National Agricultural Policy Triggers Social Discomfort in Colombia

Agriculture is among the top priorities on the global development agenda due to the persistence of international challenges, extreme poverty (1.2 billion people worldwide; 22 percent of the population in developing areas), inequitable land concentration, and an almost unsupportable increase in food demand. [1] In fact, governments and worldwide development agencies are beginning to recognize that agriculture must be a totally reliable engine for growth and social inclusion if developing countries are able to come up with more equitable strategies for using their land and other available natural resources for growth and modernization. The World Development report of 2008 states that agriculture must be placed at the center of the development agenda in order to enhance global economic growth and social equity, especially in those countries whose incomes depend mostly on agricultural commodities. In addition, the United Nations predicts that more than half of the land that may become absorbed into a worldwide agricultural production could be drawn from seven African and South American countries, including Colombia. [2]

Certainly, the future of the negotiations between the Colombian government and the insurgent Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia; FARC) movement will have an important effect on the future of Colombia’s agricultural sector, as peace is necessary for development to occur in a zone of conflict. Recent reports about a groundbreaking deal in Cuba (where the talks are taking place), which would allow the FARC to become a political party in Colombia, has injected new life and hope into the talks, which had stalled over this very issue. Whether a full and lasting agreement can be reached before Colombia’s presidential elections remains unclear. Nevertheless a successful deal could usher in a new era of Colombian agricultural growth.

Because of its privileged geographical position and its abundant natural resource endowment, Colombia’s agricultural sector has been the subject of fierce debate between the government and the country’s farmers, which recurrently has turned violent in recent months. From August 19 to August 30, Colombian farmers expressed their dissatisfaction with the current status of the agricultural sector by means of violent protests in more than twenty cities. Although farmers mainly placed the blame for the downturn in the performance of the sector on the negative impact of the 2012 Colombia-U.S. free trade agreement (FTA), known as the Trade Promotion Agreement, the explanations for the lack of growth may actually be far broader. The slowdown may also be the result of the absence of defensible land strategies, which would have included more protection for the exporters, investment in infrastructure, and institutional strengthening.

Colombia has 22.1 million hectares of land available for further agricultural mobilization and more than 11 million people that have identified rural activities as their principal source of livelihood. [3] Colombia is ranked at 25 out of 223 countries in terms of furnishing available land for agriculture, creating substantial options in terms of a meaningful expansion of agricultural activity. However, underemployment, which was 31 percent in 2012, and the current low utilization of land, which is close to 24.1 percent, are producing a less dynamic agricultural sector. [4]

Colombia’s reality is that its society does not fully utilize its natural resources, a state of affairs which, if achieved, could contribute to equitable social development in the country. Therefore, in 2010, Colombia’s President Juan Manuel Santos (2010 – present) proposed a set of measures called “las locomotoras de crecimiento” (growth drivers). These factors were an attempt to involve the national government in strengthening Colombia’s agricultural sector. The Santos administration, in order to fulfill the nation’s requirements, would have to reach various objectives regarding investment in infrastructure, implementation of trade policies that would stimulate the domestic market, and provide for the allocation of useful public goods and services. By doing so, the government would potentially be able to reduce the current 28 percent level of poverty; more competitive land and maritime infrastructure would tend to develop a more rational system of distribution. Engaged, farmers would have more employment options. [5] Considering that the next presidential elections are scheduled for 2014, the Santos administration is nearing its end, but the agricultural sector is still not being fully utilized, as was intended. This outcome has triggered a good deal of social friction, and has brought to light the structural problems, such as the discontinuity of state policy, high costs of fertilizers, the near universal corruption, and an increase of imports, which cannot be corrected by the currently implemented measures.

Agrarian Protests Call into Question National Agricultural Policies

The side effects of the new Colombia-U.S. FTA have triggered the disruption of national operations through a series of protests which began with the coffee production sector, and then spread to all productive sectors associated with agriculture. Although the epicenter of violent protests took place in the Boyacá region, located in the eastern part of Colombia, social unrest spread to 17 of the country’s 32 districts. As many as 5,000 farmers blocked roads between the countryside and the major cities in protest, resulting in at least four deaths. [6] Additionally, there was a profound effect in the flow of commercial activity and in social order, and an attempt at a negotiation involving the government and the country’s main agricultural watchdog organization in charge of supporting farmers, the Mesa Nacional Agropecuaria y Popular (National Popular Agricultural Board; MIA).

Even though the commercial bilateral agreement between Colombia and the United States was well received by the government and the business sector, in its first year it has not accomplished a noticeable improvement in Colombia’s trade balance. The collective manifestation of protests started at the end of August. After the FTA went into effect, Colombian imports of commodities from the United States increased by 13.5 percent from May 2012 to March 2013. Many of these products already are produced in Colombia. The agro-industrial sector, which witnessed a 120.4 percent increase, and the agricultural sector, with a 32.8 percent increase, were the major sectors in which foreign purchases had seen a significant growth. In fact, the 23.7 percent rise in imports of soy and the 16.5 percent rise of rice imports, combined with the fact that the Colombian corn market must open completely to American companies under the terms of Bogota’s arrangement with its neighbor (although, to a significant degree, Colombia has the ability to supply its domestic demand), are issues that confirm that the FTA’s stipulations must be redefined. [7]

However, the asymmetries deepened by the FTA are not just the consequence of poorly negotiated points between both governments. In other words, the weakness in the agricultural sector goes beyond the bilateral agreement between Colombia and the United States. The insufficiency of a number of sub-sectors of Colombia’s agricultural sector brings to light the structural difficulties regarding costs, infrastructure, lack of internal organization, and the failure of Colombia’s land restitution policy.

According to a survey performed by the Sociedad de Agricultores de Colombia (Agricultural Society of Colombia; SAC), 42 percent of producers state that the agricultural profits are decreasing due to high costs of available inputs, fertilizers, and transportation. The high cost of capital has led to a sharp increase in prices of agricultural products. [8] Unfortunately, the domestic infrastructure does not adequately address what has been found to be necessary for an economy dependent on agriculture. The 2012 National Competitiveness report acknowledged that the lack of proper roads makes transportation within Colombia far more expensive and time-consuming when compared with other countries. Hence, transporting 28 tons of products from Bogotá to Cartagena could be $2,000 USD more expensive than transporting it to Shanghai, in China. [9]

In addition, it is essential to take into consideration that Colombia’s 0.87 Gini coefficient in rural areas is one of the highest in the world. [10] This means that land distribution in Colombia is near to perfect inequality, which the coefficient says is 1. Therefore, one of the major goals of President Juan Manuel Santos’ administration is the successful implementation of Ley 1448 de 2011 de Víctimas y Restitución de Tierra (Law 1448 of 2011 of Victims and Restitution of Land). This law seeks to reduce social disparity amongst the people who have been affected by violence in rural zones through the return of land currently controlled by armed groups.

However, it has been two years since the law was put into effect, and it has not provided the quick respite that the rural sector often requires. For instance, of the more than 1 million hectares that need to be returned to their owners, only 13,000 have been transferred back in farmers’ hands. In addition, according to Human Rights Watch (HRW) this law only further enhanced the formation of regional armed movements that oppose the redistribution of lands. More than 80 land restitution leaders were threatened by the Urabeños—followers of the conservative hand—who organized a brigade composed of 1,000 mercenaries in order to carry out murders against farmers claiming land titles. [11]

This violence was the main reason why the government started negotiations with the major armed group in Colombia, the FARC, to bring the decades-long internal conflict to an end. Since October 2012, both actors proposed an agenda in which agrarian development and stimulation of agricultural production and land distribution were, in theory, top priorities. Nevertheless, political requirements that would ensure the FARC a greater degree of participation in national affairs, coupled with the desire of the president to show quick results in order to raise his already impaired popularity, have slowed down the round-table negotiations on a number of occasions. Indeed, by November 6^, negotiators reached a draft that includes just two of the six items under discussion and none of them have to do with agrarian points. [12]

What is even more worrying for the future of these negotiations is the recent FARC involvement in a plot to murder Colombian former President Álvaro Uribe Vélez, who is totally against pacific talks between the government and this guerrilla group. Soon after the plot was uncovered, Uribe sarcastically commented, “These are the little saints that are going to turn into a political party.” [13]

In general, it seems that the protests that have occurred in the last few months are now being voiced in expressions of the indignation of small rural producers who feel that it is time for the state to end the marginalization of rural areas. Even though most of the recent Colombian presidents have included in their platforms programs that promote agricultural development, their measures have clearly never been strong enough. For example, Álvaro Uribe Vélez, the Colombian president from 2002 to 2010, implemented Agro Ingreso Seguro (Secure Agricultural Income; AIS), a strategy to protect the incomes of producers who have been negatively affected by the globalization of the economy. [14] However, the outcomes of his program remain a mystery since the act has significantly benefited wealthy families and entrepreneurs who live in Colombian Caribbean (which is a wealthy beach neighbourhood). They received 2.125 million pesos at the same time that peasants received 5 million pesos. Hence, instead of encouraging development in the sector, this strategy corresponded with an increase in poverty rates in rural areas, which is now at 22.8 percent. [15]

In addition, due to economic liberalization and foreign investment flows, Colombia has begun specializing in the production of mining and services. As a result, Colombia now needs to import most of its agricultural goods, which could be easily produced in the country. Therefore, it seems that cheap imports will increase in Colombia in the next few years. Consequently, it is essential that the Colombian government recognize that Colombian farmers are at a distinct disadvantage in respect to U.S. farmers who are subsidized by their government. The Colombian government needs to provide safeguards and stronger tariffs to its products to protect their farmers and the focus of its agricultural industry.

One possible solution is to reformulate the core of the problem, which represents the current Colombian agricultural model. The policy framework should take into account that agriculture needs to be sustainable and competitive. In this sense, there must be an efficient resource allocation and the productive transformation of small farmers’ businesses’ expansion through further investment. This could lead to a more competitive production process. In addition, even though the new global context is characterized by the emergence of new markets and free trade agreements, the Colombian government needs to realize the importance of also prioritizing its local market. Arguably, it is not just that Colombian farmers are now forced to use genetically modified seeds at the behalf of transnational companies but because the U.S. government requires this to approve the Free Trade Agreement. The big issue is that under the FTA’s code, each country is not allowed to give a preferential status to foreign or local products. Thus, there is an evident incompatibility between the FTA and its code, which has led to a violation of a principle in the Colombian constitution. Under article 64, it is an obligation of the state to promote progressive access to land and services for education, health, housing, and credit in order to improve the income and living standards of farmers.

Overall, Colombia is facing important challenges that mostly depend on the development of the talks that take place in Cuba between the government and FARC. Thus, the possible negotiation of an agrarian reform would be the initial step to rebuild the damaged sector of the Colombian economy. The recent agrarian protests are justified, since there has always been a mismatch between goals and reality, because the government has not come up with any logical solutions. Indeed, the administration has announced a decrease of 38 percent in the rural budget, although agriculture in Colombia is shown to be one of the five main pillars of the Santos administration’s platform. The scarcity of attention now being given to rural producers is a strong factor that can help explain Juan Manuel Santos’s approval rating, which currently stands as a worrisome 21 percent. Therefore, if he seeks to be re-elected in 2014, Santos almost certainly will not have the support of coffee growers and farmers, which are the groups that lead the national drive to export.

Jennifer Barajas, Research Associate at the Council on Hemispheric Affairs

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References

[1] “The Millennium Development Goals Report 2013,” United Nations, 2013, http://www.un.org/millenniumgoals/pdf/report-2013/mdg-report-2013-english.pdf

[2] Sharma, Yojana. “Global Development agenda must prioritise agriculture, food policy” April 24, 2012. http://www.scidev.net/global/food-security/news/global-development-agenda-must-prioritise-agriculture-food-policy-.html

[3] Perfetti, Juan José. Políticas para el Desarrollo de la agricultura en Colombia. Fedesarrollo, Sociedad de Agricultores de Colombia (SAC), Incoder, Finagro, Banco Agrario. April 2013. pp. 30http://www.fedesarrollo.org.co/wp-content/uploads/2013/07/Libro-SAC_Web.pdf

[4] Ibid.

[5] Salinas, Yamile.  La locomotora del Agro. Consensos y diferencias. Punto de Encuentro, page 2.

[6] Redacción BBC Mundo.” El conflicto del campo irrumpe en Bogotá”. August 29, 2013. http://www.bbc.co.uk/mundo/ultimas_noticias/2013/08/130829_ultnot_disturbios_bogota.shtml

[7] Círculo de inversionistas. “Qué consecuencias trae el TLC CON Estados Unidos y su alcance en la economía nacional”.  http://www.circulodeinversionistas.com/especiales/tlc/item/31-que-consecuencias-trae-para-la-economia-nacional-el-tlc-con-eeuu

[8] Redacción Revista Semana. “¿Por qué el descontento agrario llegó a este punto?” August edition.

[9] Ibid.

[10] The World Bank. Gini index. http://data.worldbank.org/indicator/SI.POV.GINI

[11] Redacción el País. “Los Urabeños, la banda que amenaza la restitución de tierras en Colombia”.  September 19th, 2013. http://www.elpais.com.co/elpais/judicial/noticias/urabenos-amenazan-restitucion-tierras-colombia-segun-human-rights-watch-0

[12] “Colombia and the FARC: Not out of the Woods Yet” The Economist. November 16^th, 2013. http://www.economist.com/news/americas/21589861-just-agreement-reached-news-assassination-plot-highlights-risks-peace

[13] Ibid.

[14] Campuzano, David. “Agro Ingreso Seguro,  Historia de un fraude al campo Colombiano”. Especiales El Espectador. 2011

[15] Betancourt, Maria Soledad. “La crisis agraria y las causas del paro. Mucho más profundas que los TLC” September 4, 2013. http://reliefweb.int/report/colombia/la-crisis-agraria-y-las-causas-del-paro-mucho-m%C3%A1s-profundas-que-los-tlc