The Department of Agrarian Reform (DAR) has issued two new rules that would boost investments in agriculture.
Administrative Orders (AO) numbers 4 and 6, series of 2016 which govern particular transactions affecting agricultural lands. AO no. 4 which provides rules on agribusiness venture agreements (AVAs) will take effect on June 16 this year while AO no. 6 regulates transfer of ownership of agricultural lands will be effective on June 17.
Both rules are aimed at creating an environment sustainable for agribusiness in the country by securing tenure rights of agrarian reform beneficiaries (ARBs) while also strengthening business relations with investors.
“Both remained faithful to the provisions of the Comprehensive Agrarian Reform Law, but the requirements and procedure were streamlined to simplify the process,” said Justin Vincent La Chica, DAR assistant secretary.
AVAs are contracts entered into by an ARB or group of ARBs with an investor which involves the possession of the land; management of the operations of the farming of the land; control/distribution of the produce of the land, for a period of more than two cropping seasons; commitment of the owners to produce certain crops, at a determinable quantity, for a period of more than two cropping seasons; and/or such other arrangements similar to these.
The agency also said AO No. 4 also crafted rules which gives premium to mediation and conciliation as the primary form of dispute resolution.
“While the requirements and the process were made simpler, the Presidential Agrarian Reform Council still has the discretion on approving these agreements under the new rules. This is provided for by the law and we have no authority nor any intention to circumvent that,” La Chica clarified.
AO No. 6 will lessen if not eliminate r red tape in the transfer of ownership of agricultural lands is seen to be lessened or eliminated.
“The transfer of ownership of agricultural lands, including those not distributed through an agrarian reform program, must be cleared by the DAR before it is registered. The DAR is tasked to verify that the said transfer is not restricted by the Comprehensive Agrarian Reform Law,” La Chica said.
The agency also said that under the new order, ARBs are also prohibited to to transfer the awarded land during a holding period of ten years and while the amortization to the government has not yet been fully paid. Only transfers through hereditary succession, or to the government or another qualified beneficiary are allowed during the said period.
“Our interpretation of the law is, except for an Agrarian Reform Cooperative, all types of juridical entities are considered as one person hence only allowed to own up to five hectares of land. Any attempt to circumvent the five-hectare ceiling rule, such as with the use of fly-by-night juridical entities, will be dealt with to the full extent of the law,” La Chica also warned.