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 50^th 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:

• Full payment for the land, the FB is given 15 years to complete payment or if full payment is made before the prescribed length of payment;
• Membership in the Samahang Nayon or a duly-recognized or authorized cooperative; and,
• Actual use (cultivation) of the land.

 

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:

• General Fund – consisting of an initial payment of 10 pesos as membership fee and annual dues amounting to 5 pesos and other incomes that may be derived such as collection of loans from different borrowers. This fund is intended to cover the expenses that may accrue in the performance of the SN’s functions.
• Barrio Savings Fund (BSF) – the money for this Fund came from farmers themselves. Members were deducted 5% upon the release of their loans from either the Philippine National Bank, the Agricultural Credit Administration, or rural banks and those who did not borrow loans but are required to pay 5 pesos for monthly contributions. The BSF was intended to purchase government equity in rural banks and had the option to purchase shares of stocks and control the rural bank’s policies. Should this scheme not materialize, the BSF may be used to capitalize on a cooperative rural bank with the same subsidies and assistance provided by the Central Bank.
• Barrio Guarantee Fund (BGF) – the money for this Fund is derived from the member’s (beneficiaries for land transferred under PD 27’s OLT) contribution of 1 cavan/hectare/season. This Fund acts as a guarantee for land amortization payments being paid by members, to pay for insurance premiums of all members as well as to finance the establishment of full-fledged marketing cooperatives in SN units.

 

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.

 

 

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.

 

 

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