Five crucial problems in the SC decision on Hacienda Luisita

Posted: November 25, 2011 in Economy, Socio-Political
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Photo from Bulatllat

While the nation welcomed the decision of the Supreme Court ordering the actual land distribution of Hacienda Luisita, the SC decision presents several problems and challenges for farmers and advocates of land reform. The decision highlights the limitations and problems with government’s land reform program CARPER.

  1. The SC decision ordered the compensation of the owners of Hacienda Luisita. By “owners”, we mean the Cojuangco-Aquino family. They will be compensated for the 4, 335 hectares that will be distributed to the farmers. If each hectare is valued at 1,000,000, the Cojuangco’s will receive P4.3 billion. The government will advance a certain amount, and the farmers will have to pay the entire amount through an amortization scheme. No less than President Benigno Aquino III stressed the importance of “just compensation” for the landowners. He also invoked CARPER as the basis for this “just compensation”. What is unjust in this scheme is that the vast estate was unjustly acquired by the Cojuangco’s through a government loan from the GSIS and Central Bank. Public funds were used to acquire the estate with the condition that land would eventually be distributed to the farmers. Furthermore, the farm workers have paid for the value of the land through their sweat and blood, working on the estate for several decades without receiving any of the supposed fruits of their labor. Over the years, the Cojuangco’s got richer and the farm workers were mired deeper in destitution. There is therefore nothing just in paying the Cojuangco’s P4.335 billion which will come from public funds and the pockets of the long-exploited farm workers. The farmers demand that the land be distributed for free.
  2. The SC decision did not rule that the Stock Distribution Option scheme was unconstitutional. Only Chief Justice Renato Corona supported the junking of the SDO. It would have been a landmark victory for thousands of other farmers nationwide if the SDO itself, this loophole in the agrarian reform program of the first Aquino regime, was altogether junked. The SDO has been abused by big landlords who wanted to evade land reform and actual land distribution. Instead of actual land distribution, farmers are swindled through shares of stock.
  3. The SC decision exempted the 500 hectare land purchased by RCBC. This is controversial because RCBC knew that the land in question was the subject of an agrarian dispute, yet it entered into a transaction with the Luisita management to acquire the land. They claimed that they were “innocent purchasers” but facts will reveal that RCBC , Luisita Industrial Park Corporation (a subsidiary of HLI) and Centennary Holdings had interlocking directors or officials. There is also the land conversion order which reclassified this supposedly agricultural land. The HLI management of course earned a hefty sum from this sale.
  4. The SC decision exempted more than 1,000 hectares of land from the coverage of land reform.  Farmers and their lawyers have challenged the basis of this exemption and have pushed that land reform cover at least 6,443 hectares.
  5. The P1.3 billion payment by management to the farmers from the earnings of land sale (RCBC, SCTEX) will still be subjected to a lot of accounting wizardry. This amount can still go down if HLI shows that it spent the money for legitimate corporate expenses and taxes.

This is not a victory for CARPER. Quite the opposite, what happens in the next few months will show that CARPER will make genuine land reform even more difficult, nay impossible.

It is now the collective struggle of the farmers which will ensure that their legal victory (land distribution) will truly be beneficial for all farmer beneficiaries.


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