Envío Digital
Central American University - UCA  
  Number 161 | Diciembre 1994



Decollectivization: Agrarian Reform

It is not a matter of violence or illegality. The fact is that small farmers are losing their lands because they are selling them. Why do they do it? In order to stop this agrarian counterreform it is necessary to change the focus, to defend the proprietors more than the property. It is necessary to listen to the producers: what do they want to do with the lands they received?

Nitlápan-Envío team

The Nicaraguan peasantry's permanent demand for property has meant that in the last 13 years more than 200,000 peasant families have obtained over 4 million acres of land through agrarian reform. More than half of this land was transferred at the end of the war to peasants who had fought with the Resistance or in the army.

The agrarian reform profoundly changed one of the primary structural obstacles to the Nicaraguan economy's sustainable development: the unequal distribution of land. The changes in agrarian structure also had an important effect on reducing the amount of idle land and the large monocrop farms, which depend heavily on imported inputs and state subsidies and tend to spend their profits on consumption rather than reinvest them.

The new agrarian structure has offered Nicaragua the first opportunity in its history to intensify agricultural production based on the labor of underemployed peasants and on their own economic rationale. They are the ones with the greatest potential to make good use of the national resources.

Agrarian Reform Land for Sale

Despite these transcendental achievements, the current tendency is a reversal of the agrarian reform. Although it is very difficult to quantify how much reformed sector land has been sold by its peasant beneficiaries, studies in four of the country's departments (Boaco, Chontales, Masaya and Rivas) estimate that 14% has already been sold. These studies reveal that in some cattle regions (Nueva Guinea, Camoapa, Acoyapa) where families of demobilized Resistance members settled, almost a third of the distributed land has been sold at prices ranging between $50 and $100 per acre, which illustrates that it is a buyer's market, with the sellers at a serious disadvantage.

The main buyers have been some of the National Development Bank's 300 largest clients, a group that includes both well known anti Sandinistas and well known Sandinistas. Bank officials acknowledge that much of the 40% of these clients' production loans that is overdue has been "detoured" to purchase these lands at "give away" prices.

Now back in the hands of large property owners, these lands will once again be dedicated to extensive traditional cattle ranching, excessively dependent on public credit. The advantages of small and medium farms will be lost to the country. The tragedy is less that peasants sell their land than that the lands will be used for production that is less efficient for the national economy. Another aspect of the tragedy is that these property changes are not taking place because the buyers are economically more efficient, but because they are privileged clients of state bank credit.

Peasant Initiated Agrarian Reform

Everyone in Nicaragua agrees that the country's stability and economic reactivation depend on resolving the property problem, but the approach differs widely. Urban public opinion and the government most fear an eventual conflict between former owners affected by the agrarian reform and its peasant beneficiaries. But this is not the biggest problem; the number of cases in which the conflicts have reached a crisis point leading to violent confrontations or evictions is insignificant.

The central question of agrarian property, hidden by politicians but directly affecting national economic development, is the insecurity of the thousands of peasants who possess lands under the new "peasant initiated" agrarian reform. This reform consists of the peasants' own parcelization of an estimated 90% of collective agrarian reform land into individual properties.

The problem is that this reorganization has not opened the way for these peasants to become farmers. Political blocs are preventing a definitive parcelization, and without individual property titles, the peasants are not eligible for credit and cannot fence in their land. Both things cause them many problems. They cannot combine cattle ranching with agriculture. They cannot live on their farms. They cannot diversify production or plant trees to reduce climatic risks. They have no stable work or a guaranteed food supply and cannot diversify their markets. They cannot make infrastructural investments in construction, wells and the like. The women cannot consolidate their poultry and pork projects and thus join productive labor. Their future is uncertain because they do not know if these lands will really be part of the family heritage. And finally, no individual members are willing to take responsibility for the debts contracted by the collective property, so the debt grows and grows until the problem is "resolved" through the sale of the collective land.

Insecurity and increased needs are pushing the peasants to dangerous practices learned in the past decade, such as irrational exploitation of the land, continued dependence on monocrops and excessive use of chemical inputs and machinery. Other, even more serious practices include irrational tree felling for firewood and lumber sale, and the abandonment of soil renovation projects. All of these practices increase the peasants' economic vulnerability and render them less able to deal with and adapt to market changes.

As long as this situation continues, agrarian reform will take backward steps, leaving the peasants less able to sell their lands at a good price and with limited opportunities for economic reactivation for both themselves and for the country.

Defend Property Owners, not Property

Peasant farms with clear titles are resisting the unfavorable economic situation better. They make better use of the resources obtained through rural financing programs and are producing with more diversity for local markets. Some cooperatives and production collectives have also managed to consolidate, but these are exceptional cases primarily small cooperatives often linked by extended family ties, with good resources and economic advantages.

Individual peasant landowners and the cooperatives that have managed to consolidate the parcelization are the least likely to sell out, while those most likely to are the cooperatives whose lands are still in collective form. In many cases, the sale is negotiated between the buyer and the cooperative leadership.

Obviously, the lack of financing and agricultural services seriously limits reactivation in the rural sector. It is also clear that consolidating the new parcelization will not automatically accelerate economic reactivation or mechanically create the structural basis for agricultural development. It will, however, energize many peasant families, help them overcome economic limitations and promote their creativity, allowing them to better value the resources they already have.

Reality is showing that the reconcentration of land is taking place more through the market itself than through violent or "legal" evictions. The rural property problem must thus be approached differently: property owners must be defended, not property. So far, the counter agrarian reform is moving against those who cannot compete economically, not against all properties distributed through agrarian reform per se.

Peasants Want Decollectivization

The serious limitations of linking agrarian reform to peasants organized in "collective" cooperatives has been clear since 1984. Peasant resistance to these forms of organization was expressed through increased contra activities in the country's interior, the desertion of cooperative members, the cooperatives' economic crisis and growing peasant discontent in some regions of the Pacific. The Sandinista government was forced to relax its agrarian policy and begin distributing part of the agrarian lands to individuals, although the majority continued to receive collective property titles.

By the end of the 1980s the peasants themselves began subdividing the production cooperatives. Many cooperative members voted against the FSLN in the 1990 elections, which can be interpreted as a rejection of the collectivization forms the Sandinistas implemented. With the FSLN's electoral defeat, producers accelerated decollectivization.

This decollectivization process reflects, on the one hand, a political phenomenon, and on the other, an economic one: the market pressure on producers to adapt technically and organizationally to other conditions. In practice, where decollectivization has taken place, the changes have not only been in the forms of cooperation between producers, but also in production and production techniques. In Masaya, the peasants who fenced in their properties and moved to their farms, have diversified their production and increased the amount and quality of family labor. This is in sharp contrast to those who continue collective forms of production or who divided up the cooperative but have not fenced in the individual property or received individual property titles.

Decollectivization is not synonomous with selfishness or closed individualism. Decollectivizing property and production does not mean breaking all links with economic and organizational cooperation among peasants. Hundreds of new cooperation initiatives exist in financial services, technical information, marketing services and the like among those who have already decollectivized. But various obstructions are slowing down these peasant initiatives to reorganize land that was or still is collective.

Political Imposition and Economic Myths

The conception of the Sandinista agrarian reform in the 1980s as a fundamental political operation to stop the contras and increase the number of sympathizers with the revolution is in great measure the basis of that transcendental reform's poor economic results.

The cooperatives were basically viewed by their promoters as part of the political organization apparatus and as instruments of state intervention in rural society. Technicians and political leaders saw the peasants as beneficiaries of aid and recipients of "modern" and rational economic and productive orientations, never as economic subjects, authentic agents of national progress.

This limited focus of development gave priority to the "modern" state sector and completely underestimated the economic potential of small and medium family farms. The economic rationality of these farmers was also disparaged, and the peasants themselves were labeled as individualist , selfish and incompatible with the "new man." The peasants' traditional production techniques were far more subject to value judgments than to a technical and economic analysis of their origin and utility. The technical and social rationality of traditional cooperatives was ignored; these include help within families, among neighbors and others, all adapted to local production and the conditions in each family.

Cooperation among rural producers has a definite rationale; peasants work together when there are clear and lasting economic and social advantages. Traditionally, rural producers engage in some activities individually and others collectively. The total collectivization of production and property has no moral virtue, economic advantages or efficacy if the participants do not believe in it.

The logical consequence of a politicized and ideological approach to agricultural collectivization was extensive intervention by the government and union and party authorities in cooperative production and organizational decisions. Economic myths prevailed, such as the supposed excellence of economies of scale or the assumed viability of technification programs. These myths created huge debts, for which the promoters are more responsible than the peasants themselves.

The basis of institutional control of the cooperatives was, in great measure, due to the the cooperative leadership's political and economic power and their top down management methods.
Many cooperatives today still have open or hidden conflicts between members, who are demanding changes in property ownership, and leaders, who oppose the changes. Instead of supporting a dialogue free of ideology, many local union leaders dismiss the members' attitudes and insist that decollectivization goes against peasants' political interests because it weakens their ability to resist large landholders. A vision of this type significantly distorts the ways peasants interpret their own problems. The issue is always presented to them as a crisis of union or political organization because of the rupture that decollectivization means. This is an ideological focus and an incorrect and perhaps even mercenary explanation that does not promote constructive dialogue. Very few voices in the rural areas yet dare to offer political, intellectual and moral support to the already begun agrarian reform "from below," or to other initiatives of rural producers who are trying, also from below, to reorganize agrarian cooperation so they can resist economically and recover traditional moral and cultural values that contribute to rural unity and the country's development.

Legal Insecurity, Debts, Spending

Dealing with the rural property problem requires political will, economic support and clarity about what to do. There are serious problems of pending debts, a long overdue legal aspect and a need to assign resources.

Many parcelized cooperatives have bank debts or mortgages in collective form. Although some individual members have the ability to begin making payments on them, no member will due to the risk that the collective property will remain mortgaged and there will be no possibility of getting new financing. It is a vicious circle: those who can pay their individual part of the debt do not do so because the collective debt will block their credit anyway. The collective debt then continues to accrue interest, and productive decapitalization takes place due to the lack of new investment credits.

Another, even more serious problem is that of legal insecurity. Many of the large haciendas expropriated by the agrarian reform were never registered in the name of the new owners. A recent legal study estimates that 76% of the expropriated agrarian reform lands fall in this category. Legally, their former owners can still reclaim them. One article in the constitutional reform proposal currently being debated in the National Assembly would outlaw confiscations in Nicaragua. Although the proposal is correct for the future, at this moment it could totally blockade the legalization process for all those beneficiaries whose farms are still in the name of confiscated former owners.

Finally, parcelization means costs in topographical surveys, legal services and taxes. Fences to mark property limits also represent an important material cost.

Today, a great majority of peasants are willing to spend whatever they must to obtain their individual property title, but lack of liquidity and generalized poverty means that they lack even minimum resources.

Listen to the Peasants

In the debate on rural property, both the government and the FSLN ignore the problem of the peasants' economic crisis because it is not a direct cause of political destabilization. Effectively, this is true, and is why there have been so few advances in solving the problem. The political elites' predominant focus is essentially political. In addition, the relatively successful attempt to confuse the problem of the agrarian reform beneficiaries with the Sandinista "piñata" has seriously hobbled the search for a stable property scheme that recognizes and gives full legitimacy to this important social sector.

What do the peasants want? In this debate, they put decollectivization at the center of their problem. It is indispensable to reorganizing production under forms of cooperation forms freely chosen by them according to the social and economic advantages that cooperation offers.

From the national interest viewpoint, defending these property owners is to bet on Nicaragua's economic reactivation. The economic potential of peasant production systems and economic practices must be recognized if the country wants to move forward.

The argument in favor of the advantages of small family economies and the positive role they can play in national development does not grow out of an ethical position about "ideal" development. The historic experience of various Southeast Asian countries today developed countries or industrialized Europe gives the argument a solid basis. The current decollectivization process in the former Soviet Union and other former Soviet bloc countries, as well as Vietnam and China are not only the convulsions of political change but also the recognition of the peasantry's economic potential.

Today only Nicaragua, among all the Latin American countries, has perhaps so many oppportunities for sustained and equitative economic development. This is because of the advances in land distribution; more than 4 million acres of land in the hands of over 200,000 families.

Landowners and Technocrats Wrong

Reactivating the agricultural sector depends largely on the abilities of this new propertied sector and the traditional peasant sector to consolidate and reactivate their farms. Their ability to generate and save money, create jobs and produce food for the cities gives these Nicaraguans enormous economic potential. The establishment of a long period of peace in the rural areas depends on their consolidation. This is not an attempt to exclude large agricultural businesses, but to create equal conditions for large and small to participate in the market. It is an opportunity for the state to promote those diverse sectors according to what they offer the economy and social development.

Not all agrarian reform beneficiaries will be able to become farmers, some because they lack the productive experience or economic organization to do so, others because they have limited resources and will eventually sell their land. But since unemployment and hunger is the only alternative for the majority, many will opt to try to consolidate their farms.

The claim of oligarchic landowners and leftwing technocrats that small producers are lazy or incapable of increasing their productivity has been amply demonstrated to be untrue. The least that can be done today to prove that these ideas are remnants of the past is to give the small farmers the opportunity to participate in an open market economy without political criteria.

Proposals to Support the "Peasant-Initiated Agrarian Reform"

1. Promote an ideology free debate about the agrarian changes that have occurred and are occurring in Nicaragua, emphasizing what will benefit the national economy and the interests of agrarian reform recipients.

2. Support the legalization of individual parcels of formerly collective land. Individual property titles should be the first step in supporting peasant initiatives, but later steps also need support. It is not enough to be an "individual" farmer, one must also be competitive in the new market conditions.

3. Exonerate the individual land title process from taxes, particularly when a property transfer takes place.

4. Negotiate the individualization of the old cooperative's collective debt with the National Development Bank (BANADES).

5. Provide a small amount of economic support so peasants can construct live border fences around their parcels, which will promote production diversification, medium term investment and a better incorporation of family labor.

6. Create a mortgage bank to orient the land market and help small producers buy parcels from those who want to sell.

7. Open the sources of rural institutional financing to support the reactivation of family units and those production cooperatives that have managed to consolidate.

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