CIP has mostly stayed out of the debate over the free-trade agreement between Colombia and the United States. Our longtime focus on security, conflict resolution and human rights doesn’t leave us well-equipped to debate issues like intellectual-property provisions, side agreements, “fast track†expiration, “chicken hindquarters,†and the like.
While accompanying Colombian opposition Senator Gustavo Petro during his March 5-9 trip to Washington, though, we heard him make an anti-FTA argument that was new to us, sounded plausible, and had strong regional security implications.
Sen. Petro spent little time discussing the dangerous climate that faces labor organizers in Colombia, which is the argument heard most frequently from the free-trade agreement’s opponents in the U.S. Congress. Instead, borrowing from the work of Colombian economist Luis Jorge Garay, Petro contended that the trade agreement will greatly benefit Colombia’s narcotraffickers.
The argument goes like this:
1. The FTA will devastate Colombian farmers who depend on crops that can be harvested two or more times per year, such as corn, rice, barley and cereals. According to Petro, about 90 percent of the farmers who grow these crops have small or medium-sized landholdings. They will be unable to compete with the cheaper produce of subsidized U.S. agribusiness.
2. The FTA will benefit other Colombian agricultural products, however: what Petro called “delayed yield†crops (tardÃo rendimiento). That is, products that take several years – in some cases, as many as 10 to 15 years – before they begin to yield a harvest. Such crops include timber, African oil palm, rubber, cacao, and many fruit trees.
3. Growing these “delayed yield†crops requires that farmers meet two conditions. First, they must have large landholdings; five acres of forest simply won’t provide enough timber to feed a family. Second, the farmer must have lots of “liquidity†– access to cash on which to live while waiting years for his “delayed-yield†crops to begin making a profit.
4. Who in Colombia, Petro asked, has both large landholdings and lots of cash? “They have a name in Colombia,†the senator said. “The narcotraffickers.â€
Colombia’s drug lords have bought enormous amounts of land over the past thirty years; it has been a preferred way to launder money. This concentration of land in the hands of narcotraffickers (with sales often pressured by paramilitaries) has caused what many analysts call a “reverse land reform†in Colombia’s countryside. Petro cited a 2002 Colombian government study (cited here [PDF] by a UN official) that found 61.2 percent of the country’s cultivable land in the hands of 0.4 percent of landholders – that is, 10,000 people. Petro contends that many of these 10,000 – perhaps a majority – are either narcotraffickers or “testaferros,†people whom the drug lords pay to allow their names to be used on land titles.
5. According to Petro, the FTA would benefit the drug lords in two ways. First, by creating a big market for the “delayed yield†crops planted on their large landholdings. And second, by guaranteeing plenty of cocaine production, since smallholding farmers driven out of business by U.S. competition will be tempted to choose a more profitable crop that can be harvested several times per year: coca.
Senator Petro’s agricultural argument against the free-trade agreement is alarming and compelling. From the standpoint of rural political economy, though, does it make sense? How great is the risk that this might really happen – that the drug lords would indeed be big winners? If the risk is significant, how can the FTA be altered to address it?
Again, this is not our area of expertise. We would welcome comments from more knowledgeable readers.
March 20th, 2007 at 12:48 am
I think the argument seems conceptually sound, but I’m not sure if all of Sen. Petro’s quantifications and extrapolations stand up to further scrutiny (aside from those bits already sourced above, I mean).
In other words, the problem is analyzing how much of a problem this would be or isn’t, as a whole.
And still..personally, I seriously doubt that the U.S. trade negotiators would be willing to give the bulk of Colombian farmers a reasonable chance of turning this around, at the expense of U.S. trade interests. For them trade is trade, politics is politics, and the drug war is the drug war. A pity that reality usually doesn’t work that way, but that’s how they’ve been treating it.
March 20th, 2007 at 9:46 am
I´m not convinced the FTA can be fixed. Your commentary is spot on and it´s something that has been troubling me for quite some time. Cyclical producers are basically screwed absent a “Buy Colombia” campaign or something nationalistic like that. In fact, the whole idea of “free trade” between economic superpowers and developing states seems nutty. We should be giving them “free trade” with us as a development assistance measure, not allowing US businesses to undercut Colombian ones.
At any rate, I work on a USAID program that I believe is one of the US government´s attempts to address this problem. Basically, USAID is attempting to jump start community forest enterprises (among other things) as a means to prevent coca farming or shift away from coca farming. I have been and remain highly skeptical of this policy as a coca remedy, but now the motivation makes a bit more sense.
Since I started working on this program, I have asked several managers what is going to happen if the FTA gets ratified. How are small, community enterprises going to compete with large scale multinationals? I have yet to receive a response.
Everyone seems to be concerned with questions of short term profitability (definitely of concern) but no one seems to have their eye on the long term picture. I have very real concerns that a 3- or 4-year program that spends hundreds of millions of dollars will ultimately leave poor Colombian farmers will little choice but to revert to coca as their capital resources dry up.
March 20th, 2007 at 11:00 am
Without an agrarian reform that address the highly concentrated land-tenure scheme in Colombia, Petro’s argument is sound. But this argument simply points to a fundamental Colombian problem, one that goes far to explain the presence of insurgent forces and of drug trafficking. This problem has been pointed out so many times over the past three-quarters of a century, yet nothing ever happens to address it effectively.
Here in the U.S., we hear so little about this problem, and the exclusive political arrangements that allow it. We hear little about the extreme inequities of Colombia, of which the skewed land-distribution is a vital part.
What we hear about is always cast in the lexicon of the drug war, or a war on insurgents as “narcoterrorists. We continue to plow the sea, going after symptoms and ignoring root causes. We continue to think that addressing mere symptoms is in our long-term interests. When will we ever learn?
March 20th, 2007 at 4:18 pm
Camilo Wilson: The issue of land reform is definitely one of the big problems that Colombia has not been able / willing to properly address for quite some time, at least at the government / political elite level.
Another factor worth mentioning is that the guerrillas, ironically enough, have contributed to the land concentration process you speak of: Greater extortion and kidnapping around the late 1970’s – early 1980’s made many medium landowners retreat into the cities and sell their properties to drug lords or large landholders, who in turn financing paramilitarism and have fostered the displacement and further concentration of even more land.
March 22nd, 2007 at 5:08 pm
Continuing the theme of free trade, I came across a scholarly article today that makes the following arguments (and provides warrents to point #1 above):
A 2000 UNDCP report demonstrated that trade liberalization under the WTO has already reduced domestic agricultural production. This is problematic and represents a challenge to any coca eradication/crop substitution plan as open markets have reduced prices and forced farmers to shift to more profitable and usually illicit crops.
Ag imports to Colombia increased from 800,000 tonnes in 1990 to 7,000,000 in 1999 primarily because the prices were cheap. Lower ag prices had several effects:
1. It caused a shift to cattle ranching- the profits were higher, but this causes substantial deforestation.
2. Between 1990-1999, ag product participation in the GNP dropped by 4%.
3. Annual crop abandonment during the same period was 800,000 ha.
4. Coca production jumped.
5. National unemployment went from 8% to 20% with a concurrent rise in rural poverty.
6. Illicit businesses purchased between 2-4 million ha of land.
Colombia has seen what “free trade” can do. They dont need another agreement that privileges the subsidized North.
(Full disclosure: Prior to moving to Colombia, I was a strong believer in Free Trade and the FTAAs.)