William C. Thiesenhusen (1996):
Trends in Land Tenure Issues in Latin America

Executive Summary

The purpose of this paper is to study various Latin American countries which have especially serious land problems and attempt to draw some general conclusions from them for policy. The omission of some countries does not imply that they do not have land problems but that information on them is less current. Some issues, such as land invasions and protecting fragile resources, are relevant to a number of countries. Other issues, such as resettling former refugees, come up in the context of only one country; in this paper, Guatemala.

In general, aid from international sources to Latin America and from governments to the rural poor has been based on phrases that are in fashion for a time, then are dropped for other panaceas. There are no cure-alls; solving most problems requires imaginative policies. Past panaceas ("extension assistance," "tax reform," "land reform") tend not to work by themselves. By the time that "integrated rural development" (IRD) became the fashionable phrase, land reform had been forgotten and the results of IRD were criticized in that benefits flowed to the rich, omitting the landless and land poor. Similarly, for the past decade rural development was supposed to occur via the establishment of viable "land markets." Not surprisingly, it did not.

While land markets became an excuse for not investing in the rural poor, it was also deemed necessary for countries to relieve their position of debt and, later, to stabilize and restructure. Privatization of key state owned enterprises played an important part in these efforts and the process is ongoing. Help for the rural poor through the government became discordant as the rest of the economy was becoming more marketized. The result is that for a number of reasons, chief among them the fact that campesinos were not able to command needed mortgage credit, rural poor were not benefited even when economies began to grow again in the early 1990s. If resources are highly concentrated, as they are in Latin America, public policy that is not somewhat "poor biased" tends to concentrate resources and income still further. Because of the large numbers of workers involved, wages in the region have not risen and land purchase is beyond reach. Yet, policymakers continue to advocate a free, open, and unfettered land market, assuming that campesinos will receive land.

Budgets of most governments will remain tight. Regulation by the World Trade Organization or regional trading agreements (such as NAFTA and MERCOSUR) cause a deficit, which leads to high interest rates. This will continue to be frowned upon internationally (and domestically as well).

A better system of land taxation is needed to raise revenue and to press unused but arable land into use. There needs to be a better international understanding of the fact that there is much unused but cultivable land on Latin American haciendas and fazendas. Pressing this land into agricultural use will relieve pressure on the frontier where land is ecologically fragile.

When such tax revenues are more forthcoming, peasants wishing to buy land may be subsidized through local mortgage land banks designed for that purpose. Of course, the problem is that political pressures prevent the passage of land taxes, as these impinge on the rich. Parliaments in the region have resource-owning members and others who are dependent on the elite for votes and campaign funding.

Meanwhile landless groups, after years of quiescence are becoming more vocal. Mestizo groups have rebelled at landlessness for decades, but, with the exception of the Mapuches in Chile, who protested in the 1960s, Indians in most parts of the region tended to accept their lot. The Indian marches, which occurred in 1992 in Ecuador and Bolivia as part of the 500th anniversary celebration of the landing of Columbus in the new world, and the Chiapas rebellion in Mexico began a more militant phase. There have been significant numbers of land invasions in Central America and Brazil as well as in other parts of Mexico, and these usually have been countered by government forces.

Landlessness and problems with land short campesinos have environmental impacts. Although some forests in protected areas are encroached by concessionaires, many peasants attempt to settle in the formerly forested areas and carve out a minifundio there. Much of this land leaches rapidly, and within a few years peasants have had to move on to new land, destroying more of the forest. Eventually, this land tends to be bought up by livestock farmers who use it for grazing.

It would be easy to blame the peasants for this environmental destruction but that would be tantamount to blaming the victim. Much of the problem rests with the large landholders who leave substantial arable areas uncultivated on their farms. In Brazil, for example, it is estimated that if the landless and land poor were to receive this land they would all have farms of about 4 hectares. In fact, because they are not accommodated within the farming areas of Brazil, the peasants have to migrate to the frontier or cities. Programs of environmental protection must accommodate the peasant's need for subsistence if they hope to control the use of resources in an environmentally sound manner.

One reason that landlords can leave so much land idle is that there are no land taxes to give them the incentive to use their property more wisely. A tax that imposes a higher rate on farmland than on unarable land would encourage putting land to its "highest and best" use. This is strongly resisted by the landlords whom, to this day, are heavily represented in the parliaments of the region.

The collapse of import substituting industrialization and the debt crisis of the 1980s led most of Latin America to adopt export promotion as the strategy most likely to lead to growth. This meant fostering manufacturing that was labor intensive and promoting, in the agricultural sector, non-traditional agricultural exports (NTAX), which proved to be useful in that they occupied a relatively small part of the export sector and displayed faster growth. It was hoped that the NTAX strategy would promote the fortunes of smaller farms. It became known that while smaller farmers could tend the crop in a more intensive manner, they did not have the expertise to promote assembly of the product in preparation for marketing and were not able to use chemical products and other husbandry practices in accordance with the strict quality control of the importers.

Stabilization and restructuring policies that called for a more realistic exchange rate (one that was not overvalued would favor exports), curtailed inflation, cut government spending, and privatized were standard in the 1980s and the present. These policies were deemed necessary to promote exports, generate foreign exchange, and pay debts. It was hoped that the policies would re-start economic growth and enable the countries to pay off their foreign debtors. During that period, government was relegated to a decidedly weaker role than it played in the 1970s and 1980s. In fact, the rhetoric of the period thoroughly denigrated the state as a major player in promoting economic growth and laid the future of economic development at the feet of the unfettered free market. There were reverberations felt in agriculture as the environmental consequences of natural resource destruction came to be downplayed and emphasis came to be placed on developing a viable land market.

Before full reliance could be placed on the land market, however, more titling and registration of farm property was required to make buying and selling and the easy receipt of credit possible. Titling and registration would create more security for farmers (so they could produce more investments in their property). As this happened, the argument went, a more intensive farming program would be adopted which would employ more labor. The free functioning of the land market would also make farming large properties more uneconomic and cause hacendados and fazendeiros to sell off to smaller proprietors. These policies have not yet shown the salubrious results that were their promise.