Bulmer-Thomas V., Coatsworth J., Cortes-Conde R. The Cambridge Economic History of Latin America: Volume 2, The Long Twentieth Century
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492 Otto T. Solbrig
grazing area increased principally in tropical and interior regions. During
the first period, increases in production corresponded with increases in
surface, whereas in the second, increases in production came both from
increases in area cultivated and increases in yield. The change from exten-
sive agriculture to intensive agriculture took place as the result of the occu-
pation of most of the best agricultural land together with the availability
of new technologies collectively known as the “green revolution.” These
consist primarily of the combination of more productive genetic varieties
(High Yielding Varieties or HYV), labor-saving machinery (tractors, self-
propelled machinery), and chemical inputs (herbicides, fertilizers, pesti-
cides). The new techniques were diffused by governmental agricultural
research organizations (e.g., INTA [Instituto Nacional de Tecnolog
´
ıa Agraria]
in Argentina, EMBRAPA [Empresa Brasileira de Pesquisas Agropecuarias]in
Brazil, INIA [Instituto Nacional de Investigaciones Agr
´
ıcolas]inMexico)
and by a private international network of stations known as the CGIAR
[Consultative Group for International Agricultural Research] of which the
CIMMYT [Centro de Investigacion de Maiz y Trigo]inMexico is the best
known.
Argentina is the best documented example of this shift in land use. From
1890 to 1930, cultivated surface in the pampas increased from 2,049,683
hectares in 1895 to 7,792,842 hectares in 1937 when all arable land was
under cultivation. A long period of stagnation followed, and starting in
the late 1960s, agricultural productivity in the pampas increased without
an increase in surface. When, in the 1990s, export taxes and other controls
on agriculture were lifted, record yields, especially in cereals and oilseeds,
followed. Between 1960 and 2000, Argentina tripled its pampean agricul-
tural production without increasing agricultural surface. For the country
as a whole, total agricultural land in 2000 was twenty-five million hectares,
seven million more than the surface cultivated in 1961. The difference is
entirely attributable to the occupation of new land outside the pampas,
made possible in large measure by the introduction of No-Till agriculture
that allows farming in drier areas.
In Brazil, the situation is more complex. Southern Brazil (the states of S
˜
ao
Paulo, Paran
´
a, Santa Catarina, and Rio Grande do Sul) followed a pattern
similar to that of Argentina: increases in production tied to increases in
surface until the middle of the century and production increases attributable
to yield increases without increases in surface in the last thirty years.
Interior regions of Brazil were very lightly settled during the first half
of the century with a largely peasant agriculture, some of which was
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Structure, Performance, and Policy in Agriculture 493
truly self-sufficient, and extractive activities, primarily rubber tapping. The
modernization of agriculture in the southern states after 1960 led to the
expulsion of many small holders that moved to the newly opened lands in
the interior of the continent. Consequently, Brazil has two distinct types
of agriculture: a very modern and highly capitalized agriculture centered
in the southern states but spilling over into some new areas such as the
states of Goias and Mato Grosso and also in parts of the northeast, and an
extensive and poorly capitalized agriculture in frontier regions. Yet, even
in these areas, there is increasing pressure to augment yields and enhance
efficiency.
Central America and southern Mexico have seen, in the last fifty years, the
largest transformation (in percentage) of forestland into agricultural land
in Latin America. This process seems to have slowed down now because
more than 80 percent of the existing tropical forest has been transformed
into agricultural land or pastures (see Chapter 9).
Land use in the Andean countries with a large peasant population dur-
ing the first half of the century was among the most traditional in all the
Americas. Lately, there has also been a strong push in these countries to
increase production and introduce modern technology aimed at small hold-
ers. The best example is Chile, which has developed the most efficient and
capital-intensive agriculture in Latin America. Its limited arable land sur-
face and its Mediterranean climate with winter rains and summer drought
circumscribe agriculture in Chile. Consequently, just like in California,
with which it shares many climatic characteristics, much of agriculture in
Chile is irrigated. As is well known, this type of agriculture produces the
highest yields.
AGRICULTURAL GROWTH STRATEGIES
In the second half of the nineteenth century, Latin America adopted a
strategy of export-led growth. Because at that time the level of industri-
alization was extremely low, agricultural products and minerals were the
main commodities available for export. This period coincides with a stage
in the industrial development of Europe when there was a great demand
for foodstuffs and minerals. It also coincided with the prevalence in the
governing elite of Latin America at that time of a liberal economic philos-
ophy intent on opening and economically developing their countries after
the stagnation that independence and civil war had brought.
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494 Otto T. Solbrig
The economic growth that took place in the principal Latin American
countries in the 1880–1914 period did not just happen but was the result of
a vision colored by self-interest and adjusted to local circumstances. The
landowning classes controlled the central governments. They were also the
producers of the agricultural export commodities. Yet the infrastructure
of roads and port facilities needed to bring products to market was prac-
tically nonexistent in Latin America and there was not enough capital in
most countries to build them. There also was a shortage of labor in many
countries.
Because Europe was interested in the growth of trade with Latin America,
an unwritten collaboration developed. European and United States interests
saw an opportunity for investments. European capital – primarily English –
was infused into transport infrastructure (mostly railroads), finance (banks),
and commerce. In some cases, such as the construction of the port of
Buenos Aires, the government borrowed the money from abroad to build
the necessary infrastructure.
Local interests perceived an opportunity for enrichment and kept the
production of agricultural commodities firmly in their hands. Accord-
ing to Halperin Donghi, their earnings were higher than those of foreign
investors.
3
An exception was provided by some plantation enclaves – most
notably banana plantations in Central America and sugar estates in Cuba –
that were foreign (mostly U.S.) owned. Yet this boom did not always
increase savings nor was it necessarily invested in industry, but led often to
conspicuous consumption by the landed elites, as attested by opera houses
in the Amazon or palatial buildings in M
´
erida, Mexico, or Buenos Aires.
The owners of the land controlled the rural population (through a system
of patronage and coercion). They also prevailed on the national govern-
ments to have laws enacted that favored their interests. This elite became
known as the landed oligarchy. In some cases, such as in Argentina, the
relationship of the landed oligarchy with English capitalists was so close
that English customs and mores were adopted. Argentina became a virtual
economic – but not a political – colony of Great Britain in the twenty years
preceding World War I.
The development of the landed oligarchy went through three phases.
4
The first phase saw the establishment and expansion of the landed oligarchy.
It started after the end of the wars of independence and the civil wars
that followed. These had ended by the middle of the nineteenth century,
3
Halperin Donghi, “The Buenos Aires Landed Class.”
4
J. Chonchol, Sistemas agrarios en Am
´
erica Latina (Mexico City, 1994).
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Structure, Performance, and Policy in Agriculture 495
although in some countries such as Colombia this did not happen until the
end of the century. During this first phase, a group of leading families in
each country obtained control over the land and the rural population. This
was done in different ways according to the characteristics of each region. In
most countries, one important source was the sale of fiscal lands at very low
prices to a few bidders. So, for example, following the military campaign
against nomad Indians in Argentina in 1879, known locally as La conquista
del desierto, the central government obtained control over vast areas of
land. Most of these were distributed to the troops in lieu of pay, the surface
received being in relation to military rank. Because many of the soldiers and
lower ranks were not ready to become agricultural pioneers at the frontier,
they quickly sold their allotments to a few individuals for very low prices.
In other countries, local ruling groups directly appropriated fiscal lands.
Another source was land held by Indian villages or self-sufficient peasants
that was taken over, such as in Ecuador and in Mexico, by neighboring
haciendas without compensation. Finally, in some countries, most notably
Mexico and Colombia, a source of land was the expropriation of estates
held by the Catholic Church.
The second phase that started around 1880 and lasted until World War I
was a phase of consolidation of the landed oligarchies. Taking advantage
of their control of land, they monopolized the production of export com-
modities in their haciendas and plantations. In these years, the oligarchic
state reaches its apogee. Yet here there are also great differences between
countries. In Argentina, for example, there was an active land market dur-
ing this period.
5
The third phase that lasted from World War I until the
depression of 1929 is one of crisis and decadence of the oligarchic state, as
it was increasingly challenged by a rising urban middle class.
The export-led growth strategy was initially quite successful, yet in the
long run it was unable to match the growth of the United States for a variety
of reasons.
6
In many instances, the producers of export products became
very successful enclaves, not always well integrated with the rest of the
economy. Their growth did not invariably translate into a similar growth in
the sector producing for the domestic market. This is particularly the case in
Mexico, Peru, and Brazil, but it can be seen also elsewhere. In some cases,
5
Roberto Cort
´
es Conde, El progreso argentino 1880–1914 (Buenos Aires, 1979). O. Barsky and J. Gelman,
Historia del agro argentino (Buenos Aires, 2001). Jeremy Adelman, Frontier Development (London,
1994).
6
Victor Bulmer-Thomas, The Economic History of Latin America Since Independence, 2nd ed.
(Cambridge, 2003).
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496 Otto T. Solbrig
that difference still persists. However, differences between domestic and
export markets should be seen more as differences of degree than of kind.
The economic depression that enveloped the world after 1929 had a dev-
astating effect on the growth of Latin American agriculture. Gone – or
highly curtailed – were the markets for coffee, sugar, and other tropical, as
well as temperate, commodities. Prices plunged severely. Latin American
countries found themselves in very difficult situations and many defaulted
on their debts. In order to maintain crop values, governments bought com-
modities at some fixed minimum price and warehoused them, waiting for
better prices, or even burned them, as in the case of Brazilian coffee. Not
until World War II did growth resume. By then, most Latin American
countries, now attuned to the interests of urban sectors, adopted an import
substitution growth strategy in the hope of developing industry. Tariffs, par-
ticularly for industrial products, were raised to favor local industries. Yet
these industrial products for the most part were not internationally com-
petitive and countries had to go back to agriculture to produce the export
surplus that could earn the foreign exchange needed to supply industry
with capital goods and raw materials. However, the new industries were
unable to supply the rural sector, at a reasonable price, with the chemical
fertilizers and pesticides or the machinery needed to modernize. The result
was a slow growth of the rural sector as well.
Demographic growth in the second half of the twentieth century has been
the highest in human history and population growth has been extremely
high in Latin America during this period (Table 12.3). Although at the
beginning there were serious doubts regarding the capacity of the world’s
agriculture to feed such a fast-growing population, the last forty years have
seen agricultural production exceed population growth. A number of rela-
tively simple, but powerful capital-intensive technologies were introduced
such as High Yielding Varieties, low-priced chemical fertilizers, chemical
herbicides and pesticides, and new labor-saving machinery. Because these
technologies required less labor and had economies of scale, there was also
areduction in the relative proportion of rural labor and, occasionally, even
in absolute terms (Table 12.4)aswell as concentration in the ownership of
land. Finally, these more intensive technologies also had negative environ-
mental effects.
The reduced labor requirement of agriculture led to massive internal
migration movements that are not yet over. In some countries, such as
Argentina, Brazil, or Mexico, they coincided with a period of industrial
growth that absorbed some of the rural population. In other cases, such
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Structure, Performance, and Policy in Agriculture 497
Table 12.3. The population of Latin America: 1950–2005 (in thousands)
1950 1960 1970 1980 1990 2000 2005 (est.)
Argentina 17,150 20,616 23,962 28,094 32,527 37,032 39,302
Bolivia 2,714 3,351 4,212 5,355 6,573 8,329 9,275
Brazil 53,975 72,742 95,988 121,616 147,957 170,406 181,086
Chile 6,082 7,608 9,496 11,147 13,100 15,211 16,136
Colombia 12,568 16,857 22,561 28,447 34,970 42,105 45,580
Costa Rica 862 1,236 1,730 2,285 3,049 4,024 4,454
Cuba 5,850 6,985 8,520 9,712 10,629 11,199 11,369
Dominican
Republic
2,353 3,231 4,422 5,695 7,061 8,373 9,026
Ecuador 3,387 4,439 5,970 7,961 10,264 12,646 13,798
El Salvador 1,951 2,579 3,599 4,587 5,112 6,278 6,876
Guatemala 2,969 3,963 5,243 6,820 8,749 11,385 12,952
Haiti 3,261 3,803 4,520 5,453 6,907 8,142 8,799
Honduras 1,380 1,894 2,591 3,567 4,870 6,417 7,199
Mexico 27,737 36,944 50,588 67,562 83,223 98,872 106,139
Nicaragua 1,134 1,542 2,123 2,919 3,824 5,071 5,774
Panama 860 1,126 1,506 1,950 2,398 2,856 3,067
Paraguay 1,488 1,842 2,350 3,114 4,219 5,496 6,216
Peru 7,632 9,931 13,193 17,324 21,569 25,662 27,804
Puerto Rico 2,218 2,360 2,716 3,197 3,528 3,915 4,091
Uruguay 2,239 2,538 2,808 2,914 3,106 3,337 3,455
Venezuela 5,094 7,579 10,721 15,091 19,502 24,170 26,468
Latin America 162,904 213,166 278,819 354,810 433,137 510,926 548,866
Source: FAOFAOSTAT Database.
as Peru, Bolivia, Paraguay, Costa Rica, Colombia, and Brazil, a part of the
displaced rural population migrated to the frontier in search of land. This
resulted in massive deforestation in frontier areas (see Chapter 9).
In the fourth section, I describe the particulars of the agricultural growth
strategy in selected countries and in relation to different commodities.
However, first some words regarding land reform are needed.
ATTEMPTS AT LAND REFORM
Some kind of land reform has been implemented in most Latin American
countries during the long twentieth century. Land reform aimed at breaking
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498 Otto T. Solbrig
Table 12.4. The rural population of Latin America: 1950–2005 (in thousands)
1950 1960 1970 1980 1990 2000 2005
Argentina 5,944 5,440 5,178 4,811 4,386 4,370 4,355
Bolivia 1,795 2,119 2,536 2,921 2,920 3,136 3,237
Brazil 34,268 39,560 41,741 40,366 37,347 32,119 29,161
Chile 2,529 2,447 2,352 2,091 2,191 2,162 2,086
Colombia 7,276 8,574 9,793 10,636 10,941 10,538 10,263
Costa Rica 573 812 1,058 1,214 1,412 1,649 1,710
Cuba 2,961 3,154 3,391 3,097 2,801 2,764 2,703
Dominican
Republic
1,794 2,254 2,641 2,819 2,935 2,898 2,898
Ecuador 2,430 2,911 3,610 4,222 4,609 4,679 4,808
El Salvador 1,238 1,590 2,181 2,566 2,595 2,492 2,362
Guatemala 2,093 2,677 3,380 4,269 5,416 6,870 7,605
Haiti 2,864 3,212 3,631 4,161 4,871 5,236 5,373
Honduras 1,137 1,463 1,842 2,323 2,834 3,033 3,071
Mexico 15,906 18,194 20,730 22,735 22,920 25,341 26,066
Nicaragua 738 932 1,125 1,452 1,795 2,225 2,420
Panama 552 662 789 966 1,109 1,249 1,294
Paraguay 974 1,187 1,479 1,816 2,164 2,420 2,531
Peru 4,922 5,334 5,619 6,137 6,708 6,988 7,068
Puerto Rico 1,318 1,309 1,132 1,058 1,012 970 943
Uruguay 492 504 503 430 342 270 243
Venezuela 2,709 2,941 3,048 3,106 3,124 3,160 3,144
Latin America 94,513 107,276 117,759 123,196 124,432 124,569 123,341
Source: FAOFAOSTAT Database.
up large estates has been seen as an issue of social equity by many sectors
in Latin American societies, especially after the decline of the power of
the landed oligarchy. When large estates are not managed efficiently, land
reform is also a way to increase production, and many economists advocated
land reform on those grounds.
7
In practice, land reform in many cases has
been a vehicle to disable rural-based political power groups, as was the case
in Peru.
The hope is that land reform will help stimulate economic development
by increasingproduction and capital accumulation that then can be invested
in industry and service activities. Yet, in practice, land reform does not
7
B. Johnston and P. Kirby, Agriculture and Structural Transformation: Economic Strategies in Late Devel-
oping Countries (London, 1975).
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Structure, Performance, and Policy in Agriculture 499
always lead to increased productivity. A case in point is Peru, where the
land reform enacted by the military regime of General Velasco Alvarado
did break up some very efficient estates that were replaced by less efficient
cooperatives.
Land reform can be effected by expropriation or by the forced sale of
large estates to the government that subsequently breaks up such estates
and distributes them to smallholders, or it can be effected through tax
instruments. The first attempt at land reform in Latin America was by
the government of the Mexican revolution, which broke up all the large
haciendas. The 1917 Constitution of Mexico set limits to the land area that
individuals could own, and established the new juridical entity of the ejido.
These are areas held by local communities and subdivided by them into
farms that are individually worked during the life of the farmers. After that
they revert back to the community, but in practice they often are passed
to the farmer’s heirs. Ejido land could not be sold or taken for debts, so
that it could not be mortgaged. Although often held as an example, the
Mexican land reform, after some initial successes, was an impediment to
the development of modern agriculture in Mexico and was modified in the
1990s (for more details see the fourth section).
The second attempt at land reform was that effected in Bolivia after
the 1952 revolution. Haciendas in the Bolivian altiplano, where most of the
population was concentrated at that time, had maintained the structure of
the local native communities. However, the communities that were within
the jurisdiction of the haciendas – which were a majority – owed labor ser-
vices to the estates in a system that resembled the European medieval corv
´
ee
system. The Bolivian land reform involved breaking up those large hacien-
das that contained native communities, the abolition of the community’s
obligations to the estates, and giving the members of communities, which
had been tied to the land until then, freedom of movement. At the time
of the reforms, close to 80 percent of the Bolivian population was rural.
The years following the Bolivian revolution saw a significant growth of the
Bolivian population. There also were massive population movements to the
cities and to the lowlands, both in the eastern escarpment of the Bolivian
altiplano and in the northeast. This was an unintended consequence of the
agrarian reform.
The Bolivian land reform did not bring back the traditional native com-
munity, as had been intended. For the most part, community land was
subdivided into individual plots. It did, however, increase the living stan-
dard of the Bolivian peasant, and increase social services, especially schools
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500 Otto T. Solbrig
and medical services. It also led to the occupation of the Bolivian lowlands,
where an active agricultural frontier has resulted in extensive deforestation.
The Cuban land reform is the most drastic of all those carried out in
Latin America. One of the first decisions of the Castro government upon
taking over the country in 1959 was to enact the land reform act of May 1959.
The law set a maximum size of thirty caballer
´
ıas (a caballer
´
ıa is equivalent
in Cuba to 13.43 hectares) for a farm, except for those whose productivity
was 50 percent above the national average. These could be as large as 100
caballer
´
ıas.Foreigners as well as sugar mills were prohibited from owning
land, and tenancy, sharecropping, and similar agreements were prohibited.
Former tenants, sharecroppers, and squatters got two caballer
´
ıas of the
land they had tilled free, and the owners of the land could be compelled
to sell them three more caballer
´
ıas for a total of five (some sixty hectares).
Expropriated land was to be paid by government bonds, but that was never
done. In 1963,asecond agrarian reform was passed that expropriated all
private land beyond five caballer
´
ıas. Owners were compensated with up to
250 pesos a month for ten years.
The state in Cuba became the de facto landlord, determining to a very
large extent the crops to be cultivated and the forms of production. The
emphasis on sugar production continued (see the fourth section) and a
high-input agriculture was implemented. When Cuba lost the support of
the former Soviet Union, this kind of agriculture collapsed and has been
replaced successfully by a more environmentally friendly system.
Contrary to the agrarian reforms in Mexico, Cuba, and Bolivia, which
were the result of a revolution, a freely elected democratic government ini-
tiated the reform in Chile. For some time in the 1940s and 1950s, Chile’s
agricultural production had not kept up with population growth and the
country had become a net importer of food. Many felt that the root cause
was the uneven land tenure regime based on the traditional hacienda known
as fundo in Chile (see the fourth section). The Frei government, in 1965, ini-
tiated a process of land reform that went through several phases in the next
twelve years. The first phase, from 1965–70, was one of limited expropria-
tion and capitalist modernization; the second phase of total expropriation
and liquidation of the hacienda system took place under the socialist gov-
ernment of Salvador Allende; and the final phase, under the dictatorship
of Augusto Pinochet, was one of retrenchment.
During the first phase of the Chilean agricultural reform, about 10 per-
cent of the fundos were expropriated and incentives given for the rest to
modernize. The expropriated fundos were organized into asentamientos,a
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Structure, Performance, and Policy in Agriculture 501
sort of cooperative in which the former workers had rights in line with
their previous role in the fundo. After a trial period of three to five years,
hacienda workers could obtain property rights to the land of the fundo and
could choose to divide it and farm individual plots, maintaining a loose
cooperative arrangement, or could choose to farm the former fundo col-
lectively. At the same time, the government tried to provide incentives for
nonexpropriated fundos to modernize. The availability of irrigation water
was increased, efforts were made to stabilize prices, and credit was provided.
Land taxes were increased and hacienda workers were allowed to unionize.
These changes forced the owners of inefficient private fundos to modernize
or sell their estates. In this first phase, the approach was a “carrot and stick”
one aimed primarily at increasing agricultural production.
The second phase took place under the government of Salvador Allende,
based on the same law as the Frei government, but radicalizing its imple-
mentation by expropriating all fundo land. Government policy shifted from
trying to increase agricultural efficiency to trying to eliminate the landlord
class and transfer power to rural workers. Nevertheless, private capitalist
farms in the forty to eighty hectares range survived and increased from 12
to 27 percent of all land farmed. Because of their high productivity, the
importance of these farms was greater than their actual surface. Expropri-
ated fundos were organized into large cooperatives that could reap bene-
fits of scale. They were put under government management with former
rural workers as wage laborers. The new units known as CERA (Centro de
Reforma Agraria) looked more like collective farms or haciendas with the
state as owner. In spite of hopes to the contrary, they turned out to be fairly
inefficient because rural workers preferred to farm their own plots of land.
The agrarian reform in Peru has been the most peculiar one in Latin
America. A military government under the leadership of General Juan
Velasco Alvarado in 1971 executed it. Good-quality arable land is in short
supply in Peru (see the fourth section) and it was very unequally held. On
the coast, large and efficient haciendas and sugar estates controlled all the
land and the water; in the inter-Andean valleys, a mixture of haciendas,
minifundios, and indigenous communities competed for the land. The vast
Amazonian lands were just being opened for colonization. Land conflicts
were common, with occasional occupation of haciendas in the coast and a
steady alienation of Indian lands by haciendas in the inter-Andean valleys.
8
The military government feared an agrarian uprising following the model
8
Ably dramatized in the novel of Manuel Scorza, Redoble por Rancas (Barcelona, 1970).