Farmers now have option to get land, keep stocks

PRESIDENT Aquino’s family has reached a settlement under which farmers in its Hacienda Luisita Inc. (HLI) will be given the option to retain shares of stock in the corporation or secure parcels of land from a third of the 6,500 hectare plantation up for distribution, an HLI source said.

The deal could set the tone for Mr. Aquino’s policy on agrarian reform. In his State of the Nation Address July 26, the newly elected President did not touch on this key social justice issue that has fueled a communist insurgency for generations.

Mr. Aquino’s cousin, Fernando Cojuangco, 47, HLI chief operating officer, negotiated the deal, which the Inquirer source said would be signed Thursday and then forwarded to the Supreme Court.

The court is to decide on a directive from the Department of Agrarian Reform (DAR) to HLI to parcel out the hacienda to its workers, saying that the stock distribution option (SDO) has failed to improve their lives—the mandate of the Comprehensive Agrarian Reform Program (CARP).

A hearing on the case has been scheduled on Aug. 18.

Under the proposed settlement, the 10,502 farmer-beneficiaries recognized by HLI would be allowed to choose whether to retain their shares under the SDO or surrender these in exchange for land.

“Those who opt for land distribution would be given a financial package and they would no longer be obligated to pay Luisita’s debts. Also, the benefits they received before would not be taken away,” the source said.

The family has said that the hacienda was saddled with unspecified debts.

“Of course, once the land is distributed, it would be up to the beneficiaries to decide what to do with their lots. They could set up a cooperative,” he added.

The source, who requested anonymity because he was not authorized to speak publicly, said that an “agreement in principle” with representatives of four labor unions in the hacienda in talks that began during the presidential election campaign.

“This is a breakthrough settlement agreement,” the source said. “We don’t want to continue with this devastating situation where we continue fighting. There has to be a breakthrough to this impasse.”

HLI spokesperson Tony Ligon, asked for comment, said only: “I can confirm that talks are continuing with legitimate farmer-beneficiaries.”

Union unaware of deal

Lito Bais, acting president of the United Luisita Workers Union (Ulwu), the main labor group in the plantation, said he was unaware of the deal. Ulwu staged the strike in 2004 that turned violent and left 14 people dead. (The National Bureau of Investigation put the number of fatalities at seven.)

“I don’t know about any offer from Luisita or a compromise agreement,” Bais said when reached by theInquirer through his mobile phone at 6:40 last night. He said the union officers met last night to discuss participation in the Supreme Court hearing on the case.

The source, however, said that Ulwu was among the four unions involved in the negotiations.

CARP was enacted in 1988 by Mr. Aquino’s mother, Corazon Cojuangco Aquino, to fulfill a campaign promise two years after she became president in a People Power revolution. The SDO is an alternative to land distribution under CARP.

DAR directive: A reprisal?

HLI is contesting the DAR directive, approved by the presidential agrarian reform council, during the Arroyo administration. The court subsequently issued a temporary restraining order.

The Cojuangcos have said that the DAR order was a reprisal after the late Corazon Aquino joined calls for then President Gloria Macapagal-Arroyo’s resignation for allegedly stealing the 2004 election, a charge Arroyo has denied.

The latest version of CARP, signed last year, calls for the completion of land distribution in five years. This covers more than 1 million ha of the nation’s most productive farms, including Hacienda Luisita, that have evaded land distribution.

Plantation-style farming

Around 4.3 million ha of mostly public lands have been handed out to tenant tillers under CARP over the past two decades.

Fernando Cojuangco told the New York Times last year when the agrarian reform issue came up during the election campaign that sugar production could only be done “plantation-style.”

The source said the management and farmers began talking after Mr. Aquino announced during the campaign that labor problems at the hacienda and calls for land reform would be addressed soon.

The source explained that only around 1,400 ha, out of the 6,500-ha hacienda, would be distributed because the farmers’ shares account for only a third of HLI’s total shares.

“The farmers who choose to remain under the SDO would also receive a financial package but they will have to wait for developments because Luisita would undergo a rehabilitation program,” the source said. The hacienda’s operations have been paralyzed as a result of the strike.

The source said that around P140 million would be given to farmers to be released “in tranches.”

Now a matter of choice

While the SDO was approved by an overwhelming majority in two referendums in 1989 in the hacienda, the source said this time, the farmers will be allowed to make a choice and that this will be respected.

“The referendum will be your own decision, your vote,” the source said.

While insisting that the DAR was not privy to the negotiations, the source said that the government would have to pay HLI for the distributed land.

“Its market price will be determined by what is written in the law,” the source said.

Judicial question

“What has been brought to the Supreme Court was a multifaceted complaint for interpretation. It’s really a judicial question,” the source said.

“Whether there is a compromise agreement, or whether there is none, that is beside the point. The Supreme Court will still have to render a decision especially for those questions of law,” he added. With a report from Tonette Orejas, Inquirer Central Luzon

Sidebar:

IN THE KNOW Hacienda Luisita: Bigger than Caloocan City

HACIENDA LUISITA straddles parts of Tarlac City and Concepcion and La Paz towns in the province of Tarlac. The property, which originally spanned 6,443 hectares, is bigger than Caloocan City (5,580 ha).

Previously called Compania General Tabacos de Filipinas (or Tabacalera), it was later named after the wife of Don Antonio Lopez, who headed Tabacalera when it acquired the hacienda in 1882.

The Huk rebellion in the 1950s led the Spanish owners of Tabacalera to sell the estate and its sugar mill, Central Azucarera de Tarlac (CAT).

In 1958, the Cojuangcos acquired the sugar mill and the estate through a loan from the Government Service Insurance System and a dollar loan from the Manufacturer’s Trust of New York, which was guaranteed by the Central Bank of the Philippines “with the view of distributing the hacienda to small farmers.”

Jose Cojuangco, Sr., father of Corazon Aquino, appointed his son-in-law, Benigno “Ninoy” Aquino Jr., as the hacienda’s first administrator.

A year later, Hacienda Luisita became the top sugar producer in Central Luzon.

The estate is now owned and managed by Hacienda Luisita Inc. (HLI). HLI was incorporated on Aug. 23, 1988, or almost two years after Corazon Aquino took office as president in 1986.

Stock distribution option

Corazon Aquino made agrarian reform her centerpiece program to promote social justice and agricultural development, and enacted the Comprehensive Agrarian Reform Law on June 10, 1988.

But Hacienda Luisita remained intact because it opted instead to distribute stocks in lieu of land to its farm workers under the stock distribution option (SDO) scheme. In 1988, nearly 5,000 ha of the estate were placed under an SDO agreement between the landowners and the farm workers.

On Nov. 16, 2004, a number of sugar mill workers were killed and dozens others were wounded when police and military forces dismantled barricades set up by the striking workers in the estate. (The workers claimed that 14 from their ranks were killed, but the National Bureau of Investigation put the number at seven.) The 11-day-old strike at the Cojuangco sugar mill was the result of the workers’ demands for higher wages.

In 2005, the Department of Agrarian Reform canceled the SDO on grounds that it had failed to improve the lives of the farmer beneficiaries.

In May 2006, the Presidential Agrarian Reform Council rejected the HLI motion to reconsider the revocation of the SDO.

But in June 2006, the Supreme Court issued a temporary restraining order against the distribution of the estate.

Also in 2006, the CAT Labor Union questioned the diminution of its members’ 13th month pay before the Supreme Court. In July this year, the high court reprimanded the sugar mill operators and ruled that Central Azucarera de Tarlac acted in “bad faith”.

President Aquino’s uncle, Pedro Cojuangco, is president of both CAT and HLI. Inquirer Research

Source: Inquirer Archives, Central Azucarera de Tarlac Website and Securities and Exchange Commission, Philip Tubeza, Philippine Daily Inquirer