Interview with Cristobal Kay

Trans-Latin business and land grabbing in Latin America

Sally Burch

16/12/2013

Opinión

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Land-grabbing involving huge amounts of land, a phenomenon that arose principally in the last decade and which has been accentuated since the food crisis of 2008, is radically transforming agrarian structures in the world, displacing campesinos (peasant farmers) and increasing the hold of agroindustry. In Africa and Asia, this phenomenon mainly results from agreements between States, where a government agrees to the buying or renting of huge extensions of land – one hundred, two hundred thousand hectares or more – in another country, in order to produce food under their control and to export it, and thus guarantee the food security of their populations.

Nevertheless, the process has taken on a distinct characteristic in Latin America, as Cristobal Kay, a specialist in development and agrarian reform, explains. In our Continent, it is not other States but mainly big trans-Latin corporations that are investing in neighbouring countries. In an interview with ALAI, Kay noted that, as this process increases, it becomes much more complex to envisage agrarian reform in the countries affected.

An academic specialized in development theory, who studied first in Chile and in England and is now a professor at the Institute of Social Studies in The Hague, Cristobal Kay recalls that in Latin America, this phenomenon has its roots in the “lost decade” of the 1980s, with neoliberal policies. When States abandoned policies of credit and technical assistance to campesinos and lowered customs barriers to the importation of foods, peasant economy became marginalized and many campesinos had to seek other sources of income, when not to emigrate. On the other hand, the rural sectors that benefited were those capitalist agricultural producers that had access to investment and the necessary knowledge to move into new export markets, with new products such as broccoli and other vegetables, fruit and African palm oil.

This fact, according to Kay, "totally changed agrarian structures, moving towards greater concentration of land and greater capitalization of agriculture...These agrarian businesses expanded, often incorporating campesino land or deforesting the Amazon, creating new agricultural frontiers, and at the same time creating a series of negative impacts on the ecologies of these countries". This new agrarian structure functions with temporary workers, lacking labour stability and with extremely low wages, or where crops are highly mechanized, such as soya, creates very few jobs at all. "In one-half century, from 1960 to 2010, the cultivation of soya went up from 260 thousand hectares to more than 42 million. That is to say, it multiplied hundreds of times", the researcher pointed out.

Below, our conversation on these topics continues, in which Kay reveals that in Latin America, land-grabbing involves patterns that are new on a world level, given that this is essentially a question of Latin American enterprises from a given country that invest in another Latin American country.

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CK: - We are talking about big companies that already control fifty thousand hectares, or one hundred thousand hectares, for example in Argentina, that later invest in Paraguay, or Uruguay, especially for soya, or for pasturage and cattle raising. Brazil is doing the same: there are many agrarian businessmen who for three or four decades have bought land in Eastern Bolivia, in Santa Cruz, in the lowlands, and who today control perhaps a third of the land in Eastern Bolivia. They control 40 or 50% of the soya production in the country.

Paraguay is the most dramatic case. In this country, almost two thirds of soya production is controlled by capital, investors, landowners, the majority of Brazilian original, but also a significant contingent of Argentines. Because of this there is an emerging problem of national sovereignty, since a large part of these investments in land by Brazilians and Argentines takes place in frontier zones of these countries. Soya production is the most important crop in Paraguay, hence controlling two thirds of soya production -- I don't have an exact figure --, but this amounts to controlling perhaps 40% of the entire agricultural and livestock production of that country by these Latin American capitalists.

Much of this Latin American capital is associated with international capital, for example, with the famous financier George Soros. Soros has en enterprise that finances the purchase of land through an Argentine company, and this company invests on a vast scale, using large scale machinery.

While there is some foreign capital involved, this is not what is driving this change; the driving force comes from capital held in a few Latin American countries. Even small countries such as Chile, which has a certain advantage in the lumber industry: there is a Chilean forestry company that has more than a million hectares, of which half is outside Chile, in Argentina, Brazil and Paraguay. Since there is no more land for reforestation in Chile, this Chilean capital invests in other Latin American countries, in those which still have an abundance of land. This also has an ecological impact, especially in the monoculture of eucalyptus, which absorbs a lot of water, and pines; in these cases it is difficult to cultivate the land afterwards for any other agricultural or livestock production.

ALAI: - Are these investments in land also tied to speculation in the financial sector?

- Yes, because the advantage is that land does not lose its value, it provides an excellent fixed investment, especially if agricultural and livestock prices continue to rise; and it is probable that agricultural prices will never fall again to the pre-crisis levels of 2008. But speculation happens rather with these new crops, as I said, the oil palm, the African palm, with soya and sugar cane. These three crops can be termed "wild card crops" -- a colleague in the Hague, Saturnino Borras, calls them "flexicrops" -- because they can be used for several things, either for oil, for food, or for biofuel. And they have the advantage that this depends on food prices: if prices are low, sugar cane or soya can produce ethanol. Hence, they speculate, as international prices for each of these products fluctuate. This gives great flexibility to capital, and capital always tried to maximize profits and income, working in international markets.

- In view of this situation as you describe it, what are the implications for the future? What must we worry about? What alternatives can be envisioned in the face of this situation?

- With this new capital that takes over land – we are talking of 100 thousand hectares, some reaching a million hectares –, they’re quantities of land that are historically unimaginable. This is way beyond the traditional hacienda. The difference is that this capital is not exclusively agrarian. Much of this new investment involves agrarian industry, the forestry industry, the sugar cane processing industry, or that of African palm. In the case of foreign capital, this even involves financial or mining industries; and commercial capital, there are supermarkets that make investments. Hence this is no longer agrarian capital, but capital that comes from various sources, that controls the chain of production. This is a chain of value that is completely integrated and controlled by this corporate capital, which has access to the latest production technologies, it has the capacity to finance machines for harvesting and the processing industry.

In the face of this, with a free market, governments do not have the capacity to negotiate or to seek more favourable agreements for their countries. They perhaps introduce some minor restrictions.

With respect to the implications of this process, as I said already, it has displaced some campesino sectors, led to conflicts with indigenous people, as is the case with some mining operations, although these cases are less known. And in many of these areas that the governments say are unoccupied, these are state lands, but there were local populations, indigenous populations, rooted in these areas, and who are displaced by these investments.

With respect to a vision of the future, and especially if one wants to bring about an agrarian reform, today it is more complex to do so, since the campesino element no longer has to deal with the old feudal landlord, with which he had a patronage relationship. There was a clearly identified enemy – we might say -- with which one could engage in a social struggle: against the patrons, against the landlords who had been established in the area for centuries, since colonial times, with the old large estates. Now we are dealing with investment groups, often limited public companies. In this case, how is it possible to try to expropriate or redistribute land, in the face of capital that can easily sell the land or move somewhere else?

In addition, now it is not a question of expropriating uncultivated, unproductive land, as was the case with the old large estates. These are capitalist enterprises, with large and highly productive investments, high-tech, completely integrated into the international market; hence governments are extremely reluctant to touch these businesses.

Because of this, today's agrarian reforms have to be much more participative, they have to consider the needs of indigenous communities, to consider gender questions, to incorporate women in the process of agrarian reform, something that was not done in agrarian reforms in the 1950s, 1960s, or the beginnings of the 1970s. In addition, today it is also necessary to incorporate an ecological dimension, a question that did not exist for agrarian reforms of the 1950s or 1960s. Hence, given this new situation, a real, massive agrarian reform is much more complex.

In consequence, to oppose these huge conglomerates, such as Monsanto, the social struggle must also become a transnational movement; such as, for example, the Via Campesina. We have to have a campesino movement that is interconnected, interrelated and which is globalizing, which has a transnational dimension, joining forces in every country with this struggle, now a global struggle, against GMO seeds, against big financial capital and making their points at the level of the international community -- through the United Nations, bodies such as FAO, etc., because it is in these circles that political forces move.

Allying with ecological movements, with movements that want to maintain genetic biodiversity, with movements that go up against supermarkets, movements that want to strengthen local markets, local crops, for a landscape that is not monocultural, and so on. Joining forces between rural sectors and urban social sectors, creating a transnational political alliance, in order to change this monocultural and predatory model. It is a vision; luckily there are a number of intermediary steps to achieve it.
(Translated for ALAI by Jordan Bishop)

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