PH Land Reform – Mind Reform Instead Of Distribution Reform

Truth to tell, PH land reform has never progressed beyond distribution of land – because the distribution of land is bad! So now we have many landowners, but no successful farmer from among the beneficiaries.

Small isn’t beautiful!

Is it because of the stupidity of the authors of the law – or the stupidity of the farmers? Neither. It’s the stupidity of some economists!

In his column in BusinessWorld, Raul V Fabella says the Department of Finance, DoF, the National Economic and Development Authority. NEDA, and Congress are “contesting how best to reverse the economic free-fall wrought by the COVID-19 pandemic lockdown.” The DoF and NEDA believe that the best way is to grant private corporate income tax deduction, to give them “breathing space,” from 30% down to 25%. Economists are hoping that the tax savings will be converted by private firms into new investments, new jobs. Similarly, Congress wants “to create jobs by ramping up state infrastructure spending.”

It happened in the USA, when Franklin Delano Roosevelt was President:

Realistically, it is only demand-pulling stimulus mounted by a welfare-oriented… government that could arrest the negative feedback loop of a free fall. Classical economists were horrified by Keynes’ heretical position: “What? Pay people to dig holes in the ground only to refill them?” asked detractors. President FD Roosevelt initiated the New Deal along Keynes’ lines: hired idled workers to replant America’s forests, build dams and roadways, and this pushed back the crisis.

Thank you President Roosevelt! After this pandemic, with our idled workers we will replant devastated Philippine forests, build dams and roadways.

But right now, I’m more interested in agriculture than infrastructure. I don’t know why but no economist, not even Mr Fabella, talks about economies of scale.

The main trouble with CARP farmers is that they do not consolidate their operations, so they do not enjoy economies of scale.

For farmers, land ownership gives you the false impression that you should be doing things on your own. They have to change their minds!

I don’t blame the farmers. I graduated from the UP College of Agriculture, now UP Los Baños, but I don’t remember a single lesson in farm consolidation to operate more efficiently with less cost per unit of work done.

No Sir, Mr Fabella, debt condonation will not result in renewed and better farming – CARP farmers know that they will always remain poor. You know why? When a farmer wants to buy seeds, fertilizers, pesticides, he borrows money from a usurer. When harvest comes, he is forced to sell at the price that the merchant is offering, to pay off his debts.

Rather than debt condonation, I recommend that CARP farmers in a town be organized into a multi-purpose cooperative. The coop will then be the source of much cheaper loans, as well as the keeper of farm machines that everybody can use. The coop can ask financial and other assistances from the Department of Agriculture under Secretary of Agriculture William Dar.

Then I’m sure the CARP farmers will rise to the occasion after the pandemic!@517