Farmland buyouts feared over REIT revisions

MANILA, Philippines — The private sector has sounded the alarm over the threat of massive buyout of farmlands amid the revisions in the Real Estate Investment Trust Act (REIT) that will leave more farmers jobless.

The Philippine Chamber of Agriculture and Food Inc. (PCAFI) has expressed concern over the imminent destruction of agricultural lands.

“The REIT reduces public ownership of a REIT to 33 percent, enabling increased control of private companies. Therefore, everybody is now up to develop more lands,” PCAFI president Danilo Fausto said.

“You will see massive acquisition of land, possibly even including big farm lands, in Central Luzon. Where will they get the land? From farmers losing in the rice industry,” he said.

Following the implementation of the Rice Tariffication Law last year, some farmers have started selling their lands amid low profit as a result of the drop in the prices of palay (unhusked rice).

“What is happening is there will be malls inside a vast tract of land. In the next century, there will be no more land for food,” Fausto said.

The revised REIT implementing rules and regulations took effect last Feb. 7. The law requires REITs to offer shares to the public a minimum of 40 percent of the outstanding capital stock. This minimum public ownership should be raised to 67 percent within three years from listing.

However, the high MPO discouraged land developers as they would barely have control over the venture with a measly 33 percent. But the revised rules now encourage massive real estate development.

PCAFI is now pressing the government to offer a compromise by raising investments in farm development.

Fausto said the government should give agriculture a similar support since it is the backbone of the economy and is a source of raw materials for industrial development.

In particular, he said the government should pour money into guarantees for farm production in order to encourage banks and investors to lend to agriculture.

“The government should also develop farmlands along with real estate lands. You look at the housing sector. It receives P180 billion in guarantee.  But how much is the guarantee for agriculture? Only P5 billion,” he said.

Fausto argued that while the government is investing huge amounts for its Build Build Build program, this will just lead to massive conversion of farmlands into residential-and commercial lands without the support for farm production.

“Farm-to-market roads accelerate delivery of produce to market. But if you do not have goods to deliver, you will just accelerate sale of farmlands to real estate developers,” he said.

“The REIT is a massive accumulation of capital to develop lands. We can’t stop that anymore. But why don’t we have a balance? Let’s develop lands, but also develop agriculture production so you can feed people in call centers,” Fausto said.

Further, PCAFI is pushing for the immediate passage of the Land Use Act which will prevent massive conversion of agricultural lands into residential-commercial areas and will solidify the presence of investors in agriculture.

“Our investors will have stability with the Land Use Act. They’re putting in millions and billions in investments. But at the end of the day, their land may be converted because we don’t have a proper land use law. Lands that are perfectly productive should remain producing food for our country,” he said.