The World Policy Institute understands that policymakers and opinion leaders need creative ways to catalyze innovation and engage wider coalitions in solving some of the world’s biggest challenges. By working with artists focused on the same issues, this cross-cutting initiative seeks to build a new, collaborative model for social change.
In Every Nation for Itself: Winners and Losers in a G-Zero World, World Policy Institute Senior Fellow Ian Bremmer illustrates a historic shift in the international system and the world economy—and an unprecedented moment of global uncertainty.
By Robert Valencia
Colombia has stood still for almost three weeks now. Since late August, a countrywide strike by potato, dairy and poultry farmers has blocked highways, sparked rallies, and wreaked havoc in cities. So large were the disruptions that President Juan Manuel Santos called on the national guard to shield the capital Bogotá and other cities from vandalism.
The farmers complain that free-market reforms in Colombia have made their lives harder. In particular, they blame their current plight on the recently signed Free Trade Agreement (FTA) with the United States and other similar agreements with countries like Canada in recent years. This begs two questions: Is free trade solely responsible for the farmers’ troubles? And what can be done to improve their situation?
Small and medium-sized agrarian businesses have long felt abandoned by the Colombian government. They complain that free-market policies begun under former President César Gaviria in 1993 made them vulnerable to what they consider unfair foreign competition, while benefitting the 75 percent of the population who live in cities. Although Colombia’s economy has grown steadily over the last decade, rural households are three times less likely to generate the same income as average urban households. Most of the campesinos (Spanish for peasants) demand cheap fertilizers and other agrarian products, cheap credits from the Agrarian Bank, and the democratization of land ownership.
Much of their anger is directed against the recent free trade agreement with the United States and similar agreements with six other nations. By removing tariffs, they will likely increase cheap agricultural imports over the next 15 years and expose Colombian farmers to greater competition. Dairy imports, for example, already rose from 9.7 tons in 2006 to 33.7 tons last year, according to the Office of National Statistics (DANE) – a trend that will likely continue.
But although FTAs hurt Colombian farmers, they are not solely responsible for their low living standards. A boom in mining and oil exploration has attracted foreign direct investment, leading the peso to appreciate against the dollar. Since a strong currency lowers the price of agricultural imports, local producers suffer from increased foreign competition. Farmers in other resource-rich countries like Peru and Ecuador are grappling with similar problems.
Squeezed between the adverse effects of free trade and a strong exchange rate, Colombia’s agricultural sector needs support. The government should subsidize small farmers to make up for unfavorable market conditions and ensure their existence for years to come. It needs to invest in agriculture, given that most of the foreign investment has been dedicated to mining purposes. A role model can be found in the Grameen Foundation, which, by working in tandem with governments, has provided effective financial services to smallholder farmers.
Agricultural reform can only be successful with a strong rule of law, a lack of which has doomed past programs. Case in point: the so-called “Agro Ingreso Seguro,” a program established by the former Alvaro Uribe administration (2002-2010). It sought to provide subsidies to farmers, but lacked government oversight and led to corruption – some of the money may even have fallen into criminal hands. The program was replaced by another, called “Desarrollo Rural con Equidad” (or Equal Rural Development, in Spanish) in 2011, but it seems that the program has done nothing for farmers thus far.
The weak rule of law has also created loopholes in the way international agricultural corporations have operated in Colombia. In 2007, Chiquita admitted having ties with Colombian paramilitary groups in exchange for local protection in the banana-harvesting zone from left-wing guerrillas. Rather than protect the plantations, the right-wing mercenaries killed banana growers and farmers. This shows that more presence of law enforcement – either by the police or the national guard – is needed in poverty-stricken, abandoned areas of Colombia, such as the Orinoquía (the Orinoco River region) and the Middle Magdalena River section.
Agrarian reform combined with a stronger rule of law will not only benefit peasants, but could also bring an end to the country’s 50-year-long civil war. Peace talks between the government and the Revolutionary Armed Forces of Colombia (FARC) are currently taking place in Havana and agrarian policies are at the core of a possible agreement.
Almost since its inception, FARC has asked the Colombian government to promote agrarian reform. Both the government and guerrillas agree that a “land bank” to redistribute 1 million hectares seized from drug cartels and guerilla groups to small farmers, as well as a property register, can make land distribution more equitable. There are currently 1,100 judicial processes to recover lands in the states of Bolivar, Cesar, and Meta. If an agrarian reform is achieved, it will clear a significant hurdle that has historically impeded a peace agreement.
Peace will be a big boost for Colombia’s farmers, who have been especially hard-hit by the 50-year-long civil war. Many have been displaced from their lands (Colombia has the world’s second largest number of displaced persons) and some have been forced to join the ranks of leftist insurgents.
Free Trade Agreements are part of an ongoing global integration that Colombia needs to keep with up with in order to remain competitive. Colombian producers are not just competing with American and European, but also with Asian producers. The country is already part of the Pacific Alliance economic bloc—also comprised of Mexico, Chile, and Peru—which seeks to integrate each country’s stock markets to compete with Asian-Pacific markets.
While globalization can’t be halted, the government needs to ensure that small Colombian farmers don’t become its casualties. The time to level the playing field is now, before FTAs come in full swing in the next 15 years. By then, Colombia will hopefully have achieved peace and its farmers will once again have a promising future.
Robert Valencia is a New York-based political analyst and a contributing writer for Global Voices Online.
[Photo courtesy of World Bank Photo Collection]
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