CITY OF SAN FERNANDO— The Supreme Court has ruled that Hacienda Luisita Inc. (HLI) is entitled to just compensation for the home lots it gave to farmers who will now get land on the company’s sugar plantation through agrarian reform.
In a resolution dated April 24 but released only last week, the Supreme Court said HLI should be paid since the stock distribution program that covered the home and farm lots in 1989 was revoked by the Presidential Agrarian Reform Council (PARC) in 2005 to clear the way for land distribution.
Each measuring 240 square meters, the home lots were considered part of the farmers’ benefits as shareholders in HLI, a company owned by the family of President Benigno Aquino III.
Resolving questions that arose from the revocation of the stock option, the court ordered the government to pay HLI, through the Department of Agrarian Reform (DAR), for the home lots.
The order to pay, the court said, follows Section 4, Article XIII of the Constitution, which requires just compensation for land coming under agrarian reform.
It is the only amendment that the court made to its July 5, 2011, decision and
Nov. 22, 2011, resolution affirming the PARC’s decisions to revoke the stock option and distribute Hacienda Luisita through compulsory acquisition.
The court ordered the payment to be based on 1989 land prices, which the court also used as basis for just compensation to HLI for the 4,195 hectares of land that would be distributed to qualified land-reform beneficiaries in Hacienda Luisita.
The court said the payment for the home lots should be made to HLI, not to Tarlac Development Corp. (Tadeco), which was 77-percent owned by HLI at the time the court upheld the PARC decisions.
Plantation workers owned 33 percent of HLI until the PARC revoked the stock option.
Tadeco should not expect payments since it transferred the titles to the home lots to HLI in 1989, the court said.
Filomeno Inocencio, agrarian reform director in Central Luzon, said he understood the court’s April 24 resolution to mean that the farmers would not pay for the home lots.
He said the DAR might get funds from the budget of the Comprehensive Agrarian Reform Program Extension with Reforms, but the agency should first see if the compensation could be legally drawn from the program’s funds.
In a text message from the United States, lawyer Antonio Ligon, HLI spokesperson, said paying for the home lots was not the obligation of the farmers. They should pay only for the farmland they would get, Ligon said.
In Manila, the DAR had proposed a system that would make owning a piece of the hacienda worth it for the farmers.
The Supreme Court has ordered the division of the 4,335.24-ha sugar plantation among 6,296 farmers. This means each farmer will get a 0.68-ha plot.
The farmers should not despair. Agrarian Reform Secretary Virgilio de los Reyes suggested that the farmers try block farming—combining small farms to make large farms to achieve better production.
“We are encouraging them to do block farming with the [Department of Agriculture] (DA) and the [Sugar Regulatory Administration] (SRA),” De los Reyes said.
The DAR is already using block farming in agrarian-reform communities in Batangas, De los Reyes said. Block farming could increase yield on sugar farms by 50 percent, or from 99 bags to 147 bags of sugar per hectare, De los Reyes said.
Under a block-farming agreement, the DA will shoulder the cost of equipment and development services, while the SRA will take care of the cost of technology and overall management of the block farms.
The Hacienda Luisita farmers stand to benefit from the system and they can also plant other crops, like vegetables, which, according to De los Reyes, are suitable to small farms. With a report from Kristine L. Alave, in Manila