Not Just Another Recession
Why the Global Economy May Never Be the Same
Just a decade ago, "agrarian reform" was anathema throughout most of the Western hemisphere. Only visionaries, revolutionaries and a few staff members of international agencies paid it any heed. Latin American governments spurned it, and the U.S. Government ignored or disapproved of it. In the two countries where it had taken place, Mexico and Bolivia, it was the product of violent revolution.
In 1960 a government of the democratic Left in Venezuela fulfilled a long- standing campaign pledge by pushing through an agrarian reform law and pressing its application. From Cuba, Fidel Castro, professing his to be a peasant movement, called upon the other hemispheric societies to follow his revolutionary lead. The United States moved to counteract his disrupting impact throughout the two continents and, at a plenipotentiary conference in 1960, the Act of Bogotá was constituted, incorporating the call for reform and the promise of U.S. funds.
Agrarian reform achieved full respectability at Punta del Este in August 1961, The delegates, many reluctantly, signed the declaration, which included a commitment "to encourage . . . programs of comprehensive agrarian reform leading to the effective transformation, where required, of unjust structures and systems of land tenure . . ."
To comply with the urgings of the United States and the letter of the Alliance for Progress-and to qualify for aid-almost all the Latin American legislatures spun out protracted and high-sounding laws, It seemed that an outmoded, tradition-bound system, unique in the world, was about to be restructured.
Callow reform enthusiasts were to learn, however, the nice difference between legal action and real action. With a plethora of new laws on the books across the hemisphere, only Venezuela pursued its resolve in a purposeful way. In Chile, a progressive government gained power in 1964 and with difficulty succeeded in replacing a flimsy 1963 law with a legal instrument adequate to effect agrarian reform. In the other countries, politically dominant elements were indifferent if not opposed to altering the tenure structure. Action was limited to tokenism, such as the distribution of peripheral public lands, or to technical and financial measures, such as increased machinery imports and price supports, Occasionally some progress was made in cadastral surveys and land-tax systems.
Arguments against agrarian reform are similar throughout the nations of the hemisphere. The two prime defenses of the status quo are the sanctity of private property and the efficiency of larger units. Real or imagined flaws in extant reforms lead to the additional criticisms that decreased production results when peasants replace the traditional owners and that the government falls into a paternalistic role as implementor of the program.
The conservative rationale regarding the inviolability of private property is based on the theory that the right is God-given, resting on natural law and preceding the State itself; therefore, the State has no jurisdiction in the matter. In the mid-twentieth century, however, this line of thinking has become anachronistic. One Latin American nation after another has incorporated in its laws the concept of "the social function of property" either in tandem with or as successor to "the inviolability of property."
Latin Americans are particularly fond of pointing to the high efficiency of large farm units in the United States and, therefore, of belaboring land parceling as contrary to rational agricultural development. The comparison is, first of all, erroneous because in the United States family-sized units still do dominate. In any case, to suggest that size alone is the key to production is simplistic; if this were true, Latin America would be world leader instead of laggard in crop yields. In fact, an antiquated latifundia system can more reasonably be condemned than defended in the light of experience on large modern farms.
The U.S. model is perhaps most inappropriate for Latin America because of the difference in the rural populations. Whereas in the United States industrialization and urbanization have, since 1920, reduced the number of people on the land. Latin America's rural population expands at about 1.6 percent annually, and in most of the countries composes half or more of the total population. In Mexico, for instance, the peasant population has doubled in the last 40 years. Though production of more food is badly needed, the long-neglected and excessive rural population adds a critical element to the complex problem of the countryside. Rather than adopt labor- expelling measures such as mechanization, the necessity is to find labor- intensive solutions which simultaneously increase production.
In some instances, of course, there are grounds for criticizing a particular agrarian reform for creating dwarf units which defy agricultural improvement There are areas in both Mexico and Bolivia where the number of peasants receiving or taking land far exceeds what the land should support Profiting from these earlier mistakes, the current programs in Chile and Venezuela are attempting to avoid the minifundia pitfall.
Mexico and Bolivia are also cited by opponents of agrarian reform as proof that agricultural production falls after land distribution. In both cases preliminary evaluations reported declines, in Mexico in the 1920s and '30s and in Bolivia through the 1950s. However, subsequent studies pointed out that, although less food reached the urban centers, more was being consumed in the countryside by peasants who had previously been coerced into turning the produce over to the patron. In addition, when the landowning class which controlled the marketing channels was ousted, other trade patterns developed which were different from the flow measured by economists. It is now concluded, therefore, that production was maintained or increased. Likewise, post-reform studies in Mexico, Venezuela, Chile, Taiwan and Japan show not only increased productivity on smaller units but also more intensive employment of the rural labor force.
In most Latin American countries, the issue of agricultural production is undoubtedly critical, for burgeoning populations require spiraling food imports. Ambitious to industrialize, businessmen and policy-makers are reluctant to risk any measure which might necessitate the use of foreign exchange for wheat or beans instead of capital goods. Opponents of agrarian reform, therefore, exploit this anxiety by centering their attack on the production front, where studies and experience are not sufficiently conclusive to refute the charge. In addition, they disparage the social aspect of agrarian reform by claiming that peasant status after reform is unaltered; the State merely replaces the former landowner as patron, imposing its will upon a sector which continues dependent and submissive.
Reform personnel have difficulty countering these two attacks simultaneously; experience so far suggests that they must choose to develop either the land or the man. Since economic considerations tend to dominate, emphasis is generally on the land. From the moment of its inception a reform is under obligation to produce as much or more than the system it replaces. Hard-pressed by their opposition, government bureaucrats and technicians hover nervously over their land-reform charges to ensure that they do not make a mistake which would impair the crop.
The ideal would be a moratorium on passing judgments, so that at least as much attention could be given to developing human capacity as to plant yield. The level of tempers, interests and politics is too high, however, to allow such a luxury.
In Mexico the Ejidal Bank has become the institutional patron, and most of the recipients of land, the ejidatarios, are completely dependent upon it for credit, for decisions on crop allocation and for the distribution of profits. Absorbed by administrative tasks, the Bank has little time, staff or responsibility for training the peasants who, with only a minor decision- making role, seldom develop as entrepreneurs. Of course, being a mature program, the Mexican example encompasses great diversity, and there are innumerable exceptions to Bank paternalism.
This pitfall, evident in the pioneer program, will perhaps serve as warning for the new program in Chile, where the Agrarian Reform Corporation could easily follow the same route. As set forth by the Chilean law, expropriation is to be followed by two to five years of close government tutelage to train the beneficiaries in modern agricultural methods, provide them with the essential infrastructure and establish their credit. Concomitantly, leadership and community-development specialists are to groom the peasants to become decision-making operators. In this, Chile has vastly improved upon the early course of Mexico's agrarian reform when peasants were largely left to fend for themselves.
Although close surveillance is perhaps warranted during this preliminary training stage, the danger is that it will become habit Titles to the land are now being granted to the peasants, however, and it can be hoped that, with greater independence and diminishing attacks from the opposition, the Chilean asentados will become self-reliant farmers.
Supporters of agrarian reform, likewise, amass social and economic evidence to argue the case for structural change in rural areas. Agriculture is failing to produce enough food to meet the needs of population growth. It does not fulfill its potential in producing export crops which could provide important earnings to finance imports. And, not only has it failed to better the substandard conditions of rural inhabitants but, in fact, poverty, misery and discontent are increasing in the countryside.
The agrarian structure in Latin America consists of four types of holdings, essentially: plantations, family-sized and owner-operated farms, latifundia and minifundia.
The plantation system concentrates on extensive export crops-coffee, sugar, cacao, bananas. Commercially minded of necessity, it is generally modern in the sense of utilizing land, capital and labor sufficiently well to meet competition. It is the lifeblood of the region's balance of payments; 52 percent of total international earnings in the 1960s have come from agricultural exports.
The family-sized farms are so minimal in number and acreage as to have little consequence in the agricultural economy of the continent. They cluster in such areas as southern Chile, the State of São Paulo in Brazil, the Japanese colonies in Amazônia, the fringes of the Calí Valley of Colombia and the Costa Rican highland.
It is chiefly upon the latifundia-minifundia complex that reformists focus their ire. Social considerations aside, the charge is that the former underutilize both land and labor, and that the latter exhaust the soil by overcropping and underfertilizing; moreover, the uneconomic size of the small plots does not absorb efficiently the manpower of the minifundistas. This traditional structure of landholdings commonly misuses both soil and terrain. The more desirable valleys and plains are usually held in large tracts and devoted to extensive crops or cattle-raising; characteristically, production is stunted by absentee ownership, antiquated methods and equipment, and minimum capital investments. On the surrounding slopes and mountainsides are the lots planted in cereals and legumes- erosion and negligible inputs depleting the soil's fertility.
Tax rates on land have been insignificant and delinquency in payment has been high. Labor has been the cheapest of commodities, to be had for little more than a stipend in kind and the use of a small plot of land. There has been, therefore, no financial burden in owning land and no need to make it pay its way, But land with its resident laborers has, since the coming of the Spaniards, endowed its owners with social prestige. More recently it has served as a hedge against inflation. In countries where, even today, investment alternatives are few, land has been considered the most desirable, even by townspeople who have no knowledge of agriculture. Land value has derived more from these intangible attributes than from its real or potential level of production. Profits have been derived more from the over-exploitation of the peasant than from the cultivation of the soil.
The result of this misappropriation of the land is the irony that, while Latin America's major source of export earnings is the agricultural cash crop, the area is increasingly unable to feed itself. Agricultural imports, mainly foodstuffs, rose to 20 percent of the area's total purchases abroad by 1965, while vagaries in weather, transport and marketing caused periodic shortages, high prices and inflationary pressures in the domestic market.
Looking to the misuse of both man and land in this agrarian structure, advocates of change base their arguments on two major principles-social justice and economic development. The original motivation for land distribution in the early reforms of Mexico and Bolivia was almost purely social justice. The Mexican Revolution's clarion call for "Land and Liberty" and a Zapata riding forth on a white horse would no longer win the day, however, barring violent outbreaks. Although the humane concern to better the peasants' life continues, economic development is more likely to be the prime objective; the argument for agrarian reform is now made with charts and graphs projecting international receipts and payments, five-year plans, the consumer price index and the gross national product. Scratch the surface of such a polemicist and one may find a visionary dreaming of social justice, but he has learned that economics, not idealism, wins the support of the industrialists and urban middle class who are essential to forge a coalition to counterbalance the bloc of large landowners.
President Eduardo Frei of Chile is an example of the amalgam of humanitarian idealism and practical economics. Bringing the rural sector into the mainstream of society was a major issue of his 1964 campaign, but he also appealed to the urban vote by arguing that agrarian reform would bring more and cheaper food into city markets. Lamenting the drain of agricultural imports on Chile's economy, equivalent to 25 percent of its total export earnings, President Frei in his first State of the Nation message (1965) said: "It is an undebatable fact that the most critical issue in our economic development resides fundamentally in the backwardness of our agrarian sector,"
The potential role of a modernized agricultural sector in revitalizing industrialization has also become a key argument of developmentalists. They insist that rural progress would significantly expand the domestic market. The mood of countries such as Brazil, after a decade of euphoria buoyed by rapid industrialization, changed in the 1960s to one of pessimism. In the postwar boom import substitution and the construction of light industries were emphasized; these have now reached a plateau with plants operating below capacity, producing high-cost units, often of inferior quality. To avoid stagnation, sales must be multiplied by means of a significant increase in the consumer market.
In Brazil, 54 percent of the labor force is occupied in agriculture but contributes only 28 percent to the gross domestic product. That labor force is largely illiterate, is therefore denied the vote and is condemned generally to a subsistence living on the fringes of the national economy. This is the potential market that technocrats, planners and industrialists want to tap.
Tangible proof that agrarian reform contributes to the purchasing power of the peasant is found from one end of Latin America to the other. In the Yaquí Valley of northwest Mexico the beneficiaries of President Cardenas' land distribution in the 1930s live in multi-roomed homes with TV sets, major appliances, built-in kitchen cabinets and modern bathrooms. The coöperative society owns a fleet of tractors, plows and combines. After the Bolivian peasants seized the land in 1952-53, numerous local markets sprang up in the villages. Whereas pre-reform trade was based largely on barter, cash began to flow into the rural area, and solvent peasants participated in the money economy for the first time. Purchases of shoes, bicycles, radios, factory-made clothing and tractors are now common.
In the valley surrounding Santiago, Chile, a peasant leader on a recently expropriated farm said: "It is very easy to criticize and oppose the agrarian reform while sitting in Santiago, but I personally feel the real significance of this new situation when I know that now I can have shoes not only for my children, but even for my wife-new shoes, shoes bought with my own money and not used shoes which the patroncita gives me as a present when they are already worn out"
Another source of impetus for agrarian reform arises from a recognition that bad rural conditions progressively threaten and inconvenience other sectors of the society.
Latin America's cities are increasing faster than those anywhere else in the world, and the bulk of that growth is in the shantytowns, which are expanding at four to five times the rate of the core cities. Since the land cannot support them, peasants migrate in search of jobs. An unemployment rate of 30 percent in the slums is not uncommon, and many of the so-called employed are merely bootblacks or junk collectors.
Brazil's situation is typical. In one decade, 1950-60, Curitiba, capital of the State of Paraná, doubled in population, and São Paulo increased by 74 percent. Traffic is jammed and streets are in ill-repair. There are electricity and water stoppages, and even local telephone calls can result in inordinate delays. Suffering serious deficiencies in services and amenities, the middle class is increasingly disturbed and has come to see improved rural conditions as a means to keep the would-be migrant on the farm.
A recent report on Latin American urbanization by the Food and Agriculture Organization found that Mexico suffers less from the problem. This is accredited to "large numbers of moderately populated agricultural villages [which] provide an alternative to urban migration . . . The program of agrarian reform has probably contributed to this staying power."
City-dwellers have also been made aware of rural conditions by the several significant outbreaks of peasant violence in the last decade. Because these posed serious threats to the society, agrarian reform was deemed advisable in order to ensure political stability. For those few years, starting in the late 1950s and into the 1960s, peasants were viewed as possible explosive elements, to be feared, appeased and, if necessary, quelled. Then came the rash of evangelists who sought to transform the quiescent campe- sino into a militant rebel. In almost all cases of overt peasant dissent, leadership was from the middle class and the assumption was that the abuses suffered had spawned a suppressed anger, which, if released, would contribute to the restructuring of society. Protagonists were Hugo Blanco in Andean Peru, Francisco Julião in Northeast Brazil, Camilo Torres in Colombia and, ultimately, Che Guevara in Bolivia.
However, this apparently promising matrix for revolution-or at least for forcing basic structural change-proved sterile. Just as Guevara was later to lament the passivity of the peasant, Julião in 1962 said that the campesino did not "act like a human being, but a vegetable. The great task which we undertake is to make him live like a human being." The classic statement of his activist days was: "to agitate is beautiful, but to organize is difficult"
Heir to Julião's abortive attempt to mobilize the Brazilian peasants is the Catholic Church, which stresses education, not agitation. The priests devoted to this work assume a long and tedious task just to prepare the downtrodden rural sector to articulate its own demands. Chile's very real agrarian reform, promulgated in July 1967, was the product not of peasant pressure or rural-based power but of the foresight of middle-class intellectuals and the pioneering effort of the Church.
In some few cases, peasant activism brought results. Until the new agrarian reform law of this year, Peru's program consisted largely of granting titles to Andean Indians who, as groups, have invaded large holdings and seized the land. In general, however, the result for the protestors has been intensified suppression and deeper disillusionment. Peasant violence seems to have subsided, at least for the time being, and middle-class revolutionaries look more to urban guerrilla activity to vent their dissatisfaction,
As a result of these pressures for rural change, real agrarian reforms have been achieved in a few Latin American nations: some forged by revolution and some shaped by legislative process; some executed and some stillborn; some under close government tutelage and some on a laissez-faire course. The range is represented by Bolivia, Mexico, Chile, Venezuela and Brazil.
The first two were products of revolution but differ somewhat in their origin and course. Bolivia's 1952 revolution was an emotional refutation of the exploitation of man and resources by a small oligarchy of nationals and foreigners. Peasants demanded land and, when the new government tarried, took it for themselves. Destitute and disorganized, the Bolivian Government has never quite caught up with the de facto reform. After almost two decades, nearly half of the peasants have not received titles, and much less than half have received technical or financial aid. In the beginning there was a kind of blind faith that social and economic advances would automatically accompany the simple act of land redistribution. Now it is recognized that major inputs of capital and know-how are necessary to achieve significant progress, but in Bolivia the will and the resources have not yet been focused on the need.
Mexico's was, likewise, the product of revolution, characterized by peasant participation and the cry for social justice, particularly for land. The Government, however, maintained control, legitimizing agrarian reform first by decree in 1915 and then by the Constitution of 1917. Though distribution was slow until the 1930s, the peasants on the whole kept faith, and the distribution was carried out under official auspices. As in Bolivia, it was assumed that putting peasant and land together sufficed, and little attention was given to assisting the ejidatarios. But, unlike Bolivia, Mexico came to realize the need to stimulate agricultural production and, since the thirties, has increasingly rendered services to the agrarian sector: credit, research, marketing controls, seed improvement, irrigation systems and farm insurance. Mexico, being wealthier than Bolivia, has been able to benefit certain areas, such as the Northwest, sufficiently to make a dramatic impact
Mexico's agrarian reform is an irregular program with significant successes to show in some geographic regions and abject failures in others; with ultramodern agricultural techniques on some farms juxtaposed with oxen and wooden plows on others; with the idealized ejido (communal) system disintegrating into individual plots, yet instilling the ejidatarios with prestige and a sense of dignity; with spurts of governmental enthusiasm followed by conscious attempts to suppress the whole concept.
Among the agrarian reforms of nonrevolutionary origin. Chile's strikes hardest at the traditional institutional structure. After a feeble start in 1963, under the reform law of 1967 private lands in excess of 200 irrigated acres are being expropriated, even in the valuable agricultural heartland of the central zone. Compensation is based upon tax-assessed value, which is based upon productive capacity rather than the inflated market value. With a low cash indemnification, 1 to 10 percent, and long-term bonds only partially adjustable to inflation, an owner may recover as little as 30 percent of the pre-reform value of his land, Naturally, the landowners and their allies fought vigorously to defeat the measure.
Avid supporters of agrarian reform have been disappointed with the pace of Chile's expropriation and distribution. Feeling that Frei's popularity, a strong law and the urgency of the problem warranted and facilitated vigorous implementation, they have been disgruntled by the President's concessions to temporizers. In fact, the Government's restraint reflects the political reality of Chile as well as that of other Latin American countries. No president and no government is assured of fulfilling its mandate. Even in democratic Chile, where coups d'état have been rare, rumors of impending golpes are spread from time to time as a subtle way of reining in the speed and direction of executive action. Even the canard can be an effective political weapon. President Frei, like most Latin American leaders, including military strongmen, must tailor his program to a volatile balance of power, and a misjudgment entails not just a fall in the popularity polls but very real jeopardy for the whole administration.
Compared to Mexico's mature program, Chile's is still embryonic, benefiting approximately 15,000 families to date. It is estimated that the reform, as it is now being executed, will stabilize at 35,000 to 40,000 families. After thirty-five years of land distribution, Mexico had benefited 2.3 million families, representing 54 percent of all landholders and possessing 45 percent of all cropland. The difference in scope and vigor in the two programs can be assigned not so much to duration as to origin.
Mexico's agrarian reform was the prime objective of a revolution and is endowed with a sanctity which ensures its survival. The Mexican program was formed in a new and sympathetic political matrix. As the historian Daniel Cosío Villegas described the effects of his country's revolution:
. . . it totally swept away not only the political régime of Porfirio Diaz but all of the Porfirian society, that is, the social classes or groups together with their ideas, tastes and manners. Not only the commanders-in- chief of the army but their officers and all the soldiers disappeared without exception. Landowners, urban and especially agricultural, were almost entirely replaced by new ones. Not one of the great newspapers survived. Only two out of about fifty banks continued into the new régime. Official bureaucracy-federal, state and municipal-was wholly reformed,
In Chile there is no suggestion that the old guard has been destroyed. Typical of Latin American solutions, compromise rather than confrontation has been its hallmark. Unlike Mexico's, the reform does not result from the demands of the society as a whole but of one party, the Christian Democrats, whose popular vote has steadily declined. Having won a majority in the presidential election of 1964, its support fell to less than a third in the congressional elections early this year. In the 1969 elections the party of the Right made a comeback, and its stalwarts now look to the resuscitation of ex-President Jorge Alessandri as its candidate in the 1970 presidential race. Should a conservative triumph, he would be unwise to halt the reform but could slow its pace decisively in the name of "consolidation." On the other hand, a victory of the parties to the Left of the Christian Democrats would obviously take the program on another course.
Like Chile's, Venezuela's agrarian program was hammered out by parliamentary procedure, but it has not tested the temper of the society to the degree that Chile's has. Venezuela's reformists have not had to collide head-on with the traditional structure and the vested interests because an abundance of public land and government funds made circumvention possible. Coming to power after a self-serving dictator and his avaricious friends, President Rómulo Betancourt and the Acción Democrática party could, without compunction or condemnation, restore to the State their predecessors' huge holdings representing some of the richest and best-located lands in the country. Also, Venezuela's small population of approximately nine million left vast areas uninhabited, ready for development with the proper investment. The Government undertook major expenditures to finance colonization projects, irrigation systems, extension services, rural housing, malaria eradication and the purchase of private property at market prices with cash payment. Outlays of such scope, impossible for impecunious Chile, have expedited the reform program of oil-rich Venezuela.
Venezuela is perhaps the only Latin American nation where colonization has been carried out with considerable success. Generally, it has been conjured up as surrogate for real agrarian reform. In a surge of enthusiasm, peasants from overpopulated core areas have been carried off to disease- ridden hinterlands, given a token advance and left to forage on their own. To be effective, colonization demands major investments in roads, land clearance, health programs, school construction, agricultural training and ecological research; only Venezuela has been willing and able to tackle such an immense undertaking in the way it should be done. On the whole, colonization-long used as a gambit to avoid real agrarian reform-has been discredited as the prime remedy for curing the social and economic malaise of the Latin American countryside.
Beyond the practical considerations of capital and land supply, Venezuela's course was smoothed by a consistent adherence to the concept of private property. Whereas the Mexican ejido is still suspect as being a would-be kolkhoz and the Chilean asentamiento is constantly, though falsely, labeled "communist," Venezuelan parcels were distributed with titles, making the peasant an overnight capitalist The opposition was thus deprived of one of its most emotional rallying cries.
The Venezuelan reform, which has benefited 100,000 families since 1960, is considered practically complete. Yet, a significant share of the country is still held in latifundia, and a limitation on the size of holdings has never been imposed by law or court. Nor has the whole peasant sector benefited from the reform. Dissatisfaction exists among some who have not received land grants and among others who hold title to parcels which continue unproductive because they never received the necessary improvements. The program, however, has made a significant contribution to the country's agricultural development.
As in many Latin American countries, Brazil's governments during recent decades have produced a multitude of bills, directives, studies, plans, projects and programs concerned with the agrarian situation. Most of them emphasized colonization, and the one pioneering draft which proposed the distribution and utilization of land for social purposes was shunted aside before reaching Congress.
Brazil needs agrarian reform as much as any other Latin American country. Its tenure structure is badly balanced: 81.3 percent of the non-public land is held by 12.6 percent of the landowners in latifundia of 1000 to 100,000 hectares. Dwarf units fragment the other 18.7 percent of the territory among 87.4 percent of the owners. Crop yields in Brazil are inferior to those in Argentina, Chile and Mexico and are not experiencing the improvements of the other three nations, A cash-crop psychosis dominates, concentrating on coffee and sugar, both of which suffer from overproduction and world market fluctuations. Meanwhile, regional and periodic food shortages and rising prices for such staples as bread, dried meat and beans inconvenience the upper classes and subject the poor to inadequate diets.
But unlike Chile and Venezuela no government has come to power in Brazil which has been dedicated to the cause of agrarian reform. Legal instruments have gradually evolved which make possible a program of expropriation and distribution, and sufficient basic data has been gathered to facilitate rational action. So far, however, performance has been limited to little more than small-scale projects and demagogic half-measures.
In Brazil as in the other Latin American countries where agrarian reform is still more a matter of word than of deed, there are certain key situations which reveal the true intent of those who determine the program's fate. One of the most obvious of these is the budget granted to the executing agency. The Brazilian Institute for Agrarian Reform (IBRA) was created by the Land Statute of 1964. During its first two years, when it was largely involved in planning and in conducting a nationwide cadastral survey, its fairly modest budget requests were met by government appropriations. However, in 1967 and 1968, when the agency was ready to initiate reform projects, it was granted 34.9 percent and 21.5 percent, respectively, of its proposed budget. An IBRA report stated frankly that "the lack of resources is the principal reason for the delay in carrying out the agrarian reform."
Another failing typical of timid programs is excessive expenditures for small-scale projects. At one such showplace in Northeast Brazil precious IBRA funds went to construct a social center, a church, an administration building and recreation facilities. Eighty-seven beneficiaries of the project were presented with finished houses, a warehouse, chicken house, stable and corrals. But they received parcels too small for subsistence; the cost of the land represented only 3.17 percent of the total investment Such costly projects provide arguments to reform opponents who proclaim that the country cannot afford such expenditures on a nationwide scale.
Still another barrier placed before effective reform is organizational complexity. In the continuing revision of the administrative structure concerned with executing a reform, President Costa e Silva recently issued a decree-law redefining the responsible agencies and their relationships. Whereas IBRA was formerly linked directly to the Ministry of Agriculture, a new intermediary body has been created, the Executive Group of Agrarian Reform (GERA). Time may prove otherwise, but GERA's composition seems unwieldy: 11 members including representatives of six ministries, the central bank, the landowners association, plus IBRA and a related agency of agricultural development (INDA).
If the pattern of the past continues, there will be more work groups and committees set up to study what previous agencies and groups have already evaluated and on which they have made recommendations. On the basis of past preparations, Brazil is ready to start an agrarian reform of significance. A major encumbrance in the 1946 Constitution was eliminated in the 1967 Constitution: full indemnification in cash prior to expropriation is no longer required. Such a stipulation made agrarian reform economically impossible. Constitutional clauses calling for full prepayment in cash were common in most Latin American charters until recently and have been a major barrier to effecting reforms. Brazil can now finance the reform with long- term bonds.
The concept of "social function" has, likewise, altered the bases of the tenure structure. The 9th Institutional Act of April 1969 says specifically that "The President of the Republic may [approve] the expropriation of rural property for reasons of social interest . . ."
Because of a nationwide land registry in 1965, the Brazilian Government for the first time in history has sufficient data on the pattern of ownership and has also succeeded in implementing a progressive land tax which encourages productivity. It has, therefore, been able to designate five priority areas for reform, chosen according to the following criteria: the existence of public development projects such as irrigation and rural electrification, the existence of latifundia, manifest social tension, concentration of minifundia, high incidence of landless farmers, and badly utilized land near urban centers.
If the Costa e Silva government wants to repair the agrarian situation, it has the power and information to do so, and potentially it has the support.
Brazil's is typical of the situation in most Latin American nations. An anachronistic tenure structure is holding back production in both the industrial and agricultural sectors. Internal and external pressures for change have, in recent years, forced certain adjustments in legal instruments and government organization which now make reform possible. The landowners and their conservative supporters still retain enough power, however, to bar effective measures, and they have exerted their traditional authority to quell peasant protest and its progressive leadership. Arguments for agrarian reform are increasingly voiced by the modern urban sector, which realizes that the agrarian structure is retarding economic development.
If these urban elements exercise their potential economic and political power, realizing that their interests are contrary to the traditional landowners', they may gain control of the government or exert pressure on military régimes so as to stimulate action, This has been the case in Chile; in Venezuela the peasant sector was sufficiently politicized and organized to give strong support to the city leaders. The experiences in those two countries suggest that similar agrarian reform programs will be moderate but nevertheless capable of revitalizing agriculture.
Colombia and Ecuador have also made some progress in agrarian reform and colonization, but the programs are much more limited than those of Chile and Venezuela, Until Peru's latest agrarian reform law, decreed by President Velasco in June 1969, distribution in that country had benefited only 8,000 families, and the reform was limited to the Andean highlands, with the more productive coastal strip exempted.
The shift in power and the progress of an agrarian reform are both slow, however, while populations and food imports are growing rapidly. For this reason there is a tendency to adopt noncontroversial short-term solutions based on technology, mechanization and modernization of the agricultural infrastructure.
But the short-term, technical solutions do not solve the social problems and in some cases aggravate them. Rural conditions have worsened rapidly in the last two decades. Agrarian reform is an extremely complex process, interlocked with the whole of the sociopolitical and economic structure of a nation, and of necessity a prolonged, difficult and costly undertaking. The programs now in existence give ample proof that a country must be willing to dedicate major quantities of capital and manpower to the development not only of the land but also of the man. Unwillingness to make this investment may prove even more costly in terms of violence in the countryside and stagnation of the economy and society.