ASG Law

Tag: Livestock Farming

  • Livestock Farms vs. Agrarian Reform: Upholding Constitutional Exemptions

    The Supreme Court ruled that land exclusively dedicated to livestock raising is exempt from the Comprehensive Agrarian Reform Program (CARP). This decision underscores the constitutional intent to exclude livestock farms from agrarian reform, thereby protecting landowners who have consistently used their property for livestock production since before the enactment of CARP in 1988. The ruling reaffirms property rights against agrarian reform claims when the land use is demonstrably for livestock, not agriculture.

    From Pasture to Progress: Can Livestock Farms Evade Agrarian Reform?

    The case of Heirs of Ramon Arce, Sr. v. Department of Agrarian Reform revolves around a parcel of land in Montalban, Rizal, owned by the Arce family since the 1950s. This land, spanning 76.39 hectares, was primarily used for raising livestock, including buffaloes, carabaos, and goats, essential to the family’s dairy business, Arce Dairy Ice Cream. The method employed was “feedlot operation,” confining the animals and supplying them with cut grass.

    In 1998, acting on the advice of the Philippine Carabao Center-Department of Agriculture (PCC-DA), the Arces transferred their older livestock to a facility in Novaliches, Quezon City, due to liver fluke concerns. However, younger cattle remained on the Montalban property, and the family continued growing napier grass to feed their livestock. In 2008, the Provincial Agrarian Reform Officer (PARO) issued a Notice of Coverage (NOC) under CARP, prompting the Arces to seek exclusion, arguing their land was dedicated to livestock raising before CARP’s enactment. This claim ignited a legal battle, challenging the classification of livestock farms under agrarian reform laws.

    The Department of Agrarian Reform (DAR) initially favored the Arces, with both the Municipal Agrarian Reform Officer (MARO) and the Legal Division of the DAR Provincial Office recommending the exclusion of the land from CARP coverage. These recommendations were based on findings that the land was indeed used for livestock farming, with napier grass production supporting the animals. Regional Director Antonio G. Evangelista then issued an order lifting the Notice of Coverage, which became final and executory after no appeals were filed.

    However, this decision was contested by the Samahan ng mga Magsasakang Nagkakaisa sa Sitio Calumpit (SAMANACA), who sought to annul the order, claiming their members were qualified beneficiaries of the land. Subsequently, DAR Secretary Virgilio De Los Reyes reversed the earlier decision, arguing that the Arces failed to prove continuous livestock activity on the land. This reversal led to a series of motions and appeals, eventually reaching the Office of the President (OP), which sided with the Arces, exempting their land from CARP coverage. Undeterred, the DAR elevated the case to the Court of Appeals (CA), which overturned the OP’s decision, leading the Arces to seek recourse with the Supreme Court.

    At the heart of the Supreme Court’s decision lies the interpretation of “agricultural land” under Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL). Section 3(c) of the Act defines agricultural land as land devoted to agricultural activity and not classified as mineral, forest, residential, commercial, or industrial land. However, the Supreme Court has previously addressed this issue in Luz Farms v. The Honorable Secretary of the Department of Agrarian Reform, where it declared unconstitutional the provisions of CARL that included lands devoted to livestock under CARP’s coverage.

    xxx it was never the intention of the framers of the Constitution to include the livestock and poultry industry in the coverage of the constitutionally mandated agrarian reform program of the government.

    The Court, in Luz Farms, emphasized that the constitutional intent was to exclude livestock and poultry industries from agrarian reform, classifying them as industrial rather than agricultural activities. This classification is critical, as industrial lands are not subject to CARP. The Supreme Court, in this case, reiterated this principle, asserting that lands devoted to livestock raising are classified as industrial and are thus exempt from agrarian reform.

    The Supreme Court found substantial evidence indicating that the Arce family’s land was consistently used for livestock production since the 1950s, well before CARP’s enactment in 1988. This evidence included certifications of ownership of large cattle, attestations from the Philippine Carabao Center, and investigation reports from DAR personnel. Despite the DAR’s later claim that livestock activity had ceased, the Court noted that the transfer of older livestock to Novaliches was a temporary measure for health and sanitary reasons, not a change in land use. The younger cattle remained in Montalban.

    Moreover, the Court gave weight to the findings of the MARO and DARPO, which initially recommended the exclusion of the land based on ocular inspections and submitted documents. The MARO’s findings, supported by evidence, indicated continuous livestock farming, while the DARPO’s report highlighted the land’s exclusive utilization for livestock raising long before CARP. The Supreme Court found the DAR and CA’s reliance on a later ocular inspection, which claimed the absence of livestock, to be flawed. This inspection was conducted without notice to the Arces, potentially leading to inaccurate findings.

    The Supreme Court also addressed the argument that growing napier grass on the land constituted agricultural activity. The Court clarified that the napier grass was grown to feed the livestock, supporting the feedlot operation. This operation, recognized by the DAR itself, involves confining animals and providing them with cut grass. The presence of napier grass, therefore, did not automatically classify the land as agricultural for CARP purposes.

    Additionally, the Court distinguished this case from Department of Agrarian Reform v. Vicente K. Uy, which the CA cited. The Supreme Court clarified that the conditions set forth in A.O. No. 09, Series of 1993, requiring exclusive use for livestock and specific land-to-livestock ratios, were not applicable, as that administrative order had been deemed unconstitutional. The Court highlighted that the Arce family’s continuous use of the land for livestock raising since before CARP’s enactment negated any suspicion of converting agricultural land to evade agrarian reform.

    Finally, the Supreme Court denied the motion for intervention filed by SAMANACA. The Court reasoned that SAMANACA failed to demonstrate a direct and immediate legal interest in the case, as their members were never in possession of the land, nor were they tenants or farmers thereon. Their claim of being identified as qualified beneficiaries was unsubstantiated.

    FAQs

    What was the key issue in this case? The key issue was whether land exclusively dedicated to livestock raising is subject to the Comprehensive Agrarian Reform Program (CARP). The petitioners sought to exclude their land from CARP coverage, arguing it was a livestock farm.
    What did the Supreme Court rule? The Supreme Court ruled that the land was exempt from CARP coverage. The Court emphasized the constitutional intent to exclude livestock farms from agrarian reform.
    What is the significance of the Luz Farms case? The Luz Farms case established the principle that livestock raising is an industrial activity, not agricultural. This classification exempts livestock farms from agrarian reform.
    What evidence did the Arce family present to support their claim? The Arce family presented certifications of ownership of large cattle, attestations from the Philippine Carabao Center, and investigation reports from DAR personnel. They also provided photographs and documentation of their livestock operations.
    Why did the DAR initially support the Arce family’s petition? The DAR, through its MARO and DARPO, initially supported the petition based on findings that the land was used for livestock farming. Their reports highlighted the presence of livestock and the production of napier grass for feed.
    What was the basis for the DAR’s later reversal of its decision? The DAR later reversed its decision based on an ocular inspection that claimed the absence of livestock on the land. However, the Supreme Court found this inspection to be flawed due to lack of notice to the Arce family.
    What is a “feedlot operation,” and how did it factor into the Court’s decision? A “feedlot operation” is a method of raising livestock where animals are confined and fed cut grass. The Court recognized that the Arce family’s use of napier grass to feed their livestock supported their claim that the land was dedicated to livestock raising.
    Why was SAMANACA’s motion for intervention denied? SAMANACA’s motion was denied because they failed to demonstrate a direct and immediate legal interest in the case. Their members were never in possession of the land, nor were they tenants or farmers.

    The Supreme Court’s decision in Heirs of Ramon Arce, Sr. v. Department of Agrarian Reform clarifies the scope of agrarian reform, protecting landowners who have consistently used their property for livestock production. This ruling reinforces the constitutional distinction between agricultural and industrial activities, ensuring that livestock farms are not subject to land redistribution under CARP.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: HEIRS OF RAMON ARCE, SR. VS. DEPARTMENT OF AGRARIAN REFORM, G.R. No. 228503, July 25, 2018

  • Livestock Farming and Agrarian Reform: Understanding Land Use Exemptions in the Philippines

    Maintaining Livestock Exemption: Continuous Land Use is Key

    TLDR: This case clarifies that land exempt from agrarian reform due to livestock farming must maintain that specific land use. A shift away from livestock operations can lead to the land being reclassified and subject to agrarian reform, emphasizing the importance of consistent land use for retaining exemptions.

    G.R. No. 182332, February 23, 2011

    Introduction

    Imagine a thriving cattle farm, passed down through generations, suddenly facing the threat of agrarian reform. This was the reality for Milestone Farms, Inc., a company that sought to exempt its land from the Comprehensive Agrarian Reform Program (CARP) due to its use for livestock farming. The case highlights the complexities of land use exemptions and the importance of maintaining the specific activity that qualifies the land for such exemptions.

    Milestone Farms, Inc. applied for exemption from CARP, arguing that its land was primarily used for livestock, poultry, and swine raising. The legal question at the heart of this case was whether the land, initially exempted based on its use for livestock farming, could be subjected to CARP coverage due to a change in land use. The Supreme Court ultimately ruled against Milestone Farms, emphasizing that continuous use for livestock farming is essential to maintain the exemption.

    Legal Context: CARP, Luz Farms, and Land Use

    The Comprehensive Agrarian Reform Program (CARP), established under Republic Act No. 6657, aimed to redistribute agricultural land to landless farmers. However, the law also recognized certain exemptions, particularly for land used for specific purposes.

    A pivotal case in defining these exemptions is Luz Farms v. Secretary of the Department of Agrarian Reform, which excluded agricultural lands devoted to livestock, poultry, and/or swine raising from CARP coverage. The Supreme Court clarified that livestock, swine, and poultry-raising are industrial activities, not agricultural, and therefore not subject to agrarian reform.

    Republic Act No. 7881 further amended R.A. No. 6657, solidifying the exclusion of private agricultural lands devoted to livestock, poultry, and swine raising from CARP. It is important to note that this exclusion is based on the specific and continuous use of the land for these purposes.

    Key Provisions:

    • Republic Act No. 6657 (Comprehensive Agrarian Reform Law): The foundation of agrarian reform in the Philippines, aiming to distribute agricultural land to landless farmers.
    • Republic Act No. 7881: An amendment to R.A. No. 6657, specifically excluding private agricultural lands devoted to livestock, poultry, and swine raising from CARP coverage.
    • Luz Farms v. Secretary of the Department of Agrarian Reform: A landmark case that defined livestock farming as an industrial activity, thus exempting it from agrarian reform.

    Case Breakdown: The Journey of Milestone Farms

    The Milestone Farms case unfolded over several years, involving multiple administrative and judicial levels. Here’s a breakdown of the key events:

    1. Initial Exemption: In 1994, the DAR Regional Director initially exempted Milestone Farms’ 316.0422-hectare property from CARP, based on the Luz Farms ruling.
    2. Reconsideration: The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. challenged the exemption, leading to a review by the DAR Secretary.
    3. DAR Secretary’s Ruling: In 1997, the DAR Secretary partially revoked the exemption, covering 75.0646 hectares under CARP, arguing that not all the land was actively used for livestock farming as of June 15, 1988.
    4. Office of the President (OP) Decision: Initially, the OP reinstated the full exemption in 2000, but later reversed its decision in 2002, siding with the DAR Secretary’s partial revocation.
    5. Court of Appeals (CA) Rulings: The CA initially reinstated the full exemption in 2005, but later amended its decision in 2006, lifting the exemption of 162.7373 hectares and declaring it covered by CARP.
    6. Supreme Court Decision: The Supreme Court affirmed the CA’s amended decision, emphasizing that the land was no longer primarily used for livestock farming.

    The Court highlighted the significance of continuous land use, stating:

    “Petitioner’s admission that, since 2001, it leased another ranch for its own livestock is fatal to its cause.”

    The Court also noted the importance of evidence showing current land use, stating:

    “The acquisition of such cattle after the lifting of the exemption clearly reveals that petitioner-appellant was no longer operating a livestock farm, and suggests an effort to create a semblance of livestock-raising for the purpose of its Motion for Reconsideration.”

    Practical Implications: Maintaining Exemptions and Land Use

    This case serves as a crucial reminder for landowners seeking exemptions from agrarian reform based on livestock farming. It underscores the necessity of maintaining continuous and active use of the land for the specific purpose that justifies the exemption.

    Businesses and property owners should ensure that their land use aligns with the legal requirements for exemption and maintain thorough records to demonstrate continuous compliance. Changes in land use, even if seemingly minor, can jeopardize the exemption and subject the land to CARP coverage.

    Key Lessons

    • Continuous Use: Land must be continuously and actively used for livestock, poultry, or swine raising to maintain exemption from CARP.
    • Documentation: Maintain detailed records of livestock operations, including the number of animals, infrastructure, and land use.
    • Compliance: Regularly review and ensure compliance with DAR regulations and guidelines.
    • Transparency: Disclose any changes in land use to the DAR promptly.

    Frequently Asked Questions

    Q: What is the Comprehensive Agrarian Reform Program (CARP)?

    A: CARP is a government initiative to redistribute agricultural land to landless farmers, promoting social justice and rural development.

    Q: What type of lands are exempted from CARP?

    A: Under certain conditions, lands used for livestock, poultry, and swine raising, as well as those with industrial or residential classifications, may be exempted.

    Q: What did the Supreme Court decide in Luz Farms v. Secretary of the Department of Agrarian Reform?

    A: The Court ruled that livestock, poultry, and swine-raising are industrial activities, not agricultural, and therefore not subject to agrarian reform.

    Q: What happens if land exempted for livestock farming is no longer used for that purpose?

    A: The exemption may be revoked, and the land may be subjected to CARP coverage.

    Q: What evidence is needed to prove continuous use for livestock farming?

    A: Evidence may include records of livestock population, infrastructure, land use, and compliance with DAR regulations.

    Q: Does shifting to another ranch invalidate my CARP Exemption?

    A: Yes. The court found that Milestone Farm’s leasing of another ranch for it’s livestock was fatal to their cause, suggesting they were no longer operating a livestock farm on the property in question.

    ASG Law specializes in agrarian reform and land use issues. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Livestock Farms and Agrarian Reform: Understanding CARP Exemption in the Philippines

    Protecting Livestock Farms: How Philippine Law Exempts Animal Husbandry from Agrarian Reform

    Navigating land ownership and agrarian reform in the Philippines can be complex, especially for landowners engaged in livestock farming. This landmark Supreme Court case clarifies that land exclusively dedicated to livestock raising is generally exempt from the Comprehensive Agrarian Reform Program (CARP), safeguarding the interests of agricultural businesses beyond traditional crop cultivation.

    G.R. NO. 169277, February 09, 2007

    INTRODUCTION

    Imagine owning a farm passed down through generations, dedicated to raising cattle for decades. Suddenly, the government declares your land subject to agrarian reform, potentially displacing your livelihood. This was the predicament faced by the respondent in this case, highlighting the critical intersection of agrarian reform and livestock farming in the Philippines. At the heart of the legal battle was a fundamental question: Should land consistently used for livestock raising be subject to redistribution under the Comprehensive Agrarian Reform Program (CARP)? This Supreme Court decision provides a definitive answer, reaffirming the exemption of livestock farms from CARP coverage and setting a crucial precedent for agricultural landowners.

    LEGAL CONTEXT: LUZ FARMS AND THE EXEMPTION OF LIVESTOCK

    The legal foundation for exempting livestock farms from CARP rests on the landmark case of Luz Farms v. Secretary of the Department of Agrarian Reform. In this 1990 ruling, the Supreme Court declared key provisions of Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), unconstitutional insofar as they included lands devoted to livestock, poultry, and swine raising within the agrarian reform program. The Court reasoned that raising livestock is an industrial, not agricultural, activity. This distinction is crucial because CARP, as mandated by the Constitution, focuses on the redistribution of agricultural land to landless farmers.

    The Supreme Court in Luz Farms explicitly stated:

    “[L]ivestock, poultry and swine raising are industrial activities. They are not agricultural, and the lands devoted to them are not agricultural lands. Therefore, Sections 3(b), 11, 13 and 32 of RA 6657, insofar as they include livestock and poultry in the definition of ‘agricultural land’ and ‘agricultural activity’ are invalid because they are not in accordance with the constitutional mandate…”

    Following Luz Farms, the Department of Agrarian Reform (DAR) issued Administrative Order No. 9, Series of 1993 (A.O. No. 9). While seemingly implementing Luz Farms, A.O. No. 9 introduced specific ratios of land to livestock and stipulated that only lands “exclusively, directly and actually used for livestock, poultry and swine raising as of 15 June 1988” would be excluded from CARP. This administrative order aimed to prevent landowners from fraudulently converting agricultural lands to livestock farms solely to evade CARP coverage. However, as this case reveals, the interpretation and application of A.O. No. 9 became a point of contention.

    CASE BREAKDOWN: UY VS. DEPARTMENT OF AGRARIAN REFORM

    The case of Department of Agrarian Reform vs. Vicente K. Uy revolved around a 349.9996-hectare property in Quezon province, owned by Vicente Uy and his co-owners. In 1994, forty-four farmers occupying portions of the land petitioned the DAR to be declared beneficiaries under CARP. Uy, on behalf of the owners, applied for exclusion from CARP coverage, arguing that the land had been exclusively used for livestock raising since before June 15, 1988, the effectivity of CARP.

    Here’s a breakdown of the procedural journey:

    1. Initial DAR Investigation (1995): A Provincial Task Force inspected the property, finding 429 heads of livestock (cattle, horses, carabaos) and some coconut trees. The Task Force recommended partial exclusion, suggesting areas occupied by tenants should remain under CARP.
    2. PARO and Regional Director Decisions (1995): The Provincial Agrarian Reform Officer (PARO) recommended excluding 219.50 hectares based on livestock count and infrastructure. The Regional Director affirmed this.
    3. DAR Secretary Order (1996): On appeal, the DAR Secretary partially granted exclusion for 219.50 hectares. The DAR considered only livestock aged seven years or older in 1995 as proof of existence in 1988, applying a strict interpretation of A.O. No. 9.
    4. Office of the President (OP) Decision (1998): The OP affirmed the DAR Secretary’s decision, emphasizing that livestock must have existed on the land as of June 15, 1988, to be counted for exemption.
    5. Court of Appeals (CA) Initial Decision (2003): The CA initially affirmed the OP, upholding the DAR’s partial exemption.
    6. CA Amended Decision (2004): Upon reconsideration, the CA reversed its decision and exempted the entire 349.9996 hectares, along with an additional 22.2639-hectare contiguous property (TCT No. 11948). The CA interpreted A.O. No. 9’s “regardless of age” clause to mean that all livestock present during inspection should be counted, not just those supposedly existing in 1988.
    7. Supreme Court Decision (2007): The Supreme Court partially granted DAR’s petition, affirming the CA’s amended decision for the 349.9996-hectare property (TCT No. 160988) but reversing it for the 22.2639-hectare property (TCT No. 11948).

    The Supreme Court’s reasoning hinged on the unconstitutionality of DAR A.O. No. 9, as previously declared in Department of Agrarian Reform v. Sutton. The Court reiterated that Luz Farms definitively excluded livestock farms from CARP coverage. Justice Callejo, writing for the Court, emphasized:

    “Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.”

    Regarding the presence of coconut trees and tenant farmers, the Supreme Court found these to be incidental to the primary use of the land for livestock raising. The Court noted that the coconut trees provided shade and supplementary fodder, and the tenant farmers’ presence did not negate the land’s principal use for livestock. However, the Court reversed the CA’s exemption of the 22.2639-hectare property due to a lack of evidence showing it was ever included in CARP coverage or investigated by the DAR.

    PRACTICAL IMPLICATIONS: SECURING CARP EXEMPTION FOR LIVESTOCK FARMS

    This Supreme Court decision reinforces the principle established in Luz Farms: land exclusively and directly used for livestock raising is exempt from CARP. While DAR A.O. No. 9 attempted to regulate this exemption, the Supreme Court, in line with Sutton, deemed it unconstitutional to the extent it curtailed the constitutional exemption. For landowners engaged in livestock farming, this ruling offers significant protection against CARP coverage.

    Key Lessons for Livestock Farm Owners:

    • Continuous Use is Key: The exemption applies to land exclusively, directly, and actually used for livestock raising. Maintaining this consistent use is crucial.
    • Documentation Matters: While A.O. No. 9’s strict 1988 deadline was invalidated, documenting the history of livestock operations on the land remains important to demonstrate continuous use. Business permits, ownership records of livestock, and any historical evidence can be valuable.
    • Incidental Agricultural Activity: The presence of some coconut trees or tenant farmers engaged in minor agricultural activities does not automatically negate the livestock exemption if the primary land use remains livestock raising.
    • Focus on Land Classification: The classification of land as agricultural in general terms does not automatically subject it to CARP if it is specifically used for industrial activities like livestock raising.
    • Seek Legal Counsel: Navigating CARP and exemption processes can be complex. Consulting with legal professionals experienced in agrarian law is advisable when facing CARP coverage issues.

    FREQUENTLY ASKED QUESTIONS (FAQs)

    Q1: Does this ruling mean all land with livestock is exempt from CARP?

    A: Not necessarily all land, but land that is exclusively, directly, and actually used for livestock, poultry, or swine raising is generally exempt based on the Luz Farms doctrine. The key is demonstrating the primary and actual use of the land.

    Q2: What kind of proof is needed to show land is used for livestock raising?

    A: Evidence can include business permits, records of livestock ownership and sales, infrastructure for livestock (corrals, barns, etc.), testimonies, and historical documentation showing continuous livestock operations.

    Q3: If my livestock farm also has some coconut trees or crops, can it still be exempt?

    A: Yes, potentially. The Supreme Court in Uy recognized that incidental agricultural activities, like coconut trees for shade and fodder, do not negate the primary use for livestock raising. The focus is on the dominant land use.

    Q4: Is the age of livestock important for CARP exemption?

    A: No, according to this ruling and the invalidation of A.O. No. 9’s strict interpretation. The focus should be on the current and historical use of the land for livestock, not rigidly tracing livestock back to June 15, 1988.

    Q5: What should I do if my livestock farm is being subjected to CARP coverage?

    A: First, gather evidence to demonstrate that your land is primarily and actually used for livestock raising. Then, seek legal counsel to help you file an application for exemption with the DAR and, if necessary, appeal adverse decisions to the courts.

    Q6: Does this exemption apply to all types of livestock farms?

    A: Yes, the Luz Farms ruling and this case cover livestock, poultry, and swine raising. The principle is that these are considered industrial activities distinct from traditional agriculture covered by CARP.

    ASG Law specializes in Agrarian Law and Property Rights. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Livestock Lands Untouchable: DAR A.O. No. 9 Declared Unconstitutional

    The Supreme Court affirmed that lands devoted to livestock, swine, and poultry raising are industrial, not agricultural, and therefore, not subject to agrarian reform. The decision invalidates DAR Administrative Order (A.O.) No. 9, series of 1993, which attempted to regulate livestock farms by setting retention limits. This protects landowners who have dedicated their property to livestock farming from being forced to redistribute their land under the Comprehensive Agrarian Reform Law (CARL), as such activities are deemed industrial rather than agricultural. This effectively reinforces the constitutional intent to exclude livestock farms from agrarian reform coverage, securing property rights in the livestock industry.

    Pasture vs. Progress: Can Agrarian Reform Graze on Livestock Farms?

    The case of Department of Agrarian Reform vs. Delia T. Sutton, Ella T. Sutton-Soliman, and Harry T. Sutton revolves around a disputed parcel of land in Masbate, primarily used for cow and calf breeding. The respondents, the Suttons, voluntarily offered to sell their land to the Department of Agrarian Reform (DAR) under the existing agrarian reform program. However, with the enactment of Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian Reform Law (CARL) of 1988, which initially included livestock farms within its coverage, and the subsequent Luz Farms ruling, the Suttons sought to withdraw their offer, arguing that their cattle-raising activities should exempt their land from agrarian reform.

    The crux of the matter lies in the validity of DAR Administrative Order No. 9, series of 1993 (A.O. No. 9), which prescribed retention limits for lands used for livestock raising. DAR argued that the A.O. was necessary to prevent landowners from evading agrarian reform by converting agricultural lands to livestock farms. The Suttons contended that A.O. No. 9 contravened the 1987 Constitutional Commission’s intent to exclude livestock farms from land reform, a position supported by the Supreme Court’s ruling in Luz Farms v. Secretary of DAR. The central legal question, therefore, is whether DAR exceeded its authority by issuing A.O. No. 9, thereby contradicting the Constitution and established jurisprudence.

    The Supreme Court anchored its decision on the principle that administrative agencies, while possessing rule-making authority, cannot overstep constitutional bounds. **Administrative rules and regulations must be authorized by law and must not contravene the Constitution.** The court emphasized that DAR’s attempt to regulate livestock farms through A.O. No. 9 was an overreach of its delegated power.

    To be valid, administrative rules and regulations must be issued by authority of a law and must not contravene the provisions of the Constitution. The rule-making power of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution.

    The Court highlighted the intent of the 1987 Constitutional Commission to exclude lands exclusively devoted to livestock, swine, and poultry-raising from agrarian reform. Citing the landmark case of Luz Farms, the Court reiterated that **livestock, swine, and poultry-raising are industrial activities, not agricultural ones**, thus falling outside the scope of agrarian reform. This distinction is critical because it acknowledges the significant industrial investment involved in livestock operations, distinguishing them from traditional crop or tree farming.

    Further solidifying this stance, the Court referred to the case of Natalia Realty, Inc. v. DAR, where it was held that industrial, commercial, and residential lands are not covered by CARL. This precedent reinforced the principle that the term “agricultural land” does not include lands classified for non-agricultural purposes. The Suttons’ case was analogous because their land, dedicated to cattle-raising, was effectively classified as industrial and thus exempt from agrarian reform.

    The Supreme Court also addressed DAR’s concern that landowners might convert agricultural lands to livestock farms to evade agrarian reform. The Court found this argument unconvincing, as the Suttons had been engaged in cattle-breeding since 1948, long before the enactment of CARL. **The law prohibits the conversion of agricultural lands to non-agricultural purposes after the effectivity of CARL**, and the Suttons had not altered their business interests.

    The Court also noted that after the passage of the 1988 CARL, Congress enacted R.A. No. 7881, which amended certain provisions of the CARL. This new law changed the definition of “agricultural activity” and “commercial farming” by excluding lands devoted to commercial livestock, poultry, and swine-raising. This legislative modification aligned the agrarian laws with the Constitutional Commission’s intent to exclude livestock farms from agrarian reform.

    Ultimately, the Supreme Court held that A.O. No. 9 was unconstitutional because it enlarged the coverage of agrarian reform beyond the scope intended by the 1987 Constitution. This decision safeguards the property rights of those engaged in livestock, swine, and poultry-raising by confirming that their lands are not subject to redistribution under agrarian reform laws. By reinforcing the constitutional limitations on agrarian reform, this ruling provides clarity and protection for businesses in the livestock sector, allowing them to operate without the threat of land redistribution.

    FAQs

    What was the key issue in this case? The central issue was whether DAR Administrative Order No. 9, which prescribed retention limits for lands used for livestock raising, was constitutional, given the constitutional intent to exclude such lands from agrarian reform.
    What is DAR A.O. No. 9? DAR A.O. No. 9, series of 1993, is an administrative order issued by the Department of Agrarian Reform that provided retention limits for lands used for the raising of livestock, poultry, and swine. It aimed to regulate these farms under the Comprehensive Agrarian Reform Law (CARL).
    What did the Supreme Court rule about DAR A.O. No. 9? The Supreme Court declared DAR A.O. No. 9 unconstitutional because it exceeded the scope of agrarian reform intended by the 1987 Constitution by including livestock farms, which are considered industrial, not agricultural, activities.
    What was the Luz Farms ruling? The Luz Farms ruling is a Supreme Court decision that stated that livestock, swine, and poultry-raising are industrial activities and do not fall within the definition of “agriculture” or “agricultural activity,” thus excluding such lands from agrarian reform.
    Why did the Suttons want to withdraw their voluntary offer to sell? The Suttons wanted to withdraw their voluntary offer to sell their land because they argued that their land was devoted exclusively to cattle-raising and should, therefore, be exempt from the coverage of the Comprehensive Agrarian Reform Law (CARL).
    What is the significance of R.A. No. 7881 in this case? R.A. No. 7881 amended the CARL by changing the definition of “agricultural activity” and “commercial farming” to exclude lands devoted to commercial livestock, poultry, and swine-raising, aligning the agrarian laws with the constitutional intent to exclude livestock farms.
    What is the practical effect of this ruling for landowners? The practical effect of this ruling is that landowners who have dedicated their property to livestock, swine, and poultry-raising are protected from having their lands redistributed under agrarian reform laws, ensuring the security of their investments and operations.
    How does this case relate to the Natalia Realty case? The Natalia Realty case established that industrial, commercial, and residential lands are not covered by the CARL, reinforcing the principle that “agricultural land” does not include lands classified for non-agricultural purposes, thus supporting the exclusion of livestock farms.
    What was DAR’s argument for issuing A.O. No. 9? DAR argued that A.O. No. 9 was necessary to prevent landowners from evading agrarian reform by converting agricultural lands to livestock farms, ensuring that the agrarian reform program’s objectives were not circumvented.

    In conclusion, the Supreme Court’s decision reinforces the constitutional boundaries of agrarian reform, clarifying that lands devoted to livestock and poultry-raising are beyond its reach. This ruling offers critical protection to landowners engaged in these industries, ensuring that their property rights are upheld and their operations are not disrupted by land redistribution efforts. The Court reaffirmed its commitment to safeguarding constitutional principles and preventing administrative overreach.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: DEPARTMENT OF AGRARIAN REFORM vs. DELIA T. SUTTON, G.R. NO. 162070, October 19, 2005

  • Agrarian Law: Livestock Farms Exempt from CARP Coverage if Primarily Devoted to Livestock Raising Before 1988

    The Supreme Court ruled that land primarily used for livestock, poultry, and swine raising before June 15, 1988, is exempt from the Comprehensive Agrarian Reform Program (CARP). This decision underscores that the actual and primary use of the land at the specified time determines its exemption, not just its classification or potential for agricultural use. Landowners who can demonstrate livestock farming operations before the CARP law took effect are entitled to exemption.

    From Farmland to Livestock Haven: Can Herrera’s Estate Avoid Agrarian Reform?

    Pureza Herrera sought to exempt her vast landholding in Toledo City from CARP, arguing it was a livestock farm. This case arose from Herrera’s application for deferment of CARP implementation on her 113-hectare property. She claimed it was used for livestock and coffee beans. However, the Municipal Agrarian Reform Officer (MARO) initiated CARP coverage, leading to annotations on the land title. This prompted Herrera to file for exclusion, citing that her land was devoted to livestock raising before the enactment of Republic Act (R.A.) No. 6657, the Comprehensive Agrarian Reform Law (CARL).

    Despite her application, the DAR proceeded with investigations and eventually issued Certificate of Land Ownership Award (CLOA) No. 00071771 in favor of agrarian reform beneficiaries. The estate, after Herrera’s death, opposed this move, asserting premature CARP coverage due to the pending exemption application and the land’s primary use for livestock. This conflict between agrarian reform and established livestock farming became the central legal battle. The DAR initially denied Herrera’s application, citing a lack of sufficient evidence that the land was primarily used for commercial livestock purposes before June 15, 1988. This determination was based on the absence of a business permit and certificates of livestock ownership, as required by DAR administrative orders. The Court of Appeals (CA) reversed the DAR’s decision, finding that the land was indeed exempt from CARP coverage, prompting the DAR to elevate the case to the Supreme Court.

    At the heart of the case lies the interpretation and application of R.A. No. 6657, as amended, and relevant administrative orders issued by the DAR. Section 11 of R.A. No. 6657 initially included commercial livestock farms under CARP coverage, subject to a deferment period. However, subsequent amendments and administrative orders sought to exclude certain livestock farms from CARP, particularly those primarily devoted to livestock raising before a specified date. This legal framework requires a careful evaluation of the land’s actual use, as the court elucidated that the key determinant is whether the land was “exclusively, directly and actually used for poultry, livestock and swine raising as of June 15, 1988.”

    The Supreme Court weighed the conflicting findings of the DAR and the Court of Appeals, acknowledging the exceptional nature of the case, as a question of law arose as to whether the DAR could proceed with the placement of the property under CARP before the resolution of petitions/applications of Herrera. The Court ultimately affirmed the CA’s decision, emphasizing that the DAR should have awaited the outcome of Herrera’s petition for deferment and exemption. The Court reasoned that the issuance of CLOA before the final resolution of these applications undermined the proceedings and rendered them moot. This adherence to due process is important.

    The Supreme Court highlighted that substantial evidence supported the claim that the property was primarily used for livestock, poultry, and swine raising before June 15, 1988. This evidence included sworn statements, a site inspection report from the Department of Agriculture, and the testimony of Carlos Herrera. These pieces of evidence showed the historical and continued use of the land for livestock purposes, outweighing the lack of formal business permits or livestock ownership certificates. A key point was that the testimonies established a continuous activity.

    The Court underscored that the absence of business permits or livestock ownership certificates should not automatically negate the evidence of actual livestock farming operations. These documents are merely evidence of ownership, and the DAR’s insistence on their presentation was deemed excessive. The Supreme Court’s ruling affirms the importance of due process and the need for a thorough evaluation of the land’s actual use. It clarifies that livestock farms primarily devoted to such activities before the CARP law took effect are entitled to exemption, even in the absence of formal business permits or livestock ownership certificates. It shows that the factual, practical use takes precedence.

    FAQs

    What was the key issue in this case? The key issue was whether the Herrera livestock farm was exempt from CARP coverage due to its primary use for livestock raising before June 15, 1988.
    What is the CARP? CARP stands for the Comprehensive Agrarian Reform Program, which aims to redistribute agricultural lands to landless farmers.
    What did the Supreme Court decide? The Supreme Court ruled that the Herrera livestock farm was exempt from CARP coverage.
    What evidence did the court consider? The court considered sworn statements, site inspection reports, and testimonies that supported the claim that the land was used for livestock raising before 1988.
    Why did the DAR initially deny the exemption? The DAR initially denied the exemption due to the absence of a business permit and certificates of livestock ownership.
    Did the lack of permits affect the outcome? No, the Supreme Court ruled that the absence of permits did not negate the credibility of the evidence demonstrating actual livestock farming operations.
    What is the significance of the June 15, 1988, date? June 15, 1988, is the date that serves as the cut-off for determining whether a land’s primary use was for livestock raising, which qualifies it for CARP exemption.
    What happens to the CLOA issued for the land? The Supreme Court ordered the recall and cancellation of CLOA No. 00071771 issued on January 18, 1996, and other related documents.

    This case sets a significant precedent for land use and agrarian reform in the Philippines, reinforcing the importance of preserving established property rights while upholding the goals of agrarian reform. It balances the rights of landowners who had already invested in livestock farming with the agrarian reform objectives. Future cases involving similar disputes may rely on this ruling to assess the primary land use.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Department of Agrarian Reform vs. Estate of Pureza Herrera, G.R. No. 149837, July 08, 2005