Exemption from CARP Coverage: Proof of Exclusive Livestock Use Required

The Comprehensive Agrarian Reform Program (CARP) covers all agricultural lands, but lands devoted to livestock, poultry, and swine raising are classified as industrial and may be exempt. In Department of Agrarian Reform v. Basilan Agricultural Trading Corporation (G.R. No. 170018, September 23, 2013), the Supreme Court clarified the strict evidentiary standard for claiming this exemption. The ruling underscores that landowners must prove exclusive livestock use as of the effectivity of Republic Act No. 6657 on June 15, 1988.

The Facts of the Case

Basilan Agricultural Trading Corporation (BATCO) owned over 206 hectares of agricultural land in Lamitan, Basilan. In 1989, BATCO voluntarily offered the entire property for sale to the government under Section 19 of RA 6657. In 1992, the Department of Agrarian Reform (DAR) placed a 153-hectare portion under compulsory acquisition.

BATCO rejected the DAR's land valuation in 1997. The DAR deposited compensation with the Land Bank and issued titles in favor of the Republic, then distributed Certificates of Land Ownership to a farmers' cooperative.

Only in 1998 did BATCO file a petition for exemption, claiming the land was devoted to cattle and livestock production since 1987. BATCO cited the ruling in Luz Farms v. DAR Secretary and DAR Administrative Order No. 09-93.

The Issue

The central question was whether the Court of Appeals gravely abused its discretion in exempting the subject lands from CARP coverage despite BATCO's admission that only a portion was devoted to livestock raising, and considering its earlier voluntary offer to sell the property.

The Supreme Court's Ruling

The Supreme Court ruled in favor of the DAR, reversing the Court of Appeals. The Court held that the determination of whether land qualifies for exemption must first be threshed out before the DAR Secretary, who has technical expertise in these matters. Courts cannot simply brush aside the DAR's factual findings if supported by substantial evidence.

Exclusive use requirement. To be entitled to exemption, the land must be exclusively devoted to livestock, swine, or poultry raising as of June 15, 1988, the effectivity of RA 6657. This requirement prevents fraudulent declarations and protects the rights of agrarian beneficiaries, consistent with Section 73(c) of RA 6657, which prohibits conversion of agricultural land to avoid coverage.

BATCO's inconsistent claims. The Court found no substantial evidence that the entirety of the lands was exclusively devoted to livestock production. BATCO initially claimed almost all 206 hectares were devoted to cattle raising, but later admitted only about 100 hectares were actually used for livestock. The Court also noted BATCO's own landowner's reply declared the primary land use as coconut, coffee, rubber, and black pepper production—not livestock.

Belated evidence. The DAR Secretary observed that none of the 156 certificates of livestock ownership predated the effectivity of RA 6657. More than half of the cattle was registered only months before the exemption petition was filed. The municipal agriculturist certified only 120 heads of cattle, short of the minimum requirement under DAR AO 09-93.

No due process violation. The Court rejected BATCO's claim of denial of due process. The lands had been under CARP coverage since 1992, long before the exemption petition was filed in 1998. BATCO's actions—including its voluntary offer to sell, counter-offer of valuation, and identification of beneficiaries—all affirmed the coverage.

Practical Takeaways

• Proof must be contemporaneous. Landowners claiming exemption from CARP coverage must present evidence that the land was exclusively used for livestock, poultry, or swine raising as of June 15, 1988. Evidence of use after this date is insufficient.
• Exclusive use is the standard. Partial use for livestock does not qualify. The land must be exclusively devoted to the qualifying activity, not merely suitable for it or used alongside other agricultural crops.
• File exemption claims promptly. Waiting years after coverage begins—especially after voluntarily offering land for sale—weakens an exemption claim and may be treated as an afterthought.
• The DAR Secretary's findings carry weight. Courts generally respect the DAR Secretary's factual determinations on land classification, given the agency's technical expertise.
• Voluntary offers may bar later claims. Offering land under the voluntary offer to sell scheme is an admission that the property is subject to CARP coverage.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.