Saving the sugar industry

"It's a lesson we never learned."


I vividly recall my younger days as student activist, we demanded the abrogation of the Laurel-Langley Agreement (LLA) claiming it was a carryover of the infamous Bell Trade Act which provided “free trade” between the Philippines and the US. The Agreement was an extension of the parity rights upon which preferential tariff was given to sugar exporters until 1974.

The LLA was a mercantilist-protectionist economic policy. While it seeks to impose a monopoly on our exports, protectionism was designed to obligate the Philippines to export specific commodities like sugar, pineapple, coconut oil and hemp, thereby preventing us from developing and exporting other products just to meet the export quota that only benefited the few landlords. It was a colonial economic system that effectively prevented us from diversifying and seeking new markets to allow the economy to develop to a higher level like creating a manufacturing industry.

The LLA signed in 1955 cannot be an example of US economic trade liberality. It was intended to assure the US industries the continued supply of sugar caused by Cuba’s decision to nationalize all lands in 1953, which as a former US colony, was forced to export sugar upon the approval of the Platt Amendment in 1901. The Bell Trade Act of 1946 that preceded the LLA was given a deceptive title of “parity rights agreement” as a condition to the grant of “independence.” Many of our local politicians and landlords went agog fantasizing that free trade was the exact formula the country needed to attain economic emancipation.

The approval of the LLA intensified the communist insurgency in the 50s. The government was compelled to arm the landlords to prevent a communist takeover of their lands. But as the rebellion raged, there was change in the tenor of their demand to one of land reform. This was expected because our ratification of the LLA saw the reconsolidation of agricultural lands to comply with the increasing export quota for sugar. The landlords went on a buying spree to acquire agricultural lands, clearing new lands for conversion to sugar plantation, buying the lands of small farmers and even grabbing farmlands.

The period was characterized by social unrest much that it saw the birth of the haciendas. We have to remember that the haciendas or big agricultural estates were introduced by the Americans because of demand by the colonial economy.

When the Americans colonized this country, the encomiendas were almost extinct or their lands occupied by the natives planting crops for their own consumption. Agricultural production was mainly confined to the planting of tobacco, corn, rice and vegetables. Famine was unheard of, except in areas where able-bodied men were forced to render labor or polo to the Spanish authorities.

After the approval of the Schurman Commission in 1902, William Taft bought for the US government, huge agricultural friars lands to be sold to American carpetbaggers and businessmen and to the moneyed ilustrados for cultivation to satisfy the demand of the US market for sugar. That saw the early beginning of the hacienda.

The US, being an advanced capitalist economy with a colony, needed raw materials to quench the thirst of its industries. The cultivation of sugar, coconut and pineapple was most ideal and lucrative. That treaty obligation to satisfy the US market saw the transition of our economy from a feudalistic to one of serving the needs of an imperialist state, thus justifying the communist categorization of the Philippines as a semi-feudal and semi-colonial. At its peak, the LLA created its own economic class different from the Spanish ilustrados. They were called the “sugar barons”, a derisive title borrowed from the 18th century wealthy Americans of the Gilded Age where corruption and monopoly was rampant. They control the steel industry, the railroad and the banks. As finance moguls, they likewise controlled politics.

The emergence of the sugar barons coincided with the formation of the big haciendas like the acquisition by the Yulos of Canlubang Estate in Laguna and Hacienda Luisita by the Cojuangcos in Tarlac. Most of the haciendas were acquired through behest loans, taking advantage of the “Filipino First Policy” of President Garcia of which many were not paid. Haciendas were formed in Pampanga, Tarlac, Laguna, Bulacan, Batangas, Negros, Iloilo and Bukidnon, all guarded to prevent the intrusion of insurgents. These private armies formed the nucleus of political warlordism much that big landlords began to mix their status by financing, supporting and providing armed goons to their lackeys.

The late Eugenio Lopez even boasted at one time that nobody becomes the President of this country without his blessings. This was true because the sugar bloc cornered the largess in the revenue in our sugar export while enjoying an assured market. They became the ultra rich class while the farmers called sacadas wallowed in poverty. The sacadas migrated from hacienda to hacienda hoping to be hired as sugar cane cutters and paid below the minimum wage.

While the sugar barons savored the fruits earned in the export of sugar our farmers were mired in extreme poverty.

As observed, keeping the haciendas to cater to the economic demands of the US market has long been a losing economic proposition intended to preserve the mercantilist-protectionist policy.

It prevented the country from venturing to the production of high-value crops to promote real free trade as what China has done to its economy. Besides, the Philippines can no longer produce sugar cheaper than Thailand, Vietnam and Indonesia proving that the government can no longer subsidize a dying industry that only benefits the landlords. Only by providing our people income and make their livelihood a self-sustaining one could we be able to cut off the bond of subservience that justifies the colonial economy like that of the Philippines. 

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Topics: Laurel-Langley Agreement , Eugenio Lopez , Sugar , Bell Trade Act , Land

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