Transcript Slide 1

The Acquisition of Private Property
by the State
The Case of the Comprehensive Agrarian Reform
Program in the Philippines
Arsenio M. Balisacan
SEARCA & UP Diliman School of Economics
Email: [email protected]
International Conference on Private Property Rights: The
Economic Foundation of a Free Society
University of Asia and the Pacific, Pasig City
19 September 2008
Economic Growth,
Land Inequality, & Poverty
–
What is systematically
related with economic
growth is not income
inequality per se but
inequality in the
distribution of physical
assets, particularly land.
Advocacy for land reform
– Narrow focus on equity
– Overlooking efficiency
gains: raising the
economy’s long-term
growth path
7
Average Annual GDP Growth, 1960-1990 (%)
Recent economic
development literature
Cross-country
data
6
5
4
3
2
1
0
45
55
65
75
85
Initial Land Distribution (Gini
coefficient for land)
95
Inequality in Land Distribution
Philippines vs World Regions
(Perfect Inequality=100; Perfect Equality=0)
100
80
60
40
20
0
a
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a
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P
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Su
Eas
es
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p
ilip
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P
ia
As
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So
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Lat
eri
m
A
ca
Inequality in Land Distribution
RP Provinces vs. World Regions
(Perfect Inequality=100; Perfect Equality=0)
100
80
But high variation across
geographic areas…
Ilocos provinces (Luzon):
60
Somewhat resembling East
Asian countries
40
Negros provinces
(Visayas) and Davao
provinces (Mindanao):
20
0
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Bu Occ tin A tern
nd aran Ilo
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Roughly comparable to Latin
American countries
Economic Growth,
Land Inequality, & Poverty
Peculiarity of the Philippine experience: weak
response of poverty reduction to economic growth
Growth benefits all
income groups,
but even more so
for the high
income groups.
% change in income wrt 1%
change in overall ave income
1.5
1
0.5
0
Q1
(poorest)
Q2
Q3
Q4
Q5
(richest)
Other factors exert
direct impact on
the welfare of the
poor. Could land
distribution be
one?
Pathways to poverty reduction
Income Growth
“expansion
of the pie”
(Growth
Channel)
Direct
Effect
Poverty
Reduction
Reverse
Causality
Determining Factors
• Asset (land)
distribution
• Education
• Health
• Infrastructure
• Demographic factors
• Institutions
• Initial Conditions
“division of the pie”
(Equity Channel)
The Philippines Comprehensive
Agrarian Reform Program (CARP)
Initially 10-year implementation, ending 1998;
extended by another 10 years, ending 2008
Key features
– Inclusion of all agricultural lands
– Going beyond tenancy arrangements to include
other production arrangements
– Phasing schedule starts with rice & corn lands, then
VOS, public lands, & large private agri lands
– Land valuation – “just compensation”
– Budgetary requirement – Php 221B
– Support service delivery
CARP Accomplishment
Land Acquisition and Distribution
(as of 2007)
6,000,000
77%
done
5,000,000
83%
done
hectares
4,000,000
3,000,000
2,000,000
1,000,000
0
DAR
DENR
Scope
Accomplishment
CARP Accomplishment
Land Acquisition and Distribution
Land Type/Mode of Acquisition
DAR
Scope
(ha)
Percent
Accomplishment
4,428,357
86.4
3,093,251
69.5
Operation Land Transfer
616,233
91.1
Government Financing Institutions
243,434
66.1
Voluntary Offer to Sell
437,970
127.9
Compulsory Acquisition
1,507,122
17.7
Voluntary Land Transfer
288,492
208.6
1,335,106
125.5
604,116
119.2
70,173
115.0
660,817
132.3
3,771,411
81.0
Public Alienable and Disposable Lands
2,502,000
68.7
Integrated Social Forestry/
Community Based Forest Management
1,269,411
105.2
8,199,768
83.9
Private Agricultural Lands
Non-Private Agricultural Lands
Settlements
Landed Estates
Government Owned Lands
DENR
TOTAL
Source: Presidential Agrarian Reform Council
CARP Accomplishment
Provision of Support Services
Agrarian Reform Communities (ARCs)
– Integrated area-focused rather than sectoral
approach in the delivery of support services
– Vehicle for fast-tracking investment in social
services
– Covered 47% of total ARBs; 80% of ARCs received
FAPs (as of end of December 2006)
– Average cost of intervention: Php 38.4M per ARC
– Top interventions: TA on organizational
management, agricultural production enhancement,
off-farm livelihood and enterprise development, and
roads
Assessing the Impacts
Constructing comparable “treatment” and “control”
groups (Propensity Score Matching)
ARC
Non-ARC
Assessing the Impacts
Outcome indicators
Ensuring attribution (“Double difference” )
ARC
For initially comparable
groups, assess:
 With vs Without ARC
Non-ARC
Before vs After ARC
T
Year
Assessing the Impacts
Primary consideration in the empirical approach
–
–
Representativeness at the national level (beyond anecdotal
evidence)
Comparability issues
NSO Censuses and Surveys (nationally representative)
–
–
–
–
–
Census of Population and Housing 1990, 2000
Census of Agriculture 1991, 2002
Annual Poverty Indicators Survey 2004
Family Income and Expenditure Survey 2003
Labor Force Survey 2004
BAS Survey Data (nationally representative)
DAR Administrative Data
Rapid Appraisal covering 15 municipalities in 5
provinces representing different levels of CARP
accomplishment
Minimal impact on rural income…
18,000
14,525
15,000
12,157
14,422
12,189
12,000
1991
2002
9,000
6,000
3,000
0
ARC
Non-ARC
 The net gain for a family of 5 living in an ARC amounts to Php 1,170
when expressed in current prices.
… and, accordingly, on rural poverty
Poverty incidence (% deemed poor)
45
39.8
39.0
36
27
24.2
24.8
1991
18
2002
9
0
ARC
Non- ARC
But higher educational attainment of
household members for ARCs…
Indicator
ARC
1990
Non-ARC
2000
1990
2000
Ddiff
Educational attainment (Actual attained vs. Potential attainment)
Household head
45.2
49.1
45.1
48.7
0.38
Ages 6-24
69.1
74.7
68.6
73.3
0.90
Ages 25 and up
47.8
53.1
47.1
51.9
0.45
Source: Matched panel in 1990 and 2000 CPH.
Better access to credit for farm
households holding individual land titles
Parameter
Estimate
Standard
Error
Holder of individual title
-0.189
0.096
**
Small farm
0.344
0.205
*
Size of titled farm
-0.071
0.076
Household size
0.034
0.017
Ratio of irrigated land
-0.085
0.094
Age of farmer
-0.032
0.022
Age of farmer, squared
0.000
0.000
Ratio of members w/ tertiary
educ.
-0.649
0.119
***
Negative factors
Farm located in ARC
-0.260
0.087
***
Distance to bank
-0.001
0.007
– Small farm
– Household size
Constant
1.195
0.649
Variables
Source: Ballesteros (Forthcoming)
Sig
**
*
Positive factors
– Farms located in
ARC
– Household members
w/ tertiary education
– Holder of individual,
registered land titles
Probability of not being poor: Land
ownership matters
Land ownership
categories
Result of Significance Test: Probability of
not being poor
In the ARC
(WARC)
No Land
(XLAND)
Not in the
ARC
(XARC)
In the ARC
(WARC)
E
F
A
ARB
(WARB)
Not in the
ARC
(XARC)
With Land
(WLAND)
Not an
ARB
(XARB)
In the ARC
(WARC)
Not in the
ARC
(XARC)
A vs
B
Wland_WARB_WARC>
Wland_WARB_XARC
*
A vs
C
Wland_WARB_WARC>Wland_XARB
_WARC
*
B vs
D
Wland_XARB_WARC=Wland_XARB_
XARC
A vs
D
Wland_WARB_WARC>Wland_XARB
_XARC
*
B vs
E
Wland_WARB_XARC>Xland_WARC
**
*
B
C
D
Implementation Issues &
Constraints
Funds released (Php145B) as of 2007 much
less than what was programmed (Php 222B)
in 1988
Inadequate capacity of implementing
agencies (e.g. in conducting cadastral
surveys, facilitating arbitration, etc.)
Frequent leadership changes: inhibits
continuity
Collective CLOAs as preferential mode of
program implementation
Implementation Issues &
Constraints
High preference to
collective CLOAs as
mode of
implementation.
But what matters most
to household welfare
and access to credit is
ownership titles, not
collective titles
(collective CLOAs).
Collective CLOAs
weakened the capacity
of LGUs to collect real
property taxes, their
main revenue source.
Type
No. of
Titles
%
Area (Ha)
%
Individual
693,969
79%
850,201
29%
Collective
180,749
21%
2,082,765
71%
Total
874,718
100%
2,932,967
100%
Should CARP be Extended?
Yes, BUT not Business-as-Usual
implementation
Final (non-negotiable) timeframe to
complete what has been started
Areas to Focus on
Segregation of collective CLOAs
– Maximize the incentive effects of individual land
ownership
Mainstreaming the ARC strategy (integrated,
area-focused)
– Joint implementation strategy with DA, other RDrelated agencies, and LGUs: convergence of
services
Exploring other options for implementing land
reform in sugar and coconut, including
negotiated and market-facilitated schemes
Beyond CARP
Geographic areas of the country are
heterogenous: importance of various pathways
out of poverty in agriculture vary across areas.
– Income growth in agriculture: investing in
productivity-enhancing measures, such as irrigation
and R&D, and good institutions
– Diversification of the rural economy (expanding
rural non-farm opportunities): investing in
infrastructure
– Migration (linkage to growth centers): investing in
education
Thank you!