The Gardener went this time (21st March) to the southern city of Davao for a conference with fellow gardeners across the big island of Mindanao on what to really think and say and do about the much-publicized coconut levy funds. The Philippine Garden is a coconut garden – growing 350 million fruit bearing coconut trees in thousands of islands across the Philippine archipelago, bearing for the world more than 15 billion coconut fruits year after year after year, in-season and out-of-season, typhoon-ravaged or typhoon-free.

The most heavily taxed citizen in recent history

Sometime back, in the nineteen seventies, a levy was imposed by the state on the gardeners of coconut lands to generate public funds. Someone at this conference stood up to make the point clear.

Before history-blind financial managers of government have their way, he said, we should note quite clearly that in any dictionary of any country, at any time of history – anywhere – there has never been any doubt about the meaning of the word “levy”, namely, that it is a tax – an imposition of the state on the people to generate public funds. But equally clearly, a levy is distinguished from a general tax in that the latter are funds raised for the general revenues while a levy is a special tax not for the general revenues but for the benefit and use of that sector in society from which it was collected in the first place.

Quite concretely in the Philippine context, the law provided that “the proceeds from the levy shall be …a separate trust fund which will not form part of the general fund of the government” (Sec.1, P.D.276). Therefore the government of the Republic should not too easily consider itself the absolute owner of the levy funds – public as these funds truly are – but, rather, should merely consider itself a Trustee of such funds for the real beneficial owners who are the farmers themselves from whence the funds came in the first place.

Who are these farmers? And how was the coco levy collected?

The coco levy was unquestionably a tax on the farmers. The collecting state agency was the PCA or Philippine Coconut Authority. In the years of coco levy collection the newspapers posted prices “net of levy” in as much as the relevant Presidential Decrees provided that the levy would be charged against the gardener during the first domestic copra sale.
The PCA, however, while charging the levy against the farmer during the first domestic copra sale, collected that levy from the last domestic buyer. The latter merely passed on the levy cost to the gardener through the escalera, the layers of middlemen operators in the countryside.

The PCA was supposed to give out triplicate receipts for the payment of the levy after the end-users of copra remitted the required amounts: one copy for the buyer, one for the producer, and the third one was registration copy. The end users kept the buyer’s copy, while the producer and registration copies were supposed to go back to the farmers and gardeners who were deemed to have paid for the levy.

The farmers were then also supposed to register his receipts with the recognized farmers’ organization – that, in turn, was supposed to return the registration copies and submit a conciliation report to the PCA. These receipts, the coco fund receipts, were supposed to establish for the farmer his ownership rights over a planned (by law) coconut investment company.

The truth is – there was no way for the farmer to see that the levy was operating behind the buying price of copra that the middlemen offered him – unless he read the papers which sometimes posted prices “net of levy”. The farmer simply experienced low prices for his copra. Whatever prices the middlemen set he took – for granted. He was not necessarily aware that the levy actually depressed the prices for his produce.

By how much were the prices for his produce depressed? How much was the tax on the farmer? From the initial P0.55 for every 100 kilos of copra, the tax went up to P13.00 and peaked at P100.00 – averaging throughout a still high, very high, P60.00 per 100 kilos of copra – which represented roughly 33.8% of farm income.

No doubt about it – the levy made the poor coconut farmer the most heavily taxed citizen of the whole country. As greed increased with the Cojuangco years, the method of calculating the levy got worse. The government calculated the levy using a higher price as basis – higher than what the farmer was actually receiving: a higher rate of taxation and a greater burden for the poorest of the poor.

Today there should no longer be any doubt whatsoever that the coco levy funds are public trust funds for the benefit of the farmers.

Thus it was time to hear directly from the gardeners – the small holders, the small coconut farmers. There are small coconut farmers’ organizations whose members own less than five hectares of coconut lands each. Some of them are tenants or lessees of bigger sized farms. They are the real farmers on whom the coco levy was imposed by the State to generate public funds for their benefit and the development of the coconut industry.

These farmers are now speaking out. They have names and addresses. They are real people who can be consulted and know what they want. They are not mere NGO’s or intermediate change agents. They are not mere proxies for the Coconut Industrial Sector although they themselves want to embark on serious rural industrialization starting with the myriad number of products that the fresh coconut can offer. They are not mere representatives of Finance and Development Corporations or of the government’s general treasury units. They are Mang Ando and Kuya Terio, they are Noy Miano and Aling Sion, they are Kuya Fabian and Ka Paniong, they are Mang Peping and Mang Gimo, they are Ka Entin and Aling Rosa – they are gardeners, the small coconut farmers.

Let them not be robbed a second time by government agencies and private do-gooders. Even Mr. Eduardo Cojuangco has acknowledged, “The money is not mine. It belongs to coconut farmers.” Except for 20% of San Miguel Corporation that he has just “won” with seeming finality.

Some officials in the government have spoken like these funds belong to the general coffers, in utter ignorance of the history of these funds. And there are all kinds of organizations – such as those composed NOT of small farmers but either of ideological brokers and government fixers, or of big landlords who are professionals, businessmen, and everything else but farmers – so-called “farmers” who were not at the level of first domestic sale but now publicly demand their alleged share in the equity structure.

One can, of course, be open-minded especially in regard to landlord-tenant or landlord-worker relations as to who may yet be included in the definition of “farmer”. Bottom-line consideration, needless to say – which, in fact, must be repeated over and over again, is not to exclude the very workers and tillers of the soil, who work as small owners, tenants or lessees. The law was precisely enacted as a corrective bias in their favor. Even the court’s initial decisions address them all the time as the levy funds’ true beneficial owners.

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