G.R. No. 228503 . July 25, 2018.
HEIRS OF RAMON ARCE, SR., PETITIONERS, V. DEPARTMENT OF AGRARIAN REFORM, REPRESENTED BY SECRETARY VIRGILIO DELOS REYES, RESPONDENT.

FACTS

The petitioners, Heirs of Ramon Arce, Sr., were the registered owners of a 76.39-hectare parcel of land in Montalban, Rizal. Since the 1950s, they utilized the land for livestock raising, specifically for a dairy operation producing milk for their ice cream business. Their farming method was a “feedlot operation,” where animals were confined and fed with napier grass cultivated and cut from the subject lands. In 1998, due to a liver fluke infestation, they transferred their older, milking livestock to a separate facility in Novaliches, Quezon City, while younger cattle remained on the land. They continued to grow and harvest napier grass from the property to feed all their livestock.
In 2008, the Department of Agrarian Reform (DAR) issued a Notice of Coverage over the land under the Comprehensive Agrarian Reform Program (CARP). The petitioners sought exemption, arguing the land was devoted to livestock farming, which is excluded from CARP coverage. The Municipal and Provincial Agrarian Reform Officers both recommended granting the petition for exclusion, finding the land was directly and exclusively used for livestock feed production. However, the DAR Secretary denied the petition, ruling the land was not directly, actually, and exclusively used for livestock raising because the animals were not physically pastured thereon. The Court of Appeals affirmed the DAR Secretary’s decision.

ISSUE

Whether the subject land is exempt from CARP coverage as land directly, actually, and exclusively used for livestock raising.

RULING

Yes, the land is exempt. The Supreme Court reversed the CA and DAR rulings. The legal logic hinges on the interpretation of “devoted to” livestock raising under the Constitution and relevant jurisprudence. The constitutional exclusion of livestock farms from agrarian reform is clear. The Court, citing Luz Farms v. Secretary of DAR, established that lands devoted to livestock, poultry, and swine are excluded. The determination is based on the land’s primary use, not merely the physical location of the animals.
The Court found that the DAR and CA erred in imposing a rigid requirement of physical pasturing. The petitioners’ feedlot operation, where napier grass is cultivated on the land and then carried to feed confined livestock, constitutes a direct, actual, and exclusive use of the land for livestock raising. The land serves as the indispensable source of fodder, forming an integrated component of the livestock business. The temporary relocation of some animals for health reasons did not sever this integral connection or change the land’s primary agricultural purpose. The consistent use since the 1950s, long before CARP, and the findings of the field officers supported this conclusion. Therefore, the land is not an agricultural land subject to CARP but is excluded as land devoted to livestock farming.