Impact of agrarian reform on landowners : a review of literature and a conceptual framework

The 1987 Consultatution provides that the state shall promote comprehensive rural development and agrarian reform " It requires the state to provide incentives to landowners to encourage them to invest the proceeds of the compensation for their lands under agrarian reform to promote industialization, employment creation, and privatization of public sector enterprises It provides that financial instruments used as payments for lands shall be honored as equity m public enterprises where landowners chose to invest These consultations are a major feature of the Comprehensive Agrarian Reform Program (CARP) signed into law (Republic Act 6657) by President Corazon C Aquino on 10 June 1988 Philippine studies on agrarian reform have dealt largely with the agrarian reform beneficiaries and the reform s effects on their welfare and production efficiency Very little work has been undertaken on the agrarian reform's other major actor the landowner This is rather surprising in view of the important role expected of landowners in promoting industrialization and employment. This paper presents a review of literature and related experiences on the impact of agrarian reform on the landowners, for two main reasons: (1) landowners are a legitimate concern of the government, and (2) policymakers and even social scientists view landowners as potential investors, entrepreneurs, and industrialists. The usual expectation is that landowners will assume another role, that of investors and entrepreneurs, once displaced from their land and given government incentives for them to join industry. It is interesting and significant to find out to what extent the expectation is realized, and if the contrary happens, to determine Why.