The Marcos Agrarian Reform Program: Promises and Contradictions

This article is an abridged version of a book chapter on the history of land reform in the Philippines.

 

In one of the heated exchanges between Imee Marcos and technocrats as to whether the Philippines became a rice exporting country during martial law, the question of her father’s legacy on agrarian reform is put into the fore.  Did the Philippines really achieve sufficiency in rice production to the point that we had surplus and export the grain? This is indeed a timely question as Marcos’ agrarian reform[1] program will be in its 50th year in two years’ time.

This is also an opportune time to ask key questions that are sometimes overlooked. Did the imposition of authoritarian rule aid agrarian reform? Where or from what sector did opposition to agrarian reform come from? How is agrarian reform related to the Green Revolution? What about crops that were outside the purview of agrarian reform? Only by taking into consideration some of these issues and concerns can we have a better grasp of the topic and arrive at some conclusions.

As the saying goes, the devil is in the details! But let us bear in mind some important introductory notes.

PD 27 is the hallmark of the agrarian reform program. For the first time, peasants can now own the land they till. Previous tenurial arrangements allowed only sharecropping and leasehold, feudal structures that instituted huge disparity and injustice. PD 27 also enjoys the distinction of being the law written by hand (see Figures 1-3). Thus, the land-to-the tiller program was to a large extent meant to address peasant unrest.[2] In so doing, the government focused on just two crops – rice and corn. And that the government justified the non-inclusion of other crops as: one, due to international commitments and two, would have an adverse effect on the country’s national output. Also, there are a host of other laws that were introduced to support its implementation.

 

 

President Lyndon B. Johnson’s visit to IRRI on 26 October 1966, the year the Green Revolution was launched with the introduction of the IR8 variety or the “miracle rice”. Photo from http://irri.org/blogs/irri-history/this-month-in-irri-history-october. Accessed 1 September 2016 4:57 PM (EST).

 

Marcos’ agrarian reform program also falls within an agricultural development strategy that was initially formulated by scientists and researchers and funded by the Ford and Rockefeller foundations through the International Rice Research Institute (IRRI). The program comprised a high-technology package that included the intensive use of fertilizers and pesticides, the introduction of new and high-yielding rice varieties, water control and social reengineering (Cullather 2004, 259). This was to be complemented by the export of select agricultural products, then the country’s top dollar earner (Boyce 1993, 9).

Finally, social reorganization at the local level became necessary for the model to be effective. Thus, the rationale behind agrarian reform lies not only in solving hunger and promoting a social reform agenda but more so as a bold attempt at modernizing Philippine society. By introducing so-called “miracle seeds,” the motive behind PD 27 was to “draw farmers into the mainstream of economic life.” (Cullather 2014, 266).

 

Presidential Decree 27

Marcos’ land reform program may trace its roots in the Green Revolution. In the early 60s, the International Rice Research Institute (IRRI) was established at the University of the Philippines at Los Banos campus in Laguna to undertake extensive research to produce new rice varieties. While the Philippines hosted and supported the Institute, its funding came from oil and chemical companies like Shell and Chevron whose by-products, essential supply in the production of fertilizers and pesticides. Soon, IRRI came up with so-called “miracle seeds” such as IR-8, IR-15, and IR-20.

 

The only handwritten law in Philippine history.

 

It is not accidental that the introduction of new rice varieties rapidly increased fertilizer production. From 101.2 million metric tons in 1956, total fertilizer consumption reached 563 million metric tons in 1972. This would reach to almost 780,000 metric tons in 1978 when the Masagana 99 Program ended, up by 15% from the 1977 total of 636,590 metric tons. Soon, foreign companies that included Esso Atlas Fertilizers, Union-Hikari, and BASF entered the booming market. Esso partnered with local businessmen led by Alfredo Montelibano and established Planters Products, the largest in the industry with a network of over 400 stores nationwide. In 1973, Planters Products cornered 63.8% of the total market and at its peak in 1979 sold 983.3 million pesos worth of fertilizers (LUSSA 1982, 32-33).

At the same time, PD 27 was cautious and restrained as it covered only two types of agricultural lands (rice and corn) and lands that were tenanted and privately-owned. Furthermore, the retention limit was set originally at 7 hectares maximum. Later this was revised, the maximum area that a tenant can own is an economic family-size farm of 3 hectares if irrigated and 5 hectares if unirrigated.  Alienable and disposable lands were likewise covered as part of the resettlement component of the law. However, PD 27 excluded farmlands and plantations devoted to traditional export crops such as sugar, copra, bananas, tobacco, pineapples, etc.

 


On retention limit

From a macro perspective, the scope of PD 27 covered less than 14% of all cultivated lands. Out of a total of 9.7 M hectares of cultivable lands nationwide, rice and corn lands totaled 4.2 M hectares while non-rice and corn areas amounted to 4.5 M hectares. Of the 4.2 M hectares devoted to rice and corn, only 1.42 were tenanted and fell under the scope of the land reform program. These were further divided into – Operation Land Transfer (OLT) – 822,000 has.; Lease Hold Operations (LHO) – 562,000 has.; and, Land Emancipation Patents (LEP) – 88,000 has. (DAR, 1987).

The value of the land transferred to the tenants was assessed at 2 ½ times the annual harvest of three normal crop years. The total cost of the land was to be paid by the tenant over a period of 15 years in equal amortizations. Established in 1963 thru PD 251, the Land Bank of the Philippines (LBP) was tasked to provide adequate financial support in all phases of the agrarian reform Program (MAR, 1979).

Aside from land tenure, PD 27 had four other components. These support services include institutional development, physical development, agricultural development, and human resources development.  Land tenure improvement included compact farming, cooperative farming, land consolidation, and the formation of agro-industrial estates. Institutional development includes the formation or creation of support organizations such as the Samahang Nayon, farmers’ cooperatives or associations, and farmer-oriented financing institutions. Physical development refers to infrastructure while Agricultural development farm management services and technology such as the Masagana 99 and the Green Revolution Project.

 

Operation Land Transfer

OLT, as it is also known, is the orderly and systematic transfer of ownership of tenanted rice and corn lands. This is the flagship program of PD 27 and was first launched in November 1972 on select farms in Luzon and the Visayas. Thereafter, OLT was introduced to the whole country starting in 1973. Below are the five steps required for farmers to own lands.

 

Table 1: Operation Land Transfer Procedure in Rice and Corn Areas

Stages Activity Agencies Involved
Phase I Tenant Identification DAR, DLGCD
Phase 2 Parcellary Mapping DAR, BL
Phase 3 Generation, Registration, and Distribution of Certificates of Land Transfer (CLT) DAR, NCC, LRC
Phase 4 Land Valuation and Compensation DAR, NCC, LBP
Phase 5 Issuance of Emancipation Patents (EP) DAR BL, LRC

Note: BL = Bureau of Lands, DLGCD = Department of Local Government and Community Development, LBP = Land Bank of the Philippines, LRC – Land Registration Commission, NCC = National Computer Center.

 

A farmer targeted as eligible for inclusion under PD 27 is deemed as farmer-beneficiary (FB). Once issued a Certificate of Land Transfer (CLT), the FB can use this as collateral in borrowing from financial institutions (banks and cooperatives). However, to be issued a Certificate of Land Transfer (CLT), the FB is first required to be a member of the Samahang Nayon (SN). This is to ensure payment to the Land Bank who will in turn pay compensation for landlords whose lands were targeted for distribution. Originally, FBs were to pay the LBP the value of the land in 15 equal annual amortizations at 6% per annum interest rate per year. However, there were other modes of payment introduced by the LBP in later years to include the use of bonds and stocks.

An Emancipation Patent (EP), the title to the land, is then issued to the FB once all the requirements have been complied. By compliance, it is meant that the FB has satisfied 15 requirements, among which are the following:

 

Samahang Nayon

In his 1972 treatise entitled Land Reform is the Fundamental Foundation of all our Efforts, Marcos declared that “land reform, I repeat, under the philosophy and the approaches we have adopted since the beginning means, first, the conversion of sharecropping from leasehold to ownership. But ownership has many concepts. It is my hope that before we shall transfer ownership to the tenants, they shall first organize cooperatives…The program envisions the need for field technicians, for the servicing of farmers in the supervised credit system” (Marcos 1972, 34).

The rationale for this statement is that the history of cooperative development prior to 1972 has been marked by failures. Cooperative development in the Philippines may be traced to the establishment of the Farmer Marketing Cooperatives (FACOMA) that was introduced in the 1950s and financed heavily by the USAID to defray huge capital outlay on rice milling and storage facilities. This was also meant to mitigate the practice of usury that indebted peasants heavily (Jensen 1982, 1). While many cooperatives were plagued by technical and financial problems, the most important factor however was lack of enthusiasm on the part of peasants. It was striking that cooperatives failed not because of lack of support but rather the lack of commitment and sense of ownership on the part of the peasants.

This view is further buttressed by previous studies that concluded that the failure of past agrarian reform programs, and, inter alia, the success of peasant revolts is that the peasant perceives the bureaucrat as an intruder, whose temperament and lifestyle is essentially foreign and as a source of unreasonable obstacles and delays in the government’s avowed aim of giving land to the tillers. The same studies observed that the degree of cohesion and administration by which peasants were organized by the Huks eventually proved to be the communities that were the most receptive to reform and the more capable compared to peasants that were previously unorganized. (Oveholt 1976, 431).

In 1974, Orlando J. Sacay,[3] the Department of Interior and Local Government (DILG) undersecretary for Cooperatives Development, proposed the creation of the New Cooperative Development Program or the Samahang Nayon, a nationwide cooperative system designed to hasten rural development. Learning from the lackluster performance and defects of cooperative formation from the past, Sacay placed more emphasis on members’ education, capital build-up, and discipline. Among the objectives of the Samahang Nayon (SN) were: to prepare farmers to become better producers; to ensure timely payments of land amortization; to enforce savings among farmers; to encourage farmers to preform activities collectively; and, to develop marketing outlets for farm products. In summing up, Dr. Sacay said that the members will have nothing to do but “learn, save and practice discipline.” (Sacay 1974, 12).  It must be said that there is a more compelling reason for the creation of a nationwide network of cooperatives other than to ensure payment of amortizations. Dr. Sacay believed that the rationale behind the SN is more long-term – for cooperatives to be a vehicle that shall facilitate the distribution of wealth.

The educational process that Dr. Sacay envisioned for the efficient and scientific management of cooperatives was divided into two parts. Phase I was designed to be a pre-membership course which included lessons on agrarian reform, history and principles of cooperatives, and the SN’s rationale, organizational setup, policies and requirements. Phase II, or Manpower Development, was devoted to management training for both officers and members, training of agricultural workers, and technical lessons for SN members. For both phases, Dr. Sacay designed a sixty-five-week training schedule.

Capital build-up or capital mobilization on the other hand are forced or compulsory savings mechanisms that were meant to extend credit from their own savings. Dr. Sacay believed this was the only way to solve the perennial problem of repayment. Another underlying principle behind these forced schemes is premised on the concept of “strength in numbers.” In addition, these funds were designed to provide farmers the capital to engage in business and finance with the end in view of forming community-based rural banks (or farmers’ banks). The rationale for this was to create a new funding window as traditional rural banks run established by well-to-do families became inflexible in servicing the farmers.

The following are the Funds outlined in the program:

 

The rise of SN organizations and membership (see Table 2) was due to many factors. It may be due to its compulsory membership, a precondition for being a beneficiary of the land reform program. But it was discovered that many farmers were enticed to join SN because it was offered good information and advice on farming, offered lower-priced farming inputs, and gave higher market prices for their produce.

From a savings standpoint, the SN was able to generate a total of 95M pesos over a five-year period for an average of 100 pesos per member and 5,200 pesos per SN. The SN was successful as far as scale is concerned. Even with only 20 pesos per member per year, it was possible to generate a substantial amount over a short-term period for a national savings project. But at the same time, loan repayment was the most problematic. In some instances, farmers evaded membership of the SN due to its financial obligations.

 

Table 2: Registered Samahang Nayon and Members, 1974 – 1979

Region 1974   1975   1976   1977   1978   1979  
SN Members SN Members SN Members SN Members SN Members SN Members
I 1,704 78,534 1,787 85,141 2,002 90,552 2,038 94,953 2,041 97,560 2,089 97,820
II 598 34,155 755 42,676 813 47,877 877 51,037 912 53,014 914 53,014
III 1,485 83,520 1,608 97,432 1,763 114,636 1,892 125,190 18,98 126,836 1,909 127,263
IV 1,365 60,043 1,590 74,026 1,749 83,763 1,833 86,162 1,871 86,442 1,879 86,535
V 864 40,177 1,000 47,046 1,095 51,238 1,169 57,759 1,196 59,409 1,201 59,516
VI 1,379 54,644 1,542 63,410 2,178 94,917 2,205 100,072 2,254 100,755 2,256 100,780
VII 1,084 45,967 1,152 51,949 1,269 59,718 1,327 68,138 1,339 68,772 1,390 69,557
VIII 629 20,035 1,230 45,244 1,501 55,114 1,753 65,124 1,784 66,898 1,825 69,684
IX 381 17,082 462 21,563 507 25,491 576 28,864 587 29,415 612 31,511
X 1,212 67,057 1,362 72,332 1,499 97,909 1,584 99,589 1,716 107,192 1,720 107,869
XI 874 44,368 837 48,436 1,187 61,879 1,247 69,298 1,278 74,476 1,290 75,321
XII 786 37,546 928 47,854 1,054 50,522 1,080 53,589 1,095 54,666
Total 11,575 545,582 14,111 686,801 16,491 828,948 17,555 896,708 17,956 924,358 18,180 933,536

Source: LUSSA 1982.

 

Masagana 99

The Masagana 99 Program was launched in 1973 as a Program of Survival to address the acute food shortages and later to increase rice production. The target was to achieve a yield of 99 cavans (or 4.4 tons) of unmilled rice per hectare. Masagana 99 was anchored on two service provisions – a credit program and transfer of technology. Masagana 99 was an innovative supervised credit program and the first of its kind in its time. To emancipate farmers from usury and banks’onerous conditions set by banks in extending loans to farmers, the government guaranteed 85% of all losses on Masagana 99 loans. This warranty induced rural banks to forego of its traditional practice of requiring collaterals. Even the rediscounting policy was revamped to make them easy and at least cost to the farmer-creditor. Thereafter, some 420 rural banks and 102 branches of the Philippine National Bank agreed to provide loans on such conditions.

Loan applications were processed quickly and on the spot. Bank employees, together with farm technicians, processed the farm plan and budget for farmers’ seldas[4] or cooperatives. An individual farmer with a collateral to offer may also obtain credit. The maximum allowable loan reached the equivalent of US$100 per hectare with one percent (1%) monthly interest. Once approved, many of the loans were sent to the farm sites by foot, motorcycle, jeeps, and even pump boats. The Philippine National Bank called this program “Bank on Wheels”. Part of the loan was given in cash to cover labor costs while the balance was given in Purchase Orders and which could be exchanged for fertilizers and pesticides at participating stores.

 

PNB’s Bank on Wheels Program designed to supplement the Masagana 99 Program by way of providing loans and even delivering them to the farmers in the fields

 

If the credit program was innovative, so too was the transfer of technology. Farmers were now introduced to new rice varieties called HYVs (high-yield varieties) which were radically different from the ones they previously planted. These varieties required extensive preparation and use of fertilizers and pesticides so that the farmer, with the aid of farm technicians, would have to follow the method specified by the Program.

To ensure coordination and cooperation of all farm-related initiatives, local chief executives were drawn into the program. Governors were designated chair of the Provincial Action Committees while mayors were made heads of Municipal Action Teams. Both officials were responsible for coordinating various agencies – banks, millers and traders, farm input dealers, local radio networks, DA, DAR, and DLGCD – at their respective levels.

In its first year, Masagana 99 was a huge success. Because of the prevailing political conditions, implementing actors performed their mandated tasks, however grudgingly. Moreover, the country generally enjoyed good weather in 1974 so that losses to agriculture were minimal, unlike in the last three years. Furthermore, as fertilizer prices in 1974 increased sharply due to the turmoil in the Middle East and the dictate imposed by the Organization of Petroleum Exporting Countries (OPEC), the government cushioned its impact through subsidies, amounting to about 21% of retail price. Lastly, the government provided a guaranteed farm gate price of US$6 per sack, relieving farmers of severe losses when market prices fell during harvest time. As far as attaining self-sufficiency in rice is concerned, Masagana 99 was a huge success. In fact, after only two years of its implementation, the Philippines was able to attain sufficiency in 1976[5] and may have exported rice[6].

 

Table 3: Status of Masagana 99 Credit Program after Expiration (31 April 1979)

Phase Term # of Borrowers Area (has.) Loans Granted (in M pesos) Repayment Rate (in %)
I May – October 1973 401,461 620,922 369.5
II November ’73 – April ‘74 236,115 355,387 230.7 94
III May – October 1974 529,161 866,351 716.2 94
IV November ’74 – April ‘75 354,901 593,609 572.1 84
V May – October 1975 301,879 558,330 572.9 82
VI November ’75 – April ‘76 151,862 255,882 255.9 76
VII May – October 1976 144,265 244,477 274.3 81
VIII November ’76 – April ‘77 89,623 148,763 164.3 80
IX May – October 1977 131,842 222,622 250.5 81
X November ’77 – April ‘78 92,476 155,095 176.1 74
XI May – October 1978 116,624 202,606 236.9 80
XII November ’78 – April ‘79 85,401 157,521 158.0 68

 

 

Contradictions in the Marcos Agrarian Reform Program

The Marcos regime’s rhetoric on agrarian reform did not match its actions. The retention limit of 7 has. deprived 55% of tenants in rice and corn lands the right to own lands they tilled. (Tadem 2014, 406). In fact, not even two years into the implementation of PD 27, General Order (GO) 47 and Presidential Decree 472 were signed which gravely undermined land acquisition and tenure. GO 47 required all corporations with over 500 employees to provide for the rice and corn needs of their employees either through importation or direct production. On the other hand, PD 472 required all logging concessionaires and lessors of pasteur lands to develop areas for rice and corn production for their workers. Concerned parties were given incentives like financial packages, access to credit from Land Bank and other commercial banks, and suspension of the ownership requirements. With this, Marcos launched what is to be called corporate farming.

While the rationale for corporate farming may have to do more with food self-sufficiency, this scheme inadvertently deprived potential agrarian reform beneficiaries of available cultivable land. By 1978, approximately 250 corporations that went into rice production were operating on 58,450 has. of land. Other foreign firms like Caltex, Shell, Del Monte, Dole, and many others expanded production into soybeans, sorghum, mung beans, and by 1981, lands occupied by multinational corporations (MNCs) had reached 86,000 has. This makes the average size of a corporate farm at 402 has. For example, banana plantations expanded rapidly rose from only 3,400 has. in 1969 to 19,600 has. by 1983. MNCs did not buy or owned lands, they just leased them or had joint ventures with government corporations (Putzel 1992, 411).

To aggravate the problem, rather than acquire idle, abandoned or unexploited lands, many corporations encroached on farms already cultivated by tenants, small farmer-settlers and owner-cultivators. In effect, the productivity-oriented goals of corporate farming came in conflict with the equity-oriented goals of the agrarian reform program.  Thus, rural poverty incidence rose from 55.6% in 1971 to 63.7% in 1985 while the number of landless rural workers rose from 47% of the total population in 1975 to 50% in 1985. At the same time, rice production diminished by 39% between 1970 and 1981 due to the high cost of production (Ibid., 412).

 

Table 4: GO 47 Corporate Farms by Region

Region No. of Corporate Farms Area

(in has.)

No. of Firms Served
I 2 1,800.00 5
II 4 1,751.91 7
III 22 6,900.54 33
IV 24 25,354.50 64
V 1 790.00 9
VI 10 6,664.52 29
VII 0 0.00 0
VIII 3 10,509.70 10
IX 0 0.00 0
X 8 8,704.50 37
XI 21 23,542.00 73
XII 0 0.00 0
TOTAL 95 86,017.67 267

Source: LUSSA 1982, Annex A, Summary I, 303.

 

Table 5: Corporate Farms by Region and Clientele (Selected)

Region Participating Corporate Farms / Agro-Service Corporations Clientele / Firms Served
I MERALCO MERALCO, PCI Bank, Phil. Electric Co.
II Tabacalera , Central Azucarera de Bais, La Suerte Cigar, Monterey Farms Keng Hua Paper Products, London Biscuits, Artex Dev. Corp., Pacific Banking, Carnation Phils.
III Delgado Bros., Itogon-Suyoc Mines, BANCOM, Phil-Am Insurance, RCPI, Republic Bank, Universal Mills, Universal Robina, SGV, Vitarich Hooven Comalco, Smith-Bell Co., Red V Coconut, Cummins Diesel, Bancom, UCPB, La Suerte Cigar, Goya Products, Mercury Drug, Colgate- Palmolive, Bataan Cigar and Cigarettes.
IV Benguet Agri. Corp., Foremost Farms, PLDT, PHIVIDEC, Republic Glass, San Miguel Corp., Benguet Consolidated, RFM, Consolidated Foods (CFC), United Laboratories, Fortune Tobacco, Litton Mills, Delta Motors (Toyota Phils.), Land Bank, Consolidated Bank, Family Savings Bank, Philippine Veterans Bank, San Miguel Corp. ANSCOR, Atlas Consolidated, Atlas Fertilizers, Phelps-Dodge, J&P Coats.
V Royal Rice Caltex Phils., Filipinas Shell, Marcopper, PAL, Kimberly-Clark, Consolidated Mining, Purefoods.
VI Highgrain Farms, Agricultural Needs Inc., Mobil-Oil Phils., Victory Liner, Visayan Electric Co. Liberty Flour Mills, Lopez Sugar Corp., Passi Sugar Central, Phil. Daily Express, Insular Lumber, Lepanto Mining, Equitable Banking.
X CDCP Farms Corp., Mandala Agri Dev. Corp. etc. CDCP, General Rubber, Franklin Baker, Phil. Veterans Bank, Reynolds Phils., BF Goodrich, Ford Phils., AG&P, Elizalde and Co., Tanduay Distilleries, Jardine-Davies, Negros Navigation,
XI Alcantara and Sons, Davao Grains, Ace Farms, General Milling Corp., Golden Farms, Mindanao Rice Corp., TADECO Holland Milk Products, Goodyear Tires, Standard Fruits, Dole Phils., Mariwasa, Philex Mining, Marsman Corp., Victorias Milling, Rustan’s, Davao Fruits, Banco Filipino, Traders Royal Bank, Metrobank, California Manufacturing Corp.

Source: LUSSA 1982, Annex A, 285 – 302.

 

One contributing factor to the failure of the agrarian reform program was a crucial sub-component – banking. Because banks’ financial orientation and practices did not jibe with the spirit of land reform, the mechanics of the program focused greatly on compensation to the landowner. As a result, the process of land acquisition became tedious and burdensome for the targeted beneficiaries. Because of Virata’s conservative views and corporate training, the option the Land Bank employed in compensating dispossessed landlords was to pay them in cash. Sixto K. Roxas, creator of the concept of an agricultural bank, argued that “monetizing land and that this capital transfer transaction does not create new wealth.” (Tadem, 2014: 407). For Roxas, the Philippines should have followed instead the Taiwan model wherein dispossessed landowners where given government shares in publicly-listed corporations, making them capitalists and generating wealth beyond the agricultural sector. Or in a regime wherein financial instruments could be used by landowners to finance industrial ventures so long as they are related to agriculture, among which are post-harvest facilities, processing plants, etc. This proposed scheme thus strengthen the country’s agro-industrial sector. In this manner, land ownership conversion was complemented by wealth conversion.

Indeed, observers and analysts point to the considerable responsibility of the LBP in the dismal accomplishment record of PD 27. Of the six stages in Operation Land Transfer, the fourth which is land valuation was where the process bogged down continually and where the largest backlogs were recorded (Putzel 1992, 140). In the end, landowner compensation became the “overwhelming preoccupation of the implementing agencies” (Valencia 1982, 78). As Valencia further notes, the high repayment default rate by Emancipation Patent (EP) holders reached 90% due to the burdensome amortization payments and high costs of production. Land valuations were overpriced by as much as 72% so that land transfer became just another market transaction. So that there was a subsequent and inevitable loss of control over awarded lots by CLT and EP holders leading to the collapse of the beneficiary-oriented small farmer credit program and extension services.

The same observation was also made by the UN-FAO sponsored World Congress for Agrarian Reform and Rural Development (WCARRD). After a field visit to the country shortly after the downfall of the Marcos regime, WCARRD noted that agrarian reform was hampered by strong landlord resistance and the lack of political will on the part of the government. Specifically, the Report noted that OLT was hampered by problems with land valuation, a complicated payment system and a lack of a nationwide cadastral survey. The Report also noted that while PD 27 exempted other crops due to the Philippine government’s obligations to the international market, this exemption failed to provide intervention to 340,000 tenants cultivating 705,800 has. of sugarcane, coconut, tobacco, and other and other lands that could have benefitted from agrarian reform (WCARRD, 1987, p. 79).

Another contradiction had to do with the coverage of PD 27. Why cover only rice and corn? Why not other crops as well such as coconuts, sugar, bananas, etc. This debate reflects the tension between proponents of agrarian reform and those who oppose it. Covering only rice and corn made Marcos’ agrarian reform vulnerable to criticisms that the real intent was to target oligarchs and at the same time protecting cronies such as Benedicto, Cojuangco, Enrile, Lobregat, etc. This argument may be answered this way. One, Marcos’ main opponent, Ninoy Aquino, and the Cojuangco clan which owned Hacienda Luisita were not into rice but sugar. Two, rice and corn are essentially for domestic consumption and any shortfall may be augmented by imports. On the other hand, bananas, sugar and coconuts are mainly for export and one of the top-dollar earners. And because the production of these crops required economies of scale, land reform would place production quotas at risk. While rice and corn may be planted on small, individually titled lands without effect on the country’s traditional export earnings. State intervention could then be focused only on support services – technology, irrigation, farm extension and infrastructure to make the program viable.  In short, land reform in rice and corn areas became feasible as these crops did not threaten foreign exchange receipts from the so-called cash crops (Kiunisala 1987, 19).

The Samahang Nayon received full support from government financial institutions, especially the Central Bank. However, the financial scheme designed by Dr. Sacay and the Cooperative Development Program was too complicated for peasants. When introduced, the scheme sounded good on paper and was a concept well ahead of its time. But the program’s design and rationale were beyond the comprehension of peasants.  SN’s design required a great deal of organizational cohesion, financial talent, and unwavering commitment on the part of the farmers. In retrospect, SN implementation could have been done in stages. Change or reforms however do come in waves so that there was a tendency to maximize what could be done in the shortest possible time.

Then in August 1981, a Central Bank circular ordered that one-fourth of the Barrio Savings Fund collected from farmers were directed towards the Kilusang Kabuhayan at Kaunlaran (or KKK). A project of Imelda Marcos’ Ministry of Human Settlements and with the supervision of Conrado Benitez, a close associate of the First Couple, the KKK was designed as a livelihood program intended for urban communities. Where and how to use the fund fell squarely on Imelda’s decision. Thus, in one stroke the hard-earned money contributed by the peasants for their own use was taken by Imelda for other purposes.

The Masagana 99 Program was also a novelty as the program introduced an entirely new system of credit. Lender–creditor relations via the banking system were changed not only with massive government intervention but also with the introduction of a new player – the farm technician –  who helped design and implement the farmer’s work plan. His signature was enough to process the loan. Yet, the Masagana 99 Program was meant more to promote productivity and solve the perennial rice shortage problem more than to improve the income of small farmers.

In spite of its success as a productivity measure, the Masagana 99 Program proved burdensome to the farmers. The first had to do with a change of identity in borrowing, i.e. from the individual to the collective.  With this change, more loans were made available to farmers. But if the farmer had to contend with repaying his own loan to one particular lender only, this time the farmer had to come up with a detailed work plan, join the Samahang Nayon, and complete the requirements. With respect to technology, the farmer had to learn new techniques and methods that were unknown to him. If farmers were used to planting traditional varieties that required less effort to plant, the introduction of new hybrid or high-yielding varieties (HYVs) proved difficult for the farmers for it takes time to master this new technology. Thus, the farmer had to undertake this double burden in so short a time to qualify as a beneficiary.

The insurgency had shifted from rice and corn lands prior to 1972 towards farms or plantations that were outside the coverage of land reform – sugar, coconut[7], and banana. Peasants and farm workers in these areas became easy targets of radical peasant organizing. Indeed, those outside the coverage of agrarian reform suffered more than rice and corn farmers. Raging issues such as the ill-effects of mono cropping and the dismal conditions of sugar farms workers are highlighted as a way of comparing these areas with those under PD 27 as well as to contextualize the beginnings of a more radical agrarian reform program in the post-Marcos era.

 

Table 6: Area Planted to Sugarcane, 1963 – 1979

Crop Year Area Planted (in 000 hectares)
1963 – 1964 292.2
1965 343.4
1966 310.3
1967 283.4
1968 296.6
1969 320.7
1970 376.7
1971 473.3
1972 420.3
1973 434.8
1974 465.6
1975 513.5
1976 533.2
1977 567.2
1978 498.3
1979 416.9

Source: LUSSA 1982, 91.

 

Table 7: Philippine Sugar Production, 1972 – 1973 to 1979 – 1980 (in MT)

Region 1972 – 1973 1973 – 1974 1974 – 1975 1975 – 1976 1976 – 1977 1977 – 1978 1978 – 1979 1979 – 1980
Luzon

 

441,038 507,357 498,880 670,543 593,971 568,676 474,801 538,468
Negros

 

1,434,906 1,441,084 1,420,976 1,601,510 1,540,469 1,336,976 1,364,061 1,292,533
Panay

 

234, 647 294,983 235,122 287,954 259,950 187,596 202,192 193,214
Eastern Visayas 123,001 167,364 188,723 228,337 197,964 154,112 157,606 146,018
Mindanao

 

11,961 35,013 47,271 86,958 91,409 89,170 89,332 96,258
Total 2,245,554 2,445,801 2,390,974 2,875,303 2,683,763 3,336,529 2,287,983 2,266,491

Source: LUSSA 1982, 93.

 

Table 8: Distribution of the Philippine Sugar Exports, 1971 – 1977 (in 000 MT)

Destination     1971 / % share 1975 / % share 1976 / % share 1977 / % share 1978 / % share
Algeria
China (PROC) 199.3 / 16 283.8 / 11.8
Indonesia 10 / 1.1
Iran 53.9 / 5.5
Iraq 104.1 / 8.1
Japan 476.2 / 49 32.5 / 3.7 62 / 5.3 236.6 / 9.9
Korea (South) 71.7 / 6.6 5.3 / 0.3
Malaysia 42.2 / 3.6 40.2 / 1.7
Singapore 8 / 0.6
United Kingdom 51 / 5.2 32.5 / 3.7
United States 1,344.7 / 100 328.7 / 33.8 480.3 / 55.6 625.9 / 58.7 1,223.9 / 50.6
Soviet Union (USSR) 195.7 / 22.6 608.2 / 25.2
Others 62.4 / 6.4 123.2 / 14.3
Total 1,344.7 972.2 864.0 1,124.2 2,419.0

Source: LUSSA 1982, 95.

 

Table 9: Daily Average Wage Rates of Farm Workers by Farm Operations (in pesos)

Farm Operation 1975 1976 1977 1978 1979
Plowing 6.92 9.61 10.34 11.53 11.64
Planting / Transplanting 5.46 8.19 10.65 11.40 11.50
Weeding 6.11 6.80 7.34 7.36 7.42
Fertilizer Application 5.45 6.66 9.84 10.09 10.18
Spraying / Dusting 8.24 8.30 8.88 9.65 9.20
Harvesting 6.00 9.32 11.59 11.65 11.76
Average 6.36 8.13 9.77 10.28 10.28

Source: LUSSA 1982, 107.

 

 

Conclusion

The Marcos agrarian reform program may be framed in the following contradictions:

 

Rhetoric vs. reality

Land ownership was the hallmark of the Marcos agrarian reform program. PD 27 made peasants owners of the land they tilled for previous tenurial arrangements allowed only sharecropping and leasehold. However, PD 27 covered only 14% of all agricultural lands and only 17% of all farmworkers. The 5 hectares retention limit deprived 55% of tenants in rice and corn lands to own lands. And that the biggest resistance to reform came from the small landowners. Moreover, the government justified the non-inclusion of other crops as: one, due to international commitments and two, would have adverse effect on productivity.

 

Social justice vs. productivity

The land-to-the tiller program was meant to address agrarian unrest and prevent political instability, to deprive opponents of the state’s potential recruits. However, land reform measures in other countries that graduated into capitalist industrial economies, the emphasis was on productivity or making farming a profitable enterprise. Agriculture was connected to the national supply chain much to the benefit of farmers. The introduction of corporate farming in the guise of food security eventually undermined family-sized farms that could have been covered by PD 27 and distributed to landless peasants. Bureaucrats vs. technocrats

 

Technocrats versus bureaucrats

While technocrats designed the program, it was the bureaucrats that saw its implementation. Technocrats imposed unrealistic demands for peasants to own lands such as documentation, land valuation, cooperatives etc. but it was the personnel of the Department of Agrarian Reform and farm technicians from the Department of Agriculture who had to face peasants who could not understand the arduous processes involved or landowners who were reluctant with the program or dissatisfied with the compensation provided. Sometimes misunderstandings led to harassment thru court and administrative cases.

 

Self-interest vs. community/group interest

Membership in the Samahang Nayon was compulsory before tenants could become beneficiaries. They were thus a “captured audience” of the program. Moreover, the guidelines the Samahang Nayon implemented induced farmers not only to save but to bail out defaulting members of their cooperative. Unrealistically, they were asked to set up cooperative banks, an indication of how remote program designers were to the reality on the ground. Furthermore, tenants must now assume responsibility for other tenants, requiring additional costs and responsibilities. Overall, this burden proved to be onerous on the part of the farmers, an additional yoke the farmers had to bear in order to qualify for the program.

 

Productivity vs. sustainability

While the initial results of the agrarian reform program were positive, the question of sustainability eventually caught up. The introduction of high-yield varieties (HYVs) proved to be dependent on farm inputs in which costs spiraled over the years becoming unaffordable to peasants and raising sharply the cost of production. In sugar lands, monocropping became the justification to meet international commitments and obligations. Monocropping however proved to be disastrous to planters and tenants when the prices of sugar started to spiral in the late 70s. Doubly hard for the farmworkers was the prevalence of the seasonal work system, wherein work was available only for a few months a year. And to justify the competitiveness of sugar prices, wages were kept to a minimum. In coconut farms, taxes imposed on produce were minimal when prices of copra in the world market were high. But even when the prices of copra plummeted, additional taxes continued to be exacted from farmers.

 

 

Notes

  • [1] This article uses the phrase agrarian reform over land reform. While land reform focuses on land distribution and was the practice in many countries in the postwar years, lessons from many experiences showed that support services such as credit, extension services etc. were necessary to ensure the success of land ownership, thus agrarian reform.
  • [2] In Virata’s memoir, he recalls saying: “Rather than for the landowners to lose their lands to the NPA, we better have agrarian reform for the farmers so that they will be with us.” (Sicat 2014, 404). Marcos on the other hand had this to say: “the answer of communism is the abolition of private property. By this we mean nothing but that wealth and property shall not be utilized in such a manner that it constitutes the new barbarism…We have promised by the proclamation of martial law, we have committed our very lives, our future and our dreams to two objectives. The first, the eradication of the armed force of the rebellion of the communists…Number two, we must now remove the social roots of grievance and rebellion. The first root of grievance and rebellion is the feudal land system in the Philippines. It must therefore go” (Marcos 1972, 31&34).
  • [3] Dr. Orlando Sacay worked as a consultant for rural development in many agencies prior to his appointment as undersecretary. His unit, the Cooperative Development Program, was later transferred to the Department of Agriculture as part of government streamlining and restructuring.
  • [4] Selda or cells or groupings. Farmers were encouraged to partner with other 5 to 15 farmers based on contiguity to access the loan jointly. Like the Samahang Nayon, group liability for the loan became the guarantee of lenders.
  • [5] Scholars and analysts attribute the success of the program to favorable climate conditions or the absence of destructive typhoons during this time period, unlike previous years where typhoons and record-level rainfall brought unprecedented flooding in Central Luzon, the country’s rice bowl.
  • [6] Scholars and analysts attribute the success of the program to favorable climate conditions or the absence of destructive typhoons during this time period unlike previous years where typhoons and record level rainfall brought unprecedented flooding in Central Luzon, the country’s rice bowl.
  • This however did not mean that the Philippines became a rice-exporting country like Vietnam, Thailand, or India. In fact, these years were more than the exception to the rule as the Philippines began importing rice once more.
  • [7] The issue of coconut farms and the so-called coco levy funds shall be the subject of the July issue whose focus shall be on Eduardo “Danding” Cojuangco, Jr.

 

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