Crossroads (Toward Philippine economic and social progress)
Philippine Star, 19 February 2014


A central component of Philippine agricultural policy is tied up with the agrarian reform program. After many years of implementation, the program is nowhere near the objective that land reform in the country was set out to fulfill.

The comprehensive agrarian reform program (CARP) failed to concentrate on the job because it took on too much. Some of its policy design created barriers in the way of achieving its goals.

Moreover, the CARP added uncertainty in decision making on agricultural investments, which fuelled higher transactions costs. As a result, it did not achieve rising productivity and improved living standards to many poor people who are dependent on agriculture for their livelihood.

These are big statements.

CARP’s road to failure. My colleague at the UP School of Economics, Dr. Raul V. Fabella, wrote a thought-provoking assessment of land reform in the country that supports the big words above.

Withholding first my comments on his excellent contribution, I will go free rein and trace the essential history to provide proper backdrop to the land reform problem in the country.

Land reform is more political than economic agenda. All political agenda of reform have their economic impact. Oftentimes, such programs facilitate outcomes that are unwanted or better avoided.

As a program of the government, agrarian reform was designed to correct certain inequities rooted in an economic system based on land, to promote some form of social justice. All other government programs in pursuit of the land reform objective was to give impetus and support to the corrective measures designed to uphold social justice.

An accepted tenet of land reform is that farmers who own the land that they farm are much better motivated than tenant farmers. A problem within a democracy is that landowners were often those who got elected to political office. So, efforts at land reform could be blocked by those who controlled the legislation, the landowners.

Agrarian reform during early independence. The peasant unrest of the post-independence period was exemplified by the open Hukbalahap (communist) rebellion, later supplanted by the communist New People’s Army (NPA). The causes of this rebellion had been initially rooted in the tenancy problems in rice agriculture, and sometimes also in the other major crop, corn, although it would change in complexion into a wider communist insurgency.

Labor unrest in rice and corn lands was most common in Luzon and in some islands of the Visayas before independence and beyond. To distribute land from landowners to the tillers was the main demand of the peasant movements of the times. But if Congress were in the hands of landowners, agrarian reform had little chance of success.

Elected leaders of the nation came mostly from the landowning classes. No president of the new Philippine independent republic could advance the land reform agenda sufficiently forward given that Congress was controlled by large landowners.

Not even the popular Ramon Magsaysay could do it. Then, in 1973, Ferdinand Marcos achieved a breakthrough. After he abolished Congress as martial law dictator, he decreed the first meaningful land reform law that transferred large land holdings to the farmers, allowing only seven-hectare retention for the landowner.

With this decree, the die was cast for truly meaningful agrarian reform. The land transfer program of rice and corn lands had been set in motion, directly benefiting tenant farmers by making them owners of the plots that they farmed after a period of land transfer. The farmer could now look forward toward owning the land that he had been tilling over the years.

Broader and comprehensive. When Corazon Aquino succeeded to the presidency, she restored the political institutions of the pre-martial law period. Imbued with the euphoria of triumph over dictatorship, the land reform program that she sponsored widened the coverage of the reform to all large holdings of land suitable for agricultural purposes.

The agrarian reform program was embodied in the CARP law (RA 6658, 1987). When CARP expired after 20 years, a new enabling law was passed, an “extension with reform” or CARPER (RA 9700, 2008). CARPER is to expire in June 2014.

The CARP made the coverage of land reform comprehensive, practically covering all large holdings of private and public lands suitable for agriculture, regardless of tenurial arrangements. In other words, it covered all lands planted to any agricultural crops.

The agrarian reform program therefore went beyond the more limited focus on rice and corn lands and covered all possible agriculture based on large landholdings. The program explicitly included all lands that were cultivated by multinational companies that had arrangements with government owned lands.

CARP put on notice that all such agricultural lands could be programmed for distribution. All of a sudden, even plantation workers on some form of wage contracts became asset beneficiaries for land. These enterprises became part of land reform beneficiaries who were organized into cooperatives, with former workers now as cooperative members.

The mechanisms for land and asset transfers were not well-defined. CARP gave new opportunities for transfer mechanisms that followed the intent and philosophy of the land transfer. However, whatever was the method, each case of land transfer was one that taxed the abilities of the implementing agency, the Department of Agrarian Reform (DAR).

The CARP was ambitious. It generalized the problem of land transfer where, in some cases, there was little need to do so. With CARP, workers in ongoing plantation operations which operated on a wage basis or other tenurial arrangement found themselves to be beneficiaries of the land reform program.

In this way, plantations devoted to sugar, coconut, fruit trees, pineapples, bananas, coffee, rubber, palm trees, and so on – long in operation as viable business enterprises – were brought under the coverage of CARP.

While CARP broadened the basis of landownership in the country, in many respects it was also a setback. On the surface, this land reform program improved on the Marcos formula. CARP allowed retention of five hectares for the landowner and Marcos allowed seven hectares.

But looking more closely, this land reform legislation increased the land retention limits while appearing to reduce it. In fact, landowners with four children, for instance, would retain up to 17 hectares under this rule, since each child was entitled to a retention of three hectares.

Another important difference was in the matter of valuation. In the Marcos formula, the farmer-recipient was the ultimate gainer. The valuation formula of CARP was more favorable to landowners. Land valuation at transfer was raised because the basis for land values was increased!

(To be continued)