CARP Exemption for Livestock Farms: Proof Must Be Exclusive and Timely

The Supreme Court's 2013 ruling in Department of Agrarian Reform v. Basilan Agricultural Trading Corporation (G.R. No. 170018) clarifies a critical point for landowners seeking to exempt their properties from the Comprehensive Agrarian Reform Program (CARP): the burden of proving exclusive use for livestock, poultry, or swine raising as of June 15, 1988 rests squarely on the landowner, and courts must respect the DAR Secretary's technical findings.

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 Republic Act No. 6657 (the Comprehensive Agrarian Reform Law). In 1992, the DAR placed a 153.88-hectare portion under compulsory acquisition.

BATCO rejected the DAR's valuation of about P7.5 million and, in 1998, filed a petition for exemption, claiming the land was devoted to cattle and livestock production since 1987. BATCO cited the Luz Farms ruling and DAR Administrative Order No. 09-93, which governed exclusions for livestock, poultry, and swine raising.

The DAR's Findings

The DAR Regional Director denied the exemption after an ocular inspection showed the land was not "exclusively, directly and actually used" for livestock raising as of June 15, 1988. The DAR Secretary affirmed, noting that:

• None of BATCO's certificates of livestock ownership predated the effectivity of RA 6657;
• More than half of the cattle (80 of 156 heads) was brought to the property only in March and April 1998, barely months before the exemption petition was filed;
• The municipal agriculturist certified only 120 heads of cattle, short of the required one head per hectare;
• BATCO presented no evidence of hogs, goats, or compliance with infrastructure requirements.

The Court of Appeals Reversal

The Court of Appeals reversed the DAR Secretary and ordered the cancellation of titles issued to the farmer cooperative. The CA credited BATCO's evidence—certifications, photographs, and affidavits from former municipal mayors—and ruled that the cancellation of titles before full payment violated due process.

The Supreme Court's Ruling

The Supreme Court reinstated the DAR Secretary's order, holding that the CA gravely abused its discretion. The Court emphasized several key points:

Exclusive use is required. To qualify for exemption, a landowner must prove the land was exclusively devoted to livestock, swine, or poultry raising as of June 15, 1988. BATCO itself admitted in its supplemental motion that only about 100 hectares—not the entire property—was devoted to livestock.

The DAR Secretary's findings deserve respect. The DAR has technical expertise in agrarian matters, and its factual findings, when supported by substantial evidence, should not be disturbed without justifiable reason.

BATCO's own declarations contradicted its claim. In its landowner's reply dated May 6, 1997, BATCO described the land as "cocoland" and "coco/coffee"—not as pasture. The Court called the exemption claim "a mere afterthought."

The belated evidence was unpersuasive. The certificates of livestock ownership submitted late were in BATCO's name, not the previous owner's, casting doubt on their veracity. The affidavits of former mayors described the land as "principally devoted to coconut production," which undermined, rather than supported, the exemption claim.

No denial of due process. BATCO raised the due process claim only belatedly before the CA. Moreover, the DAR had deposited compensation in cash and bonds after BATCO rejected the valuation, satisfying the requirement of just compensation.

Practical Takeaways

• Proof must be contemporaneous. To claim a CARP exemption for livestock, poultry, or swine raising, a landowner must present evidence that the land was exclusively used for such purposes as of June 15, 1988—the effectivity date of RA 6657. Certificates, permits, and records dated after this period will not suffice.
• Own declarations matter. A landowner's own submissions to the DAR—such as land use declarations in valuation replies—can be used against a later claim of exemption. Inconsistent positions weaken credibility.
• The DAR Secretary's findings carry weight. Courts generally defer to the DAR Secretary's factual determinations in exemption cases, given the agency's technical expertise. Overriding these findings requires a clear showing of grave abuse of discretion.
• Exemption claims should be raised promptly. Waiting years after coverage, and only after valuation disputes arise, invites skepticism and may be treated as an afterthought.
• Voluntary offers can be binding. Offering land under the voluntary offer to sell (VOS) scheme is an acknowledgment that the property is subject to CARP coverage, making a later exemption claim more difficult to sustain.

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