Maintaining Livestock Exemption: Continuous Land Use is Key

TLDR: This case clarifies that land exempt from agrarian reform due to livestock farming must maintain that specific land use. A shift away from livestock operations can lead to the land being reclassified and subject to agrarian reform, emphasizing the importance of consistent land use for retaining exemptions.

G.R. No. 182332, February 23, 2011

Introduction

Imagine a thriving cattle farm, passed down through generations, suddenly facing the threat of agrarian reform. This was the reality for Milestone Farms, Inc., a company that sought to exempt its land from the Comprehensive Agrarian Reform Program (CARP) due to its use for livestock farming. The case highlights the complexities of land use exemptions and the importance of maintaining the specific activity that qualifies the land for such exemptions.

Milestone Farms, Inc. applied for exemption from CARP, arguing that its land was primarily used for livestock, poultry, and swine raising. The legal question at the heart of this case was whether the land, initially exempted based on its use for livestock farming, could be subjected to CARP coverage due to a change in land use. The Supreme Court ultimately ruled against Milestone Farms, emphasizing that continuous use for livestock farming is essential to maintain the exemption.

Legal Context: CARP, Luz Farms, and Land Use

The Comprehensive Agrarian Reform Program (CARP), established under Republic Act No. 6657, aimed to redistribute agricultural land to landless farmers. However, the law also recognized certain exemptions, particularly for land used for specific purposes.

A pivotal case in defining these exemptions is Luz Farms v. Secretary of the Department of Agrarian Reform, which excluded agricultural lands devoted to livestock, poultry, and/or swine raising from CARP coverage. The Supreme Court clarified that livestock, swine, and poultry-raising are industrial activities, not agricultural, and therefore not subject to agrarian reform.

Republic Act No. 7881 further amended R.A. No. 6657, solidifying the exclusion of private agricultural lands devoted to livestock, poultry, and swine raising from CARP. It is important to note that this exclusion is based on the specific and continuous use of the land for these purposes.

Key Provisions:

• Republic Act No. 6657 (Comprehensive Agrarian Reform Law): The foundation of agrarian reform in the Philippines, aiming to distribute agricultural land to landless farmers.
• Republic Act No. 7881: An amendment to R.A. No. 6657, specifically excluding private agricultural lands devoted to livestock, poultry, and swine raising from CARP coverage.
• Luz Farms v. Secretary of the Department of Agrarian Reform: A landmark case that defined livestock farming as an industrial activity, thus exempting it from agrarian reform.

Case Breakdown: The Journey of Milestone Farms

The Milestone Farms case unfolded over several years, involving multiple administrative and judicial levels. Here’s a breakdown of the key events:

1. Initial Exemption: In 1994, the DAR Regional Director initially exempted Milestone Farms’ 316.0422-hectare property from CARP, based on the Luz Farms ruling.
2. Reconsideration: The Southern Pinugay Farmers Multi-Purpose Cooperative, Inc. challenged the exemption, leading to a review by the DAR Secretary.
3. DAR Secretary’s Ruling: In 1997, the DAR Secretary partially revoked the exemption, covering 75.0646 hectares under CARP, arguing that not all the land was actively used for livestock farming as of June 15, 1988.
4. Office of the President (OP) Decision: Initially, the OP reinstated the full exemption in 2000, but later reversed its decision in 2002, siding with the DAR Secretary’s partial revocation.
5. Court of Appeals (CA) Rulings: The CA initially reinstated the full exemption in 2005, but later amended its decision in 2006, lifting the exemption of 162.7373 hectares and declaring it covered by CARP.
6. Supreme Court Decision: The Supreme Court affirmed the CA’s amended decision, emphasizing that the land was no longer primarily used for livestock farming.

The Court highlighted the significance of continuous land use, stating:

“Petitioner’s admission that, since 2001, it leased another ranch for its own livestock is fatal to its cause.”

The Court also noted the importance of evidence showing current land use, stating:

“The acquisition of such cattle after the lifting of the exemption clearly reveals that petitioner-appellant was no longer operating a livestock farm, and suggests an effort to create a semblance of livestock-raising for the purpose of its Motion for Reconsideration.”

Practical Implications: Maintaining Exemptions and Land Use

This case serves as a crucial reminder for landowners seeking exemptions from agrarian reform based on livestock farming. It underscores the necessity of maintaining continuous and active use of the land for the specific purpose that justifies the exemption.

Businesses and property owners should ensure that their land use aligns with the legal requirements for exemption and maintain thorough records to demonstrate continuous compliance. Changes in land use, even if seemingly minor, can jeopardize the exemption and subject the land to CARP coverage.

Key Lessons

• Continuous Use: Land must be continuously and actively used for livestock, poultry, or swine raising to maintain exemption from CARP.
• Documentation: Maintain detailed records of livestock operations, including the number of animals, infrastructure, and land use.
• Compliance: Regularly review and ensure compliance with DAR regulations and guidelines.
• Transparency: Disclose any changes in land use to the DAR promptly.

Frequently Asked Questions

Q: What is the Comprehensive Agrarian Reform Program (CARP)?

A: CARP is a government initiative to redistribute agricultural land to landless farmers, promoting social justice and rural development.

Q: What type of lands are exempted from CARP?

A: Under certain conditions, lands used for livestock, poultry, and swine raising, as well as those with industrial or residential classifications, may be exempted.

Q: What did the Supreme Court decide in Luz Farms v. Secretary of the Department of Agrarian Reform?

A: The Court ruled that livestock, poultry, and swine-raising are industrial activities, not agricultural, and therefore not subject to agrarian reform.

Q: What happens if land exempted for livestock farming is no longer used for that purpose?

A: The exemption may be revoked, and the land may be subjected to CARP coverage.

Q: What evidence is needed to prove continuous use for livestock farming?

A: Evidence may include records of livestock population, infrastructure, land use, and compliance with DAR regulations.

Q: Does shifting to another ranch invalidate my CARP Exemption?

A: Yes. The court found that Milestone Farm’s leasing of another ranch for it’s livestock was fatal to their cause, suggesting they were no longer operating a livestock farm on the property in question.

ASG Law specializes in agrarian reform and land use issues. Contact us or email hello@asglawpartners.com to schedule a consultation.