Is agrarian reform worth it?

I have had my doubts about it for years. But I thought the only reason agrarian reform doesn’t seem to be working in this country is the way the law has been crafted by a landlord dominated Congress and implemented by an unimaginative, ineffective and possibly corrupt bureaucracy. After all these years, it is no longer debatable that all of the above are true.

It is not unreasonable to wonder if all the money and heartaches being invested in our kind of agrarian reform program are worth it. And speaking of money, you can’t even trust the bishops who are among the noisiest on this issue.

I heard that one pretty high level Catholic red cap was entrusted with P20 million by a private citizen for microfinance lending to some Bukidnon farmers involved in a dramatic land reform battle. The money was supposedly diverted to a church building project elsewhere in the country…

I guess, building a cold concrete building, albeit a house of worship, far from Bukidnon, is more important. Even then, no permission to divert was sought. If the red cap was a government official, diverting funds even if it did not personally benefit him is plain malversation a church official would have denounced. Such hypocrisy from our holier than thou Church hierarchy!

Anyway, it is also unfortunate that even as our Congress continues to debate an extension to the program, there is no real substantive discussion of the issue. Everything is emotional. It is either you are a heartless opponent of social justice or a blind advocate of a non solution to an urgent problem of dramatically reducing the poverty rate of our rural population.

This is why I found it so enlightening to read the presentation materials of UP Economics professor Dr. Arsenio Balisacan on the subject. Dr. Balisacan, an acknowledged expert on agricultural and rural economics, confirmed my worse suspicions about agrarian reform as we know it. Agrarian reform has proven to be more expensive than our recent exercises on conditional cash transfers in dealing with poverty. We are not getting our tax money’s worth.

Dr. Balisacan estimated the comparative average cost per household at P144,377 for agrarian reform versus P62,382 for conditional cash transfers. Roughly a little over a third of total money spent on agrarian reform goes to landlord compensation and expenses related to land titling, with another third going to the bureaucracy with only a third going to actually help beneficiaries make a go of it. In other words, most of the money earmarked for agrarian reform is not being used to directly help the poor make the program a success.

And the prospects for agrarian reform being reformed as it is extended are almost nil. Dr. Balisacan expects a “Business as usual” approach which means: Restrictive provision on transferability of awarded lands, as well as on land use conversion will continue to impact negatively on farm incentives, access to credit and technology, and productivity and income growth. If this extended CARP is simply a reincarnated CARP, what’s the use? There must be some other avenues open for poverty alleviation.

If we are to measure the success of agrarian reform in terms of poverty alleviation, it is obvious that it has miserably failed. Poverty worsened in recent years, even as the economy grew modestly. At current expectations of medium-term economic growth, and assuming “business as usual,” Dr. Balisacan predicts that “chances are high that MDG on poverty will be missed.” We are the laggard in this area for our region. “Poverty reduction has been quite fast in East Asia, but not so in the Philippines,” Dr. Balisacan laments.

So, is agrarian reform passe? Dr. Balisacan thinks so, but with qualifications. He feels that other than CARP, the rural poor have other avenues of escaping from rural poverty.

Dr. Balisacan thinks we should learn the lessons from Asia’s leading performers in poverty reduction. They did it by creating productive employment opportunities. Infrastructure development is key to their success. Improved infrastructure promotes connectivity, especially between leading/urbanizing and lagging/rural areas.

Better infrastructure helps raise productivity in agriculture. We have to remember that even as we are seeing the declining importance of agriculture in the national economy, agriculture continues to contribute the bulk of total poverty.

One other thing our neighbors did was to facilitate diversification of economic activities in rural areas. “Increasingly, non-agri income growth has been the main engine for poverty reduction, though agri growth may still have comparative advantage in: areas where agricultural income shares are higher and in relatively ‘more rural’ (remote, less commercialized) areas.”

Countries that have successfully reduced poverty did so by helping the poor gain access to social services, particularly education, health, and family planning services. This helps enhance opportunities for migration to rapidly growing sectors/areas. Helping develop market-friendly institutions to exploit the benefits of agglomeration and specialization enables the beneficiaries to make their farming activities economically viable, including helping them seize opportunities from globalization.

Looking to the future, Dr. Balisacan feels we should stop regarding agrarian reform as a panacea for rural development. “There is no ‘one size fits all’ pathway out of rural poverty. Pathways differ across regions/provinces due to variations in agro-climatic endowments and infrastructure development.” In our case, such differences can be dramatic. Ilocos provinces somewhat resemble East Asian countries; Negros provinces (Visayas) and Davao provinces (Mindanao) roughly comparable to Latin American countries.

For Dr. Balisacan, CARP has been a mute (and very costly) instrument for rural poverty reduction. This is also because of restrictions on transferability and land use; incomplete assignment of individual rights (collective CLOAs); weak support services.

And because the five-year extension (up to 2014) entails a total budget of P150 billion, we ought to be asking the hard questions … what will we get for the money… or if we can get better results by using the money for more effective poverty reducing programs… we should go for it instead. –Boo Chanco, Philippine Star