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The Constitutional and Social Context of Agrarian Reform

By: Christian S. Monsod, Chair-PARFUND and ONE VOICE; Member, Constitutional


Commission of 1986
(Multisectoral Seminar-Workshop on Agrarian Justice sponsored by the Agrarian
Justice Foundation-Bacolod, June 03, 2008)
The Constitution as the fundamental law is always invoked as a source of absolute
rights especially against the state.
But there is another aspect to peoples rights under the constitution when there is
an apparent conflict among provisions involving the rights of private parties, and the
state is called upon to resolve the conflict by legitimate means at its disposal. This is
intensified when the dispute arises from a State policy that is the central, and
sometimes, controversial, theme of our Constitution social justice.
My presentation consists of the following:
(1)

The Constitution and Social Justice

(2)

The Constitutional Intent on Agrarian Reform

(3)

The Social Context

(4)

(a)

Historical background

(b)

Why agrarian reform?


(i)

Peace, security and human development

(ii)

Equity and Efficiency/Growth

The Future of CARP

The Constitution and Social Justice


Social Justice was legally defined by our Supreme Court. It was expounded
eloquently by Justice Jose P. Laurel in the case of Calalang vs. Williams which every
law student is required to memorize.
Social justice is neither communism, nor despotism nor atomism nor anarchy,
but the humanization of laws and the equalization of social and economic forces by
the state so that justice in its rational and objectively secular conception may at least
be approximated. Social justice means the promotion of the welfare of all the people,
the adoption by the government of measures calculated to insure economic stability
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of all the component elements of society through the maintenance of proper


economic and social equilibrium in the interrelations of the members of the
community, constitutionally, through the adoption of measures legally justifiable, or
extra-constitutionally, through the exercise of powers underlying the existence of all
governments, on the time-honored principle of saluspopuliestsupremalex.
But if I were asked to encapsulize in one phrase or sentence what social justice is all
about, I would say that it is in Section 1, Article XIII of our Constitution which talks
about, equitably diffusing wealth and political power for the common good.
Social justice is thus about political reform and asset reform.
The principal means of diffusing political power is through elections, with a process
that is clean, fair and orderly. There can be no real democracy without real elections.
We all agree, I assume, that our biggest national problem is poverty. Poverty is largely
a rural and agricultural phenomenon 70% of poor families live in rural areas; 66% of
poor families have household heads who are engaged in agriculture.
Thus, the key to economic progress is agricultural development. And the key to
agricultural development is agrarian reform. There can be no real social
transformation without agrarian reform.
The constitution explicitly recognizes the strong linkage between industrialization
and economic progress (i.e. full employment), and agriculture and agrarian reform in
the second paragraph of Sec. 1, Article XII on the National Economy:
The State shall promote industrialization and full employment based on
sound agricultural development and agrarian reform
The theoretical basis for asset and political reform is found in the formulation by
economist Kenneth Arrow (a Nobel Peace Prize awardee for economics) who
wrestled with the tension between the unerring efficiency of the free market and the
imperative that some kind of fairness should prevail. His solution was brilliant,
twisting the traditional thinking about competitive markets and efficiency on its head.
He proved that not only are all markets efficient, all efficient outcomes can be
achieved using a competitive market, by adjusting starting positions. (Tim Harford
The Undercover Economist). This is asset and political reform is all about adjusting
starting positions before market forces and unhampered competition are allowed to
fully operate.
Unlike in the 1935 and the 1973 Constitutions, the 1987 Constitution devoted a
separate and comprehensive article to social justice.
The President of the Constitution Commission, Justice Cecilia Munoz-Palma, said
that social justice is the heart of the new Constitution. Ultimately, regardless of its
imperfections that reflect the imperfectability of those who tried to write it, the 1987

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Constitution would be judged by the efficacy and effectiveness of its provisions on


social justice.
Sec. 1 of Article XIII states: The Congress shall give the highest priority to the
enactment of measures that:
--protect and enhance the right of all the people to human
dignity;
--reduce social, economic, and political inequality;
--remove cultural inequities;
--by equitably diffusing wealth and political power for the
common good.
Given the scope and reach of that mother provision in Art. XIII, other articles of the
Constitution contain social justice provisions. The most relevant, of course, are the
provisions under the Agrarian and Natural Resources Reform section of Article XIII.
Provisions, however, in other parts of the Constitution underline the emphasis on
social justice, to mention a few:
--Art. XII, Sec. 1 The goals of the economy are a more equitable distribution
of opportunities, income and wealth
--Art.XII, Sec. 6 The use of property bears a social function and all economic
agents shall contribute to the common good.subject to the duty of the State to
promote distributive justice
--Art.XIV, Sec.1 The State shall protect and promote the right of all citizen to
quality education at all levels
--Art.II, Sec. 26 The State shall guarantee equal access to opportunities for
public service and prohibit political dynasties as may be defined by law.
--several other provisions, as in the Legislative and Executive articles, such as
those on term limits, absentee voting, party-list system, sectoral representation in the
local sanggunians and others.

The Constitutional Intent


In the deliberations of the Constitutional Commission, there was clear consensus on
the following:
(1)There is a significant difference between equality and equity. Inequality is a
condition that can exist without necessarily any connotation of a moral wrong.
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Inequality by itself is not evil, unless it is gross. Equality is a standard to aspire for
but a realistic approximation of it, as Laurel suggests, is reasonable enough. Thus, the
Constitution speaks of merely reducing inequalities because the objective is not to
levelize all the people in all aspects of social, economic and political life.
Equity is something else. It is a normative or ethical concept and what is inequitable
is wrong or evil or unjust. Hence the reference to cultural inequity in the
Section 1 and the retention of the objective of equitably diffusing wealth and
political power for the common good. The context of social reform is a society with
unjust structures built up through the years which cannot be dismantled except
through asset reform such as redistribution of land.
(2)However, the Commission was mindful of the fact that it is difficult to implement
asset reform or land redistribution in a democratic setting such as ours. The more
successful ones (Korea, Japan, Taiwan, China) were undertaken authoritarian rule.
Hence, the compromise in our Constitution was to give just compensation despite
the clear empirical evidence in the experience of other countries that (1)
redistribution does not result in an equitable society if assets such as land are priced
at market values to determine just compensation and (2) that just compensation will
only work if the government is willing and has the resources to subsidize the farmers
with supporting services and to pay the difference between just compensation to the
landowner and affordable cost to the farmer, with the cost of such subsidies being
borne by taxpayers. The compromise formula, as we know, was somewhere inbetween assessed and market value as adjusted by the productivity of the land. This
was a big concession to landowners with consequences on the budgetary cost of
agrarian reform.
(3) Agrarian reform should admit of other conditions, such as ecological,
developmental and equity considerations (such as rights of small landowners and
indigenous communities). But we must beware of creeping exceptions not originally
contemplated that take land out of the scope of agrarian reform, such as tourism and
now, even sugarland for ethanol.
(4) It was clear in the deliberations that the civil rights of the landowners with respect
to the land such as Art. 428 (right to enjoy, dispose and recover). Art. 429(right to
exclude others from the property, the right to enclose or fence property, the right to
compensation in case of eminent domain), Art.440 (accession), Art. 478-481 (right to
quiet title), are subordinated to and cannot take precedence over the constitutional
mandate on social justice, such as agrarian reform.
(5) The pursuit of social justice is always subject to the requirements of due process in
the exercise by the State of the powers delegated to it by the people. The three most
important of these powers are taxation, eminent domain and police power. When
taxation and eminent domain are inadequate to the task of attaining an equitable
diffusion of wealth and political power, the State can validly use its police powers.

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(6) There may be exemptions, or the need for incentives, authorized by the
Constitution and implementing legislation. There may be procedural requirements.
There may even a time line for accomplishing it, in the interest of faster justice. But
with all due respect, it does not appear from the deliberations of the Commission that
all these conditions can be used to dilute, circumvent or frustrate the objective of the
constitutional provision that the process must result in the farmer being given the
land and the landowner being given just compensation.
What is the point of citing the deliberations in the Commission when there is no
disagreement, even from the rich, that landed interests and gross inequalities of
wealth and income have existed for more than a hundred years and need to be
corrected? The point is that it is difficult enough to navigate through the legal and
economic constraints of the Philippine version of agrarian reform without the
government itself, and, in some cases, our courts, being a part of the problem.

Social Context the historical background


-the long history of social injustice that started when the Spaniards destroyed the
traditional system of land ownership common ownership of land by village clusters
known as barangays, similar to existing systems among several indigenous
communities and distributed the land (haciendas) to Spanish military and clergy or
established encomiendas (administrative districts).
-The take-over by the U.S. which did not address this problem, but only established a
new class, although certain changes were introduced, i.e. land titling, homestead and
limitations on size of ownership.
-the 1935 Constitution addressed the issue of foreign access to land, i.e. corporations
must have at least 60% Filipino ownership, and use-rights were limited in time. Other
reforms included limitations on interest rates on loans and an increase in the
sharecropping share from 50% to 70%. But very little of these laws were really
followed in practice and the Huk rebellion was born.
-Under the Magsaysay and the Macapagal administrations, land reform was again
tackled, such as the Mindanao resettlement program, but no significant results were
really achieved in terms of scope and magnitude of land transfer.
-With martial law, the whole of the Philippines was declared a land reform area
under PD 27. Significant progress was made, but the continued practice of the share
tenancy system, the exemptions allowed and shortcomings in support systems
(although it was Marcos who set up the new Agrarian Reform Department) did much
to limit the effectivity of the reforms in addressing rural poverty.
-the CARL years since 1988 land distribution increased substantially but lack of
support systems, principally funding and infrastructure, is still prevalent, and many
big landed estates have not yet been included in the program. The latest inventory by
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the Department of Agrarian Reform is about 1.3 million hectares, which are the most
productive and valuable of the land earmarked for compulsory acquisition (big
haciendas) which have managed to resist coverage through legal maneuvering, force
and violence and the use of political influence. To this area must be added some
600,000-900,000 hectares of government land still to be distributed by DENR.

Why Agrarian Reform?


1.Political economy considerations
* a. Concentration of assets may lead to concentration of power and ability to
produce political reflective of sectoral or personal preferences.
* b. High inequality breeds social discontent, leading to political instability,
reducing investment and therefore growth.
2.Credit/Insurance market imperfections To the extent that physical assets are
commonly accepted as collateral, the poor, who do not have these assets, may be
unable to access credit and hence take advantage of income-enhancing technologies
and production processes. They may also not have the means to smooth household
consumption especially food and health and education services for children in the
event of downside risks, effectively preventing them from escaping the poverty trap
from one generation to the next. Investment in human capital formation and
economically profitable opportunities may thus be confined to owners of land assets.

Peace, Human Security and Human Development


The Human Development Report for the Philippines for 2005 comments on the
relationship between agrarian reform and Peace, Human Security and Human
Development (quoting the Borras study):
By 2002, CARP officially claimed to have redistributed six million hectares of
land to more than 2 million peasant households, accounting for nearly half of
the countrys agricultural lands and two-fifths of the total rural households
respectively
Parenthetically, the latest DAR figures is that about 6.9 hectares have been distributed,
with some 2 million holders of Emancipation Patents and CLOAs. In addition farmer
beneficiaries with leasehold contracts number 1.16 million and 8,000 farmers are
beneficiaries under the stock distribution option.
The number by any standard are among the largest land transfer accomplishment of
any agrarian reform program in the world.
The HRD says:
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Not surprisingly, the rate of accomplishment of land reform turns out to be a


good predictor of the frequency of armed conflict: the higher the proportion of
land redistributed under the agrarian reform program relative to the potential
land reform area, the lower the likelihood of conflict..
However, the HDR notes that the social dimension of agrarian reform appears to be
less critical with respect to armed conflict, with other social indicators, for example
adult education, having a greater impact on lessening its occurrence.
The Twin Goals of Equity and Efficiency/Growth
-Equity; social justice as a constitutional mandate
-Efficiency/Growth This objective tends to be overlooked in the national
dialogue on agrarian reform.
While equity is indeed the primary objective of agrarian reform, we cannot ignore
economic growth. For an improvement in land inequality is not just about
advancing equity goals; it is also about raising the trajectory of income growth by
improving over-all economic efficiency
Studies show that economic growth is required for poverty reduction countries
doing well with poverty reduction are also countries that have done well in growth.
Fortunately, the empirical evidence disproves the false dilemma that the landowners
are trying to raise against CARP with such issues as productivity, progress and
economic growth. The evidence shows categorically that there is no contradiction
between agrarian reform and real income growth, industrialization, and progress as
long as the support services and infrastructure as promised by the law are provided
by the State. Thailand is a good model on how agrarian reform, productivity in
agriculture and economic growth go together the average landholding is about 1.5
hectares and no farm is more than one kilometer away from a road. Yet large-scale
production and other variations on collective farming have made them one of the
biggest exporters of farm products. In other words, there is no contradiction between
large-scale production and small-scale ownership of land.
Assessing CARP
What is the performance record of CARP in our country?
Phase I Comprehensive studies at the micro (household), meso (community) and
macro (sectoral and economy-wide) impact of CARP up to 2000.
Phase II Re-examined earlier findings in light of additional newly available data
(agriculture and population census, national household surveys and update panel
data)
Allegations to the contrary, agrarian reform has resulted in significant benefits:
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-Land tenure improvement: Census of Agriculture and Fishers 1990 and 2002
show (a) more farmers owning and operating the lands they till; (b) improved
tenure security through leasehold, and (c) reduction in share tenancy among
farmers.
-Social Capital: In 1993, average membership in cooperatives or organizations in
Agrarian Reform Community (ARC) barangays was 54. As of 2006, the average
increased to 78 farmer-members per barangay, even when the number of
barangays covered also increased.
-Improvements in Welfare: Non-monetary
-Households in the ARC barangays are slightly better off than those in the nonARC barangays, as demonstrated by the higher proportion of houses with
strong roofs and higher educational attainment of household members aged 6
to 24 years.
-Improvements in Welfare: Monetary
-Estimates indicate that in 1990, the per capita expenditure in ARC barangays
was slightly lower than in non-ARC barangays. In 2000, both figures have
increased, with ARC barangays having a per capita expenditure higher than
non-ARCs, amounting to P223 (in 2006 prices)
-Poverty incidence in ARCs decreased from 40% to 25% over the period 1990
and 2000. Moreover, this reduction is slightly higher than that experienced by
those in the non-ARC barangays.
-Benefit-Cost Analysis of ARC and mainstream agricultural development
strategy:
-Both yield positive net present values (NPV). For the ARC strategy, the initial
year yielded a negative NPV, which is to be expected. Overall, however, the
ARC strategy results in incremental NPV of P3.4 billion.
-Effect on Incomes of Land Ownership and the ARC strategy (controlling for
other factors):
-Per capita expenditure, per capita income, and per capita net farm
incomes of farmers with no lands (whether in ARCs or non-ARCs) are
significantly lower than their counterparts owning land, i.e.,
-Impact on Poverty of Land Ownership: -ownership of land implies that
the odds that you are non-poor are at least 1.76 to as much as 2.6 times
that of being poor.
In short, ownership does matter.
The Future of CARP
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While there is significant empirical evidence that agrarian reform has yielded
significant benefits and has the potential for greater benefits, the fact is that it has
encountered implementation problems, notably- slow processes in land acquisition
and distributioninsufficient technical capacitylegal disputesprotests against
coverage, classification, identification and qualification of beneficiariesexemptions
from CAR and land conversionlandowners resistance harassment judicial
cases involving land valuation and just compensationand, of course, FUNDING.
Balisacan et al in the book Securing Rice, Reducing Poverty says that while studies
have shown that CARP provided direct benefits to the beneficiaries, the overall
conditions in the terms of poverty and inequality seemed to have not significantly
improved. He cites as reasons that the initial wholesale distribution concentrated
more on non-contentious and convenient areas and that access to credit among
farmers had been very limited. May FBs chose to sell or mortgage property rights to
private traders and moneylenders (i.e. underground land market transactions).
However, Balisacan also cites latest studies that show conclusively that, for the
Philippines as a whole, 82% of the provinces can significantly increase real income
growth by reducing inequality, i.e. by social justice measures to redistribute assets,
particularly of private landed estates. These are the lands, as mentioned earlier, that
have managed to resist coverage, and the terminating CARP now would in effect
reward the intransigent who have defied the Constitution.
Whatever the problems encountered by CARP, the point is that CARP is not the cause
of the continuing poverty nor the obstacle to solving it. On the contrary, completing
CARP in accordance with the mandate of the Constitution is a necessary, although
not a sufficient, condition to correct social injustice, and achieve sound agricultural
development growth.
In the final analysis, the future of CARP is a political decision of those in power with
respect to two questions:
How much reforms is the government willing to undertake (i.e.

political

will)?
How much resources is government willing to devote to such reforms?
So far, there is much to be anxious about in the response by the Arroyo
administration to both questions. Agrarian reform was not even included in the 10point agenda of the Arroyo administration when it took power in 2001. And the
bishops and the agrarian community has been informed by administration officials
that there is strong resistance from within the administration coalition to block the
bill, and its passage by the Congress is becoming problematical. More than the
administration may think, non-passage of the bill would amount to a political
miscalculation.

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There isnt much time. Without an extension and provision of funds beyond June
2008, the acquisition and distribution phases of CARP will come to a halt. And while
the President has said that she is fully behind extending CARP, events may be
overtaking the program. The certification of the bill as urgent which the agrarian
reform community has been asking for the past year is late in coming. The promise
by DAR to accelerate notices of coverage to large private lands particularly in 15
priority provinces has not happened. Complementary legislation, such as the
National Land Use Act, are dead in the water. The proposed comprehensive approach
to credit in the countryside, jointly prepared by DAR and the agrarian community,
has not been filed to date.
There is some news that is both good and bad. The good news is that in recent high
profile cases such as the cases of Task Force Mapalad in Negros Occidental and the
Sumilao farmers in Bukidnon, we have witnessed the phenomenon of the President
personally intervening in the cases that led to compromise agreements. And in the
case of the Arroyo farmlands in Negros, about 558 hectares of the 1,000 hectares
promised by the President in 2001 have been distributed, and she came out recently
with a statement that she has instructed the DAR to act on the distribution of the
balance.
While the farmers are very grateful for the direct intervention of the President on
their behalf, the bad news is why does it need the Presidents personal intervention
for the problems to be solved? She has many other issues of national importance that
demand her attention and the fact that she had to intervene in individual cases is a
sad commentary on the governance of the CARP. With all due respect to our friends
of DAR, the I and the farmers of task force mapalad are concerned, if not often
disappointed with the performance of some local DAR officials in Negros Occidental.
I hope you do not our being candid. But this is not a time for euphemism.
One unfortunate consequence of the compromise approach, which our judicial
system encourages, is that no definitive rulings are results on key issues, such as the
cancellation of conversion orders as in the Sumilao case for non-implementation
within the 5-year period.
We thank those judges and those in the legal profession, as well as those in the
enforcement agencies, who play vital roles as well in the delivery of agrarian justice
who do their in making agrarian reform work. And we hope that those who do not
will think more deeply about the transcendental issues involved in the cases.
If indeed the Executive is the sword, the Legislative is the purse and the Judiciary is
the conscience of a nation, it should be easy enough for all of them to muster their
passion and talents to go beyond the strict technicalities of the law, to uphold the
spirit and intent of constitutional mandate on social justice.
Chief Justice Concepcion, in the deliberations on social justice, asked the indulgence
of the Commission for the sometimes literal and narrow jurisprudential view of
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lawyers about the vision of social transformation that the non-lawyers in the
Commission seemed to see with clearer eyes.
In summary, if we go back to the original question posed at the beginning of this
session about the apparent conflicting rights of farmers and farm workers and those
of landowners in the implementation of agrarian reform, the simple answer is
provided by the Constitution itself the landowner gets just compensation (which is
a huge concession, given the government resources needed for it) and the farmer gets
the land. That is why the corporatizationwindow that Hacienda Luisita availed of
is an anachronism in CARP because the farmers never get control of the land. A
compromise to allow the farmers to take over 3% of the shares every year, was
rejected by the Aquino administration. Had it been incorporated in the law, after 17
years, estates like Luisita would now be be under the management control of the
farmers with 51% of the shares.
In closing, may I say that I dont envy those of you at the frontlines of the legal and
moral dilemmas that abound in concrete situations in the field. It is easy enough for
many of us to know what to do when observing situations from a distance. But as a
commentator said about President Clinton and his published book, His integrity is
at its highest when the situation is at its hypothetical. I wish all of you the best in the
difficult task of addressing the problems at the frontlines, which is certainly far from
being hypothetical.
Thank you for the honor of speaking to you today.

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