Perils of an unrestricted rural land market

The Foundation for Economic Freedom (FEF) argues that the fundamental problem of Philippine agriculture is the “restrictions in the rural land market” due to the Comprehensive Agrarian Reform Program’s 10-year prohibition on selling and mortgaging of CARP lands (Inquirer, 5/19/17). Asserting that these restrictions keep farmers poor and prevent them from raising their productivity, the FEF echoes earlier calls for a “property rights regime” with no agricultural land ceiling.

We beg to disagree.

First, contrary to FEF claims, Philippine rural poverty is characterized mainly by lack of access to land and productive resources. A study by Focus on the Global South using official data shows that the top 15 provinces with high poverty incidences also have the highest land redistribution backlog, with 13 of these provinces above the national poverty average of 26.5 percent.

On the other hand, areas with high land distribution accomplishments showed significant positive changes in terms of rural poverty and farm productivity. Studies by the Asia Pacific Policy Center (APPC) reveal that CARP has contributed to the “observed changes in rural welfare in agrarian reform communities (ARC) and amongst landowning farmers.”

The APPC’s Arsenio Balisacan writes that “poverty incidence in ARC barangays went down by 16 percentage points between 1990 and 2000, and figures for 2005 and 2011 show that average yields in ARCs actually improved relative to national averages for all crops—palay, coconut, sugar and corn.” The Annual Poverty Indicators Survey for 1998, 2004, and 2011 indicate that CARP households registered an increase in their average per capita income by 12.3 percent and reduction in poverty incidence by 21 percent compared to the general population and landowning non-CARP households.
Monsod and Piza (2014) report that the average net profit from agrarian reform beneficiary (ARB) farms in ARCs was 10 percent higher than non-ARB farms in ARC, and that a benefit-cost analysis of the ARC model compared to “the mainstream agricultural development strategy” shows a greater net present value (NPV) for the former. Cielito Habito’s 2008 Report Card on Asset Reform Programs shows that 81 percent of ARBs in ARCs reported improvements in the quality of their lives.

Second, it is disingenuous to call for an unrestricted land market regime to solve the Philippines’ agricultural problems. To paraphrase one of this commentary’s authors, under the current dysfunctional capitalist system where noneconomic factors are prominent, where political and agribusiness rural elites are predatory, and where rent-seeking speculation through voracious property developers rules, it would be highly naive to dream of such a land regime.

Besides, existing restrictions “have not prevented private capital from asserting and invoking the ‘laws’ of the market and encroaching on land reform areas and harassing and dislocating legitimate ARBs in particular and other rural populations in general—all in the name of productivity, efficiency, and optimum land utilization.”

More essential, an unrestricted land market with no ownership ceiling “will simply open wide the rural floodgates to modern mutant versions of the unlamented landlord class and reintroduce the oppressive and exploitative social relations that necessitated a redistributive land reform program in the first place. It is precisely this rapacious property rights regime in the rural sector that a truly just and meaningful land reform seeks to prevent, and where it exists, to overturn.”

Social justice and adequate support services for small farmers are the essential components of a productive and ecologically sound agricultural sector, not large-scale profit-hungry private capital. More than ever, land redistribution remains the key to countryside development and national economic progress.

Eduardo C. Tadem, PhD, is president of the Freedom from Debt Coalition and professorial lecturer in Asian studies at the University of the Philippines Diliman. Mary Ann Manahan is senior program officer of Focus on the Global South.