Envío Digital
Central American University - UCA  
  Number 202 | Mayo 1998


Central America

Central America's Granary: Reflections from Europe

The difference between societies that advance and those that stagnate resides in their capacity to react to challenges of first magnitude, such as the challenge presented to Nicaragua by the rural world, or that presented to Central America by regional agrarian policy.

Pedro Caldentey del Pozo and José Juan Romero Rodríguez

Gabriel García Márquez
Initiatives promoting the setting up and consolidating of supranational regional economic blocs are multiplying, given the current framework of world globalization. This process is particularly intense on the American continent. In the case of Central America, long after the relatively successful Common Market of the 1960s, after the crisis of the 1970s and the profound convulsions of the 1980s and early 1990s, a path is once again opening to an integration process that could have better chances of success this time.

Without a doubt, the European Union (EU) constitutes the most consolidated and successful experience of supranational regional integration in the world. Its prolonged development over more than four decades, its advances and retreats, its praxis of institutional articulation and decision-making, its sectoral policies and interregional compensation and, currently, its risky gamble on monetary integration around the euro, make the European Union an interesting object of study. In light of its successes and its failures, it could perhaps be easier to imagine a scene of future integration for the Central American countries.

Among the European Union's common expenditures, the European Community Agrarian Policy (PAC) has traditionally constituted the most costly financial capital. Even today, approximately 50% of the total EU community budget is dedicated to price protection and the agrarian market. For some years the PAC has been undergoing substantial modifications for important reasons, also worth incorporating in the reflection.

What has occurred with Europe's protection policies for agro-food production illustrates better than many prudent theoretical disquisitions the validity or invalidity of the paradigms adopted in other places. This also applies to Nicaragua. Our intention has nothing to do with the idea of "exporting" the European model, but does have to do with using it as material for reflection. Given the European experience, one can also analyze the world food problem and the necessary conditions for a country to achieve food security. All of this reflection has something to say to Central America in general and Nicaragua in particular.

When Europe was Hungry

Born in the 1950s, the PAC's essential objective was to increase European agricultural productivity in a "lean cow" period, when production in European countries could not feed their populations. Its goal, neither more nor less, was to guarantee Europe's food security, not yet recovered from the trauma of World War II. To reach this goal a highly protectionist formula was installed: price guarantees were established, complete with intervention mechanisms that protected European products from foreign ones and gave direct support to farmers. This vigorously promoted European agriculture at the cost of a voluminous budget.

Only ten years after going into effect, the PAC had become a giant "machine" that generated food surpluses in the European Economic Community (EEC). The EEC went from being a net food importer to being an exporter—with strongly subsidized exports. Community warehouses overflowed with surplus stock, above all the so-called "continental" products: cereals, milk, meat, sugar, etc., all pulled off the market at great collective cost—high prices for consumers, very high public spending for taxpayers.

Protection of agriculture made the administration—essentially the community—a great protagonist, through protectionist mechanisms and relatively little consideration of the market in farmers' decisions. The much praised "market economy" had no role in European agricultural policy.

A Policy Victim of its own Success

The PAC crisis intensified in the 1970s and reached its peak in the 1980s. The crisis was the beginning of the end of a "productivist" model—produce a lot at any cost—reinforced by strong protectionism. Both external and internal reasons caused this crisis.

Among the internal reasons were a very high spending budget, severely questioned by Great Britain, among others; enormous quantities of surplus; inequalities in the protection measures, which were very strong for the continental products and weak or non-existent for Mediterranean products (fruits and vegetables, with the exception of olive oil); inequality in protection by countries and by farmers, with protection measures concentrated in a few countries and among the wealthiest and largest farmers; environmental problems generated by intensive exploitation of agriculture and cattle.

But the reasons were not only internal. The PAC was also questioned for powerful external reasons: primarily the world trade liberalization process reflected especially in the Uruguay Round of the GATT. In these negotiations, the polarization between the United States and the Europeans reached a paroxysm due to pressure by the United States, supported by other agricultural-product exporting countries, to force the EEC to modify its protection system and, in particular, to reduce the high barriers put on foreign agricultural products.

To a certain degree, the PAC ended up a "victim of its own success." So much surplus contributed to the loss of internal and external legitimacy. It had to change, despite the tenacious resistance of European farmers, headed by the French, the primary recipients of community funds.

The Hour of the Reforms

The beginning of the end of this productivist model reinforced by heavy protectionism ushered in the period of reforms, characterized by an obliged reduction in public protectionism and an increase in the importance given to the market as regulator of agrarian activities.

Thus a successful stage, dominated by a high cost and exclusively productivist and agrarian logic, ended. That generation of European farmers should not be blamed, however, since they had to make decisions in a very special context and according to incentives offered to them.

Today, after profound changes, the problem of European agriculture is the accelerated concentration of production, in which millions of production units will be lost. The changes have deepened the differences and inequalities among agrarian systems and one can speak of a fracturing of the rural system, leading to all sorts of dualities. The coexistence of one agriculture with competitive potential with another of less commercial capacity constitutes one of the central elements of the current crisis.

Stop the Waves, But Don't Turn the Tide

All of this is of interest for reflection in Central America, as is the evolution of the rural paradigm of the European community. Modern European society, fundamentally urban, is now asking the rural areas to fulfill new functions that might not only solve the crisis they find themselves in, but also be a clear opportunity for the future. Even with tensions, the new international economic space is creating new financial and market conditions that should be taken advantage of in favor of the rural world. The challenge is to use them to generate the changes and adaptations that the new times demand.

The crisis of the rural world cannot be understood outside of the far greater crisis of the current economic growth model we are experiencing at the world level. There are movements at the international level that are like the rising of an ocean tide. But while the tide is rising, the waves continue to rise and fall, which could lead us to confuse the waves' movement with that of the tide. The tide cannot be detained by building small dikes of sand, as children try to do on the beach. Like them, we can only play at the edge, putting up small barricades to try to stop the waves, and we might even be able to stop one or two. What we cannot do is change the direction of the tide.

The rising tide is the globalization of agrarian markets, where it is ever more evident that food-producing countries whose populations have food deficiencies resist depending on the import of food surpluses "dumped" by rich countries. Meanwhile, countries with agricultural export potential have an ever more imperious interest in getting a bigger slice of the world "pie" of raw materials export participation.

The future line that appears to be opening up in Europe would consist of continuing to "spoil" farmers—though in new ways—with the conviction that there can be no rural world without them. Common sense leads one to think that, even though the number of European farmers has decreased in recent decades, there will never be agriculture without farmers. This leads one to the conviction that the rural world should be largely if not exclusively made up of farmers. Food production and land conservation and planning needs farmers. Thus, there must be a coming together of land planning and agrarian policy.

A self-critical and open reflection by the so-called Group of Witches, in Brussels in 1996, indicates the degree to which criticism of the classical model has been assumed by the European ruralist current: "Finally, just one question, but what a question! What production and consumer models would be compatible and complementary in a single but also diverse world, given that the Western model is neither sustainable—because it plunders and is inadequate for society's needs—nor generalizable to the rest of the world—because it uses up collective resources—nor acceptable as a universal model—because it is based on a particular culture?"

People's Right to Feed Themselves

In the words of French agrarianist Bertrand Hervieu: "The globalization of exchange constitutes the essential data of the current recomposition of economic life. Today one must think in planetary terms: production, consumption, exchange and the relationship with one's own surroundings."
In this globalization context, the history of PAC, its successes and failures, is an excellent backdrop for better understanding the mechanisms implied in the concept of food security. Seen from the Central American, and particularly the Nicaraguan view, the vicissitudes of PAC and its reform show us the great challenge represented by people's right to feed themselves.

While there is no food scarcity on the horizon in Western Europe, that is not the horizon of other regions of the planet. In a multitude of countries there is an unsatisfactory balance in the supply and demand of food, because of both demographic growth and the inability to produce those foods for many reasons. This provokes ever more important imbalances in the world situation.

Food support—which can be a justifiable palliative in emergencies—cannot become the habitual way to solve the problem. The reflection of many farmers and even agrarian economists from wealthy countries—"If we're capable of producing a lot and producing it well, we'll take charge of feeding the poor countries"— cannot be accepted as valid. Apart from the fallacy hidden within this affirmation, which ignores the enormous protectionism that allowed so much productivity, the same simple response of always can be given: "You have to teach people how to fish, not give them the fish."
What developing countries are demanding, with more and more conviction, is their right to a portion or proportional part of world wealth. Respecting this right demands recognizing the right to develop their own agricultural sector and giving them the opportunity to do it.

In December 1992 a group of 20 French personalities from all tendencies, meeting in Seillac, France, developed a manifesto that saw light in April 1993 and has had a significant echo, not only in France but in other European contexts. Now known as the Group of Seillac, it has expressed with particular honesty and vigor the relationship existing between the agrarian and rural crisis of EU countries and the world food crisis. It is not by chance that many of the ideas proposing a change of paradigm proceed from the intellectual horizon of France, a country that is reticent to embrace that change given the enormous interests at play for its powerful agrarian lobby. The French intellectuals say:
"Global society and agriculture are suffering crises whose differences can't hide their similarities. This is a crisis that will unquestionably lead to new relationships between society and its agriculture, to a new vision of the relationships between agrarian production and life in rural spaces, between modernity and living beings.

"Considering that the agrarian problem is just one aspect of the world crisis at the end of the second millennium, it would be useless and dangerous if the only one to present that problem was the agrarian world. It is a problem condemned to find no solution unless it is addressed with a coherent focus that takes into account the entire world in its growing complexity, unity and diversity.

"The reflection should be broadened to the EU, to the European continent, to countries with ample spaces that dominate the market today, as well as to countries with limited spaces that are concerned about their food security and the conservation of their countryside; and also, above all, to third world countries, threatened by demographic growth and the slow evolution of productive systems toward dependence, and at the same time toward hunger, urbanization and emigration."

People's Right to Produce

It is not possible to mortgage the South's development—in the geo-economic and cultural sense—in order to defend at all costs the positions of the northern exporting countries, especially the largest—the United States and the EU—which flood the world markets with their products.

We cite below an extensive comment from Bertrand Hervieu, of the Group of Seillac, because of the logic of his reflections:
"The world food problem is not, first of all, a production problem. Not only do we have surplus, but we also know we have the technical capacity to feed two or three times the current volume of the planet's population. The true world food challenge is primarily that of storage, transformation and distribution, not production. What is being questioned is the economic inability to supply the market, but not a real or potential lack of provisions in the market.

"How are [European and especially French] farmers—who have not stopped asserting loudly and strongly that they are not a "supported" collective—going to accept that their own position is based on assisting other collectives into perpetuity? 'Pas de pays sans paysans,' [there's no countryside without farmers], they proclaim. And they're right. General de Gaulle once used this forceful formula: 'A country that can't feed itself is not a great country!' Can one seriously demand democratic stabilization in all those countries [of the East and South], and block the development of their own agricultural production? Entire societies in southern countries are on the verge of exploding precisely because their agriculture has been destroyed. Those societies have a need to produce their own food to recover collective dignity and meaning. Those societies also have the need to export in order to gain access to the world markets and to accumulate. Agricultural development in those countries implies that we [the northern countries] accept the questioning of our own exporting positions and the global equilibrium of our production mechanisms.... In any case, there will be an enormous contradiction between the defense of a discourse of the necessary solidarity among all the world's peasants and the willingness to guarantee ourselves [northern farmers] world food coverage."

The Price of Voluntary Blindness

Edgar Pisani, former agriculture minister in France and a member of the Seillac Group, argues succinctly that the exporting presence of the wealthy countries in the world food markets—basically in order to get rid of their surplus—has a perverse effect on the generalization of the model: "When too much is produced, it leads to even more production, so that the presence in the foreign markets not be occasional or marginal, but permanent and significant."
However, economic globalization leads to the rise of demands from relatively less developed countries, which are in a condition to supply food at good prices—with comparative advantages—and want to use the expansion of their agricultural sector to develop their economies. Given this, European society should look at the planetary implications of its options in an entirely globalized economic situation. Edgar Pisani also says: "It is critical to remember that, in the current state of discoveries and investments in the use of cereals or animal proteins, the more we flood world markets at the prices we are offering—taking into account our competition with the United States—the more we will remove incentives for agricultural development in the countries of the South. Currently, the arrival of cereals to southern markets at world prices is enough to annihilate the efforts of national agriculture in those countries. It is more interesting for a Tunisian merchant to get cereals on the world market than to buy them at cost from the farmers of the Bizerta plain. Certainly, these distant problems can be considered only secondarily if what is being discussed is the survival of our own farmers, but sooner or later there will be an economic, political and moral price of this voluntary blindness."
This is a significant reflection. The proclaimed "moral" aspirations of the northern farmers to feed the poor of the South, their supposed "right to export," should be countered by the right of all peoples to feed themselves. Rich countries should stop flooding the world—particularly the poor countries—with their surplus agricultural products. It's time to understand the meaning of this renunciation. As Hervieu says: "We're beginning to understand that a country's project, or that of a group of countries, to "feed humanity" is not, despite the apparent beauty of the formula, a humanistic project."

Shameless Protectionism of the Rich

The history of agrarian policies in the OECD countries—especially the EEC, United States, Japan and Canada—is the history of shameless protectionism to benefit their respective agricultures. With diverse formulas—some more based on price protection, others on direct aid or deficiency payments—all have energetically protected their agriculture and their farmers.

Naturally, this protection has been possible only in the wealthy countries, those which "allow themselves the luxury" of subsidizing their agriculture with public funds generously contributed by tax-paying citizens. It can be said that agrarian policy "protects whom it can, not whom it wants." In fact, all countries would like to protect, but not all can.

Given the European experience, this conclusion is evident: to guarantee food security in regions with supply problems, it is critical to protect the production and trade of the basic foods of those regions. The questions that emerge from this obvious principle are elementary. Why would a system that was beneficial for the EEC, that made the specter of scarcity threatening the European continent in the years following World War II disappear, not be good for countries with important sectors of the population suffering hunger or underfed?
Another obvious question. Why do wealthy countries—especially the European ones—which protected their agriculture for decades precisely with exact regulations (variable tariffs called prélevèments) and powerful restitutions (subsidies) for exports—now recommend that other countries lift tariffs on agricultural products and so vehemently preach trade and customs liberalization for food products?

Why Not in the Southern Countries?

It is clear that if any system has functioned efficaciously to motivate food production it has been the complex protectionist mechanism that the EEC adopted. After applying highly protectionist policies for decades, policies that were finally modified only when there was no other solution, it is hypocritical for Europeans to now push developing countries to liberalize their productive sectors, including basic grains. Why not apply the systems that were so successful—perhaps too successful—in the EEC to countries with production deficits? And now that it is unthinkable for poor countries to self-finance a protectionism of this type, would it be so off-target to propose the creation of a fund similar to the European FEOGA with financial resources from international cooperation—governments, multilateral lending agencies, NGOs—to help them protect their agriculture? Really, if the problem of food security is one of the most important issues on the planet and if the arbitrary solutions to date have not been successful, why not create a world solidarity fund to protect food production?
The proposal is undoubtedly complex, both financially and organizationally; but it is efficacious. It would increase food production worldwide. It is an infallible and already proven method, though only in the planet's wealthiest countries. On the other hand, it is a proposal very similar to the STABEX system that the EU applies to ACP countries of the Lomé Convention, though this system has limited resources and refers only to export products, with the consequent danger of ignoring basic foods production.

Nicaragua as Granary: The Obvious

The debate about agricultural policy and the evolution of the agricultural sector is at the center of Central Americans' interests. No political party fails to talk about agrarian policy in its government program. Basic grains production is given strategic interest and value. The question of food security and the challenge of incorporating small and medium agricultural producers—passive protagonists of the region's critical impoverishment—into basic grains production and domestic and foreign trade networks are still issues for reflection in Central America.

Despite all of this, the agrarian policy implemented for decades by almost all Central American governments has revolved around promoting traditional and nontraditional agricultural exports. It has barely taken into account producing for domestic consumption or improving food security indicators.

When, in his election campaign, President Arnoldo Alemán used the slogan "make Nicaragua the Central American granary once again," he was seeking to evoke past times of prosperity, though without specifying that they were prosperous for only a few. The political use of this image can have multiple interpretations. What is obvious is that this project is not compatible with a total opening—unusual in developed countries' agriculture—that leaves national producers totally unprotected against grain imports from the United States—or even Vietnam, to mention a recent, and polemic, case. The distortions in the market and in Nicaraguan eating habits caused by food aid and development cooperation expressed in donations of wheat or corn instead of euros or dollars is also not compatible with the "granary" project.

The project to convert Nicaragua into Central America's granary ranges from encouraging domestic consumption to promoting the participation of small and medium farms in productive activities and in modernizing the country's agricultural structures. It does not include the immediate and almost total liberalization of basic grains imports or the virtual suppression of rural credit instruments to small and medium farmers.

Central America: Food Insecurity

As a consequence of the application of neoliberal policies, agriculture for domestic consumption has occupied a marginal role in Central America, thus generating problems of food insecurity and critically altering a large sector of peasants on whom food production for the basic Central American diet depends. According to ECLA, 1.3 million Central American farmers, 76.5% of the total 1.7 million, are dedicated to basic grains production, normally on small family production plots where traditional techniques are used and 80% of the harvest is consumed by the family.

In 1995, talking about the evolution of basic grains imports, ECLA stated: "Import trends differ significantly among countries, reflecting the relative absence of regional external supply and complementarity policies. Costa Rica is the country with the greatest participation in imports (26.5% of the region's total), based on a policy to convert its agricultural structure to higher profit crops. Honduras has slightly increased its participation, while Guatemala and Nicaragua have reduced their relative weight and El Salvador remains constant.

"Even when the growth rate of basic grains production has been low and less than that of the population, the high rhythm of imports has made possible an increase in apparent consumption in the region (3% in the 1980s and 4.5% in the 1990s), as well as in per-capita apparent consumption (0.4% in the past decade and 1.6% in the current one). The effect of imports on apparent consumption growth is greater and greater: from 38.95% in the 1980-94 period to 41.2% in the 1990-92 period, including wheat; and since net imports do not behave inversely to net production changes—except in sorghum—the increase in apparent consumption will increasingly depend on the facilities to operate imports—given the structural rigidity to production increases—as well as on greater domestic competition for the use of hard currency and credit due to the growing restrictions on regional exports."
The economic liberalization policy is generating more dependence on imports in the basic grains sector. It is also provoking a deterioration of Central American food security, as the FAO indicated in April 1998 when it released the results of its Report on the World State of Agriculture and Food.

Rhetorical Declarations, Concrete Policies

Today's debate on regional integration processes in Latin America is between the neoliberal model and another, more structuralist one. The first model—which leans toward implanting free trade zones—is characterized by the absence of vigorous, firm and decided common sectoral policies or inter-territorial cohesion. For the structuralist model—what the UN Economic Commission on Latin America (ECLA) has termed "productive transformation with equity" —to become a reality, ECLA's well-known recommendations for constituting "regional integration models or open regionalism" cannot ignore the serious problems of food security existing in Central America. The Central American region needs to adopt formulas that fit in with this second model, and among these formulas an agro-food and rural policy is a priority.

In contrast to the Common Market years, Central American integration in the 1990s does not contemplate a specific industrial policy but does pay special attention to agrarian policy. The regional integration process in this new stage is thus correcting the mistake of concentrating efforts on only one sector and forgetting about a sector of such strategic importance for the region as agriculture.

The Central American governments have declared on various occasions that the agricultural sector is the key to regional economic reactivation. The qualitative and quantitative importance of agro industry also justifies the need to include it as the centerpiece of international insertion strategies. Despite this conviction, however, the policies applied in recent years not only have not confirmed the priority nature of the sector, but have actually posed a certain incompatibility with its full development.

PAECA: Major Accords

The Declaration of the Antigua Summit in June 1990—which assumed a trade-off between political and economic issues in the new integration—made references to the agricultural sector in its numeral 32 and in the Central American Economic Action Plan (PAECA). The first decisions about regional agricultural policy were made at the X Presidential Summit in San Salvador, in June 1991, when the Central American Agricultural Action Plan was approved, and in the XIII Meeting of Panama in December 1992, when the Agricultural Commitment of Panama was approved.

In synthesis, the major PAECA agreements were to:
Implement a price band system for application to import tariffs on four grains: yellow corn, rice, sorghum and soy.
Liberalize intra-regional trade of all basic agricultural products and even out the import tariffs among countries on products susceptible or not to the application of the price band system. Among these products are: white corn, liquid and powdered milk, beef, pork, chicken, red and black beans, cattle on the hoof and live poultry.
Significantly reduce the state's role in marketing basic agricultural products, limiting its activity in this area to the management and operation of the band system as a whole and to the guarantee of strategic food reserves, eliminating all systems for setting and controlling prices.
Harmonize policies for the treatment of donations and concessional imports.
Make progress in formulating an integral agro export promotion program.
Maintain a realistic exchange rate policy.
The price band system for the four basic grains is probably the most important agreement in the PAECA. The special sensitivity of Central American economies to the agricultural sector explains the exclusion of their products from the foreign trade liberalization system. The Central American governments are not renouncing the right to temporarily increase the sector's tariff protection, given the need to guarantee regional food security and protect small basic grains farmers from the fluctuations and distortions in international markets.

The price band system is based on applying a variable basic tariff, which increases or decreases to compensate for the effect of extreme variations in international import prices. The system kicks in when pre-tax import prices are below or above a predetermined minimum or maximum. It is an attempt to set up a mechanism similar to the agrarian regulatory actions applied by the European Union.

The PAECA established June 30, 1992 as the deadline to finish liberalizing intraregional trade of agricultural products and January 1, 1992 for the adoption of the price band system for the four basic grains. The application of these measures, however, was very irregular in the short time it lasted, and did not go beyond 1996.

Liberalize or Protect?

The current extension of trade liberalization to the agricultural sector resuscitates a debate in the region. Nicaragua's National Union of Farmers and Ranchers (UNAG) puts forward a significant position: "The tariff appears to be the most visible instrument to influence imports. In no way would it be an attempt to implement the protectionist system that originated problems for the country by promoting the inefficiencies of productive companies. It also would not try to oppose free trade agreements and treaties. But given the lack of productive structure, of incentives to production and of strong pressures for fiscal equilibrium in this current crisis in the external sector, what is recommended is only a moderate tariff increase, to achieve a reasonable reduction in imports. This would affect luxury products or those that do not affect the consumption level of broad sectors of the population. It is also recommended that the trade and tariff policies or free trade agreements avoid buying in foreign markets basic grains, dairy products or other products on whose production the income of a large number of small and medium farmers depends: 120,000 farmers or 600,000 people who live in extreme poverty."
From perspectives dominated by the current neoliberal slant, other authors state that incorporating agriculture into free trade would be indispensable for agroindustrial processing plants to benefit from a reduction in prices and thus get into the cheaper markets, which would allow them to promote nontraditional exports in the region.

Flexible tariff protection policies appear justified and unavoidable in basic grains because of food security and self-sufficiency. Since grains are the basic diet and are produced by thousands of small farmers, their production and prices on the Central American markets decisively influence the quality of life of the region's least favored sectors.

Central American governments have also proposed converting and modernizing the productive sectors to minimize the negative effects of the trade opening and encourage vertical integration of agricultural production. The Agricultural Commitment of Panama thus instructed the region's economic Cabinets to draft a proposal for the future establishment of a Regional Fund for converting and modernizing the agricultural sector, which would develop functions similar to the Fund created by the European Union for the same reason.

A Lack of Political Will

Although there is a clear need to guarantee some protectionism to certain agricultural sectors by creating an institutional framework capable of putting those measures into practice, the agrarian policy of the new Central American integration is facing problems similar to those in other areas of the integration process.

The proposals have not been carried out in practice. The price band system was interrupted in 1996 before it had been completely developed and before there had been sufficient time for it to generate either positive or negative effects. Nor does Central American agrarian policy have the financing sources necessary to modernize and to fulfill its objective of guaranteeing food security to the population.

The fundamental problem is lack of governmental definition. As in other periods of Central American history, certain social sectors linked to agricultural exportation appear to be imposing their pro-free exchange stance and underplaying the necessary articulation of agriculture with other productive sectors and the incorporation of small and medium basic grains farmers into society and consumption.

Given Central American tariffs, with radical reductions for food products, it is worth asking whether this hasn't gone too far. Is it prudent to open the borders so generously to basic grains imports from third countries? Should some system be adopted—of the prélèvement sort—to keep Central American basic grains from drowning in the "free" market?

Why Not a Central American PAC?

There are no greater food production incentives than the old price guarantees and intervention mechanisms like the state buying harvests at good prices, so well known in the European Union. As in Europe, the Central American regional setting is propitious for the design and application of a Central American agrarian policy. A PAC, to be exact.

Couldn't a Central American agricultural policy be designed based on these elements?
1. A system of variable tariffs to protect regional producers and consumers against international price fluctuations for basic grains and to guarantee competitiveness of the regional products against imports from third countries.

2. A system of public interventions—buying, storing and selling—in regional markets to stabilize prices received by producers and paid by consumers, supported with controlled food aid, with economic aid from foreign cooperation to finance the construction of storage infrastructure.

3. A regional modernization fund for agrarian production and trade structures that would become a channel for part of the support from international cooperation in this field.

This formula should be able to avoid the quite well-known problems of European aid, given that, in reality, the bulk of financial aid to protect agrarian production ends up in the pockets of the largest and wealthiest producers. This sad reality is denounced in the famous Mac Sharry document to reform the European PAC and we have had the chance to prove it in field studies on agrarian exploitation in Andalusia, in Spain.

It is not helpful to offer indiscriminate proportional aid to production. There are other possible formulas, like aid modulation. "This system," says Pisani, "consists of individualizing each producer of a determined product, paying higher prices when the amounts delivered are weaker.... This system allows preferential remuneration to the first fractions of merchandise delivered, and a progressive movement toward equal prices at a reference price that approximates the world price."
There are no recipes. The Central American people themselves have to determine the most suitable concrete ways to incorporate agrarian policy and rural development into the already tight regional integration agenda. But just as there can be no authentic regional integration without inter-territorial rebalancing mechanisms—cohesion policies—there can also be no construction of an authentic Central American common market without addressing the problem of food self-sufficiency, of food security in a much more determined way.

Twelve Theses for a Project

Central American authors, institutions and organizations have been working for some time to define objectives and actions of an agrarian policy based on fundamentals like those we have discussed and will now summarize.

Perhaps one of the most interesting proposals to emerge from the region itself was put together by a team of Central American authors recognized for their investigative reliability. The team was coordinated by Eduardo Stein, formerly executive Secretary of the Action Committee of Support for Central American Economic and Social Development (CADESCA) and now Guatemala's foreign minister, and economist Arias Penate, former Minister of Agriculture of El Salvador and author of various works on the agro-food system, food security and biotechnology in Central America.

CADESCA, which is based in Panama, has made important contributions to the study on the effects of adjustment policies and food aid on the region's food security. In 1992 it published Stein and Penate's work "Democracy without Poverty: Development Alternative for the Central American Isthmus," one of the most complete policy alternatives proposed in the region thus far.

This strategy begins by describing the structural problems in Central America from a concept of development that depends on incorporating technical progress, obviously a conceptual legacy of the ECLA tradition. On the other hand, the role of the state, the decisive importance of agroindustrial development, the faith in import substitution and the interest in profound and active economic integration are elements of notable difference between this strategy and ECLA's current global proposals.

The authors develop their alternative regional development strategy proposal in twelve theses. We have chosen five of them:
1. The central thesis is that the synergetic articulation between agriculture and industry is the best way to achieve cumulative value-added processes for a production to make it increasingly competitive in the regional and international framework.

2. The strategy should guarantee food security and self-sufficiency—complementary and potentially viable objectives for the region, though not for each country considered alone—and should thus establish strategies to strengthen the agro-food system.

3. The alternative development policy should avoid a logic of extraction and should guarantee environmental and developmental sustainability.

4. The strategy proposes international reinsertion based on the complementarity of the national with the regional and international.

5. It is conceived within a dynamic of real progress in productive, trade and financial integration among the countries of the isthmus, within which the creation of regional industries and productive integration services should play an important role.

The main articulating thesis of their model is the articulation of agriculture and industry. According to the authors, this basic thesis can promote Central American regional development and resolve or mitigate the structural problems, incorporating social sectors that today are excluded and impoverished. This policy is compatible, indicates Stein, with the need to implement structural adjustment policies, although the latter should be adapted to the needs and priorities of the region's societies.

Exporting Basic Grains to the Caribbean

Other initiatives, which have emerged from the Central American University (UCA) in Managua, share some of the basic tenets of the Arias-Stein proposal. The UCA develops research and promotes projects around the farm economy through its research institute Nitlapán. In that context, Xabier Gorostiaga proposed the basis of a regional development proposal that largely coincides with the tenets of the Arias-Stein alternative: "The conviction that an alternative to this panorama is necessary and possible and that the subjects and resources exist to implement it is both a supposition and a condition for building it. The Central American alternative for the year 2015 would be based on a social contract capable of creating an agro-industrial base that guarantees food self-sufficiency and the export of basic grains to the 35 countries of the recently formed Association of Caribbean States, historically deficient in these products. A farm economy of small and medium agricultural producers has the ability to take on this challenge. It also has the potential to modernize itself to improve its productive and exporting capacities for coffee, bananas, sesame seeds, sugar, cattle, etc.

"Agro-industrializing these exports and new nontraditional ones would allow the interconnection between rural and urban zones in the region. The production of nontraditional goods—fruits, flowers, vegetables, biodiversity—with an added industrial value greater than it now has could avoid the dualization of the economy—modernized zones next to backward zones—by creating jobs and effective demand able to generate a true, responsive and rich domestic market. Free trade zones for exports of both industrial and agro-food products, linked to foreign investment and transnational companies, would add a new source of regional accumulation."
In analyzing the possibilities offered by the new Central American integration process of the 1990s to the design of a regional agrarian policy, we should note another agreement with a conceptual novelty important to the process, though it is barely developed so far. In the regional Ecological Summit—the extraordinary presidential meeting held in Masaya in October 1994—the countries adopted the Alliance for Central American Sustainable Development (ALIDES), an accord that defines a regional strategy to make sustainable development the central policy of the region's states, reiterating and broadening the commitments that grow out of the Central American integration process. Although the development of this Alliance does not appear to concern any of the region's governments, its mere existence is one more incentive to take advantage of the regional framework in designing a regional agrarian policy.

New Functions for the Rural World

If we can learn anything else from the European experience, it is that the modern concept of rural development implies, above all, recognizing and discovering the new functions of the rural world, which go far beyond—although including—mere agricultural or food production, with which it has traditionally been exclusively identified. In this perspective, the functions of the rural world would be:
Food production: guaranteeing food security.

Territorial equilibrium: procuring that population distribution throughout the territory is not concentrated in great urban nuclei which generate growing marginalized sectors while large spaces remain unpopulated and abandoned.

Ecological equilibrium: recognizing that the rural world now fulfills and should continue to fulfill an essential function in the conservation of ecosystems and essential processes for life.

Production of quality landscapes: guaranteeing open and natural spaces, in contrast to the closed, artificial and convulsive urban landscape.

Resource production: especially guaranteeing clean water, an ever more scarce natural resource.

Contamination sumps: absorbing what is in the air, water and soil with a new way of seeing things, in which "those who contaminate pay and those who conserve collect."
Support for recreational activities: guaranteeing open-air recreation, widely demanded by an overwhelmingly urban society, which is also the sector with the highest income.

Non-food agricultural uses: dedicating lands, for example, to the production of textile fibers or to obtaining energy products.

In the new rural system there would be a modern agrarian sector and the rural-urban dualism would shrink. The inequity gaps would have to disappear and the rural space would thus take on a new role in society, administering goods and services to all society, not only food, thus improving the quality of life for all. Complementarily, the negative effects of certain production and consumption processes would be absorbed in this new system, transforming them into positive aspects and generating added value and jobs.

The Earth Is Our Greatest Treasure

"Our way of life is implied in the simple question of how we treat the earth, which is, after people, our most precious resource." This affirmation from the famous and—to a certain degree prophetic—book by Schumacher confronts us with an exceptionally serious problem. According to the Seillac Group, this is a global diagnosis: "World population growth; the need to guarantee survival to all human beings; the inclination of the current model to destroy natural resources, especially energy and water; the tendency of developed countries to consume more space to guarantee the functions of organization and service; the destructive effects of certain practices and techniques that destroy the plant cover, modify climates and attack the biosphere; all of these elements together and undoubtedly others, raise doubts about the planet's future capacity—overwhelmed by questions—given the needs and the threats."
As foreign observers sincerely committed to Central American development, we sometimes have the impression that its societies—producers, politicians, intellectuals and university leaders, leaders from all sectors—wait and wait before deciding to face these transcendental problems in an energetic, consensual, reflective and responsible manner. The differences between societies that advance and those that stagnate lie in the ability to react to the great challenges.
It is something like the story of that pilgrim who climbed Mount Athos, in Greece, looking for peace in his soul by consulting one of the hermit saints. As is known, the hermits of Mount Athos live in inaccessible caves carved into rocks which one reaches in a large basket hoisted up as in an elevator, with ropes pulled by a young monk. The tale goes that as he was going up, the pilgrim observed that the rope was very frayed from use and asked the monk in charge of the hoisting: "How often do you change the rope?" To which the monk replied: "Don't worry. We change it every time it breaks!"
In the same way, Central American societies, happily confident, appear to put off necessary decisions and actions...until the rope breaks. It has perhaps never been more urgent and necessary than now—we dare to believe also possible—to have a serene debate to define a horizon for Central American farmers and their rural world. In Central America, political forces, unions, study and research centers, individual producers and associations—with special protagonism by the youngest—should unite forces, ideas and suggestions, given each country's obvious limitations on its own.

At the beginning we cited the surprising words of an urban character by Colombian novelist Gabriel García Márquez. We end with the words of an Andalusian writer no less famous but not at all contemporary, the gregarious Hispano-Roman agronomist from the beginning of the Christian era, Lucio Junio Moderato Columela, born in Cadiz and a Roman citizen, in the preface to his work De re rustica:
"Although the city lacks people to teach the cited arts, the community could continue to bloom, as happened in antiquity, because in other times the cities were very happy, and they could continue to be so without comedians and even without troublemakers; but without farmers it is evident that men cannot subsist nor eat."

An ancient affirmation that remains valid two thousand years later.

Pedro Caldentey del Pozo and José Juan Romero Rodríquez, sj, are professors at the Faculty of Economic and Business Science (ETEA), University of Córdoba, Spain, and collaborators with the Central American Universities (UCA) in Managua and San Salvador.

Print text   

Send text

<< Previous   Next >>


América Latina
When Children Organize And Want to Work

The Killing Stone, Bedrock of Peace?

Some Voices of the 55,000 Victims


We are Hitting Bottom: Where is the Way Up and Out?

Central America's Granary: Reflections from Europe
Envío a monthly magazine of analysis on Central America
GüeGüe: Web Hosting and Development