Joint Membership Meeting
A Conversion on the Extension of Carl

16 January 2009 - The president signed on 10 June 1988 the historic Comprehensive Agrarian Reform Law, mandating the distribution of agricultural lands to farmers. On 30 December 2008, the land acquisition and distribution component of CARL expired, but not before Congress extended the law for six months to enable lawmakers to reach a consensus on what amendments will be made to close the expired law’s loopholes. Meanwhile, the extended CARL suspended the government’s compulsory acquisition and distribution of private landholdings, limiting it only to voluntary offers to sell land and voluntary land transfers — a decision criticized by CARP supporters and beneficiaries.

While the fate of CARL hangs in suspended animation, questions of its effectiveness in attaining social justice and enhancing economic growth were raised. To shed light on this controversial issue, the Management Association of the Philippines and the Makati Business Club invited Ernesto Garilao, former secretary of the Department of Agrarian Reform, and Christian Monsod, chairman of the Philippine Agrarian Reform Foundation for National Development, as guest speakers during their joint general membership meeting held last 16 January 2009 at the Peninsula Manila.

The Heart of Social Justice
“Agrarian reform is not only a constitutional mandate, but it is the right thing to do to address the problems of inequality and poverty,” said Garilao as he opened the discussion on the importance of agrarian reform.
Monsod supported this, saying that productivity growth in agriculture is necessary to lift the rural poor out of poverty. “Seventy percent of the country’s poor families are residing mostly in rural areas, and 66% of poor families have household heads that are engaged in agriculture,” stated Monsod. He warned that concentration of assets will lead to the concentration of power and ability to produce political outcomes, thereby breeding social discontent. As such, Monsod supports Kenneth Arrow’s theory that in order to achieve efficient outcomes starting positions must be adjusted, and “asset reform is all about starting positions,” he said.

Since CARL’s inception, 7 million hectares out of the 8.2 million target have been distributed, but Garilao stressed that further intervention is required to make these lands productive. The former DAR secretary pointed out that during President Ramos’s term, the government provided the necessary support services, such as credit availability, irrigation and rural infrastructure, technical assistance to agrarian reform communities, and training to develop farmers’ management and technical skills. He added that strong political support, better bureaucracy, and proper coordination with stakeholders are among the necessary requirements to make an agrarian reform program work.

Benefits and Loopholes
Citing studies conducted separately by Arsenio Balisacan, Cielito Habito, and a German technical group (GTZ), Monsod enumerated the positive impact of CARP over the years. He said that being an agrarian reform beneficiary (ARB) possessing land in an agrarian reform community (ARC) increases a farmer’s household income, expenditures, and welfare. It has also been observed that poverty incidence in ARCs decreased from 40% to 25% over the period 1990 and 2000. “Every peso invested in ARCs yields benefits of P5.41, compared to the yielded benefit in non-ARC areas, which is P3.41,” said Monsod. However, having only 47% of the ARBs located in ARCs should not deter the government from continuing CARL but, instead, work harder to intensify and fully implement the program with more efficiency.

The impact of CARL on land productivity was also discussed as Monsod shared data from the Bureau of Agricultural Statistics showing ARCs having higher yields in rice and corn compared to non-ARC produce. He also stressed that small farms, even those less than two hectares, can be very productive, such as in the case of Velez Malaga where farmers have 0.93 hectares each but are already in their second cropping for sugarcane.

On Compulsory Acquisition
Both speakers stressed the importance of compulsory acquisition in implementing agrarian reform. “Compulsory acquisition of largely privately owned land is very crucial in completing CARP and achieving its objectives,” said Monsod. Comparing the different modes of land acquisition in the history of CARP reveals that voluntary offers to sell and voluntary land transfers have both exceeded targets with accomplishment rates of 127.8% and 208.6%, respectively. However, compulsory acquisition only accomplished 17.7% of its target. “Some large landowners used political influence to prevent confiscation, others tried to circumvent the reform by illegal land transfers and land use conversion,” reports GTZ in its study, as referenced by Monsod. “The landowner-dominated Congress delayed persistently the allocation of funds.”

Addressing Shortcomings
The implementation of CARL has been far from ideal. Both speakers agreed that land distribution remains a big problem, particularly for sugar lands where compulsory acquisition is low. Garilao added there are still many uninstalled farmer-beneficiaries, or those awarded with land titles but unable to till their lands because of harassment, unpaid lands, low valuations, and conversions. Existing policy distortions against agriculture and the lack of credit extended to farmers are also perennial concerns. The implementation of CARL has been incredibly slow, and governance weaknesses and inadequate institutions have been noted as part of the program’s shortcomings.

In order to address the problems and shortfalls of CARL, the speakers suggested reorganizing DAR. “Part of the opposition to the program is the fact that DAR has never really been explicit in accountability of the use of resources and performance,” said Garilao. Monsod, on the other hand, suggested that DAR prioritize land acquisition development and agrarian justice, giving special attention to the 12 most problematic provinces. In addition, the speakers urged the government to enter into more negotiated settlements and mediation to resolve landowner compensation issues and guarantee support services to beneficiaries. In relation to access to credit, Monsod deemed it necessary to individualize collective certificate of landowner acquisitions (CLOAs) covering 1 million hectares and to enact an agricultural credit act.

Christian Monsod ended with a statement that speaks volumes about agrarian reform: “This is a big challenge for all of us when institutions are weak, governance is fragile, and the external environment is deteriorating. Clearly, we
need to do more, not less.”
Download Garilao's presentation | Download Monsod's presentation

ABOUT THE SPEAKERS

Ernesto D. Garilao
Mr. Garilao served as the secretary of the Department of Agrarian Reform from 1992 to 1998, and as the vice-chairperson of the Social Reform Council, then the highest policymaking body for the Philippines’ anti-poverty program from 1994 to 1998. He is currently the president of the Zuellig Foundation and the executive director of the AIM-Team Energy Center for Bridging Societal Divides.

Christian S. Monsod
Mr. Monsod is currently the chairman of the Philippine Agrarian Reform Foundation for National Development, as well as the legal counsel for Task Force Mapalad, a national federation of farmers, farm workers, and individuals working for agrarian reform and rural development.