Norlyn Tomanda

Agrarian Laws

Agrarian Laws: Effects in the Socio-Political Landscape in the Philippines

The basic principles of a genuine, meaningful and sustainable agrarian reform program are
enshrined in the long history of agrarian unrest and rural social movements that have
punctuated the country’s experience since colonial times.

The core principle in agrarian reform is the primacy of the right of all members of the
agricultural labor force who do not own land, near-landless farmers, farmworkers, small
fisherfolk and other direct producers to own and control the land, have full access to other
natural resources and gain full disposition over the produce.

A series of land reform programs have been legislated and, to a lesser extent, implemented by
successive administrations during the last several decades in the Philippines.

Land reform policies have been continuously on political agenda in the Philippines since the
early part of this century. Generally, the land reform initiatives of the government have been
combinations of (though not limited to) regulation on land tenancy, resettlement to public
lands, and appropriation and redistribution of private lands. Since the Commonwealth period,
among these three broad categories of land reform measures, governments in the past tended
to rely more heavily on the first two (tenancy regulation and resettlement) rather than on the
politically contentious land redistribution. However, as the relative scarcity of land increased
due to the closure of the frontier areas, and in response to the continuing peasant unrest,
redistributive land reform has become increasingly high on policy agenda more recently.

In the early years of the Martial Law period land reform was high on policy agenda. A month
after the Martial law regime started, President Marcos issued Presidential Decree No. 27 (PD
27) aimed at “emancipation of the tiller from the bondage of the soil.” Under PD 27, all rice
and corn fields over the lowered retention limit of 7 hectares were to be transferred to the
tenants who tilled them at a price 2.5 times the value of average annual production, payable
to the Land Bank at 6 percent interest within fifteen years. When the tenant completed
amortization she/he would be issued a land title, called “Emancipation Patent” (EP),
transferable only to her/his heirs; during the period of amortization the tenant would receive a
“Certificate of Land Transfer” identifying her/his cultivated area and promising her/him the
right to purchase it. On the other hand, land owners were to be paid 10 percent in cash and 90
percent in Land Bank bonds, as was stipulated in the 1963 Code. Furthermore, under the
“Operation Leasehold (OLH) Program,” tenanted rice and corn fields under the 7 hectare
retention limit were to be tilled under fixed rent lease contract with the official rental ceiling
of 25 percent of average output (net of costs for seeds, harvesting, threshing, loading,
hauling, and processing) for three ‘normal’ years prior to the reform implementation. While
PD 27 can be seen as an improvement in expanding the potential coverage of land reform
compared to earlier legislation, it still included some notable limitations in its design, which
were also shared by the earlier laws. Among others, PD 27 stipulated; (1) that the land must
already have been in agricultural production by 1972, thereby excluding new agricultural
land which subsequently amounted to 1.24 million hectares between 1971 and 1980, (2) that
land reform was limited to rice and corn fields which amounted to about 4 million hectare as
of 1972 while excluding its application to 2.5 million hectares of coconut and sugar lands (as
of 1972), and (3) that the decree applied only to tenanted areas, which represented about 24
percent of all rice and corn areas, excluding landless laborers and subtenants amounting to
3.5 million in 1975. As so designed, PD 27 would cover about 12 percent of the total
Philippine farm area as of 1972. In addition, such design provided landowners covered by the
decree with opportunities to avoid its implementation by shifting to crops other than rice or
corn (or to non-agricultural use), or by evicting tenants, replacing them with hired labor and
undertaking direct management of the farm operation.

Originally meant to restore the dignity and improve the lives of the then 10 million-strong
rural labor force by transforming them into owner-cultivators and productive citizens, the
watered-down CARP/ER and its skewed implementation have instead aggravated rural
inequalities and brought about stagnation in the countryside. It is estimated that 75 percent of
the country’s poor live in the rural areas. Given the official rural poverty incidence of 38
percent (compared to 14 percent for urban areas), there are at least 13 million rural-dwelling
Filipinos suffering in poverty. Of the country’s poor households, 61 percent are in the
agricultural and fishery sectors. Poverty incidence is highest among farmers at 41 percent and
fisherfolk at 37 percent compared to the national poverty incidence of 27 percent. From 2009
to 2012, more people in the countryside entered subsistence poverty (125,724) than nationally
(107,877). Despite CARP/ER’s avowed goal of redistributing land, and although many
beneficiaries have become owner-cultivators, inequities in land distribution have been
increasing with the land inequality ratio today peaking at 0.57, up from 0.53 in 1960.
Furthermore the agricultural sector’s labor productivity is only 16 percent that of industrial
workers and 31 percent of service workers.

High inequality in land distribution is bad for both equity and overall economic growth.
Unfortunately, the policy discussions have tended to focus on the equity side of the benefits
from a reduction in land inequality. Yet, it appears that the overall efficiency gains (economic
growth) from an informed land reform program represent an enduring source of poverty
reduction. Put differently, a policy advocacy for land reform has to highlight recent findings
from growth empirics that high inequality in the distribution of land (or assets, generally)
depresses the long-term potential of the economy to grow at a faster pace and hence to forego
opportunities for the poor to get out of poverty traps.

However, the road to the design and implementation of an effective land reform program is
paved with dangers. Many land reform initiatives in developing countries, including the
CARP in the Philippines, have had limited success only partly because they failed to
realistically confront the budgetary requirements of the program and, more importantly, the
political landscape and technical capacity of the implementing agencies. This failure has
meant that land acquisition and the provision of support services could not be done as swiftly
as in the East Asian experience. Consequently, the slow pace of the program had created
uncertainties, adversely affecting output and investments in agriculture.
Moreover, it has induced premature conversion of agricultural lands into non-agricultural
uses.

After almost 30 years of implementation of an agrarian reform program meant to emancipate

the tillers (tenants and agricultural workers) from servitude to elite landowning interests, the
goal remains elusive with final resolution nowhere in sight. Perhaps what is needed is a
thoroughgoing overhaul of the program and its basic premises a well as the overall socio-
economic context under which such an equity-oriented and social justice based program
operates.

Sources:

1. Agrarian Reform and Poverty Reduction in the Philippines, Arsenio M. Balisacan. 2007
2. Philippine Agrarian Reform in the 21st Century, Eduardo Climaco Tadem, May 2015