Get Real

Screwed coming and going

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The decision of the Supreme Court on Hacienda Luisita was announced on Tuesday, April 24. As of this writing (Friday, April 27), the decision has yet to be promulgated. My information is that the discussion of the high court en banc on Tuesday needed to be properly reflected in both the majority decision and in the dissenting opinions, and so some amount of rewriting had to be done. Plus, of course, the signatures of all 14 participating justices (Associate Justice Tony Carpio inhibited himself) have to be affixed. Which is why the delay, and why it still hasn’t been uploaded onto the Supreme Court website.

The most contentious issue was the matter of the compensation to be paid to the owners of Hacienda Luisita (Tarlac Development Corp., or Tadeco, wholly owned by the family of Jose Cojuangco Sr.). Both in the original and this latest decision, the vote was 8-6 in favor of compensation based on the November 1989 fair market value of the land—November 1989 being when the Stock Distribution Option was “chosen” by the farmers, and Hacienda Luisita Inc. (HLI) was born, its ownership divided between the farmers (one-third) and Tadeco (two-thirds).

The reason that the farmers’ share in the new corporation was only one-third was: The land that was their contribution to HLI—4,916 hectares—was valued at P40,000 per hectare, for a total of P196 million, while the Tadeco contribution was valued at P393.9 million.

And who was ultimately responsible for that valuation of P40,000 per hectare? Why, the Department of Agrarian Reform, of course, which is supposed to consult Land Bank of the Philippines in this regard.

I emphasize the above because in the course of the mediation hearings conducted on the Supreme Court’s orders in 2010, Land Bank offered the information, based on its records, that the value of similar agricultural land in Tarlac in 1989 was P170,000 per hectare.

Which can mean one of three things: the DAR did not bother to consult Land Bank in 1989, choosing P40,000 by itself; it consulted Land Bank but disregarded its valuation, with the latter keeping quiet about it; Land Bank itself gave the valuation of P40,000 per hectare at the time, and decided to change the figure to P170,000 only in 2010.

Whichever version one uses, the fact remains that P40,000 per hectare was the valuation that was given in November 1989 to the Luisita land given to the farmers. And therefore, following the high court’s order, that is what should be paid to the owners today. If the DAR uses any other amount, it would be in violation of the high court’s decision, and would be grossly unfair to the farmers.

Why? Because it was that P40,000 per hectare valuation in 1989 that gave the Cojuangco family absolute control of the new corporation, the farmers’ one-third ownership effectively meaning that they had no control of their lives or of their land.

It is also noteworthy that had P170,000 per hectare been the valuation given by the DAR in 1989, there would have been no HLI to begin with—because that means that the majority of the HLI shares would have had to belong to the farmers, and they would have been in control of the corporation. Which also means that there would have been no point to a Stock Distribution Option or a Stock Distribution Plan as far as Tadeco was concerned. The farmers would have then gotten the land outright.

It was that P40,000 valuation that kept the farmers in bondage. And if only as an arithmetic aside, the farmers would have had the controlling interest in HLI even had the valuation been placed at P80,000 per hectare, instead of P170,000. It also bears repeating here that Tadeco, with the DAR’s imprimatur, valued its own contribution of land to the new corporation at P500,000 per hectare, the same land as that which was valued at P40,000 per hectare if contributed by the farmers. In other words, the farmers were screwed coming and going.

It is only karmic that the weapon used to screw the farmers is now turned on the screwers. The amount is P40,000 per hectare, not a centavo more. But shouldn’t interest be paid to Tadeco, interest that would have accrued had the land been sold to the farmers in 1989? Yes. But only if, at the same time, Tadeco is made to pay rent for the farmers’ land that it used over the same period of time. What was being paid to farmers over that period was wages (and very low wages at that), not rent.

At this point, if the Reader still thinks that Tadeco may be getting the short end of the stick, please disabuse yourself of that thought.

Remember: The total land area of Hacienda Luisita that should have been subjected to agrarian reform was 6,443 hectares, but the actual area reformed was 4,916 hectares. Which means that the owners of Tadeco, with the approval of the DAR, were allowed to keep for themselves 1,527 hectares of land.

That’s a heck of a lot of land. Even if one deducts 66 hectares that supposedly comprise the sugar mill land, 263 hectares supposedly unfit for agriculture, 266 hectares of roads and creeks, and 121 hectares  “given”  to the farmers for home lots, there would still be 811 hectares of land left for the owners of Tadeco.

Eight hundred eleven hectares of land is larger than most of the other sugar plantations in the country.

Which leads to the question: Shouldn’t the DAR reform that land, too? The original decision of the Supreme Court gives it the authority to do so. I sincerely hope that Agrarian Reform Secretary Gil de los Reyes is made of stern stuff.

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