Is agrarian reform our best path to inclusive growth?

My feelings, whenever I pass Department of Agrarian Reform building on Quezon City’s Elliptical Road, are mixed. It’s so visibly old, so large—as though it, along with its hundreds of offices, has been there a long time and isn’t going anywhere anytime soon. It remains a landmark because—over 27 years after President Corazon Aquino signed the Comprehensive Agrarian Reform Program (CARP) into law—the goals of redistribution have yet to be fully achieved.

In the immediate post-war years, Taiwan and South Korea—nearby rice-producing countries to whom we’re often compared—completed huge land reform programs in around five years each. By the end of the 1950s, they were done—their agricultural economies up and running. The two countries accomplished more in five years than the Philippines has accomplished in all of 27. Why have we been incapable of following suit?

Agricultural lands in Korea and Taiwan had been expropriated by the Japanese. Japan invaded Taiwan—then called Formosa—in 1895 and annexed Korea in 1910. They had been Japanese colonies for decades, while the Philippines was invaded and occupied at a time when Japanese war efforts were reaching their peak—a time when the Japanese were much more interested in extracting agricultural produce than in land ownership.

After Japan’s surrender at war’s end, Taiwan and Korea were ideally set up for land reform—the colonial landlords were forced to return to Japan. Korean industrial elites had seen their wealth bombed into uselessness and the few people remaining in Formosa were mainly indigenous—and poor—and soon far outnumbered by Chinese fleeing the mainland. None of this was the case with Filipino landlords.

American fear of Communism in Korea and Taiwan drove their aggressive approach to the imposition of land reform. Postwar landless farm workers were a major recruiting pool for Communist movements. Communist insurgency, however, was not seen as a major threat in the Philippines (at least at the time)—and the landlords were the very people who had been helping the Americans run the country prior to the invasion.

Many of today’s historians stress these issues because of the role inequality plays in corruption. According to this view, having a rich, powerful elite naturally leads to flourishing corruption through the mechanisms of “capture” and “clientelism.”

In other words, an economically powerful elite can “capture” government by bribery and campaign contributions—legal and illegal. At the same time, such an elite can establish patron-client relationships with the large, poor population through vote buying and bureaucratic patronage.

This is not just an academic abstraction. Previous to their land reform programs, corruption in Korea and Taiwan was—as near as limited historical evidence can show—about the same as in the Philippines. After land reform, Korea and Taiwan moved—according to the same measurements—steadily toward less corruption. (Which is not to say that elites didn’t form—they did, in both countries, along with incidents of corruption—but by the time that happened, capture and clientelism had moved on to industry and finance, rather than landholding alone.)

The obvious lesson is that serious land reform—by reducing inequality—is one of the surest ways to reduce corruption stemming from the government’s seemingly never-ending cycle of capture and clientelism by our economic elites. But it’s no easy task. Almost three decades’ worth of legislation and court precedents have accumulated, making “due process” serve as an instrument of elite landowners.

Probably the biggest problem in Philippine agrarian reform implementation is strong landowner resistance against the program, coupled with government’s sometimes lagging political will to fully implement the law. This has even led to cases of agrarian-related violence.

One province regarded as a last bastion of landlordism is Negros Occidental. Known as the “Sugarbowl of the Philippines,” the sugar industry is the lifeblood of the province’s economy. It produces more than half of the country’s sugar. The sugarcane oligopoly—owned and operated by big hacienderos—including the Cojuangcos, Arroyos, Ledesmas, Lacsons, and Benedictos—include numerous political families.

According to several studies, over 80% of our Congress comes from “traditional clans”—politically powerful clans or outright political dynasties—while a 2004 study found less than 20% with no business interests. Family ability to educate lawyers or finance graduate degrees necessary for higher Judicial and Executive posts furthers the de facto capture of government by the elite. Every presidential candidate in our nation’s history has promised—with one degree of sincerity or another—to finally, once and for all, implement land reform. But the deck of due process is already stacked.

Sugarcane workers in these haciendas—long subjected to a feudal system making them totally dependent upon the landowners for money and food—are among the poorest type of laborers. Often seen standing along roadsides, they often await the chance to jump aboard a field truck just to get a day’s work. They earn below minimum wage rates, received no non-wage benefits, and sometimes get sick or even die due to poverty and hunger. Negros has experienced “tiempos muertos” before, when many sugarcane workers died due to hunger and poverty. Child labor, also, is not unknown on sugar plantations.

Alongside a burgeoning poverty magnitude of 138,554 poor households, the province also has 120,000 hectares of yet-to-be-distributed sugarlands—amounting to 82.11% of the nation’s undistributed sugarcane land.

Confronting legal blockage and delay of the redistribution program, the Department of Agrarian Reform (DAR) has, in the meantime, started implementing the Sugar Block Farming (SBF) Project and other related initiatives in Negros Occidental under the government’s Accelerated and Sustainable Anti-Poverty Program (ASAPP). The ASAPP is an inter-agency program that aims to ensure that economic growth will translate to increase the income of the poor—faster than redistribution implementation—by creating quality employment opportunities for the poor.

In the municipality of La Castellana, the DAR signed an agreement with the Sugar Regulatory Administration and the Department of Agriculture (DA), allocating P44 million to enhance sugar block farming, and to improve the productivity and income of 35 agrarian reform beneficiary organizations covering 3,000 farmer-beneficiaries across 2,710 hectares of sugarlands.

The Sugar Block Farming project helps agrarian reform beneficiaries confront the classic “economies of scale” problem that has so vexed sugarland redistribution efforts in the past. Farmer-beneficiaries with grants of three hectares or less can consolidate their production into 30 to 50 hectare units with other farmers through partnership, joint venture, and sharing—while preserving individual ownership.

As DAR Undersecretary for Foreign Assisted and Special Projects Herman Ongkiko explains, “The Sugar Block Farming project seeks to improve the productivity of sugarcane farms collectively managed by cooperatives through funding, technical assistance, trainings, and the provision of farm materials.” During the “National Week for Overcoming Extreme Poverty” last month, the DAR was in Bacolod City to distribute Certificates of Land Ownership Award (CLOAs) covering 396.48 hectares of private landholdings to 768 farmer-beneficiaries from eighteen areas in Escalante and Manapla.

They also provided a P16-million credit assistance to 547 agrarian reform beneficiaries belonging to seven recipient cooperatives. This credit provision—a tripartite program of the DAR, the DA, and the Land Bank of the Philippines—is under the Agricultural Production Credit Program. According to DAR Regional Director Stephen Leonidas, “The program is designed primarily to provide loans to farmer-beneficiaries and their households through agrarian reform beneficiaries’ organizations or cooperatives to support their individual or communal crop production, agri-enterprise and other livelihood projects.”

Equally important to smallholders, the DAR also turned over 43 units of farm machinery—13 heavy tractors, 18 shredders and 12 rice threshers worth P72 million—to 27 Negros Occidental cooperatives to help increase the beneficiaries’ sugarcane production. “These farm machineries will service more than 3,000 farmer-beneficiaries here. And because the machines are mechanized, it will make farming easier and faster for them. It will also greatly improve their yield and increase their income,” Leonidas said.

Since ASAPP is an inter-agency program, Ongkiko was quick to point out the work of other agencies in income and employment-generating projects. “To help sustain employment, we are partnering with local government units and the Technical Education and Skills Development (TESDA) for skills training such as carpentry, cooking, welding, dress-making, etc. These skills trainings are for the sons and daughters of our farmer-beneficiaries who needed skills to obtain jobs.”

Several other agencies are involved in market access, training prospective farmer beneficiaries in farm management and finances, and generally transforming farmers and farm workers into agribusiness entrepreneurs.

Any long term alleviation of hunger and poverty in Negros Occidental, however, must include the distribution of that remaining 120,000 hectares of private sugar estates. While DAR and government’s ASAPP efforts are certainly laudable, many challenges persist and it’s all too easy consider the above numbers—396 hectares redistributed; 768 new beneficiaries—paltry when held against the 120,000 hectares and 138,554 impoverished households. But there are at least two things we should bear in mind.

One is that, since 1972, over 8 million hectares of land have been distributed to over 5.4 million beneficiaries.

A second consideration is the “due process” issue. From 1972 till 1986, Marcos was de facto dictator and yet, while boasting of his land reform program, his government only acquired 4% of eligible farmland and distributed it to less than 8% of the eligible beneficiaries. That, during 14 years in power.

Since the restoration of democracy, despite the entanglements of due process, we have accomplished much more—even considering that it’s been 27 years compared to 14. But, after 40 years, it’s not surprising that the cases remaining are among the most complex and difficult to resolve.

As easy as it may be to lay poverty concentrations like we see in Negros Occidental at the aging doorstep of the DAR, or to point accusing fingers at a faceless sugar oligarchy, we are a democracy. Unlike in a dictatorship, land title conflicts, eligibility of potential recipients and a dozen other regulatory conflicts must be submitted to due process if we are to be a government of laws, not men.

Ateneo Economics Professor and former NEDA Director-General Cielito Habito reminds us that inequalities stem from a historically skewed distribution of assets that has been further exacerbated through time by similarly skewed access to opportunities for advancement. Asset reform programs such as CARP need to be faithfully implemented, sustained, and intensified to address the inequalities dampening inclusive growth. And, in the Philippines, this can only be achieved by making agrarian reform work in a democratic setting.

Some actions we can take—anti-political dynasty laws to ameliorate government capture by the economically powerful elite; freedom of information laws that would make bureaucratic clientelism harder to disguise—may seem tangential to land reform and frustratingly long-term. But they are actually among the best available democratic methods of rooting out the true barriers to solutions such as agrarian reform.

While we overcome one individual barrier at a time—on a piece-by-piece basis—we are fortunate to have inter-agency efforts like ASAPP to help make land reform work by empowering recipients, and to lessen the suffering of those landless still awaiting their turn.