Farmland conversions for gov’t projects exempted from fees, bonds

on . Posted in DAR In The News
businessworld OLThe Deparment of Agrarian Reform (DAR) is exempting landowners from paying fees and posting bonds when they apply to convert farmland into non-agricultural government projects that are certified as urgent.
In an order issued on Dec. 15, the department said that in order to “effectively cater to the urgent needs of the public,” the DAR “finds it more prudent to exempt from the payment of applicable fees and bonds all applications for land use conversion involving priority projects that are under the control and supervision of the Head of the government agency concerned.”

Administrative Order (AO) No. 7, series of 2015, which was published in a national newspaper yesterday, amends the pertinent provisions of DAR AO No. 1, series of 2002. It was signed by DAR Secretary Virgilio R. De Los Reyes.

Aside from the payment of filing fees and inspection cost, a landowner who seeks to convert redistributed farmland into non-agricultural use is required to post a bond to guarantee against premature conversion.

Under Republic Act 6657 or the Comprehensive Agrarian Reform Program of 1988, the DAR may authorize the reclassification or conversion of farmland and its disposition when it ceases to be economically feasible and sound for agricultural purposes. This can be done only after the lapse of five years following the award of the agrarian land to the landowner.

AO No. 1, series of 2002, requires the posting of a cash bond equivalent to at least 2.5% of the zonal value of the land based on the latest issuance of the Department of Finance. The bond is in the form of cash, cashier’s or manager’s check issued in favor of the DAR. The posting of the bond is a guarantee against premature conversion.

In order to be exempt from the applicable fees and bonds, the applicant must secure a certification from the concerned national government agency that a project is urgent or a priority; will serve the public good pursuant to its mandate; and is under the control or supervision of the certifying agency.

However, the DAR said that the performance bond is not waived. The applicant is required to post this bond five days after the receipt of the conversion order. The bond is callable on demand and may be forfeited in favor of the Agrarian Reform Fund if the applicant fails to complete the development of the land or has failed to comply with the conditions of the conversion order.

The latest DAR order also exempts the applicant from submitting some documents, including proof of financial and organizational capability of the developer to develop the land, socioeconomic benefit-cost study of the proposed project, and certification from the Housing and Land Use Regulatory Board on the zoning or classification of the land.