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Comprehensive Agrarian Reform Program (CARP): Time to Let Go

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  • Raul V. Fabella

    (School of Economics, University of the Philippines Diliman)

Abstract

This paper revisits the record of CARP over the quarter century of its existence. By 2014, 5.05 million of the 5.37m hectares of the targeted agricultural land shall have been distributed. As a program for land asset equity, it shall have accomplished 99% of its target, whopper of a success for a government program. As a program to advance the economic welfare of farmers, it has accomplished the opposite of its stated goals. Productivity has fallen drastically in coconut and sugar and poverty incidence among agrarian reform beneficiaries in agrarian reform communities stood at 54% in 2011 higher than for farmers in general. CARP and CARPER has created a new class of people: the landed poor. The paper then explores the many design and implementation flaws that has brought this sad result among which are: CARP’s illegalization of the market for land assets (Section 27) sending Coasean bargains underground and the 5-hectare land ownership ceiling leading to the demise of the legal rural financial market and the flight of private capital. It is time to shift from land equity to farm efficiency. The paper argues for the return of the market in rural production: let productive farmers legally cultivate 10 or more hectares as the market dictates; let PSE-registered firms legally operate agro-industrial farms without land ceiling. Poverty reduction requires the shift of resources and manpower from informal to formal sectors. CARP has done the opposite. To echo the architect of the great Chinese Economic Miracle, Deng Xiaoping: It is time to stop redistributing poverty!

Suggested Citation

  • Raul V. Fabella, 2014. "Comprehensive Agrarian Reform Program (CARP): Time to Let Go," UP School of Economics Discussion Papers 201402, University of the Philippines School of Economics.
  • Handle: RePEc:phs:dpaper:201402
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    File URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/1455
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    References listed on IDEAS

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    1. Marife Ballesteros & Alma dela Cruz, 2006. "Land Reform and Changes in Land Ownership Concentration : Evidence from Rice-Growing Villages in the Philippines," Development Economics Working Papers 22613, East Asian Bureau of Economic Research.
    2. Daron Acemoglu & James A. Robinson, 2001. "A Theory of Political Transitions," American Economic Review, American Economic Association, vol. 91(4), pages 938-963, September.
    3. Shenggen Fan & Connie Chan-Kang, 2005. "Is small beautiful? Farm size, productivity, and poverty in Asian agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 135-146, January.
    4. Palmer, Donald W. & Pemberton, Carlisle A., 2007. "An Estimation of the Efficient Size of Sugarcane Enterprises for Farmers in Trinidad," Farm and Business - The Journal of The Caribbean Agro-Economic Society, Caribbean Agro-Economic Society, vol. 7(1), June.
    5. Marife M. Ballesteros & F. Bresciani, 2008. "Land Rental Market Activity in Agrarian Reform Areas : Evidence from the Philippines," Development Economics Working Papers 22614, East Asian Bureau of Economic Research.
    6. Bhalla, Surjit S & Roy, Prannoy L, 1988. "Mis-specification in Farm Productivity Analysis: The Role of Land Quality," Oxford Economic Papers, Oxford University Press, vol. 40(1), pages 55-73, March.
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    Cited by:

    1. Toby C. Monsod & Sharon A. Piza, 2014. "Time to let go of CARP? Not so fast," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 51(1), pages 19-27, June.
    2. Llanto, Gilberto M. & Geron, Ma. Piedad S. & Badiola, Jocelyn Alma R., 2016. "Comprehensive Study on Credit Programs to Smallholders," Discussion Papers DP 2016-48, Philippine Institute for Development Studies.
    3. Gary B. Teves, 2014. "Improving Credit Access for the Food and Agriculture Sector through Enhanced Implementation of Existing Policies and New Strategies," UP School of Economics Discussion Papers 201415, University of the Philippines School of Economics.

    More about this item

    Keywords

    CARP; agrarian reform; agriculture; Coase Theorem; Philippines;

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