Position Paper on House Bill 2984[1]


Even the staunchest rural development advocate cannot deny that landowner compensation remains a persistent problem in agrarian reform. The inadequacy of compensation values and delays in payment to landowners, among other concerns, have often been used to justify calls to terminate the land acquisition and distribution (LAD) component of Republic Act No. 6657; this even as policymakers continue to grapple with the issue of whether or not to authorize further allocations for the program as its “funding deadline” looms.

To address this problem, House Bill 2084 was filed in the House of Representatives by Hon. Florencio Garay with the main objective of increasing the cash percentage of landowner compensation.

The Explanatory Note of said bill reads:

Under Section 18 of the same law, it appears that only a small portion of the compensation for lands surrendered to the farmers is paid in cash, to wit: 25% for lands above 50 hectares, 30% for lands above 24 hectares up to 50 hectares and 35% for lands 24 hectares and below. As proposed, this bill increases the cash portion to 40%, 50% and 60%, respectively, so as to give the landowners a more equitable compensation for what may have been the product of his decades of hard work and savings.

Indeed, since the inception of RA 6657, many landowners have raised complaints that the delays in payment and the schemes adopted by the government have not given them enough incentives to invest in enterprises that would spur industrialization and that the cash portion was too low to encourage them to explore other viable alternative forms of investment.

In theory, there is nothing inherently objectionable with the proposal of the legislator from Bislig City. The proposal involves the mere increase of the cash percentage of the total payment to be given to the landowner as compensation for the land expropriated by the government for distribution to landless farmers. It does not call for an increase in the total payment itself. IDEALS understands that this bill could be of much help to small landowners not enjoying the resources enjoyed by big landowners, and on whose livelihood land expropriation will impact heavily.

However, the landscape on which this bill is foisted must be taken into consideration. It cannot be gainsaid that the goals of the Comprehensive Agrarian Reform Program (CARP) and the targets set by the Department of Agrarian Reform (DAR) have yet to be met, particularly with regard to land acquisition and distribution, support services delivery and the development and capacity-building of agrarian reform beneficiaries.

Thus, IDEALS submits that HB 2984 must be supported only when the following assurances are made. First, that the increase in cash percentage of landowner compensation must not be a reason for a delay in the land transfer component of CARP and that that it will not be used as an excuse to justify the failure to deliver support services for agrarian reform beneficiaries; second, that it will necessarily be accompanied by an over-all increase in the budget provided for CARP implementation; third, that this landowner concession may only be made when it is accompanied by more people-oriented and farmer-oriented reforms to remedy persistent problems of unabated conversion and non-distributive schemes.

The many studies undertaken in the past have all demonstrated that for any land redistribution program to be effective, it is imperative that it be time-bound. Completion must be made at the soonest possible time. Statistics from the Department of Agrarian Reform reveal that from 2001 to 2005, the DAR was only able to distribute an average of 77,140 hectares of private agricultural lands, well below the commitment of President Gloria Macapagal Arroyo in her State of the Nation Address. In a PARC Executive Resolution No. 2007-102-01 issued February 5, 2007, DAR still has a working balance of 1,077,598 hectares. It is clear that the targets have yet to be met.

The debates in the House of Representatives and in sectoral consultations nationwide have allowed landowner objections to LAD to resurface. Invariably, calls for a moratorium in or even a complete abandonment of the land transfer program are made. We believe such moves would imperil the agrarian reform program as it has been envisioned by the Constitution, for land acquisition and redistribution lies at the very heart of the issue of rural development. Subsequent to this should be the delivery of adequate support services to capacitate our farmers to till the lands on their own and manage their own enterprise. All these activities require a serious commitment on the part of government to implement the agrarian reform program to include the allocation of substantial funding for all program components.

Even if the eventual extension of CARP would still carry a LAD component, prevailing over the landlord opposition, it is not difficult to contemplate a scenario where distribution would be delayed because the government is unable to meet the new requirements of greater cash percentage in landowner compensation. As such, the necessary mechanisms have to be in place to ensure that acquisition and distribution are not held hostage by budgetary constraints of the Department of Agrarian Reform.

Which necessarily leads us to our second point: there must be a greater budget allocation for CARP implementation. In the same PARC Resolution, it was stated that no less than PhP 327,295,069,388 is required for a 10-year CARP extension. Indeed, without any concomitant increase in CARP budget, the resources would be used up simply on cash payments to landowners, leaving precious little for support services. If there is anything good that should be made to come out of the bill, it is to expedite the process of compulsory acquisition (at present, less than 10% of lands for redistribution have been acquired via compulsory acquisition) and lessen, if not neutralize landowner resistance, by presenting a palatable concession. It should not be used as a delaying tactic or a ploy to circumvent the mandatory provisions of the law.

Lastly, IDEALS maintains that the proposal to increase the cash percentage of landowner compensation is a concession that should only be admitted when accompanied by reforms that are farmer-oriented and whose clear objectives would be to stem rural poverty and propel genuine development in the countryside. Based on the lessons learned over the past twenty years, the need for these reforms is urgent and compelling. Beset by persistent problems of conversion, leasebacks, stock distribution options, a strong and reinvigorated agrarian reform program post-2008 requires decisive steps to plug these holes. These are imperatives that must be addressed first before initiatives be undertaken to address landlord concerns.

AR Dialogues No. 1-08 / January 31, 2008

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