Saturday, March 15, 2014

Time to let go of agrarian reform

Yesterday I went to a lecture by Dr. Raul Fabella of the UP School of Economics sponsored by Ayala Corporation. I listened to the lecture while I was reviewing private international law.

Dr. Fabella said that it is time to let go of agrarian reform because we have done enough for land distribution. Yet formal credit for farmers is still bad so it is time to allow publicly listed corporations to own land so there could be more efficient land ownership.

Then his colleague whose name escapes me now said that the Philippines has the lowest agricultural exports in Asia and also blamed poor agricultural service. He also said that the most improvement in income came from non-farm employment.

So why should we take the leap to letting publicly listed corporations have first crack at buying agricultural land when we have three workable solutions: 1) Improve farmers' access to formal credit. 2) Improve agricultural services. 3) Increase non-farm employment.

Government would have to step in with the first two solutions because these are market failures, but the private sector can help a lot with non-farm employment. The problem with publicly listed corporations acquiring land is that they must comply with the constitutional requirement of Filipino land ownership.

There might also be problems when an alleged Filipino corporation on the books acts as a dummy for foreign corporations. We might be selling away our land to foreigners acting through Filipino dummies. Let us abide by our constitution.

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