The Supreme Court ruled that land owned by the Department of Education, Culture and Sports (DECS) and leased to a private agricultural corporation is not exempt from the Comprehensive Agrarian Reform Program (CARP), even if the lease income benefits educational purposes. The Court emphasized that to qualify for exemption, the land must be directly, actually, and exclusively used for educational purposes, not merely generate income for such activities, underscoring the stringent requirements for CARP exemptions.

From Sugarcane Fields to School Funds: Can Leased Land Claim Educational Exemption?

This case revolves around two parcels of land, Lot No. 2509 and Lot No. 817-D, totaling 189.2462 hectares, located in Negros Occidental. These lands were donated to the respondent, the Department of Education, Culture and Sports (DECS), by the late Esteban Jalandoni in 1921. DECS then leased the lands to Anglo Agricultural Corporation for agricultural purposes. In 1993, a group of farmworkers petitioned to have the land covered under the Compulsory Agrarian Reform Program (CARP). The Department of Agrarian Reform (DAR) approved the coverage, but DECS appealed, claiming that the lease income was used for educational purposes, thus exempting the land from CARP. The Court of Appeals sided with DECS, leading to this Supreme Court review.

The central legal question is whether land owned by an educational institution but leased for agricultural use falls under the exemptions provided by Republic Act No. 6657, the Comprehensive Agrarian Reform Law (CARL). The core of the dispute lies in interpreting Section 10 of R.A. No. 6657, which defines the lands exempt from CARP coverage. The resolution hinges on whether the actual use of the land, rather than the purpose of the income derived from it, determines its eligibility for exemption.

The Supreme Court emphasized the broad scope of CARP, noting that the general policy is to cover as much agricultural land as possible. Section 4 of R.A. No. 6657 explicitly states that CARP covers all public and private agricultural lands. This is further detailed by specifying that all alienable and disposable lands of the public domain devoted to or suitable for agriculture, as well as all private lands with similar characteristics, fall under CARP.

Defining ‘agricultural land,’ Section 3(c) of the same law describes it as land devoted to agricultural activity, excluding those classified as mineral, forest, residential, commercial, or industrial. The term “agriculture” itself is defined as the cultivation of soil, planting of crops, growing of fruit trees, raising of livestock, poultry, or fish, including harvesting and other related farm activities. In this context, the Court noted that the subject properties, originally private agricultural lands, continued to be used for sugarcane cultivation even after being donated to DECS and leased to Anglo Agricultural Corporation. No legislative or presidential act reclassified the lands, reinforcing their status as agricultural land suitable for CARP coverage.

DECS argued that its use of the lease income for educational purposes should qualify the land for exemption. However, the Court disagreed, pointing to Section 10 of R.A. No. 6657, which enumerates the types of lands exempt from CARP. This section clearly states that only lands “actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes” are exempt.

The Court applied the **plain meaning rule** (verba legis), emphasizing that the words of the law are clear and unambiguous. This rule dictates that when the words of a statute are clear, plain, and free from ambiguity, they must be given their literal meaning without attempted interpretation. Here is the specific provision at play:

Lands actually, directly and exclusively used and found to be necessary for national defense, school sites and campuses, including experimental farm stations operated by public or private schools for educational purposes, … , shall be exempt from the coverage of this Act.

The Court distinguished this case from Central Mindanao University v. Department of Agrarian Reform Adjudication Board, where land was exempted from CARP because it was reserved for the university’s use and was part of its research program. In the CMU case, the land was not alienable and disposable and was directly integrated into the university’s educational activities.

Conversely, in this case, the DECS land was leased to a private corporation for profit, with the income, rather than the land itself, being used for educational purposes. The Court highlighted that the lands were not actually and exclusively utilized as school sites or campuses. The following table summarizes the key distinctions between the two cases:

Feature	Central Mindanao University v. DARAB	Department of Agrarian Reform v. DECS
Land Status	Reserved for university use	Alienable and disposable agricultural land
Land Use	Directly used for research and educational programs	Leased for agricultural profit
Educational Benefit	Land itself contributes to education	Income from land contributes to education
CARP Exemption	Exempt	Not Exempt

Regarding the qualifications of the farmer beneficiaries, the Court upheld the DAR’s determination. The identification of potential beneficiaries under CARP is vested in the Secretary of Agrarian Reform, as stated in Section 15, R.A. No. 6657. The Barangay Agrarian Reform Committee (BARC) certified the farmers as potential CARP beneficiaries, and the DAR issued a Notice of Coverage. The courts should exercise caution in substituting their judgment unless there is a grave abuse of discretion by the administrative agency, which was not evident here.

In its decision, the Supreme Court emphasized that the CARP is designed to promote social justice for landless farmers and liberate them from oppressive tenancy. The objective is to redistribute land to the underprivileged, providing them with a viable livelihood and a decent life. Therefore, exemptions to CARP must be strictly construed to ensure that the program’s goals are not undermined.

FAQs

What was the key issue in this case?	The key issue was whether land owned by DECS and leased for agricultural purposes is exempt from CARP coverage because the income is used for educational purposes.
What is the Comprehensive Agrarian Reform Program (CARP)?	CARP is a program designed to redistribute agricultural land to landless farmers to promote social justice and rural development. It is governed by Republic Act No. 6657, also known as the Comprehensive Agrarian Reform Law (CARL).
Under what conditions can land be exempt from CARP?	Land can be exempt from CARP if it is actually, directly, and exclusively used for specific purposes such as national defense, school sites, or experimental farm stations operated by schools for educational purposes.
Why was the DECS land not exempted from CARP in this case?	The DECS land was not exempted because it was leased to a private corporation for agricultural purposes, and was not directly, actually, and exclusively used as a school site or for other educational activities.
What is the significance of Section 10 of R.A. No. 6657?	Section 10 of R.A. No. 6657 enumerates the types of lands that are exempted from the coverage of CARP, specifying the conditions and purposes for such exemptions.
What is the “plain meaning rule” (verba legis) and how was it applied in this case?	The “plain meaning rule” is a principle of statutory construction that states that when the words of a statute are clear and unambiguous, they should be given their literal meaning without further interpretation. In this case, the Court applied this rule to interpret the exemption requirements under Section 10 of R.A. No. 6657.
What was the Court’s ruling in Central Mindanao University v. DARAB, and how did it differ from this case?	In Central Mindanao University v. DARAB, the Court ruled that land reserved for the university’s use and directly integrated into its research program was exempt from CARP. This differed from the DECS case because the DECS land was leased for profit and not directly used for educational purposes.
Who determines the qualified beneficiaries under CARP?	The Secretary of Agrarian Reform, in coordination with the Barangay Agrarian Reform Committee (BARC), is responsible for identifying and registering qualified beneficiaries under CARP.
What is the role of the Barangay Agrarian Reform Committee (BARC) in CARP implementation?	The BARC assists the DAR in identifying and registering potential CARP beneficiaries and provides data on agricultural lessees, tenants, and farmworkers.

This case underscores the importance of adhering to the strict requirements for exemptions under the Comprehensive Agrarian Reform Law. It clarifies that the actual use of the land, not merely the purpose of the income derived from it, determines its eligibility for exemption. This ruling reinforces the CARP’s objective of redistributing land to landless farmers and promoting social justice in the agricultural sector.

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. DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS), G.R. No. 158228, March 23, 2004