Where agrarian reform succeeded

It should hopefully be clear to BBM and our policymakers that unless they tackle agrarian reform first, nothing they are thinking of doing will make our agricultural sector more productive.

Technology and modernization will not help unless land fragmentation is addressed. With the average farm size of less than a hectare, nothing much can be expected specially for rice, sugar and coconut.

Curiously, agrarian reform worked in Taiwan, Japan and South Korea but not here. Even if it was introduced at about the same time, only ours failed.

Economist Toti Chikiamco reminded me that national scientist Dr. Raul Fabella wrote a paper on why land reform in Taiwan was successful and I wrote a column on it back in 2014. Here is the link: https://www.philstar.com/business/2014/02/17/1291216/carp-redistributing-poverty

Dr. Fabella observed that “As a program for land asset equity, it shall have accomplished 99 percent of its target, whopper of a success for a government program. As a program to advance the economic welfare of farmers, it has accomplished the opposite of its stated goals.”

Dr. Fabella found productivity has fallen drastically in coconut and sugar and poverty incidence among agrarian reform beneficiaries in agrarian reform communities stood at 54 percent in 2011 higher than for farmers in general.

Ironically, Dr. Fabella said, “CARP and CARPER have created a new class of people: the landed poor.”

Where did we go wrong? For land reform to succeed, Dr. Fabella observed, some very stringent governance and design requirements are required.

“First, those early post-war land reform episodes were over and done in no more than five years. They succeeded because they knew when and where to stop.

“Japan’s, Taiwan’s and South Korea’s land reform largely stopped at rice lands! By contrast CARP has lasted 25 years and took on all crops. Counting the years from the original rice and corn land reform in 1964, we already had half a century of land reform.”

Toti observed that by doing their land reform program quickly, Japan and Taiwan didn’t create uncertainty in property rights to deter investments in agriculture as we experienced.

Dr. Fermin Adriano, a former DA undersecretary and UP Los Baños professor confirmed Toti’s point. He said the “shock” element in the implementation of Agrarian Reform was an important factor.

“Our protracted implementation over decades gave the landlord class time to formulate evasive schemes.”

There are other important factors, Dr. Adriano identified:

“Taiwan under Japanese colonial rule had good land records. Not so in the Philippines. As late as the 1980s, more than half of Mindanao’s land was untitled.

“The Philippines had a series of land reform laws starting from Quezon governing share tenancy, then there were also laws passed during Magsaysay (Huk rebellion then), Macapagal (1963), Marcos (PD 27) and culminating in Cory’s time (CARL). That is a span of 60 years which enabled landlord-controlled Congress and other government instrumentalities to find and invent loopholes in various AR laws.”

There is political will and national leadership commitment in Taiwan. Land reform was also backed by strong US support. But not in the Philippines.

“The US had an interest in dismantling landlords in Japan (the elite constituted the force behind Japanese imperialism) and Taiwan (again landlords constituted the ruling elite there) who were viewed as enemies of the US.

“That is not the case in the Philippines, where the hacienderos (particularly in the sugar industry) were closely tied to US interests,” Dr. Adriano said.

In the Philippines, reforms were half-hearted. Congress was dominated by landowners who blocked meaningful change, and leaders often compromised – e.g. Hacienda Luisita during Cory Aquino’s presidency.

The Sino-American Joint Commission on Rural Reconstruction (JCRR), established in 1948 under the US China Aid Act, delivered coherent support, robust funding and strong execution, making Taiwan’s agrarian reform effective and swift.

In contrast, CARP in the Philippines was hollowed out by legal, financial and structural loopholes. Landlords used the legal system to stall and reverse CARP. There were schemes to frustrate the original intention of agrarian reform.

The voluntary land transfer or VLT diverted land transfers into arrangements favoring landlords, often using dummy beneficiaries.

The stock distribution option or SDO notably in Hacienda Luisita, offered stock shares instead of land. That’s clearly evading land redistribution. Farmers have no management say in the corporation.

Our program had been underfunded. The landlord-dominated Congress limited the budget to delay implementation. Yet, even when DAR received a P30 billion per year budget, its bureaucracy used much less, undercutting progress.

The lack of technical assistance to farmers, credit access and secure titles encouraged distress sales, pawning of land rights and even reconsolidation by landlords.

Landowners converted agricultural lands to non-farming uses (residential, commercial) for exemptions, taking advantage of reclassification loopholes.

Dr. Adriano said that “AR implementation should have ended in 1998 as CARL was passed in 1988.”

He said that the prolonged implementation resulted in the following negative effects:

“Incidences of resistance and evasion would rise; loss of collateral value of agricultural land because of uncertainty over the final land ownership so that banks would not accept AR certificates as collateral;

“Continuing fragmentation of land to miniscule sizes as original owners passed it on to their kids;

“Growing incidences of graft and corruption in land transactions because of the highly complex way of owning and converting agricultural land for other uses.”

What was sold to the Filipino people as a social justice program simply didn’t live up to the promise. And it messed up the agricultural sector so badly that we are now importing a lot of the food we need.

If BBM wants to fix agriculture, the first step is to merge DA and DAR for better coordination. Unless BBM addresses the reasons why agrarian reform failed, we will struggle to feed our people.

Unfortunately, BBM isn’t daring enough for anything more than business as usual. And he has less than three years left.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco