether his compensation is paid on a daily, weekly, monthly
or “pakyaw” basis. The term includes
an individual whose work has ceased as a consequence of, or in connection with,
a pending agrarian dispute and who has not obtained a substantially equivalent
and regular farm employment. (Section 3[g] of R.A. 6657).
Joint Venture Agreement is an agribusiness venture whereby a company is
organized and co-owned by an investor and the agrarian reform beneficiaries
through their cooperatives or associations. The investor may provide the
management and marketing skills, technology infrastructure, and capital while
the ARBs‘ contribution/participation in the joint
venture includes labor, the usufructuary rights to
the land, and capital, infusion, if available.
Lease
Arrangement is an agribusiness scheme whereby the ARB’s,
through their cooperative or farmworkers‘
association, enter into a contract of lease with the landowner/investor.
The lessee shall have farm control and operations within an agreed period
of time but not to exceed ten (10) years, subject to extension upon mutual
agreement of both parties. The lease rental shall not be less than the
amortization to be paid by the ARBs to the Land Bank
of the Philippines (LBP) pursuant to DAR Administrative Order No. 6, Series of
1998, and other pertinent laws, rules and regulation.
Management
Contract is an agribusiness arrangement whereby the ARBs,
or their cooperative/organization, hire the services of the landowner or an
investor to manage and operate the farm in exchange for fixed wages or
commission.
Other Farmworkers are those who does not fall under
paragraphs [g], [h] and [i] of R.A. 6657, i.e., the
definitions of farmworker, regular farmworker, and seasonal farmworker.
(Sec. 3 [j], R.A. 6657).
Regular Farmworker
is a natural person who is employed on a permanent basis by an agricultural
enterprise or farm (Sec. 3 [h], R.A. 6657).
Seasonal Farmworker is a natural person employed on a recurrent,
periodic or intermittent basis by an agricultural enterprise or farm, whether
as a permanent or a non-permanent laborer, such as “dumaan“,
sacada and the like (Sec. [i],
R.A. 6657).
Standing Crops
refer to the harvestable agricultural produce or a portion thereof (e.g.,
fruits, sap, root) normally harvested for such particular crop growing on the
land at the time DAR takes possession thereof.
Voluntary Offer to Sell is a scheme whereby the landowner voluntarily
offers his agricultural land including facilities and improvements necessary
for agricultural production, if any, for distribution to qualified
beneficiaries.

ARTICLE II
Selection of Beneficiaries

SECTION 4. Qualifications of Beneficiaries.
— Agrarian reform beneficiaries for acquired commercial farms must have the
following qualifications:

They must be at least 18
years old upon filing of application as agrarian reform beneficiary;
They must have the
willingness, aptitude and ability to cultivate and make the land productive;
and,
They must have
been employed in the commercial farm between June 15, 1988 and June
15, 1998 or upon expiration or termination of the deferment:
Provided, That farmworkers
who have worked longest on the land continuously shall be given priority.

SECTION 5. Grounds for Disqualification. — The following
shall constitute as grounds for disqualification of potential beneficiaries of
acquired commercial farms;

Mandatory retirement;
Optional retirement or
resignation: Provided, That there is no case
filed by the farmworker or prospective beneficiary
questioning such retirement or resignation;
Dismissal for
cause by final judgment as prescribed under labor laws;
Waiver or refusal to be
a beneficiary; or
Violation of agrarian
reform laws and regulations as determined with finality after proper
proceedings by appropriate tribunal or agency.

SECTION 6. Procedure for Selection of
Beneficiaries. — The selection of qualified
beneficiaries for acquired commercial farms shall subscribe to the following
procedures:

a. Beneficiary Screening Committee. — A Beneficiary Screening Committee shall be created composed of the following:

Provincial Agrarian Reform Officer (PARO) who shall act as Chairman;

Municipal Agrarian Reform Officer (MARO), as member;

Provincial Agrarian Reform Coordinating Committee (PARCCOM) Chairman or his duly-authorized representative, as member;

Barangay Agrarian Reform Council (BARC) Chairman or his duly-authorized representative from each of the barangays where the subject commercial plantation is situated, as member(s); and

Barangay Chairman or his duly-authorized representative, from each of the barangays where the subject commercial plantation is situated, as member(s).

The Beneficiary Screening Committee shall be responsible for the qualification, identification and selection of agrarian reform beneficiaries for acquired commercial farms. In the performance of its tasks, the Committee may invite representatives from the landowners, peoples’ or non-government organizations and/or such other groups or entities as may be necessary as resource persons.

b. Notice to Potential Beneficiaries. — Upon effectivity of this Order, the PARO concerned shall post a list of commercial farms whose deferments have already expired together with a notice inviting all interested farmworkers in said commercial farms to be listed as potential beneficiaries, and directing them to submit proofs of their qualifications within 30 days from posting. The posting of the list and notice shall be made in conspicuous places within the subject property, barangay and municipality, where the property is located.

c. Preparation and Posting of Preliminary List. — The Beneficiary Screening Committee shall, upon expiration of 30 days after posting of the list/notice, prepare a preliminary list of potential beneficiaries on the basis of those have filed applications for agrarian reform beneficiary in the prescribed form (Annex 1: Application Form for ARB).

In preparing the preliminary list, the Committee shall consider the following pieces of evidence in deciding whether to include or exclude a potential beneficiary, to wit:

Application subscribed and sworn to before any official authorized to administer oaths; showing age, date of birth, residence, length of service, or date of employment among others;

Proof of employment; and

Such other proofs necessary to establish that the applicant has all the qualifications and none of the disqualifications to be an agrarian reform beneficiary.

The Committee shall then post copies of the preliminary list of beneficiaries in conspicuous places of the subject property, barangay and municipality. The list shall contain an invitation to all interested parties to appear at a public hearing at the designated place and time.

d. Public Hearings. — Within 15 days from the posting of the preliminary list, the Beneficiary Screening Committee shall conduct public hearings for the purpose of examining and cleansing the preliminary list of beneficiaries. As much as practicable, the public hearings shall be conducted after regular working hours at a place to be determined by the Committee preferably outside the commercial farm under acquisition.

The public hearings shall be presided by the Chairman of the Beneficiary Screening Committee with the members thereof in attendance. During the public hearings, any interested party may present proof of disqualification or lack of qualification of any person appearing on the preliminary list. For this purpose, the Committee may, in addition to the proofs earlier enumerated, consider any of the following pieces of evidence as may be appropriate:

Original or certified copy of notice of dismissal or retrenchment;

Original copy of waiver as beneficiary under oath;

Original or certified copy of resignation letter;

Original or certified copy of decision, order or ruling by a court, quasi-judicial body, or administrative agency; and

Such other proofs that will establish the qualifications or disqualifications of the potential beneficiary.

The Beneficiary Screening Committee shall rule on petitions or requests in writing for the inclusion/exclusion of potential beneficiaries either during or after the public hearings as it may deem appropriate.

e. Preparation of Updated List and Waiting List. — Within 15 days from the last public hearing, the Beneficiary Screening Committee shall prepare an updated list of potential beneficiaries on the basis of the proofs presented during the public hearings and taking into consideration the order of priority prescribed in Section 22 of R.A. 6657. A waiting list which shall contain the names of those who possess the minimum qualifications and none of the disqualifications, but who could not otherwise be accommodated in the updated list, shall also be prepared. The updated list and the waiting list shall again be posted in conspicuous places of the subject property, barangay and municipality.

f. Resolution of Protests. — Any interested party may, within ten (10) days from posting of the updated list/waiting list, file a protest in writing with the Beneficiary Screening Committee on the qualifications or disqualification of those appearing on the said lists. Within three (3) days from receipt of the protest, the Chairman of the Committee shall furnish a copy thereof, together with the supporting evidence, to the beneficiary whose qualification is under question, with a directive for him to answer or comment within an inextendible period of 10 days from receipt. Upon expiration of the 10-day period, the Chairman shall, with or without the protestee’s answer or comment, immediately transmit the records to the Regional Director. The Regional Director shall resolve the case within 15 days from receipt on the basis of substantial evidence showing the qualification or disqualification of the beneficiary subject of the protest, and furnishing a copy of the order/decision to the Beneficiary Screening Committee. No motion for reconsideration shall be allowed from the order or decision of the Regional Director, but the same may be appealed to the Undersecretary for Field Operations and Support Services whose decision shall be final and executory. The appeal, however, shall not stay the execution of the order of the Regional Director.

g. Preparation of Master List. — After the Regional Director resolved any and all protests concerning the qualifications or disqualification of those appearing on the updated list/waiting list, the Beneficiary Screening Committee shall prepare a masterlist of beneficiaries who shall be the recipients of the commercial farm under acquisition. The masterlist shall be posted in conspicuous places of the subject property, barangay and municipality. In the event a beneficiary whose inclusion in the list is on appeal with the Undersecretary for Field Operations and Support Services is ordered excluded from the masterlist, his name shall be stricken off from the list and replaced with those on the updated list or, if not available, from those on the waiting list following the order of priority appearing on said lists.

h. Prioritization of Beneficiaries. — The Beneficiary Screening Committee shall prioritize the potential ARBs pursuant to Section 22 of R.A. 6657. They shall be ranked according to the length of their continuous service in the commercial farm reckoned from June 15, 1988 up to the expiration of the deferment period; residency, i.e. whether residing in the same barangay or municipality; whether they have been validly retrenched, i.e. with approval of the Dept. of Labor and Employment; the nature of their work, i.e. whether directly related to farm activities; and such other factors as the Committee may deem appropriate.

SECTION 7. Farmworkers Excluded From Land Distribution. — In
cases where the lands available for distribution are not sufficient, the DAR
shall ensure that the excluded farmworkers, if
interested, may avail of support services extended to ARBs
in acquired commercial farms, including social infrastructure building and
enterprise development.

ARTICLE III
Acquisition, Valuation, Compensation and Distribution of
Land
A. Acquisition

SECTION 8. Mode of Acquisition. — Commercial farms with expired deferment period shall be
acquired either through voluntary offer to sell (VOS), compulsory acquisition
(CA), or direct payment scheme (DPS).

Voluntary
Offer to Sell/Compulsory Acquisition — In order that acquisition of
deferred commercial farm through voluntary offer to sell may be allowed, the
offer to sell must have been submitted before the expiration of the deferment
period, otherwise, the property shall be placed under compulsory acquisition.
Direct
Payment Scheme
1. Upon mutual agreement of both
  the landowner and the majority of all qualified agrarian reform beneficiaries,
  and approved by the DAR, direct payment of deferred commercial farms placed
  under CARP coverage may be allowed.
2. The area of the land to be
  transferred to the beneficiaries shall not be less than the area which the
  government would otherwise acquire for redistribution through CA or VOS.
3. The terms and conditions of the
  DPS shall include the immediate transfer of possession and ownership of the
  land in favor of the identified beneficiaries. The Certificates of Land
  Ownership Award (CLOAs) shall be issued to the
  individual ARBs, or their cooperative or association,
  as may be appropriate, with proper annotations.

SECTION 9. Procedure for Acquisition.
— The acquisition of deferred commercial farms shall be governed by the
following procedures:

Voluntary
Offer to Sell/Compulsory Acquisition

The Order of Deferment
previously issued over the landholding shall serve, upon expiration of the
deferment period of the subject commercial farm, as the Notice of Coverage,
supported by the Compliance Work Program and Summary of Exceptions (Form A)
originally submitted with the approved deferment application. However,
for record purposes, the landowner shall be served a Notice of Expiration of
Deferment (Annex 2) which shall contain a reminder of his right to retention,
should he wish to exercise the same;
In general, the procedure for
acquisition shall follow DAR Administrative Order No. 01, Series of 1998, as
amended by DAR Administrative Order No. 02, Series of 1996, entitled
“Revised Rules and Procedures Governing the Acquisition of Agricultural
Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to
Republic Act No. 6657”, subject to certain modifications intended to expedite
the process as provided herein.
The specific steps are as
follows:

Steps	Responsible Agency/Unit	Activity	Forms/Documents (Requirements)
	(Steps 1-12 for Lands Subject of Voluntary Offer to Sell)

1	LO	Submits voluntary offer to sell over landholdings before expiration of deferment period	CARP Form No. 01 (Letter Offer)

2	DARMO	Acknowledges voluntary offer within seven (7) days upon receipt of offer	CARP Form No. 01. a-DCF-1 (Acknowledgment)
	(Steps 3-12 for Lands Subject of Compulsory Acquisition)

3	DARMO	Secures/reviews deferment folder of deferred commercial farm subject of coverage	The folder should contain, among others, the following: – Deferment Order – Name of LO – Title/TD No. – Area – Location – Vicinity Map/Plan

4	DARMO	Posts Deferment Order previously issued which shall now serve, for the purpose of covering the subject commercial farm, as Notice of Coverage, for seven (7) days in the barangay and municipal hall where property is located thereafter, issues Certificate of Posting Compliance.	CARP Form No. 06 (Certification of Posting Compliance)

5	DARMO	Schedules Field Investigation and sends Notice thereof to BARC, DENR, DA, LBP, LO and prospective ARBs at least two weeks in advance	CARP Form No. 02 (Notice to Conduct Field Investigation)

6	DARMO	Conducts joint field investigation of property with LBP, DENR, DA, LO, BARC and prospective ARBs.

7	DARMO	Prepares FIR and Land Use Map jointly with LBP and BARC	CARP Form No. 03 (Field Investigation Report); and CARP Form No. 03-DCF-02 (Report on Modifications in Land Use)

8	DARMO	Selects qualified ARBs from Masterlist of Beneficiaries prepared Beneficiary Screening Committees by and Farmer’s and causes signing of APFUs.	CARP Form No. 04(Application to Purchase Undertaking)

Note: In the event the beneficiary selection process becomes contentious and is delayed for more than thirty (30) days after the preparation of the Updated and Waiting Lists, the MARO concerned shall forward the claim folder, without the APFU’s, to the PARO for submission to Land Bank for valuation: Provided, that the actual release of payment to the landowner shall only be effected upon submission of the APFU’s by the DAR and the request for payment.

9	DARMO	Forwards claim folder to DARPO	CARP Form No. 07 (CF Transmittal Memorandum)

10	DARPO	Receives claim folder and forwards to DAR-LBP Pre-Processing Unit (PPU) for review/evaluation of documents. Gathers lacking documents, if any.

11	DARPO	Expedites survey activities and ensures that segregation/subdivision survey returns are completed and approved by DENR-LMS pursuant to existing guidelines	Approved subdivision or segregation plan (ASP) with technical description.

12	DAR-LBP- PPU	Forwards CF to LBP-LVLCO together with the ASP, if applicable.	CARP Form No. 08 (Memorandum Request to Value the Land)

b. Direct
Payment Scheme

The landowner and qualified
beneficiaries of the commercial farm subject of coverage may, upon mutual
agreement, opt for the direct payment scheme at any time during the acquisition
process, after the Preparation of the Master List but prior to the transmittal
of the claim folder to the LBP.
Acquisition under DPS of lands
with liens or encumbrances may be allowed: Provided, That the amount
corresponding to the mortgage over the subject landholding shall be deducted
from the total value of the land to be paid by the ARBs:
Provided, Further, that said agreement shall be upon mutual consent of both the
ARBs and the landowner, duly concurred with by the
mortgagee or lienholder. In case of delinquent realty
taxes, the ARBs may be allowed to assume such
liability to be deducted from the total value of the land.
Upon mutual consent of the ARBs and the landowner, duly concurred with by the
mortgagor or lienholder, the ARBs
may assume the mortgage: Provided, That such
obligation shall not exceed the annual amortization otherwise due to the land
pursuant to Section 26 of RA 6657, if subject landholding was acquired under
VOS or CA.
The following procedures shall
be followed in availing of the direct payment scheme:

Step	Responsible Person Agency/Unit	Activity	Forms/Documents (Requirements)

1	Landowner and Qualified Farmworker Beneficiaries	Jointly notifies the DAR of their intent to avail of Direct Payment Scheme (DPS)	DPS-DCF Form No. 03 (LO/FB Notice of DPS)

Note: The notice to avail of the DPS may be served by both parties to the DAR any time during the acquisition process, but prior to the transmittal of the claim folder to the LBP. However, if served prior to the preparation of the Master List, the notice shall be validated by the MARO with the identified ARBs included in the Master List, in a referendum to be held for this purpose.

2	MARO	Secures/reviews deferment folder of deferred commercial farm subject of coverage.	The folder should contain, among others, the following: Deferment Order Name of LO Title/TD No. Area Location Vicinity Map/Plan

(Steps 3-5 are to be accomplished in case the Joint Field Investigation has not yet been conducted)

3	DARMO	Schedules the conduct of Field Investigation and sends Notice thereof to BARC, DENR, DA and prospective ARBs at least two weeks in advance	CARP Form No. 02 (Notice to Conduct Field Investigation)

4	DARMO	Conducts joint field investigation of property with DENR, DA, LO, BARC and prospective ARBs.

5	DARMO	Prepares FIR and Land Use Map jointly with BARC	CARP Form No. 03 (Field Investigation Report); and CARP Form No. 03-DCF-02 (Report on Modifications in Land(Use)

6	DARMO	Selects qualified ARBs from Masterlist of Beneficiaries prepared by Beneficiary Screening Committees.	Masterlist of Qualified ARBs
			DPS-DCF Form No. 03 (Report on the Conduct of Referendum)
7	MARO	Conducts referendum between LO and identified ARBs on the proposed DPS. The DAR shall ensure that the ARBs are fully aware of and understand the options available to them in land distribution. The majority of all the ARBs should agree to the proposed DPS.

8	LO, ARBs and MARO	LO and ARBs negotiate on the purchase price and other terms of the DPS; MARO ensures that the same are beneficial and acceptable to both parties.	DPS-DCF Form No. 04(Memorandum of Understanding re Direct Payment Scheme)

9	MARO	Forwards DPS folder to DARPO	CARP Form No. 07-A(DPS Folder Transmittal Memorandum)

10	DARPO	Receives DPS folder and reviews/ evaluates documents; gathers lacking documents, if any; approves proposed DPS, if documents are in order.

B. Valuation

SECTION 10. Determination of Just Compensation.
—

As a general rule, DAR
Administrative Order No. 5, Series of 1998 entitled “REVISED RULES AND
REGULATIONS GOVERNING THE VALUATION OF LANDS VOLUNTARILY OFFERED OR
COMPULSORILY ACQUIRED PURSUANT TO REPUBLIC ACT NO. 6657“,
shall apply in the determination of just compensation for deferred commercial
farms.
In the case of DPS, the
applicable purchase price for such land shall be mutually agreed upon by both
parties, but in no case higher than the prevailing market value.

SECTION 11. Responsibility for Valuation. — The process of valuation
must involve agrarian reform beneficiaries and their organizations, the Barangay Agrarian Reform Committees, the landowner
concerned, the Department of Agrarian Reform, and the Land Bank of the Philippines.

SECTION 12. Procedures for Valuation. —

In case of lands
voluntarily offered or compulsorily acquired, the following procedures shall
apply:

Step	Responsible Person Agency/Unit	Activity	Forms/Documents (Requirements)

1	LBP-LVLCO	Receives and evaluates the CF for completeness, consistency and document sufficiency. Gathers additional valuation documents, if necessary.

2	LBP-LVLCO	Determines land valuation based on valuation inputs	Claim Valuation and Processing Form (CVPF)

3	LBP-LVLCO	Prepares and sends Memo of Valuation, Claim Folder Profile, and Valuation Summary (MOV- CFPVS) to PARO.	CARP Form No. 9 (Memorandum of Valuation and Claim Folder Profile and Valuation Summary

4	DARPO	Receives LBP’s MOV-CFPVS and ascertains completeness of the data and information therein.

5	DARPO	Sends Notice of Land Valuation and Acquisition to LO by personal delivery with proof of service or registered mail with return card, attaching copy of MOV-CFPVS and inviting LO’s attention to the submission of documents required for payment of claim.	CARP Form No. 10 (Notice of Land Valuation and Acquisition)

6	DARPO	Posts copy of the Notice of Land Valuation and Acquisition (NLVA) for at least seven (7) working days on the bulletin board of the provincial capitol, municipal and barangay halls where the property is located and issues a Certificate of Posting Compliance.	CARP Form No. 11 (Certificate of Posting Compliance)

7	LO	Replies to Notice of Land Valuation and Acquisition and submits documents required for payment of compensation claim	CARP Form No. 10.a(LO’s Reply to NLVA)
	(If LO accepts, proceed to A) (If LO rejects, proceed to B)
	A. Where LO accepts the Land Valuation
8	DARPO	Upon receipt of LO’s Letter of Acceptance, sends Memorandum to LBP to prepare Deed of Transfer and pay the LO.	CARP Form No. 12 (Request to Pay)

9	LBP-LVLCO LBP-HO	Prepares DOT for LO to execute and deposits compensation proceeds in the name of LO in cash and in bonds. The entire deposit may be withdrawn by LO; however, the actual release of the same shall only be effected upon LO’s submission of all documentary requirements.	CARP Form No. 13 (Deed of Transfer)

10	LO	Executes DOT and submits payment requirements to LBP within seven (7) working days.	CARP Form No. 13 (Deed of Transfer)

11	LBP	Should the LO fail to submit the required documents within seven (7) working days from LBP receipt Compliance with of the DAR Request to Pay, notifies DAR of such failure by LO and also issues to DAR the Certification of Deposit.	CARP Form No. 16 (Notice of LO’s Non- Requirements)

12	LBP	Upon completion of payment requirements within seven (7) working days, immediately prepares payment and issues to DAR Certification of Payment	CARP Form No. 17(Certification of Payment)

13	Department of Agrarian Reform	Requests ROD to transfer the Certificate of Title covering subject property in favor of RP; simultaneously forwards copy of Certification of Payment to DARMO with instructions to take over physical possession of the land.	CARP Form No. 18 (Request to Issue TCT in favor of RP)

14	LBP	Forwards DOT together with the owner’s duplicate of title and ASP(if applicable) to ROD for registration	CARP Form No. 13(Deed of Transfer), Certified copy of ASP and its technical description approved by DENR, if property is only partially covered by CARP.

15	ROD	Registers DOT and issues TCT in the name of RP, then forwards owner’s duplicate certificate of title to PARO and certified copy of the owner’s duplicate certificate of title to LBP, then proceeds with generation and registration of CLOA.

16	LBP-LVLCO LBP-HO	Prepares payment release form upon LO’s compliance with all the requirements for payment. In case the land is encumbered, pays the mortgagee-bank/creditor upon LO’s request and pays the balance of the proceeds to the LO.	LBP Payment Release Form
B. Where LO Rejects the Land Valuation
8	DARPO	If the LO rejects the offered price or fails to reply within thirty (30) days from receipt of the Notice of Land Valuation and Acquisition, forwards to LBP the Request to Deposit compensation proceeds in cash and in bonds in the name of the LO.	CARP Form No. 10.a (LO’s Reply to NLVA) CARP Form No. 15 (Request to Deposit)

9	DARPO	Requests the DARAB/RARAD/ PARAD to conduct administrative proceedings, furnishing a copy each of the LO’s Letter of Rejection, Notice of Land Valuation and Acquisition, and LBP’s Memorandum of Valuation.	CARP Form No. 14(Advice to DARAB/ RARAD/PARAD)

10	LBP-LVLCO LBP-HO	Deposits compensation proceeds in the name of the LO and issues Certification of Deposit to DAR through the PARO, copy furnished the LO.	CARP Form No. 17 (Certification of Deposit)

		The entire deposit may be withdrawn by the LO; however, actual release of the same shall be subject to LO’s submission of all requirements for payment and execution of Confirmation of Coverage and Transfer.	CARP Form No. 17.a(Confirmation of Coverage and Transfer for Claims of Individual LOs – still pending with DARAB)

11	DARPO	Upon receipt of the Certification of Deposit from LBP, transmits the same to Register of Deeds concerned, including the approved segregation/subdivision plan of subject property, if partially covered, and simultaneously requests ROD to issue TCT in the name of RP; and forwards copy of above Certification to DARMO with instructions to take over physical possession of the land.	CARP Form No. 18 (Request to Issue TCT in the Name of RP)

12	ROD	Issues new TCT in the name of RP and forwards owner’s duplicate certificate of title in the name of RP to PARO, and certified copy of the owner’s duplicate of title to LBP-LVO, then proceeds with generation and registration of CLOA.	New TCT in the name of RP and owner’s duplicate copy of title in the name of RP

13	DARPO	Forwards to DARMO certified copy of TCT in the name of RP with instructions to proceed with distribution of the same in favor of qualified ARBs.	Certified copy of TCT in the name of RP

14	DARPO	Upon receipt of the Finality of DARAB Order, requests LBP to pay LO in accordance with Certificate DARAB Decision; requests LBP to of prepare Confirmation of Coverage and Transfer for LO to accomplish. In case LO still rejects DARAB Decision, he may go to the Special Agrarian Court (SAC) for final determination of just compensation.	CARP Form No. 17.c (Confirmation of Coverage & Transfer for Claims of Individual LOs– Already decided by DARAB CARP Form No. 17.d (Confirmation of Coverage & Transfer for Claims of Corporate LOs– already decided by DARAB)

15	LBP-LVLCO LBP-HO	Prepares payment release form upon LO’s compliance with all requirements for payment. In case the land is encumbered, pays mortgagee-bank/creditor upon LO’s request and pays balance of the proceeds to LO.	LBP Payment Release Form

(b) In the case of DPS, the following procedures shall apply:

Step	Responsible Person Agency/Unit	Activity	Actions/Documents (Requirements)

1	DARPO	Notifies both LO and ARBs of the approval of the proposed DPS.	DPS-DCF Form No. 05(Notice of Approval of DPS) or,
		If DPS is disapproved, sends corresponding notice to LO and ARBs, specifying therein the reasons for disapproval, as well as the documents and/or activities required to facilitate approval.	DPS-DCF Form No. 05-a (Notice of Disapproval of DPS)

		After the lapse of three (3) months from date of submission of the DPS MOU (DPS-DCF Form No. 04) but the requirements for approval are still not duly complied with, compulsory acquisition of subject landholding shall be immediately resumed.

2	DARPO	Reviews purchase price agreed upon in the MOU (DPS-DCF Form No. 04) and either approves or disapproves proposed DPS.	DPS-DCF Form No. 05(Notice of Approval of DPS) or, DPS-DCF Form No. 05-a (Notice of Disapproval of DPS)
		Should there be no agreement on purchase price, after three (3) months from the date of submission of the MOU, compulsory acquisition of subject landholding shall be immediately resumed.

3	DARPO	Expedites survey activities and ensures that segregation/subdivision survey returns are completed and approved by the DENR-LMS pursuant to existing guidelines.	Approved subdivision or segregation plan (ASP) with technical description.

4	LO	Executes Deed of Transfer in favor of the ARBs, duly witnessed by PARO and MARO	DPS-DCF Form No. 06 (Deed of Transfer)

5	DARPO	Forwards DOT to ROD with request to generate title in favor of ARBs	CARP Form. No. ___(Request to Generate CLOA in favor of ARBs)

C. Compensation

SECTION 13. Manner of Payment. —

(a) Voluntary Offer to
Sell/Compulsory Acquisition

(1) The LBP shall compensate the
landowner in such amount as may be agreed upon pursuant to Sections 17 and 18
of RA No. 6657, or as may be finally determined by the court as just
compensation for the land, facilities and improvements.

(2) The compensation shall be paid in
any of the modes specified in Section 18 of RA 6657. For lands voluntarily
offered, an additional incentive of 5% cash payment shall be paid to the
landowner, other than banks and financial institutions, pursuant to Section 19
of RA 6657.

(b) Direct Payment Scheme

(1) Payment under DPS for the land may
be made by the ARB in cash or in kind to the landowner, under terms mutually
agreed upon by them, and which shall be indicated in the Memorandum of
Agreement (DPS-DCF Form No. 04) duly approved by the DAR.

(2) The MOA, upon approval of the DAR,
shall form an integral part of the Deed of Transfer (DPS-DCF Form No. 06) which
shall be executed by the landowner in favor of the ARBs.

(3) For landholdings acquired under DPS,
the MOA shall be binding to the parties immediately upon registration of the
DOT by the ROD, and the subsequent generation of CLOAs
in favor of the ARBs.

(4) Further, the ARBs
shall be eligible to borrow from the Land Bank through its regular loan
portfolio, an amount equal to eighty-five percent (85%) of the selling price of
the land that they have acquired pursuant to RA 7905. The remaining cost
of the land shall be paid directly to the LO by the ARBs.
The Joint DAR-LBP Policy Committee shall draw up the necessary guidelines
for the availment of this loan.

(5) Other alternative modes of payment
under the DPS, in cash or in kind, shall be encouraged subject to the approval
and monitoring provisions prescribed in this Order.

SECTION 14. Issuance of Proof of Payment. —
For lands voluntarily offered or compulsorily acquired, the LBP shall issue the
Certification of Deposit within fifteen (15) days upon receipt of the Request
to Deposit from DAR, in case of non-acceptance by the LO of the valuation, but
in no case to exceed ninety (90) days from the date of receipt of the LO of the
Notice of Land Valuation and Acquisition.

In case of acceptance of the valuation, the LBP shall immediately
issue the Certification of Payment, within seven (7) working days from
execution of the DOT, but in no case to exceed sixty (60) days from the date of
receipt of the LO of the Notice of Land Valuation and Acquisition.

With respect to payments under the DPS, the ARBs
shall, upon effectivity of the MOA specified under
Section 13(b) above, open an account in any government depository in the name
of the landowner. All payments to the landowner shall be made through
said account, and the corresponding deposit slips shall serve as proof of
payment by the ARBs.

SECTION 15. Period of Payment of Land Amortization.
—

(a) Land

(1) Amortizations for lands
voluntarily offered or compulsorily acquired shall be paid by the ARB to the
Land Bank in thirty (30) annual installments at six percent (6%) per annum.
The annual amortization shall start one year from the date of CLOA
registration.

(2) The payments by the ARBs for the first three (3) years shall be two and a half
percent (2.5%) of annual gross production (AGP) and five percent (5%) of AGP
for the fourth and fifth years. To further make the payments affordable,
the ARBs shall pay ten percent (10%) of AGP or the
regular amortization, whichever is lower, from the sixth (6th) to the thirtieth
(30th) year.

(3) The LBP shall, within
one year from the date of registration of the CLOA, furnish the ARBs the schedule of amortizations computed based on the abovecited provisions of R.A. 6657. Such amortization
schedule shall be based on benchmark gross production figures, which shall
later be adjusted to reflect actual production performance of the subject
landholding.

(4) Payment terms under the
DPS shall be mutually agreed upon by the LO and ARBs,
as approved by the DAR, and as contained in the Memorandum of Agreement
executed by and among the parties, but in no case shall the period exceed
fifteen (15) years. Interest rates per annum shall not exceed current mandated
rates for agricultural loans.

(5) In case of payment
options availed of under Section 13(b)(5) above, the
amount financed by LBP shall be paid by the ARBs
subject to existing guidelines of the LBP on loan repayment schedule.

SECTION 16. Monitoring of Payments. — For
lands, voluntarily offered or compulsorily acquired, the LBP shall submit
periodic reports to the DAR on the amortizations made by the ARBs.

For lands acquired under DPS, the ARBs
shall furnish the DAR copies of their deposit slips representing payments made
to the account of the LO. The DAR, through the MARO, shall keep a ledger
to reflect said payments. The MARO shall submit quarterly reports of the
payments to the PARO for monitoring and evaluation purposes.

D. Distribution

SECTION 17. Mode of Distribution. — Commercial farms may be
distributed collectively or individually. Qualified beneficiaries shall be awarded
a maximum of three (3) hectares or a minimum of one (1) hectare each, in case
the land is not sufficient to accommodate them.

To expedite the acquisition, the commercial farms shall be
initially distributed collectively or under co-ownership.

In case the beneficiaries desire to partition the land, DAR shall
first determine whether it is economically feasible and sound to divide the
land, in coordination with the Department of Agriculture and other concerned
agencies.

Thereafter, the beneficiaries may, by a majority vote, decide
whether to proceed with the partition or not.

In the event the beneficiaries decide to partition, the land
shall be allocated to the individual beneficiaries by drawing lots in the
presence of DAR representatives.

SECTION 18. Generation of CLOAs. — Collective CLOAs shall be
generated within thirty (30) days upon receipt by the PARO of the certified
copy of the certificate of title in the name of Republic of the Philippines.

Individual CLOAs shall be generated
within thirty (30) days upon receipt of the Approved Segregation Plan (ASP).
However, in the case of individual distribution, and considering the time
and financial constraints particularly in the conduct of individual surveys, a
collective CLOA may be generated in the interim over the subject landholding.

SECTION 19. Standing Crops. — The landowner shall retain his share
of any standing crops unharvested at the time the DAR
shall take possession of the land pursuant to Section 16 of R.A. 6657. The DAR,
through the PARO, shall take possession of the land immediately upon the
issuance of RP title therefor. Upon taking
possession, the PARO and the MARO concerned shall inventory the unharvested standing crops, and shall give the landowner
reasonable time to harvest the same.

SECTION 20. Registration of CLOAs and Installation of Beneficiaries. — CLOAs shall be registered immediately upon generation.
The PARO shall install or cause the installation of the beneficiaries in
the commercial farm within seven (7) days from registration of the CLOA.

SECTION 21. Model Farms. — Commercial farms designated as model
farms pursuant to Section 7 of RA 8435, otherwise known as the
“Agriculture and Fisheries Modernization Act of 1997”, shall be
acquired and distributed collectively to ensure economic scale production.
The landowner shall be given the right of first refusal to enter into any
appropriate alternative venture arrangement with the agrarian reform
beneficiaries therein.

SECTION 22. Resolution of Disputes. — Any
and all disputes arising from the acquisition, valuation and distribution of
commercial farms shall be resolved in accordance with existing agrarian laws
and regulations applicable on the matter. However, considering that the
intent of the law is to immediately acquire and distribute these commercial
farms, such disputes shall be accorded the highest priority and shall be
expeditiously disposed of.

ARTICLE IV
Acquisition, Valuation, Compensation and Distribution of
Facilities and Improvements

SECTION 23. Coverage. — All infrastructure, facilities and
improvements including buildings, roads, machinery, receptacles, and
instruments or implements permanently attached to the land which are necessary
and beneficial to the operation of the commercial farm shall be subject to
acquisition, upon the written request to the DAR of a majority of all
identified ARBs, following the procedures prescribed
in Sec. 25 hereof.

SECTION 24. Mode of Acquisition. — As a
general rule, acquisition of facilities and improvements shall be encouraged
through the direct payment scheme.

SECTION 25. Procedures for Acquisition. —
The following procedures for the acquisition of facilities and improvements
shall be followed:

(a) The majority of all the ARBs shall manifest in writing to the DAR, through the
MARO, their intention to acquire the facilities and improvements which are
necessary and essential to farm operations, copy furnished the LO.

(b) The MARO shall then
facilitate negotiations between the ARBs and the LO
on the terms and conditions of acquisition and payment, but which negotiations
shall not exceed three (3) months from receipt of the ARBs‘
offer by the LO, otherwise, said facilities and improvements shall be acquired
compulsorily.

(c) While the
negotiations are in progress, the ARBs and the LO may
execute an interim agreement on the use and rental of the facilities and
improvements.

(d) In case of failure of
negotiations, or where no agreement is reached after the three-month period,
the DAR shall compulsorily acquire the facilities and improvements. Disputes in
the ownership of the facilities and improvement shall not be a bar to their
compulsory acquisition.

(e) Any disagreements on the
valuation of the facilities and improvements shall be resolved by the DARAB, at
the instance of either the LO, ARBs, or DAR.

SECTION 26. Valuation. —

(a) The facilities and
improvements shall be valued by the Land Bank of the Philippines
in accordance with pertinent DAR administrative issuances.

(b) For facilities and
improvements covered under DPS, the purchase price shall be mutually agreed
upon by the LO and ARBs, but in no case higher than
the value computed based on pertinent DAR administrative issuances.

(c) However, at the
option of the landowner, duly concurred with by the ARBs,
DAR and LBP, the services of an independent appraiser may be availed of to
ascertain the present value of the facilities or improvements to be acquired,
at the account of the landowner. Such agreement may either be at the cost
of the LO or both LO and ARBs, but in either case, a
Memorandum of Understanding shall be executed (DPS-DCF Form No. 07).

(d) Upon agreement on the
valuation and approval of the DPS for the facilities and improvements, the LO
shall then execute a Deed of Transfer for said properties in favor of the ARBs.

(e The Deed of Transfer
covering said facilities and improvements shall be duly annotated in the CLOAs for the landholdings where said facilities or
improvements are found.

SECTION 27. Period of Payment by the ARBs. —

(a) Payment for facilities
and improvements compulsorily acquired or under direct payment shall be
amortized in equal installments over the remaining useful life of said
facilities and improvements. Further, in case of direct payment, and upon
mutual consent of the ARBs and LO, the ARBs may opt for a payment period shorter than the
remaining useful life of the facilities and improvements, provided that said
payment, in addition to the land amortization, shall not exceed the net
production income to be derived by the ARBs.

(b) In case of payment
options availed of under Section 13(b)(5) above, the amount
financed by the LBP shall be paid by the ARBs subject
to existing guidelines of the LBP on loan repayment.

(c) For facilities and
improvements acquired under DPS, the MOA shall be binding to the parties
immediately upon annotation of the deed of transfer (DOT) in the CLOAs from the landholdings where the facilities and
improvements are found.

SECTION 28. Distribution. — Facilities and improvements acquired
shall be distributed collectively, through a Deed of Transfer which shall
specify the names of the ARBs and duly annotated in
the CLOAs generated over the subject landholdings
where said facilities and improvements are found. Areas where the
facilities and landholdings are found are deemed common areas and shall not be
partitioned individually.

ARTICLE V
Operation and Management Schemes for Distributed
Commercial Farms

SECTION 29. Types of Agribusiness Venture Arrangements. — The qualified ARBs or their cooperative/association in distributed
commercial farms may enter into any, but not limited, to the following
agribusiness venture arrangements:

(a) Joint Venture
Arrangement;

(b) Lease Arrangement;

(d) Management Contract; or

(e) Build-Operate-Transfer
Scheme.

The qualified ARBs or their
cooperative/association may also opt for a combination of two or more of the
above schemes, or any other operation and management schemes they may choose in
collaboration with the proposed investor. However,
lease arrangement shall be the least preferred scheme.

SECTION 30. Essential Elements of Agribusiness Venture Arrangements. — The agribusiness venture arrangements shall contain the
following minimum requirements:

(a) Contracting Parties

(1) Agreements or contracts
pertaining to agribusiness venture arrangements in distributed commercial farms
may be executed by and between the qualified ARBs and
the investor or former landowner.

(2) Only qualified ARBs who have been awarded the title to the distributed
area subject of the agribusiness venture arrangement may qualify to enter into
such contract. In no case can a potential ARB, prior to the award of the
land and the subsequent receipt of the CLOA, be
allowed to enter into an agribusiness venture arrangement.

(3) Any qualified investor
or former landowner may enter into an agribusiness venture arrangement with the
qualified ARBs: Provided, That they are able
to prove their financial and technical capability to meet their duties and
obligations under the proposed arrangement, as evidenced by the relevant
financial and income statement: Provided, further, That the former
landowner or operator of the commercial farm shall be given priority.

(4) The qualified investor
may be any individual, partnership or corporation with established financial
and technical capabilities duly registered with the Securities and Exchange
Commission, as may be appropriate.

(5) A former landowner may
enter into an agribusiness venture arrangement provided he has no outstanding
obligations with the qualified ARBs. Specifically for
distributed commercial farms, labor obligations such as separation pay and
other benefits should have been paid by the landowner to the former farmworkers-ARBs before he may qualify as contracting party
to the agribusiness venture arrangement.

(b) Consent of Affected ARBs

(1) The consent of all
identified ARBs for the acquired commercial farm
concerning the terms and conditions of the proposed
arrangement is necessary for it to be valid and binding.

(2) Where it is the
cooperative or association which will enter into agreement, said consent shall
be secured in writing from the concerned ARBs,
through the Board of Directors or other duly authorized signatories to the
agreement, subject to the existing guidelines of the cooperative or association
in the grant of authority to enter into such contracts or agreements, and
subject, further, to the provisions of the Cooperative Code or Corporation
Code, as may be applicable.

(1) The agreement covering
the proposed agribusiness venture arrangement shall specify the object thereof.

(2) In the case of JVA, the
contract shall provide only for the usufructuary
rights to the land, but not the transfer of ownership of the
land itself, valued at prevailing market rates, but not lower than the
amortization cost thereof.

(d) Essence of Agribusiness Venture Arrangements

(1) Consistent with the
objective of RA 7905 entitled “AN ACT STRENGTHENING THE Implementation
Of The Comprehensive Agrarian Reform Program, And For Other Purposes,”
agribusiness venture arrangements are aimed to optimize the operating size for
agricultural production and also to promote agricultural security of tenure and
security of income to beneficiaries.

(2) It is expressly
understood, therefore, that qualified ARBs and the
investor enter into agreement for the agribusiness venture arrangement to
achieve the above objective. Specifically, the ARBs
shall have access to the physical (land and/or facilities) and human resources
(labor) necessary for agricultural production, while the investor has the means
and capability to provide the necessary financial, technical and/or managerial
inputs towards an improved production and marketing of the agriculture produce.

(3) In the case of lease
arrangements, provisions for the use of the land by the ARBs
who will not be hired by the investor, or who will otherwise be retrenched or
retired during the lifetime of the agreement, corresponding to the subject ARB’s actual share of the land subject of the lease
arrangement, shall be included in the contract.

(e) Period of Agreement

The agribusiness venture arrangement shall be for such period as
may be mutually agreed upon by the contracting parties.

(f) Price Review Mechanism

(1) The price for the
services or goods to be delivered as specified in the agribusiness venture
arrangement shall be based on fair and prevailing market rates.

(2) In the case of lease
arrangements, the rental rate shall be based on lease determination guidelines,
existing or that which may be formulated for this purpose, but in no case less
than the amortizations due on the land.

(3) Contracts on lease
arrangements shall include a rental rate review or adjustment mechanism.

(4) All contracts on
agribusiness venture arrangements shall include provisions for price review or
adjustment mechanism, as may be appropriate, and as applied for each industry.
However, such price review mechanism may be waived upon mutual consent of
both ARBs and investors.

(g) Arbitration Clause

Agribusiness venture agreements shall include provisions for
mediation/conciliation and arbitration as a means of resolving disputes arising
from the interpretation or enforcement thereof. Mediation/conciliation may be
undertaken by duly trained DAR mediators or conciliators acceptable to both
parties. Arbitration shall be conducted pursuant to RA 876 otherwise known as
the “Philippine Arbitration Law.” These alternative dispute
resolution strategies shall first be availed of before the parties may seek
judicial relief. The costs of arbitration shall be shouldered by the contracting
parties.

Any and all disputes arising from the interpretation or
implementation of agribusiness venture agreements involving commercial farms
shall be considered as an agrarian dispute within the jurisdiction of the DAR.

(h) Effectivity

The agribusiness venture agreement shall take effect as
stipulated by the parties, unless the DAR Secretary disapproves the same within
30 days from receipt of a copy of the agreement. Any of the contracting parties
shall furnish a certified copy of the agreement to the Office of the Secretary
within five (5) days from execution thereof, copy
furnished the DAR regional office.

SECTION 31. Operation and Management of Facilities and Improvements. — Facilities and improvements subject of acquisition shall
be owned collectively and the land where said facilities and improvements are
found shall be considered as common areas. The facilities and
improvements shall be operated and managed by a cooperative, association or
corporation duly organized by the ARBs in whose favor
the land was awarded.

SECTION 32. Monitoring and Evaluation. —
The Office of Support Services at DAR Central Office shall institute a system
of monitoring and evaluation of ongoing agribusiness venture arrangements.
It shall ensure, through the appropriate field offices,
that the terms and conditions of the agreement are faithfully complied
with. Annual on-site evaluation of areas with existing AVAs shall be conducted by the OSS,
and a report thereon submitted to the PARC Executive Committee, through the
Office of the Undersecretary for Field Operations and Support Services.

SECTION 33. Transitory Period. —

(a) In the event the ARBs cannot immediately agree on what operation and
management scheme to adopt (whether full individual/cooperative takeover or
AVA), or during the pendency of the processing of the
proposed agribusiness venture arrangement, a transitory period not to exceed
one year from the date of award of the land may be allowed.

(b) During said transitory
period, any agreement existing between the former landowner, corporation or
business association and the workers’ cooperative or association prior to the
acquisition of the land shall be respected until such time, not to exceed one
year, that the ARBs are able to take full control and
management of the land, or an agribusiness venture arrangement is implemented,
as the case may be.

(c) However,
considering that the ARBs are already the owners of
the land during the transitory period, they shall be paid the corresponding
amount for the use of the land, which shall not be less than the amortization
cost of the land. Such amount shall be indicated in the Interim Agreement which
shall be executed on the date of award of the CLOA, by and between the
concerned parties, duly approved by the DAR Regional Director.

(d) The ARBs
shall also be paid production and profit share, as computed based on Section 32
of RA 6657 and pertinent rules and regulations thereof, during the transitory
period.

(e) Further, the Interim
Agreement shall provide for ARB representation and involvement in farm
management operations, as well as free and open access to pertinent records.

(f) The Interim Agreement
is automatically terminated as soon as an AVA agreement takes effect, or the ARBs assume full control and management of the farm, as the
case may be.

(g) In case of full
individual or cooperative takeover, a 15-day written notice is required to be
served by the ARBs or ARB cooperative/association to
the existing management, indicating their intention, prior to actual and
physical take over of said farm operations and management.

ARTICLE VI
Final Provisions

SECTION 34. Repealing Clause. — The
provisions of DAR Administrative Order No. 6, Series of 1998 and all other
orders, circulars or issuances inconsistent herewith are hereby repealed or
modified accordingly.

SECTION 35. Separability Clause. — In the
event any of the provisions of this Order is declared unconstitutional, the
validity of the other provisions shall not be affected by said declaration.

SECTION 36. Effectivity. — This Order shall
take effect ten (10) days after publication in two (2) newspapers of general
circulation.

Adopted: 23 Dec. 1998

(SGD.) HORACIO R. MORALES JR.
Secretary

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