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ROUGHCUTS | Will debt condonation up production?

FOR US the biggest news to have dominated the front pages of national newspapers recently was the order of President Ferdinand R. Marcos, Jr. to have the indebtedness of thousands of farmer-beneficiaries of the government’s agrarian reform program condoned. The total indebtedness is estimated to be about a billion pesos.

Sure the order of the President was welcomed by the farmers with jubilation. After all who among them will not be happy when suddenly they are unshackled from the bondage of indebtedness that rendered them less enthusiastic in cultivating the land they had been tilling for long without certainty if they can eventually own it.

The indebted farmer-beneficiaries are tenants in lands that belong to landlords that have been dominating the country through their influence in government, or their occupying the top positions in governance

Most, if not all of the farmer-beneficiaries of the piece of land, actually inherited their being tenants from their forefathers. Now with their being beneficiaries of the government’s land reform program they had the rare opportunity to own the land they till through an easy term and at a very liberal cost.

But as many of us already knew, most of these new landowners blew the opportunity to fully own the land. In only after a few months of paying the amortization the farmer-beneficiaries started defaulting on their payments. Thus, over the years their indebtedness ballooned to huge amounts the magnitude of which makes them hopeless in attaining their dream – to proudly call the land they till their very own.

So, it was not anymore surprising to see the tenant-beneficiaries jumping with joy upon knowing that no less than the President wanted them emancipated from the bondage of indebtedness.

But here is the catch. The President, in deciding to erase the tenant-farmers’ debts, expects that the beneficiaries will make their land more productive and their lives be alleviated substantially by the increase in their productivity.

Will the debts condonation indeed increase the land and the farmers’ productivity? A friend of ours, Marlu Villarosa, does not think so. He says there are a lot of other things needed to be done before both the land and the farmers increase their productivity.

Our take on the matter however, is that the washing out of the tenant-famers’ debts in fully acquiring the land due them may or may not result to higher yield. It may because the stress on the farmer-tillers will be off their backs when every harvest time they would not anymore be thinking of paying any debt related to the land acquisition. What they earn from their produce will now solely be devoted for their family’s needs and to foot the bills for other domestic necessities.

But it may also not increase the farmer and the lands productivity. What with the spiraling cost of farm inputs such as fertilizers and other pesticides, lack of government support in terms of providing post-harvest storage facilities, lack or no subsidy at all in other farm operation needs.

While admittedly there are now more farm-to-market roads now than before  that connect the farms to the markets for selling the farm produce, the high cost of transportation remains a major bar in disposing of farm products at better prices.  Then the middlemen still continue to lord over in the procurement of the farmer’s products. These middlemen are the arms of cartels who are the ones dictating the market prices.

And how much output can the farmer-beneficiaries add to their current capability when most of them still use the antiquated manual way of tilling their land? Even without debts to think anymore, the farmers can still not afford to buy tractors, harvesters, etc.

It is only when government assumes the responsibility of providing the mechanization needs of the farmers, or putting up the post-harvest facilities closer to the farmer-users, or dealing with the cartels and smugglers can it expect the emancipated farmers to be more productive and contribute substantially in increasing the country’s Gross Domestic Product (GDP).

Even warning them of getting back the land if they sell it prior to the end of the ten-year prohibition may not deter the farmers from skirting the mandate. Yes, it is easier said than done. As the saying goes, “There are many ways to kill a cat.”

Extreme necessities oftentimes lead people to find ways to circumvent the law.

So, again the question, “Will the billion peso debt forgiveness equate to progress?” as asked by our friend?

It all depends on how the “debt forgiver”, and the “forgiven” farmer-beneficiaries play their roles; do their responsibilities in the equation attendant to the debt condonation.


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