Envío Digital
Central American University - UCA  
  Number 242 | Septiembre 2001



Which Party Has the Best Agricultural Development Plan?

Agriculture technology specialist Laurent Levard, who heads the Central American University’s Agrarian Sciences Department, shared with envío his impressions about the initial plans presented by the PLC and FSLN for developing Nicaraguan agriculture. We offer them below.

Laurent Levard

Will the next government be able to propose and implement an agrarian policy that really responds to the sector’s problems, in particular one that favors technological changes that offer economic and social development to both the rural population and society as a whole? What path to technological development will the new government promote? Which actors will it count on to carry out this development process? Will its new agrarian policy be able to ensure a sustainable development process rather than just a few immediate effects?
These are extremely important questions. The best way of evaluating the initial proposals that the candidates are beginning to put forward is to first consider the basic characteristics of Nicaraguan agriculture as it exists today.

What do we have now?

The productive yields per unit of land are low, as are the transformation levels of the agricultural products. The un- and under-employment levels in the rural sector are very high and the remaining productive sectors will be unable to absorb such a large labor force in the coming years. Structurally, the country is suffering a serious trade deficit. The national ecosystems are in crisis and in the course of the next 10 to 15 years the "safety valve" represented by the country’s remaining agricultural frontier and rainforests will have disappeared, intensifying the ecological crisis to the utmost.
The history of agrarian societies in different parts of the world has shown that the peasantry is much more susceptible than the business sector to making technological changes that are coherent with the interests of their countries. Peasant producers have interests that the business sector lacks, but only if they have access to land, means of production and markets, are not floundering in an economic and social crisis, are not subjected to certain relations such as land rental and other insecure forms of access to land and do not find it easy to engage in extensive accumulation by acquiring more land.
The peasant sector is interested in intensifying production to increase added value and does so by using family labor. The business sector has the same interest but depending on the relative prices of the factors of production.

When a lot of land is available, agribusiness leans toward extensive systems. The best example in Nicaragua is the extensive land use in livestock raising. The current coffee crisis is another example: with the plunge in international prices, the most profitable alternative for the capitalist producer is to lay off the labor force, neglect the plantations and thus make production more extensive. Such an approach compromises future yields and generates short-term unemployment among the farmhand families. The peasant producers do not react the same way; even with low prices, they continue caring for their coffee plants using family labor.

The peasant sector is interested in reproducing and improving the fertility of the ecosystem planted, because their reproduction as a social subject, their future, depends on it over the long term. The social reproduction of the business sector, which has opportunities to invest its capital in other activities, does not depend fundamentally on the care of the ecosystem. The history of Nicaraguan agriculture—extensive cotton cultivation, extensive cattle ranching—provides a clear illustration of the ecological disasters caused by an agrarian structure dominated by the business sector.

The peasant sector tends to invest the majority of its economic surplus in productive activities and in nationally produced consumer goods. By doing that, its "economic betterment" is multiplied in the rest of the economy. In Nicaragua’s current conditions, the agrarian business sector’s multiplier effects on the national economy are minimal.

What do we need?

Any government program must consider the socioeconomic climate. To generate a setting favorable to the economic and social development of the peasantry, the proposed policies must be holistic, seeking to resolve the diverse limitations simultaneously and progressively.

Such an integral policy has to develop sustainable institutions that provide most of the peasantry access to credit, with interest rates in line with their reality, making it possible for those poor peasants who still have land to capitalize until they become peasant farmers. Such an integral policy has to foster price and market policies that encourage agricultural production and to develop agroindustrial transformation processes and marketing chains that are beneficial to agrarian producers.

An integral policy must include a land tenure policy that, besides continuing with the titling process, counteracts the current dynamic of agrarian counter-reform, discourages extensive land accumulation and provides lands to landless peasants, as well as to the poorest small-holders so that they can become true peasant farmers. Among other things, this requires a progressive land tax and a state institution that intervenes in the land market. An integral policy requires an environmental institutionality and regulatory framework that favors genuine territorial planning and seriously promotes reforestation. It also needs an education system that produces technicians and professionals who know how to take into account, analyze and integrate the different aspects of the country’s agrarian reality.

What is Bolaños offering?

Although the agrarian policy proposals offered by the Constitutionalist Liberal Party (PLC) and the Sandinista National Liberation Front (FSLN) are still very general, they already permit some hypotheses about the possible strategic orientation of each party should it win.

The proposal of PLC presidential candidate Enrique Bolaños, laid out in a paid ad in the newspapers, is explicitly divided into two components. One message is aimed at the "peasants and small agricultural producers," in which his proposals respond to various problems affecting the peasant sector: a national peasant credit program, financing for silos and a long-term credit program for land purchase.
Comparing that to his message to the "medium and large agricultural producers, cattle ranchers and forestry and fishing entrepreneurs," it becomes evident that Bolaños is putting his money basically on the large producers to develop the coffee, cattle and nontraditional products destined for the world market. As part of this second message, he proposes the creation of a Credit and Investments Fund, long-term credits for developing the coffee sector, a livestock technological development program, and support measures for the development of nontraditional export crops. While he claims that certain measures announced in this second message will also benefit the peasant sector, the very duality of messages and overall tone suggest that he is counting on the business sector to head up agriculture’s economic development and envisions it as the central axis of investment.

Will the peasantry be content with traditional credit packages geared mainly to the annual agricultural cycles, accompanied—or perhaps even conditioned?—by technical assistance and the distribution of improved seed varieties from the "green revolution"?
Bolaños’ message states that the development of the business sector will also benefit the peasantry, specifically stating that "the large producers are big generators of employment. If their businesses go well, things will go well for their workers too." History, however, has already shown that the business sector’s growth has actually been the main obstacle to development of the peasant economy, due to its competition for land and the unequal relations of production and exchange it establishes with peasant producers, such as wage levels, land rental costs, futures purchases, etc.

The PLC proposal makes no reference to the work of multiple NGOs and microfinance agencies in the rural sector or to the potential role that municipal governments could play in promoting rural development. Only at the very bottom of the message is there a reference to this reality in an exhortative statement. Is this a sign that the central government will continue developing its own programs, ignoring all the local stakeholders, while local governments continue to lack the attributions and resources needed to coordinate territorial development?

And what is Ortega offering?

The FSLN’s proposal for the rural sector so far—also presented in paid ads in the newspapers—has a totally different skew, since it is directed exclusively to the peasant producers, particularly those who are most decapitalized. It consists of providing a "productive food certificate" and in-kind credit (production capital) worth US$1,500 per family, which will be granted to the woman, will be conditioned to the implementation of certain techniques and will be only partially repayable. The repaid funds will permit the creation of local revolving funds to benefit other families.

This proposal is aimed at responding to the needs of the most decapitalized sectors (small-holders, poor peasants with land) both through the amount and through the goods being offered: a cow, a sow, five hens and a rooster, seed, a silo, screen fencing, etc. It is positive that implementation of the proposal foresees close collaboration among the central and municipal governments, private organizations (NGOs, churches, universities, business people and worker and producer associations) and international cooperation agencies. This proposal obviously must be complemented by other measures to guarantee an appropriate socioeconomic and institutional setting. Without it, this "productive package" would very likely be used up rapidly, without generating any real capitalization and development for the families benefited.
There are various questionable aspects of this program. As not all producers require the same capital goods and the concept of the "productive food package" leads one to think that all families will receive exactly the same, it is worth asking if the program would be implemented with enough flexibility. Another question is whether it would be implemented with enough long-term vision to avoid it being just another charity handout. To avoid this pitfall, the rules would have to be very clearly set out and enforced. In trying to address the needs of the poorest rural sector, the program must include a subsidy component, but will it guarantee that the producers truly pay the part to be reimbursed, and if they do not, will the announced measures be applied and the goods acquired serve as the collateral? Conditioning the provision of the "productive package" to the commitment to implement specific agro-ecological practices also raises some questions. What will happen to the producers who repay their loan without having implemented these practices. Will they be fined or will a kind of "technological police" be created to verify the producers’ practices?
It is important for this kind of program not to be lax when it comes to enforcing the rules agreed upon, because proposing and not fulfilling, requiring commitments and not respecting them makes it harder to create a genuine institutionality for development. In this regard, it seems better for the specific measures aimed at fostering new agro-ecological practices be separate from the "package."
The FSLN’s proposal is limited. First, it does not consider the other productive sectors: the landless peasants, whose main limitation is access to land; and the more capitalized peasants and poor peasants with land, both of whom require credit to produce and/or capitalize. Nor does the proposal make any reference to state intervention in the markets, whereas the PLC candidate specifically states that he will be "on the alert to avoid unfair competition from cheap imports from other countries," which would be very positive for the peasant economy.

It is extremely positive that the FSLN has embraced a proposal that came from the sectors within the Sandinista party most favorable to the peasants and that it is already being implemented in some areas. Nonetheless, the agrarian business sectors are also influential in the party and they still have technocratic visions that appear not to have benefited from the lessons of the failures of the huge agro-industrial businesses of the eighties—that were even then disparagingly called "white elephants."

Where does hope reside?

The agrarian business sector’s economic and social clout, the traditional anti-peasant bias in the vision of development held by many leaders of both parties and the scant national presence of organized peasants suggest that it will be hard for the peasantry to make its interests count with the new government, whether Liberal or Sandinista.
Nonetheless, the influence of civil society organizations and of some sectors of the Sandinista party, conscious of the strategic importance of peasant development to Nicaragua, suggest that the scenario could be more favorable for the peasantry with a Sandinista government. Even in that case, the legitimate social pressure that the poorest rural sectors will exercise on the new government, the deeply rooted cultural of subsidies that still exists, and the social and political advantages to the FSLN of maintaining it, give rise to a crucial question. Would an FSLN government be capable of building sustainable mechanisms and institutions to support the different strata of the peasantry beyond the initial subsidies to support peasant capitalization? More concretely, would it enforce the rules needed to ensure that sustainability? Has the FSLN learned the important lessons of its erroneous political policies of the eighties well enough to recognize that the peasantry has a central role to play in Nicaragua’s economic take-off?

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