The banality of evil, small farmers’ edition

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Marlen V. Ronquillo

Veterans of the peasant movement cannot but help notice the identical numbers in two of the major laws that dedicate—and dedicate in a big way—funds for the uplift of the small farmers. The first is Presidential Decree 717, the Marcos-era edict that, in theory, was the first major overhaul of banking rules to benefit the small farmers in a big, big way.

The PD, called the historic Agri-Agra Law, was given a minor facelift by RA 1000, but the force and ground-breaking nature of the original PD remain, at least on the theoretical side. The Agri-Agra Law ordered the banks to allot 25 percent of their yearly loan portfolios to agriculture in general and small farmers (15 percent) and agrarian reform beneficiaries (10 percent). What can be bigger than a law whose intent was to integrate the small farmers and land reform beneficiaries into the financial mainstream? And decreed in a context of widespread and unconscionable usury in farm lending?

Before the Agri-Agra Law, there was no law for farm credit, not even a token one. And remember this: credit is the lifeblood of farm production, whether small-scale, medium-sized or large-scale. Small farmers were simply not allowed to be part of the mainstream financial system.

A bank with the exclusive mandate to serve farmers, the Land Bank of the Philippines, was also created to prop up the intent of PD 717.


The post martial law Congress passed RA 7171 and the law did not just adopt the numbers of the original path-breaking decree of Mr. Marcos for the farmers. RA 7171, like PD 717, mandates a special fund for farmers, this time tobacco farmers in the political bailiwick of Mr. Marcos, Northern Luzon, the farming region in the country that produces Virginia tobacco.

The uncanny match of the two laws’s numbering and mandate is something you would not fail to notice if you have been involved in the farming sector at one time or another. Or, to one like me who has been there from time immemorial.

But that is not the thing that strikes you most, the uncanny match of numbering and mandate. While the two laws conform to the great ideal of a law, just and fair and lifting sectors on the margin, the application is altogether a different matter. Like all laws and edicts and promulgations that mandate the lifting of the small farmers, they are routinely and brazenly violated, assaulted and mocked. The assault is so routine that the evil impact of that assault on small farmers and their little lives remind many of the phrase “banality of evil.”

PD 717, again, was radical on paper. Had it been fully enforced and implemented since the decree year in 1975, it could have radically transformed small-scale agriculture into a thriving and vibrant one. And improved the lives of small farmers in the process, rice and corn farmers in particular. Small-scale farms earning P1 million per hectare as a result of adopting modern practices and the best of irrigation and technology? That would have been the growth track had the implementation fulfilled its side of the bargain.

What derailed the law were the holes intentionally placed by those tasked to write down the details of the historic law. Banks were allowed too many escape clauses, or the so-called modes of alternative compliance. Acquisition of government securities was one. Investment in mass/socialized housing was another. These two modes alone allowed the banks to pour the theoretical 25 percent of the loan portfolio to non-farming accounts. If there were farming accounts at all, these were funds loaned out to the agribusiness giants.

The mockery of the law was so complete and this was borne out in audit after audit. Loans granted under the “small farmer” category were loans to the giant rice mill owners or owners and operators of giant farm silos and storage areas.

The LBP is Exhibit B of the paper-only credit extension to small farmers and agrarian reform beneficiaries. The fact that the bank established exclusively for the agrarian reform beneficiaries and small farmers is now the country’s number four bank is testament to the evolution – and hollowness – of farm credit.

The Land Bank portfolio is 90 percent corporate account and corporate farm account and the token 10 percent for small farmers is both a tragedy and a farce, mostly for its press releases on its supposed countryside mandate.

Under Mr. Aquino, there was even an attempt to change the whole mandate shamelessly and an EO was done to merge it with the Development Bank of the Philippines (DBP) to create a giant state banking enterprise that would jump to Number Three in terms of assets and loans and other benchmarks.

He was the same president whose reaction to the Napoles scam was to cut-off the token farm subsidies to small farmers on Day One the scam made newspaper headlines.

What about RA 7171 ?

RA 7171 is now in the headlines as the Ilocos Norte provincial government had used proceeds from the tobacco excise tax to buy second hand buses and assorted vehicle types. Gov. Imee Marcos’s dad was Mr. Marcos of the PD717 decree.

Like PD 717, the RA provides for a dedicated fund with specific mandates. Coops for tobacco farmers. Livelihood projects for tobacco farmers. Infra projects for tobacco farmers. It is a limited list and nowhere in the mandate is the purchase of used buses. While the optics of the House inquiry on the tobacco fund use by the Ilocos Norte government portray Ms. Marcos as the victim of two House leaders cum bullies, the truth is the House leaders are doing the right and legal thing here – look into a very obvious misuse of the RA 7171 money.

Today, the surname of the leader, it appears, no longer makes a difference. The new generation of Marcoses and Aquinos all make it a point to shaft the small farmers. The body politics, the supposedly vigilant and crusading bloggers, the so-called civilsociety pay no mind. The House leadership should really push the inquiry into its logical end.

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