History of evading land reform
In 1957, to purchase the Central Azucarera de Tarlac (CAT) from Spanish-owned Compania General de Tabacos de Filipinas (Tabacalera), Jose Cojuanco Sr. was obliged to obtain the 6,474-hectare Hacienda Luisita, as well as seek loans. Subsequently the CAT and Hacienda Luisita were transferred to Cojuanco’s Tarlac Development Corporation (TADECO), an agricultural corporation. In line with government’s social justice program, these loans were guaranteed on the condition that the Cojuangcos will distribute the Hacienda land to small farmers.
The clan was also granted a P7-million loan in purchasing the Hacienda, on the condition that the latter will be subdivided among tenants. The case filed by the Marcos government in 1985 to compel the Cojuangcos to transfer Hacienda Luisita to the Ministry of Agrarian Reform for subdivision and sale to farmers was dismissed by the Court of Appeals in 1988 on the ground that Luisita would be covered by agrarian reform.
Fifty-two years have passed since the Cojuangcos acquired Hacienda Luisita at no cost except the promise to return the land to its rightful tillers. Yet, that promise remains unfulfilled. Under the presidency of Corazon Cojuangco-Aquino, youngest sister of Hacienda Luisita’s majority owner Jose “Peping” Cojuangco, RA 6657 or the Comprehensive Agrarian Reform Law (CARL) was enacted. Aquino made land reform her administration’s centerpiece program, and even vowed to subject Luisita to land reform “to serve as an example”.
However, both the CARL itself and Executive Order 229 signed by Aquino provided for the “transfer of shares of stocks, rather than land, to workers and other qualified beneficiaries… as the action is deemed compliance with the land distribution requirements of the Comprehensive Agrarian Reform Program (CARP)”. Subsequently, the TADECO created Hacienda Luisita Inc. (HLI) as a company specifically for this purpose.
Source: Bulatlat.com: How Hacienda Luisita Stock Scheme Led to Farmers Misery