As the 1980s began, the Philippines’ economic development strategy was in shambles, resulting in a crisis. The Marcos regime outlined a new policy for Philippine agriculture in a 1983 position paper sent to the World Bank, titled “The Agenda for Action in Agriculture: 1983 to 1987.”
The World Bank thus played a major role in this policy shift, proposing a series of Philippine agricultural reforms: eliminate credit subsidies to small rice and corn farmers; dismantle government monopolies in sugar, coconut and grains exportation; merge and streamline government agencies in agriculture; remove price controls on rice, corn and other commodities; and prepare a five-year plan for agricultural development.
Marcos complied with the prescriptions. Credit subsidies to small farmers were dismantled and interest rates were pegged at market rates. Private entrepreneurs were allowed to export sugar, rice and yellow corn. Government agencies involved in agriculture and food production were merged. Price ceilings on rice and corn were raised three times. Tariffs on imports of crop inputs were reduced. A five-year plan for agriculture was drawn up.
In 1984, the World Bank provided a US$150-million loan to support the agricultural shift. However, 99% of the components were for the importation of agricultural inputs while the remaining 1% paid for foreign technical experts. The main loan beneficiaries were the transnational agribusiness corporations which manufactured and exported these inputs, their local affiliate firms, and input dealers.
Apart from serving to perpetuate the structures of control in the rural areas and doing little to alleviate the plight of small farmers, the US$150 million simply flowed back to the advanced donor states.
As export crops were given priority, the new thrust was geared more toward aiding private businessmen and big landowners rather than small farmers and owner-cultivators. Marcos cronies solidified or assumed control of agricultural sectors: Roberto Benedicto for sugar, Eduardo Cojuangco for coconuts, and Antonio Floirendo for export bananas. These industries later suffered severe downturns and Marcos had to bail out his cronies in billions of public funds.
Agribusiness expansion led to these consequences: production of food crops suffered as export promotion intensified; the country remained a food-deficit country while receiving food aid from abroad; farmer-tillers and rural communities were ejected from their lands by aggressive corporate expansions in the export fruits industry, palm oil, corporate rice farms, and coconut plantations.
Being capital-intensive, agribusiness farms caused wide-scale labor displacements; agricultural workers continued to suffer low wages far below rural poverty lines. Soil degradation, pollution and health problems for workers and communities intensified due to monocrop culture and the extensive use of harmful chemicals by plantations.
Rice production declined in 1983 due to the high cost of inputs, and unavailability of low credit. Palay harvests rotted from continuous rains, prompting huge rice imports from Thailand and China.
Rural poverty incidence grew to 64% in 1985 from 56% in 1971. The number of rural poor families swelled from 2.5 million in 1975 to 3.8 million by 1985. Rural inequality became so pronounced that in 1985, 45% of rural families had only 21% share of the income, while 19% cornered 43%.
A major consequence of the agricultural crisis was the growth of landless workers from 31% of the rural population in 1966 to 61% by 1980. This stemmed from the inability of small farmers to repay debts to village creditors, including landowners and merchant dealers.
In many cases, agrarian reform beneficiaries had to mortgage their land transfer certificates and eventually surrender them to rural banks, the state cooperative, or farm machinery dealers.
The new rural development policy officially abandoned equity-oriented goals for an exclusively productivity-centered approach. Marcos exempted from agrarian reform corporations that engage in large-scale planting of export crops.
Thus, agrarian reform finally dealt a death blow. Covering only 28% of the officially estimated total number of tenants in croplands and only 33% of tenanted agricultural lands, the program was able to transfer land titles to only 3.3% of the targeted beneficiaries by December 1984.
The tragedy is that government planners in post–martial law regimes have been blind to the lessons of the 1980s. The same Marcos-style agricultural strategies have remained in place, continuing to inflict pain and hardship on peasants and rural workers.
Membership in the World Trade Organization in 1995 eliminated all quotas on agricultural goods, causing the agricultural trade deficit to rise by 95% between 1995 and 2019. The Philippines became a dumping ground for cheap and subsidized agricultural surpluses from other countries, bankrupting local producers.
The 2019 Rice Tariffication Law liberalized rice trading, allowing unlimited importation by private rice traders. The result was an epic disaster for rice farmers. Palay prices plunged to their lowest in years and rice farm households lost as much as PhP80 billion in the first year of the law’s implementation.
There appears to be no end in sight to the agony and suffering of the local agricultural sector and its direct producers, peasants and rural workers, and their families.
(This piece is excerpted from Eduardo C. Tadem, “How Marcos undermined Philippine agriculture and further marginalized the peasantry,” in the Philippine Journal of Public Policy: Interdisciplinary Development Perspectives. 2022. It first appeared in OpinYon weekly.)
(Eduardo C. Tandem, PhD, is a convenor of the Program on Alternative
Development of the University of the Philippines’ Center for Integrative and Development Studies and is a professorial lecturer of the UP Asian Center in Diliman. –ED.)