12 June 2012

[LEGAL NOTES] Queries on CARPER beyond 2014

The DAR’s continuing mandate and authority to process and proceed with the acquisition and distribution of agricultural landholdings issued with Notices of Coverage prior to CARP expiration on June 30, 2014.

Utilization of legislated budget for a government program for its full implementation shall be allowed even after the expiration of said program.

No less than Section 4, Article VIII of the Philippine Constitution  mandates that “The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular farm workers, who are landless, to own directly or indirectly the land they till.” The same section adds that, “the State shall encourage and undertake the just distribution of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may provide xxx.” 

Clearly, agrarian reform is a mandate of the Constitution, hence, it cannot be deemed to have ended unless and until the essence of the program—which is the distribution of all agricultural lands to the landless—have been fully complied with. 

This precept is bolstered by the Department of Justice which has issued DOJ Opinion 9, series of 1997 saying that CARP is a “continuing program” and does not end until its “original scope and mandate” has been completed.  While Section 5 of CARL (RA 6657) states that “The distribution of all lands covered by this Act shall be implemented immediately and completed within ten (10) years from the effectivity thereof,” the DOJ Opinion series of 1997 opined as follows:
  • Implementation prescribed in the aforequoted Section 5 is merely directory in character.
  • It could not have been the intention of the law to prescribe a fixed and rigid period of ten-years for the CARP.  Such intention would have frustrated the policy and purpose of the law.
  • The CARP is a continuing program and xxx does not end after the lapse of ten (10) years.
  •  It bears emphasis that the ten-year period of implementation is only a time frame given to the DAR for the acquisition and distribution of public and private agricultural lands covered by RA No. 6657 xxx This is made clear in the Bicameral Conference Committee Report xxx for a “no-date” formula.

Part of that “scope and mandate” is the Land Acquisition and Distribution (LAD) target which, at present, has a backlog of more or less 1 million hectares.  Ending the implementation of CARP without completing the acquisition and distribution of lands covered by the program will result in the anomalous situation of having persons owning landholdings in excess of the allowable retention limit under the law.

If an agricultural landholding has been issued with a Notice of Coverage before the expiration of the Comprehensive Agrarian Reform Program (CARP) on June 30, 2014, does the Department of Agrarian Reform (DAR) retain the authority to process and proceed with the acquisition and distribution of such landholding even beyond the said date?

Yes.  The applicable provisions of law in this regard are Section 7 of Republic Act No. 6657, as amended, and Section 30 of R.A. No. 9700. The pertinent portion of Section 7, reads, as follows:
SEC. 7. Priorities. - The DAR, in coordination with the Presidential Agrarian Reform Council (PARC) shall plan and program the final acquisition and distribution of all remaining unacquired and undistributed agricultural lands from the effectivity of this Act until June 30, 2014. Lands shall be acquired and distributed as follows:xxx
Land acquisition and distribution shall be completed by June 30, 2014 on a province-by-province basis.

Some interpret the aforementioned provision of the law to mean that land acquisition and distribution proceedings under CARP shall cease and can no longer be commenced after the expiration of the Program on June 30, 2014.  This, however, is belied by Section 30 of R.A. No. 9700 which explicitly provides that CARP proceedings initiated prior to June 30, 2014 may be processed and implemented even beyond such date:
Sec. 30. Resolution of Cases. – Any case and/or proceeding involving the implementation of the provisions of Republic Act No. 6657, as amended, which may remain pending on June 30, 2014 shall be allowed to proceed to its finality and be executed even beyond such date.

Indeed, the issuance of the notice of coverage constitutes the first necessary step towards the acquisition of private land under the CARP.[1]  Indubitably, its issuance signifies the initiation of CARP coverage, acquisition, and distribution proceedings which involve the administrative and quasi-judicial jurisdiction of the DAR.[2]  The notice of coverage informs the landowner of the State’s intention to acquire a private land upon payment of just compensation and gives him the opportunity to present evidence that his landholding is not covered or is otherwise excused from the agrarian law.[3]  Indeed, in such a case, an affected landowner may invoke the administrative and quasi-judicial jurisdiction of the DAR by invoking the defenses and remedies available to landowners under agrarian reform law.[4]  Considering that the issuance and due service of a notice of coverage on a landowner commences the land acquisition and distribution proceedings under CARP as far as the said landholding is concerned, it necessarily follows that by operation of Section 30 of R.A. No. 9700, the CARP acquisition and distribution proceedings commenced shall be allowed to proceed until finality.

Where a program has been provided with a legislated budget and such program expires, may the government agency tasked with the implementation of such program utilize the legislated budget despite the expiration of the program?

Section 63 of the RA 6657, as amended by RA 9700, state the following provisions regarding the funding source for the program, to wit:

Funding Source. - The amount needed to further implement the CARP as provided in this Act, until June 30, 2014, upon expiration of funding under Republic Act No. 8532 and other pertinent laws, shall be funded from the Agrarian Reform Fund and other funding sources in the amount of at least One hundred fifty billion pesos (P150,000,000,000.00).

"All funds appropriated to implement the provisions of this Act shall be considered continuing appropriations during the period of its implementation: Provided, That if the need arises, specific amounts for bond redemptions, interest payments and other existing obligations arising from the implementation of the program shall be included in the annual General Appropriations Act: Provided, further, That all just compensation payments to landowners, including execution of judgments therefore, shall only be sourced from the Agrarian Reform Fund: Provided, however, That just compensation payments that cannot be covered within the approved annual budget of the program shall be chargeable against the debt service program of the national government, or any unprogrammed item in the General Appropriations Act: Provided, finally, That after the completion of the land acquisition and distribution component of the CARP, the yearly appropriation shall be allocated fully to support services, agrarian justice delivery and operational requirements of the DAR and the other CARP implementing agencies."

There is no case in point that squarely addresses the query advanced. However, the query may still be resolved by applying pertinent provisions of political law.

The power of the purse—or the power to authorize payment from funds in the National Treasury—is lodged exclusively in Congress.[5]  This power is primarily exercised through the enactment by Congress of the General Appropriations Act (GAA).  An appropriations act is primarily a special type of legislation whose content is limited to specified sums of money dedicated to a specific purpose or a separate fiscal unit.[6]

The power of appropriation carries with it the power to specify the project or activity to be funded.[7]  In exercising its prerogative to appropriate, Congress regularly conducts budget hearings which had been the usual means of reviewing policy and of auditing the use of previous appropriation to ascertain whether they have been disbursed for purposes authorized in an appropriation act.  The consideration of the budget is also an opportunity for the lawmakers to express their confidence in the performance of a Cabinet Secretary or to manifest their disgust or disfavor of the continuance in office of a bureaucrat.[8]

Thus, in enacting a statute, the legislature is presumed to have deliberated with full knowledge of all existing laws and jurisprudence on the subject.[9]  Accordingly, the act of Congress of appropriating funds in favor of a government agency impliedly carries with it the imprimatur that the agency endowed with a specific budget has the prerogative and authority to utilize the same.[10]  Moreover, the abolition of a government agency is not implied and must be stated in clear and explicit terms.  The rule in our jurisdiction is that reorganizations of the agencies comprising the executive branch are valid so long as it is made in good faith.[11]

Applying these principles to the question discussed above, it becomes clear that once Notices of Coverage have been issued by the DAR and valuation of the covered lands has been done, there is already an obligation on the part of the national government to pay the owners thereof. Moreover, the CARPER law states that Support Services Delivery (SSD) and Agrarian Justice Delivery (AJD) shall continue even after the land Acquisition and Distribution (LAD) has been completed. To be able to comply with or fulfill such obligation incurred in the process of implementing CARP, the government shall necessarily tap the legislated, albeit unspent, budget as provided for under the CARP law itself. The government agency’s legislated budget shall be used to process, follow through with, and fund the remaining components of the program, especially SSD and AJD.

Besides, it is important to note that to date (two years before CARP expiration in June 2014) the budget which has been allocated for the CARP since Republic Act 9700 took effect only amounts to approximately P47 Billion Pesos, P103 Billion short of the legislated budget of P150 Billion.  If the program will be deemed to expire and all its components to have ended by June 30, 2014 without seeing completion, there would be an absurd situation where the balance of P103 Billion will be left unallocated and unspent for the purpose meant by the authors of the law—to abide by the mandate of the Constitutional provision on agrarian reform. To stick with the notion that the program can just end without the totality of its legislated budget being properly allocated to achieve the program objectives and being used to benefit agrarian reform beneficiaries would be tantamount to saying that laws and Constitutional edicts can be violated and the people shortchanged by merely letting time pass without pursuing the program/mandate to its end.

[1] Department of Agrarian Reform v. Cuenca, G.R. No. 154112, September 23, 2004.                             
[2] Ibid.
[3] Sta. Monica Industrial & Dev’t Corp., v. Department of Agrarian Reform, G.R. No. 164846, 18 June 2008, 555 SCRA 97.
[4] Rep. Act No. 6657, §50. See also DAR Administrative Order No. 3, Series of 2003.
[5] 1987 Constitution, art. VI, Sec. 29(2); Philippine Constitution Association v. Enriquez, 235 SCRA 506 (1994).
[6] National Food Corporation v. Court of Appeals, G.R. No. 115121, 9 Feb53 SCRA 470.
[7] Philippine Constitution Association v. Enriquez, 235 SCRA 506 (1994).
[8] Rivera, Law of Public Administration, 177-78 (1956).
[9] Anak Mindanao Party-list Group v. Executive Secretary, G.R. No. 166052, August 29, 2007, 531 SCRA 583.
[10] See Banda v. Ermita, G.R. No. 166620, 20 April 2010.
[11] Dario v. Mison, 176 SCRA 84, 127 (1989).

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