Win-win

By Alex Magno (The Philippine Star), Jul 15, 2017

If Agrarian Reform Secretary-designate Rafael Mariano had his way, he would have voided all the agribusiness venture agreements (AVAs), cancelled all farmers’ amortizations for the land awarded them and wrought havoc on the flourishing plantation industry in Mindanao. One of his undersecretaries, in fact, urged the farmers to attack LandBank officers with bolos if they came to collect amortizations.

Mariano’s extreme dislike for the AVAs is purely ideological. In his agrarian Utopia, the beneficiaries of land reform will continue tilling their small patches of land independently and for all eternity. All our agriculture would remain in the subsistence stage and petit-bourgeois farmers will have no landlords to exploit them and no farmhands to exploit in turn.

He is even antagonistic to the idea of farmers paying amortization to the government bank that underwrote the land transfers. His version of “genuine” land reform is confiscatory: take the land from the previous owners and distribute them for free to farmer-cultivators.

His is a perverse Utopia. It is a vision that clashes with the reality on the ground.

To begin with, the parcel of land distributed the agrarian reform is too small to be sustainably cultivated. The size of the parcel does not make it economical to mechanize agricultural production thereby keeping food costs high. Small-plot agriculture makes it necessary for government to subsidize irrigation and hand out free seeds and fertilizers for all eternity. The farmer is left too poor to even consider shifting crops. He cannot afford, for instance, to convert his rice plot to an orchard that might have higher yield but require long gestation.

In a word, Mariano’s agrarian Utopia deprives farmer-beneficiaries the economic freedom to decide on how to make their land work for them. It condemns them to working the land without hope of economic redemption.

This is such a cruel Utopia the orthodox Left imposes on our farmers. It is so cruel some farmers look back to tenancy as a better time.

The orthodox vision of creating an independent class of landowning farmers fails everywhere. Apart from the parcels being too small to be sustainable, the land reform model cannot account for differential productivity between pieces of land. Some have fertile soil but want in irrigation. Others are marshland useful for growing mushrooms – or bananas.

If we were to increase the size of the agrarian reform plots, there will not be enough land to distribute to all staking claims for land. The irony of the land reform program is that it has pushed more people from the land and created a large underclass of the rural poor. The program also crippled our agricultural productivity, forcing us to import food.

It used to be unthinkable that smuggling onions and garlic, let alone rice, could be so lucrative. It used to be unthinkable that our cost of agricultural production could be so high as to induce smuggling, which takes advantage of commodity price differentials.

Necessity

Necessity is the mother of invention. So it was that farmer-beneficiaries of land reform and plantation owners found a way wiggle out of the rigidities of land reform orthodoxy and invent the AVA.

Land reform orthodoxy prohibits the farmers to sell their land. While this infringes on their property rights, it is seen as a deterrent to re-concentration of ownership.

Short of selling the land they own but which could not support them, farmers enter into AVA arrangements. This arrangement allows the farmers to earn from leasing their property. If they choose to work for the highly efficient plantation, they receive a competitive wage on top of the lease. In addition, the plantations invest in clinics and schools to look after the needs of the families.

If Mariano and his ilk had their way, they would have the farmers trash the AVA and, as the NPA repeatedly does, burn the plantations. But that would kill the goose that lays the golden egg.

Instead of heeding leftist agitators, members of the Davao Marsman Agrarian Reform Beneficiaries Cooperative recently decided to continue with the AVA and leverage for more benefits. The Marsman Estate Plantation Inc. (MEPI), many years ago, decided to voluntarily surrender their land to the agrarian reform program expecting mutually beneficial AVAs to be concluded with the farmers.

Recently, MEPI and the cooperative found a win-win solution. The existing AVAs were amended to guarantee the agrarian reform beneficiaries and unmatched array of benefits, including: a signing bonus, retroactive and advance rental payments for the land as well as a regular monthly income for each farmer. Needless to say, the existing health care and scholarship programs will continue.

Antero Sison Jr., president of MEPI reported the happy development to President Duterte in a letter last June 21. For his part, Hernando Rivero, chairman of the cooperative, described the amended agreement as “reasonable and economically beneficial for themselves, the community, the banana industry and the government.”

The amended agreement secures the jobs of 1,800 employees of MEPI and their 8,000 dependents.

The DAR, under Mariano, tried agitating the farmer beneficiaries to reject the AVA arrangement and reclaim the land. The vote of the cooperative is clearly a rejection of the deceptive Utopia peddled by the Left.

The amended agreement between MEPI and the cooperative now stands as a model for other agribusinesses in the area. It establishes an enviable benchmark for the economic share farmers may gain.

Also, this new agreement might have saved our banana industry from ideologically inflicted destruction. The NPA may still continue with its rampage against the plantations, but they cannot win hearts and minds.