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Land Reform in Latin America

Is land reform in Latin America a political issue, economic issue, or both? Is it viable, i.e. would there be a reduction in hunger and poverty? Does the power of local elites and transnationals present difficulties in such a process? What associated problems need to be solved to make it effective?

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by Nicholas Klar

The question of land reform in Latin America is a difficult one. It cannot be addressed in a uniform way as conditions affecting land tenure varies in different regions. So in a broad sense, issues that affect reform in all of Latin America will be looked at, including capitalist penetration, terms of trade, the debt crisis, disarticulated alliances, peasant differentiation, ecological destruction, politics, and world economics.

By putting forward an overall picture it will be conveyed that solutions do not appear to exist on a small scale. Land reform, like that of other concerns in Latin America, cannot be addressed on its own. Land is just one factor in the prevention of hunger and poverty. There is a need for sweeping changes that can only be done as a whole. Every issue, even those involving industrialization, are related. Theories cannot just take economics into account, without counting the social cost.

Redistribution by itself will not eliminate hunger or poverty. The conclusion will therefore try to elaborate on this. It is also important to verify what is meant by 'land reform'. The generally accepted notion is where a government undertakes to divide up large land holdings into lots that are then granted or sold to small farmers. This is not always necessarily the case, but will be used in this context for the purposes of this paper.

The first challenge of land reform is its actual availability. There are simply too many people in Latin America to ensure that all who want land can actually have it. The reality is that the countryside can only support around 15% of the population. At present Brazil has a rural population of 30%. The successful first world economies have a majority of urban dwellers who are supplied food by efficient primary industries.

The argument of reform proponents is that land is concentrated in the hands of too few, and land reform has not continued far enough yet. In some countries 10% of landowners control over 80% of the land. [Newfarmer p.209] Some land is left fallow either awaiting rising prices, or for tax purposes. This concentration of land has '...tampered with something sacred: beliefs about rights to land.' [Williams p.159]

This belief has meant revolutionary movements have often foundered on the rocks of land reform after achieving power. Unlike modern day moral theorists who believe peasants only wish to subsist, the famous revolutionary Che Guevara actually opposed radical redistribution of land. In Latin America efficiency has been compromised by too many people concentrated on small plots of land. These plots do not necessarily ensure even a subsistence lifestyle.

Apart from inaccessible mountain lands or the Amazon Basin most land is now being used. Due to increased pressures land is not be allowed to remain fallow. Fertilizers and chemicals have brought increased yields, but have also brought sickness, loss of topsoil and salinization, and killed ecological systems vital to the food chain. [Ibid] Organic farming is discouraged because it requires crop rotation. Many of these problems can be tied to the Green Revolution that began in the 1960's.

Land reforms in some countries have actually been reversing due to the effects of the Green Revolution. Agriculture as a growth industry set a catastrophic chain of events into motion. [Lappe p.22] Despite the superior productivity of many Latin American farmers [Ibid p.23] some governments came to believe that it would be better to eliminate a majority of small farmers, thereby ensuring large acreages efficiently producing export cash crops. Mechanization was introduced which was not cost effective on a small scale. Aid, credits and technology went mainly to elites in an effort to improve efficiency on large landholdings. Fertilizers and insecticides also became essential.

The revolution was a large factor in the currently popular Comparative Advantage Theory. This theory is that each nation will specialize in a narrow range of goods that they produce most efficiently. Fiscally burdened countries are obliged to export 'flat out' in an effort to reduce their foreign debt. A major problem with this is the large reliance on non-food agriculture. Production has been switched from that of basic food to livestock feed, breweries, and sweeteners for the home market, and commodities for the first world. [Bennett A. p.303]

Thousands of farmers have been removed from both the production and consumption processes. [Ibid] Food must be imported which then increases debt, and also makes countries dependent on food producing nations and transnational corporations. This also has the contradictory effect of raising debt.

The debt crisis has forced Latin America into reliance upon the international community and the 'New World Order'. The global economy today is a web of interdependence that transcends the sovereignty of all states. In a steadily shrinking globe there are four major players in the new economy - capital, international institutions, multinational corporations, and national governments.

Governments are hamstrung by their need to pay debt, bring in hard currency and attract capital. Structural Adjustment Programs imposed by the IMF and World Bank have dictated the policies of most Latin American states. Conditions are also needed where foreign capital can be invested safely with a reasonable return. To this end effective land reform is generally unacceptable to such institutions.

Prebisch considered that unfavorable international terms of trade limited a government’s road to reform. Prices and market control are dominated by groups in the developed world, and nationals are marginalised in this process. [Bennett, J. p.155] Lower prices and repatriated profits contribute to continued poverty. The General Agreement on Trades and Tarriffs (GATT) is controlled in the main by the first world.

Therefore, on these and other issues transnational groups are able to undermine government sovereignty. This process is what Kwame Nkrumah referred to as Neocolonialism. [Soe p.219] Despite this criticism, nations could not in reality function effectively in today's global order without these groups, and are only one component of areas needing to be addressed.[Bennett, A. pp.250,265]

Latin America is also hampered by its bimodal form of agriculture. Because of colonial land tenure patterns the Junker Road was taken as capitalism penetrated the agricultural sector. This resulted in large land holdings dominated by elites and transnationals. Thousands of peasants were dispossessed bringing large-scale social change. This change in the peasant class is still going on today and is known as Peasant Differentiation Theory. It also brought about mono-export economies where only a few select crops were grown.

The situation is even more difficult in Central America, which is good example of a cash crop 'mono export' economy. Upon conquest of the Isthmus the economy was styled to supply Spanish needs, and decisions invariably were made to suit Spanish mercantile interests. Large lands were expropriated from the indigenous community, which suited a plantation style economy and consolidated "oligarchic domination". [Rivas pp.5,6] With capitalist penetration the Junker Road was firmly established.

Between 1913-1938 coffee and bananas still accounted for more than 70% of Central American exports. [Smith p.8] By the turn of the century solid alliances between foreign interests and local elites had been formed. Enormous plantations, employing thousands of wage laborers, were turned into self-dependent foreign enclaves owned by such companies as UFCO.

Central America, like much of Latin America, became heavily dependent on the United States. During the 1960's the Alliance for Progress (AFP) invested huge amounts of aid without consideration for economic or political reform. Alba contends that the AFP read ' a monumental joke' [Alba p.127] Once again, no overall strategy was effected.

When some other Latin American states began to industrialize with ‘Import Substitution Industrialization’ (ISI) programs Central America, caught in a web of foreign capital, did not follow. They remained locked into a mono-export economy that would later restrict any chances of modernization or improvement. [Smith p.9] The Central American Common Market was formed in an attempt to improve its economic situation. It failed because each of its nations produced similar goods that were intended for the markets of developed nations, and shared similar infrastructures.

ISI was not the success in South America that it was purported to be. In Brazil, claimed to be the "economic miracle", the majority of the population lives in poverty. There are many reasons for this but can be tied largely to its narrow focus. No heed was given to the agricultural sector, apart from that it would provide cheap surplus labor for the new factories. Many of those dislocated moved into the Black Economy. [Soe p.245]

Here, as in most other Latin American states, the Trickle Down Theory exacerbated divisions of wealth. Inequality of wealth was actually deemed favorable. Potential markets were eliminated and effective markets saturated. This contributed to the rationalization of agriculture consolidating land into even larger landholdings dominated by the rich. [Bennet, J. pp. 137,8]

Vertical integration, where all sectors were evolving at the same time, was the important element in the European Industrial revolution. New technology was advanced simultaneously for agriculture and industry. This vital element was not heeded in Latin American states as the focus of policies and theories was moved around continuously.

This is a vital factor effecting land reform. With industrialization food prices are kept low to feed the urban population, therefore uncompetitive farmers are not able to break out of a cycle of poverty. Many flee to the cities, and their lands taken over by larger concerns. Others turn to producing cash crops, or as is increasingly common, the Contract Road. This is particularly so in Mexico where foreigners are not allowed to own land.

B.F.Johnston put forward the theory that these countries could break out of this cycle by instituting a unimodal system of agriculture, similar to that of the U.S. This is characterized by family enterprises working medium sized farms. This goes against the popular notion of land reform as many small and large landholdings would be lost.

The three objectives would be, advancing structural transformation, raising the welfare of the rural population, along with fostering changes in their attitudes and behavior. [Lecture 2.2.93] This theory does appear to make some sense. However it does not take into account some of the political and economic realities of Latin America.

These include monopolistic land control, the power of profit taking middle-men and disarticulated alliances (special interests), and the clamor for peasant land reform with its associated revolutionary implications. Like the much talked about New International Economic Order (NIEO) there seems to be a lack of political will or economic means that could bring it to fruition.

A good example of special interest influences occurred in Guatemala where land reform was attempted by a progressive government after 1944. This was just one of many reforms instituted by the Arevalo government, which were often likened to Roosevelt's 'New Deal'. These included a new constitution, political democracy, universal suffrage (apart from illiterate women), and an ambitious welfare program.

Economic diversification (moving away from an export crop economy) was encouraged through investment promotion, but by 1950 the three large monopolies in Guatemala had not been seriously challenged.[Jonas p.25] Agrarian reform had begun but it was not until 1952 that land reform began to alienate the lands of the oligarches and UFCO. Landless peasants started forcibly taking land without waiting for legislation or titles. Finally in 1954, the military and local elites, seeing their privileges being eroded assumed power (with the assistance of the U.S.), and reforms were reversed. This was a familiar story in Latin America throughout this century.

There are two general arguments put forward in the case for land reform. One is socio-political. Latin America has become increasingly democratic in recent years, casting off traditional military governments. These new governments are forced to be responsive to the needs of large groups who have the political will to oust them. Therefore, land reform is needed to keep them in office.

Secondly, for economic reasons governments must perpetuate agrarian functional dualism. This is needed to ensure a slowdown in the collapse of peasant agriculture so that a cheap pool of rural labor remains. [De Janvry pp.224-5,230] Also as some peasants move into the bourgeoisie they support government policy and become opposed to more radical reform.

Because major land reform appears to have reached its limit, Rural Development Programs (RDP's) have been implemented in some states in an effort to provide a middle road between political and economic pressures. Economic considerations are not considered as important as the political, unlike agricultural development projects. [Ibid pp.228-230] RDP's are rarely effective, and once again are not formulated with an overall strategy in mind. [Ibid pp.253,4]

The assumption that land reform is not tenable is usually held by those who have a vested interest in its ramifications. However this assumption is not always necessarily true. China has reached a high level of food sufficiency through labor intensive agriculture. The important element here is that agriculture has been supplemented by localized industry producing goods needed in the particular area, and who are able to absorb surplus rural labor without massive dislocation.

The system is also subject to strong political control and backed up by extensive health care. Here we see a more effective strategy because it addressed in an overall way. [Lecture 2.25.93, Bennett J. p.33] However this model would be unlikely to be acceptable to the global order. Forces of world capitalism would not be imbued with fervor to embrace a socialist system unruled by free market forces.

Yet a study by the BDNES of Brazil shows that South Korea, one of the four "Asian Tigers", has been successful because of an effective export orientated industrial development program based on the transformation of its agrarian subsistence base. Strong government intervention played a large role in determining allocation of resources, rather than allowing it to be dictated by the market. This refutes the popularly conceived notion that it's success was based on liberal economic programs.[Bissio p.100]

Ejidos in Mexico have enjoyed the support of the population and proved to be successful in many ways, particularly in keeping social peace. [Soe p.239] Land reform began early in Mexico (1926), and paved the way for development. [Survey p.19] However one of the major problems for land reform is the perception of populace, and what they find acceptable. In Bolivia peasants pressed for communal properties, in Chile private property was the consensus, in Cuba the story was different again. [Lecture 2.25.93] Unlike those who espouse the Moral Economy Theory peasants may not want to 'only subsist' but improve their lot in life.

In concluding it could be argued that land reform is feasible, and could reduce hunger and poverty given the right circumstances, but with several preconditions. These are a movement away from the Junker Road to the Farmer Road, an improvement in terms of trade, a change in rural marketing methods, welfare and attitudes, agricultural policies firmly tied to industrial, economic and social policies, more localized industrialization, and strong state political control of all of these elements.

The challenge is not to imitate models or adopt endless theories, but to evolve all-encompassing political processes alongside of the above where local savings, individual productivity, the work ethic, entrepreneurial initiative, sound administration, just laws, and humane social arrangements all have their place. [Soe p.226]

To do this the power of the disarticulated alliances would need to be challenged. The AFP failed in their Latin American mission because they '...gravely underestimated the power and resilience of the traditional upper classes...'.[Smith p.11] Those states who have been able to restrict the power of elites have implemented meaningful reform, and suffered less revolutionary challenge. [Ibid p.13] Inequality must be reduced at every level. [Lappe p.24]

By undertaking complete measures, it may finally begin to bring under control all those other issues which tend to be approached in disparate ways. These include overpopulation, ecological destruction, famine, epidemics, child mortality, human rights, militarism and the vast movement of money from South to North. Solving only economic problems does not mean that social problems will automatically follow. Blame cannot be laid at the feet of any one issue, including the lack of land reform. The problem is a complete package which needs to be addressed, not a variety of single concerns.



V.Alba 'Dialogue of the Deaf and Dumb NY:Frederick A. Praeger 1965

A. LeRoy Bennett 'International Organizations : Principles and Issues' Prentice Hall : N.J. 1991

J.Bennett 'The Hunger Machine' Cambridge:Polity Press 1987

R.Bissio (Ed) 'Third World Guide 91/92' Uruguay:Instituto del Tercer Mundo 1990

Committee on Foreign Relations, U.S. Senate 'Survey of the Alliance for Progress' U.S. Government Printing Office 1967

A. De Janvry 'The Agrarian Question' Baltimore : John Hopkins University Press 1981

F.M.Lappe and J.Collins 'Food First' in G.M. Berardi (Ed.) 'World Food, Population and Development' Totowa:Rowman and Allanheld 1985

R.Newfarmer 'The Politics of Strife' in M.Blachman, W. Leo Grande, and K.Sharpe 'Confronting Revolution' NY:Pantheon 1986

Edelberto Torres Rivas 'Central America Today' in M. Diskin (Ed) 'Trouble In Our Backyard' NY:Pantheon 1983

P.Smith 'The Origins of Crisis' in M. Blachman, et al, Ibid

C. Soe (Ed.) 'Comparative Politics 86/87' Connecticut : Dushkin Publishing Group 1986

R.Williams 'Agriculture and the Crisis in Central America' Chapel Hill : University of North Carolina Press 1980

© 1993-2008, Nicholas Klar, PO Box 280, Brighton SA 5048, AUSTRALIA 

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REF: Nicholas Klar, 1993, "Land Reform in Latin America", + date accessed


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