Envío Digital
Central American University - UCA  
  Number 72 | Junio 1987



Rural Cooperatives: Breaking New Ground?

Nitlápan-Envío team

Today something far greater than economic demands and pluralism is at play in the Nicaraguan countryside. The meaningful participation of peasants in the agrarian reform process has grown to such a degree that it is producing a new wave of democratization within the cooperative movement as well as in the relations between state institutions and peasant organizations. This phenomenon stands alongside the process of institutionalizing the revolution and the democratization expressed in Nicaragua's 1984 elections, the Constitution and the advances in the autonomy process on the Atlantic Coast.

The peasants' participation, their newfound confidence in themselves and their persistent search for concrete solutions has highlighted a series of problems in the cooperative movement. It has also sparked a major debate about democracy in the countryside. The agrarian reform process and the revolution in the Nicaraguan countryside have paved the way for this open discussion of problems normally kept under wraps by governments that in an authoritarian fashion prefer maintaining the status quo over liberating the oppressed classes.

The FSLN is promoting a campaign this year to strengthen the base of the cooperative movement. This campaign is both a result of growing peasant participation and a way to broaden the movement and channel its efforts into Nicaragua's ongoing battles of production and defense.

The turn given Nicaragua's agrarian reform by the peasant population in the first months of 1985 (envío, August 1985) ushered in this new phase of democratization. Over the last two years, the new tendency to provide individual plots of land and the increasingly flexible cooperative model have resulted in a matured critique of the concept and style of the cooperative movement, precisely the peasant critique that provoked the turn.

At the same time, the peasant initiatives have provoked self-criticism by Sandinista leaders and cadres regarding what they themselves identify as the "top-down style of management in the agricultural sector."

In the crucible of pressures resulting from the war, the economic crisis, the inevitable distortions caused by the economic transformations in Nicaraguan agriculture, the growing size and strength of the cooperative sector and the voice of the peasant population—heard more and more in the broad play of social forces—a new working consensus has been reached among leaders, party members and agricultural specialists. All are agreed that the new correlation of forces, characterized by the strategic decline of the counterrevolution and the acute economic crisis facing the country, demands new measures regarding the problems affecting the cooperative movement and the revolution's interest in the countryside.

The cooperative movement itself is not in crisis, and in fact is advancing. It is precisely its advances that suggest the need to reformulate some aspects of the Sandinista strategy for cooperative development implemented in the initial stages of the revolutionary process.

However, although everyone agrees that problems exist, the debate is still open as to what the solutions should be and what an adjustment of the cooperative strategy in Nicaraguan agriculture will mean. The peasant population itself, guided by its immediate interests, is opting for spontaneous solutions to its difficulties. Some rural leaders deeply question the management styles in the cooperative movement and propose putting the peasant population at the movement's head in order to solve the current difficulties, overcome the top-down style and assure that the peasants themselves are increasingly the protagonists of the process. Others advise only a transformation of those cooperatives headed up by agrarian reform officials, fearing that the peasant population itself would go off in more conservative, rather than progressive, directions.

These last two positions, both expressed by FSLN members, speak to the need to strengthen the base of the cooperative movement, but differ in their political position. The first values the experience of the peasants and base-level cadres in developing the cooperatives and believes that lessons can be drawn from them in the search for solutions consistent with the revolutionary process. The second is characterized by a tendency to send down quick-fix solutions from the top that the peasants and base cadres must then assimilate.

In the midst of this diversity of opinion, the FSLN opted to open new arenas for democratic discussion and strengthen the base of the cooperative movement. The campaign it initiated in March uses two types of actions: first, regional and national seminars for Sandinista party members in the rural sectors to provide for permanent attention to and study of the cooperative movement's problems and solutions; and second, mobilization of the peasants so that they themselves solve the problems and increase their capacity both to organize and self-manage the agrarian reform process. Through this campaign, then, the FSLN is proposing to open a political space in which the rural representatives of the revolution might change their top-down style and the peasants achieve a greater participation in the process of forming cooperatives in order to solve the economic problems of the cooperative sector.

In this issue, envío will analyze this new twist that the peasants and Sandinista cadres are giving the cooperative movement. Starting from a context of the movement's achievements and the early limits imposed upon it, we will also try to focus on the different political positions that have sprung up between the peasants and agrarian reform officials involved in this process.

Rapid growth brings new problems

The agricultural cooperative sector has been a dynamic one over the last three years. In 1983 the large landowners, small producers and poor peasants all garnered more or less the same amount of long-term credit for agricultural investments. But by 1986, the small producers and poor peasants received almost three times as much long-term credit as the large business sector.

Within the peasant sector, it was the cooperatives that most increased their level of investment. In 1983, they controlled 47% of the long-term credit awarded to small producers and peasants; by 1986 that figure had increased to 67%.

At the beginning of 1986 cooperative production accounted for one-fifth of the gross domestic product (GDP) in Nicaragua. Its importance in material production was even more significant.

Given this importance to the national economy, the cooperative movement has become a fundamental concern for Sandinista policymakers. The 1987 Economic Plan demonstrated that this sector should be very carefully integrated into national economic policy, and it can be predicted that the sector will continue to grow. In an agrarian country, with an essentially peasant-oriented social and economic structure and an economy profoundly distorted by the presence of a strong informal urban sector—representing over half the economic activity in the cities—the cooperative process, both urban and rural, is a strategic piece in the overall economic puzzle. It is quite possibly the key to the social organization of production, and the foundation on which the new revolutionary economy should be developed.

In his speech at the First National Peasant Congress, held by the Union of Small Farmers and Cattle Ranchers (UNAG) in May 1986, Comandante Luis Carrion talked about the cooperative movement in Nicaragua: "This movement, although still not consolidated, has already transformed the lives of thousands of peasants and has constituted itself as a firm revolutionary base with enormous productive potential.... We’re entirely convinced that the cooperatives are the only viable route to make it possible for tens of thousands of small producers to gradually leave behind the poverty and backwardness to which they have historically been relegated.... It's true that many cooperatives have confronted problems and difficulties, and that's logical as they represent a new experience by which the peasants themselves have to learn many things through daily practice…. Not enough has been done about this to date and many valuable experiences are largely unknown and have not been learned from. This needs to be corrected in the immediate future.... But at the same time that we strongly support the cooperative movement, it should be clearly stated that the FSLN categorically rejects the use of compulsion or force in the forming of cooperatives. The distribution of land to peasants who demand it should not be used as a means of forcing them into cooperatives. No one can or should be obliged to become part of a cooperative against his or her will. Cooperatives should come about only as an expression of the peasants' free will and both the government and the FSLN should be promoting the cooperative movement through persuasion rather than force. UNAG must watch for strict adherence to these principles on the part of all government officials."

The Sandinista Agricultural Cooperatives in the war zone represent a virtual "minefield" for the counterrevolution. Furthermore, the Nicaraguan cooperative movement in general appears to have obtained better results when compared with similar experiences in agrarian reform programs carried out in Chile under Salvador Allende's Popular Unity government, and in Peru under the Velasco Alvarado government. Nonetheless, the agricultural cooperatives suffer from some fairly serious problems. Given the size of the sector, these problems also affect the national economy as a whole.

In his presentation of the 1987 Agricultural Plan, Jaime Wheelock, the minister of agricultural development and agrarian reform (MIDINRA), discussed weaknesses within the cooperative movement and the agrarian policies carried out by MIDINRA from 1979 to 1985. He pointed to an overemphasis on a strictly economic vision of the agrarian reform, along with a neglect of the economic consolidation of the cooperative sector. "The agrarian reform is humanitarian. It is a political project about basic rights, but it’s also an economic project, and it has to be demanded of the cooperative movement and of ourselves as well that the movement be transformed into one that is both political and economic.... [The peasant population] has to be a leading force in the economy and we have to make both peasant production and the cooperatives economic models in which we invest and work with to perfect our revolution."

ABCs of the cooperative movement

In the Sandinista Agricultural Cooperatives (CAS), the peasants collectively own the land, working it together and sharing its production. In the Credit and Service Cooperatives (CCS), the peasants share technical assistance and other services, but maintain individual ownership of the land.

The Surco Muerto Cooperative (CSM) is a mixed model: ownership of the land, which is divided into individual lots separated only by an unplanted furrow (thus the name, surco muerto), is collective. Some services and tasks, such as preparing the soil, are carried out collectively, while other jobs are done on the individual plots using family labor.

The Traditional Cooperatives or Limited Responsibility Cooperatives (CRL) are credit and service cooperatives formed before the revolutionary triumph by poor peasants and small producers.

As long as the agrarian reform has a "charitable" character, based primarily on distributing land and credit, it will, as Comandante Wheelock pointed out, "be a simple humanitarian reform." In this sense, he added, "the Sandinista Agrarian Reform would have a significant Christian content, but would lack a revolutionary content, which is to take this political-social transformation and effect an economic transformation that could function as a foundation for the future."

According to Wheelock, the negative tendencies in the movement sprang from an excessively rigid and inflexible way of promoting certain cooperative models along with a lack of training among the cooperative members who were to head up the movement. This caused a series of problems. Wheelock identified the principal ones: contracting wage labor without incorporating the laborer's family into the work; the lack of internal democracy within the cooperative movement; the abandonment of cooperatives by members, which has resulted in 75,000 hectares of land left fallow; poor use of the surplus; poor planting programs; problems in self-management and administrative capability; lack of cooperation and organization between different cooperatives; and in particular the weaknesses in the organization of the small producers in the Credit and Service Cooperatives.

This series of problems and negative tendencies in the cooperative movement, along with the spontaneous growth of the base and its lack of social control, are in some measure a reflection of an overly top-down state management that discourages peasant mobilization and participation.

The historical context

All these problems are closely linked to 1) the history of the Sandinista cooperative movement; 2) the weaknesses of the agrarian policy and its technical cadres (the majority of whom come from an urban background and have little experience in organizing peasants); and 3) more than anything, the limitations imposed on the revolution by the US aggression, along with the restrictions resulting from the international economic crisis.

The Nicaraguan cooperative movement, like the revolutionary process itself, has had to develop in a context of crisis and aggression, and has gone through three major phases.

Phase I: 1979-1982. Consolidation of the state sector and credit programs for the peasant population.

Within the revolution's agrarian policies, the decision to concentrate a majority of resources and efforts on the state sector (the Area of People's Property, APP), postponing until 1982 the strong promotion of the cooperative movement, has been sharply questioned. This decision was based in large part on political considerations. Already by August of 1979 the government had decided to put a brake on land takeovers by the peasants, therefore also holding back the formation of the first Sandinista Agricultural Cooperatives.

With that political measure, the FSLN hoped to guarantee national unity against US aggression during the early months of the revolution and to avoid the insecurities and social conflicts that always accompany land expropriation and massive land distribution to a peasant population. There were also economic reasons behind the decision to hold back both the pace of the agrarian reform and a full-fledged movement towards production cooperatives. It was essential to raise production levels, which had fallen precipitously during the war of liberation, as quickly as possible. The FSLN also wanted to avoid the return of vast numbers of salaried agricultural workers to peasant conditions (largely self-sufficient agricultural work) and the consequent shortage of labor for Nicaragua 's key agroexport crops.

Through sustained injections of credit into strategic state and urban development programs, tens of thousands of peasants were integrated into these projects as wage workers, under better working conditions than they had experienced during the Somoza dictatorship.

The revolution's early policy of controlling peasant land invasions, prioritizing the creation of the APP and taking only cautious first steps in organizing peasants effectively left the peasant population without a leading role in the agrarian reform process. It also had a negative influence on both the later development of the cooperative movement and the character of the revolutionary alliance between urban sectors and the peasant population.

Although the decision to postpone the distribution of land to the peasant population tied the hands of the FSLN in terms of developing a strong cooperative movement, it must nevertheless be recognized that the decision was an important element in reviving the national economy and improving the conditions under which the country could confront the US threat.

For example, the policies resulted in an annual 10% growth rate in the agricultural GDP between 1980 and 1983. On the other hand, it should be taken into account that in all socialist revolutions to date, the classic agrarian reform model has been to parcel out land, followed by a long process of forming cooperatives and creating a state agricultural sector through the use of credit, investment, technical assistance, marketing and other policies.

In Nicaragua, however, the agrarian reform began in a very different way, with the creation of a strong state sector. Instead of distributing land to the peasants, the revolution distributed credit. The enormous expansion of credit—from 4% of the entire credit package under the Somozas to 23% in the revolution's first year—was greeted enthusiastically by small individual producers in the countryside. They quickly organized into 1,185 Credit and Service Cooperatives and 876 pre-cooperatives (as those with fewer than 10 members were known). Rather than functioning as true cooperatives, however, these cooperatives were little more than banking outposts in the countryside. They shared no services and received no technical assistance or training.

Later, this cooperative sector, which unified peasants only on the basis of credit, went into decline. Of the 2,000 cooperatives founded in the first year of the revolution (see Tables II and III), 1,500 disappeared due to the lack of state attention beyond merely supplying credit, the high debt levels accumulated by the cooperative members, the reduction of credit to poor peasants in 1981 and later, the impact of the war. Between 1981 and 1986, a process of recovery and reformation of these cooperatives began; they were replaced with new cooperatives, many of which suffered from some of the same problems.

During this first phase of the cooperative movement, the CASs were in large measure the product of a struggle for land by rural semi-wage laborers and poor, landless peasants. By the time of the insurrection and in the first few moments after July 19, 1979, many of these peasants, assisted by Sandinista cadres and the Association of Farm Workers (ATC), had begun to carry out land invasions. They took over land, primarily in the areas near León and Masaya, working it collectively or in proto-cooperatives.

But the peasants' struggle to retain control of the invaded land and take over new lands came into contradiction with the policy of national unity. The FSLN's decision to hold back the land takeovers and the development of the cooperative movement met resistance among those poor semi-wage laborers who had collaborated with the FSLN during the insurrection. These tensions—expressed on February 9, 1980 in an ATC-led demonstration in Managua with the slogan, "Not one more inch of land back" (to its old owners)—modified the FSLN's policy. They permitted the survival of almost 500 CASs. These were consolidated during 1980-82 even though they only controlled 1.2% of the land by the end of the period and had many problems springing both from the instability of the cooperative members and the weakness of state support and services.

Phase II: 1982-1985. Emphasis on the CAS model and semi-wage laborers over the CCS and medium-sized farmers.

During the second phase of the cooperative movement, the revolution promoted the CASs among rural semi-wage laborers. At the same time, from 1982 on, agricultural workers' real wages began to deteriorate, a process that was to deepen in the following years.

As can be seen in Table III, while the number of CAS members tripled, that of CCS members fell by some 10%. The prioritization of the CASs over the CCS—that is, favoring a collective form of production over a model based on individual parcels of land—was felt by the peasant population as an imposition on them by the revolutionary government.

Speaking of the organizational weaknesses in the cooperative movement, Agricultural Minister Jaime Wheelock remarked in the First National Seminar of Cooperative Movement Cadres, "The second organizational aspect is the organizational inflexibility we’re suffering to some degree. This probably has to do with problems of our experience, top-down problems in the model, which have been pointed out. What is clear, however, including in the war zones, is that although we have emphasized in the first phase of agrarian reform for landless peasants that this should be through a process of individual plots, we’ve found that the CAS project continues moving forward, and is the strongest. There aren't even credit and service cooperatives, or stores; rather the collectivization of the land is direct, and the cooperatives are virtually state production units."

Today, many agree that this inflexibility and the decision to make the granting of land plots conditional on the incorporation of peasants into collective production structures created difficulties for a stable, participatory and politically solid transition toward an efficient system of production cooperatives.

Despite the problems generated by the lack of state flexibility in the face of peasant demands regarding their family economy, it would have been a mistake not to take advantage of the potential for economic organization, mobilization and apprenticeship for the peasants represented by the advance in the organization of production cooperatives. This was particularly the case because there are CASs—especially among the earliest ones, which struggled hardest for their existence—that have been consolidated and are ready to share their experiences with others.

As mentioned before, this decision was largely a political one, based on the classic socialist agrarian reform strategy: "unleash" the peasantry against the landlords and then begin the arduous process of peasant cooperativization, slowly moving from credit and service cooperatives to agricultural production coops. The decision to place priority on the CAS was also motivated in this period by a desire to maintain economies of scale and to avoid "repeasantization" on small plots.

As with Chile and Peru, the decision in Nicaragua to emphasize production cooperatives and discourage tiny parcels of land was born not only of the need to provide guarantees to the landholding bourgeoisie, preventing the spontaneous invasions of their land, but also of the interaction of social forces: semi-wage earning peasants were fighting for land and many Sandinista cadres from urban origins were struggling to bring modernization and progress to what they considered the backward rural sector.

What were, in greater detail, the historical and social roots of the decisions that marked this second phase of the development of the cooperative movement?

During the first phase, as we noted, poor, semi-wage earning peasants were the social energy behind the creation of the Sandinista Agricultural Cooperatives. The CAS model was produced by an alliance between those peasants and Sandinista cadres from the urban insurrection. The rural semi-wage laborer on the outskirts of the cities where the Sandinista insurrection occurred were the "natural" allies of the urban guerrillas for the construction of the first Sandinista associative forms in the countryside. Poor, and without the stable roots in the social structure of the small peasant producer or the full-time agricultural proletarian, the part-time agricultural wage-earner was a very complex figure. Such a person was accustomed to playing various social roles according to need: peasant, wage-earner, migrant worker, seasonal entrepreneur or unemployed worker. He or she had to be quick and audacious to survive amidst the inequalities of the Somoza world.

When semi-wage earning peasants pressured for land takeovers—especially in León and Masaya—Sandinista cadres from urban backgrounds offered them the farms they judged the best, those already developed and modernized, with confiscated tractors, infrastructure, investment and fuel.

For the peasants, they were merely the best lands. For the urban cadres, they were lands that required collective work, that could best guarantee modern, technically proficient and more collective administrative structures. This view was definitely a more "socialist" one. In offering them, the Sandinistas also offered the peasants the ideals of a new, more just and egalitarian world. For the urban cadres, the cooperative and its internal organization represented the guarantee of access to this new world, even in those cases where the resources necessary to move to a collective production scheme were not available.

The three commandments for being a "good Christian" in the Sandinista cooperative movement at the beginning were: 1) not to possess private property, 2) work together in a community or a collective, and 3) share the proceeds equally. The mortal sin was individualism, symbolized by the peasant's tiny parcel.

In expecting that the semi-wage laborers could immediately fulfill these commandments, some Sandinistas fell into idealistic, utopian attitudes. The peasants wanted a new world, but weren’t necessarily disposed to live immediately according to the three commandments. There was, as Wheelock recalls, an excess of humanism, giving "alms" of land, tractors, machinery, investments and a more modern form of organization in expectation of a rapid conversion from all the attitudes and customs of the past. There was no clarity regarding either the microeconomic and organizational environment necessary for such a transformation, or the importance of the peasants having a protagonist role in setting out the rules of the game. The intent to inculcate these three "commandments" was characterized by paternalism, not only in the giving out of land, machinery and new technology—which diminished peasant responsibility—but also in the interpretation and application of the agricultural cooperatives law.

Although the peasants were already accustomed to working as laborers in collective squads on the same farms they were invading, and the experience of seasonal wage labor was their common denominator, the great majority of them were also accustomed to renting land to sow and reaping their own harvest with help from the rest of the family. In some cases, the "commandments" clashed with the lack of resources to carry them out. Many times, the peasants didn’t accept the new forms of organization and there was no program of technical and ideological training to establish common criteria among the agrarian reform cadres and the partners of these first Sandinista cooperatives. The collective organization of production was, for the semi-wage laborer, the disagreeable price that had to be paid to gain access to land.

However, with the pressure for land and the implementation of the 1982 Agrarian Reform Law, the revolution gave priority to the CAS model, conditioning the distribution of land and investments on collective organization of production. From that moment, the CAS were conceived as the keystone of the cooperative sector. Still today, for many Sandinista cadre in the countryside, the only "real cooperatives" are the CAS.

From 1982 to 1985, the government gave priority to the CAS model. The CAS today control 11% of the nation's arable land and have some 26,000 members, 30% of the cooperative movement in all. In that period, CAS members began to be "the favored pets of the cooperative sector." Owners of the best land in Nicaragua, they absorbed a great percentage of state support in terms of technical assistance, access to capital and long-term credits. Some CAS grew dramatically in resources and participants, simply because for some cadres the fact that they were "big" guaranteed that the organization would be more advanced. In reality, many of them gradually became dependent on a paternalistic type of assistance.

The economic privileges the CAS received over the other cooperative models didn’t produce the economic, political or ideological consolidation that the architects of the Nicaraguan cooperative project had hoped for and expected. This provoked questions in the FSLN, not over the role of the cooperatives within the present model of agrarian development so much as over the FSLN’s top-down mass line and the style of political conduct in the countryside.

One of the roots of verticalism in the promotion of the CAS was the idea that being a semi-wage laborer prepares a peasant to be a member of a production collective. In reality, many of the problems that came up in the CAS in these years had their roots precisely in this social base: the rural semi-wage laborer. A cooperative will have difficulty operating efficiently if its members don’t have a serious concern for production, a profound identity with the land, with sowing and cultivating. These qualities are more easily found among small peasant producers with their individual parcels of land than among rural semi-wage laborers who don’t see their vocation as moving rapidly to become collective producers.

Simply put, the rural semi-wage laborer isn’t prepared for the direct leap to being a member of a production collective, which is a difficult and complex move. It’s not impossible, but it requires sustained ideological leadership and considerable training, which can’t be obtained through voluntarism. In Nicaragua this leap was attempted but, as in other countries, the resources for training, advising and following up on the cooperative movement were insufficient.

This was the context in which the semi-wage laborer failed to fulfill the "idealistic" expectations that the promoters of a land reform similar to others in contemporary Latin America had for them. In Chile and Peru, this peasant sector didn’t respect the "three commandments" of a "good" cooperative. It didn’t respect them in Nicaragua, either.

In this sense, the majority of the CAS production cooperatives in Nicaragua appear to have the same problems as were encountered in other countries, in which a direct leap was attempted towards collective production on a base of agrarian semi-wage labor. Despite everything, the relative solidity of the Nicaraguan CAS compared with the coop experiences in Chile and Peru suggests a commitment, both by the agrarian reform cadres and by the peasants, to a profound social revolution that is confronting imperialist aggression.

According to MIDINRA leaders, the problem has its roots in the acceleration of the cooperativization process and the lack of human resources for education and training. In its presentation of the work plan for 1987, MIDINRA’s minister noted, "The other problem concerns the management of the cooperative movement.... We have organized the cooperative movement with semi-proletarians and poor peasants... and although we have made a great effort to train them, the truth is that we’ve only covered some cooperatives. As a result, the cooperative leadership is weak and giving them massive support is very complex."

In an interview with the newspaper Barricada, Comandante Alonso Porras, the agrarian reform director, said that the rapid birth of the CAS came about because "we were conscious that it was the only and best form for the peasant to reach a higher standard of living and self-development." The other reason for accelerating the process was the war, which obliged small and medium-sized producers to unite "not so much for economic reasons as to defend themselves and to survive."

According to Porras, "to move from an individual or family economy and consciousness to a different form of collective organization requires the development of social consciousness in a gradual process of apprenticeship and that process was accelerated by the characteristics of the CAS model, which gave no space to the peasant's individual demands."

These difficulties can only be overcome today with political-ideological work of education and cultural development of rural semi-wage laborers, in a gradual and flexible process of cooperativization in transition towards more complex forms of socialization. Time is a crucial factor in the process of consolidating a cooperative movement.

Until now, many of the government officials in the countryside haven’t taken that sufficiently into consideration, understanding "superior forms of organization" in a highly idealistic manner, disconnected from the immediate interests of the peasants and the country's real possibilities of developing those higher forms. Searching for their goal, they believed they were only a step away and thought, as is said in Nicaragua, that "to make a bottle, you just have to blow hot glass from a tube." From this crisis has come a new consciousness that the solutions to the problems confronting the cooperatives can’t be found idealistically through better economic-administrative-management, but through a comprehensive treatment in which the FSLN, with all the institutions it has launched in the countryside, discuss politically and ideologically the interests of the peasants and the revolution, in all the spheres of cooperative life.

As Wheelock remarked to the cadres of the cooperative movement, "A third structural problem has to do with a subjective problem, one quite far from the cooperative movement, more closely linked to the organization of revolutionary power.... Some compañeros have mentioned that there has been a lack of integration, a lack of coherence among ourselves. We know there are limitations, that there have been problems, to a certain degree objective ones, but they aren’t beyond our control to resolve. After seven years, this is the first time we’re meeting in an assembly of all the relevant forces to discuss how we’re going to move, what the government is going to do, the FSLN, UNAG, the ATC, women. That we haven’t discussed.… Sometimes it’s believed that the cooperatives are a problem institution. And since MIDINRA has a section called Agrarian Reform, it’s assumed that it’s a problem of MIDINRA or of the Agrarian Reform Section, when in reality it’s a problem of the revolution. It’s a problem that touches the changes in the entire society, and human consciousness."

Credit and service cooperatives: A less developed model

During the second phase of the Nicaraguan cooperative movement, the excessive confidence in the productive-administrative form of the state enterprises and of the CAS, and the almost magical belief that modern technology would bring success to these sectors, impeded the consistent development of simpler forms of cooperation, such as the Credit and Service Cooperatives (CCS).

One of the major deficiencies of the Nicaraguan cooperative movement has been the weak development of the CCS, particularly in the countryside where the majority of the traditional peasants live. As Table IV indicates, the CAS are found mainly in the heavily populated areas of the Pacific, near cities or near the most modern state production complexes in the countryside. But further away—in the theater of the counterrevolutionary war—the model that has taken root the most among the peasants is the Credit and Service Cooperative.

Some 73% of the CCS members are in Regions I, V and VI, the major area of the war since it began in 1982. Thus a single alternative has come to be repeated: the CAS for rural semi-wage laborers located near urban centers or in agroindustrial areas, the CCS for traditional peasants in deeply rural areas. In this set of alternatives, which were typically opposed to each other, one can see how prioritizing the CAS meant, in reality, emphasizing semi-wage laborers rather than traditional peasants who reside principally in areas affected by the war.

It should also be mentioned that the Sandinista strategy of peasant organization in the CCS had major limitations. The only contact the traditional peasants had with the revolution was through the bank and almost the only good received from the bank was credit. Thus the CCS have not managed to create a sufficient collective material base to provide services for the production efforts of its individual members. Even the handling of credit became reduced to "pass the money."

Outside of this limited service, the revolution left the peasants in the countryside to the mercy of the "rich" peasants, medium-sized producers, large farmers, the bourgeoisie, or in many cases, even large plantation owners. Little changed for the peasants, since in all material organization of production they depended on more affluent producers to satisfy the needs of productive investment and services, to get goods to market, to obtain consumer goods for their families and to obtain loans and transport in case of an emergency. Many times—and this is the most serious part of the problem—the poor peasant had no one to turn to, inasmuch as the revolution broke up unjust systems of commerce without replacing them with new systems.

This thin effort to bring the government closer to the poor peasants of remote areas and the low levels of relations and cooperation that existed among them were important factors that contributed to the counterrevolution's ability to confuse and manipulate a small but significant percentage of these farmers. The CIA and former Somoza National Guard members encountered a small breeding ground of contras among them.

But the lack of organization of traditional peasants is a factor not only in isolated areas of the countryside; it also pertains in some areas where there are sufficient roads and productive services. The link between state enterprises and individual producers was too weak, as MIDINRA itself has recognized. MIDINRA is now promoting the model of a "state territorial enterprise" to solve this problem, so the state enterprises and existing CAS can be launching pads for the democratic transformation of the agrarian sector rather than islands of state privilege, as they have been to a certain degree.

MIDINRA's strategy for the second phase, concentrating efforts on the 500 prioritized CAS, has been shown to be ineffective. At the beginning of 1985, the cooperative movement entered its third phase.

Phase III: 1985-present. The peasants adjust the cooperative movement.

The Nicaraguan government reversed the course of the war with the new policy of giving individual parcels of land to peasant farmers, giving sharecroppers titles to the lands they had been farming on the agricultural frontier, investing a higher percentage of the national budget to supplying the countryside, being more flexible in its cooperative models, as well as making major advances on the military front itself. The supply of foot soldiers for the counterrevolution dried up and the FDN entered a strategic decline.

Afterward, and as a result of the change in policy of the agrarian reform and the cooperative movement, peasant cooperation increased, provoking in turn a process of self-criticism within FSLN ranks regarding the cooperativization policy. The growing awareness of the deficiencies of verticalism can also be interpreted as resulting from making the agricultural cooperative model more flexible. Over these two years, peasant participation is producing a shift in all public institutions in the countryside and also in the FSLN’s mass line. The campaign to strengthen the base of the cooperative movement is a sign of this new turn in agrarian reform.

The counterrevolutionary defeat opens now an historic space for the revolution to demonstrate to poor peasants and small producers that they were right when they opted intuitively for the government of Nicaragua and against foreign aggression.

In the opinion of many workers in the Agrarian Reform Ministry, now is the time to consolidate military victories, producing even more and organizing traditional peasants according to their own demands, responding to what they want: less complex cooperative models designed in accord with their experience and the characteristics of each region of the country.

As Agricultural Minister Wheelock noted in the presentation of the 1987 Work Plan, "On the question of the models, we have observed organizational inflexibility. We introduced the Sandinista Agricultural Cooperative (CAS) model without evaluating it afterward, and the result is that many peasants aren’t interested in agricultural cooperatives; they have problems, their members quit, and a cooperative that had 30 members may be down to 10, and consequently have three times as much land as they can productively work. This is related to problems of inflexibility, as much in the CCS as in the CAS. Every territory must function in accordance with general norms that we’re going to review and formulate, and in their application the regions must participate actively in the definition of microeconomic models, to which the cooperative movement must adjust itself. The associative movement, the model of family labor power, must enter into discussion in this analysis. The other problem has to do with the running of the cooperative movement.... In the main we’ve organized the cooperative movement with semi-proletarians and poor peasant farmers, that is, with a population that before the revolutionary triumph was illiterate and didn’t know accounting. Although we’ve made a great effort in education and training, the truth is that we’ve covered only some cooperatives. Consequently, the cooperative leadership is weak, and giving them sufficient support is a very complex matter. From all this, it can be deduced that there’s much to do, and that neither top-down state management nor the economic deficiencies of the cooperatives can be tolerated."

Of the 180,000 rural families that it is calculated could enter the cooperative movement initiated with the revolution, only 76,000 are reached by the program of the General Direction of Agrarian Reform (DGRA, a department of MIDINRA). Another 14,000 are part of traditional "limited responsibility" cooperatives and some 40,000 are in cooperatives promoted by church-sponsored social action groups or in UNAG supply coops. A part of the 37,000 members in the UNAG supply coops are also organized in CAS and CCS cooperatives served by the DGRA. Aside from the challenge of increasing the levels of cooperation among the existing cooperatives, some 70,000 peasant families (about 40% of the potential cooperative population) have had no contact with revolutionary cooperativism. This potential is vital for a better territorial organization of production in a country in which organizational efficiency must be present in the economic battle.

A campaign to strengthen cooperatives

The FSLN's response to the turn the peasants are giving to the cooperative movement is a campaign to broaden public support for the cooperatives and the agrarian reform itself. On March 22, a conference was held to begin the campaign. At the conference, Jaime Wheelock called on the participants to prepare a plan "that takes into account the peasants’ suggestions and concerns. This plan should respect the peasants as our main sources of solutions to the problems of agrarian reform, abandoning any type of bureaucratic, highly administrative approaches." Likewise, he pointed out that "the peasants’ suggestions must be heard out, their problems must be identified and solutions to their problems must be turned into plans of action."

To emphasize the importance of the campaign, President Daniel Ortega sent a letter to the cooperative members. (Selections from his letter are reproduced at the end of this article.) Prior to the conference, FSLN members participated in workshops where they discussed the cooperative movement and the purpose of the present campaign. The campaign hopes to build more popular support for the cooperative movement and to channel the movement’s energies to face the challenges of the revolution in rural areas.

Debate over democracy

In the development of cooperatives, what are the real possibilities for constructing a political strategy that allows for grassroots participation? In the midst of the economic crisis and the war, what is the likelihood that this campaign will succeed? What are the possibilities that it will be able to transform the present form of state management into one that better heeds the criticism of the peasants as well as taking seriously the concept of a worker-peasant alliance? The fate of this new Sandinista experiment will depend largely on two factors: a) the ability of the peasants involved in the cooperative movement to organize and have their concerns heard and b) the Sandinistas' ability to both address the peasants' concerns and use those concerns for the interest of the revolution. In reference to the latter, there are two fundamental questions: What is the Nicaraguan peasants' revolutionary potential and will the Sandinistas be able to respond to and channel it?

Ultimately, whether any significant advances in the cooperative movement occur depends on how deeply the revolution influences peasants, government workers and rural political activists. Although the spectrum of opinion concerning the cooperatives is rather broad, it can be defined by four general positions. The depth of the revolution's influence will probably depend on how the tensions between these four political perspectives are resolved.

The first position is that of the agrarian reactionaries towards the agrarian reform. With their constant ideological exploitation of the cooperative movement's failures, this position tries to destroy the movement. It hopes that the peasants will reject the principles behind organizing altogether. Given this framework, it’s easy to predict that the reactionaries will use the political discussion opened up by the campaign to discourage the peasants from joining cooperatives.

The second position represents the sentiments of the peasants themselves. They feel that the solutions to the cooperative movement's problems can be resolved by accepting their immediate goals. Those who have an idealistic political vision tend to support this type of short-term thinking by the peasants as a solution to all the movement's problems.

The third position supports an attitude of prudence and continuity which is manifested by an unwillingness to change the present strategy for dealing with the cooperative movement. Reserving leadership of the movement for the state, this position is interested in management from on high.

The fourth position maintains that the revolution should direct the cooperative movement, but with more grassroots participation and base-level initiative, taking into account the interests of both the peasants and the revolution.

All those who closely follow the agrarian issue in general and the cooperative question in particular hold some elements of all these positions to some degree, even including certain vices of the reactionaries. Therefore, these four positions cannot be equated simply with one group or another. The picture is much more complex and obliges the peasants to pay closer attention.

The first position: Don't let the fox watch the chickens

The cooperative movement is the main economic, ideological and military target of the reactionaries and the armed counterrevolution. The vehemence of the attack against the cooperative movement indicates just how much the reactionaries and counterrevolutionaries see their interests threatened by this form of peasant organization.

The FDN has directed its terrorist attacks against the production cooperatives, making them its preferred military targets. As a result, more than 1,000 cooperative members have been killed since 1983. The contras attack the cooperatives with the intention of equating membership in the cooperative movement with certain death in the minds of the peasants.

The reactionaries also attack the cooperative movement as an ideological target, with the same argument it uses against the state sector. They claim that the cooperatives are just appendages of the state. Similar to their attacks on state-managed enterprises, they condemn the cooperatives as inefficient, opportunist and privileged because of their easy access to capital. According to this reactionary entrepreneurial perspective, the individual can produce more than the cooperatives and the state and with fewer resources, because the cooperative lacks what characterizes the individual producer i.e., self-interest.

At the root of this critique lies a profound contempt for peasants based on a deeply rooted lack of confidence in their abilities. This stance is best captured by the old saying, "Don't let the fox watch the chickens." In this view, peasants are incapable of administrating more than their own fields of beans and corns. Knowing that a consolidation of the cooperative movement by the peasants would be a direct threat to their interests, these business interests ridicule the cooperative movement in the hopes of eliminating it. Likewise, they know that a restructuring of the plan for cooperative development that meets the needs of the peasants and the revolution is as formidable a threat, if not more so, than the APP itself.

Finally, the small- and medium-sized private producers attack the cooperatives as economic targets, at least on the level of competition, by more easily avoiding governmental regulations. As long as individual producers can sell their products at higher prices and do what they want with the profits—which the cooperatives cannot do—it will be difficult to strengthen the cooperatives. Even though cooperatives have privileged access to investment capital and new technology, similar to state regulated operations, it will be difficult to guarantee the stability of their labor force and steady increments in levels of production as long their profit margins are lower than those of the private sector.

The second position: "Let us do it our way"

The peasants at the very core of the cooperative movement are giving the movement a spontaneous turn. Although they don’t doubt the advantages of being in a cooperative, they do have troubles with the way the cooperatives are being organized. Although the peasants are undefined politically, they will continue to have a deep influence on the future of the cooperative movement. They are pressuring the government to give them more leverage so they can adapt the cooperatives to their own needs, styles and desires.

However, this desire to fulfill their immediate interests gives their efforts a complex and contradictory character. What signs are there of this "spontaneous turn" by the peasants? There are many:

- Peasant participation in service cooperatives organized before the revolution, e.g., the traditional or RL cooperatives, continues to rise.

- The CAS cooperatives have high desertion rates. Those who leave either become individual producers or migrate to the urban centers in search of employment.

- There is ever greater flexibility in the cooperative scheme, which takes various forms.

- There is a diversification of the products grown, with or without state approval.

- Many CAS cooperatives are becoming Surco Muerto Cooperatives (CSM), an intermediate step between a CAS and a CSS. Between 1980 and 1984, the CSM represented only 3% of the cooperatives organized annually. In 1985, they rose to 9% and in 1986, to 12%.

- Individual gardens are expanding within the CAS. At a national level, some 14% of the total planting in the CAS in 1986 was in individual gardens. In Regions V and VI, they now occupy a third of the cultivated CAS lands.

- The participation of the cooperatives in the black market is growing.

- Cooperative directors who don’t have a flexible approach to organization are being criticized. The top-down style of some of the CAS base directors is seen as an attempt to guard their positions and privileges.

- Cooperativism outside the boundaries of state regulation is growing. There has been a considerable increase in the number of UNAG supply coops and cooperatives sponsored by religious groups. If, on one level, these increases show the peasants' interest in the cooperative movement, it also interesting to note that the projects avoid describing themselves as cooperatives. Rather, they use names such as stores, projects, commissions, associations, etc. All of these cooperative movements outside the state sphere fill a void that the state itself left by not dedicating enough energy to promoting the less advanced levels of cooperativization within the credit and service cooperatives.

The political meaning of the new turn

What is the significance of the spontaneous turn that is taking place within the cooperative movement yet outside of the Sandinista cooperative development strategy?

On this point, there are two rather different perspectives. Some see the growth of cooperativism outside of the revolution's agrarian project as a setback for the Sandinistas in the rural areas. Others see it as an opportunity for a new, firmer and more dynamic Sandinista leadership among the peasants if they can respond to and guide it. Basically, the same types of questions arise when dealing with the cooperative movement as when faced with other social and political phenomena: concretely, what is the Sandinista movement in rural areas? Is it simply the number of peasants with political links to the FSLN? Or is it rather peasants mobilized to solve their problems, whether or not this mobilization has an explicitly political bent?

In the insurrections of 1978 and 1979, the FSLN's ability to empower social movements not directly under party control was one of its most original features as a political movement. To paraphrase Comandante Humberto Ortega, the party was able to form relationships "without strings" with these various movements while consolidating the influence of its own organization. At this present juncture, the FSLN may not be able to expand its influence unless it allows the development of varying forms of peasant organizations that aren’t part of the official agrarian reform program. The debate about the level of autonomy these grassroots organizations should have is clearly influenced by the different views on what role the peasants as a social class should play in the revolution.

The third position: "Keep the peasants on a short leash"

This third position has in its favor all the historical weight and inertia of the agrarian reform program implemented thus far. This position proposes prudence: "You can't change horses midstream." It wants to continue on the same horse. That is, it wants to stick with the same cooperative production models—until they work.

Those who hold this position hope that with a large amount of state intervention, an elite group of peasants will be created in the CAS who will contribute in the short run to the modernization of the agrarian sector and in the long run to its socialization. Meanwhile, the problems that arise from this process will be met with more vigorous and complex administrative solutions.

This strategy for agrarian reform is very similar to that implemented in Peru and Chile: a business strategy with a moralistic stripe. The object of this strategy is a socialist one, but the methods of achieving change come from a business mentality. This program depends upon large injections of capital and new technology in the agrarian sector in order to create a production model, whether state or cooperatively run, that is more modern, more egalitarian, more collective and more socialistic, a sort of "showcase" alongside the private sector. It is this sense that it is moralistic. In order to avoid a "repeasantization" process, which might dilute more advanced and egalitarian development models, this strategy rejects the time-consuming processes of cooperative development typical of socialist revolutions, that is, first giving land parcels to service cooperatives and later to collective production coops. The peasants' resistance to this technocratic approach is seen as a sign of their backwardness and taken to justify the need to implement this program of advancement.

This business approach to cooperative development is based on four principles vigorously defended by its proponents:

The state sector (APP) should be the core of the agrarian transformation. The public sector should be developed through large, high-tech investment projects. Furthermore, state enterprises, whether in primary products or in agroindustrial sectors, should have sufficient access to capital and new technology to promote modernization.

The peasants and the cooperative movement are destined to play an important but secondary role in the rural development strategy. In the medium and long term, the state ought to promote modern cooperative production models similar to those used in state-run enterprises. The 500 CAS cooperatives are the front line in this modernization process. They will serve as "good examples" to attract more peasant participation to the cooperative movement.

3. The development of Nicaraguan agrarian capitalism "proletarianized" the peasants. For this reason, the agrarian reform shouldn’t try to return the peasants to their previous conditions, thus losing economy of scale and the advantages of capitalist development. It should increasingly socialize the labor force in the state and the more technically and administratively advanced CAS. Only through modern productive methods can socialization occur. To accept the individual peasant economy and a gradual process of cooperative development is to destroy the possibilities for a real transformation in the rural sectors of the economy. Thus, the giving of lands, capital and technical assistance must be based on modern methods of collectivization and resource administration.

4. The transformation of the rural sectors is fundamentally an economic problem. Without new work conditions, peasants won’t emerge from their ideological backwardness. A progressive political transformation of the peasants is impossible if the starting point is the values of the peasants themselves.

Given the war, the scarcity of foreign exchange, the economic crisis and the technological brain drain, it’s obvious that this strategy already finds itself considerably stuck, and not only regarding the cooperatives. The problems of state-run enterprises are no less serious.

The inertia of these four principles of the status quo and the difficulties involved in readjusting the present agrarian program according to the peasants' interest might tempt a large part of the state apparatus to go along with business as usual. Thus, they would maintain the present plan for the long haul, converting the campaign to strengthen the cooperative base into a formalistic series of meetings with peasants in which solutions are proposed purely from an institutional perspective. The emphasis on peasant backwardness in this position reveals a fundamental lack of understanding of rural reality and refuses to recognize a strong role for the peasant organizations. Consequently, top-down state-management is fed, both in relation to the peasant organizations and to the base cadres.

The fourth position: "The FSLN to the forefront"

This position has been articulated in various ways since the Sandinistas accepted and even baptized a flexible scheme for cooperative development. It was evidenced by the rise of the CSM, the increase in family gardens in the CAS, the empowering of traditional peasant organizations and the promotion of "local committees" or "production commissions."

Those who defend this viewpoint make a clear distinction between controlling the cooperative movement and leading it. This position strongly criticizes attempts to control the cooperative movement from above. What it affirms is the need to guide the spontaneous movements of the peasants, reorienting the new forms of cooperativism to make them compatible with the cooperatives the government has traditionally sponsored. This includes supporting and giving leadership to cooperatives outside of state regulation.

The principles that guide this position are radically different from those that underlay the first position:

1. Nicaragua's economic development depends on the peasants and their involvement in the cooperative movement. The peasants are a pillar of the revolution, a social force that needs to be developed. Especially in the immense zones of the country where little infrastructure for production exists, the cooperative movement can be the basis for agricultural accumulation.

2. The peasant cooperatives are expressions of political power and not only of economic organization. Leadership of the spontaneous movement will depend on the kind of political-ideological work done in the rural sectors. Thus, the decision to join a cooperative should be totally voluntary.

3. Cooperativization has to be voluntary, gradual and long-term. It must start from the experience of the peasants' themselves, based on their own sense of the advantages. Thus, the CSS must be strengthened, the existing local committees empowered, forms of access to land opened up to the demands of peasants and interchanges and collaboration between the peasants and other groups encouraged.

4. The cooperatives can play the role of organizers of production and exchange in a locale. Greater peasant efficiency and mobility could be achieved by the cooperatives taking over the functions of territorial production organizations. Although the state will always have the job of guaranteeing the regulation and integration of production among the APP, individual and various cooperative producers, territorial organization should not be the exclusive patrimony of the state.

5. A top-down management style by the state and other political forces of the FSLN is one of the main causes of the problems the cooperative movement is suffering. The roots of this verticalism in the countryside are found in the difficulty of guiding social movements without giving in to the temptation of converting them into purely party functions. When a political movement cannot maintain a dialectic between the autonomy of social forces and the political organization, it loses its force.

This position particularly emphasizes the method of political work to establish an authentic alliance with the peasants. A rather bitter episode during a meeting of directors of the campaign to strengthen the cooperative movement in Region IV gives a good example of the need for this kind of work. A peasant was quoted as saying to one of the directors, "Today, you listen to me because I've been listening to you for the last eight years." Another peasant commented, "What we’e talking about is developing a new way of dealing with problems."

There are no set formulas for this position. Rather, there is a series of principles concerning the cooperative movement that are put into practice through work with the peasants. Thus, grassroots solutions are being looked for while at the same time the rural political activists are receiving political training through the experience of promoting cooperativism.

Rural-urban contradictions: Two visions of agrarian reform

Beyond projecting the campaign to promote cooperativism in the Nicaraguan media, and beyond preparing the peasant leaders and activists who will promote the campaign, the crucial factor in determining the success of the campaign is peasant participation. There are two ways to approach peasant participation: a) from the perspective of the peasants' moral betterment since they are judged to be individualistic, backwards and destined to be one day politically conscious workers, or b) from the perspective of a worker-peasant alliance.

In the first perspective, the city is seen as the center of correct knowledge. It offers the peasants new technology and management skills so they can produce more goods of better quality, so they will use official distribution channels and accept official prices for their goods, and so they will learn the value of democracy and grow culturally. The peasant will also contribute, hopefully, to national defense.

This perspective faithfully reflects the long history of exploitation of the rural sector by the urban. This position is like an ideological mirror that reflects capitalist relations of production. Given this, the peasant has good reason for rejecting this perspective and the management style it engenders. A majority of the problems of cooperative production in Latin America and, to a lesser extent, Nicaragua emerges from this urban-centered mentality.

In the second perspective, the peasants appear as a part of the oppressed classes and their betterment depends on achieving new quotas of economic power and new spaces for participation in the transformation of society. The matrix for a true worker-peasant alliance is found in the capacity that workers and peasants themselves have to defend their perspectives in the discussion of actual problems.

If the urban sector wants to consolidate its alliance with the peasants, increase grain supplies, increase production, etc., it has to accept that a worker-peasant alliance requires that peasants can make demands on the urban sector as well. The alliance demands a serious ideological struggle in order to attain a more egalitarian relationship between the city and the rural areas.

Inasmuch as peasants are kept "on a short leash," or are viewed as the "foxes in the chicken coop," they will be incapable of participating in the agrarian reform process. Further, the more accelerated the peasants' politicization, without their being politically empowered, the more unpredictable public support for the reform and the cooperative movement becomes. This unpredictability of public support for the cooperative movement runs the risk of opening up political opportunities for those who oppose the Sandinista movement.

However, the more the present campaign strengthens the cooperative movement and is a source of empowerment in which the peasants can make their demands known to the privileged urban structures, the more the urban policies that thread through the campaign will come into question. This would bring greater unity with regards to rethinking the strategy of cooperative development. If this unity is achieved, it will, as always, bring strength.

Extracts from Daniel Ortega's letter to the cooperativists

Brothers and Sisters,
I want to greet each member of each cooperative, each Nicaraguan peasant, every rural producer, and his family. I want to send greetings to the men and women who live near the borders where the contras are being fought every day. A salutation to those in the country who have helped in the national defense. A greeting to all those who produce the food and foreign exchange our nation needs. For each one of you a fraternal embrace, and a call to continue struggling and working.…

Although we have had many successes, we have, at the same time, many difficulties and problems. We have problems due to lack of experience, organization, production, administrative skills, technical skills and education. We also have problems learning to live and work in an organized form, which a great part of you did not know in the past. All these problems are problems of development.…

But this demands a greater amount of unity so that all of us together, within each cooperative, can participate in solving these problems. You should be continually looking at your problems and searching for solutions. All should be able to give his or her opinion. With the participation of all the cooperative members, many of these problems can be solved. Perhaps one cooperative cannot address all these problems, but if other cooperatives participate you will be able to resolve your problems with your own resources. Each one of you helping the other. You must make demands on the government institutions, which ought to support you as much as possible and respect your will.

No producer in the economy, no group, should ignore the problems it's facing because tackling these problems may be the best way of safeguarding the interest of the people. We should learn from those who have been successful in their efforts. Also, the right to discuss how one feels about the means used for our advancement is a right of the revolution. Without your participation, the revolution will not work.…

Therefore, at the beginning of the new planting season, we must prepare the soil. We should be clear on this point: the only way to defeat this aggression and overcome scarcity is through productive work. In this planting season, more and better work is converted into the battle cry of the Nicaraguan peasant.

The peasants have always been close to the heart of the Sandinista Front. In our history of struggle for our country's liberty, General Sandino was among the peasants of Segovia until he defeated the Yankees. He began a new life for the soil of Segovia working to organize cooperatives.… Sandino was the founder of Nicaragua’s first cooperative.

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