By Ed Tadem
Associate Professor of Asian Studies, University of
the Philippines Diliman

The violence that recently erupted in Hacienda Luisita where seven people died has its roots in the stock distribution option (SDO) implemented in the sugar estate in 1989 as a means of evading land reform. This scheme was inserted into the so-called Comprehensive Agrarian Reform Law (R.A. 6657) by pro-landlord legislators during the term of President Corazon
Aquino. It allows landowners who run their farms as corporations to distribute shares of stocks to farm workers in lieu of outright land transfer. The stock shares are to correspond to the value of the farmland.

Serious observers and scholars of agrarian reform contend that stock distribution can never be a substitute for land transfer which is the heart and soul of any genuine land reform program. Yet, under Philippine law, the SDO has conveniently redefined land reform and divested it
of its redistributive aspect and social justice component to accommodate the interests of powerful landed families.

The first and most prominent beneficiary of the SDO was the 6,400-hectare Hacienda Luisita, owned by Cory Aquino's family. In studies conducted by agrarian reform scholars James Putzel and Saturnino Borras, Jr., it was revealed that the Cojuangco family anticipated the
stock option provision by "creating a number of spin-off corporations related to sugar-cane production, transportation, milling, and marketing." Only one of these newly-created
corporations, the Hacienda Luisita, Inc. (HLI), dealt with the issue of land reform.

The Cojuangcos declared only 4,900 hectares as land assets "while the more expensive portions, located near roads and residential/commercial areas were segregated and declared property of the other Cojuangco corporations outside HLI." And in the valuation of the land, the HLI excluded land improvements such as roads, irrigation canals, culverts, bridges, and
water reservoir, thus further reducing the value of transferrable stocks. Not content with this, the Cojuangcos utilized what Putzel calls "accounting manipulation," where the value of the already depleted land was depressed further to only one-third of the HLI's total value while the non-land assets (which are not part of the land reform) was jacked up to two-thirds of the
corporation's value. In this underhanded manner, the family managed to retain control of the corporation and over the entire Hacienda.

Through the then management friendly labor union and with Department of Agrarian Reform officials beholden to an incumbent President brokering the deal, the 4,000 plantation workers were subsequently pressured into accepting the Luisita stock distribution plan without being made aware of its onerous provisions.

The Luisita stock option plan had been denounced as "unconstitutional" by the University of the Philippines Law Center in a position paper submitted in June 1990 to the Senate Agrarian Reform Committee. The memorandum stated that the "scheme is violative not only of the social justice provisions but even more of the specific provisions of the Constitution on agrarian reform" since it "allows the original owners to remain the controlling interest at the expense of the supposedly farmer beneficiaries".

In his recently published PhD thesis at the Institute of Social Studies at The Hague, Borras reports that as of 2002, "there was no evidence to show that the socio-economic condition of the farm worker-beneficiaries had improved" with hundreds of workers losing their jobs when
sugar-production was scaled down while the rest ended up with payslips "worth only a few pesos while the promise of big dividends from the corporation's income never materialized."
Furthermore, the Hacienda has reportedly reclaimed hundreds of hectares included in the SDO and converted these to "commercial, residential, and recreational purposes without compensation to the farmworker beneficiaries” who are legally the owners of the land.

The Hacienda Luisita stock distribution scheme is the single biggest land transaction implemented under the CARL. This prompted Sixto K. Roxas's ironic remark in 1990 that "agrarian reform is the centerpiece of the (government) program but Hacienda Luisita is the centerpiece of agrarian reform.”
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Eto ngayon ang tanong... Anong por ciento kaya ang mamanahin ni Kris Aquino sa Hacienda Luisita?

:: Bing Saturday, November 20, 2004 [+] ::
...

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