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8/13/2019 AGRA - RA 3844
REPUBLIC ACT No. 3844
AN ACT TO ORDAIN THE AGRICULTURAL LAND REFORM CODE AND TO
INSTITUTE LAND REFORMS 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
DECLARATION OF POLICY AND COMPOSITION OF CODE
Sectio !.Title- This Act shall be known as the Agricultural Land Reform Code.
Sectio ".Declaration of Policy- It is the policy of the State
!"# To establish owner-culti$atorship and the economic family-si%e farm as the basis of&hilippine agriculture and' as a conse(uence' di$ert landlord capital in agriculture toindustrial de$elopment)
!*# To achie$e a dignified e+istence for the small farmers free from perniciousinstitutional restraints and practices)
!,# To create a truly $iable social and economic structure in agriculture conduci$e togreater producti$ity and higher farm incomes)
!# To apply all labor laws e(ually and without discrimination to both industrial andagricultural wage earners)
!# To pro$ide a more $igorous and systematic land resettlement program and public landdistribution) and
!/# To make the small farmers more independent' self-reliant and responsible citi%ens'
and a source of genuine strength in our democratic society.
Sectio 3.Composition of Code - In pursuance of the policy enunciated in Section two' thefollowing are established under this Code
!"# An agricultural leasehold system to replace all e+isting share tenancy systems inagriculture)
!*# A declaration of rights for agricultural labor)
!,# An authority for the ac(uisition and e(uitable distribution of agricultural land)
!# An institution to finance the ac(uisition and distribution of agricultural land)
!# A machinery to e+tend credit and similar assistance to agriculture)
!/# A machinery to pro$ide marketing' management' and other technical ser$ices toagriculture)
!0# A unified administration for formulating and implementing pro1ects of land reform)
!2# An e+panded program of land capability sur$ey' classification' and registration) and
!3# A 1udicial system to decide issues arising under this Code and other related laws andregulations.
AGRICULTURAL LEASEHOLD SYSTEM
Sectio 4.Abolition of Agricultural Share Tenancy- Agricultural share tenancy' as herein defined'is hereby declared to be contrary to public policy and shall be abolished &ro$ided' That e+istingshare tenancy contracts may continue in force and effect in any region or locality' to be go$erned inthe meantime by the pertinent pro$isions of Republic Act 4umbered 5le$en hundred and ninety-
nine' as amended' until the end of the agricultural year when the 4ational Land Reform Councilproclaims that all the go$ernment machineries and agencies in that region or locality relating toleasehold en$isioned in this Code are operating' unless such contracts pro$ide for a shorter period orthe tenant sooner e+ercise his option to elect the leasehold system &ro$ided' further' That in ordernot to 1eopardi%e international commitments' lands de$oted to crops co$ered by marketingallotments shall be made the sub1ect of a separate proclamation that ade(uate pro$isions' such as theorgani%ation of cooperati$es' marketing agreements' or other similar workable arrangements' ha$ebeen made to insure efficient management on all matters re(uiring synchroni%ation of theagricultural with the processing phases of such crops &ro$ided' furthermore' That where theagricultural share tenancy contract has ceased to be operati$e by $irtue of this Code' or where sucha tenancy contract has been entered into in $iolation of the pro$isions of this Code and is' therefore'null and $oid' and the tenant continues in possession of the land for culti$ation' there shall bepresumed to e+ist a leasehold relationship under the pro$isions of this Code' without pre1udice tothe right of the landowner and the former tenant to enter into any other lawful contract in relation tothe land formerly under tenancy contract' as long as in the interim the security of tenure of theformer tenant under Republic Act 4umbered 5le$en hundred and ninety-nine' as amended' and aspro$ided in this Code' is not impaired &ro$ided' finally' That if a lawful leasehold tenancy contractwas entered into prior to the effecti$ity of this Code' the rights and obligations arising therefromshall continue to subsist until modified by the parties in accordance with the pro$isions of thisCode.
Sectio #.Establishment of Agricultural Leasehold Relation- The agricultural leasehold relationshall be established by operation of law in accordance with Section four of this Code and' in othercases' either orally or in writing' e+pressly or impliedly.
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Sectio $.Parties to Agricultural Leasehold Relation- The agricultural leasehold relation shall belimited to the person who furnishes the landholding' either as owner' ci$il law lessee' usufructuary'or legal possessor' and the person who personally culti$ates the same.
Sectio %.Tenure of Agricultural Leasehold Relation - The agricultural leasehold relation onceestablished shall confer upon the agricultural lessee the right to continue working on thelandholding until such leasehold relation is e+tinguished. The agricultural lessee shall be entitled tosecurity of tenure on his landholding and cannot be e1ected therefrom unless authori%ed by theCourt for causes herein pro$ided.
Sectio 8.Extinguishment of Agricultural Leasehold Relation- The agricultural leasehold relationestablished under this Code shall be e+tinguished by
!"# Abandonment of the landholding without the knowledge of the agricultural lessor)
!*# 6oluntary surrender of the landholding by the agricultural lessee' written notice ofwhich shall be ser$ed three months in ad$ance) or
!,# Absence of the persons under Section nine to succeed to the lessee' in the e$ent ofdeath or permanent incapacity of the lessee.
Sectio &.Agricultural Leasehold Relation Not Extinguished by Death or ncapacity of the Parties-In case of death or permanent incapacity of the agricultural lessee to work his landholding' theleasehold shall continue between the agricultural lessor and the person who can culti$ate thelandholding personally' chosen by the agricultural lessor within one month from such death orpermanent incapacity' f rom among the following !a# the sur$i$ing spouse) !b# the eldest directdescendant by consanguinity) or !c# the ne+t eldest descendant or descendants in the order of theirage &ro$ided' That in case the death or permanent incapacity of the agricultural lessee occursduring the agricultural year' such choice shall be e+ercised at the end of that agricultural year&ro$ided' further' That in the e$ent the agricultural lessor fails to e+ercise his choice within theperiods herein pro$ided' the priority shall be in accordance with the order herein established.
In case of death or permanent incapacity of the agricultural lessor' the leasehold shall bind his legalheirs.
Sectio !'.Agricultural Leasehold Relation Not Extinguished by Expiration of Period! etc"- Theagricultural leasehold relation under this Code shall not be e+tinguished by mere e+piration of theterm or period in a leasehold contract nor by the sale' alienation or transfer of the legal possessionof the landholding. In case the agricultural lessor sells' alienates or transfers the legal possession ofthe landholding' the purchaser or transferee thereof shall be subrogated to the rights and substitutedto the obligations of the agricultural lessor.
Sectio !!.Lessee#s Right of Pre$emption - In case the agricultural lessor decides to sell thelandholding' the agricultural lessee shall ha$e the preferential right to buy the same underreasonable terms and conditions &ro$ided' That the entire landholding offered for sale must be pre-empted by the Land Authority if the landowner so desires' unless the ma1ority of the lessees ob1ectto such ac(uisition &ro$ided' further' That where there are two or more agricultural lessees' eachshall be entitled to said preferential right only to the e+tent of the area actually culti$ated by him.
The right of pre-emption under this Section may be e+ercised within ninety days from notice inwriting which shall be ser$ed by the owner on all lessees affected.
Sectio !".Lessee#s Right of Redemption- In case the landholding is sold to a third person withoutthe knowledge of the agricultural lessee' the latter shall ha$e the right to redeem the same at areasonable price and consideration &ro$ided' That the entire landholding sold must be redeemed&ro$ided' further' That where these are two or more agricultural lessees' each shall be entitled tosaid right of redemption only to the e+tent of the area actually culti$ated by him. The right ofredemption under this Section may be e+ercised within two years from the registration of the sale'and shall ha$e priority o$er any other right of legal redemption.
Sectio !3.Affida%it Re&uired in Sale of Land Sub'ect to Right of Pre$emption- 4o deed of sale ofagricultural land under culti$ation by an agricultural lessee or lessees shall be recorded in theRegistry of &roperty unless accompanied by an affida$it of the $endor that he has gi$en the writtennotice re(uired in Section ele$en of this Chapter or that the land is not worked by an agriculturallessee.
Sectio !4.Right of Pre$emption and Redemption Not Applicable to Land to be Con%erted intoResidential! ndustrial and Similar Purposes- The right of pre-emption and redemption grantedunder Sections ele$en and twel$e of this Chapter cannot be e+ercised o$er landholdings suitablylocated which the owner bought or holds for con$ersion into residential' commercial' industrial orother similar non-agricultural purposes &ro$ided' howe$er' That the con$ersion be in good faithand is substantially carried out within one year from the date of sale. Should the owner fail to
comply with the abo$e condition' the agricultural lessee shall ha$e the right to repurchase underreasonable terms and conditions said landholding from said owner within one year after theaforementioned period for con$ersion has e+pired &ro$ided' howe$er' That the tenure of one yearshall cease to run from the time the agricultural lessee petitions the Land Authority to ac(uire theland under the pro$isions of paragraph "" of Section fifty-one.
Sectio !#.Agricultural Leasehold Contract in (eneral- The agricultural lessor and theagricultural lessee shall be free to enter into any kind of terms' conditions or stipulations in aleasehold contract' as long as they are not contrary to law' morals or public policy. A term'condition or stipulation in an agricultural leasehold contract is considered contrary to law' morals orpublic policy
!"# If the agricultural lessee is re(uired to pay a rental in e+cess of that which is
hereinafter pro$ided for in this Chapter)
!*# If the agricultural lessee is re(uired to pay a consideration in e+cess of the fair rental$alue as defined herein' for the use of work animals and7or farm implements belonging tothe agricultural lessor or to any other person) or
!,# If it is imposed as a condition in the agricultural leasehold contract !a# that theagricultural lessee is re(uired to rent work animals or to hire farm implements from theagricultural lessor or a third person' or to make use of any store or ser$ices operated bythe agricultural lessor or a third person) or !b# that the agricultural lessee is re(uired toperform any work or render any ser$ice other than his duties and obligations pro$ided inthis Chapter with or without compensation) or !c# that the agricultural lessee is re(uiredto answer for any fine' deductions and7or assessments.
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Any contract by which the agricultural lessee is re(uired to accept a loan or to make paymenttherefor in kind shall also be contrary to law' morals or public policy.
Sectio !$.Nature and Continuity of Conditions of Leasehold Contract- In the absence of anyagreement as to the period' the terms and conditions of a leasehold contract shall continue untilmodified by the parties &ro$ided' That in no case shall any modification of its terms and conditionspre1udice the right of the agricultural lessee to the security of his tenure on the landholding&ro$ided' further' That in case of a contract with a period an agricultural lessor may not' upon thee+piration of the period increase the rental e+cept in accordance with the pro$isions of Sectionthirty-four.
Sectio !%.)orm and Registration of Contract- Should the parties decide to reduce their agreementinto writing' the agricultural leasehold contract shall be drawn in (uadruplicate in a language ordialect known to the agricultural lessee and signed or thumb-marked both by the agricultural lesseepersonally and by the agricultural lessor or his authori%ed representati$e' before two witnesses' to bechosen by each party. If the agricultural lessee does not know how to read' the contents of thedocument shall be read and e+plained to him by his witness. The contracting parties shallacknowledge the e+ecution of the contract before the 1ustice of the peace of the municipality wherethe land is situated. 4o fees or stamps of any kind shall be re(uired in the preparation andacknowledgment of the instrument. 5ach of the contracting parties shall retain a copy of thecontract. The 1ustice of the peace shall cause the third copy to be deli$ered to the municipaltreasurer of the municipality where the land is located and the fourth copy to the 8ffice of theAgrarian Counsel.
5+cept in case of mistake' $iolence' intimidation' undue influence' or fraud' an agricultural contractreduced in writing and registered as hereinafter pro$ided' shall be conclusi$e between thecontracting parties' if not denounced or impugned within thirty days after its registration.
Sectio !8.Registration of Leasehold Contract- The municipal treasurer shall' upon receipt of hiscopy of the contract' re(uire the agricultural lessee and agricultural lessor to present their respecti$ecopies of the contract' and shall cause to be annotated thereon the date' time and place ofregistration as well as its entry or registration number.
Sectio !&.Registry of Agricultural Leasehold Contracts- The 9unicipal Treasurer of themunicipality wherein the land is situated shall keep a record of all such contracts drawn ande+ecuted within his 1urisdiction' to be known as :Registry of Agricultural Leasehold Contracts:. ;e
shall keep this registry together with a copy of each contract entered therein' and make annotationson said registry of all subse(uent acts relati$e to each contract' such as its renewal' no$ation'cancellation' etc. 4o registration fees or documentary stamps shall be re(uired in the registration ofsaid contracts or of any subse(uent acts relati$e thereto.
Sectio "'.*emorandum of Loans- 4o obligation to pay money on account of loans includinginterest thereon obtained by the agricultural lessee from the agricultural lessor or his representati$eshall be enforceable unless the same or a memorandum thereof be in writing in a language or dialectknown to the agricultural lessee' and signed or thumb-marked by him' or by his agent.
Sectio "!.Exemption from Lien and+or Execution- The following shall be e+empt from lienand7or e+ecution against the agricultural lessee
!"# Twenty-fi$e per centum of the entire produce of the land under culti$ation) and
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!,# To take reasonable care of the work animals and farm implements deli$ered to him bythe agricultural lessor and see that they are not used for purposes other than thoseintended or used by another without the knowledge and consent of the agricultural lessor&ro$ided' howe$er' That if said work animals get lost or die' or said farm implements getlost or are destroyed' through the negligence of the agricultural lessee' he shall be heldresponsible and made answerable therefor to the e+tent of the $alue of the work animalsand7or farm implements at the time of the loss' death or destruction)
!# To keep his farm and growing crops attended to during the work season. In case ofun1ustified abandonment or neglect of his farm' any or all of his e+pected produce may'upon order of the Court' be forfeited in fa$or of the agricultural lessor to the e+tent of thedamage caused thereby)
!# To notify the agricultural lessor at least three days before the date of har$esting or'whene$er applicable' of threshing) and
!/# To pay the lease rental to the agricultural lessor when it falls due.
Sectio "%.Prohibitions to Agricultural Lessee- It shall be unlawful for the agricultural lessee
!"# To contract to work additional landholdings belonging to a different agriculturallessor or to ac(uire and personally culti$ate an economic family-si%e farm' without the
knowledge and consent of the agricultural lessor with whom he had entered first intohousehold' if the first landholding is of sufficient si%e to make him and the members ofhis immediate farm household fully occupied in its culti$ation) or
!*# To employ a sub-lessee on his landholding &ro$ided' howe$er' That in case of illnessor temporary incapacity he may employ laborers whose ser$ices on his landholding shallbe on his account.
Sectio "8.Termination of Leasehold by Agricultural Lessee During Agricultural 0ear- Theagricultural lessee may terminate the leasehold during the agricultural year for any of the followingcauses
!"# Cruel' inhuman or offensi$e' treatment of the agricultural lessee or any member of his
immediate farm household by the agricultural lessor or his representati$e with theknowledge and consent of the lessor)
!*# 4on-compliance on the part of the agricultural lessor with any of the obligationsimposed upon him by the pro$isions of this Code or by his contact with the agriculturallessee)
!,# Compulsion of the agricultural lessee or any member of his immediate farmhousehold by the agricultural lessor to do any work or render any ser$ice not in any wayconnected with farm work or e$en without compulsion if no compensation is paid)
!# Commission of a crime by the agricultural lessor or his representati$e against theagricultural lessee or any member of his immediate farm household) or
!# 6oluntary surrender due to circumstances more ad$antageous to him and his family.
Sectio "&.Rights of the Agricultural Lessor- It shall be the right of the agricultural lessor
!"# To inspect and obser$e the e+tent of compliance with the terms and conditions oftheir contract and the pro$isions of this Chapter)
!*# To propose a change in the use of the landholding to other agricultural purposes' or inthe kind of crops to be planted &ro$ided' That in case of disagreement as to the proposedchange' the same shall be settled by the Court according to the best interest of the partiesconcerned &ro$ided' further' That in no case shall an agricultural lessee be e1ected as aconse(uence of the con$ersion of the land to some other agricultural purpose or becauseof a change in the crop to be planted)
!,# To re(uire the agricultural lessee' taking into consideration his financial capacity andthe credit facilities a$ailable to him' to adopt in his farm pro$en farm practices necessaryto the conser$ation of the land' impro$ement of its fertility and increase of itsproducti$ity &ro$ided' That in case of disagreement as to what pro$en farm practice thelessee shall adopt' the same shall be settled by the Court according to the best interest of
the parties concerned) and
!# To mortgage e+pected rentals.
Sectio 3'./bligations of the Agricultural Lessor- It shall be the obligation of the agriculturallessor
!"# To keep the agricultural lessee in peaceful possession and culti$ation of hislandholding) and
!*# To keep intact such permanent useful impro$ements e+isting on the landholding at thestart of the leasehold relation as irrigation and drainage system and marketing allotments'which in the case of sugar (uotas shall refer both to domestic and e+port (uotas'pro$isions of e+isting laws to the contrary notwithstanding.
Sectio 3!.Prohibitions to the Agricultural Lessor- It shall be unlawful for the agricultural lessor
!"# To dispossess the agricultural lessee of his landholding e+cept upon authori%ation bythe Court under Section thirty-si+. Should the agricultural lessee be dispossessed of hislandholding without authori%ation from the Court' the agricultural lessor shall be liablefor damages suffered by the agricultural lessee in addition to the fine or imprisonmentprescribed in this Code for unauthori%ed dispossession)
!*# To re(uire the agricultural lessee to assume' directly or indirectly' the payment of theta+es or part thereof le$ied by the go$ernment on the landholding)
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!,# To re(uire the agricultural lessee to assume' directly or indirectly' any part of the rent':canon: or other consideration which the agricultural lessor is under obligation to pay tothird persons for the use of the land)
!# To deal with millers or processors without written authori%ation of the lessee in caseswhere the crop has to be sold in processed form before payment of the rental) or
!# To discourage' directly or indirectly' the formation' maintenance or growth of unionsor organi%ations of agricultural lessees in his landholding' or to initiate' dominate' assist
or interfere in the formation or administration of any such union or organi%ation.
Sectio 3".Cost of rrigation System- The cost of construction of a permanent irrigation system'including distributory canals' may be borne e+clusi$ely by the agricultural lessor who shall beentitled to an increase in rental proportionate to the resultant increase in production &ro$ided' Thatif the agricultural lessor refuses to bear the e+penses of construction the agricultural lessee orlessees may shoulder the same' in which case the former shall not be entitled to an increase in rentaland shall' upon the termination of the relationship' pay the lessee or his heir the reasonable $alue ofthe impro$ement at the time of the termination &ro$ided' further' That if the irrigation systemconstructed does not work' it shall not be considered as an impro$ement within the meaning of thisSection.
Sectio 33.*anner! Time and Place of Rental Payment- The consideration for the lease of the landshall be paid in an amount certain in money or in produce' or both' payable at the place agreed uponby the parties immediately after threshing or processing if the consideration is in kind' or within areasonable time thereafter' if not in kind.
In no case shall the agricultural lessor re(uire the agricultural lessee to file a bond' make a depositor pay the rental in ad$ance' in money or in kind or in both' but a special and preferential lien ishereby created in fa$or of the agricultural lessor o$er such portion of the gross har$est necessary forthe payment of the rental due in his fa$or.
Sectio 34.Consideration for the Lease of Riceland and Lands De%oted to /ther Crops - Theconsideration for the lease of riceland and lands de$oted to other crops shall not be more than thee(ui$alent of twenty-fi$e per centum of the a$erage normal har$est during the three agriculturalyears immediately preceding the date the leasehold was established after deducting the amount usedfor seeds and the cost of har$esting' threshing' loading' hauling and processing' whiche$er are
applicable &ro$ided' That if the land has been culti$ated for a period of less than three years' theinitial consideration shall be based on the a$erage normal har$est during the preceding years whenthe land was actually culti$ated' or on the har$est of the first year in the case of newly-culti$atedlands' if that har$est is normal &ro$ided' further' That after the lapse of the first three normalhar$ests' the final consideration shall be based on the a$erage normal har$est during these threepreceding agricultural years &ro$ided' furthermore' That in the absence of any agreement betweenthe parties as to the rental' the ma+imum allowed herein shall apply &ro$ided' finally' That ifcapital impro$ements are introduced on the farm not by the lessee to increase its producti$ity' therental shall be increased proportionately to the conse(uent increase in production due to saidimpro$ements. In case of disagreement' the Court shall determine the reasonable increase in rental.
Sectio 3#.Exemption from Leasehold of /ther 1inds of Lands- 4otwithstanding the pro$isions ofthe preceding Sections' in the case of fishponds' saltbeds' and lands principally planted to citrus'
coconuts' cacao' coffee' durian' and other similar permanent trees at the time of the appro$al of thisCode' the consideration' as well as the tenancy system pre$ailing' shall be go$erned by thepro$isions of Republic Act 4umbered 5le$en hundred and ninety-nine' as amended.
Sectio 3$.Possession of Landholding2 Exceptions- 4otwithstanding any agreement as to theperiod or future surrender' of the land' an agricultural lessee shall continue in the en1oyment andpossession of his landholding e+cept when his dispossession has been authori%ed by the Court in a1udgment that is final and e+ecutory if after due hearing it is shown that
!"# The agricultural lessor-owner or a member of his immediate family will personallyculti$ate the landholding or will con$ert the landholding' if suitably located' intoresidential' factory' hospital or school site or other useful non-agricultural purposes&ro$ided) That the agricultural lessee shall be entitled to disturbance compensatione(ui$alent to fi$e years rental on his landholding in addition to his rights under Sectionstwenty-fi$e and thirty-four' e+cept when the land owned and leased by the agriculturallessor' is not more than fi$e hectares' in which case instead of disturbance compensationthe lessee may be entitled to an ad$anced notice of at least one agricultural year beforee1ectment proceedings are filed against him &ro$ided' further' That should thelandholder not culti$ate the land himself for three years or fail to substantially carry outsuch con$ersion within one year after the dispossession of the tenant' it shall be presumedthat he acted in bad faith and the tenant shall ha$e the right to demand possession of theland and reco$er damages for any loss incurred by him because of said dispossessions.
!*# The agricultural lessee failed to substantially comply with any of the terms andconditions of the contract or any of the pro$isions of this Code unless his failure is causedby fortuitous e$ent or force ma1eure)
!,# The agricultural lessee planted crops or used the landholding for a purpose other thanwhat had been pre$iously agreed upon)
!# The agricultural lessee failed to adopt pro$en farm practices as determined underparagraph , of Section twenty-nine)
!# The land or other substantial permanent impro$ement thereon is substantiallydamaged or destroyed or has unreasonably deteriorated through the fault or negligence ofthe agricultural lessee)
!/# The agricultural lessee does not pay the lease rental when it falls due &ro$ided' Thatif the non-payment of the rental shall be due to crop failure to the e+tent of se$enty-fi$eper centum as a result of a fortuitous e$ent' the non-payment shall not be a ground fordispossession' although the obligation to pay the rental due that particular crop is notthereby e+tinguished) or
!0# The lessee employed a sub-lessee on his landholding in $iolation of the terms ofparagraph * of Section twenty-se$en.
Sectio 3%.3urden of Proof- The burden of proof to show the e+istence of a lawful cause for thee1ectment of an agricultural lessee shall rest upon the agricultural lessor.
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Sectio 38.Statute of Limitations- An action to enforce any cause of action under this Code shallbe barred if not commenced within three years after such cause of action accrued.
BILL OF RIGHTS FOR AGRICULTURAL LABOR
Sectio 3&.Rights for Agricultural Labor- To enable the farm workers to en1oy the same rights andopportunities in life as industrial workers' they shall en1oy the following
!"# Right to self-organi%ation)
!*# Right to engage in concerted acti$ities)
!,# Right to minimum wage)
!# Right to work for not more than eight hours)
!# Right to claim for damages for death or in1uries sustained while at work)
!/# Right to compensation for personal in1uries' death or illness) and
!0# Right against suspension or lay-off.
Sectio 4'.Right to Self$/rgani4ation- The farm workers shall ha$e the right to self-organi%ationand to form' 1oin or assist farm workers> organi%ations of their own choosing for the purpose ofcollecti$e bargaining through representati$es of their own choosing &ro$ided' That this right shallbe e+ercised in a manner as will not unduly interfere with the normal farm operations. Indi$idualsemployed as super$isors shall not be eligible for membership in farm workers> organi%ations undertheir super$ision but may form separate organi%ations of their own.
Sectio 4!.Right to Engage in Concerted Acti%ities- The farm workers shall also ha$e the right toengage in concerted acti$ities for the purpose of collecti$e bargaining and other mutual aid orprotection.
?or the purpose of this and the preceding Section' it shall be the duty of the farm employer ormanager to allow the farm workers' labor leaders' organi%ers' ad$isers and helpers completefreedom to enter and lea$e the farm' plantation or compound at the portion of the same where saidfarm workers li$e or stay permanently or temporarily.
Sectio 4".Right to *inimum -age - 4otwithstanding any pro$ision of law or contract to thecontrary' farm workers in farm enterprises shall be entitled to at least &,[email protected] a day for eight hours>work &ro$ided' That this wage may' howe$er' be increased by the 9inimum organi%ation or group of farm workers has presented to the landowner a petition orcomplaint regarding any matter likely to cause a strike or lockout and a copy thereof furnished with
the epartment of Labor' or while an agricultural dispute is pending before the Court of AgrarianRelations. If it is pro$ed during the said period that a worker has been suspended or dismissedwithout 1ust cause' the Court may direct the reinstatement and the payment of his wage during thetime of his suspension or dismissal or of any sum he should ha$e recei$ed had he not beensuspended or dismissed' without pre1udice to any criminal liability of the landowner' farm employeror farm manager as prescribed by Section twenty-four of Commonwealth Act 4umbered 8nehundred and three' as amended.
Sectio 4%./ther Applicable Pro%isions - All other e+isting laws applicable to non-agriculturalworkers in pri$ate enterprises which are not inconsistent with this Code shall likewise apply to farmworkers' farm labor organi%ations and agrarian disputes as defined in this Code' as well as torelations between farm management and farm labor and the functions of the epartment of Laborand other agencies.
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Sectio 48.Exceptions to Preceding Section- The preceding Sections of this Chapter' e+ceptSections forty' forty-one' forty-two and forty-three shall not apply to farm enterprises comprisingnot more than twel$e hectares.
ARTICLE IO()*i+*tio * F-ctio o/ t0e L* A-t0o(it1
Sectio 4&.Creation of the Land Authority- ?or the purpose of carrying out the policy ofestablishing owner-culti$atorship and the economic family-si%e farm as the basis of &hilippineagriculture and other policies enunciated in this Code' there is hereby created a Land Authority'hereinafter called the Authority' which shall be directly under the control and super$ision of the&resident of the &hilippines. The Authority shall be headed by a Bo$ernor who shall be appointedby the &resident with the consent of the Commission on Appointments.
;e shall be assisted by two eputy Bo$ernors who shall be appointed by the &resident with theconsent of the Commission on Appointments' each of whom shall head such operating departmentsas may be set up by the Bo$ernor. The Bo$ernor and the eputy Bo$ernors shall hold office forfi$e years.
Sectio #'.6ualifications and Compensation of (o%ernors- 4o person shall be appointedBo$ernor or eputy Bo$ernor of the Authority unless he is a natural-born citi%en of the &hilippines'with ade(uate background and e+perience in land reform here and7or elsewhere' and at least thirty-fi$e years of age.
The Bo$ernor shall recei$e an annual compensation of twenty-four thousand pesos) the eputyBo$ernors shall each recei$e an annual compensation of eighteen thousand pesos.
Sectio #!.Po7ers and )unctions- It shall be the responsibility of the Authority
!"# To initiate and prosecute e+propriation proceedings for the ac(uisition of pri$ate
agricultural lands as defined in Section one hundred si+ty-si+ of Chapter I of this Codefor the purpose of subdi$ision into economic family-si%e farm units and resale of saidfarm units to bona fide tenants' occupants and (ualified farmers &ro$ided' That thepowers herein granted shall apply only to pri$ate agricultural lands sub1ect to the termsand conditions and order of priority hereinbelow specified
a. all idle or abandoned pri$ate agricultural lands' e+cept those held orpurchased within one year from the appro$al of this Code by pri$ateindi$iduals or corporations for the purpose of resale and subdi$ision intoeconomic family-si%e farm units in accordance with the policies enunciated inthis Code &ro$ided' That the subdi$ision and resale shall be substantiallycarried out within one year from the appro$al of this Code)
b. all pri$ate agricultural lands suitable for subdi$ision into economic family-si%e farm units' owned by pri$ate indi$iduals or corporations worked bylessees' no substantial portion of whose landholding in relation to the areasought to be e+propriated' is planted to permanent crops under laboradministration' in e+cess of se$enty-fi$e hectares e+cept all pri$ate agriculturallands under labor administration and lands ac(uired under Section se$enty-oneof this Code) and
c. in e+propriating pri$ate agricultural lands declared by the 4ational LandReform Council or by the Land Authority within a land reform district to benecessary for the implementation of the pro$isions of this Code' the followingorder of priority shall be obser$ed
". idle or abandoned lands)
*. those whose area e+ceeds "'@* hectares)
,. those whose area e+ceeds @@ hectares but is not more than "'@*hectares)
. those whose area e+ceeds " hectares but is not more than @@hectares) and
. those whose area e+ceeds 0 hectares but is not more than "hectares.
!*# To help bona fide farmers without lands or agricultural owner-culti$ators ofuneconomic-si%e farms to ac(uire and own economic family-si%e farm units)
!,# To administer and dispose of agricultural lands of the public domain under thecustody and administration of the 4ational Resettlement and RehabilitationAdministration prior to the appro$al of this Code and such other public agricultural landsas may hereafter be reser$ed by the &resident of the &hilippines for resettlement and sale'in accordance with such terms and conditions as are set forth under this Chapter&ro$ided' That the e+ercise of the authority granted herein' as well as in the preceding
sub-paragraph' shall not contra$ene public policy on the permanency of forest reser$es orother laws intended for the preser$ation and conser$ation of public forests)
!# To de$elop plans and initiate actions for the systematic opening of alienable anddisposable lands of the public domain for speedy' distribution to and de$elopment bydeser$ing and (ualified persons or corporations)
!# To recommend to the &resident' from time to time after pre$ious consultation with theSecretary of Agriculture and 4atural Resources' what portion of the alienable ordisposable public lands shall be reser$ed for settlement or disposition under this chapter)
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!/# To gi$e economic family-si%e farms to landless citi%ens of the &hilippines who need'deser$e' and are capable of culti$ating the land personally' through organi%edresettlement' under the terms and conditions the Authority may prescribe' gi$ing priorityto (ualified and deser$ing farmers in the pro$ince where such lands are located)
!0# To reclaim swamps and marshes' obtain titles thereto whene$er feasible andsubdi$ide them into economic family-si%e farms for distribution to deser$ing and(ualified farmers)
!2# To undertake measures which will insure the early issuance of titles to persons orcorporations who ha$e actually settled and culti$ated disposable alienable lands of thepublic domain)
!3# To sur$ey' subdi$ide and set aside lands or areas of landholdings under itsadministration for economic family-si%e farms' large-scale farm operations' town sites'roads' parks' go$ernment centers and other ci$ic impro$ements as circumstances maywarrant and to submit subdi$ision sur$ey plans conducted either by the go$ernment orpri$ate sur$eyors on parcels of lands under its administration for $erification andappro$al either by the irector of Lands or by the Land Registration Commission)
!"@# To inform the Agricultural &roducti$ity Commission and the 8ffice of the AgrarianCounsel of the problems of settlers and farmers on lands under its administration)
!""# To ac(uire for agricultural lessees e+ercising their right of pre-emption underChapter I of this Code' any landholdings mentioned thereunder)
!"*# To conduct land capability sur$ey and classification of the entire country and printmaps)
!",# To make such arrangements with the Land =ank with respect to titles of agriculturallands of the public domain under its administration as will be necessary to carry out theob1ecti$es of this Code)
!"# To e+propriate home lots occupied by agricultural lessees outside their landholdingsfor resale at cost to said agricultural lessees) and
!"# To submit to the &resident of the &hilippines and to both ;ouses of Congressthrough their presiding officers' to the Secretary of ?inance and to the Auditor Beneralwithin si+ty days of the close of the fiscal year' an annual report showing itsaccomplishments during the year) the e+propriation proceedings it has undertaken) thee+penditures it has incurred and other financial transactions undertaken with respectthereto.
Sectio #".Appointment of Subordinate /fficials and Employees- The Bo$ernor shall organi%e thepersonnel in such departments' di$isions and sections of the Authority as will insure their ma+imumefficiency. ;e shall appoint' sub1ect to ci$il ser$ice rules and regulations' fi+ the compensation'sub1ect to
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land co$ered by the petition shall be instituted or prosecuted until it becomes certain that the landshall not be ac(uired by the Authority.
Sectio $'.Disposition of Expropriated Land- After separate certificates of titles ha$e been issuedin accordance with Section fifty-eight' the Land Authority' on behalf of the Republic of the&hilippines and in representation of the Land =ank as the financing agency' shall allot and sell eachparcel or lot to a (ualified beneficiary selected under Section fifty-fi$e of this Code' sub1ect touniform terms and conditions imposed by the Land =ank &ro$ided' That the resale shall be at costwhich shall mean the purchase price not more than si+ per centum per annum' which shall co$eradministrati$e e+penses' and actual e+penses for subdi$ision' sur$eying' and registration &ro$ided'
further' That such cost shall be paid on the basis of an amorti%ation plan not e+ceeding twenty-fi$eyears at the option of the beneficiary.
In case some agricultural lessees working portions of agricultural lands ac(uired by the go$ernmentunder this Code prefer to remain as lessees thereof' which preference shall be e+pressed in writingand attested by a representati$e of the 8ffice of Agrarian Counsel' the resale and redistribution tothem shall be deferred until such time that such lessees are ready and willing to assume theobligations and responsibilities of independent owners' which shall be manifested by a writtennotice to this effect by the lessees and which shall oblige the Land Authority forthwith to allot andsell such portions to such lessees under the same uniform terms and conditions. &ending the sale'such lessees shall continue to work on their landholdings and recei$e the produce thereof' sub1ect'howe$er' to the re(uirement that they pay the Land =ank the allowable rental established in Sectionthirty-four. The Land =ank shall apply the rental to the si+ percent added to the ac(uisition priceand credit the balance to the ac(uisition cost in the name of the lessee as partial payment for theland.
The Land Authority shall administer said parcels of land during the period they are under lease.Competent management and ade(uate production credit shall be pro$ided in accordance with theprogram de$eloped by the Land Reform &ro1ect Team for such area.
Sectio $!./rgani4ation of Cooperati%e Associations- ?or the purpose of more efficientmanagement' adoption of modern farm methods and techni(ues' and spreading risk' either throughdi$ersification of farm pro1ects or mutual assumption of risks the farmer beneficiaries may organi%ethemsel$es into cooperati$e associations with the ad$ice or assistance of the Agricultural&roducti$ity Commission and in accordance with the guidelines established by said Commission forsuch associations.
Sectio $".Limitation on Land Rights- 5+cept in case of hereditary succession by one heir'landholdings ac(uired under this Code may not be resold' mortgaged' encumbered or transferreduntil after the lapse of ten years from the date of full payment and ac(uisition and after such ten-year period' any transfer' sale or disposition may be made only in fa$or of persons (ualified toac(uire economic family-si%e farm units in accordance with the pro$isions of this Code &ro$ided'That a purchaser who ac(uired his landholding under a contract to sell may secure a loan on thesame from any pri$ate lending institution or indi$idual for an amount not e+ceeding his e(uity onsaid landholding upon a guaranty by the Land =ank.
Sectio $3.nscription of Specific Prohibition Against Resale and Subdi%ision of Landholding-Certificates of titles of landholdings ac(uired by the Land Authority and resold to purchasers shallcontain therein a specific inscription prohibiting further subdi$ision and the resale' transfer orencumbrance of said landholdings e+cept as pro$ided in the preceding Section.
Sectio $4.Exemption from Attachment- Lands ac(uired under the pro$isions of this Chapter shallbe e+empt from e+ecution and attachment' e+cept when the land itself is the property mortgaged' inaccordance with Section si+ty-two of this Code.
Sectio $#.Precedence of Expropriation Cases- 5+propriation cases filed by the Authority underpro$isions of this Chapter shall take precedence o$er all other ci$il cases pending before the Courtand shall be terminated within a period not e+ceeding si+ months from the date of filing.
Dit(i6-tio o/ A)(ic-5t-(*5 L* o/ t0e P-65ic Do7*i
Sectio $$.Title to Public Agricultural Land- Dpon reser$ation by the &resident of the &hilippinesof public agricultural land a$ailable for disposition by the Land Authority' such land shall besur$eyed' titled and transferred to the Land =ank' which shall reduce said title into indi$idual titlesfor specific parcels or lots in accordance with the subdi$ision sur$ey conducted by the LandAuthority under paragraph 3 of Section fifty-one &ro$ided' howe$er' That e+isting laws go$erningthe ac(uisition of public lands shall ha$e been complied with.
The Land Authority shall thereupon distribute in accordance with the pro$isions of this Code' eachparcel or lot' sub1ect to the terms and conditions of the Land =ank' to a beneficiary selectedpursuant to Section se$enty-one or in accordance with paragraph , of Section fifty-one' to abeneficiary selected pursuant to paragraph , of Section one hundred twenty-eight.
Sectio $%.Census of Settlements - The Authority shall take a census of all settlements alreadymade or started by farmers on their own initiati$e on public agricultural lands' forest lands' and onpri$ate titled lands which had been cleared' occupied and culti$ated wholly or partially by them'with or without legal sanction. The census shall include' among other things' the bona fide characterof the settlements' the character of the settlers or farmers' the e+act status of the lands settled' thefeasibility of enlarging the settlements' particularly in connection with the resources of the landoccupied and the neighboring areas' actual and potential accessibility to markets' as well as strategiclocation of the settlement with respect to national security.
Sectio $8.Assistance to Settlers in Transporting Themsel%es and Their 3elongings- The Authoritymay' in certain pro1ects' assist settlers in transporting themsel$es' their belongings' work animalsand farm e(uipment' if any' f rom the communities from which they are migrating to the settlementareas reser$ed for the purpose and for subsistence necessary until credit can be pro$ided by
go$ernment financing agencies' or by any other credit institution by loaning to them the full amountre(uired for such purposes. These loans from the Land Authority shall be non-interest bearing' shallconstitute a lien upon the land' and shall be amorti%ed o$er a period of ten years' payable annuallybeginning with the end of the third year' after the date of arri$al in the settlement areas' sub1ect tothe right of the borrower to pay in the full at any time prior to the maturity of the loan.
Sectio $&.Assistance to Settlers in Securing E&uipment- The Authority may assist the settlers insecuring e(uipment' supplies and materials needed) or assist the cooperati$e associations of the newsettlers in securing the most ad$antageous prices or terms on farm implements and supplies needed.
Sectio %'.Pro%iding .ousing and Accommodations to Settlers- The Authority may help pro$idehousing and other accommodations for the new settlers upon their arri$al in the settlement areas bythe stationing them in properly sur$eyed and subdi$ided lots reser$ed for the purpose help them
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organi%e community acti$ities) and cooperate with the =ureau of ;ealth' the =ureau of &ublicSchools and other pertinent agencies of the Bo$ernment' in pro$iding ser$ices necessary for theproper establishment of community facilities.
Sectio %!.Po7er of the Land Authority to Sell to .olders of 3onds ssued to )ormer Lando7ners-hose Lands .a%e 3een Purchased for Redistribution- The Land Authority shall sell' for a pricenot less than the appraised $alue' any portion not e+ceeding one hundred forty-four hectares in thecase of indi$iduals or one thousand twenty-four hectares in the case of corporations of the publicagricultural lands transferred to the Land =ank which is suitable for large-scale farm operations toany holder' who is (ualified to ac(uire agricultural lands through purchase' of bonds issued to
former landowners whose lands ha$e been purchased for redistribution under this Code' sub1ect tothe condition that the purchaser shall' within two years after ac(uisition' place under culti$ation atleast thirty per centum of the entire area under plantation administration and the remaining se$entyper centum within fi$e years from the date of ac(uisition. The Bo$ernor of the Land Authority shallissue the title of said land upon showing that the purchaser has begun the de$elopment andculti$ation of his land under plantation administration &ro$ided' That public agricultural land soldas hereinabo$e specified shall not be the ob1ect of any e+propriation as long as the same shall bede$eloped and culti$ated for large-scale production under farm labor management' e+cept asallowed by the Constitution.
The selling price of the portion of the public agricultural land sold under this Section shall becredited to the Bo$ernment>s subscription to the Land =ank. As payment for the land sold under thisSection' the Land =ank shall accept as sole instruments of payment the bonds issued pursuant toSection se$enty-si+. Issued bonds accepted as payment for the land sold shall be cancelled to thee+tent of the amount paid.
All sales under this Code shall be sub1ect to the pro$ision of Chapter 6 of the &ublic Land Actco$ering sales of public agricultural lands insofar as they are not inconsistent with the pro$isions ofthis Code.
Sectio %".Duplicate Records to be )urnished the 3ureau of Lands- The Land Authority shallfurnish the =ureau of Lands with the duplicate records of proceedings on applications for the sale orother disposition of public agricultural lands under its administration.
Sectio %3.Transfer of Appropriations! Po7ers! )unctions! etc- The 4ational Resettlement andRehabilitation Administration and the Land Tenure administration are hereby abolished and theirpowers and functions not inconsistent with this Code' balances of all appropriations' funds'e(uipment' records and supplies' as well as agricultural lands' public and pri$ate' under theiradministration' are hereby transferred to the Authority &ro$ided' That the function of the LandTenure Administration with respect to the e+propriation of urban lands as pro$ided by e+isting lawsis hereby transferred to and all hereafter be undertaken by the &eople>s ;omesite and housingCorporation.
In addition to the appropriations herein transferred there is hereby appropriated from the generalfunds in the 4ational Treasury not otherwise appropriated the sum of fi$e million pesos' or so muchthereof as may be necessary' to carry out the purposes of this Code.
To carry out the land capability sur$ey and classification mentioned in paragraph "* of Sectionfifty-one and Section one hundred thirty-two of this Code' there is hereby appropriated out of theunappropriated funds of the 4ational Treasury the amount of ten million pesos.
Sectio %4.Creation- To finance the ac(uisition by the Bo$ernment of landed estates for di$isionand resale to small landholders' as well as the purchase of the landholding by the agricultural lessee
from the landowner' there is hereby established a body corporate to be known as the :Land =ank ofthe &hilippines:' hereinafter called the :=ank:' which shall ha$e its principal place of business in9anila. The legal e+istence of the =ank shall be for a period of fifty years counting from the date ofthe appro$al hereof. The =ank shall be sub1ect to such rules and regulations as the Central =ankmay from time to time promulgate.
Sectio %#.Po7ers in (eneral- To carry out this main purpose' the =ank shall ha$e the power
!"# To prescribe' repeal' and alter its own by laws' to determine its operating policies' andto issue such rules and regulations as may be necessary to achie$e the main purpose forthe creation of the =ank)
!*# To adopt' alter and use a corporate seal)
!,# To ac(uire and own real and personal property and to sell' mortgage or otherwisedispose of the same)
!# To sue and be sued' make contracts' and borrow money from both local and foreignsources. Such loans shall be sub1ect to appro$al by the &resident of the &hilippines andshall be fully guaranteed by the Bo$ernment of the &hilippines)
!# Dpon recommendation of the Committee on In$estments' to hold' own' purchase'ac(uire' sell or otherwise in$est' or rein$est in stocks' bonds or other securities capable ofgi$ing the =ank a reasonably assured income sufficient to support its financing acti$itiesand gi$e its pri$ate stockholders a fair return on their holdings &ro$ided' howe$er' Thatpending the organi%ation of the Committee on In$estments' the =ank may e+ercise the
powers herein pro$ided without the recommendation of said Committee on In$estments&ro$ided' further' That in case of the dissolution of the Land =ank all unsold public landstransferred to it which may be allocated to the Bo$ernment of the &hilippines in thecourse of li(uidation of the business of the =ank shall re$ert to the epartment ofAgriculture and 4atural Resources) and
!/# To pro$ide' free of charge' in$estment counselling and technical ser$ices tolandowners whose lands ha$e been ac(uired by the Land =ank. ?or this purpose' theLand =ank may contract the ser$ices of pri$ate consultants.
Sectio %$.ssuance of 3onds- The Land =ank shall' upon recommendation by the =oard ofTrustees and appro$al of the 9onetary =oard of the Central =ank' issue bonds' debentures andother e$idences of indebtedness at such terms' rates and conditions as the =ank may determine up to
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an aggregate amount not e+ceeding' at any one time' fi$e times its unimpaired capital and surplus.Such bonds and other obligations shall be secured by the assets of the =ank and shall be fully ta+e+empt both as to principal and income. Said income shall be paid to the bondholder e$ery si+ !/#months from the date of issue. These bonds and other obligations shall be fully negotiable andunconditionally guaranteed by the Bo$ernment of the Republic of the &hilippines and shall beredeemable at the option of the =ank at or prior to maturity' which in no case shall e+ceed twenty-fi$e years. These negotiable instruments of indebtedness shall be mortgageable in accordance withestablished banking procedures and practices to go$ernment institutions not to e+ceed si+ty percentum of their face $alue to enable the holders of such bonds to make use of them in in$estmentsin producti$e enterprises. They shall also be accepted as payments for reparation e(uipment and
The =oard of Trustees shall ha$e the power to prescribe rules and regulations for the registration ofthe bonds issued by the =ank at the re(uest of the holders thereof.
Sectio %%.ssuance of Preferred Shares of Stoc5 to )inance Ac&uisition of Landed Estates- TheLand =ank shall issue' from time to time' preferred shares of stock in such (uantities not e+ceedingsi+ hundred million pesos worth of preferred shares as may be necessary to pay the owners oflanded estates in accordance with Sections eighty and eighty-one of this Code. The amount ofshares that the =ank may issue shall not e+ceed the aggregate amount need to pay for ac(uiredestates in the proportions prescribed in said Section eighty of this Code. The =oard of Trustees shallinclude as a necessary part of the by-laws that it shall issue under Section se$enty-fi$e of this Code'such formula as it deems ade(uate for determining the net asset $alue of its holdings as a guide andbasis for the issuance of preferred shares. The shares of stock issued under the authority of thispro$ision shall be guaranteed a rate of return of si+ per centum per annum. In the e$ent that theearnings of the =ank for any single fiscal year are not sufficient to enable the =ank' after makingreasonable allowance for administration' contingencies and growth' to declare di$idends at theguaranteed rate' the amount e(ui$alent to the difference between the =ank>s earnings a$ailable fordi$idends and that necessary to pay the guaranteed rate shall be paid by the =ank out of its ownassets but the Bo$ernment shall' on the same day that the =ank makes such payment' reimburse thelatter in full' for which purpose such amounts as may be necessary to enable the Bo$ernment tomake such reimbursements are hereby appropriated out of any moneys in the 4ational Treasury nototherwise appropriated. The =ank shall gi$e sufficient notice to the =udget Commissioner and the&resident of the &hilippines in the e$ent that it is not able to pay the guaranteed rate of return on anyfiscal period. The guaranteed rate of return on these shares shall not preclude the holders thereoffrom participating at a percentage higher than si+ per centum should the earnings of the =ank forthe corresponding fiscal period e+ceed the guaranteed rate of return. The =oard of Trustees shalldeclare and distribute di$idends within three months after the close of each fiscal year at the
guaranteed rate unless a higher rate of return in 1ustified by the =ank>s earnings after makingreasonable allowance for administration' contingencies and growth' in which case di$idends shall bedeclared and distributed at a higher rate. The capital gains deri$ed from the sale or transfer of suchshares and all income deri$ed therefrom in the form of di$idends shall be fully e+empt from ta+es.
Sectio %8.Special (uaranty )und- In the e$ent that the =ank shall be unable to pay the bonds'debentures' and other obligations issued by it' a fi+ed amount thereof shall be paid from a specialguaranty fund to be set up by the Bo$ernment' to guarantee the obligation of the Land =ank' andestablished in accordance with this Section' and thereupon' to the e+tent of the amounts so paid' theBo$ernment of the Republic of the &hilippines shall succeed to all the rights of the holders of suchbonds' debentures or other obligations &ro$ided' howe$er' That for the ne+t four years after theestablishment of the =ank' the payment to the special guaranty fund should not e+ceed one millionpesos per year' after which period' the Bo$ernment shall pay into the guaranty fund the sum of fi$e
hundred thousand pesos each year until the cumulati$e total of such guaranty fund is no less thantwenty percent of the outstanding net obligation of the Land =ank at the end of any single calendaryear.
The guaranty fund shall be administered by the Central =ank of the &hilippines in the manner mostconsistent with its charter. ?or the purpose of such fund' there shall be appropriated annually thesum of one million pesos out of any moneys in the 4ational Treasury not otherwise appropriated'until the total amount of twenty million pesos shall ha$e been attained.
Sectio %&.Recei%ing Payments and Time Deposits- The =ank' under the super$ision of the9onetary =oard and sub1ect to the pro$isions of the Beneral =anking Act' shall recei$e sa$ings andtime deposits from the small landholders in whose fa$or public lands or landed estates ac(uired bythe Land Authority ha$e been sold and' for this purpose' establish' and maintain branches andoffices in such areas as may be necessary to ser$ice such deposits. The 9onetary =oard shallsuper$ise and authori%e the =ank to recei$e sa$ings and time deposits from the public in areaswhere facilities for such a ser$ice do not e+ist or cannot be ade(uately pro$ided by other depositinstitutions.
Sectio 8'.*a5ing Payment to /7ners of Landed Estates- The Land bank shall make payments inthe form herein prescribed to the owners of land ac(uired by the Land Authority for di$ision andresale under this Code. Such payment shall be made in the following manner ten per centum incash and the remaining balance in si+ percent' ta+-free' redeemable bonds issued by the =ank inaccordance with Section se$enty-si+' unless the landowner desires to be paid in shares of stock
issued by the Land =ank in accordance with Section se$enty-se$en in an amount not e+ceedingthirty per centum of the purchase price.
In the e$ent there is an e+isting lien on encumbrance on the land in fa$or of any Bo$ernmentinstitution at the time of ac(uisition by the Land =ank' the bonds and7or shares' in that order' shallbe accepted as substitute collaterals to secure the indebtedness.
The profits accruing from payment shall be e+empt from the ta+ on capital gains.
Sectio 8!.Capital- The authori%ed capital stock of the =ank shall be one billion fi$e hundredmillion pesos di$ided into ninety million shares with a par $alue of ten pesos each' which shall befully subscribed by the Bo$ernment and si+ty million preferred shares with a par $alue of ten pesoseach which shall be issued in accordance with the pro$isions of Sections se$enty-se$en and eighty-
three of this Code. 8f the total capital subscribed by the Bo$ernment' two hundred million pesosshall be paid by the Bo$ernment within one year from the appro$al of this Code' and one hundredmillion pesos e$ery year thereafter for two years for which purpose the amount of two hundredmillion pesos is hereby appropriated upon the effecti$ity of this Code' and one hundred millionpesos e$ery year for the ne+t two years thereafter' out of the funds in the 4ational Treasury nototherwise appropriated for the purpose &ro$ided' That if there are not enough funds in the 4ationalTreasury for the appropriation herein made' the Secretary of ?inance' with the appro$al of the&resident of the &hilippines' shall issue bonds or other e$idence of indebtedness to be negotiatedeither locally or abroad in such amount as may be necessary to co$er any deficiency in the amountabo$e-appropriated but not e+ceeding four hundred million pesos' the proceeds of which are herebyappropriated &ro$ided' further' That the bonds to be issued locally shall not be supported by theCentral =ank &ro$ided' finally' That there is automatically appropriated out of the unappropriatedfunds in the 4ational Treasury such amounts as is necessary to co$er the losses which shall includeamong other things loss of earnings occasioned by the limitation of the resale cost herein pro$ided
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such that said amount together with the administrati$e e+penses mentioned in Section ninety hereofshall not e+ceed in the aggregate the e(ui$alent of two and one-half per centum of its assets limitedtherein.
Sectio 8".(o%ernment Shares- All shares of stock in the =ank subscribed or owned by theBo$ernment shall not be entitled to participate in the income earned by the =ank from itsin$estments and other operations' whether in the form of cash or stock di$idends or otherwise.Amounts e+pended for the administration of the =ank shall not be deemed as a participation of theBo$ernment in income.
Sectio 83.Preferred Shares- All preferred shares of stock issued under Section se$enty-se$en ofthis Code shall be entitled to the income earned by the =ank on its in$estments and other operationsand shall ha$e a limited right to elect annually one member of the =oard of Trustees and onemember of the Committee on In$estments &ro$ided' That the holders of such preferred shares ofstock shall not bring deri$ati$e suits against the =ank. Such preferred shares shall be fullytransferable &ro$ided' further' That upon the li(uidation of the =ank' the redemption of suchpreferred shares shall be gi$en priority and shall be guaranteed at par $alue.
Sectio 84.9oting of Shares- The $oting power of all the shares of stock of the Land =ank ownedor controlled by the Bo$ernment shall be $ested in the &resident of the &hilippines or in such personor persons as he may from time to time designate.
Sectio 8#.,se of 3onds- The bonds issued by the Land =ank may be used by the holder thereof
and shall be accepted in the amount of their face $alue as any of the following
!"# &ayment for agricultural lands or other real properties purchased from theBo$ernment)
!*# &ayment for the purchase of shares of stock of all or substantially all of the assets ofthe following Bo$ernment owned or controlled corporations The 4ational e$elopmentCompany) Cebu &ortland Cement Company) 4ational Shipyards and Steel Corporation)9anila Bas Corporation) and the 9anila ;otel Company.
Dpon offer by the bondholder' the corporation owned or controlled by the Bo$ernmentshall' through its =oard of irectors' negotiate with such bondholder with respect to theprice and other terms and conditions of the sale. In case there are $arious bondholdersmaking the offer' the one willing to purchase under terms and conditions most fa$orableto the corporation shall be preferred. If no price is acceptable to the corporation' the sameshall be determined by a Committee of Appraisers composed of three members' one to beappointed by the corporation' another by the bondholder making the highest or only offer'and the third by the two members so chosen. The e+penses of appraisal shall be bornee(ually by the corporation and the successful purchaser.
Should the Bo$ernment offer for sale to the public any or all of the shares of stock or theassets of any of the Bo$ernment owned or controlled corporations enumerated herein' thebidder who offers to pay in bonds of the Land =ank shall be preferred pro$ided that the$arious bids be e(ual in e$ery respect e+cept in the medium of payment.
!,# Surety or performance bonds in all cases where the Bo$ernment may re(uire oraccept real property as bonds) and
!# &ayment for' reparations goods.
Sectio 8$.3oard of Trustees- The affairs and business of the =ank shall be directed' its powerse+ercised and its property managed and preser$ed by a =oard of Trustees. Such =oard shall becomposed of one Chairman and four members' one of whom shall be the head of the LandAuthority who shall be an e+-officio member of such =oard and another to be elected by the holders
of preferred shares. The Chairman and two members of the =oard of Trustees shall ser$e on full-time basis with the =ank.
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The Land =ank shall not in$est in any corporation' partnership or company wherein any member ofthe =oard of Trustees or of the Committee on In$estments or his spouse' direct descendant orascendant has substantial pecuniary interest or has participation in the management or control of theenterprise e+cept with the unanimous $ote of the members of the =oard of Trustees and of theCommittee on In$estments' e+cluding the member interested' in a 1oint meeting held for thatpurpose where full and fair information of the e+tent of such interest or participation has beenade(uately disclosed in writing and recorded in the minutes of the meeting &ro$ided' That suchinterested member shall not in any manner participate in the deliberations and shall refrain frome+erting any pressure or influence whate$er on any official or member of the =ank whose functionsbear on or relate to the in$estment of the funds of the =ank in the enterprise &ro$ided' further' That
the total in$estment in any single corporation' partnership' company' or association shall not e+ceedfi$e per centum of the total in$estible funds.
Sectio &'.Personnel2 Cost of Administration- The Administrati$e e+penses of the =ank duringany single fiscal year shall not in any case e+ceed two and one-half per centum of its total assets.The =oard of Trustees shall pro$ide for an organi%ation and staff of officers and employeesnecessary to carry out the functions of the =ank' fi+ their compensation' and appoint and remo$esuch officers and employees for cause. The =ank officers and employees shall be sub1ect to therules and regulations issued by the Ci$il Ser$ice Commission but shall not fall under the ssubscription to the capital of the =ank.
Sectio &%.Regulation- The =ank shall not be sub1ect to the laws' rules and regulations go$erningbanks and other financial institutions of whate$er type e+cept with respect to the receipt of sa$ingsand time deposits in accordance with Section se$enty-nine of this Code' in which case the legal
reser$e and other re(uirements prescribed by the Central =ank for such deposits shall apply. The=ank shall be operated as an autonomous body and shall be under the super$ision of the Central=ank.
Sectio &8.Tax Exemption- The operations' as well as holdings' e(uipment' property' income andearnings of the =ank from whate$er sources shall be fully e+empt from ta+ation.
Sectio &&./rgani4ation of 3an5- The =ank shall be organi%ed within one year from the date thatthis Code takes effect.
Sectio !''.Penalty for 9iolation of the Pro%isions of this Chapter- Any trustee' officer' employeeor agent of the =ank who $iolates or permits the $iolation of any of the pro$isions of this Chapter'
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or any person aiding or abetting the $iolations of any of the pro$isions of this Chapter' shall bepunished by a fine not to e+ceed ten thousand pesos or by imprisonment of not more than fi$e years'or both such fine and imprisonment at the discretion of the Court.
AGRICULTURAL CREDIT ADMINISTRATION
Sectio !'!.Reorgani4ation of ACC)A to Align ts Acti%ities- The administrati$e machinery of theAgricultural Credit and Cooperati$e ?inancing Administration created under Republic Act
4umbered 5ight hundred twenty-one' as amended by Republic Act 4umbered Twel$e hundred andeighty-fi$e' shall be reorgani%ed to enable it to align its acti$ities with the re(uirements andob1ecti$es of this Code and shall be known as the Agricultural Credit Administration.
Sectio !'".)inancing- To finance the additional credit functions of the Agricultural CreditAdministration as a result of the land reform program laid down in this Code' there is herebyappropriated the sum of one hundred fifty million pesos out of funds in the 4ational Treasury nototherwise appropriated in addition to e+isting appropriations for the Agricultural Credit andCooperati$e ?inancing Administration.
Sectio !'3.Pri%ilege of Rediscounting- The Agricultural Credit Administration is hereby grantedthe pri$ilege of rediscounting with the Central =ank of the &hilippines' the e$elopment =ank ofthe &hilippines and the &hilippine 4ational =ank eligible e$idence of indebtedness ac(uired by it incarrying on its authori%ed acti$ities' at an interest rate e(ual to the lowest charged by the abo$e
financing institution on any pri$ate person or entity.
Sectio !'4.Po7er to /btain Additional )unds- 4othing in this Section shall limit the power ofthe Agricultural Credit Administration to obtain from the Central =ank of the &hilippines' thee$elopment =ank of the &hilippines' the &hilippine 4ational =ank and other financing institutions'such additional funds as may be necessary for the effecti$e implementation of this Act &ro$ided'That such additional funds are to be utili%ed as loans to farmers and7or farmers> cooperati$es.
Sectio !'#.Loaning Acti%ities- Loaning acti$ities of the Agricultural Credit Administration shallbe directed to stimulate the de$elopment and operation of farmers> cooperati$es. The term :?armers>Cooperati$es: shall be taken to include all cooperati$es relating to the production and marketing ofagricultural products and those formed to manage and7or own' on a cooperati$e basis' ser$ices andfacilities' such as irrigation and transport system' established to support production and7or
marketing of agricultural products.
Dnder such rules and regulations in accordance with generally accepted banking practices andprocedures as may be promulgated by the Agricultural Credit Administration' Rural =anks ande$elopment =anks may' in their respecti$e localities' be designated to act as agents of theAgricultural Credit Administration in regard to its loaning acti$ities.
Sectio !'$.Credit to Small )armers- &roduction loans and loans for the purchase of workanimals' tillage e(uipment' seeds' fertili%ers' poultry' li$estock' feed and other similar items' may bee+tended to small farmers as defined in Republic Act 4umbered 5ight hundred twenty-one' basedupon their paying capacity and such securities as they can pro$ide' and under such terms andconditions as the Agricultural Credit Administration may impose' pro$ided the amount thereof doesnot e+ceed two thousand pesos' or such amount as may be fi+ed by the &resident' but in no case
shall the amount of loan e+ceed eighty per centum of the $alue of the collateral pledged. Ininstances where credit is e+tended for items which are not consumed in their use' such items may bepledged as security therefor. The Agricultural Credit Administration shall promulgate such rulesand regulations as may be necessary in the e+tension of the loans herein authori%ed so as to assuretheir repayment &ro$ided' That such rules and regulations shall follow and be in accordance withgenerally accepted financing practices and procedures.
Sectio !'%.Security for Loans- The production of the borrower' after deducting the lease rentaland7or liens thereon' shall be accepted as security for loans &ro$ided' That said production ispledged to the Agricultural Credit Administration with appropriate safeguards to insure against its
unauthori%ed disposition &ro$ided' further' That the amount of loan shall not e+ceed si+ty percentum of the $alue of the estimated production.
Sectio !'8.Loans to Cooperati%es- The Agricultural Credit Administration is hereby authori%edto e+tend such types of loans as it may deem necessary for the effecti$e implementation of thisCode' to eligible farmers> cooperati$es as herein defined' under such terms and conditions as it mayimpose and with such securities as it may re(uire. A farmers> cooperati$e that has been registeredwith the Securities and 5+change Commission and affiliated with the Agricultural CreditAdministration shall be eligible for loans if' in the 1udgment of the latter' its organi%ation'management and business policies are of such character as will insure the safety and effecti$e use ofsuch loans.
Sectio !'&.Loans for Construction or Ac&uisition by Purchase of )acilities - Loans for the
construction or ac(uisition by purchase of facilities of farmers> cooperati$es may be granted by theAgricultural Credit Administration.
Sectio !!'.nterest on Loans- The total charges including interest and insurance fees on all kindsof loans shall not be more than eight per centum per annum &ro$ided' That if an impairment of thecapitali%ation of the Agricultural Credit Administration is imminent by reason of the limitation ofthe interest rate herein pro$ided' there is automatically appropriated out of the unappropriated fundsin the 4ational Treasury such amounts as is necessary to co$er the losses of the Agricultural CreditAdministration' but not e+ceeding si+ million pesos for any one year.
Sectio !!!.nstitution of Super%ised Credit- To pro$ide for the effecti$e use of credit by farmers'the Agricultural Credit Administration may institute a program of super$ised credit in cooperationwith the Agricultural &roducti$ity Commission.
Sectio !!".(uidance to Cooperati%es - The Agricultural Credit Administration shall ha$e thepower to register and pro$ide credit guidance or assistance to all agricultural cooperati$es includingirrigation cooperati$es and other cooperati$e associations or fund corporations.
Sectio !!3.Auditing of /perations- ?or the effecti$e super$ision of farmers> cooperati$es' thehead of the Agricultural Credit Administration shall ha$e the power to audit their operations'records and books of account and to issue subpoena and subpoena duces tecum to compel theattendance of witnesses and the production of books' documents and records in the conduct of suchaudit or of any in(uiry into their affairs. Any person who' without lawful cause' fails to obey suchsubpoena or subpoena duces tecum shall' upon application of the head of Agricultural CreditAdministration with the proper court' be liable to punishment for contempt in the manner pro$idedby law and if he is an officer of the association' to suspension or remo$al from office.
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Sectio !!4.Prosecution of /fficials- The Agricultural Credit Administration' through theappropriate pro$incial or city fiscal' shall ha$e the power to file and prosecute any and all actionswhich it may ha$e against any and all officials or employees of farmers> cooperati$es arising frommisfeasance or malfeasance in office.
Sectio !!#.)ree Notarial Ser%ices- Any 1ustice of the peace' in his capacity as notary e+-officio'shall render ser$ice free of charge to any person applying for a loan under this Code either inadministering the oath or in the acknowledgment of instruments relating to such loan.
Sectio !!$.)ree Registration of Deeds- Any register of deeds shall accept for registration' free ofcharge any instrument relati$e to a loan made under this Code.
Sectio !!%.-riting$off ,nsecured and /utstanding Loans- Sub1ect to the appro$al of the&resident upon recommendation of the Auditor Beneral' the Agricultural Credit Administration maywrite-off from its books' unsecured and outstanding loans and accounts recei$able which maybecome uncollectible by reason of the death or disappearance of the debtor' should there be no$isible means of collecting the same in the foreseeable future' or where the debtor has been $erifiedto ha$e no income or property whatsoe$er with which to effect payment. In all cases' the writing-offshall be after fi$e years from the date the debtor defaults.
Sectio !!8.Exemption from Duties! Taxes and Le%ies- The Agricultural Credit Administration ishereby e+empted from the payment of all duties' ta+es' le$ies' and fees' including docket andsheriff>s fees' of whate$er nature or kind' in the performance of its functions and in the e+ercise of
its powers hereunder.
AGRICULTURAL PRODUCTIVITY COMMISSION
Sectio !!&.Creation of the Agricultural Producti%ity Commission- ?or the purpose ofaccelerating progressi$e impro$ement in the producti$ity of farms' the ad$ancement of farmers andthe strengthening of e+isting agricultural e+tension ser$ices through the consolidation ofall7promotional' educational and informational acti$ities pertaining to agriculture' the present=ureau of Agricultural 5+tension of the epartment of Agriculture and 4atural Resources is herebyplaced directly under the e+ecuti$e super$ision and control of the &resident and hereinafter renamedAgricultural &roducti$ity Commission.
Dpon the effecti$ity of this Code' the Agricultural Tenancy Commission of the epartment ofEustice' together with its powers' duties' responsibilities' files' records supplies' e(uipment'personnel and une+pended balance of appropriations' is hereby placed under the Agricultural&roducti$ity Commission as a separate office thereof.
Sectio !"'.Commissioner of the Agricultural Producti%ity Commission - The Agricultural&roducti$ity Commission shall be administered by an Agricultural &roducti$ity Commissioner whoshall be appointed by the &resident with the consent of the Commission on Appointments and whoshall ha$e a compensation of si+teen thousand pesos per annum. 4o person shall be appointed as aAgricultural &roducti$ity Commissioner unless he be a holder of at least a =achelor of Sciencedegree in Agricultural from a reputable school or college of agriculture and shall ha$e practicedagriculture for at least fi$e years' and who is of recogni%ed competence in agricultural economics orany of its e(ui$alents.
Sectio !"!.Po7ers and Duties- The Agricultural &roducti$ity Commissioner shall e+ercise thesame powers and duties $ested in the irector of the =ureau of Agricultural 5+tension.
Sectio !"".Di%ision on Cooperati%es- In addition to the e+isting di$isions of the =ureau ofAgriculture 5+tension' herein renamed as Agricultural &roducti$ity Commission' there shall be ai$ision of Cooperati$es and such other di$isions and sections as the Agricultural &roducti$ityCommissioner may deem necessary to organi%e in order to carry out the promotional andeducational acti$ities of the Commission.
Sectio !"3.Recruitment! Selection and Training of Extension -or5ers- The e+tension workersshall be recruited and selected from graduates of agricultural college with ade(uate practicale+perience and training in actual crop' tree' poultry and li$estock farming &ro$ided' howe$er' Thatin the e$ent there are no graduates of agricultural colleges a$ailable' graduates of agricultural highschools may be temporarily employed. Training of e+tension workers shall be done in con1unctionwith research institutions to insure their ma+imum efficiency.
Sectio !"4.)unctions of Extension -or5ers- In addition to their functions under Republic Act4umbered Si+ hundred eighty' it shall be the duty of e+tension workers
!"# To reside in the locality where they are assigned' to disseminate technical informationto farmers' and to demonstrate impro$ed farm management practices and techni(ues)
!*# To work with indi$idual farmers in farm planning and budgeting' guide them in theproper conduct of farm business and work out schedules of re-payment of loans obtainedby farmers)
!,# To assist farmers in securing the ser$ices or assistance of other agencies' or theirpersonnel' ha$ing to do with rele$ant acti$ities and problems of farmers)
!# To $isit newly-established independent farm operators either singly or collecti$ely atleast once a month)
!# To conduct educational acti$ities that will ac(uaint leaseholders and otherindependent farm operators with their rights and responsibilities under this Code)
!/# To encourage the formation and growth of pri$ate associations' study clubs'committees and other organi%ed groups of farmers' familiari%e them with modernmethods of farming and interest them to acti$ely participate' collaborate or take theinitiati$e in agricultural research' e+perimentation and implementation of pro1ects incooperation with the Agricultural &roducti$ity Commissioner and other agencies) and
!0# To promote' stimulate and assist in the organi%ation of farmers> cooperati$es.
Sectio !"#.Appropriation- In addition to the funds herein transferred' there is herebyappropriated from the general funds in the 4ational Treasury not otherwise appropriated the sum offi$e million pesos' or so much thereof as may be necessary to carry out the purposes of this Chapter.
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LAND REFORM PRO9ECT ADMINISTRATION
Sectio !"$.Creation of National Land Reform Council- There is hereby created a 4ational LandReform Council' hereinafter called the Council' which shall be composed of the Bo$ernor of theLand Authority' who shall act as Chairman' the Administrator of the Agricultural CreditAdministration' the Chairman of the =oard of Trustees of the Land =ank' the Commissioner of theAgricultural &roducti$ity Commission and another member appointed by the &resident uponrecommendation of the minority party recei$ing the second largest number of $otes in the last&residential election who shall hold office at the pleasure of such minority party' unless sooner
remo$ed for cause by the &resident as members and the Agrarian Counsel as legal counsel&ro$ided' That the Council shall not be considered fully constituted and ready to function until afterthe member representing the minority party has been appointed by the &resident of the &hilippines&ro$ided' further' That the minority party shall submit its recommendation to the &resident withinsi+ty days from the appro$al of this Code' in the absence of which the Council shall be deemed tobe so constituted e$en without such member from the minority party &ro$ided' finally' That theminority representati$e shall recei$e a per diem of fifty pesos for each day he attends a councilmeeting' chargeable to the appropriations of the Land Authority.
Sectio !"%.*eetings2 Resolutions- The Chairman of the Council shall con$oke the Council as itsresponsibilities enumerated in Section one hundred twenty-eight may warrant' and shall presideo$er its meetings.
It shall be the duty of the members to attend any meeting of the Council upon the call of theChairman. In case of inability' a member may re(uire the officer ne+t in rank in his agency to attendthe meeting in his behalf.
A ma1ority $ote of the members present if there is a (uorum shall be necessary for the appro$al of aresolution. Dpon such appro$al the resolution shall be final and binding upon all members of theCouncil and their respecti$e agencies insofar as their functions' powers and duties re(uired underthis Code are concerned.
The refusal of any member to implement any resolution or part thereof falling within the scope ofthe powers granted to his agency shall be sufficient ground for the &resident of the &hilippines toremo$e said member from office or to impose upon him disciplinary or administrati$e sanctions.
Sectio !"8.)unctions of National Land Reform Council- It shall be the responsibility of theCouncil
!"# To construct the general program of land reform contemplated by this Code)
!*# To establish guidelines' plans and policies for its member-agencies relati$e to anyparticular land reform pro1ect)
!,# To formulate such rules and regulations as may be necessary to carry out thepro$isions of this Code for !a# the selection of agricultural land to be ac(uired anddistributed under this Code) !b# the determination of si%es of family farms as defined inSection one hundred si+ty-si+) and !c# the selection of beneficiaries to family farms
a$ailable for distribution &ro$ided' That priority shall be gi$en in the following order?irst' to members of the immediate family of the former owner of the land within the firstdegree of consanguinity who will culti$ate the land personally with the aid of labora$ailable within his farm household) Second' to the actual occupants personallyculti$ating the land either as agricultural lessees or otherwise with respect to the areaunder their culti$ation) Third' to farmers falling under the preceding category who areculti$ating uneconomic-si%e farms with respect to idle or abandoned lands) ?ourth' toowner-operators of uneconomic-si%e farms) and ?ifth' to such other categories as may befi+ed by $irtue of this Code' taking into consideration the needs and (ualifications of theapplicants
!# To re$ise' appro$e' or re1ect any land reform proposal or pro1ect) and
!# To proclaim in accordance with the pro$isions of this Code' which proclamation shallbe considered as ha$ing been promulgated immediately after three successi$e weeklypublications in at least two newspapers of general circulation in the region or localityaffected by the proclamation' preference being gi$en to local newspapers' if any' that allthe go$ernment machineries and agencies in any region or locality relating to leaseholden$isioned in this Code are operating &ro$ided' That the con$ersion to leasehold in theproclaimed area shall become effecti$e at the beginning of the ne+t succeedingagricultural year after such promulgation &ro$ided' further' That the proclamation shallbe made after ha$ing considered factors affecting feasibility and fund re(uirements andthe other factors embodied in Sections one hundred twenty-nine' one hundred thirty andone hundred thirty-one.
Sectio !"&.Creation of Land Reform Districts- The Council shall e+ercise the functionsenumerated in the preceding Section for particular areas which the Council shall select anddesignate as land reform districts. A district shall constitute one or more reform pro1ects' eachpro1ect to comprise either a large landed estate or se$eral areas within small estates. In the selectionof a district' the Council shall consider factors affecting the feasibility of ac(uiring for redistributionthe areas within the district' including
!"# The producti$ity of the area)
!*# Its suitability for economic family-si%e farms)
!,# The tenancy rate in the area)
!# The minimum fi+ed capital outlay re(uired to de$elop the area)
!# The pro+imity of the area to resettlement pro1ects) and
!/# The number of farmers that culti$ate uneconomic-si%e farms' the ability and readinessof such farmers to be resettled' an