Venezuelan Land Reform: ballyhoo about revolutionary reform is mostly political noise
<a href=www.vheadline.com>Venezuela's Electronic News Posted: Sunday, April 27, 2003 By: Gustavo Coronel
VHeadline.com commentarist Gustavo Coronel writes: Up to the 1920s agriculture was the key economic activity in Venezuela. After that year, petroleum production had two effects: 1. It took hands away from agricultural work and 2. Expanded food demand, which had to be satisfied with increasing imports. World War 2 made imports difficult and this led to policies of import substitution which started in the 1950s.
In those years the government put together a special Commission to analyze the issue of Land Reform and their recommendations served the basis for the Law of Agrarian Reform, passed in 1960.
Historically all of Latin America has had a very uneven distribution of land. During the 1960s, 3% of Venezuelan land holdings contained 70% of adequate land. The Agrarian Reform, started in 1960 led to a program of land redistribution which allowed 140,000 families to become owners of redistributed lands between 1960 and 1976.
About 20 million acres were redistributed ... some 30% of all available land. Although very important, this effort fell short of expectations since only 25% of the land redistributed was of prime quality ... the average size of new holdings was too small, some 25 acres.
The execution of the program was slow and poorly coordinated, while financial resources allocated were insufficient. Credits were generally small. Technical assistance was weak and collective farms poorly run. Much was done from the top down without full participation by the farmers. Still ... the reform did create a new class of rural owners and had a modest but positive social and economic impact in rural areas.
Petroleum became the main enemy of agrarian reform ... the country had too many petroleum dollars and the traditionally overvalued currency made food imports much cheaper than local products. The Venezuelan population became almost totally urban ... almost 95% today. Governments developed an urban bias which directed most financial resources to the cities, where the votes were (and are).
In November 2001, President Chavez issued a Decree-Law called Law of Lands & Agrarian Development. This Decree was passed, together with 40 other ones, as part of a blanket delegation of authority given to the President by the National Assembly. As such it did not have the benefit of open, democratic discussion among affected sectors and this created an immediately strong resistance on the part of land owners and political sectors opposed to the government.
The Decree-Law has a strong political flavor, as part of a "revolutionary" program, which tends to overshadow its progressive, economic potential benefits. The "Exposicion de Motivos" ... the conceptual framework ... lists as the instrument's main objectives: a fair distribution of wealth, elimination of "latifundios" (large land holdings), protection of the environment and guarantee of national food security. These are all reasonable objectives.
However, the Decree-Law gives government bureaucrats almost total discretionary authority to intervene all lands (public and private) which could be suitable for production.
The concept of private property is redefined to make it dependent on "public utility" or "general interest" ... as defined by the government. This largely puts private owners in the hands of government bureaucrats who might, or might not, be politically-motivated (revolutionaries) or economically motivated (corrupt).
In this sense the Decree-Law clearly exceeds the limits of government authority stipulated under Article 115 of the current 1999 Constitution.
The government will promote agrarian cooperativism ... theoretically a reasonable approach. In practice, however, this strategy has not been successful in the now defunct Soviet Union or in Cuba, where most food production came, or comes, from landholdings outside of the collective farms.
The Decree-Law introduces an interesting concept of "ownership" for future holders of redistributed lands i.e. the holding will "belong" to the beneficiary or his descendants as long as it remains fully productive, as defined by the government and can not be sold. This sounds very fair.
The lands will be divided into three categories: Idle (ociosas), Improvable and in full production. The characteristics of each category are determined by government officers and, inevitably, will be largely subjective. For example, lands "in full production" would not be merely those in full production but those producing the crops that the government thinks advisable. This means that no landholdings are free of intervention by the State at any given point in time and can be given over to new holders.
The National Agrarian Institute (IAN) is being liquidated and replaced by three new Institutes: the Institute of Lands (INTI),the Venezuelan Agrarian Corporation and the National Institute of Rural Development ... this transition is presently under way, and is already in a state of great disarray. The three institutes will share many gray areas of administrative responsibilities and the lack of a proper coordinating agency will no doubt allow for endless confusion and "turf" conflicts.
The Decree-Law contains 281 articles, of which the last 100 are dedicated to legal procedures related to the activities. Articles 17, 37 to 45 and 89 give government officers an unlimited and undesirable power to intervene all lands, allow squatters into the properties and place the burden of proof of ownership on the owners themselves. Since the administrative procedures will be lengthy and complex, the occupation of these lands can extend for an indefinite amount of time.
I found Article 128 interesting since it requires that the president of the Institute of Lands be a person "of a remarkable career in the Agrarian sector." The current president is Adan Chavez, the elder brother of President Chavez, and his career has not been remarkable in any sector.
I have read in some detail, as an exercise in mortification, the 281 Articles of the Decree-Law and have to say that it is strongly statist and contains articles which are of clear confiscatory nature.
The major blunder, perhaps, has to do with articles 19, 20 in which the "conuco" ( a small patch of land worked by a farmer in a very primitive way) is consecrated as one of the pillars of the Venezuelan agrarian activity. Work and permanence of "conuqueros" would be guaranteed by the government and assistance would be given to continue in their "traditional" activities.
The "conuco" is the most damaging manner to do farming as it involves systematic deforestation and burning of hill slopes, promoting erosion and destroying the biodiversity, exactly what the Decree-Law pretends to defend. This is equivalent to instituting the Oxen Cart as the preferred manner of transportation for 21st century international travel. Stupid, if you pardon my French.
What seems to be true, so far, is that all this ballyhoo about revolutionary land reform is mostly political noise.
Invasions (squatting) are taking place under the protection of the government ... a few chaotic experiments are taking place in Tachira and Zulia ... some people have already been killed.
- The political component of reform was put in motion much before the planning, the programs and the technical inputs appeared.
The great risk is that only the political component will exist without a real organized reform taking place. This risk is great because the government bureaucracy has already given abundant signs of an abysmal incompetence.
This is one of the Venezuelan problems that make waiting for the Referendum a nail biting affair...
Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983. In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort. You may contact Gustavo Coronel at email gustavo@vheadline.com
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