Agrarian Policies in Central America

The agrarian question and current challenges
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Yet, for the most part, the focus shifted away from the agrarian question.

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Given that the labor regimes in agriculture had been transformed along capitalist lines in the second half of the twentieth century, it seemed there was no longer an incomplete transition that needed to occur in the countryside. With capitalist labor relations fully in place, much of the focus turned to the state, what role the state should play in promoting economic development, and what should be left to market forces. Free market advocates called for greatly reducing the role of the state in the economy, while other theorists responded by emphasizing the importance of state intervention, the need for greater state capacity, and the type of interventions the state must make to be successful Evans ; DiJohn Globalization and the integration of southern agriculture into global commodity chains and networks of corporate agribusiness had rendered the agrarian question obsolete, as the linkages between domestic agriculture and industry had been replaced by international circuits and world markets.

Much like earlier debates, more recent debates focus largely on the labor regimes in agriculture, with little attention given to rural property relations. Though some still argue for the relevance of agriculture in industrialization Byres ; Kay , both sides of the debate tend to agree that the defining characteristics of agrarian capitalism are the proletarianization of rural labor and the market integration of rural productive units.

The globalization of agribusiness and the increasing integration of southern agriculture into global markets are seen as proof that capitalist imperatives and market forces have thoroughly penetrated the global South. In other words, integration into world markets has created the universalization of capitalist imperatives on a global scale.

However, the problem with these characterizations is that they do not take into account the specific property relations in agriculture in Latin America and other parts of the global South. That is, they do not account for the specific relationships that exist between producers and their land, and whether access to land is mediated by market competition. As has been argued by Brenner , the existence of specific property relations is essential to the functioning of the market imperatives characteristic of capitalist society.

Regardless of the presence of wage labor or market integration, in the absence of capitalist property relations the basic forces of capitalist competition and market discipline will not function, and thus producers will not be subject to market coercion.

The agrarian question and current challenges

The persistence of large, underproductive landholdings in Latin America provides ample evidence of this. Those who claim that the forces of capital are universal and that all production is subject to the same basic market forces cannot account for what is still today the most dominant sector in many Latin American countries—the large landed estate. These estates are widely recognized for maintaining uncompetitive production methods and greatly underutilizing the land they occupy.

And though they operate with wage labor and are often highly integrated into world markets, they tend to be immune to market pressures, maintaining low-investment, low-risk production strategies and extensive as opposed to intensive uses of the land. The reason for this, I argue, is that these productive units maintain distinct property relations that make them not subject to the same fundamental forces of capitalist competition as producers in the global North. As I argue in the next section, the presence of specific property relations is the key mechanism behind sustained processes of capital accumulation, and this mechanism is largely absent in much of Latin American agriculture.

If much of the analysis on Latin America has tended to associate capitalism with the presence of wage labor and market integration, scholars have also tended to see the relationship between capital and labor as the driving force behind the process of capital accumulation. As the latifundios adopted more modern labor regimes, they also began to adopt more modern methods of production, and became increasingly capitalized in the second half of the twentieth century.

In other words, the shift in labor regimes meant these estates became fully capitalist, and this new relationship between labor and capital was the mechanism that drove capital accumulation. However, what this view ignores is that the market forces that drive accumulation in capitalism depend much more on the commodification of the means of production, such as land, than on the commodification of labor Brenner ; Wood Regardless of whether or not wage labor is employed, it is only when land becomes a commodity that is traded on the market that producers may be forced to make competitive use of their land and to sell competitively on the market in order to maintain possession of the land.

Indeed, some of the most advanced and dynamic agriculture in the world, such as that of the United States, has generally made little use of wage labor in its historical development. Instead, it was the generalized commodification of land that forced producers to plow surpluses back into production, innovate, and transform the productive process to match the competition and stay in business Post It is for these reasons that the key mechanism behind capital accumulation is actually not the labor relations in agriculture, as de Janvry suggests, but rather specific property relations.

These relations, when predominant in a given society, facilitate the functioning of market imperatives and impose market discipline on producers to maximize the output of their land, making capital accumulation become generalized and systematic Post ; Brenner Those that do not systematically reinvest surpluses back into production may risk being unable maintain a competitive rate of profitability, be unable to remain solvent, and thereby lose possession of their land. In this way, it is the property relations that create the market discipline characteristic of capitalist society and thus the continuous drive to maximize profits.

In many Latin American countries, these specifically capitalist property relations have seldom materialized on the large estates, despite the transition to wage labor and a high level of market integration. Indeed, scholars have seldom focused much attention on the specific relationship between landowners and their land in Latin America. Yet, the specific ways in which land has been appropriated throughout history has meant that landowners are often under little pressure to produce their land effectively or to maximize profits in order to maintain possession.

Transformations from above

Going back to colonial times, land in Latin America has often been acquired outside of market mechanisms. This typically occurred through massive land grants from the crown such as the merced , or the sesmaria in Brazil, or, after independence, through free or low-cost land concessions from national or local governments Furtado , 68— Rather than investing heavily in improved technologies, employing productive human labor, attempting to capture increased market shares, or developing linkages with other production processes, latifundistas could become wealthy from harvesting natural and quasi-natural products of the land.

In other words, instead of maintaining a competitive use of the land, producers could minimize risk through more extensive uses of the land such as cattle grazing or forestry, which provide a constant income but require only a fraction of the investment. When possession of land is not mediated by market competition, producers are under few market constraints to utilize their land competitively, allowing them to ignore productivity and channel investment away from production toward the diversification of their economic activities. Surpluses from agriculture can be invested into other more lucrative businesses, commercial endeavors, or the acquisition of more land, with little need for systematic reinvestment.

This productive logic has continued up to the present day on large estates throughout much of Latin America. Though land was widely commodified by the twentieth century, and land markets became the principal means of acquiring land, the property relations on large estates were often not significantly changed. This is because the general pattern of land appropriation came to be characterized by a logic of portfolio diversification Bicalho and Hoefle ; Richani That is, land is acquired by individuals who have accumulated wealth from various economic activities, usually commerce or other urban endeavors, and who seek to invest in land as a speculative investment, or as a store of wealth in the context of high inflation.

Because land is appropriated under a logic of portfolio diversification, it means the owners possess various other sources of wealth and income and therefore do not depend on the output of the land. Regardless of the fact that the land is acquired on the market, the owners are under little market pressure to use the land competitively in order to maintain possession of it. Instead, land can be paid for with wealth generated from other economic activities, and profits from the land can be channeled back to those economic activities or into an even greater diversification of investments.

Instead of being used as a productive asset, land is treated as a medium for storing wealth that otherwise would be eroded by inflation or taxed by the state, with the actual production of the land playing only a secondary role. In other words, this specific relationship between producers and their land results in a short-circuiting of capital accumulation in agriculture. Many landowners began to implement modern technologies and methods on their farms such as improved crop varieties, animal breeds, and fertilizers, yet they often continued to employ low-investment production strategies that greatly underutilized the land.

Mere pseudo-modernisation has occurred. The ranches have all the trappings of being highly productive but the pastures only have one or two steers per hectare. Even in the context of neoliberalism and the opening up of markets, landowners who have acquired land as portfolio diversification are often not under market pressure to make significant investments or improve productivity, as their continued possession of the land does not depend on competitive production. Neoliberal reforms to land markets have done little to change this, since it is not the functioning of land markets that creates this scenario, but rather the predominant forms of land appropriation among elites that generate specific property relations.

Therefore, even in the context of dynamic land markets, elite land can often remain underutilized or entirely unproductive without the threat of foreclosure or bankruptcy. In what follows, I attempt to demonstrate how widespread this productive logic is in Latin America today.

Agrarian Reform in Latin America

Although it is difficult to determine the true extent of certain property relations, agricultural census data can demonstrate how prevalent large landholdings are throughout the region and how they utilize the land that they occupy. As I will show, the data on large estates reveals the prevalence of low-risk, low-investment production strategies, and there is evidence from various countries of widespread portfolio-based land appropriation that gives rise to this type of productive logic. For this section, recent agricultural census data was collected from six major Latin American countries: Argentina, Brazil, Colombia, Mexico, Peru, and Venezuela.

For this reason, the focus will be mostly on Brazil and Peru, which have the most detailed data, and will include only limited data from Colombia, Venezuela, Argentina, and Mexico. The first thing to note from the data is the continued dominance of large landholdings in these countries. Despite frequent claims over the years that the large estates would disappear due to their inefficiency and inability to compete with the more productive small and medium producers, this does not appear to be the case. As Table 1 shows, large holdings of hectares or greater occupy the majority of agricultural land in all of the countries studied, 3 and the largest holdings of greater than 1, hectares occupy nearly half of all agricultural land in Brazil and Venezuela, more than two-thirds in Peru, and three-quarters of all agricultural land in Argentina and Colombia.

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Macroeconomic adjustment and sectoral reforms have strongly modified the framework for rural development in Central America. This book offers a structural . It is argued that with the spread of neoliberal policies throughout Latin America in recent years, the era of major agrarian reforms that started with the Mexican.

In other words, though land concentration has decreased in some places in recent years, it is still extreme in most major Latin American countries, and the countryside continues to be dominated by large landholdings. However, it should be noted that there are significant differences both between and within countries.

Agriculture Outsourcing: South America/Latin America farmland investing

In some countries, such as Chile, large unproductive estates are practically nonexistent Bengoa , whereas in other countries, such as Colombia, they are ubiquitous. Likewise, there are often significant differences from one region of a country to the next. Northeast Brazil, for example, has a significantly different agrarian structure from southern or southeastern Brazil, and these differences should not be overlooked. Moreover, concentrated ownership and the dominance of large holdings does not necessarily mean the land is underutilized, nor that it is operated under a logic of risk minimization.

In some regions, large farms are used for intensive mechanized agriculture, and areas of highly productive agriculture have developed in many Latin American countries. Indeed, countries like Brazil and Argentina have experienced a major boom in soybean production in recent years, and much of this production is carried out on very large, mechanized farms. Therefore, to get an idea of the relative weight of large mechanized farms as compared to other less intensive forms of production I look to data on land use specific to large farms.

Figure 1 shows land use on large holdings in Brazil, Colombia, and Peru, the only countries for which land use data specific to farm size was available. These holdings are almost entirely dominated by extensive activities like grazing and forest, with over 80 percent of the land they occupy dedicated to these two activities, while only a small portion is used for cultivation. This appears to be the case for the other countries as well, as data on overall land use reflects this same general pattern. Not only do extensive activities predominate, but land use statistics reveal the low-investment and low-productivity nature of these types of production.

This means that these landowners average far less than one animal for every hectare of grazing land, whereas smallholdings may have anywhere from 2 to 10 animals per hectare. In addition, much of the land dedicated to grazing and forest is entirely unimproved, meaning that the landowners have invested little to nothing in the land and simply harvest it for its natural and seminatural products.

This means there has been no investment in such things as planted or irrigated pastures, new grass varieties, or fertilizers that can raise the productivity of grazing land. This data was not available for large holdings in the other countries, but the situation is likely to be very similar. In Venezuela, 73 percent of all grazing land is unimproved GBV In other words, much of the livestock production in these countries takes place on vast expanses of largely unimproved land with a very low density of livestock per hectare.

This is in stark contrast to livestock operations in North America or Europe, where nearly all production involves planted and fertilized pasture, as well as intensive, concentrated factory farms such as feedlots or other types of confined feeding operations. As various scholars have pointed out, the large farms often adopt some modern technologies while still maintaining low-intensity activities that underutilize the land. Table 2 shows the percentage of large landholdings in Brazil and Peru that use various methods and technologies associated with modern agriculture. Only a minority of these farms invests in fertilizers, insecticides, or irrigation, and very few use harvesters or other agricultural machinery.

Although a majority of large farms in Brazil have tractors, these are often used as a means of transportation and clearing of land, not for cultivation. And while vaccinations are widely used in both countries, very few large cattle farms in either country employ artificial insemination. Given the fact that Brazil has one of the more dynamic agricultural sectors in the region, it is likely that the rest of the countries are even less modernized.

The data for all holdings in Mexico and Venezuela gives an idea of how prevalent the various technologies are throughout the agricultural sector in these countries. In both cases, a minority of landholdings employs technologies associated with modernized agriculture, and we could likely expect similar or perhaps lower rates among the large estates that occupy most of the land. While large farms of five hundred hectares or greater occupy 56 percent of all agricultural land in Brazil, they account for only 36 percent of the total value of production and make up only 43 percent of total investment IBGE This is in sharp contrast to small farms of less than fifty hectares, which occupy only 13 percent of the land yet account for 35 percent of the total value of production and 28 percent of total investment.

In other words, the large farms occupy more than four times as much land as small farms, yet have only 1 percent greater total value of production and only 15 percent greater total investment. Thus, despite the limitations of agricultural census data, we can confirm that the agrarian structures in these countries continue to be characterized by extreme land concentration and are dominated by large estates that employ low-investment, low-productivity production strategies. What gives rise to this situation, I argue, is the prevalence of portfolio-based land appropriation and the resulting property relations, which exempt large landowners from market pressures to maximize the productivity of their landholdings.

However, detailed information on land appropriation can seldom be found in agricultural census data, and so I turn to secondary literature for evidence of this. There is extensive evidence of portfolio-based land appropriation and other similar types of speculative land investment throughout much of Latin America. Capital generated in various business activities is invested in rural landholdings for speculative purposes or for purposes of agricultural production, often under absentee management and with the use of wage labor.

But while de Janvry associated this urban investment in land as a source of dynamism in agriculture, subsequent studies have associated it with extensive, low-productivity, low-investment productive strategies. In Brazil, Bicalho and Hoefle , note that land appropriation by urban capital is common throughout much of the country but especially in the underdeveloped Northeast and Amazonian frontier. A similar logic exists with the widespread cattle ranching on the Amazonian frontier as well. Much of the investment in large cattle ranches in the Amazon comes from wealthy investors from southern Brazil or from local urban-based merchants seeking to diversify their portfolios.

Scholars in Brazil have long recognized this type of land appropriation to be associated with unproductive holdings or an underutilization of the land Sales ; Barbosa , and indeed this is the case with cattle ranching in the Amazon. In Colombia, scholars have pointed to a very similar scenario in which much of the agricultural land has been bought up by wealthy investors as a hedge against inflation and taxation and then used for extensive cattle ranching or other low-investment activities Heath and Binswanger Between and , the amount of land occupied by large farms of five hundred hectares or greater increased from 61 percent to 77 percent, the vast majority of which is used for grazing Fajardo Montana ; Vergara Vergara However, other sectors of the bourgeoisie are equally involved, as individuals with various business activities see it in their interest to invest in land to shelter capital gains or for speculative purposes.

Regardless of whether the land is fertile, landowners minimize risk by using it for grazing, resulting in a highly grazing-dominated agricultural sector throughout the country.

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Meanwhile, around 40 million hectares are currently used for grazing, whereas only about 14 million are deemed suitable for such use. In other words, about two-thirds of the land currently used for grazing is actually suitable for other, more profitable activities like intensive cultivation. In Central America, the same logic has been uncovered, despite the fact that cattle ranching and beef production have been increasingly integrated into US markets since the s.

Williams traced the beef export boom in Central America in the second half of the twentieth century and found that although cattle production underwent modernization and began using a number of new technologies and inputs, it remained dominated by the old landowning elite and urban-based investors, who tended to utilize land for extensive grazing and often used their influence to expand onto untitled peasant and forest lands. Edelman detailed the logic of these large estates in one region of Costa Rica and found that large, underutilized landholdings persisted there throughout the beef export boom.

Though certain technologies and improved practices were adopted, the number of head per hectare of pasture hardly increased since the s, and in many cases actually declined. Finally, research in Venezuela confirms that this same general pattern of land appropriation and low-investment productive logic is present there as well. Because much of the land was bought up by wealthy investors from outside of agriculture with diversified investments in various economic activities, there is a virtual lack of market discipline to force them to maximize the productivity of their holdings.

Instead, they use the land for extensive cattle grazing while channeling profits into banking, commerce, and agribusiness Carlson The prevalence of this productive logic among large holdings throughout much of Latin America has led to a situation in which a majority of the agricultural land in these countries is underutilized or completely unproductive. Census data show that most countries use less than one-fifth of their agricultural land for cultivation, while the rest is used for extensive activities.

Colombia is the most extreme example, with more than 80 percent of all agricultural land used for grazing, and only 8 percent dedicated to crops DANE This does not appear to be due to a lack of land suitable for cultivation. According to the FAO , South and Central America have vast amounts of potentially arable land that could support the expansion of rain-fed agriculture.

Yet these regions have among the lowest level of utilization of their agricultural potential in the world, second only to sub-Saharan Africa FAO , As Figure 2 shows, most of these countries appear to have relatively large amounts of arable land, yet they tend to cultivate only a very small portion of that land. Meanwhile, in every case analyzed, grazing takes up a disproportionately large amount of agricultural land.

In other words, most of these countries would appear to be greatly underutilizing their agricultural potential not only in terms of the types of agricultural activities that dominate agricultural land but also in terms of the amount of land they use for agricultural purposes. In the next section, I argue that this situation has important consequences for industrialization and overall economic development.

Source : Based on agricultural census data and data from FAO Regardless of the prevalence of low-productivity latifundios in Latin America, there is still the question of how relevant this is for overall economic development in these countries. When Latin American scholars were writing in the mid-twentieth century about the importance of the latifundio, agriculture still made up a substantial portion of Latin American economies.

Introduction

Today, however, the agricultural sector accounts for only about 5 to 10 percent of GDP in most cases. But despite its reduced share in the economy, there is reason to believe that agriculture still plays an important role. Studies have shown that when forward and backward linkages are included, the share of agriculture in Latin American economies can increase to over 30 percent of GDP IICA Low levels of investment and utilization of industrial inputs mean that the agricultural sector is providing a much weaker source of demand for upstream industries than would otherwise be the case, and, as a result, backward linkages to agriculture tend to be relatively small.

Moreover, low agricultural productivity negatively impacts wages, which then reduces demand for manufactured goods from consumers. Yet, as I have shown, the adoption of these methods is very low on the large estates that occupy most of the land in Latin America.

In This Article

The remaining personnel will be chosen after the vote of the corresponding law, presently under discussion in the Parliament. Central America is a relatively young region, demographically speaking. If this criterion were still valid, Latin America would already be a member of the rich countries' club. The appearance of credit cooperatives independent of the banking system shows considerable potential for agricultural funding to be based on local savings, even if only in a small way. But in order to be able to do this, the government must be capable of doing it; lack of trust in its management capacity and its weakness can prevent it from succeeding. The aim of this text is to raise some of the main themes for consideration to help answer this question. Even in the targeted presidential programmes, which are the most advanced form of developing a new intervention model, there has also been an unstable combination of former practices: authoritarianism, not only on the part of the government, a fairly modernized form of patronage, and a number of hopeful first signs of pluralist tolerance.

Meanwhile, agricultural productivity affects wages, both rural and urban, by virtue of the impact on food prices; low productivity forces consumers to spend a large portion of their income on food, thus eroding consumer demand for other goods Irz et al. All of this means that low agricultural productivity can have a negative impact on domestic demand for manufactured goods in these countries and, thereby, can affect the development of local industries.

Figure 3 shows the relationship between labor productivity in agriculture and level of industrialization for Latin American countries compared to high-income OECD countries. Increasingly, some are attracting media attention, though many more are likely known only to those communities of small farmers and indigenous peoples whose lives and livelihoods are under threat or directly uprooted. More and more communities are organizing and defending their rights, even when they face violence and repression as a result. Local and international support has helped them win some victories and secure their rights to land and natural resources.

But as important as such wins are to those directly affected, it still seems like we are addressing a global pandemic with a limited treatment regime that is only effective in some cases. Equitable access, rights to land and its redistribution to ordinary people and communities are essential in order to foster inclusive and sustainable development rather than simply to promote economic growth that benefits a few. This is a global challenge , which is clearly illustrated by the situation in Latin America — the region of the world where both income and land are most unequally distributed.

Our new report, Unearthed: land, power and inequality in Latin America , argues that combating inequality in Latin America requires addressing the extreme concentration in access to and control over land, as well as in the distribution of benefits from its use. New data from national agricultural censuses across the region reveal the extent of the problem and the staggering fact that one percent of farms, the largest, in the region occupy more productive land than the remaining 99 percent.

Bibliographic Information

These mega-farms are rapidly expanding across Latin America. Soy, oil palm and sugar cane production have set new records each year for increased land use in Brazil, Argentina and Paraguay. Timber plantations alone are expanding by more than half-a-million hectares each year across the continent, especially in Chile, Mexico and Brazil. Huge cattle ranches in the Gran Chaco region of Paraguay, Argentina and Bolivia are now causing the highest rates of deforestation in the world, threatening the very survival of indigenous peoples and contributing to climate change.

While women have equal rights to men under the law in all Latin American countries, the reality in practice is very different as women have less land than men, of worse quality, and under less secure tenure. In addition to growth of large-scale monoculture, mining and oil concessions are proliferating across vast areas of the region, particularly in Bolivia, Colombia, Peru and Ecuador.

To cite one example, 31 percent of land in the Peruvian Amazon has been offered by the government for oil and gas concessions. The concentration of land distribution is even worse now in Latin America than it was half a century ago when several countries undertook agrarian reform programs, which for the most part failed to achieve the objective of land redistribution. A combination of factors, in particular the lack of comprehensive measures to foster family farming, subsequent policy reforms that favored deregulation, and corruption and cronyism, paved the way for re-concentration of land fueled by expansion of large-scale production based on natural resource exploitation.

But this dependence also has downsides arising from international market volatility and high environmental and social costs. Across Latin America, extractivism is driving greater concentration of land, wealth and economic and political power, thus leading to increased inequality. Those who control vast swaths of land also control its natural resource wealth and reap the profits it generates.

And they may not even own the land, but simply control its use via long-term concessions, rentals or contract farming, arrangements that enable them to avoid assuming the risks related to production or the responsibilities of land stewardship.