Sen. Joker Arroyo compares the travails of the coconut farmers on the cusp of recovering some P100 billion in martial law-decreed tax to that of “The Little Red Hen.”
In the folktale, the hen finds a grain of wheat. She then asks animals in the barn who wants to help her plant the grain.
“Not I,” purrs the cat. “Not I,” barks the dog. “Not I,” quacks the duck.
“Then, I will,” says the hen.
And so the exchange goes on through the growing, harvesting, milling and finally baking the bread. When all is said and done, the hen asks, “Who will help me eat the bread?” The chorus is, “I will.”
Arroyo says that’s exactly where coconut farmers stand today, after the Supreme Court unanimously ruled last week that 24 percent of sequestered shares of stock in San Miguel Corp. (SMC) acquired with proceeds of a coconut levy tax imposed from 1973 to 1982 belonged to the government and should now be used for the benefit of the industry and the farmers.
“Give the money back to the farmers,” Arroyo said in an interview on the weekend as the government grappled with the question of what to do with the recovered assets after a quarter century of judicial litigation.
“The government should spell out now what it should do,” the senator said. “They have been ominously silent.”
He recalled that little of the P52.9 billion amassed by the Bases Conversion and Development Authority in the sale of military facilities went to the modernization of the Armed Forces of the Philippines.
Arroyo shrugged off reported government intention to use the money for the rehabilitation of the coconut industry and its 3.5 million farmers. The rebuilding of the industry is a function of the government, he said, and the farmers should not be asked to shoulder this expense.
Some 20 million Filipinos, comprising the nation’s poorest of the poor, depend on the industry. Many of the farmers who paid the tax on copra imposed during the martial law years from 1973 to 1982 are either dead or dying and would no longer enjoy the fruits of their labors, said industry activists.
Farmers need to be heard
Danny Carranza, secretary general of the peasant coalition Katarungan-Quezon, said genuine farmers should be involved in any government initiative on securing and using the funds to avoid the shenanigans of the past.
Carranza pointed out that the levy was imposed by the dictator Ferdinand Marcos supposedly “for the benefit of the farmers,” but few of the peasants gained from it.
“It is important here to establish a coconut farmers trust fund to ensure that the coco levy fund will not again be squandered. It would be good if the program would directly benefit the small farmers. The government should ensure that the recovered coco levy fund would not be used again for the benefit of big capitalists,” he said.
Omi Royandoyan, executive director of the advocacy group Centro Saka, also supported the issuance of an executive order or law establishing a trust fund for the farmers.
Royandoyan warned against moves by the Nationalist People’s Coalition headed by businessman Eduardo “Danding” Cojuangco to block a bill by Rep. Erin Tañada of Quezon to establish a trust fund.
Joey Faustino, head of the Coconut Industry Reform Movement, called on President Aquino to certify for urgent legislation bills in the two houses of Congress that would establish a Coconut Farmers Trust Fund to be initially funded by any recovered coco levy funds.
He said genuine farmers should be represented in coconut-related agencies of the government, including the group of companies comprising state-owned United Coconut Planters’ Bank (UCPB) and the Coconut Industry Investment Fund (CIIF).
“To date, personalities closely related to Eduardo Cojuangco Jr. have been appointed/reappointed to the group of companies,” Faustino said.
Getting it right
“The farmers have waited this long and have had to survive on so much less. In my book, getting it right is worth the wait, even if it means waiting a little while longer,” said Marco Sardillo, a volunteer lawyer for the coalition.
Cojuangco was a member of the triumvirate that supervised the coconut industry during the martial law years. The others were then Defense Minister Juan Ponce Enrile and the late Clara Lobregat, then head of the Philippine Coconut Planters Federation.
In a decision last year, the Supreme Court said that another 20-percent block of SMC shares that was sequestered in 1986 following the Edsa People Power Revolution belonged to Cojuangco, throwing out claims by coconut farmers that it was part of the ill-gotten wealth of Marcos and his cronies. A dissenting justice described the decision as the “joke of the century.”
This 20-percent block of shares is worth P54.36 billion of common shares (based on P110/share).
All told, 51 percent of the shares of stock of SMC, now one of the nation’s highly diversified conglomerates, were acquired in 1983 for P2 billion, allegedly using coconut levy funds deposited in UCPB headed by Cojuangco, an uncle of President Aquino.
For election purposes?
The shares were reduced to 48 percent of the SMC stock as part of the company’s expansion with the subsequent entry of Japan’s Kirin brewery.
Four percent of the package estimated at P15.3 billion has been converted into treasury warrants, representing holdings of then SMC boss Andres Soriano and his employees.
The 24-percent block of SMC shares that the court had ruled belonged to the farmers was acquired using a complex arrangement with 14 holding companies. The scheme was conjured by Cojuangco’s lawyers, some of whom later became senators.
In 2009, this portfolio, estimated to be worth around P70 billion, including interests and dividends, was converted from common to preferred shares pegged at P75 per share.
Oil mills acquired by the government during the martial law years are worth P6.5 billion.
If liquidated, the bundle could be worth at least P146.16 billion.
Although the court decision on the Cojuangco shares has become final and executory, coconut reform advocates are seeking a review of the ruling.
Letters, including one signed by the head of the Catholic bishops’ National Secretariat for Social Action, have been sent to the court questioning its April 2011 ruling on this 20-percent block of shares.
A week after the high tribunal ruled in favor of Cojuangco, the President convened an interagency meeting in Malacañang to discuss strategies on what to do with the SMC shares once recovered.
A presidential task force on coco levy headed by Secretary Joel Rocamora of the National Anti-Poverty Commission was created. The group met 10 times, but none of the farmers’ groups was represented, the Inquirer has learned, although companies with links to Cojuangco subsequently were involved.
The group later came up with a so-called road map using levy funds for the development of the industry and a poverty reduction in the distressed sector “to complement the government’s overall antipoverty and rural development agenda.”
Apart from this, nothing has so far been heard from the government amid speculation that the money might be used in the elections next year.