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An Inherited Problem for the President – Hacienda Luisita

Hda Luisita is used to be owned by the Cojuangcos – of the Corazon C. Aquino circle of family. It’s been subject of land reform under the Comprehensive Agrarian Reform Program or CARP.

Land reform was originally passed to eradicate feudalism in the country. It was aimed at emancipation of peasant-tenants from feudal bondage.  Peasants became land owners. Land reform today no longer limits to tenancy as they may also include any farmland, tenancy or not, over 5 hectares in area. The idea is to break up big farm units into small farm units, which is some politics’ idea of “democratization of wealth”.

Land Reform in Capitalist Farming

Hda Luisita is capitalist farming, corporate farming to be specific. And in capital farming, farmer actually refers to the owners of the means of production, in this case Hacienda Luisita Inc. [HLI] that owned and ran the land. And, yes, Sire/ma’am, small miserable farmers and super rich farmers are the same. They are all farmers. Welcome to the era called capitalism.

Farm-er [fa’armer] (plural farm-ers) noun

Somebody who farms: somebody who owns or operates a farm

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Employees under the landowners or farmers are actually not farmers but farm workers, also known as wage earners. Hacienda Luisita is a case where farm workers would like to own the land to be the farmers. One big farmer to become many small farmers.

Anyway, Land Reform in capitalism is a matter between the state and landowner in one hand, and between the state and would-be-farmers in the other hand. State and the landowners agree on price and mode of payment. [In principle, would-be-recipients are represented in an adjudication board] State then distributes the land to recipients  under terms agreed upon by state and recipients or beneficiaries.

When landowner conceded or agreed to land reform, and when landowner accepted payment from the state, then, state became the new owner of that land until ownership has been passed on to recipients of land reform. Outgoing landowner has no business with the recipients of land reform.

At least in principles. Because, in the case of Hda Luisita that is not the case. The hacienda happens to have a sugar mill in an estate that is around 6,000 hectares [hectare X 2.471 = acre]. Hda Luisita has since been exhausting all legal remedies not to have the land simply distributed to interested farmers. They have fought for a say how it should be done, which is the “stock distribution option” or SDO for would-be-beneficiaries. By stock distribution, beneficiaries must incorporate their farm lots with the sugar mill. Interested beneficiaries in the other hand see it as THEIR option.

For HLI, giving up the land appears to be no problem. In fact many landed families made money better selling their lands to government than by anything else. Surely the Cojuangcos were not short changed in the deal. Big income is in sugar trading and not in sugar production, anyway.

Since the time of President Cory C. Aquino up to 1997, or in the first 10 years of CARP, 4, 619,000 hectares of land have been distributed under the program, 2.7% of them within compulsory acquisition [CA] and 97.2% of them within voluntary offer to sell [VOS]. VOS is land reform from landowners’ initiative. This is the period after the collapse of the sugar industry, and when the future of sugarcane farming has always been bleak until this day.

Hda Luisita is VOS but with “stock distribution option” attached to it. Why else would an estate owned or controlled by the family of a President ex President be subjected to land reform if not volunteered? So we see why giving away the land is not the problem. Preserving the sugar mill is another thing.

The existence of the sugar mill built on the land may be threatened. While sugarcane is top grosser, farmers will spend less for production and will net-profit better if they, and most likely, plant rice or corn instead. And a sugar mill without the farmers to supply the canes is sure-dead mill. Bye to lucrative sugar trading as well.

For the owners of Central Asucarera de Tarlac, simply giving up the land was therefore not as easy as would-be-farmers want it their way, or as easy as some implications of the law. Viewed from certain quarter, there are efforts by owners of Hda Luisita to defeat or circumvent the CARP for reason we have already outlined. Until Hda Luisita, CA or VOS did not have provision called SDO.

Personally, I think VOS should be scrapped and CARP modified rolled back, to affect only tenancy and idle private lands, which was what original land reform had been all about. But since there is the present CARP law, then, law ought to be law, we like it or not.

So, we have a case here of interested farmers going against the interest of those very influential in government. Interested farmers are dealing with the family of no less the President, Benigno Cojuangco Aquino III, son of one time President Cory C. Aquino. The conflict revolves around the SDO. In his mother’s time as president of the country, activists, militant farmers and farm workers, marching on their way to Malacañang Palace to demand the land under the agrarian reform law, ended up killed in what is now known as the Mendiola massacre.

And the heir of Pres Corazon C. Aquino, clear enough, is trying to avoid the same thing from happening in his time. While Noynoy apparently is not turning his back on the family’s “stock transfer” position, his administration, so far, has been quite liberal in its approach with those demanding for the land of Hda Luisita. A referendum regarding the SDO has been devised.

Another issue there seems to be who decides on who should qualify as beneficiaries. Right you are, at the end of the day, it is the owner of the land who decides. In cases involving land reform, only government that now owns those lands has the right to do that. Only DAR issues certificate of award, land or stock.

A CA usually started with  a petition by people’s organization  for some land to be acquired by government and then redistributed to the petitioners, under the land reform program.

VOS, in the other hand, stemmed from landowner’s will to sell land to government. VOS are not as simple as they sound. Ordinarily,  landowners  did not know their way around. They found their way to people who know the way. Those agents could be lawyers, or influential individuals or groups, who are knowledgeable in the maze of the bureaucracies i.e. Department of Agrarian Reform, Land Bank of the Philippines, Bureau of Internal Revenue, Bureau of Lands, and more.  The fee was usually 20% of the total amount of the sale of land.

It is not usual way for DAR to take the burden of seeking or finding interested beneficiaries for VOS land. S.O.P. requires list of beneficiaries as one requirement for approval of VOS application. And VOS applicants and their agents should provide a tentative list of that or else  their application sleeps. That system has been formalized as voluntary land transfer, a term which is technically parallel operation land transfer [OLT] of the old land reform. Almost all VOS went that way.

Farm workers-turned-farmers as stockholders of Central Asucarera de Tarlac? Next thing to happen there will be a squabble between them and the original stockholders for control of the Corporation. Contest for control of a corporation is normal, natural, and universal of all corporations. But as we have seen just the mere thought of them is no longer acceptable to many of the would-be-farmers. First, they cannot agree with Luisita’s admin on many terms. Second, they seem do not or cannot trust the other side. The situation, which has already wasted a lot  of blood right in Luisita, hangs in there.

Lastly, HLI uses the “number of days worked by a farmer” as a basis for determining the number of stocks to be given to a farmer. Through this, HLI can unilaterally deny any farmer his entitlement to the stocks by the simple expediency of not giving him any working hours or days.

Land re-distribution in Tenancy land reform is easy. There are actual tenants with actual specific areas assigned them by landlords. State simply surveys them to draw parcels based on actuality.

How would you parcel out land to farm workers? They come and go. Some of them have been there for generations. Some of them are residents while some of them are seasonal migratory. Some of them have worked there for many years, while some of them just came yesterday. What about the women and the children who weeded in the fields? Sometimes, as in the case of bloody Hda. Luisita and bloody Hda Velez-Malaga in Negros, the farm workers cannot even agree among themselves. Who qualifies and how much should go to each can, indeed, be chaotic.

SDO by HLI?  That cannot be because HLI can only recommend to DAR, which has the authority to decide and to approve.

Actually, half the interested-farmers in Luisita have already accepted and tried SDO. They were not happy. What did they expect to earn in a hectare or a fraction of it from sugarcane production, really? Even five hectares in there is a waste of time under present circumstances. And that’s what I said selling land earns better! And we already saw 4 million hectares sold by their owners because they saw no good to them! There are better things than sugarcane farming.  First, there is the instability and volatility of  the  sugar market in the country  with a long  history quite pessimistic for the planters.  Second, is the nagging issue of slave wages that have always been blamed on the landlords, and to which  nothing seemed can be done about in the situation.

As for the land reform called CARP that is actually more of politics than sound economics? Well, it looks like the President can do nothing about it. Maybe Philippine Congress will do something for CARP or whatever people would like to name the program. And whatever that is, I don’t think the President will be comfortable with. Because, he is in a situation that damn if he does and damn if he does not.

The program had actually expired but was extended by congress to appease farmers and radicals. Or maybe that is only what we see. Fact is, CA is deemed terminated while extension applies to VOS. There were lots of VOS applications that are pending yet when the program matured. Department of Agrarian Reform [DAR] has received VOS applications more than it had handled.

Damn CARP! Or, maybe, we should say damn sugar trade in this country!

Give all the lands to the poor as they are what they want and as they are what politicians think is good. Then, give farmers a little better than rice and corn. Or, give them better reason than for them to leave their lands idle. The latter solves the problem of any sugar mill, the problem of Luisita included.

Give more incentives and protection to our producing sectors. The country which is blessed with land and climate suitable for agriculture should have been an agricultural power instead of having become dependent on world agriculture. Damn “Comprehensive Agrarian Reform” program. And damn sugar trading.

Related post here. Doing away with comprehensive agrarian  reform…

Updates: SC latest ruling regarding stock distribution option in HLI.

Land distribution ng Hacienda Luisita…

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