Jan 14, 2012
Subverting Reform by Raising Wrong Development Policy Choices
by Rene E. Ofreneo, Ph.D.
Dangerous anti-reform legislative measures
Some Congressional legislative measures meant to weaken and whittle down the Comprehensive Agrarian Reform Program (CARP) are being justified in the name of food security and agricultural productivity. The authors of these measures are doing the nation a great disservice by articulating poor or wrong development policy choices and renewing social divisions in the countryside.
The reform challenge facing the country today is how to complete the land-acquisition-and-distribution (LAD) phase of CARP and transform the agrarian reform beneficiaries (ARBs) into modern agribusiness farmer-leaders. As the President remarked in her State of the Nation Address this year: “Former tenants must be empowered to become agribusinessmen”. And yet, the development paradigm of the anti-CARP legislators is the exact opposite – let the big corporations manage the farms and transform the small farmers and ARBs into land lessors, growers and workers (or mere development spectators). Worse, they even want to gift the big corporations with unlimited access to public lands, a virtual attack on CARP which is likely to fuel conflicts with the country’s ethnic and cultural minorities and the numerous informal land settlers already occupying and farming these lands throughout the archipelago.
Some of the dangerous legislative initiatives:
n Under the proposed bill “Promoting Corporate Farming” by Speaker Prospero C. Nograles and Congressman Abraham Mitra, the big corporations “may purchase or lease on a long term basis public or private agricultural land” with “full management and production control” and “may enter into contractual arrangements or joint ventures with landowners, farmers’ organizations and agrarian reform communities”.
n Under the proposed bill extending the “Land Acquisition and Distribution of Agricultural Lands” under CARP but also “Defining the Scope of the Extended Coverage”, Congressman Luis Villafuerte and other legislators are limiting the coverage of the LAD program only to those offered by landowners under the voluntary offer to sell (VOS) scheme on or before December 31, 2008 and those given a notice of coverage by the Department of Agrarian Reform (DAR) on or before June 30, 2008. Further, the bill seeks to lift the prohibition on the conversion of agricultural lands into “aquaculture, poultry, swine and other livestock projects”. The objective and eventual effect of such conversion will be the exemption of these lands from CARP. Further, like the Nograles-Mitra bill, the Villafuerte bill tries to promote corporate farming in public lands. The bill also seeks higher land valuation based on “fair market value” (thus transforming CARP into a real estate business) and use of farmland as collateral (forgetting that iniquitous land concentrations in the past were due precisely on land mortgaging by poor indebted farmers).
n Proposal of Speaker Nograles and Congressman Pablo Garcia exempting compulsory acquisition of “plantations which are under labor administration and cultivated and developed for exports such as, but not limited to coconut plantations, sugar plantations, pineapple and banana plantations”. Such a sweeping exemption clause will virtually reduce the scope of CARP coverage to the scope of land reform under Presidential Decree No. 27 issued by President Ferdinand Marcos in 1972. This proposal can only come from politicians who have no sense of the history of land injustices in the country and the reason why CARP became a major reform measure after EDSA I.
n Proposal of Speaker Nograles to amend Sections 2 and 3 of Article 12 of the Constitution “to allow the acquisition by foreign corporations and associations and the transfer of conveyance thereto, of alienable public and private lands”. Not content with the above measures watering and whittling down CARP’s coverage and substance, the leadership of the lower house of Congress even wants to open up the country for foreign land developers. As it is, there are thousands of hectares of agricultural and coastal lands that are being converted into resorts, golf courses, high-rise condominium sites and other swanky but fenced-off land projects by Korean and other foreigners using Filipino dummies.
Corporate farming and food security in the l970s
The proponents of the above Corporate Farming bills have reportedly drawn inspiration for their proposal from the Corporate Farming scheme under General Order No. 47 issued by President Ferdinand Marcos in May 1974. In the said GO 47, corporations employing 500 workers or more were encouraged to go into rice and corn corporate farming by linking up with farmers and by allowing them to lease or purchase public lands so that the country would become self-sufficient in its cereal requirements. GO 47 was one of the emergency measures adopted by the Marcos regime in response to the severe rice shortage crisis in l973-74.
However, with the notable exception of the then government-controlled San Miguel Corporation and Meralco, there were very few corporations who took up the GO 47 challenge. For the reality was that the martial-law government, through PD 27 (land reform) and Masagana 99, succeeded in a relatively short period (l973-77) in transforming small rice farmers into better and more productive rice producers. The Philippines became self-sufficient in rice in 1997 and was even able to export rice surpluses in l978-80, after a century of chronic rice importations.
How did the martial-law government do it? The answer was the empowerment of the rice farmers – through a combination of asset reform (land transfer and leasehold reform under PD 27) and an integrated package of services (propagation of high-yielding varieties with credit support, irrigation development, farm-to-market infrastructures, price support services of a newly-formed National Food Authority, etc.).
World Bank on the Leadership Role of Small Farmers
The Philippine experience in the transformation of small rice farmers into modern and productive rice farmers is somewhat echoed in the 2008 World Bank’s World Development Report (WDR) focused on Agriculture for Development. With asset reform and the right support incentives and policy governance, small farmers can be the leaders in agricultural development for they “use their resources more efficiently than larger farmers” and can have an advantage in terms of less “labor supervision problems” (p. 91). China’s shift from the commune system to the family-based self-responsibility system, which increased Chinese agricultural production several fold, is a dramatic illustration of this. And so were the examples of Japan, South Korea and Taiwan after these countries implemented a thoroughgoing or no-nonsense land reform in the l940s and l950s.
The World Bank wrote:
“…The record on the superiority of smallholder farming as a form of organization is striking. Many countries tried to promote large-scale farming, believing that smallholder farming is inefficient, backward, and resistant to change. The results were unimpressive and sometimes disastrous. State-led efforts to intensify agricultural production in Sub-Saharan Africa, particularly in the colonial period, focused on large-scale farming, but they were not sustainable. In contrast, Asian countries that eventually decided to promote small family farms were able to launch the green revolution. They started supporting smallholder farming after collective farmers failed to deliver adequate incentives to produce, as in China’s farm collectivization, or on the verge of a hunger crisis, as in India and Indonesia. Countries that promoted smallholder agriculture – for various political reasons, used agriculture as an engine of growth and the basis of their industrialization.”
The challenge really is how to transform the small farmers in the Philippines into modern farmer-leaders, or more bluntly, how to make the small farmers become modern agribusiness leaders capable of meeting the food and other agricultural requirements of this country. For this, we need to strengthen, not weaken, CARP. For this, we need, an integrated package of support services for the small farmers, not piecemeal and incoherent set of programs. For this, we need a trade and governance policy regime supportive, not destructive, of agriculture.
Role of Agribusiness Corporations
Is there then a role for agribusiness corporations?
Yes. As shown again in the experiences of Japan, Korea, Taiwan and now China, agribusiness corporations can be partners of the ARBs and small farmers in adding values to agricultural products through productive agri processing activities and the packaging and marketing of the resulting products. In short, in the promotion of agri-based industrialization, which is an underdeveloped and neglected area in agricultural development.
Agribusiness corporations need not take over large tracts of land and run feudalistic haciendas or plantations. And they need not be enemies of ARBs and small farmers. Figaro Coffee has shown in the case of coffee farming in Amadeo, Cavite that mutually beneficial and productive relations between small farmers and agribusiness corporations can be developed, with the corporations sharing better seed technology and providing profitable market with the small coffee farmers while the corporations enjoy stable supply of quality coffee.
In its 2008 WDR Report, the World Bank even pointed out the danger of land and production monopolies in agriculture as a killer of competition, which penalizes everyone. A partnership between agri-processing corporations and productive ARBs secure in their lands is the ideal system for the Philippines.
To sum up, therefore, two major development challenges in agriculture are:
n how to transform the ARBs and small farmers into modern agribusiness farmers and leaders of an agribusiness revolution in the Philippines, and
n how to develop value-adding and beneficial linkages between the ARBs/small farmers and the agri-processing corporations.
(Published in: Focus on the Philippines December 2008, http://focusweb.org/oldphilippines/content/view/233/6/)