SC Decision On Hacienda Luisita, A Deodorizer!

Though coming from a family without single hectare of farmland into our name, I can be passionate about the effect of the recent SC decision parceling out the 6,000 hectares Hacienda Luisita  (HL) to some 6,296 farmers.

Not that the high tribunal’s decision came after a long deep slumber in the court which had earlier decreed that the farmers should take ownership of the HL through stock distributions after their referendum – but the decision came few days after President Aquino through his DOJ Secretary De Lima had a spat with the SC over the right of former President Gloria M. Arroyo and her husband Mike to travel abroad.

Is the recent court decision an attempt to break up the economic flagship of the Cojuangco-Aquino clan in Tarlac and serve the President with the court’s own version of “vendetta?”  Or it was simply an attempt of the SC to deodorize itself by taking a populist idea of “land for the landless” after it has been seen as a tool of the moneyed class and the cronies?   It seems that one branch of the same family was not entitled to a vast landholdings that oppresses the poor sugar cane planters while another branch of the same family was entitled to the multi-million-peso SMB shares and coco levy funds that were collected from the poor coconut planters.  This judicial behavior is certainly surreal as well as suspect!

Whatever the motivation of the SC was, I am certain it was not for a sublime reason of elevating the common man’s aspiration for a good life.  The decision only gave the farmers a false sense of economic triumph and soon they would awaken with the sad realization that their “emancipation” was a big hoopla.

For whatever shortcomings the stock distribution had,  it is better than parceling out a viable sugar land with efficient management and marketing support to  people whose number far exceeds the entire size of the hacienda, so much so that each tenant ideally expects less than a hectare of land.

A family of five cannot survive on a hectare of land, let alone less than a hectare.  What will sustain them during drought, storm or other natural disaster?   No sooner had the title been distributed to them that you see them trooping back to their ex-landlords for farm input.  This time, they are independent farmers but without resources to farm their land which hardly make them independent.   Soon you will find them putting back the very yoke that enslaves them in the first place.

The decision entitles them to the farm land but not to the sugar mills and the managers that run the mills.   Now you have neophyte managers composed of farmers trying to learn the ropes and without the mills and market contracts that the HL previously enjoyed.

Obviously we have here, in one judicial stroke, a decree that emancipates 6,296 sugar land workers by giving them the land they till, but the farmers would be facing hunger just the same.

The Hacienda Luisita created so much political spin bordering on malicious propaganda. One YouTube video clip traces the Cojuangco ownership of the sugar estate from the Cojuangco matriarch who skimmed off  the revolutionary funds of the 1896 revolution through Gen. Antonio Luna.

Nothing could be farther from the truth.

Nick Joaquin offers a more sobering background of the controversial   Hacienda Luisita in his book, The Aquinos of Tarlac:” 

“One day in 1957, President Magsaysay had me called; he said he had been informed that the Spaniards  in Luisita were selling out. ‘And I’ said Magsaysay, ‘don’t  want the Negros sugar people to invade you in Tarlac.’  At that time the Lopez interests had bought Pasumil and Magsaysay was at loggerheads with the Lopezes.  He didn’t want them getting Luisita, too. So I went to my father-in-law and asked him if he was interested in the Central Azucarera, which the Spaniards might offer for sale.  Negotiations were opened with Tabacalera; in the midst of our negotiations Magsaysay died; thus the deal was concluded in Garcia times. The idea was to buy the hacienda, turn it into a viable operation, then subdivide it and sell it either to workers or to agricultural cooperatives. Since I was familiar with labor problems I was called on to restore order to the hacienda and get it going.”

The estate was sold to Jose Cojuangco, a rich Chinese Taipan in Tarlac by borrowing from GSIS and additional dollar amount from Manufacturer’s Trust Company from New York and the loans were guaranteed by the Central Bank of the Philippines. .

It was a sweetheart contract with the government financing institutions.  One can say that this was one of the earlier “crony loans” but better than the behest loans under Marcos because the entire estate was made a collateral for the loans.

But the Cojuangcos reneged on the agreement to subdivide the estate among the sugar planters and maybe for good reason because the farmers would not be able to run a estate without capital and technical knowhow of the managers of the estate.

In 1958, immediately after the Cojuangco purchase of the Estate, Ninoy Aquino was its first Administrator.

Here is Nick Joaquin again:

“So while tackling the snags of production, Ninoy felt he should also have a go at the kinky human factor. “I went to the UP and hired sociologists and behavioral psychologists to gather data on the hacienda population.  I brought in Jesuits to  do an in-depth study of Luisita. I wanted a multi-disciplinary  report.”  Why despite high wages, couldn’t the peasants on the estate scramble out of poverty?  Again he was faced by the ogre of gambling. As town mayor he had bowed to it; as hacienda administrator he tried to defeat it. “I offered the men extra jobs after hours but they preferred cards and liquor, gambling and boozing up to four in the morning – wasteful conspicuous consumption. I racked my brains. I brought in movies just to distract the people from gambling. I brought the PRRM the World Neighbors – all palliatives.  I told myself the older generation was hopeless and that I had better won the young, through education.”  He set up high school; bought sewing machines and provided every barrio with free sewing lessons for the girls. He gave away scholarships, with the frank aim of growing white collars from the peasantry. “At the rate the hacienda population was expanding the time might come when there would be more people than cane plants. My theory was that if the young learned a profession they would move out of the hacienda; if I could depopulate  the hacienda I could give more man-hours  per worker and increase the per capital income. So, education and scholarships were at the crux of my strategy. Then I started  relocating families in housing projects where they could do vegetable  gardening.  There were nine such villages and my goal was to get every family  earning at least two thousand a year”.

Ninoy found himself running a welfare state in miniature.

“Aside from the company hospital, I put up a mobile clinic that visited every barrio every day.  This ambulance was on the go morning and afternoon, and I’d later get the son of Taruc to be my mobile doctor. Free treatment, free medicine. Then we had dentists going out twice a week to every village, also for free.  Light, water, schooling, housing – all free. From cradle to grave – that was my concept.  I didn’t know that a managerial post would mean my becoming father, mother, uncle, doctor, nurse to a population of from twelve to fourteen thousand people!”

The technical side of the job was just as complex.  To organize a staff I went to the Los Baйos aggie college and got me the top dozen of the class of 1958 and they formed the backbone of my administration. Some of the Spanish managers of Tabacalera had stayed over for the transition but I began to replace  them with Filipinos, recruited from the capataz ranks.  I told them:  “You have been overseers  here for a long, long time.  Now let me see if you can be managers.  Show the Spaniard that the Filipino is a better producer.”  We broke all records in 1959, broke record in 1960, and again broke all records in 1961, in terms of production, and the profit curves swung up.”  One reason was increased mechanization.  “When I took over I decided to cut cane myself to see what it was like.  It was menial labor, the worst kind of coolie labor.  I told myself it had to end.” He heard a cane cutting machine being tried out in Australia and imported three prototypes along with four Aussie engineers, but it was sometime before the machines were fully operational. 

Within two years Ninoy had turned Luisita into a 26-million-peso success, its taxes alone running up to three million a year.  Production exceeded by 90,0000 piculs the peak figure set by the Spaniards – “and the hacienda was making from forty to sixty per cent profit; it never had profits like that before.”  (p. 274-78). 

Ninoy immersed himself in national politics in 1960 and had left Hacienda Luisita to the Cojuangcos.  It was under the management of the Cojuangcos where too much bloodletting happened in the estate.

5 thoughts on “SC Decision On Hacienda Luisita, A Deodorizer!

  1. Fascinating review of Ninoy’s futile attempt at introspection, discovery and innovation. It is all ghosts isn’t it, amazing ideological sleight of hand, the wool pulled over the public’s well-meaning eyes? This notion of correcting poverty by destroying the means to make money.

  2. But suppose, just suppose, that HLI is insolvent at the P40k/hectare valuation. Wouldn’t the legal effect be that the farmers would join the various creditors of HLI? The issue for the farmers would then seem to be how to set up their rights to land as ‘senior’ to the rights of other creditors of HLI to HLI assets.

    • P40K/hectare is the amount the govt. has to pay the cojuangcos which in turn will be amortized by the farmers to the govt through land bank overtime… some say 30 years.

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