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Agro-business and land grabbing in Latin America*
Published in ALAI AMLATINA 13/11/13
Interview by Sally Burch with Cristóbal Kay
Large-scale land grabbing, a phenomenon of the last decade, which increased on account of the food crisis of 2008, has radically transformed world agriculture. It has displaced peasant farmers and reinforced agribusiness.
In Africa and Asia it has been achieved through deals between governments. A government will buy or rent a huge area, about 100,000 or 200,000 hectares, or even more. It can then control production and export food to ensure the food security of its own people.
In Latin America the process is different, says CristóbalKay. He is an expert in development and agrarian reform. Here it is not other states but big business which is investing in Latin American countries. He told ALAI that the more this goes on, the less possible agrarian reform becomes.
This process had its roots in the “lost” decade of the neoliberal 1980s. When those countries reduced credit and technical assistance to peasant farmers and lowered duty on food imports, the livelihoods of many small farmers were ruined. They had to look for a living outside agriculture or even to emigrate. Bigger farmers benefited from this new situation, as they could bring in investment and had the know-how to enter the export market, producing, for instance, broccoli and other vegetables, fruit and palm oil.
Kay relates how “these businesses consolidated their land holdings so that their agriculture became capital-intensive. They expanded at the expense of peasant farmers, as well as deforesting the Amazon region and thus increasing the land available for agriculture. They also damaged the ecology of those regions.”
They use seasonal labour, giving no guarantee of regular work, and pay low wages. Where crops like soya are highly mechanised, there are few job opportunities. In the half century from 1960 to 2010 the acreage under soya in Latin America increased from 260,000 hectares to 42 million hectares.
Here are extracts from the interview.
Cristóbal Kay (CK): Big companies from Argentina that control 50,000-100,000 hectares of land are now moving into Paraguay and Uruguay to grow soya or to plant pasture for cattle. Brazilian companies are doing the same. Some 30 or 40 years ago they bought land in the Santa Cruz region of Bolivia, and today they own perhaps one third of Eastern Bolivia. They control 40-50% of Bolivian soya production.
Paraguay is the most dramatic example. The most important crop in Paraguay is soya, and an estimated two thirds of soya production is owned by Brazilian and Argentinian capital. In all, about 40% of all their agricultural production is owned by foreign Latin American capital.
Today, much of that Latin American investment is associated with international investors like George Soros. He buys land through an Argentinian company, and invests in machinery too.
Still more important than the likes of Soros are the Latin American investors. Chile, for instance, has a thriving forestry industry. One Chilean business owns more than a million hectares, half of which is in Argentina, Brazil and Paraguay. As there is no further opportunity for expansion in Chile, they are taking advantage of those neighbouring countries, where there is still suitable land available for planting pine forests and eucalyptus. This monoculture impacts badly on the ecology, as eucalyptus needs a lot of water. Later the land cannot easily be converted back to other forms of agriculture.
ALAI: Are these investments in land also linked to financial speculation?
CK: Yes. As land doesn’t lose its value, it is attractive to financial speculators. And agricultural products are also continuing to rise in price and are not likely to fall again as occurred prior to the 2008 crisis. Speculation is concentrating on the “new” crops such as African palm oil, soya and sugar cane. You could call them flexible crops. Each product can be used in more than one way: edible oil, food or biofuel. The obvious advantage is that when food prices drop, the farmers can convert sugar and soya to ethanol. Investors can change their product, depending on international prices. So capital can follow market trends and maximise returns.
ALAI: What does this mean for the future?
CK: In the past it would have been unimaginable for capital to hold 100,000 to 1 million hectares of land. This goes way beyond the size of plantations in the past. The capital for these acquisitions is coming from sectors such as agro-industry, forestry, and the processing of sugar and palm oil. When capital is international, investors may be from mining or the financial industry, or retailers such as supermarkets. So we’re not just talking of agrarian capital but capital from many other sources that control the new chain of production. It’s a whole chain that is totally integrated and spreads across the whole process. It is very powerful because it knows how international markets works, has access to the latest technology and has the capacity to finance the whole of the processing system.
Moreover, with free trade agreements, governments are not able to negotiate favourable terms for their industries, with perhaps a few minor exceptions.
All this has grave implications: peasant farming communities are destroyed and it causes serious problems for indigenous peoples. Some mining companies create similar problems though these conflicts are not so well known. Governments often claim that the land grabbed is state-owned and empty of people but there are often local communities there who lose their rights to land and are forcibly evicted.
The situation is now so much more complex than it used to be that it will be hard to carry out agrarian reform. The old state of affairs in which of peasants were challenging feudal landowners, with whom they had an age-old clientilistic relationship, is no longer the case. Since colonial times it was clear to peasant farmers with whom they had to contend: the bosses or landlords of the great plantations. Now they have to confront groups of investors, often limited companies. How can you draw up a policy to demand redistribution from these new investors when they can easily sell on their holdings and move their money elsewhere?
In the days of the big farms/small holders, it was the uncultivated, unproductive land which was bought up. Now modern governments are fearful of challenging big capital backed by great productivity and technology, part of the integrated international market.
Any efforts towards reforming the agricultural situation today must take women and ecology into account. This was not the case in the 50s, 60s and 70s. Any mobilisation against the great conglomerates like Monsanto has to be at an international level. The peasant movement has to be international today, as are the movements against genetically modified organisms (GMOs) and big finance. Solutions have to be negotiated at an international level such as the Food and Agricultural Organisation (FAO) of the UN. There have to be alliances with ecological movements and those whose aim is to support genetic diversity and with campaigners wishing to change supermarket policies, to support the local production and consumption of food and to move away from monoculture.
The uniting of rural and urban pressure groups towards the creation of international alliances must be the way forward to really challenge the system and the depredations of monoculture. This is be the vision, and steps along the way have already been taken.
*Translated into English for LAB by Sara Harcourt