Short answer. The farmers’ cooperative steps in. The rule provides that in case of default, the amortization due shall be paid by the farmers’ cooperative in which the defaulting tenant-farmer is a member, with the cooperative having a right of recourse against him — the missed payment is covered, but the tenant-farmer still owes it back.
What the law says
In case of default, the amortization due shall be paid by the farmers’ cooperative in which the defaulting tenant-farmer is a member, with the cooperative having a right of recourse against him
Labor Code, Article 9 — How Land Value Is Computed. Read the full provision →
How the amortization schedule works to begin with
The tenant-farmer pays for the land over time, not all at once: the total cost, including interest at the rate of six percent (6%) per annum, is paid in fifteen (15) years of fifteen (15) equal annual amortizations. That structure spreads the cost across a long, fixed schedule of equal yearly payments, which is the backdrop against which a missed payment, or default, actually has to be properly understood.
Who actually covers a missed payment
When a tenant-farmer actually defaults on an annual amortization, the obligation does not simply go unpaid or fall solely on him to resolve immediately. The rule directs that the amortization due shall be paid by the farmers’ cooperative the defaulting tenant-farmer actually belongs to. The cooperative effectively covers the missed payment on his behalf, keeping the overall fifteen-year amortization schedule intact and on track for everyone else relying on it.
The cooperative's payment does not erase the tenant-farmer's debt
The cooperative covering a default is not a permanent forgiveness of that debt. The same sentence gives the cooperative a right of recourse against him — meaning the cooperative can pursue the defaulting tenant-farmer to recover what it paid on his behalf. The obligation to eventually make good on the missed amortization ultimately stays with the tenant-farmer even after the cooperative has already stepped in and paid on his behalf. The cooperative's right of recourse binds the tenant-farmer personally, not the land itself, so the mechanics of how the cooperative actually recovers what it paid are separate from the land-transfer scheme.
The government's role behind the cooperative
Beyond the cooperative's role, the provision adds a further layer of security: the government shall guarantee such amortizations with shares of stock in government-owned and government-controlled corporations. That specific government guarantee sits behind the cooperative's own obligation, reinforcing the overall arrangement that keeps the entire land-transfer payment scheme functioning smoothly even when individual tenant-farmers happen to default from time to time on their own annual payments.