(This post written in collaboration with CIP Intern Hannah Brodlie.)
“Subsidies to the rich do help reduce inequality:
[former Uribe Agriculture Minister AndrÃ©s Felipe] Arias.”
(Photo source and article link)
Update 10/9: Colombia’s ContravÃa television program broadcast an excellent show about this very topic last night. It has been uploaded to YouTube and is very highly recommended (in Spanish).
Two weeks ago, the Colombian magazine Cambio broke a story about Agro Ingreso Seguro (Secure Agricultural Income), a seemingly benign program run by the country’s Ministry of Agriculture since its inception in 2007. Among the principal objectives of AIS are “to promote productivity and competitiveness, reduce inequality in the country and prepare the agricultural sector to face the challenge of the economy’s internationalization.”
The Uribe government billed Agro Ingreso Seguro as a program providing subsidies for smallholding farmers. However, it appears that many – if not the majority – of the program’s subsidies, particularly those designated for “irrigation and drainage” projects, have in fact gone to a few of the wealthiest landowning families. This is particularly true along Colombia’s Caribbean coast, arguably the part of the country where land distribution is most unequal. The cover story in this week’s Cambio explains how 25 billion pesos (US$13 million) in subsidies went to four rich families in Santa Marta, the capital of Magdalena department.
- Each project may receive a maximum of 600 million pesos (about US$322,000) in subsidies. However, the DÃ¡vila family of Magdalena divided their land, much of it used to grow African oil palm, among individual family members in order to obtain 2.2 billion pesos (US$1.18 million). Juan Manuel DÃ¡vila Jimeno did so by renting parcels of his existing land to his wife, children and his girlfriend, a former beauty queen, for small amounts of money.
- Subsidies totaling 3 billion pesos (US$1.6 million) were given to the family of Alfredo Lacouture Dangond, father of Maria Claudia Lacouture Pinedo, director of the Colombia es PasiÃ³n tourism-promotion and public-relations program that organized a promotional display of heart-shaped sculptures all over Washington in September. These 3 billion pesos, notes the MedellÃn-based Popular Training Institute (IPC), are equal to the assistance the Colombian government provides to 5,779 internally displaced families.
- The Vives family, which is politically and socially influential in Magdalena department, received more than 13 billion pesos (US$6.9 million) from AIS last year.
- Another AIS beneficiary – with 194 million pesos (US$100,000) in subsidies – is Ismael Augusto Pantoja, alias “El Negro,” a narcotrafficker requested in extradition by the United States since 2005. Pantoja received his subsidy in January 2008, was arrested in October 2008, and was extradited in September 2009.
The Inter-American Agricultural Cooperation Institute (IICA), an OAS-affiliated body, was contracted by the Agriculture Ministry to select AIS beneficiaries. Daniel Montoya, coordinator of Agro Ingreso Seguro in the the IICA, said that mistakes were made: â€œMany families obtained those subsidies because there werenâ€™t established prohibitions, but today we see that the policy was badly designed.”
However, it is worth noting that the main link between AIS and the IICA was Carlos Manuel Polo, who in 2007 became head of the IICA “irrigation and drainage” program thanks to personal connections with former Magdalena Congressman Luis Eduardo Vives. The former congressman, whose family has received generous subsidies, was convicted in 2008 for ties to paramilitary leader Rodrigo Tovar (”Jorge 40″) as part of the “para-politics” scandal. Polo told Cambio, â€œI donâ€™t deny my friendship with Luis Eduardo Vives. … That relationship does not compromise the interests of the Ministry and much less those of the IICA.â€
Critics view the revelations as evidence of rampant cronyism, with the Uribe government handing out benefits to its wealthiest supporters from the public treasury. It recalls the 2008 “Carimagua” scandal, in which land set aside for displaced Colombians was instead leased to agribusiness interests. “The Uribe government loves to give public money away to the richest and collect heavy taxes from the weakest,” wrote former minister ex ministro Juan Camilo Restrepo in MedellÃn’s El Colombiano newspaper. Writing in the BogotÃ¡ daily El Espectador, former Central Bank Director SalomÃ³n Kalmanovitz added, “In Ãlvaro Uribe’s two terms, the largest agrarian counter-reform in the nation’s history has been consolidated.”
The AIS revelations are a political blow to AndrÃ©s Felipe Arias, the Uribe administration’s minister of Agriculture from 2006 until early this year, who championed the program. Arias, a deeply conservative young politician considered a strong presidential contender if Ãlvaro Uribe is unable to run, has been so closely identified with the president that Colombians frequently refer to him as “Uribito.” In an opinion piece in Thursday’s El Tiempo, Arias defended himself by arguing that AIS has benefitted 316,000 families in the countryside, 98% of whom are small and medium producers, who have received 88% of the resources. He also contends that AIS has generated 376,000 jobs in the countryside.
Cambio acknowledges that the program has generated employment, although not not as much as ex minister Arias and current Agriculture Minister AndrÃ©s Fernandez claim. Others dispute Arias’s claims about the distribution of resources. Rafael Pardo, a former defense minister and leader of the opposition Liberal Party, said that in 2007, the program gave out 114 billion pesos (US$60 million) in subsidies, of which 65 billion (US$34 million) ended up in the hands of only 103 beneficiaries.
Former minister Arias said Thursday that it would be a bad idea to end the AIS program. He justifies that assertion, oddly, by citing the Uribe government’s high poll numbers. “This is what only a few people want. Those who appear very low in the polls. When the polls go well for us, the debate is harder.”
Indalecio Dangond, one of the major beneficiaries of the AIS subsidies, wrote an opinion piece opposite former Agricultural Minister Arias’s in Thursdayâ€™s El Tiempo. He contends that â€œthe beneficiaries are not to blame, rather the model of ex minister Andres Felipe Arias, who designed it to reach the rich and not the poor.â€
According to Cambio, this year the program has approved subsidies for 100 projects, which include more than 1.57 billion pesos (US$840,000) for Magdalena. This yearâ€™s figure is significantly lower than in years past due to the fact that those who received subsidies in 2007 and 2008 could not present again this year. An AIS analyst explained, â€œthey realized that the majority of the resources were remaining in the hands of a few, and that was disgraceful.â€