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Why Hasn’t Land Reform in Venezuela Done Much More to Boost Production?


Written for teleSUR English, which will launch on July 24

Within Chavismo, debates over agricultural policy will, I hope, be intensified by a Supreme Court ruling in May that ordered the return of some redistributed land to big landowners in the states of Barinas, Yaracuy and Merida. The government should vigorously defend land reform in the wake of the ruling, and address problems that have held back production on redistributed land. It is troubling that Chavista farmers struggling to both democratize the economy and increase production may be politically weakened because of some poor planning, disorganization and under-investment on the part of their government.

The government’s mishandling of its exchange rate system (and the cash flow problems that come from holding a whopping 70% of its international reserves in gold while the rest of Latin America, on average, holds only 8% in gold) lie at the heart of the short term problems Venezuela has experienced with high inflation and shortages. A longer term problem is one familiar to many oil rich countries: a failure to diversify which leaves key sectors of the economy underdeveloped.

In January, at a conference on agrarian issues in India, Greg Wilpert stressed that Chavista land reform has directly benefited about 1 million peasants. Rural poverty has been reduced and, more generally, land reform has politically empowered poor farmers at the expense of wealthy landowners. Nevertheless, Wilpert reported that gains made in agricultural production have been swamped by increased food consumption. Thanks largely to drastically reduced poverty, caloric consumption per capita increased in Venezuela by 45% between 1998 and 2011. The population also increased by 25%.  That means total caloric consumption increased by 81%. In contrast, overall food production increased by 22% between 2002 and 2009. Cereal production increased by 50% between 1999 to 2011.

Last year, some Venezuelan officials conceded that poor land utilization is one of the underlying causes behind recent food shortages. Out of 27 million hectares of arable land, less than 3 million hectares is being cultivated according to World Bank statistics, but Chavista governments have either taken over or redistributed 5.8 million hectares since 2003. That means there is a great deal of redistributed land that is not being cultivated at all or is barely contributing to national production.  Why is that and how big a problem is it?

Starting with the second question, a comparison between Brazil and Venezuela is one way to evaluate Venezuela’s agricultural industry at a macro level. According to the FAO, Venezuela’s Cereal Import Dependency Ratio (as of 2007-2009, the most recent period for which data is available) is 48%, compared to only 14.2% for Brazil. In the years just before the Chavista era (1995-1997) Venezuela’s ratio was higher, 55.9%, and the most recent data show Venezuela doing better than Colombia, Peru and Chile. Still, there is no denying that a country hampered for decades by very high inflation should want to drastically increase domestic production. Sufficiently increased supply would reduce inflation and diversify the economy. Several years ago, the Chavez government set a goal to make agriculture 12% of Venezuelan GDP by 2007. It was missed completely. Agriculture has remained about 4-6% of Venezuelan GDP as it has been since 1980, decades before the Chavez first took office in 1999. It’s important to remember that per capita GDP shrunk in the 1980-1998 period. Growth was restored in the Chavista era, so agricultural production increased as the industry maintained its share of GDP, but the goal had been to have its share double.  If that goal had been met, or even close, Venezuela’s cereal import dependency ratio would certainly be much closer to Brazil’s or perhaps lower.

Productivity does not stand out as a major problem when one compares cereal yield ( output per hectare under cultivation) in Brazil and Venezuela. Surprisingly, for those who’ve believed false claims about production and productivity languishing under Chavista governments, Venezuela’s overall agricultural productivity (measure as value added per worker) is better than Brazil’s. But relative to population, Brazil has 2.4 times as much land devoted to cereal production and produces 2.9 times as much cereal.

Cereal Production in 2009 (metric tons per capita)
Uruguay 1.27
Argentina 0.64
Paraguay 0.48
Brazil 0.35
Bolivia 0.22
Chile 0.18
Peru 0.17
Ecuador 0.15
Venezuela 0.12
Colombia 0.09

 

Land under cultivation for cereal 2009-2013
hectares population hectares
millions per person
Argentina 10.3 41350000 0.249
Uruguay 0.79 3297000 0.240
Paraguay 1.5 6540000 0.229
Brazil 19.6 201000000 0.098
Bolivia 0.9 10500000 0.086
Ecuador 0.81 15779000 0.051
Peru 1.3 30476000 0.043
Venezuela 1.2 28946000 0.041
Chile 0.56 17464000 0.032
Colombia 1 47130000 0.021

 

Venezuela would need to put an additional 2 million hectares of land under cereal production (without any productivity improvements at all) to catch up to Brazil in output per person.  That seems like an attainable goal in a country with 27 million hectares of arable land and that has, crucially, already redistributed 5.8 million hectares since 2003 when land reform really took off. It is also hard to see how ecological concerns would make such a goal undesirable. Of course there are other considerations besides the quantity of arable land such as it quality, but even getting another 1 million hectares of land under cultivation would have a huge impact.

It certainly doesn’t help that 30-40% of Venezuelan food products (imported and domestic combined) production, according to some government officials, have been illegally smuggled out of the country to evade price controls. It is a serious problem, but solving it, even if 30% of domestic production is lost to smuggling, would not do nearly enough to achieve the goal the Chavez government set many years ago for Venezuelan agriculture.

A grave human rights problem related to land reform has been the murders of hundreds of peasant activists since 2001 by gunmen strongly linked to wealthy landowners. Edward Ellis made a documentary, “Tierras Libres”, that revealed the way the rural elites have used their connections with the National Guard stationed in the countryside and local judiciary to evade accountability.  The international press, always eager pounce on any allegation of violence directed at the opposition, has been scandalously silent about the assassinations. However, Ellis does not believe that violence by elite opponents of land reform has been a significant factor stifling production on the redistributed land.

Laura Enriquez, a professor of sociology at Berkeley, has researched land reform in Venezuela and other countries. She says that in Venezuela  “the redistribution process started in places where perhaps it wasn’t really feasible – without massive investments – to set up cooperatives” and that “the government gave out land where there was no infrastructure (homes, transportation, schools for the kids), so people didn’t move their families out there. And, the government was loath to make quick major investments – in case the people didn’t stay – and many of the people didn’t stay because the circumstances were so difficult.” She says that a lack of government assistance with marketing and credit is part of the problem.

Tiffany Page, a former student of Enriquez, did her PhD dissertation on land reform in Venezuela. Her extensive field work was done in the states of Yaracuy and Anzoateguí. She found the process to be vastly more successful in the state of Yaracuy for several reasons. Geographically, Yaracuy is a smaller state and the farmers much less isolated from urban centers than their counterparts in Anzoateguí. Yaracuy’s land was better suited to agriculture and, partly for that reason, the land recipients typically had agricultural experience.  Yaracuy’s land recipients were also much better organized than in Anzoateguí and that helped them navigate Venezuela’s very fragmented agricultural bureaucracy far more effectively.  That greatly reduced frustration with government employees in Yaracuy.  The farmers developed productive and collaborative relationships with them.  In Anzoateguí mutual mistrust and resentment between farmers and government employees were much more prevalent. In also helped that in Yaracuy the government employees who interacted with farmers were typically from the area themselves and often the sons and daughters of peasant activists, something that was not very often the case in Anzoateguí.

Paige concluded that the government set out to achieve too many goals through land reform. For example, land reform was partly aimed at alleviating urban unemployment and housing problems, and at providing skills to the unemployed by enticing them to move to rural areas. It should be noted that even in Yaracuy, where the groundwork for success appeared to have been laid, Paige alluded to the fact that output was disappointing compared to what was expected. She argues that Chavista governments should have tried to accomplish the following limited objectives with land reform

·         increase production

·         greatly improve small farmer access to land, credit and other agricultural inputs

·         shifting to environmentally sustainable methods

Enriquez says that some Chavista leaders, since about 2010, have been pushing even more limited goals than Paige suggests, to increase food production by any means including support for some large private producers as well as state-owned farms referred to as Socialist Production Units: “these tendencies are guiding agrarian policy – at least in the key grain growing state of Portuguesa”.

More limited goals may or may not make sense depending on how much the government can realistically invest in land reform. However, objectives should not be made less ambitious to put off dealing with avoidable problems in the planning and implementation of policy.

Some of what I’ve written might seem to confirm the fallacy that while right wing polices make a mess of distribution, left wing policies screw up production.  Chavista era achievements in making distribution more equitable are more impressive than achievements in production.  However, in the pre-Chavez decades, Venezuela failed at both, as did Latin America in general.  Any honest and well-intentioned observer of Venezuela’s Bolivarian revolution should bear that in mind.

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