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
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.
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
varying degrees of
linkage to the
bogged Shining
Path down in a
rural war of
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
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-
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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