By Ray Eñano
Manila Standard Today
The relatives of President Benigno Aquino III are not the only ones seeking just compensation for Hacienda Luisita, after the Supreme Court ordered the redistribution of the vast estate to 6,296 farmer-beneficiaries. Conglomerate San Miguel Corp. is also in a bind following the court ruling.
San Miguel is a stakeholder in Hacienda Luisita after the company lent money to the cash-strapped sugar estate. The largest food and drinks company, which diversified into the power, mining, telecommunications, utility and banking businesses, advanced over P1 billion to Hacienda Luisita Inc. as payment for future sugar purchases.
San Miguel advanced P300 million each to Hacienda Luisita in at least two transactions as payment for the sugar purchases, presumably to meet the requirements of the former’s food, fruit juice and liquor businesses. San Miguel did not take delivery of the sugar purchases, preferring to bide its time and collect the produce at a later period.
San Miguel, in the first place, could not call on the sugar purchases because the estate has stopped production. Hacienda Luisita farmers staged a strike to press their demand to redistribute the farm to them as part of the government’s land reform program.
With the non-delivery of the sugar at an agreed price, Hacienda Luisita owes San Miguel at least P1.5 billion, including interests. How Hacienda Luisita will repay the advances to San Miguel remains unclear, especially in the light of the Supreme Court ruling.
Hacienda Luisita itself is in a financial quandary. It could lose entirely the sugar produce from the estate if, say, farmers decided to plant rice or other crops. Hacienda Luisita and sugar refinery Central Azucarera de Tarlac will have the costly (and unlikely) option to secure sugar canes from other fields.
The Supreme Court ruling has also put San Miguel’s ambition plan to make part of the sugar estate into a modern logistics hub. A stock distribution plan would have smoothened the conglomerate’s formal entry into Hacienda Luisita.
San Miguel, which is partly owned by chairman Eduardo “Danding” Cojuangco, President Aquino’s uncle, was about to gain a foothold in the the 6,453-hectare sugar plantation before the high court issued the ruling.
Hacienda Luisita had committed about 1,000 hectares of land to San Miguel to support the company’s plan to build an agro-industrial enclave right at the heart of Luzon. The site would have served as the center of the company’s Luzon operations and address San Miguel’s need to integrate its agricultural and industrial operations.
The grapevine said it had been San Miguel’s long-term corporate plan to integrate the bulk of its operations into one hub to boost its status as a regional and global company. Hacienda Luisita, with its sugar plantation nearby to supply the requirements of San Miguel, was the ideal host to San Miguel’s integrated operations. The completion of the Subic-Clark-Tarlac Expressway that cuts through the sugar estate has partially provided the infrastructure requirements of the future industrial center.
The sugar estate would have been a perfect industrial site for San Miguel because it is a contiguous land, unlike its earlier choice of Balayan town in Batangas province. San Miguel had tried to accumulate pieces of properties in Balayan more than a decade ago to host its proposed agro-industrial and logistics hub. But the lack of infrastructure, especially expressways, prompted the company to shelve the Balayan option.
All is not lost for Hacienda Luisita, however. The farmers could choose to become contract growers of the estate, smilar to the arrangements of Dole Philippines and Del Monte Inc. with their former pineapple and banana workers. Land reform in the plantations of Dole and Del Monte had made their former workers contract growers.
The Hacienda Luisita farmers may have little choice but to maintain their sugar farms under a different set-up to supply the requirements of the Central Azucarera de Tarlac refinery. Farmers through credit support and modern farming, hopefully, will become competitive. The government’s ethanol and renewable energy program, meanwhile, will assure farmers’ income if sugar prices in the world market collapse.
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