Despite its seemingly good performance, the country's coconut industry is in crisis. It is plagued by poor productivity, unstable prices, under-utilization of coconut farms and inadequate industrialization. Poverty among coconut farmers and farm workers is also widespread. All of these problems are rooted in government's apparent indifference over the development of the coconut industry.

This apathy is ironic because the coconut industry has been a consistent contributor to the Philippine economy.  It adds an average of 5.97 percent annually to the country's gross value added (GVA) and 1.14 percent to the gross national product (GNP). Coconut products are among the top five net foreign exchange earners, averaging at least US$760 million annually. In fact, the industry has a 59 percent share in world coconut exports.<

Government's apathy is illustrated in its seeming unwillingness to break the continued monopoly of influential land owners over large swaths of coconut lands. The problem of land monopoly was supposed to be addressed by the government's Comprehensive Agrarian Reform Program (CARP). Unfortunately, the distribution of large private landholdings (including those in coconut areas), which is the heart of the agrarian reform program, remains incomplete even after 19 years of implementation. In fact, the remaining balance of almost 1.16 million hectares^[1] (to be distributed by the Department of Agrarian Reform) is made up of purely private agricultural landholdings. (See Table 1)

Confusion often arises over the actual number of lands that must still be distributed under CARP. The DAR usually deducts from the original land distribution target its excess accomplishments from non-private agricultural lands and the non-Land Bank of the Philippines-compensable lands. This practice is deceiving and distorts the actual balance or remaining hectares, which must still be covered under the program. For example, the actual balance for private agricultural lands (or LBP-compensable lands) still stands at 1.16 million hectares, but the overall balance of DAR was only pegged at 464,239 hectares (as of December 2006) after deducting the excess accomplishments coming from the other categories.

Continued Land Monopoly in Coconut Areas

The 1996 data from the Philippine Coconut Authority (PCA) confirms the presence of monopolies in coconut land ownership. Based on the PCA data, two percent of the total farms cover an aggregate area of 1,485,000 hectares while 91 percent of the farms share an aggregate area of only 1,089,000 hectares. This means that landowners whose farms are above 20 hectares own parcels at least 87.8 hectares in size on the average, as compared to the 1.4 hectare owned by those whose farms are under the "less than five hectares" category. (See Table 2)

Land distribution has remained unfinished in major coconut-producing regions. The highest accomplishment of only 71.8 percent was recorded in the Western Mindanao region, while the lowest, reaching only 24.2 percent, was registered by the Eastern Visayas region. Unfortunately, both the target and the accomplishment include lands devoted to other crops like rice, corn, sugar, etc. Since the DAR itself admits that it has no crop-disaggregated data on land distribution, it is difficult to determine the extent of land distribution in coconut areas as well as the remaining hectares that are up for distribution. Based on DAR reports, the bulk of the remaining private agricultural lands (PAL), which are for distribution, are planted with coconut, except in provinces where the main crop is sugarcane. An examination of the reported accomplishment of the DAR shows that the data has not changed significantly since 1996. Updates on these data, however, are unavailable.^[2] (See Table 3)

Land distribution accomplishment after 19 years of CARP implementation is small since this is not limited to coconut lands. (See Table 3) The distribution of lands appears inadequate compared to the actual hectares planted to coconut in major coconut-producing regions. (See Table 4)

Aside from land distribution, CARP also mandates leasehold implementation in all lands with existing tenancy relations. These usually involve parcels that measure five hectares and below and cannot be redistributed under CARP. Based on the leasehold provision under CARP, the tenant-farmers must pay a fixed rent to the landowner at a ratio of 75:25 in favor of the tenant-farmer. It was only in 1993, however, when the DAR released an administrative order (AO) providing the guidelines for leasehold implementation. Subsequent AOs have been released by DAR to guide leasehold implementation, the latest of which was AO No. 2, series of 2006. Problems in implementing leasehold arise when DAR officials give different and, sometimes, conflicting interpretations of what has been outlined in the AO. There have also been reports of landowners unilaterally revoking leasehold agreements and municipal agrarian reform officers (MAROs) who issue certificates of non-tenancy even when no inspection has been done to ascertain the presence of tenants.

Based on DAR's accomplishment, only 1.4 million hectares have been subjected to leasehold and this holds true across all crops. This figure is probably too small given that only about 16 percent of the DAR's land distribution accomplishments cover private agricultural lands. Again, the lack of crop-disaggregated data from DAR makes it hard to determine the real extent of leasehold implementation in coconut lands. If reports from the field and the continued attempts to iron out the kinks of the leasehold AO are anything to go by, then it is clear that leasehold implementation has not been as widespread or successful as reported by DAR.

Landowner resistance

Land reform in coconut areas have met with little success, mainly because of the continued resistance of landowners against the program.  The most notable example is the Domingo Reyes case in Buenavista, Quezon. Based on the municipal assessor's office, Domingo Reyes owns at least 671 hectares of coconut land located in Barangays Wasay Ibaba, Catulin, Cadlit, Bukal, Wasay Ilaya, and Lilukin, all in Buenavista. The DAR took the required legal measures to cover the property and even participated in mediations with the lawyers representing Domingo Reyes. A fact-finding mission was organized by civil society groups and the Commission on Human Rights (CHR), but security personnel hired by Mr. Reyes barred them from entering the properties in the six barangays. It took the combined efforts of the DAR, the military, and the Philippine National Police (PNP) to finally reinstate the evicted farmers.^[3]  To date, the farmers there still suffer from harassment and threats from people allegedly linked to the previous landowner.

There are other similar cases of landlord resistance based on the data provided by the PCA. What is disturbing is the lack of urgency on the part of the DAR to distribute private agricultural lands and confront recalcitrant landowners who continue to resist and defy CARP implementation. In fact, the strategy initiated by former DAR Secretary Ernesto Garilao (which prioritized the distribution of less-contentious landholdings to ensure higher land distribution accomplishment) has become the standard operating procedure (SOP) for DAR personnel. Hence, bulk of the accomplishments of DAR is from public agricultural lands distribution and not from the distribution of big, private agricultural lands (PAL) to agrarian reform beneficiaries (ARB).

Landowners in coconut areas also resort to illegal eviction, and the filing of  estafa and theft charges against previous tenants who have opted to be identified as beneficiaries of the agrarian reform program. Often, the tenants are left with no option and are forced to accept the old sharing arrangement rather than a leasehold arrangement under CARP. If the tenants refuse to continue with the sharing arrangement, the landowner will forcibly evict them from the property.

Persistent Poverty

The inequitable agrarian structure is one of the main causes why rural poverty is still widespread in the Philippines. Around half of the population resides in the rural areas and a little over half of the active labor force are rural-based. It is further estimated that 75 percent of the country's poor are found in rural areas.^[4] Most of the poor are coconut farmers, tenants and farm workers. To date, there are 20 million people who are directly and indirectly dependent on the coconut industry.

Based on a 2000 National Statistics and Coordination Board data, at least four of the top 10 provinces with the highest number of poor families are coconut-producing provinces where coconut lands have yet to be distributed. These are Camarines Sur, Zamboanga Sur, Quezon, and Leyte. (See Table 5).  Negros Occidental, which has the most number of poor families, also happens to be the top province in terms of widespread land monopoly.

Prerequisite to poverty eradication

As of 2003, the average annual income from copra making was a measly PhP8,742.71 per hectare. Additional income could be derived from the land, if the tenants and farm workers are allowed to develop their coconut farms into highly diversified farming and livestock-growing areas by intercropping cash crops and raising farm animals in the idle areas between coconut trees. DAR estimates that through intercropping and other strategies, farm productivity can be increased—the land can yield about four billion kilos of different crops, and incomes can be raised from an average of PhP10,000 to about PhP100,000 per hectare a year.

But tenants and farm workers have no incentive to raise land productivity since the sharing arrangement is often more advantageous to the landowners. As things stand, the full potential of coconut lands could only be harnessed if control and decision-making are in the hands of the tenants and farm workers. Based on the CARP Impact Assessment Studies, it was discovered that ARBs are more inclined and motivated to develop the lands awarded them compared to those who are not beneficiaries of agrarian reform.

The solution to the poverty problem in coconut areas is to convey full ownership, control of, and access to the land to the tenants and farm workers and to provide them the initial support services needed to make these lands productive. Big coconut landholdings must, therefore, be distributed immediately through the compulsory acquisition scheme. The DAR has issued a Memorandum Order for all the provincial agrarian reform officers (PAROs) and municipal agrarian reform officers (MAROs) to issue notices of coverage to the owners of all the remaining lands, which are up for distribution under CARP. This must be pursued diligently. According to Department of Budget and Management (DBM) Director Nora Oliveros, the distribution of lands covered by notices of coverage as well as the adjudication of agrarian cases will be considered second-generation problems that will be addressed by government should funding for the CARP expire in 2008.

At this stage, the crucial task is to ensure that a law extending funding for CARP will be passed before 10 June 2008. But this law must institute reforms that would hasten land distribution. The passage of a CARP extension-with- reforms bill, however, faces rough sailing as most of the legislators are big landowners who prefer that CARP funding expire by 2008. They are also against the passage of a progressive CARP extension law.

Apart from thoroughgoing agrarian reform, a comprehensive development plan to develop the coconut industry must also be initiated. The final resolution of the levy row in favor of the small coconut farmers will unlock the coconut levy money and provide sufficient funds to develop the country's coconut industry. Because the PhP120 billion coco levy fun came from the pockets of small coconut farmers and workers, this must not revert to the General Fund but must be used to uplift the lives of millions of impoverished small coconut farmers and their families.