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EIGHTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHIILIPPINES )

First Regular Session ) TIME
BY:
HOUSE OF REPRESENTATIVES A ey
X RS
H.B,No,_4535_ nex 8A

Introduced by Rep. Vilma Santos-Recto
6th District of Batangas

AN ACT
RESCINDING THE RESTRICTIONS ON OWNERSHIP AND TRANSFERABILITY
OF LANDS AWARDED UNDER THE COMPREHENSIVE AGRARIAN REFORM
PROGRAM

EXPLANATORY NOTE

The fundamental rationale for undertaking the Comprehensive Agrarian Reform
Program (CARP) is the formation and maintenance of economic-size family farms as the
foundation of the Philippine agricultural system. Small farms, assuming access to credit is
farm size-neutral, are considered efficient because they require only family labor, which is
cheaper than hired labor and entail minimum supervision’.

The law, however, has flaws rooted in economics. The limits on farmholding size, the
collective manner by which lands are awarded, and the ten-year retention period effectively
deplete the economic value of the lands being distributed to farmers, forcing agrarian reform
beneficiaries to amortize “a value much higher than the capacity his holdings can afford to
yield?” Following the Coase Theorem’, a farmer can theoretically improve the equity,
efficiency and viability of his holdings by acquiring land through sale or lease, but the
landholding limit of five hectares and the retention period of ten years made it illegal to do
so. This economic environment, further aggravated by the bureaucratic hurdles imposed on
CARP-awarded lands and its beneficiaries, has impeded agricultural productivity, induced
capital flight away from the agriculture sector, gave rise to a thriving illicit market for CARP-

te World Bank Group (2009), Lond Reform, Rul Development and Poverty in The Phippnes: Revising the Agendo Pasig Cy: The Worl Bank Inthe

pp
‘abel, RY. 2014). Comprehensive Agrarian Reorm Program (CARP) Time to Let Go. Dicusson Paper No. 2014-02, Quezon City: Unerty of the
{pps schoo of conemis.

"conte Theorem sates tat when rade nan exteraity is possible and hee are no ransaction costs, bargaining willead oan efficent outcome regress
of hein allocation of proper HENS.

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awarded lands, encouraged proliferation of informal lenders offering loans with usurious
interest rates, and led to the emergence of a new social class — the landed poor’.

There is a growing recognition within the economic community that the government
needs to shift its effort from redistributing land to improving the productivity of the land and
the farmers that cultivate them. This bill seeks to do so by repealing the five-hectare retention
limit and the ten-year retention period on CARP-awarded land, allowing productive farmers
to operate as efficiently and as economically as the market dictates. Through this measure, it
is believed that the government could improve the productivity of the agriculture sector,
attract agricultural investments, revitalize the rural credit market, reduce poverty in the
countryside, and ensure food security.

<7
In view of the foregoing, approval of this bill iS

“Fabel, RV, (2014), Comprehensive Arran Reform Program (CARP) Time to Let Go. Discusion Paper No. 2014-02. Quezon City: Univer of the
Pripoines School of Economies,


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EIGHTEENTH CONGRESS OF THE )

REPUBLIC OF THE PHILIPPINES )
First Regular Session )
HOUSE OF REPRESENTATIVES
H.B.No, 4935

Introduced by Rep. Vilma Santos-Recto
6th District of Batangas

AN ACT
RESCINDING THE RESTRICTIONS ON OWNERSHIP AND TRANSFERABILITY
OF LANDS AWARDED UNDER THE COMPREHENSIVE AGRARIAN REFORM
PROGRAM.

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

Section 1. Declaration of Policy. — It is hereby declared the policy of the State to
recognize the right of individuals and private groups, including corporations, cooperatives,
and similar collective organizations, to own, establish, and operate economic enterprises in
order to contribute to the common good. Towards this end, the State shall rescind the
restrictions imposed on the ownership of agricultural lands and transferability of lands
awarded under agrarian reform laws and allow the efficient, effective and economically-
viable utilization of agricultural lands in line with the objectives of food security, poverty
reduction and economic development.

Sec. 2. Ownership and Retention of Agricultural Lands. — Notwithstanding any
provision of the law to the contrary, any person may own or retain, directly or indirectly, any
agricultural land more than five (5) hectares in size.

Sec. 3. Transferability of Awarded Lands. ~ Notwithstanding any provision of the law
to the contrary, agricultural lands acquired by beneficiaries under Republic Act No. 6657, as
amended, otherwise known as the “Comprehensive Agrarian Reform Law of 1988,” or any

agrarian reform laws may be sold, transferred or conveyed in accordance with existing laws.


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Sec. 4. Validity of Acquisition and Distribution of Agricultural Lands Covered under
the Comprehensive Agrarian Reform Program. ~ Nothing in this Act shall be construed as
repealing, amending or modifying the provisions on the acquisition of landholdings issued
with valid Notices of Coverage and the distribution of agricultural lands to qualified agrarian
reform beneficiaries as_-—_provided under Republic Act
No. 6657, as amended, or any agrarian reform laws.

Sec. 5. Implementing Rules and Regulations. ~ The Department of Agrarian Reform
(DAR) shall, in consultation with the Agrarian Reform Beneficiaries’ Organizations
(ARBOs), promulgate the necessary implementing rules and regulations within thirty (30)
days upon the effectivity of this Act.

Sec. 6. Repealing Clause. — All laws, decrees, orders, rules and regulations or parts
thereof inconsistent with any of the provisions of this Act are hereby repealed, amended or
modified accordingly.

Sec. 7. Separability Clause. - If, for any reason, any provision of this Act or any part
thereof shall be held unconstitutional and invalid, the other parts or provisions of this Act,
which are not affected thereby, shall remain in full force and effect.

Sec. 8. Effectivity Clause. — This Act shall take effect fifteen (15) days after its
complete publication in the Official Gazette or in at least two (2) newspapers of general
circulation.

Approved,