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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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    Cited by:

    1. Roumasset, James A., 2024. "The Microeconomics of Agricultural Development: Risk, Institutions, and Agricultural Policy," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 21(AJAD 20th), October.
    2. Llanto, Gilberto M. & Geron, Maria 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. 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.
    4. 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.
    5. Dy, Kenneth Bicol & Chau, Kwong Wing, 2023. "Compulsory land redistribution from the perspective of the theory of price control," Land Use Policy, Elsevier, vol. 131(C).

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    More about this item

    Keywords

    CARP; agrarian reform; agriculture; Coase Theorem; Philippines;
    All these keywords.

    JEL classification:

    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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