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Motor-driven hand plow
Courtesy Lisowski Collection, Library of Congress
An important legacy of the Spanish colonial period was the high
concentration of land ownership, and the consequent widespread poverty and
agrarian unrest (see The Decline of Spanish Rule , ch. 1). United States
administrators and several Philippine presidential administrations launched
land reform programs to maintain social stability in the countryside. Lack
of sustained political will, however, as well as landlord resistance,
severely limited the impact of the various initiatives.
Farm size is a significant indicator of concentration of ownership. Although
nationwide approximately 50 percent of farms in 1980 were less than two
hectares, these small farms made up only 16 percent of total farm area. On
the other hand, only about 3 percent of farms were over ten hectares, yet
they covered approximately 25 percent of farm area. Farms also varied in
size based on crops cultivated. Rice farms tended to be smaller; only 9
percent of rice land was on farms as large as ten hectares. Coconut farms
tended to be somewhat larger; approximately 28 percent of the land planted
in coconuts was on farms larger than ten hectares. Sugarcane, however,
generally was planted on large farms. Nearly 80 percent of land planted in
sugarcane was on farms larger than ten hectares. Pineapple plantations were
a special case. Because the two largest producers were subsidiaries of
transnational firms--Del Monte and Castle and Cooke--they were not permitted
to directly own land. The transnationals circumvented this restriction,
however, by leasing land. In 1987 subsidiaries of these two companies leased
21,400 hectares, 40 percent of the total hectarage devoted to pineapple
production.
In September 1972, the second presidential decree that Marcos issued under
martial law declared the entire Philippines a land reform area. A month
later, he issued Presidential Decree No. 27, which contained the specifics
of his land reform program. On paper, the program was the most comprehensive
ever attempted in the Philippines, notwithstanding the fact that only rice
and corn land were included. Holdings of more than seven hectares were to be
purchased and parceled out to individual tenants (up to three hectares of
irrigated, or five hectares of unirrigated, land), who would then pay off
the value of the land over a fifteen-year period. Sharecroppers on holdings
of less than seven hectares were to be converted to leaseholders, paying
fixed rents.
The Marcos land reform program succeeded in breaking down many of the large
haciendas in Central Luzon, a traditional center of agrarian unrest where
landed elite and Marcos allies were not as numerous as in other parts of the
country. In the country as a whole, however, the program was generally
considered a failure. Only 20 percent of rice and corn land, or 10 percent
of total farm land, was covered by the program, and in 1985, thirteen years
after Marcos's proclamation, 75 percent of the expected beneficiaries had
not become owner-cultivators. By 1988 less than 6 percent of all
agricultural households had received a certificate of land transfer,
indicating that the land they were cultivating had been registered as a land
transfer holding. About half of this group, 2.4 percent, had received
titles, referred to as emancipation patents. Political commitment on the
part of the government waned rather quickly, after Marcos succeeded in
undermining the strength of land elites who had opposed him. Even where
efforts were made, implementation was selective, mismanaged, and subject to
considerable graft and corruption.
The failure of the Marcos land reform program was a major theme in Aquino's
1986 presidential campaign, and she gave land reform first priority:
"Land-to-the-tiller must become a reality, instead of an empty slogan." The
issue was of some significance inasmuch as one of the largest landholdings
in the country was her family's 15,000-hectare Hacienda Luisita. But the
candidate was quite clear; the land reform would apply to Hacienda Luisita
as well as to any other landholding. She did not actually begin to address
the land reform question, however, until the issue was brought to a head in
January 1987, when the military attacked a group of peasants marching to
Malacañang, the presidential residence, to demand action on the promised
land reform killing 18 and wounding more than 100 of them. The event
galvanized the government into action: a land reform commission was formed,
and in July 1987, one week before the new Congress convened and her
decree-making powers would be curtailed, Aquino proclaimed the Comprehensive
Agrarian Reform Program. More than 80 percent of cultivated land and almost
65 percent of agricultural households were to be included in a phased
process that would consider the type of land and size of holding. In
conformity with the country's new Constitution, provisions for "voluntary
land sharing" and just compensation were included. The important details of
timing, priorities, and minimum legal holdings, however, were left to be
determined by the new Congress, the majority of whose members were connected
to landed interests.
Criticism of Aquino's plan came from both sides. Landowners thought that it
went too far, and peasant organizations complained that the program did not
go far enough and that by leaving the details to a landlord-dominated
Congress, the program was doomed to failure. A World Bank mission was quite
critical of a draft of the land reform program. In its report, the mission
suggested that in order to limit efforts to subvert the process, the
Comprehensive Agrarian Reform Program needed to be carried out swiftly
rather than in stages, and land prices should be determined using a
mechanical formula rather than subjective valuation. The World Bank mission
also was critical of a provision allowing incorporated farm entities to
distribute stock to tenants and workers rather than the land itself. The
scheme would be attractive, the mission argued, "to those landowners who
believed that they would not have to live up to the agreement to transfer
the land to the beneficiaries." The mission's recommendations were largely
ignored in the final version of the government's program.
On June 10, 1988, a year after the proclamation, Congress passed the
Comprehensive Agrarian Reform Law. Landowners were allowed to retain up to
five hectares plus three hectares for each heir at least fifteen years of
age. The program was to be implemented in phases. The amount of land that
could be retained was to be gradually decreased, and a non-land-transfer,
profit-sharing program could be used as an alternative to actual land
transfer.
Especially controversial was the provision that allowed large landowners to
transfer a portion of the respective corporation's total assets equivalent
in value to that of its land assets, in lieu of the land being subdivided
and distributed to tenants and farm laborers. In May 1989, the 7,000 tenants
of the Aquino family estate, Hacienda Luisita, agreed to take a 33 percent
share of the hacienda's corporate stock rather than a portion of the land
itself. Because the remaining two-thirds of the stock (the value of non-land
corporate assets) remained with Aquino's family, effective control of the
land did not pass to the tillers. Proponents of land reform considered the
stock-ownership provision a loophole in the law, and one that many large
landowners would probably use. Following the example of the Hacienda Luisita,
thirty-four agrocorporations had requested approval for a stock transfer as
of mid-1990. Although legal, the action of the president's family raised
questions as to the president's commitment to land reform.
It is difficult to estimate the cost allowing for inflation of the
Comprehensive Agrarian Reform Program. Early on, in 1988 estimates ranged
between P170 billion and P220 billion; the following year they were as high
as P332 billion, of which P83 billion was for land acquisition and P248
billion for support services and infrastructure. The lowest mentioned figure
averages to P17 billion a year, 2.1 percent of 1988 GNP in the Philippines
and 8.9 percent of government expenditure that year. The sum was well beyond
the capacity of the country, unless tax revenues were increased
substantially and expenditure priorities reordered. To circumvent this
difficulty, the Aquino government planned to obtain 50 to 60 percent of the
funding requirements from foreign aid. As of 1990, however, success had been
minimal.
Government claims that in the first three years of implementation the
Comprehensive Agrarian Reform Program met with considerable success were
open to question. Between July 1987 and March 1990, 430,730 hectares were
distributed. About 80 percent of this, however, was from the continuation of
the Marcos land reform program. Distribution of privately owned lands other
than land growing rice and corn, 3,470 hectares, was insignificant not only
in absolute terms, but it was also only 2 percent of what had been targeted.
The inability of the Department of Agrarian Reform to spend its budget also
indicated implementation difficulties. As of June 1990, the department had
utilized only 44 percent of the P14.2 billion allocated to it for the period
January 1988-June 1990. In part because of Supreme Court rulings, the
Department of Agrarian Reform cut its land acquisition target in late 1990
by almost half from 400,000 hectares to 250,000 hectares.
Data as of June 1991
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