The Two Faces of Fujimori's Rural Policy

September 25, 2007

A new law has opened up the fertile lands along the coast to the market. In the Andean highlands, however, the fear of a Shining Path revival has led the government to beef up a rickety clientelistic system. Campesinos work the land in the Andean highlands. The government of Alberto Fujimori implemented neoliberal policies rapidly in most spheres of the Peruvian economy, especially after the 1992 autogolpe, which gave the President greater leverage to impose painful reforms. The rural sector, however, was a notable exception. It was in the Andean highlands, after all, where the Shining Path insurgency first emerged, and the continued impoverishment of most of the peasantry presented a sticky political problem for the government. A handful of timid measures during Fujimori's first administration, designed to encourage the private sector to invest in agriculture, had little effect. By 1995, however, with Shining Path's main leaders behind bars and its armed activities on the wane, the government began to take bolder steps in pro- moting market relations in the agricultural sector. In July of that year, Congress passed Decree Law 26505, the long-winded "Law of private investment to promote the development of economic activities in the lands of the national territory and in the campesino and indigenous communities." As its name suggests, the law seeks to promote private-sector investment in the countryside. This was a radical departure from the agrarian reform that had been implemented in 1969 by the military government of Gen. Juan Velasco, which established cooperative and communal forms of prop- erty ownership in 75% of the country. While govern- ments have been chipping away at Velasco's social and economic reforms since 1980, none has gone so far as the Fujimori administration. The new "land law," in effect, is the final nail in the coffin of Velasco's agrar- ian reform. Opposition to the law has emerged, howev- er, among both peasant organizations and legislators wary of the impact of privatization in the countryside. To date, the law remains entangled in the legislative process. Nelson Manrique is professor of history at the Catholic University in Lima. His most recent book is Vinieron los sarracenos: El uni- verso mental de la conquista de Ambrica (DESCO, 1993). Translated from the Spanish by Peter O'Driscoll. Prior to Velasco's land reform, the countryside was dominated by large landed estates, known as haciendas or latifundios, that coexisted with minifundios, tiny plots cultivated by campesinos. Four percent of the rural population owned 56% of the cultivable land, mostly in the form of latifundios, while 96% controlled 44% of the land, divided into innumerable minifundios. Coupled with land scarcity-only 6% of Peru's land is arable-this skewed land distribution gave rise to dra- matic rural conflicts. Velasco's agrarian reform sought to bring peace and devel- opment to rural Peru by redistributing the land. In its effort to promote worker-owned enterpris- es, the Velasco regime established a complex system of cooperative land ownership. Local cooperatives, in this vision, would link up to form larger regional and national federations of producers, which would coordinate agricultural production throughout the country. The coopera- tive model was widely established along the Peruvian coast, primarily in cotton and sugar plan- tations. Because of the predominance of feudal- like relations in the high- Civil-defense patrol members per lands and the serf-like time, Palmapampa, located on th condition of the peas- antry, however, the govern have to create new structu tives. State planners, who internal workings and dem of the campesino commune cooperative model was be development than the can result, two models were a established campesino co restructured communal f( intermediate step in their cooperatives." In the case o estates, state-run cooperat Societies of Social Proper The SAIS incorporated the ing campesino communiti benefits to all members. In the short term, the lan' rural waters. In the long te dent that the military government's planners had designed their reforms without taking into account the demands of the campesinos, who wanted to recover ownership over the lands that had been stolen from them by the encroaching haciendas in the pre-Velasco years. The haciendas had disappeared, but the coopera- tives retained the structure of the latifundios. In most cases, moreover, the model of collective ownership proved to be economically unviable. Only some of the coastal cooperatives, which had taken over modern, form daily military exercises in Palmapampa in early 1992. At that e Apurimac River bordered a Shining Path "liberated zone." [ment believed that it would capitalist haciendas, survived into the 1990s. By con- res to manage the coopera- trast, the communal cooperatives, based on the produc- had little knowledge of the tion of campesino households, and the SAIS, which ocratic forms of governance were built upon traditional haciendas and their precap- ities, believed that the state's italist mode of production, failed miserably. Many of tter suited to promote rural the cooperatives on the coast and the communal coop- mpesino communities. As a eratives in the highlands were gradually dismantled, dopted in the highlands. In and the land was divided among the farmers, a process mmunities, the government known as parcelization. As a result, small-scale farmers orms of governance as an now constitute the bulk of rural landowners: 70% of all conversion into "communal land under cultivation is under 50 acres. f areas dominated by landed The struggle over the SAIS was more complex, since ives, known as Agricultural the state functionaries who ran them had a vested inter- Ly (SAIS), were established. est in retaining the cooperative structure. This led to haciendas and the surround- many bitter struggles between state administrators and es, and promised economic the campesino communities. In many parts of the coun- try in the 1980s, campesino communities carried out d reform calmed the agitated massive invasions of SAIS lands to accelerate the rm, however, it became evi- parcelization process. 40 NACLA REPORT ON THE AMERICAS 40 NACIA REPORT ON THE AMERICASREPORT ON PERU Into this conflict stepped Shining Path. It sought to channel campesino discontent against the state bureaucrats who managed the SAIS, as well as their frustration with the failed attempts of the left-wing agrarian federations to peacefully transfer the lands to the campesinos. This was a marked contrast to the 1970s, when Shining Path denounced land takeovers as "reformist" attempts to deepen Velasco's agrarian reform. At the same time that Shining Path sought to destroy the SAIS, it also sought to eliminate the cam- By the early 1990s, the proliferation of civil-defense patrols-with varying degrees of linkage to the military-had bogged Shining Path down in a rural war of attrition. pesinos' independent organizations that were leading the battle against the SAIS. The case of the "SAIS Cahuide" in the Canipaco Valley in the central highlands of Junin is illustrative in this regard. After the campesinos invaded 30,000 acres of SAIS land, prompting the cooperative's General Assembly to approve its definitive liquidation, the state bureaucrats in charge systematically blocked the land trans- fers. A month later, in January, 1989, a Shining Path column destroyed the buildings and the productive infrastructure of the SAIS Cahuide, and divided the livestock among the cooperative members. Shining Path offered no alternative for the organization of work and production. Its objectives were, essentially, to force the campesinos to return to subsistence production, in order to limit the supply of food to the cities, and to recruit them to the "popular war." Shining Path gained initial acceptance among the peasantry from the Canipaco Valley not by offering economic alternatives, but by providing services that the government had abandoned: maintaining social order, protecting campesino property by staving off livestock thieves, and providing a justice system that, while Draconian, was at least quick and free. As events unfolded, however, this acceptance gave way to open resistance. Part of the problem was Shining Path's imposition of its own structures on local forms of com- munal government. In addition, it proved unable to manage the latent intra-communal conflicts over land. In mid-1989, some Shining Path activists took sides in a violent conflict between two communities over land. The rival community turned the guerrilla activists over to the police, prompting a bloody reprisal in which Shining Path executed 12 campesino leaders. In the meantime, several former campesino leaders attempted to re-establish their communal forms of government, marking the true beginning of Shining Path's problems in the countryside. The armed forces arrived several months later, and found it easy to organize the Canipaco residents into armed civil-defense patrols to combat Shining Path. This scenario of initial campesino acceptance, then rejection, of Shining Path was repeated, with some regional variations, throughout the highlands. The peas- antry began to see the military as a more powerful ally than Shining Path. The military's change in strategy facilitated this shift: its indiscriminate attacks on the rural population had given way to more selective forms of repression. By the early 1990s, the proliferation of civil-defense patrols-with varying degrees of linkage to the military-had bogged Shining Path down in a rural war of attrition. There was an endless chain of attacks and reprisals between communities which had organized into civil-defense patrols against Shining Path and communities accused of supporting the guerrillas. This contributed to Shining Path's decision to shift its main operations to Lima. This move to the city, howev- er, led to a series of setbacks, culminating in the capture of the organizations's top leader, Abimael Guzmdn, in Lima in September, 1992. Since then, Shining Path's activities have declined sharply. The waning insurgency, coupled with the strong presence of the civil-defense patrols (and their military allies) in the highlands, allowed the govern- ment to consolidate its control over most of the coun- tryside. Fujimori's popularity in rural areas-primarily thanks to his perceived success in neutralizing Shining Path-was bolstered by a savvy campaign of public- works projects, including the construction of new schools, new roads, and the repair of dilapidated and damaged rural infrastructure. With Shining Path at bay, and his support in the countryside assured, Fujimori decided that now was the time to expand his neoliberal reforms to the rural front. Shortly after Fujimori's suc- cessful re-election in April, 1995, Congress passed the free market-inspired land law. Velasco's reforms imposed an ownership limit of 375 acres to prevent the rise of new haciendas at the expense of small farmers and peasant communities. Fujimori's land law removes all limits on land ownership. The law also overturns decades of legal norms designed to protect campesino community lands from being divided up and sold off. While the law pertains only to community lands along the coast- VOL XXX, No 1 JuLY/AUG 199641 VOL XXX, No 1 JULY/AUG 1996 41REPORT ON PERU campesinos. The coopera- tives that have survived con- tinue to grapple with the economic crisis and, in some cases, poor management. Many sugar cooperatives- one of the few remaining bas- tions of Velasco's reforms- are dividing up and selling the land. In Paramonga, one of the most important sugar cooperatives in the country, private investors side- stepped union negotiations with the state over how to restructure the cooperative by offering to buy the work- ers' shares and pay them sev- eral months in back-wages. Farmers using modern machinery collect the tomato harvest on a coastal plantation. Many campesinos sold their shares. The single largest which are the most fertile and desirable-observers fear share-holder of Paramonga is now the Delgado Parker that the government will soon seek to extend the new group, one of the country's most influential business law to the highlands. Finally, the government plans to consortiums. hand over unused state-owned land to landowners The highlands are a different story altogether. The whose holdings were expropriated by Velasco's private sector has shown scant interest in investing in reforms, the Andes. History has shown, however, that the high- Campesino organizations have protested against the lands can potentially be a political time bomb. Shining land law, which they say does not guarantee their legal Path is only the most recent (and by far the most ownership of communal lands. Only 2,000 of the 5,200 bloody) manifestation of this explosiveness. Hence, the campesino communities that have been officially rec- Fujimori administration is reluctant to carry out a full- ognized possess registered land titles. The law does not scale neoliberal reform of the rural sector in the high- say how communities with unregistered or no land titles lands. will be treated. This is, of course, a particularly urgent In fact, even in the wake of Shining Path's decline, issue for campesino communities along the coast, the state has continued to play a significant role in high- whose land can now be freely bought and sold. land agriculture, despite its iron-clad commitment to The land law reflects the marked duality which is neoliberalism elsewhere. The government's shutdown apparent in the government's overall treatment of agri- of virtually all public institutions that promoted small culture along the coast and in the Andean highlands. and medium-scale agriculture at the outset of Fujimori's This duality is a direct outgrowth of the contradictions administration seemed to portend the withdrawal of inherent in the government's neoliberal reforms. Along state support for the rural sector. Yet institutions that the coast, where the fertility and productivity of the land were eliminated, such as the Agrarian Bank, which sup- have whet the appetite of the private sector, the govern- ported agriculture through credit and subsidized inter- ment aims to make all land subject to market conditions. est rates, were simply replaced by a new set of institu- In the highlands, on the other hand, land is scarce, tions that dispense similar amounts of resources. rough, and unproductive. The campesinos own small Through the new rural agency FOPEAGRO, for exam- plots and employ cultivating techniques that pre-date the ple, the state has extended nearly $250 million in cred- arrival of the Spaniards. They work the land according it to small farmers each year since 1994-about the to the rain cycle, since few irrigation channels exist. equivalent of the credit extended annually by the Simply put, the conditions for capital growth do not per- Agrarian Bank. The National Project for the tain in the Andes. In neoliberal economic terms, the Management of River Valleys and Soil Conservation, coast is a highly profitable investment, while the high- which began its activities in 1995 with a budget of lands are utterly dispensable, approximately $3 million, now has an annual budget of On the coast, powerful business consortiums are $100 million to support rural industries and health-care eager to gobble up lands from impoverished programs. These programs are not designed, however, to pro- mote rural development. Their paternalistic logic smacks of clientelism. Funds are channeled to the pop- ulation largely in periods preceding elections. They offer mainly short-term assistance, and show little con- cern for improving the productive capacity of small farmers. The government's social-investment fund, Foncodes, for example, uses foreign donations to buy agricultural products from poor campesinos. Only a small fraction of rural farmers can put up collateral to obtain the loans from FOPEAGRO that they need to improve their output. The government is taking a calculated risk: by beef- ing up a rickety clientelistic system in the highlands, it dares to incur the wrath of World Bank functionaries, whose obsession with the ideological purity of structur- al adjustment prevents them from seeing how the social consequences of neoliberal reforms might exacerbate social conflict in Peru. In the rural sector, for example, the government's exchange-rate policy, which clearly favors imports, has devastated local farmers, who can- not compete with cheap food imports. The short-sight- edness of these functionaries parallels that of U.S. gov- ernment bureaucrats who insisted on imposing the eradication of coca crops as a "solution" to drug traf- ficking in the late 1980s, even when this policy was pushing coca producers in droves into the arms of Shining Path. Despite its periodic announcements that Shining Path's demise is at hand, the government knows that the guerrillas could potentially rebuild their social base among distraught rural farmers if conditions were to deteriorate further. The government's steps and missteps in its agricul- tural policy--dictated primarily by the greed of the pri- vate sector, which covets the fertile campesino lands on the coast-has created a volatile situation. Rather than seeking to improve the productivity of the thousands of small farmers throughout the country, the government has myopically opted in favor of big business in the remote hope that this will make the rural economy more dynamic. It is more likely, however, that stripping inde- pendent holders of their land will lead to a new con- centration of land in the hands of the few-as well as to new forms of rural conflict.

Tags: Peru, Alberto Fujimori, land, clientelism, shining path

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