Time to let go—or not? (2)

“By far the most painstaking and careful undertaking to evaluate the performance of CARP on beneficiary welfare is the 2007 APPC Impact Assessment Study funded by DAR (updated in November 2008 as ‘Land Reform, Rural Development and Poverty in the Philippines: Revisiting the Agenda’). …  [T]he effort is remarkable for its attention to detail.”

That’s from Raul Fabella’s paper titled “CARP: Time to Let Go,” where he describes a major source of “evidence” to prove his point.

Well, Reader, that study by the Asia Pacific Policy Center was the basis of a presentation I made to the Catholic Bishops’ Conference of the Philippines in support of my contention that the Comprehensive Agrarian Reform Program was worth completing. How then could Fabella use it to show that CARP has failed? Which of us misread? You judge, Reader.

“Impact on Income…. 1) The average values of per capita income, per capita expenditure, and per capita net farm incomes of farmers with NO LANDS (whether in ARCs or non-ARCs ) are SIGNIFICANTLY LOWER than their counterparts owning land. 2) The average values of the three income categories in the other four categories of farmers (those owning land) are not significantly different from each other. THIS SHOWS THE IMPORTANCE OF OWNERSHIP OR CONTROL OF LAND IN DETERMINING INCOMES OF FARMERS.” (Emphasis supplied-SCM)

“Impact on Poverty…. In particular, ownership of land implies that the odds that you are non-poor is at least 1.76 times to as much as 2.6 times that of being poor.”

Does that sound that the 2007 APPC study found CARP a failure? The first of its six recommendations, in fact, was to “finish the CARP scope,” especially the lands under compulsory acquisition, which are “the lands that really matter when equity and prospects for long-term growth are considered.”

The 2008 “update” that Fabella mentions has the stated objective of “providing support to the Government of the Philippines in its thrust to improve the welfare of the rural poor through the extension of CARP.” Why would it do that if it thinks CARP is a failure and that it is time to go?

Here are its key findings on CARP’s impact on poverty: 1) Positive impact on provincial growth (Balisacan and Fuwa, 2007) and hence on poverty indirectly; 2) But very small direct effect on poverty, especially during the last decade; 3) Redistribution of private land has strong effect on poverty: +10 percent accomplishment leads to +0.3 percent in rate of poverty reduction; 4) Compulsory acquisition has strongest effect on poverty: +10 percent leads to +0.8 percent in rate of poverty reduction; 5) Failure to target prime private agricultural lands and slow implementation appear as causes of disappointing progress.

The point that is being made in both studies is obviously not that it is time for CARP to go because it has failed miserably but that progress has not been as expected. And both studies (remember, this was written five to six years ago) point out what has to be done. They do not recommend throwing out the baby with the bath water, as what seems to be what the Time-To-Go advocates want.

So it is clear that CARP needs to be fully implemented, not killed. If every government program is to be scrapped because it has not performed according to target, we would have no education program, no Commission on Elections—in fact, we should scrap the country’s entire medium-term development plan. Does that make sense?

Why am I such an advocate of CARP, as flawed as it is? As I said, the impact studies show that there have been gains, that the gains outweigh the losses (cost-benefit analysis). More importantly, sometime in 2008 Ciel Habito gave a report card on the asset reform programs of the government (CARP, indigenous people, urban land reform, housing) based on a nationwide survey of beneficiaries. He reported that 81 percent of the CARP beneficiaries stated that despite the difficulties they experienced (lack of credit, support services, infrastructure), they are better off now than they were before CARP.

I recall that during the first Aquino regime 27 years ago, we discussed the pros and cons of CARP with a farmer and a landowner in a TV program. The landowner said he was against CARP because the farmer-beneficiaries would be given three hectares or less each, and that would not be enough to keep them alive. The farmer replied: Just give us the land and the support services, and I assure you, we will do the rest.

After 27 years, the same argument is being made: The landholdings of the beneficiaries are too small. Yet no one seems to remember that the average farm size in Japan, South Korea and China are 1.37, 1.23, and 0.43 hectares, respectively. Small is indeed beautiful. In fact, the UN International Fund for Agricultural Development (2008) said that central to global food security is the productivity of smallholder farms of less than two hectares.

Let us not forget the basics, as set forth in the 2007 APPC study: “The evidence suggests that on the average, a developing country with an initially high land inequality is expected to have a lower long-term income growth rate and slower pace of poverty reduction than a country with a more favorable land distribution.”

Well, the Philippines as a whole has a larger Gini coefficient for land distribution (i.e., land is more unequally distributed) than the average for East Asia and the Pacific. It also exhibited the lowest average growth rate in the 50-year period between 1960 and 2009 among our Asean neighbors Thailand, Indonesia and Malaysia, which, together with South Korea and China, are all rapid-growth countries. Does that ring a bell?