Agrarian reform can work

“Agrarian reform in the Philippines has failed because it has never been tried.” This is true where government did not give the necessary support services mandated by law to Agrarian Reform Beneficiaries (ARBs). But where these support services were given, agrarian reform succeeded in both increasing agriculture productivity and farmer incomes.

An ARB once told me: “Our former landowner gave us support services such as credit, technology, training and markets. But when he left because of agrarian reform, the government did not give us the substitute support services. Consequently, our livelihood failed. Agrarian reform actually made me even poorer.”

Support Services

In 2003, the farmer-fisherfolk Alyansa Agrikultura was founded with 38 federations and organizations representing all major agricultural sectors. To qualify for membership, a requirement was to advocate “agrarian reform with support services.” Even then, the Alyansa lobbied the government’s Executive and Legislative branches to provide adequate ARB support services. This was never done.

There were exceptions. The Department of Agrarian Reform (DAR) carved out Agrarian Reform Communities (ARCs) where support services, though inadequate, were provided in an integrated way. In those areas, agrarian reform succeeded because both agriculture productivity and farmer incomes increased.

Consider the table above formulated by Toby Monsod and Sharon Piza. Using 2005 data from the Asia Pacific Policy Center and 2011 data from Fermin Adriano, the yields across four major crops were compared between the ARC and the national averages.

From this table, we make the following conclusions:

Looking at the ARC and the National averages, we note that the ARC difference was double in 2011 as compared to 2005 for all four crops.

Using another viewpoint, we compared ARC yield change from 2005 to 2011 with the national change. The ARC was consistently higher than the national: 44 percent versus 18 percent for corn, 108 percent versus -2 percent for coconut, 19 percent versus 8 percent for sugar and 3 percent versus -1 percent for rice.

From both perspectives, the ARCs improved to a much greater extent than the National. Both agriculture productivity and farmer incomes increased. Agrarian reform succeeded, even if the support services provided by the government in those areas were still less than desired.

Unfortunately, the majority of ARBs are not in ARCs. Consequently, they did not get the promised integrated support services.

Budget

For a five-year period, the law stated that P150 billion should be provided for ARB support services. This was not complied with. Consequently, there are many areas where agrarian reform failed.

There are many who are totally against agrarian reform. But if our current inequity continues, inclusive growth will not be attained. The few rich will get the benefits of growth while the many poor will not get their fair share and become even poorer.

The solution is for the government to follow the law and provide the necessary support services. But realizing the government’s poor track record in this area, the private sector must now get involved.

Economies of scale, optimal technologies and market access must be promoted aggressively by the private sector. There is no contradiction between economies of scale and small farmer land ownership. What needs to be done is to organize small farmers and consolidate them into an integrated agribusiness enterprise with the necessary economies of scale in production, financing and marketing.

Former agriculture secretary Senen Bacani, one of the 10 key representatives of the AF2025 Coordinating Group working for an Agriculture Vision for 2025, is implementing such a scheme. Without requiring the divestment of lands by the suppliers of agriculture products for his fruit-processing plant, he makes arrangements for the proper support services to be given to small farmers so they can together unite in an integrated and globally competitive agriculture enterprise. This is why the temporary leaseback and longer-term joint venture agreements should be promoted.

At last week’s forum of the Management Association of the Philippines-Agribusiness and Countryside Development Foundation (MAP-ABCD), chair Ramon Ilusorio suggested that the private sector could provide these support services much more effectively than the government. Besides, there are more investment funds and agriculture expertise in the private sector than in the government.

The government should still fulfill its obligation of providing support services. But in addition, agribusiness corporations and entrepreneurs should also get involved with lease-back and joint venture agreements. They can view these as a transition phase of capacity building for the small farmers.

If agrarian reform is tried with the appropriate support services in the right way, it will no longer fail. On the contrary, it will be the largest contributor to our country’s inclusive growth.

(The author is chair of Agriwatch, former Secretary for Presidential Flagship Programs and Projects, and former Undersecretary for Agriculture, and Trade and Industry. For inquiries and suggestions, email [email protected] or telefax (02) 8522112).