Envío Digital
Central American University - UCA  
  Number 118 | Mayo 1991



Rural Workers Fight to Become Owners

Envío team

Shortly before the UNO government moved to woo international lending agencies by implementing economic "shock" measures, it started making good on its promises to privatize state-owned enterprises. While a few individual urban factories have been closed or returned to their former owners, the first moves toward massive privatization took place in the countryside. Like their urban counterparts, agricultural workers challenged government plans to return state properties to the old landowners or put them on the auction block and countered with a demand for privatization to the workers. By mid-February, with the distribution of state cattle enterprises, these efforts began to bear fruit.

Government-owned agricultural land—more than a million acres—and agroindustry make up some 60% of the value of all state property. In contrast to the many nearly bankrupt state industries, the agricultural sector includes highly productive and profitable farms and processing operations. These are both more attractive to private investors and more viable for worker-ownership than industries saddled with obsolete equipment and dependent on expensive imported inputs. As exporters, producers of coffee, cotton and beef also benefit from the recently imposed economic measures while industries that primarily produce for an internal market in recession face greater odds.

These factors augur a prolonged and arduous struggle for privatization to the workers in the countryside, but the Farm Workers' Association (ATC) has certain advantages. For one, the organization faces little competition from the pro-government unions that, in urban industries, have often favored a former owner's return and divided the work force. Agricultural laborers, many of whose lives improved dramatically with the revolution, voted overwhelmingly for the FSLN in the 1990 elections and offer a fairly solid base of resistance to efforts to reimpose the rule of the old boss.

Round one

The first round of struggle in the countryside began shortly after Chamorro's inauguration, when workers occupied farms to prevent the return of former owners—first through rental agreements under Decree 10-90 and later through definitive rulings by the Confiscations Review Commission established under Decree 11-90. Like state workers elsewhere, 70 workers seized the Los Tololos state farm near Masaya in April of last year, when the new government tried to lease it back to the former owner. They planted sorghum and sesame despite the lack of state financing and as part of the July strike accords, won a temporary victory that left the farm in their hands.

In the ensuing months, faced with government insistence on implementing Decree 11-90, workers seized more farms. Though the ATC supported—and often coordinated—these actions, "people don't always wait for coordination," said ATC leader Edgardo García. On more than one occasion, violent clashes occurred. When former owner Alejandro Salazar forced his way onto the La Cumplida state farm in Matagalpa and one of his bodyguards shot a union member's mother, angry workers burned his car and chased him out through the coffee fields.

Meanwhile, landless former contras and veteran Sandinista soldiers also made moves to seize state property. A group of 80 ex-soldiers invaded La Cumplida in late February, saying they were willing to share the land with the workers. ATC leaders indicated that, at least in some cases, takeovers had been planned with union approval.

Not until the October concertation agreement did the government formally recognize workers' right to ownership of state enterprises. Unlike the urban setting, where workers fought isolated battles in individual factories, each negotiation in the countryside included all farms and processing plants grouped in a state corporation covering an entire branch of agriculture: cattle, coffee, cotton, rice, tobacco and others.

Hatonic accord

Hatonic, the conglomerate of 16 state cattle enterprises, which includes several hundred individual cattle ranches and comprises 62% of all state land, was the first to be negotiated. From the government's perspective, the extensive and undeveloped cattle lands on the agricultural frontier offered an opportunity to relieve pressure from agricultural workers, ex-contras and former soldiers as well as prove an ideological commitment to privatization to international lending agencies and its rightwing constituency.

The ATC held discussions ranch by ranch to determine the level of commitment to fight for worker ownership and the economic viability of each unit. On that basis, the union's national leadership made decisions about which estates to fight for, and coordinated the negotiations that began in December.

In most, if not all cases, the farms' administrative staffs backed the struggle for privatization to the workers. At the Camilo Ortega Enterprise in Masaya, 67 of the 70 administrative employees sided with the workers. The director was one of them, though one worker warned, "We don't know when he'll run out of gas."

By the time the talks began, all state cattle ranches, as well as many other state farms, were in the hands of workers and/or other groups. Production proceeded, though with severe limitations. The economic crisis and lack of credit had driven many enterprises to the brink of bankruptcy and their worker-controlled administrations had been forced to lay off thousands of permanent employees and close health posts and daycare centers for lack of funds.

By February, after seven months of worker occupation, the Camilo Ortega enterprise had 3,400 idle acres and had cut its work force from 1,500 to 300. Those laid off were allowed to maintain their subsistence plots on state land, given severance pay and promised their jobs back when and if the enterprise recovered. The struggle, as Los Tololos worker Isabel Suazo expressed it, "is not a box of candy."

The economic hardships combined in some cases with internal splits or conflicts with the surrounding community. At La Cumplida, which includes both coffee and cattle, some workers turned out to greet the former owner. "He was a good boss; always good to his hired hands," said one older Salazar employee. At Los Tololos, local farmers sided with the former landowner, hoping—according to workers—for a piece of his land for themselves.

An agreement to distribute Hatonic's 525,000 acres was finally reached in mid-February. The workers received 32.1%; former landowners 26%, ex-contras 22.8% and former soldiers 19.1% of the land. Each group's portion was made up of a number of individual ranches. The workers received 56, which were turned over to some 1200 field workers, technicians and administrative employees. Beneficiaries will pay for the value of improvements to the land as well as assets such as livestock and machinery, but not the land itself. Payments are to be made over a ten-year period at favorable interest rates. Commissions were established to evaluate the assets of each ranch.

The accord includes clauses to protect the rights of former Hatonic workers on ranches being transferred to the private sector. These workers—even the ones currently unemployed—are guaranteed continued access to their housing and subsistence plots provided they have occupied them for at least three years. The returning landowners must respect workers' previously won collective bargaining agreements.

Continued conflict

Some 15 properties remained in conflict. At Los Tololos, for one, workers refused to accept the ATC's decision to cave in to government pressure and return the farm to its former owner. "We have more than enough right to claim this land," said Luis Oporto, president of the occupying collective.

Local union leader Alfonso Rosales stressed that Los Tololos and two other estates in the Camilo Ortega enterprise being reclaimed by former owners were only given up by the ATC on condition that the government guarantee worker ownership of others within the enterprise. He said that workers would be offered land elsewhere in an effort to convince them to give up their fight. "If we are in constant tension, how can we produce?" he asked. If workers don't give up the farm, he added, "there’s no way they'll give us credit. Without resources, what can you do with the land?" But, Rosales added, the union would back the workers if they chose to continue their fight. "We respect their right to resist," he said.

There was also grumbling on the Right. Some large ranchers complained that government negotiators ignored their legal claims to land in the cattle sector under Decree 11-90. "What Hatonic is doing is illegal and violates the law because you can't sell, divide up or give away what doesn’t legally belong to you," said Rosendo Díaz, representing the COSEP-affiliated large farmers' association. COSEP leader Gilberto Cuadra deplored the fact that "the usurpers have more rights to property than the legitimate owners."

A month after the Hatonic agreement was announced, cattle ranchers in Estelí formed an association of confiscated owners and demanded the strengthening of the Confiscations Review Commission established by Decree 11-90. The group, which includes some 150 members, vowed to organize all those unjustly confiscated. But while the Hatonic properties were essentially disposed of, the rich state coffee and cotton lands were still in their sights.

Capitalism with a twist

As the struggle for privatization to rural workers goes on, the ATC is beginning to define its conception of how the new worker-owned enterprises will function. Union leaders say they plan to "produce like capitalists and distribute like socialists." Groups of worker-owned farms will be organized as a corporation with shares distributed among currently employed permanent workers according to their seniority and qualifications. The stockholders will choose the director in an annual meeting and make decisions about the production plan. Any profits after investments and expenses will be distributed among them.

"We're going to have to be efficient and productive so we can make money," said Camilo Ortega leader Rosales. "It's not going to be easy." This will mean a more streamlined operation with fewer permanent employees than in the old days. Rosales and other ATC leaders said cooperatives, with their lack of technical expertise and labor discipline, have not worked. They emphasize the need for an administrative staff to guarantee technical support and follow-through on the production plan. "We don't want to improvise," Rosales said.

Given the existence of a management separate from workers and competitive pressures to increase productivity and profits at the expense of working conditions and benefits, it is clear there will still be a role for unions within worker-owned enterprises. The ATC will represent temporary as well as permanent workers in negotiating a collective bargaining agreement. The workers—whether shareholders or not—will determine together how the amount allocated for salaries and benefits will be spent.


While the dominant view within the ATC seeks to reproduce the structure of the old state enterprises, some workers appear to have a more radical vision. At Los Tololos, workers have organized themselves into a collective that bears more resemblance to a cooperative than to a corporation. "We don't want to go on being wage workers for a boss. We want this to benefit the whole collective," said production secretary Gabriel Jarquín.

At La Cumplida, union members talk about eliminating the position of director and electing a collective leadership. At both farms, workers have clashed in the past with Sandinista-appointed directors who did not represent their interests. Union members say the director at La Cumplida blocked their first attempt at a worker takeover. "He says he's a Sandinista, but we don't know what he's like inside," said worker Daniel Santos.

The idea of giving more stock to those with greater training—and higher salaries—was also challenged by some workers who suggested that those who earn least should receive more shares to avoid creating a new elite. "We don't want the big guys to swallow up the little ones," said one local union leader who proposed work discipline as an added criterion for stock distribution.

Other critics—both inside and outside the union movement—have questioned not just the form, but also the whole concept of privatization to the workers. They stress the need to strengthen the union movement as a whole, rather than dividing workers by making some into owners. These observers fear that workers could become "declassed" and forget their proletarian roots. Even privatization supporter Rosales cautioned, "A person doesn't think the same in a little house as he does in a big fancy one." Finally, some warn of the possibility that business interests could take over the fledgling projects through stock purchases or foreclosure on loans.

National ATC leaders see things differently. "We workers can't go on being a wage variable," said Edgardo García. "We have to begin to be able to discuss other things—prices, marketing, interest rates and so on. For me, it's a kind of training process." Worker enterprises, according to this view, will strengthen the union movement by setting standards for pay, benefits and working conditions. The precedent set for worker ownership in agriculture could later be extended to other areas more difficult to penetrate.

In terms of business takeover, some ATC spokespeople say bylaws will protect against individual sales of stocks to business or landed interests; others say the only protection will be political work among workers to convince them of the dangers of such a move. But even so, says García, it is likely that the enterprises will need to seek capital from financial interests. He argues that this is a necessary risk: "The reality is, this is capitalism, not socialism, but it's a more modern, open capitalism than the other one, which was totally oligarchical and conservative."

The perils of competition on the open market during times of economic crisis and the possibility of government antagonism cutting off access to credit may also defeat this experiment in worker ownership. But, in the end, ATC leaders say, this is a practical, not ideological move. "We have no choice but to find a way to own those farms," said García.

The road ahead

As envío goes to press, negotiations over the privatization of state coffee and cotton farms showed signs of impasse. Here the stakes are much higher than they were in Hatonic. Both sectors have a much greater level of investment and profit potential, particularly in the processing of the crop. Perhaps for this reason, large numbers of former landowners are demanding the return of their property in these sectors.

The intensive cultivation and high worker-to-land ratio in cotton and coffee mean less room for maneuver in negotiations. In addition, while coffee enterprises can be divided into individual farms for distribution, government spokespeople insist that the economies of scale in cotton make this impossible.

Workers in both sectors have a bitter history of exploitation under the Somoza dictatorship and of militant struggles for their rights. With greater numbers concentrated on each farm than on cattle ranches, they gained more experience with worker participation in management in the last ten years and higher expectations.

In coffee, the ATC demanded 65% of the land; the government responded with an offer of 26% (45% for the private sector and the rest to ex-contras and former soldiers). In cotton, the union proposed 50% for the workers; the government offered 20% (70% for the private sector). Processing facilities and transportation equipment were also in dispute.

The workers of Agroexco, the state cotton corporation, gave the government an ultimatum: respond to their demands or face a wave of indiscriminate land occupations. Workers would not be the only ones to participate in takeovers. "It's certain that if they give back Santa Carlota, the poor of all the surrounding communities won't hesitate to go into those farms they've had their sights on but have respected because they belonged to the workers," Apolonio Cano, a cotton worker in northern Chinandega, told Barricada. Union spokespeople say the threat of a massive giveback to the agricultural bourgeoisie has united agricultural workers, poor farmers and former soldiers and contras.

The government faces pressures from all sides. The loudest on the right are undoubtedly the aggrieved victims of Sandinista confiscations. Others are quieter. Chief government negotiator Ricardo Barrios acknowledged that there are pressures for privatization from international lending agencies, but added, "They are pressures we share." The kind of privatization the IMF and World Bank have in mind, however, is not likely to include a large sector of worker-owned enterprises.

On the other side, the government confronts a potential massive strike and occupation at a key moment in the planting cycle, particularly for cotton. Behind this are the landless, the poor, the demobilized and agricultural workers like Daniel Santos, who said firmly, "Working for a rich man is hard. They pay you what they feel like; they only give you rice and beans and they fire you if you speak up. Now we've taken the yoke off, we don't want to put it back on."

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