Land reform: crucial Philippine issue

IF ``people's power'' is to be more than empty rhetoric in the Philippines, the government of President Aquino needs to follow the examples of Taiwan, South Korea, and Japan: It must propose a comprehensive agrarian-reform program -- and soon. Sixty-five percent of Filipinos are peasants, 7 out of 10 without land; they must be included in any ``revolutionary government.'' This means stepping on some very important toes -- some foreign agro-industries and members of President Aquino's own social class. In few nations are assets as inequitably owned as in the Philippines. The World Bank finds that incomes are distributed even more unequally here than in El Salvador, the Latin American pacesetter. In 1977, the poorest 40 percent of the Filipino population earned only 14.2 percent of the household income, while the top 20 percent claimed 54 percent. That situation is worse today.

The nation's lack of production is serious enough after two years of negative growth. Even more important, when average income grew in the 1970s it increasingly went to a smaller group of Filipinos, and unemployment worsened. Moreover, the national debt expanded; much of the price of belated austerity that President Aquino will have to impose must come out of the hides of the middle and lower classes -- just when some of them expected nirvana.

Although the landless suffered most under Ferdinand Marcos, they did not become quiescent with his fall. Even the moderate left is becoming more vocal. And the far-left armed guerrilla movement now has 15,000 to 20,000 members. If the government dashes the aspirations of the rural poor and what middle-class allies it has, Mrs. Aquino can lose her constituency as surely as Mr. Marcos did -- and with more dispatch.

Those who ran for top offices in the recent Philippine elections were all members of the powerful upper class; this class has not been seriously challenged since Philippine independence. Aquino and her vice-president's stated campaign positions on land reform were equivocal. Some top military figures under Marcos were retained by Aquino: During Marcos's long rule one of their duties was to keep the peasants ``in their place.''

There has been no social revolution yet in the Philippines, but it is possible for the government to make one occur. The government could advocate a thoroughgoing agrarian reform; many through history were led by members of enlightened elites, with pressure from below. But, as all reformers, Aquino will have to decide whether to opt for her class interests or to cast her lot with the enormous group of rural landless and the disenchanted middle classes. The honeymoon period on this issue will probably be short.

Much of Aquino's decision on the point will rest upon whether she perceives it to be in the country's long run interest to develop a viable national market by providing income increases to peasants; agrarian reform and farm-sector economic growth could aid that process. The last Marcos years focused on the nation's external markets; internal markets were largely forgotten. In contrast, the Korean economy rested for a critical period on well-administered land reform and labor-intensive production techniques in agriculture and industry. The two elements, coupled with economic growth, are powerful generators of a national market.

For at least three decades in the Philippines land reform has been expected, but hopes have been repeatedly dashed. No leader caused more peasant frustration than Marcos. In 1971, after a series of peasant demonstrations demanding land reform, Marcos ordered peasant organizations disbanded. But with considerable irony, in 1972 he declared land reform to be a keystone of his martial law program. Co-opting the land reform issue was one way Marcos broadened his political base and garnered international legitimacy.

The Marcos land-reform decree declared all tenanted rice and corn land under seven hectares (about 17.5 acres) to be subject to expropriation. The value of the land would be 2 times the average annual production; peasants were to pay off in 15 years at 6 percent interest.

Figuring out what 2 times the average annual production was involved slippery calculations. Therefore, the price was usually set in a meeting of the interested peasants, the landlord, and government representatives (who might well take up the cudgels for the landlord). I witnessed one of these sessions in 1975 in Nueva Ecija on Luzon, where, apart from the inequality of the negotiating parties, the landlord had decided to lubricate the peasants with a good bit of whiskey to facilitate their capitulation to his price.

Left out of reform were all agricultural wage workers, and tenants with export crops. It also turned out that a number of certificates of land transfer were ``lost'' between Manila and the field. And some perspicacious landlords made certain that they had no tenants who could be claimants; they converted their operations to ones farmed by wage workers.

In 1982, the Ministry of Agriculture estimated that only 1 percent of the peasants in the country had obtained land through reform.

The impetus behind land reforms petered out completely in the late '70s as Marcos increasingly turned to exports while the rate of population growth skyrocketed. The export market was not dynamic enough to provide industrial employment for many off-farm migrants.

In regions that grow rice and corn most peasants now think of land reform as a very distant possibility. In the islands where most plantations are situated, wage workers hardly dare dream of land of their own. Sometimes they just hope for higher wages, or lower rents. Even if land in the Philippines were distributed equitably, there would not be enough for all possible claimants. Any land reform must contain provisions that would protect renters and those who work the farms for wages.

The end of the Marcos era has revived the expectations of Philippine peasants. They genuinely admire the forthright and serene, but still courageous, way that Aquino handles herself. She has the legitimacy and maybe even the power during her honeymoon period to proclaim a new and inclusive land reform. Future peace and prosperity of the Philippine archipelago will depend in part on whether she will be able to deliver land reform.

Not just any agrarian reform will do: The Filipino peasant will not easily be duped again by high-flying rhetoric and anti-oligarchic slogans. An important question is whether peasants will perceive whatever legislation is written as a genuine benefit to them or just another government deception. In addition, will whatever reform is devised add to the growth potential of the country?

Another important issue is related. Considerable pressure exists for allowing the forces of the free market to work in the Philippines, in part by dismantling the system that permitted many parts of the economy to be largely controlled by cronies of President Marcos. But it is entirely possible to do this merely by restoring more power to the middle-sized planters, and without giving so much as a crumb to the peasants.

Aquino will also have to grant land to peasants if she is serious about ``people power.'' During their initial stages, however, land reforms do require some concentration of authority in the hands of the government.

William C. Thiesenhusen is professor of agricultural economics at the University of Wisconsin-Madison.

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