DAR document bares Cojuangco agribiz venture illegal, made farmers poor

Task Force Mapalad News Release – January 18, 2018

Credit: SunStar

Negros peasants urge Duterte to void Danding deal, install them in 5,000-hectare hacienda


About a thousand Negros Occidental peasants are calling on President Rodrigo Duterte to end Eduardo “Danding” Cojuangco Jr.’s greed and deception that enabled the businessman to still control a vast agricultural landholding in the province for the last two decades even though the property should have long benefitted its tillers.

“Mr. Cojuangco has been fooling us for the last 20 years and sadly, the government, since the Estrada administration, just chose to close its eyes to the injustice. We thus urged President Duterte to end our grief by also ending Danding’s abuses by voiding his agribusiness deal with us and immediately installing us in our land,” said Noel Magan.

Magan is the president of ECJ CLOA Holders’ Association, the agrarian reform beneficiaries of the Cojuangco-controlled Negros haciendas, who are members of national peasant federation task Force Mapalad.

Magan is referring to the joint agribusiness venture arrangement (JVA) that Cojuangco forged with his farm workers right after a 4,654-hectare landholding in Negros consisting of 11 haciendas was supposedly given up by Danding to land reform in 1998 and was distributed by the Department of Agrarian Reform (DAR) to Magan’s group through certificates of landownership award or CLOA.

Under the business deal, Cojuangco, through ECJ and Sons Agricultural Enterprises, would still have control over the landholding consisting of 11 haciendas planted to mango, durian, pili, banana, and other fruits by providing capital, facilities, and technical expertise to operate the farms in exchange for 70 percent equity of the JVA.

Meanwhile, Magan’s group or the CLOA holders, would assign the use of their landholding to the JVA in exchange for a 30-percent equity.

Danding biz deal illegal, voidable, has no approval from President’s council

But after 20 years since the memorandum of understanding was signed between Magan’s group and ECJ and Sons, which led to the formation of the Cojuangco-controlled South Negros Joint Venture Corporation (SNJVC) that managed and operated the haciendas the farmers’ group recently found out from the DAR that the JVA was in fact illegal as the agency did not approve of the arrangement.

The haciendas are found in the cities of Bago and La Carlota and the towns of La Castellana, Isabela, Hinigaran, Murcia, San Enrique, Himamaylan, and Pontevedra.

A memorandum from a DAR panel mandated to review agribusiness venture arrangements (AVA), a copy of which was recently obtained by Magan’s group, stated that Cojuangco’s arrangement with the CLOA holders, though already implemented, “can be considered as a voidable contract” because it did not get approval from the Presidential Agrarian Reform Council (PARC), which is now headed by President Duterte.

The July 7, 2017 eight-page memo by the National AVA Evaluation Committee (NAEC) chaired by DAR Undersecretary Rosalino Bistoyong informed the PARC that while ECJ and Sons submitted the JVA for approval on August 26, 2005, the latter failed to complete the submission of documents for the PARC to act and decide on the JVA application.

“Completion of documents is the operative fact that would commence the 30-day prescriptive period,” the NAEC told the Duterte-headed PARC, referring to the number of days that the council should act from the time of the completion of the documents submitted for the JVA application.

But “since the documents…were not completed,” the NAEC said, “the 30-day period within which the PARC…is to act on the JVA did not commence.”

“Record shows the JVA has not yet been approved, in fact, it is still pending before the NAEC,” the panel said in the same memorandum.

Ariendo/Lease also illegal

The NAEC also bared that despite not having the green light to operate, the Cojuangco-controlled SNJVC placed the farmers’ landholding under “ariendo” or lease through a production management service agreement (PMSA) with Miguel Hinojales, which led to the conversion of majority of the fruit farm areas to a sugar plantation.

The committee noted that the PMSA “entered into by the SNJVC was not presented” to Magan’s group and other agrarian reform beneficiaries “nor was it approved by the PARC.”

NAEC added that since the SNJVC’s “primary contract is not approved, the subsequent auxiliary contracts” or the agreement with Hinojales, “are devoid of legal existence.”

If JVA was approved, it still has to be revoked because farmers remain poor

Moreover, the NAEC said that even if the PARC had approved the JVA, the same “can be revoked” because Magan’s group’s joint venture scheme with Cojuangco did not improve their economic status because each farmer/landowner only received P10,000 as yearly dividend/profit sharing or P833 monthly.

According to NAEC, the P10,000 yearly lease per farmer, each owning 2.56 hectares of the nearly 5,000-hectare landholding “is lower than the prevailing rate of ariendo or lease of adjacent lots/farms in the area,” which is P20,000 to P30,000 per hectare.

Moreover, the DAR committee noted that the illegal joint venture agreement with ECJ and Sons via the SNJVC had diminished the value of the farmers’ usufructuary rights over the landholding because upon the venture’s establishment, the entire landholding, which was earlier valued at P1.5 billion, was appraised at P3 million or P645 per hectare.

As stated in DAR Administrative Order No. 2 series of 1999, among the goals of agribusiness joint venture schemes are to “lift the economic status of the (agrarian reform) beneficiaries,” enable them to full benefits of agrarian reform” and “ensure security of tenure and security of income of participating beneficiaries.”

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