YPS

The statement attributed to Jess Arranza of the Federation of Philippine Industries in
the Manila Times last week disparaged the Sumilao farmers quest for their land rights and, at the same time, connoted that agrarian reform is responsible for the lack of agro-industrial progress in the rural areas. I won't comment on the legal issues relating to the Sumilao case since this has been tackled very thoroughly by a series of articles written by Fr. Joaquin Bernas of the Ateneo de Manila Law School.

What I will comment on briefly is that Mr. Arranza's views on agrarian reform, however, finds contradictory evidence in many studies that have been conducted in the past few years. For example, Dr. Celia Reyes of the Philippine Institute for Development Studies (PIDS) in 2002 showed that farm incomes are higher among the recipients of agrarian reform; poverty incidence among agrarian reform beneficiaries (ARBs) is lower than that of non-agrarian reform beneficiaries by at least 11 percentage points. And this effect is greater among those who have been ARBs for a lengthier period of time. You may download a copy of the summary of the paper in the PIDS website.

This is similar to what Professor Winnie Monsod also recently stated in her column summarizing the study undertaken by Dr. Arsenio Balisacan of the University of the Philippines and Southeast Asian Research Center for Agriculture, who found that per capita expenditure, per capita income, and per capita net farm incomes of farmers owning lands are significantly higher than their counterparts who do not own land. See Professor Monsod's article in Philippine Daily Inquirer.

Agrarian reform also improves rural productivity and investments. Dr. Prudencio U. Gordoncillo of the University of the Philippines-Los Baños reported that ARBs had accumulated more assets and investments in their farms compared to non-ARBs, while Dr. Cielito Habito of the Ateneo de Manila University undertook a study that indicated a significant increase in aggregate agricultural land productivity per hectare after the implementation of CARP due to intensive land use and asset form. See the report summaries in the Visayan Daily Star website .

I am publishing the statement of several faculty members below in support of the cause of the Sumilao who are currently camping in front of the Department of Agrarian Reform in order to fight for their lands. What the statement explains is under-investment in rural areas is not caused by the agrarian reform per se, but rather the long drawn-out implementation of the program (which in turn is caused by evasion, titling problems, etc.) (See, for example, Dr. Roehlano Briones' paper on a similar theme.)

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Statement in Support of Accelerated Implementation of Agrarian Reform in the light of the Sumilao Farmers issue

Nowhere is the importance of the need for various groups to come together to advocate for growth and development in the Philippines more evident than in the case of land reform. It comes to light as Higaonon farmers have encamped in Metro Manila, after marching for more than two months from Sumilao, Bukidnon. After being declared rightful beneficiaries of the 144-hectare Quisumbing estate in 1995, but later deprived of their lands after a court decision subjecting their lands to agro-industrial conversion, theirs is the typical story of agrarian reform in the country where evasion by landowners continues to be rampant. The Sumilao Farmers certainly will have doubts trusting what a Federation of Philippine Industries (FPI) official recently said, "I always believe that we are a nation governed by laws and not by men." The farmers have been pushing the government to ensure that the laws governing land reform should be also applied to them.

Next year, it will be twenty years since the Comprehensive Agrarian Reform Program (CARP) was enacted into law by President Corazon Aquino as Republic Act No. 6657 in 1988. Adding the years after various land reform programs were undertaken by pre-martial law administrations, the Philippines for now may be the record holder for the longest land reform program in East Asia, if not in Asia.

In economic development, it is widely recognized that effective land reform is a sine qua non of agricultural change and rapid income growth. Countries that have undertaken effective land reform not only have had more robust agricultural growth and productivity, they also have enjoyed a better distribution of income and lower rates of poverty. There is ample evidence that land reform was critical in bringing about agricultural development, poverty reduction, and even industrial growth in Korea and Taipei, China. The sweeping land reforms enacted by Korea in 1948-1950 and by The Republic of China in 1949-1953 redistributed between one quarter and one half of all available land. Korea, which had one of the most unequal distributions of land in the world in 1945 (with 3 percent of the rural population owning 60 percent of the land and a vast 80 percent of the rural population being landless tenants or semi-tenants) transformed itself into a country with one of the world's most favorable land distributions. This reversal was entirely the result of sweeping land reforms, first by the American military government in 1948 and followed by the Korean government in 1950. Even Japan and China are examples of societies that implemented land reform with political will and in a short period of time.

But why is it that in the Philippines agrarian reform, in the particular case now of Sumilao Farmers, now being interpreted as bad for investments? As the FPI official stated (Philippine Star, December 11) developments being undertaken by a large conglomerate should be allowed to push through with its project in the disputed property, otherwise, other potential investors would have second thoughts about investing in the countryside. However we disagree. We believe that it is not CARP itself, but the long drawn out period of CARP implementation, that have caused uncertainties in public and private investment in rural areas.

In fact, there have been many studies that have shown that the hastening CARP implementation improves rural investments. One of the studies that we conducted showed that landowners who did not comply with CARP invested an average of P11,066 per hectare less than those who had already complied and were just left with the maximum landholding allowed by the law. And a survey of CARP beneficiaries by UP Los Banos undertaken in 2000 found that they invested more in their farms than farmer non-beneficiaries by an average of P15,572 more per hectare. Certainly that is not a small amount when multiplied by total CARP lands. The effect to growth and development will be much greater if CARP was implemented more decisively.

Who is responsible to this situation of under-investment in rural farm areas? Certainly not the farmers as what the statements of the FPI official implied. Farmers are more than willing to invest their own money. There is a great deal of evidence from around the world that owner-cultivators have greater incentives than tenants to increase their work effort, to make longer-term productivity-enhancing investments in their land, and to adopt new and more appropriate agricultural technologies, because they know that the resulting economic gains are largely theirs. When farm workers own their land, there is less need for supervision of labor. Thus, the shift of a large number of tenants to owner-cultivators can have a significant positive impact on agricultural productivity, and rising productivity is necessary before resources, such as capital and labor (and even land), can be transferred successfully out of agriculture to the rest of the economy.

It is clear who are responsible for dragging this long drawn out battle to implement land reform. We fully support the Sumilao farmers' call for the cancellation of the conversion order and lands be awarded to them as soon as possible. We believe that the agrarian reform program of land to the tillers must be implemented quickly to produce the full benefits of growth and development in this country.

Fernando Aldaba, Ph. D., Cielito Habito, Ph. D. Edsel Beja, Jr, Ph. D., Aleta Domdom, Ph. D., Luis Dumlao, Ph. D., Leonardo Lanzona, Ph. D., Ellen H. Palanca, Ph. D., Rosalina Tan, Ph. D., Cristina Bautista, Neil Adrian Cabiles, Diana Rose del Rosario, Jamil Paolo Francisco, Lea Neri, Marissa Paderon, Harry Pasimio, Marilou Perez, Joselito Sescon, Patrick Gerard Simon-King, Philip Tuano, Economics Department; Leland de la Cruz, Development Studies Program, Ateneo de Manila University
December 17, 2007.