Global Policy Forum

The Philippines: The Family Plot

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In 1989, the owners of Hacienda Luisita, a sugar plantation estate owned by the family of the President of the Philippines, persuaded farmworkers to give up their land rights in exchange for shares and guaranteed five or six days of work per week. When the company violated its contract and gave some farmers work only one day per week, the United Luisita Workers’ Union took their case to the courts and forced the government to re-examine the 1989 agreement. On April 24thof 2012, the Workers’ Union won a big victory against Hacienda Luisita when the Supreme Court upheld a decision to redistribute 4, 335 hectares of the land to 6, 269 farmers. This article outlines this rare success of land reform in the Philippines.

By Hacienda Luisita

The Economist

May 12, 2012

THE flag of the United Luisita Workers’ Union flaps in the breeze rolling across Hacienda Luisita, a vast sugar plantation named after a Catalonian marchioness, 100km (60-odd miles) north of the capital, Manila. The flag shows three stalks of cane severed by a tip-heavy machete, known as a bolo. For a decade the union has been trying to sever this land from its powerful owners, who happen to be the family of the Philippines’ president, Benigno “Noynoy” Aquino. On April 24th it won a big victory. The Supreme Court upheld a 2011 decision to distribute 4,335 hectares (10,712 acres) of the plantation’s fertile land to 6,269 farmworkers. “We are very happy,” says Lito Bais, acting president of the union, with a gap-toothed smile.

The ruling was a defeat for Mr Aquino’s cousins and uncles, but a victory for his late mother, Cory Aquino. In 1988 she passed a land-reform law, two years after “people power” swept her into the presidency. The law was supposed to uproot the country’s colonial legacy of concentrated landownership.

But progress has been slow and costly. In 2009 the World Bank calculated that the Department of Agrarian Reform’s overheads, including the cost of legal disputes, amounted to about 38 pesos for every 100 pesos worth of redistributed land. What is more, the land-reform law left a lot to the discretion of the country’s parliament, in which landholders were heavily represented. They succeeded in introducing exemptions, such as allowing companies to offer shares to farmers in lieu of land.

In 1989 Hacienda Luisita did just that, persuading farmworkers to give up their land rights in exchange for a one-third stake in a new company, plus a number of fringe benefits that included 3% of annual sales. Farmworkers voted overwhelmingly for the deal. But in 2003 the union alleged that the company had violated its terms. Members were supposed to get five or six days of work per week, Mr Bais says, but often they got just one. That was true of only a few workers, according to Antonio Ligon, a spokesman for Hacienda Luisita Incorporated. He points out that sugar prices were low, and that the company did not lay anyone off, resulting in an “oversupply of workers”. Nonetheless, after police and soldiers killed seven of the hacienda’s striking farmworkers in 2004, the government took a second look at the 1989 agreement. Its decision to revoke it was challenged, but eventually upheld in court.

Mr Ligon says that the plantation company will abide by last month’s Supreme Court’s ruling. But he still believes the land-for-shares deal commands the support of a “silent majority” of farmworkers. If the land is divided among all farmworkers, they will get less than a hectare each, he points out. That makes little sense, because sugar farming needs scale.

Even the union does not want to chop the hacienda into thousands of pieces. Title, Mr Bais argues, should be given to the farmers collectively. If the land is instead distributed to individuals, he fears they will just sell it back to the company.

The law prevents the sale of redistributed land for ten years. But would sales be so bad? Much has changed since the “long fight” for land reform was joined. In 1988 agriculture accounted for 23% of the Philippines’ economy. Now it contributes about half that. Land reform has helped reduce rural poverty in the archipelago, the World Bank says. But where poverty fell fastest, it was growth outside the farm that played the biggest role. Hacienda Luisita is a “litmus test” for land reform, one of the Supreme Court judges says. But land reform is no longer what really matters for the Philippines’ development.


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