DOJ OPINION NO. 067, s. 2006
September 25, 2006
Secretary Nasser C. Pangandaman
Department of Agrarian Reform
Elliptical Road, Diliman
Attention: Nestor R. Acosta, CESO II
Undersecretary for Policy, Planning and Legal Affairs
This refers to your request for clarificatory opinion relating to our views contained in Department of Justice (DOJ) Opinion No. 44, series of 1990, regarding the authority of the Department of Agrarian Reform (DAR) to place under the Comprehensive Agrarian Reform Program (CARP) coverage lands already classified to non-agricultural uses prior to June 15, 1988, the date of effectivity of Republic Act (R.A.) No. 6657.
The antecedent facts as stated in your request appear to be clear:
Gamboa Hermanos, Inc. (GHI) and Negros Fisheries Corporation (NFC) are owners of vast tracts of land in Negros Oriental already classified as residential, commercial and industrial lands, and approved by the Housing and Land Use Regulatory Board (HLURB) prior to 15 June 1988. As such, the DAR granted GHI and NFC exemptions from coverage under the CARP.
Subsequently, GHI and NFC, as testament to their benevolent support of the CARP, voluntarily offered their landholdings for sale to the government through the DAR. "Voluntary Offer to Sell" (VOS) is a scheme whereby the landowners voluntarily offer their agricultural lands for CARP coverage. This scheme is governed by DAR Administrative Order No. 2, series of 2005, in relation to Section 19 of R.A. No. 6657.
Considering that the landowners initiated the offer of the subject properties for sale under the CARP, the DAR wishes to accept the offer in its eagerness to cover lands actually used for agricultural purposes and distribute the same to qualified beneficiaries, even if these lands are re-classified as non-agricultural in use.
However, your Department is apprehensive that the subject lands are not covered within its mandate to distribute all public and private agricultural lands. The DAR asserts that having been re-classified as residential, commercial and industrial and considering that the corresponding exemption orders were issued by the DAR, the landholdings of GHI and NFC have fallen beyond the scope of its jurisdiction.
Thus, your Department believes that pursuant to existing laws and administrative processes, specifically Executive Order No. 72, series of 1993, Office of the President Memorandum Circular No. 54, series of 1993, and Administrative Order No. 20, series of 1992, in relation to Republic Act No. 7160, 1 a declassification zoning ordinance to "agricultural lands" from the non-agricultural uses of the subject properties should be passed by the Sangguniang Panglungsod and duly approved by the HLURB in order for said lands to be placed within the coverage of the CARP.
Meanwhile, in a subsequent letter, 2 you state that the GHI and NFC raised as a pivotal issue on "whether or not agro-industrial lands covered by exempt orders of the DAR Secretary but suitable and currently used for agriculture can be voluntarily offered for sale to the CARP" without withdrawing the exemption previously granted to these lands as part of the Special Economic Zones (SEZs).
You also state that the GHI and NFC believe that the re-classification to SEZs does not immediately change or alter the nature of the landholdings specially since they have been and remain to be for agricultural crop production, specifically sugarcane and that, in fact, SEZs classification allows the use of the land for agricultural crop production.
Under Section 3, Chapter 1, Title XI, of Executive Order No. 292, 3 as amended, the DAR shall:
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"12) Develop, implement and undertake alternative and innovative land development schemes and land tenure systems such as but not limited to land consolidation, land farming, cooperative farming and agro-industrial estates". (Emphasis supplied)
Further, it is your view that the afore-cited Executive Order is silent on whether or not the DAR can proceed with land acquisition under VOS of lands classified as agro-industrial estates or SEZs despite the existence of a grant of exemption or whether or not there is a need to lift the grant of exemption before the said landholdings can be acquired by VOS.
Finally, you state that the offerors, GHI and NFC both claimed that in vie of the aforesaid E.O., the DAR can acquire the land despite the existence of a grant of exemption as the acquisition/distribution of the same falls within the broad mandate of the DAR. They also suggest that the exemption "should not be lifted in order to preserve the potential use and value of the area being voluntarily offered" for the greater benefit of the farmer-beneficiaries.
Hence, this query.
After a thorough reading and careful evaluation of the records submitted before this Department, the issues can be summarized as follows:
1. Whether or not lands classified as agro-industrial are covered by the definition of Agricultural Lands under Section 3(c) of the Comprehensive Agrarian Reform Law of 1988; and
2. Whether or not lands previously exempt from land reform as certified by the Department of Agrarian Reform offered for sale by the owner through a Voluntary Offer to Sell (VOS) scheme fall within the scope of the Comprehensive Agrarian Reform Law of 1988.
At the outset, it must be emphasized that the subject queries are of first impression, novel and special in character. The surrounding circumstances which brought about the issues raised are a class of their own, that is — Sui Genesis. There is no available Philippine jurisprudence to date which has facts falling squarely on the matter at hand. The resolution of the questions can, thus, only be answered when the WISDOM, INTENT and OBJECTIVES of the lawmakers in drafting the various land reform laws enacted are taken in a holistic and integrated manner where substantive law takes precedence over technical rules of procedure in the application of CARL.
The uniqueness of the subject matter is borne by the fact that an owner of land, previously declared exempt from the coverage of land reform is voluntarily offering the same under the Voluntary Offer to Sell provisions of CARL. A simplistic approach to the problem is the literal application of the meaning/coverage of "Agricultural Land" under CARL and existing jurisprudence. However, a simplistic approach to the issue at hand, as will be shown hereafter, will not only fail to realize the objectives of CARL but will in fact result to injustice to the farmer beneficiaries, their families, and society in general, the welfare of whom are primarily sought to be protected and promoted by our Constitution.
On the first issue, the irresistible answer is in the affirmative.
This Department is of the view that agro-industrial lands are within the ambit or coverage of the definition of Agricultural Land under the CARL. Section 3(b) and (c) of R.A. No. 6657 expressly provide, viz.
"SEC. 3. For the purpose of this Act; unless the context indicates otherwise:
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(b) Agriculture, Agricultural Enterprise, or Agricultural Activity means the cultivation of the soil, planting of crops, growing of 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 persons whether natural or juridical.
(c) Agricultural Land refers to land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land." (Emphasis supplied)
Clearly, from the above-cited provisions of the law, agricultural land is defined by way of making reference to agricultural activity and by express enumeration of exclusionary classification of lands not included in said definition.
Based on the foregoing, it is evident that the manner of determining the coverage or real meaning of 'Agricultural Land' is twofold, to wit:
First. As "land devoted to agricultural activity". Again, under Section 3 (b) of R.A. No. 6657, the phrase 'agricultural activity', is not limited to cultivation, planting, growing, and harvesting alone, but also extends to such "other farm activities and practices performed by a farmer in conjunction with such farming operations" done by persons whether natural or juridical. By virtue of this provision, it is clear that agricultural activity extends to other activities beyond planting and harvesting as long as said other activities are related to or in conjunction with such farming operations. These activities would necessarily include post harvesting operations which are part and parcel of agro-industrial operations.
Second. Agro-industrial lands are not included in the enumeration of exclusion provided in the definition of Agricultural Land. Under the Latin maxim of statutory construction, expressio unius est exclusio alterius (Express Mention is Implied Exclusion), the express mention of one thing in a law, as a general rule, means the exclusion of other not expressly mentioned. This rule, as a guide to probable legislative intent, is based upon the rules of logic and the natural workings of the human mind. 4 Applied to this instant case, the express enumeration of the following classes of lands, namely, 1) Mineral 2) Forest 3) Residential, 4) Commercial or 5) Industrial, necessarily excludes those lands not expressly mentioned.
The enumeration of the foregoing exclusions would not have been so expressly and categorically made were it not the intention of the legislature to restrict its meaning and to confine it terms to those expressly mentioned. This principle finds application in the case at hand as elucidated by the Supreme Court when it held in the case of Commissioner of Customs vs. Court of Tax Appeals and Litonjua Shipping Company, G.R. Nos. L-48886-88, July 21, 1993, 224 SCRA 665, 669-670:
"It is a settled rule of statutory construction that the express mention of one person, thing, act, or consequence excludes all others. This rule is expressed in the familiar maxim expressio unius est exclusio alterius. Where a statute, by its terms, is expressly limited to certain matters, it may not, by interpretation or construction, be extended to others. The rule proceeds from the premise that the legislature would not have made specified enumerations in a statute had the intention been not to restrict its meaning and to confine its terms to those expressly mentioned (Agpalo, Statutory Construction, 2nd Ed., 1990, pp. 160-161, and the cases therein cited)."
In the case of Republic of the Philippines vs. Hon. Court of Appeals and Gree City Estate & Development, G.R. No. 139592. October 5, 2000, 342 SCRA 189, 194, the Supreme Court had the occasion to rule:
"Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988 covers all public and private agricultural lands. The same law defines agricultural as land devoted to agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial."
Furthermore, the lands exempted from the coverage of the Comprehensive Agrarian Reform Program are specifically enumerated under Section 10 of R.A. No. 6657, which provides:
SEC. 10. Exemptions and Exclusions. — Lands actually, directly and exclusively used and found to be necessary for parks, wildlife, forest reserves, reforestation, fish sanctuaries and breeding grounds, watersheds and mangroves, national defense, school sites and campuses including experimental farm stations operated by public or private schools for educational purposes, seeds and seedlings research and pilot production centers, church sites and convents appurtenant thereto, mosque sites and Islamic centers appurtenant thereto, communal burial grounds and cemeteries, penal colonies and penal farms actually worked by the inmates, government and private research and quarantine centers and all lands with eighteen percent (18%) slope and over, except those already developed shall be exempt from the coverage of this Act.
The exhaustive list did not mention expressly, or even by implication, that agro-industrial land is included as an exclusion. Again, under the principle of expressio unius est exclusio alterius, agro-industrial lands are not one of those mentioned under section 10 as excluded from the coverage of CARL.
In declaring null and void for being unconstitutional Section 3(b), 11, 13 and 32 of R.A. No. 6657, insofar as the inclusion of the raising of livestock, poultry and swine in its coverage, as well as the Implementing Rules and Guidelines promulgated in accordance therewith, the Highest Court in the case of Luz Farms vs. Secretary of Department of Agrarian Reform, G.R. No. 86889, December 4, 1990, 192 SCRA 51, 58, held:
"It is evident from the foregoing discussion that Section 11 of R.A. 6657 which includes "private agricultural lands devoted to commercial livestock, poultry and swine raising" in the definition of "commercial farm" is invalid, to the extent that the aforecited agro-industrial activities are made to be covered by the agrarian reform program of the State. There is simply no reason to include livestock and poultry lands in the coverage of agrarian reform." (Emphasis supplied)
Likewise, in the case of Atlas Fertilizer Corporation vs. Secretary of the Department of Agrarian Reform, G.R. No. 93100, June 19, 1997, 274 SCRA 30, the Supreme Court excluded fishponds and prawn farms (subject to certain exceptions) from the coverage of CARL, pursuant to the passage of Republic Act No. 7881, 5 on February 20, 1995.
Finally, in the relatively new case decided by the Supreme Court, the case of Pasong Bayabas Farmers Association, Inc. vs. The Honorable Court of Appeals, G.R. No. 142359, May 25, 2004, 429 SCRA 109, 132, it was held that:
"Under Section 3(c) of Rep. Act No. 6657, agricultural lands refer to lands devoted to agriculture as conferred in the said law and not classified as industrial land. Agricultural lands are only those lands which are arable or suitable lands that do not include commercial, industrial and residential lands. Section 4(e) of the law provides that it covers all private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon."
Hence, from the foregoing discussion of cases decided by the Supreme Court, it is safe to conclude that agro-industrial classification, not being expressly mentioned as one of the exclusions in the definition of Agricultural Land under CARL, should be deemed as covered within the definition of Agricultural Land subject to land reform, especially so, when the land is voluntarily offered by the owner.
Meanwhile, in the determination of the question on whether land classified as agro-industrial may be covered by land reform under CARL, legislative intent must necessarily be seriously considered. It is true, however, that the intent of the lawmakers is not controlling by itself, but as its proceeding was preliminary to the adoption of the bill, the debates or deliberations thereon is relatively important in order to ascertain and assure the realization of the purpose/legislative intent of the lawmakers.
The proponent of draft bill No. 249, being Senator Heherson Alvarez, this was specifically documented by the Records of the Philippine Senate 6 — indicating clearly the legislative intent to include agro-industrial enterprises as included in the agrarian reform program. The records state in part:
"Senator Aquino — So, in effect, agri-industrial enterprises are included in the agrarian reform program?"
"Senator Alvarez — Yes, they may be, Mr. President. If one wants to take them as a whole integrated component, yes".
"Senator Aquino — So when we talk of agrarian reform we are talking of agricultural activity as well as agri-industrial enterprises?
Senator Alvarez — Yes, Mr. President."
The legislative intent is clear. Agro-industrial enterprise vis-à-vis agro-industrial land is covered by CARL. This, taken in conjunction with how the actual definition of Agricultural land as contained in Section 3 (c) of the CARL, one can clearly conclude that the legislative intent is to promote the objective of land reform by not unduly restricting its coverage, but by amplifying it to apply to those classes of lands not expressly excluded thereby.
When the legal mind is faced with a question the answer to which cannot be readily gleaned from the direct and elementary application of existing laws and jurisprudence, one must resort to the noble objectives of the law subject of the query. In the present inquisition, the CARL, specifically Section 2 thereof states in part:
"Section 2. Declaration of Principles and Policies. — It is the policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farmworkers will receive the highest consideration to promote social justice and to move the nation toward sound rural development and industrialization, and the establishment of owner cultivatorship of economic size farms as the basis of Philippine agriculture.
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The State shall recognize the right of farmers, farmworkers and landowners, as well as cooperatives and other independent farmer organizations, to participate in the planning, organization, and management of the program, and shall provide support to agriculture through appropriate technology and research, and adequate financial; production, marketing and other support services.
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The State shall provide incentives to landowners to invest the proceeds of the agrarian reform program to promote industrialization, employment and privatization of public sector enterprises. Financial instruments used as payment for lands shall contain features that shall enhance negotiability and acceptability in the marketplace.
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From the aforesaid paragraphs, some of the primordial objectives of CARL can be obtained. 1) The promotion of social justice to receive the highest consideration with emphasis on the welfare of the landless farmers; 2) To move the nation toward sound rural development and industrialization. 3) To provide support to agriculture through appropriate technology and research; and 4) to promote industrialization and employment.
Anent the second issue, it is evident that throughout the history of land reform legislation in the Philippines, from R.A. No. 1160, 7 R.A. No. 3844, 8 P.D. No. 27, 9 Executive Order No. 228, 10 Executive Order No. 229, 11 Proclamation No. 131 12 up to the present CARL, the primary objective remains, that is, the promotion of social justice.
The language of the Court, in the case of Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989, 175 SCRA 343, 352:
"Land for the landless farmers" is a slogan that underscores the acute imbalance in the distribution of this precious resource among our people. But it is more than a slogan. Through the brooding centuries, it has become a battlecry dramatizing the increasingly urgent demand of the dispossessed among us for a plot of earth as their place in the sun."
The instant case is peculiar in the sense that the subject land being offered via VOS classified by PEZA as ecozone (agro-industrial land) is actually planted to sugarcane, the workers therein are the farmer beneficiaries, and despite the previous exemption order issued by DAR, the land owner corporations themselves are the ones offering the land thru VOS.
Interestingly, rarely in the history of land reform that a landowner would unselfishly agree and willingly offer via VOS land it has previously and painstakingly sought to exempt. While the land owner may readily offer for sale land already declared exempt from land reform to would-be willing buyers for a higher price, in this case, the owner corporations, in a most benevolent act would rather protect the welfare of the farmers than leave them at the mercy of third party buyers. Likewise, the owner corporations seek to maintain the exemption and classification as agro-industrial mainly for the benefit of the farmer beneficiaries who will acquire land as such with a better value. In any event, the owner corporations and farmer beneficiaries agree that the ten (10) years restriction against transfer, encumbrance or alienation of the land subject to VOS be maintained in the Certificate of Land Ownership Award ("CLOA") to be issued by the DAR.
Moreover, where the promotion of the welfare of the farmer beneficiaries is at hand, a liberal interpretation of the provisions of laws on land reform is favored. Thus, the Supreme Court in the case of Wilfredo David vs. Court of Appeals, et al., G.R. Nos. L-57719-21, May 6, 1988, 161 SCRA 114, 121, held:
"In the instant case, We can do no less than to apply a liberal interpretation of the Agricultural Land Reform Code to give full force and effect to its clear intent which, under Section 2 and  of said Code, is "to achieve a dignified existence for the small farmers" and to make them "more dependent, self-reliant and responsible citizens, and a source of genuine strength in our democratic society." 13
The non-lifting of the exemption and concomitant classification as agro-industrial land will definitely be beneficial to the farmer beneficiaries who will be holding valuable land while continuing to till the same and produce crops (sugarcane) thereon via their established cooperative. This will invariably promote the primary objective of CARL by advancing the welfare of the farmer beneficiaries, their families, and the community in general.
To move the nation toward sound rural development and industrialization. The objective of the law to promote sound rural development and industrialization is actually in line with the definition of agro-industrialization. Rural development as opposed to urban development clearly refers to farming and/or farming activities. Understandably, land reform refer to rural or agro-development. Further, the law uses the conjunction "and" showing that agro-development and industrialization go hand in hand. Agro-development and industrialization however should be taken together as an integrated concept and not separate. Industrialization in land reform must perforce be taken to promote agriculture and not as an independent developmental concept. It is clear that the objective of CARL is to move the nation toward sound agro-industrialization. Therefore, lands classified as agro-industrial should be covered by CARL without the necessity of lifting the exemption or changing their classification.
Finally, despite its classification as agro-industrial, the subject land being offered to VOS is suitable, arable and actually used for sugarcane plantation.
Under Section 4 (d) of R.A. 6657, it provides:
"Section 4. Scope. — The Comprehensive Agrarian Reform Law of 1988 shall cover; regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture.
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(d) All private land devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon."
Not only is the land suitable but is, in fact, actually devoted to and planted with sugarcane as of the present date. As shown, without the need of lifting the exemption or re-classification of the land, the subject agro-industrial land can be deemed covered within the coverage of CARL as enunciated under section 4 (d) of said law.
Further, under Title XI, Chapter I, Section 3, paragraph (12) of Executive Order 292, otherwise known as the Administrative Code of 1987, it states:
Section 3. Powers and Functions of DAR. — To accomplish its mandate, the Department shall:
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(12) Develop, implement and undertake alternatives and innovative land developments schemes and land tenure systems such as, but not limited to land consolidation, land farming, cooperative farming and agro-industrial estates. (Emphasis supplied)
And as further enunciated under Executive Order No. 129-A ,14 Sections 4 (h) and 25 (a) (5), it states:
"Section 4. Mandate. — The Department (DAR) shall be responsible for implementing the Comprehensive Agrarian Reform Program and, for such purpose, it is authorized to:
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(h) Develop and implement alternative land tenure systems such as cooperative farming and agro-industrial estates, among others;"
"Section 25. Provincial Offices. — The Agrarian Reform District Offices are hereby abolished and in their stead, the Department shall create Provincial Agrarian Reform Offices as may be necessary in promoting efficiency and effectiveness in the delivery of services. . . ."
The Provincial Agrarian Reform Offices . . . has the following functions:
(a) Set priorities, specific targets, schedules, and deadlines for the execution of approved plans, programs, and projects on:
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(5) Development and implementation of alternative land tenure systems such as cooperative farming, cooperative cultivatorship schemes and agro-industrial estates among others;". (Emphasis supplied).
From the foregoing provision of Executive Order Nos. 292 and 129-A, it is clear the DAR is empowered to develop and implement alternative land tenure systems. Notably, one of the systems expressly recognized by the statute to be developed by DAR is the implementation of agro-industrial estates. This specific mandate of the DAR falls squarely within the ambit of the present subject matter such that lands re-classified as Agro-industrial estates need not be reverted back to agricultural classification whenever it is voluntarily offered by the land owner itself via VOS.
In view of the foregoing discussion, it is clear that the present agro-industrial land being voluntarily offered by GHI/NFC to DAR is within the coverage of the definition of "Agricultural Land" under CARL and thus, need not be re-classified back to agricultural nor the exemption lifted.
Please be guided accordingly.
Very truly yours,
(SGD.) RAUL M. GONZALEZ
1. Local Government of 1991.
2. Dated April 10, 2006.
3. The 1987 Administrative Code.
4. Republic of the Philippines, et al. vs. Numeriano G. Estenzo, etc., et al., G.R. No. L-35376, September 11, 1980.
5. An Act Amending Certain Provisions of Republic Act No. 6657, Entitled "An Act Instituting A Comprehensive Agrarian Reform Program To Promote Social Justice and Industrialization, Providing The Mechanism For Its Implementation, And For Other Purposes".
6. Volume 1, No. 93. Re: Discussion on Senate Bill No. 249 "An Act Instituting A Comprehensive Agrarian Reform Program To Promote Social Justice and Industrialization, Providing the Programs For Its Implementation, and For Other Purposes".
7. Implementing Free Distribution of Agricultural Lands of Public Domain as Provide in Commonwealth Act No. 691.
8. An Act to Ordain the Agricultural Land Reform Code And to Institute Land Reform In the Philippines, Including the Abolition of Tenancy and the Channeling of Capital into Industry, Provide for the Necessary Implementing Agencies, Appropriate Funds Therefor and for other Purposes (Agricultural Land Reform Code), dated August 8, 1963, [Issued during the Administration of President Diosdado Macapagal].
9. Decreeing the Emancipation of Tenant from the Bondage of the Soil, transferring to Them the Ownership of the Land They Till, Providing the Instruments and Mechanism Therefor. Dated October 21, 1972 [Issued during the Administration of President Ferdinand E. Marcos).
10. Declaring Full Land Ownership to Qualified Farmer Beneficiaries Covered by Presidential Decree No. 27, Determining the Value of Remaining Unvalued Rice and Corn Lands Subject of P.D No. 27, and Providing for the Manner of Payment By the Farmer Beneficiary and Mode of Compensation to the Landowner. (dated July 17, 1987) [Issued during the Administration of President Corazon C. Aquino].
11. Providing the Mechanism for the Implementation of the Comprehensive Agrarian Reform Program. Dated July 22, 1987 [Issued during the Administration of President Corazon C. Aquino].
12. Instituting a Comprehensive Agrarian Reform Program (dated July 22, 1987).
13. Citing Catorse vs. Court of Appeals, 129 SCRA 210, 215.
14. Modifying Executive Order No. 129 Reorganizing and Strengthening the Department of Agrarian Reform and for other purposes.