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Argentina: The clash over rent

Protester with wiphala

By IIRE Fellow Claudio Katz, June 2008.

 

 

The prolonged conflict between ruralismo and the government has resulted in an exhausting political battle. The first bloc aims to hoard the agrarian rent at the cost of the popular majority, and the government needs to exhibit authority in order to implant a social pact that favours the capitalist class as a whole.

The actions of the so-called ``countryside'' have escalated to the point of creating a climate of ungovernability, and where their leaders have emboldened themselves in the negotiations. The government reacted firmly, but it failed and was left disconcerted. It suffered an erosion of support from voters and governors, forcing it to look for conciliation. A new truce now seems imminent, but regardless of whether it is achieved or not, a lasting agreement is still an enigma. The only thing that is evident is that the conflict has eroded the cohesion that the dominant classes had maintained during the last five years.

Causes and triggers

 The ruralistas took to the highways in order to resist a system of sliding tax increases on the export of soya. But they also questioned the mechanisms of taxes and subsidies that determine the pricing of food goods. Along with the distribution of rent, they define how much bread, milk or meat will cost.

 Any concession to ruralismo implies approximating the local prices of these products to the increasing world price, aggravating the increase in the cost of the family shopping basket. This increase has a tendency to revert the decrease in the poverty index, which is currently at around 30.3%, after having reached a low point of 26.9% during the middle of 2006.

 The conflict that is underway forms part of an old confrontation that has affected all governments. Given that the spokespeople of the ``countryside'' consider themselves to be the owners of the natural rent that cultivation generates in Argentina, they have clashed with all administrations that have attempted to balance out the redistribution of this income.

The actions by the ruralistas have brought back all the myths that the owners of the land extol. They affirm that all of the population ``should give thanks to the countryside'', as if they form the laborious sector that sustains the rest of society. They suppose that the agrarian wealth is unproductively redistributed outside of this sphere, through a perverse system of state clientalism. 

 In reality, the total opposite occurs. The private appropriation of rent (historically by the large landowners and currently by their capitalist heirs) has suffocated industrial development, perpetuating the insertion of the country as a primary exporter in the international division of labour. What has made social prosperity impossible is the absence of nationalisation measures, whether direct or indirect (via taxes), of these resources.

 The immediate cause of the conflict has been the probable reduction of the great benefits that the ruralistas have obtained over the last years, as is demonstrated by the price of land or in any other profit index for this sector.[2]

 Whilst a favourable international trade conjuncture still exists, in the context of the crazy economic panorama strong turbulence is on the horizon. The easy benefits that followed the hyper-devaluation have been extinguished, together with the crippling of the regressive transference of income. Unused capacity has dissipated, formal salaries cheapened and consumption has dried up from the levels that predominated between 2002 and 2007. In a more difficult scenario, everyone is demanding their share of the agrarian rent. The ruralistas, because they consider that it to belongs to them, and the government, because it needs to confront growing costs in order to sustain a model of subsidies to the capitalists in industry and the service sector.

The soya republic

Several weeks of conflict have created the ability to better understand the agrarian transformations that were imposed by the soya reconversion. The whole ruralista bloc participated in the model that displaced cereals and generalised a monoculture that threatens food sovereignty, fuels price rises in the rest of the products and contaminates the environment. Moreover, this transformation has provoked a major concentration of property. Just 20% of producers control 80% of the soya circuit.[3]  

 Three grand sectors control the elevated rentability that this legume has generated. In the first place, the contractors (Pool de siembre) that live off investment funds and operate on a large scale on leased lands. Grobocopatel, for example, only owns 10% of the 150,000 hectares that it exploits Agrochemical companies (Monsanto, Dupont, Bayer) make up the second group of beneficiaries. They hoard profits through the strong dependency that soya production has on new seeds and fertilisers. The third sector that has enriched itself in an accelerated manner is made up by five exporting companies that control 90% of sales, with running benefits that greatly surpass the US$1000-1500 million in dispute with the introduction of the sliding tax increases.

In this chain of commercialisation – which is principally controlled by Cargill, Bunge, Dreyfus, Nidera and Aceitera General Deheza (AGD) – the principal benefits of soya are processed. The cultivation is managed from the field to the ship by a private swarm of harvesters, ports and mills. Agrofinancers also participate in these activities, operating through future buying and selling, via speculative actions that could be affected by the sliding tax increases if they were to establish a more foreseeable diagram of the evolution of prices.

 None of the voices of the ruralistas bloc have questioned this capitalist circuit. They rant against the official regulations, but they have not said a single word against the biggest owners of this business.

The official argument

Nor has the government mentioned the grand soya groups, since it maintains an excellent relationship with its executives, especially with Urquía (AGD), Grobocopatel, Elsztain and the Werthein clan. The model being implemented has been intensely supported by the official sphere and no measure that the Kirchners [first Nestor and then Cristina] have improvised in order to resolve the current dispute have touched the interests of its allies. Moreover, they are now evaluating the formation of new organisms to ``know the reality of the sector'', without introducing significant obligations.

The ministers – who unleash demagogic speeches in defence of the small producer – have for five years destined the bulk of the refunds (formally directed to these sectors) towards subsidising the most concentrated food industries. This conglomerate hoarded, for example, the US$473 million of compensations approved during 2007, and given that no register of soya producers is kept, it is a mystery exactly how they have reimbursed these privileges. To characterise those that are the friends of the government, it is enough to recall the minimal payment of real estate taxes, the lack of updating of obligations (in function of the valuation of land) or the official approval of non-compliance with social security payments.  

All of the governmental concerns have been concentrated on taxes, given that just like with value added tax, this tax is easily collected and is not shared with the provinces. Its collection currently is aimed at filling the coffers, not only to sustain the aid given to business owners, but especially to confront the rising cost of paying the external debt.  

Some supporters of the government praise the taxes in and of themselves, omitting the fact that they capture a part of the rent without redistributing it.[4] Those that affirm that the official initiative only failed in regards to its timing and presentation, hide the regressive utilisation of a tax that has not served to substantially better the level of popular life. A regulatory mechanism – indispensable in order to divorce international prices from the national – has been primarily utilised by the government in favour of the powerful.  

Producers and exploiters

 The conflict has illustrated just how obsolete the classic portrait of the Argentine countryside as a landscape of unproductive large landowners and small chacareros [owners of small farms, known as chacras] has become. But in the new context a false image of small agrarian producers as an impoverished middle class has been installed. The income of this group is small in comparison with the grand capitalists in this sector, but they do not form a segment crippled by misery.

A small producer from the pampas region with a property of 100 hectares (that is, a miniscule extension for that zone) obtains a monthly rent of 10,000 pesos, and in less than a year their land property has increased 50% in value.[5] This social location in large part explains why the Federación Agraria Argentina (FAA)[i] has acted as a bloc together with the Sociedad Rural Argentina[ii].

They maintain a solid alliance with the traditional entity of the millionaires and jointly propose the elimination of the sliding tax increases. Nor Eduardo Buzzi [head of the FAA] or Alfredo De Angeli [president of the FAA affiliate in Entre Rios] has let a word slip out against the agrarian establishment.  

 To justify this shift they have relied on two propositions. On one side they affirm that ``the government has not attended to them'' and that they had to ``act together with other entities''. But they forget that they could also have attempted a program of alliances with the workers.

On the other hand, they underline that ``the rank and file have asked us to organise this coordinated action''. But if this demand is true, it illustrates the social profile of their associates, who feel at home working with the Sociedad Rural. Those who effectively support the indebtedness and pillaging in the heterogeneous agrarian universe have remained subordinated to this pro-capitalist control of the Federación Agraria.

This attitude has antecedents in the divergences that led to the clash between the FAA and the Ligas Agrarias in the 1970s, and currently manifest themselves in the distance that this organisation has taken from organisations of the dispossessed, such as MOCASE [Movimiento Campesino de Santiago de Estero] or the Movimiento Nacional Campesino Independiente.  

These organisations channel the demands of those sectors that are truly oppressed. They represent, for example, the 300,000 peasant families kicked off their lands during the last 10 years due to the advance of soya. They also represent the 220,000 small producers from the non-central regions who are victims of the expansion of a cultivation that has already provoked the destruction of 1.1 million hectares.[6]

But the most invisible sector that brings together the exploited in this area is made up of 1.3 million rural peons. Seventy-five per cent of them work in the informal sector and receive an average wage of 600 pesos per month [around US$200], they make up the biggest national percentage of work accidents and lack any social protection. This segment has not received a single drop of the export bonanza and its total absence during the conflict confirms the pro-capitalist character of the demands at play.  

 The actions that have convulsed the countryside are a lockout, and not a rebellion of the oppressed. It has converted itself into a pro-bosses action, with road blockades that co-exist with the continuity of labour activities on the land. Its protagonists hold back products from the market and speculate on the opportune moment to sell the grain or hacienda. They are guided by market calculations and not by the criteria of popular rebellion.

Here is the nub of the tremendous difference with 2001. Those that act in the countryside are not unemployed, nor are they fighting to survive, and even those that stage cacelorazos [pot-banging protests] in support of them in the urban areas form part of the upper class. The messages of 2001 were inclusive, whilst the current ones are exclusive. At that time the small savers were mobilising against the banks, while now the rural middle class acts together with the powerful ones.

Reactions and comparisons

 The right wing has seized on the conflict in order to reinforce the political pole it has been constructing since the triumph of Mauricio Macri [iii] in Capital Federal. Not only have they once again taken up the neoliberal discourse, they have also resuscitated the gorilla [iv] positions that seemed to have been extinguished. Racist overtures extolled by the gringo European of the colonies confronted with the cabecitas negros kasyna polska [v] [black heads] of the interior has not been lacking. This skin difference has revived the oligarchic rejection towards the ``zoological barrage'' that they warned about in the 1950s and they have won the support of the mass media, which denigrates the piqueteros [vi] but champions the participants of the tractorazos [vii].

For its part, the government has opted to reinforce its retreat towards the union bureaucracy and the justicialista [viii] apparatus, that Nestor Kirchner attempts to line up from Puerto Madero. They believe that with this support base they will be able to counteract the failure of the transversal project and the loss of support amongst the middle classes. But until now they have only been able to reactivate the patotas [ix] of the construction sector and truck drivers, who have already repeated the bullying carried out in San Vicente [x].

The grand pitfall of the official policy lies in the fact that Peronism has exhausted itself as a popular movement. It is a structure to administer the state, which no longer enthuses anyone. That is why the official marches are operations that are rigorously controlled from above. The complementary actions that Luis D'Elia [xi] provides also lack popular participation. They are initiatives widely seen as manoeuvres monitored from the Casa Rosada.

For a while the political clash between the government and the right seemed to resuscitate an old polarisation between Peronism and anti-Peronism, but this confrontation represents more cultural tinges than anything political, and it is very unlikely that it will be reborn as a significant conflict. 

Regardless, what is important to avoid is false analogies that some have established between the dispute with the agro sector and the confrontations unfolding in Venezuela and Bolivia. As opposed to Evo Morales and Hugo Chavez, the Kirchners have established an alliance with the establishment, they do not collide with US imperialism, they do not clash with the dominant classes, nor have they put popular demands into play.

 Given that its government is neither nationalist, nor has it introduced social reforms, it is false to compare the current conflict with the situation at the time of the first era of Peronism. Moreover, it is clear for all to see that the threat of a coup only exists as a discourse for certain occasions. There are no armed forces, nor sectors of the establishment interested in seeing Cristina end up like [Eva Peron].

Position and programs

 The left has intervened in the conflict with a variety of positions, which have covered the whole spectrum of possible alternatives. The most inadmissible position is that which supports the bosses' lockout in defence of a ``small producer'', as if a scenario of small chacareros confronting the large landowners continued to exist. This supposition is based on a frozen snapshot of the past.

Moreover, the idealisation of any struggle with the appearance of being self-convoked, has led to a loss of bearing regarding the characterisation of the protagonists and the demands in debate. This blindness has fed upon the false analogy with the pot-banging protests of 2001 and the lack of knowledge of the reactionary role that the mobilisations of the middle class (in some circumstances) can play (as occurred with the truck drivers in Chile under Salvador Allende or the students in Venezuela at the moment).  

 The incapacity to register the conflicts between Kirchner and the right and the obsession with locating the government as the principal enemy, leads to sharing media space and practical actions with figures of the reaction.

 A symmetrical error can be seen amongst those who support the government, accepting the argument of a coup plot. In this case, the focus is on criticising the ruralistas and the mass media, omitting any denouncement of the evident complicity of the Kirchners with the soya corporations. The government is presented as the victim, forgetting that it has been the artifice of the regressive agrarian policy that precipitated the crisis.

It is clear that none of the traditional arguments in defence of the government (``lesser evil'', ``adverse correlation of forces'', ``dangers of the return of neoliberalism'') are able to disguise the connivance between the government and soya capitalism. Despite this evidence, the resurgence of the right has pushed some intellectuals to participate in a second wave of kirchnerista cooption.  

The belief that it is necessary to take a position in favour of the ruralistas or the government proposes a completely false dilemma. It is perfectly possible to denounce the lockout without supporting the government, and it is important to explain the reasons why the taxes are necessary with modalities very different to those currently being used.  

There is another path towards overcoming the crisis with alternative programs that have already been formulated by various currents and left intellectuals. The starting point is an agrarian plan to put a halt to the omnipresence of soya, recuperation of diversity in cultivation, assurance of food sovereignty and the facilitation of lowering of prices on food.  

But the regulatory role of the state cannot be limited to the administration of sliding, regionalised and co-participation taxes. This intervention has to aim towards the integral control of the circuit of agrarian production and commercialisation through a state monopoly on foreign trade and the nationalisation of the large exporting and commercialising corporations and the pools de siembra. This transformation should be accompanied by a radical modification of property relations in the countryside, introducing progressive taxes and eradicating the conditions of exploitation of rural workers. The most immediate action to be taken is to overturn the dictatorship-era law that still governs this sector.  

But it is not enough to outline a package of formally correct measures if we do not find the means by which to disseminate it in an appropriate form, establishing links with the real conflict that confronts the ruralistas with the government. The abstentionist temptation of declaring oneself at the margins of this clash can convert the best program into a bit of paper lacking any influence. It is not enough to just have a response. It is also necessary to know how to explain it, seeking to form a third option, in a moment where there is a general fatigue amongst the population in the face of the ruralista manoeuvres and the pro-government counter marches.  

 The current panorama could change if a popular program of transformation of the agro sector went hand in hand with a reactivation of social protest. There is a new fact in favour of this convergence. The rural conflict has given legitimacy from above to direct action, since this time the organisers of the road pickets were not the unemployed, the students, the workers or environmentalists, but rather the actual beneficiaries of the system. This element could favour the development of a new wave of social mobilisations.

Notes

[1] Economist, investigador, professor. Member of EDI (Economistas de Izquierda). More of his writings (in Spanish and English) can be found at http://katz.lahaine.org.

[2] The price of a hectare in Pergamino rose 132% between 2003 and 2007 and the value of land in the Pampa Húmeda surpasses its equivalent in the United States. In wheat-growing areas the price of land is four and half times what it was in 1995, two and half times the average of the last 10 years and almost double what it was at the time of Lavagna. As a direct result of the devaluation, the increase in prices of agricultural products have risen so much so that since 2005 they have oscillated between 80%, 30% and 15% (for corn, wheat and soya). The agrarian rent obtained in the 2003-04 harvest alone was equivalent to that obtained between 1992 and 1996, and was more than double the amount obtained between 1997 and 2001 (Página 12, 14-7-07, 6-4-08, 5-8-07, 6-8-07)

[3] During the last harvest, soya already occupied 60% of fertile land. It had displaced wheat, sunflower oil and had generated a drop in rice, oats and rye, as well as affecting fruit growing and horticulture. Given that RR type with glyphosate is sown, its impact in regards to contamination has been denounced in reiterated opportunities by specialists. The average size of farming exploitation went from 469 hectares (1998) to 588 (2002) using a calculation that underestimates the level of concentration, since the same owners own more than one plot of land (Página 12, 6-4-08, 20-4-08).

[4] Such is the case of Humberto Tumini: ``Los aciertos y los errores'', Página 12, 6-4-08.

[5] Página 12, 12-5-08.

[6] Diverse reports in regards to this reality have been expounded upon over the last few weeks in articles that have appeared in Página 12 (11-4-04, 25-4-08, 17-4-08).  

Translator's notes

[i] Argentine Agrarian Federation: the private institution that serves as a business organisation for small and medium agricultural producers in Argentina. It was founded on August 15, 1912, after the first employers' strike action of agrarian farmers demanding protection from the exploitation of big landowners.

[ii] Argentine Rural Society: a private organisation that unites the large landowners tied to agricultural activities in Argentina.

[iii] Mauricio Macri: neoliberal business owner, one of the richest men in Argentina, who was elected head of government of the Autonomous City of Buenos Aires in 2007.

[iv] Gorilla: refers to the right wing, as opposed to left-wing guerrillas.

[v] Cabecitas negros: translates as black heads, derogatory and racist term used to describe the followers of Peron.

[vi] Piqueteros: roughly translates as road picketers, movement of the unemployed who became famous during the 2001 economic crisis for their actions in blocking roads to stop the circulation of products and goods in demand for jobs.

[vii] Tractorazos: protests involving tractors.  

 

Photo: Vera Bolkovic 

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