MANILA, Philippines - The Department of Agrarian Reform (DAR) has crafted new rules aimed at accelerating the process of transferring ownership of agricultural lands, and attracting more investments in the sector.
The new rules are intended to “create an environment sustainable for agribusiness in the country by securing tenure rights of agrarian reform beneficiaries (ARBs) and strengthening business relations between beneficiaries and investors.
AO No. 04 provides rules on agribusiness venture agreements (AVAs) while AO No. 06 regulates the transfer of ownership of agricultural lands.
AVAs are defined as contracts entered into by an agrarian reform beneficiary or group of ARBs, on one hand, and an investor, on the other, which involve the possession of the land; distribution of the produce of the land, and commitment of the owners to produce certain crops.
“Both remained faithful to the provisions of the Comprehensive Agrarian Reform Law, but the requirements and procedure were streamlined to simplify the process,” explained DAR Assistant Secretary Justin Vincent La Chica, chairperson of the DAR Guidelines Drafting Committee.
La Chica said that in the last decade, issues surrounding AVAs cropped up which prompted the DAR to undertake several series of consultations, one of which was conducted by an independent team formed by the DAR and the United Nations Food and Agricultural Organization.
The result of the consultations together with many international principles that were recently issued, and grounded by the Constitution and pertinent laws, became the basis of the new rules,” he said.
The DAR made sure that the AO will not unduly impede on what the beneficiaries and the investors can agree together and will rather look at whether consent was freely given by the beneficiaries in an atmosphere of comity.
The rule also also noted the role of the government to provide support services to the farmer-owners to allow them to negotiate with investors, as far as practicable, on an equal footing.
“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 pointed out.
The rules also gave premium to mediation and conciliation as the primary form of dispute resolution.
La Chica said that opportunties for red tape in the transfer of ownership of agricultural lands have been lessened or eliminated altogether withthe issuance of AO No. 06.
“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,”he said.
The law bars the ARBs to transfer the awarded land during a holding period of 10 years and that is 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.
“If the restrictions do not apply, the DAR will have to clear the transfer,” La Chica said.