The Supreme Court affirmed that lands devoted to livestock, swine, and poultry raising are industrial, not agricultural, and therefore, not subject to agrarian reform. The decision invalidates DAR Administrative Order (A.O.) No. 9, series of 1993, which attempted to regulate livestock farms by setting retention limits. This protects landowners who have dedicated their property to livestock farming from being forced to redistribute their land under the Comprehensive Agrarian Reform Law (CARL), as such activities are deemed industrial rather than agricultural. This effectively reinforces the constitutional intent to exclude livestock farms from agrarian reform coverage, securing property rights in the livestock industry.

Pasture vs. Progress: Can Agrarian Reform Graze on Livestock Farms?

The case of Department of Agrarian Reform vs. Delia T. Sutton, Ella T. Sutton-Soliman, and Harry T. Sutton revolves around a disputed parcel of land in Masbate, primarily used for cow and calf breeding. The respondents, the Suttons, voluntarily offered to sell their land to the Department of Agrarian Reform (DAR) under the existing agrarian reform program. However, with the enactment of Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian Reform Law (CARL) of 1988, which initially included livestock farms within its coverage, and the subsequent Luz Farms ruling, the Suttons sought to withdraw their offer, arguing that their cattle-raising activities should exempt their land from agrarian reform.

The crux of the matter lies in the validity of DAR Administrative Order No. 9, series of 1993 (A.O. No. 9), which prescribed retention limits for lands used for livestock raising. DAR argued that the A.O. was necessary to prevent landowners from evading agrarian reform by converting agricultural lands to livestock farms. The Suttons contended that A.O. No. 9 contravened the 1987 Constitutional Commission’s intent to exclude livestock farms from land reform, a position supported by the Supreme Court’s ruling in Luz Farms v. Secretary of DAR. The central legal question, therefore, is whether DAR exceeded its authority by issuing A.O. No. 9, thereby contradicting the Constitution and established jurisprudence.

The Supreme Court anchored its decision on the principle that administrative agencies, while possessing rule-making authority, cannot overstep constitutional bounds. **Administrative rules and regulations must be authorized by law and must not contravene the Constitution.** The court emphasized that DAR’s attempt to regulate livestock farms through A.O. No. 9 was an overreach of its delegated power.

To be valid, administrative rules and regulations must be issued by authority of a law and must not contravene the provisions of the Constitution. The rule-making power of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution.

The Court highlighted the intent of the 1987 Constitutional Commission to exclude lands exclusively devoted to livestock, swine, and poultry-raising from agrarian reform. Citing the landmark case of Luz Farms, the Court reiterated that **livestock, swine, and poultry-raising are industrial activities, not agricultural ones**, thus falling outside the scope of agrarian reform. This distinction is critical because it acknowledges the significant industrial investment involved in livestock operations, distinguishing them from traditional crop or tree farming.

Further solidifying this stance, the Court referred to the case of Natalia Realty, Inc. v. DAR, where it was held that industrial, commercial, and residential lands are not covered by CARL. This precedent reinforced the principle that the term “agricultural land” does not include lands classified for non-agricultural purposes. The Suttons’ case was analogous because their land, dedicated to cattle-raising, was effectively classified as industrial and thus exempt from agrarian reform.

The Supreme Court also addressed DAR’s concern that landowners might convert agricultural lands to livestock farms to evade agrarian reform. The Court found this argument unconvincing, as the Suttons had been engaged in cattle-breeding since 1948, long before the enactment of CARL. **The law prohibits the conversion of agricultural lands to non-agricultural purposes after the effectivity of CARL**, and the Suttons had not altered their business interests.

The Court also noted that after the passage of the 1988 CARL, Congress enacted R.A. No. 7881, which amended certain provisions of the CARL. This new law changed the definition of “agricultural activity” and “commercial farming” by excluding lands devoted to commercial livestock, poultry, and swine-raising. This legislative modification aligned the agrarian laws with the Constitutional Commission’s intent to exclude livestock farms from agrarian reform.

Ultimately, the Supreme Court held that A.O. No. 9 was unconstitutional because it enlarged the coverage of agrarian reform beyond the scope intended by the 1987 Constitution. This decision safeguards the property rights of those engaged in livestock, swine, and poultry-raising by confirming that their lands are not subject to redistribution under agrarian reform laws. By reinforcing the constitutional limitations on agrarian reform, this ruling provides clarity and protection for businesses in the livestock sector, allowing them to operate without the threat of land redistribution.

FAQs

What was the key issue in this case?	The central issue was whether DAR Administrative Order No. 9, which prescribed retention limits for lands used for livestock raising, was constitutional, given the constitutional intent to exclude such lands from agrarian reform.
What is DAR A.O. No. 9?	DAR A.O. No. 9, series of 1993, is an administrative order issued by the Department of Agrarian Reform that provided retention limits for lands used for the raising of livestock, poultry, and swine. It aimed to regulate these farms under the Comprehensive Agrarian Reform Law (CARL).
What did the Supreme Court rule about DAR A.O. No. 9?	The Supreme Court declared DAR A.O. No. 9 unconstitutional because it exceeded the scope of agrarian reform intended by the 1987 Constitution by including livestock farms, which are considered industrial, not agricultural, activities.
What was the Luz Farms ruling?	The Luz Farms ruling is a Supreme Court decision that stated that livestock, swine, and poultry-raising are industrial activities and do not fall within the definition of “agriculture” or “agricultural activity,” thus excluding such lands from agrarian reform.
Why did the Suttons want to withdraw their voluntary offer to sell?	The Suttons wanted to withdraw their voluntary offer to sell their land because they argued that their land was devoted exclusively to cattle-raising and should, therefore, be exempt from the coverage of the Comprehensive Agrarian Reform Law (CARL).
What is the significance of R.A. No. 7881 in this case?	R.A. No. 7881 amended the CARL by changing the definition of “agricultural activity” and “commercial farming” to exclude lands devoted to commercial livestock, poultry, and swine-raising, aligning the agrarian laws with the constitutional intent to exclude livestock farms.
What is the practical effect of this ruling for landowners?	The practical effect of this ruling is that landowners who have dedicated their property to livestock, swine, and poultry-raising are protected from having their lands redistributed under agrarian reform laws, ensuring the security of their investments and operations.
How does this case relate to the Natalia Realty case?	The Natalia Realty case established that industrial, commercial, and residential lands are not covered by the CARL, reinforcing the principle that “agricultural land” does not include lands classified for non-agricultural purposes, thus supporting the exclusion of livestock farms.
What was DAR’s argument for issuing A.O. No. 9?	DAR argued that A.O. No. 9 was necessary to prevent landowners from evading agrarian reform by converting agricultural lands to livestock farms, ensuring that the agrarian reform program’s objectives were not circumvented.

In conclusion, the Supreme Court’s decision reinforces the constitutional boundaries of agrarian reform, clarifying that lands devoted to livestock and poultry-raising are beyond its reach. This ruling offers critical protection to landowners engaged in these industries, ensuring that their property rights are upheld and their operations are not disrupted by land redistribution efforts. The Court reaffirmed its commitment to safeguarding constitutional principles and preventing administrative overreach.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: DEPARTMENT OF AGRARIAN REFORM vs. DELIA T. SUTTON, G.R. NO. 162070, October 19, 2005