MANAGUA – Carlos Corea sits in his tiny, windowless office donning a bright pink Sandinista cap and talking in rapid “Spanglish” about how an agricultural revolution is taking place in Nicaragua’s countryside.
“We see our food as a matter of National Security, me entendes?” says the communications director for Nicaraocoop, one of Nicaragua’s larger farming cooperatives.
As a cooperative that works closely with the Sandinista government, Nicaraocoop is helping to spearhead the Sandinista government’s new agrarian reform initiative – a program that some say risks steering the country back toward the state-controlled economy that defined the first Sandinista government’s failed economic policies in the 1980s.
As a global food crisis sends basic food costs soaring and threatens Latin America’s economic progress, food security in countries such as Nicaragua is increasingly becoming a lightning rod issue that has revived nationalism and spurred calls for comprehensive government and regional policies. For Corea, a former Sandinista aide who quotes President Daniel Ortega’s speeches off the top of his head, the Sandinistas’ plans for a new agrarian reform comes down to the need for “fair trade.”
If Nicaragua plays its cards right, the impoverished countryside, where nearly a third of the economically active population works in agriculture, could benefit from rising global food prices, according to the Ortega government’s plan (NT, May 2).
With government plans to repair 2,500 kilometers of rural roads and finish clearing landmines from arable farm land, the Ortega administration hopes to cultivate an addittional 1 million manzanas of idle farmland throughout the country.
The Sandinistas have been on a crusade to provide 15,000 families a year with the basic tools to cultivate family farms as part of the “Hambre Cero” program, and have made low-interest financing available for farmers.
This year there is already more than $120 million in financing available for agricultural production – which is more than three times what was available last year, according to Alvaro Fiallos, the director of the Rural Development Institute (IDR). An additional $4 million is being made available through Venezuelan financing, Ortega said.
“These are the roots of the development bank we’ve all been asking for,” Fiallos said. The National Assembly has already approved $35 million to form a Nicaraguan Development Bank to finance agricultural production, though the bank has yet to be created.
Regionally, Nicaragua and other mostly leftist Latin countries are trying to coordinate their agricultural policies to assure food supplies and counter U.S. and European subsidized agricultural products, many of which have gained greater market access here under the Central American Free-Trade Agreement with the United States (CAFTA).
Ortega says he’d rather appeal to other Latin American countries such as Venezuela than ask for help from organizations such as the United Nations Food and Agricultural Organization (FAO).
Earlier this month, he skipped out on a FAO summit in Rome to take a tour of Latin America and deepen ties with the governments of Uruguay and Brazil. Nicaragua later rejected the declaration that came out of the FAO summit, arguing it is not a “serious” solution to the food crises in poor countries.
“In the meeting in Rome, the great global capitalist interests prevailed,” Ortega told a group of agricultural producers June 7.
The government has said increasing food production is a central part of its plan to fight inflation and rising food costs.
Agriculture Minister Ariel Bucardo wants to increase corn production by 2.6 million quintales this year and bean production by 1.3 quintales. He wants Nicaragua to work toward becoming self-sufficient in rice production, instead of having to import some 40 percent of its rice from the United States and Asia, and to increase production of sesame, sugar, powdered milk and chicken.
But as the government strives to meet the goals of its so-called “agro-revolution,” it is receiving fire from critics who say the Ortega administration is clumsily setting price controls and pushing the economy backward toward the state-controlled model that failed during the first Sandinista rule in the 1980s.
Cooperating with Cooperatives?
Critics say Ortega’s attempts to establish “fair prices” by cutting out profiteering middlemen and replacing them with state or state-affiliated institutions may be to the detriment of some Nicaraguan cooperatives, which are seen as important tools for redistributing wealth to the rural poor.
Certain Sandinista cooperatives claim to be benefiting from government support by receiving Venezuelan and Iranian aid, while others claims they have been excluded due to political ideology.
“There’s been a disproportion in aid, and some institutions are receiving more benefits than others from the state,” said Hermogenes Rodríguez, the vice president of Nicaragua’s Federation of Agricultural Cooperatives (FENACOOP), which represents more than 600 cooperatives in the country, many of them basic grain producers.
The cooperative model was formed here under the first Sandinista government in the 1980s to organize rural communities against Contra infiltrations and to implement a state-controlled economy based on production quotas. When the Sandinistas were voted out of office in 1990, the cooperatives were left to fend for themselves, with subsequent governments offering little assistance to what they considered leftover Sandinista organizations in the countryside.
Some of the cooperatives, such as Corea’s Nicaraocoop, have remained loyally Sandinista and are now getting boosts from the government. Others, however, had reorganized under a different model over the past 16 years, and are now going it alone, said Rodríguez.
Early in the Game
FENACOOP’s Rodríguez gives the Sandinista government credit for trying to reactive the cooperatives, though he says not everyone is benefiting. Still, he notes that the Sandinista government has had less than two years to undo what was done during 16 years of neo-liberal governance.
But as the government program advances, there’s been growing concern over its push to bring agricultural production and trade under the umbrella of the state food bank ENABAS.
ENABAS has been exporting beans to Venezuela, and more recently to El Salvador in deals in which the states act as intermediaries between exporters and importers. The government has a plan to sell $6 million worth of beans to El Salvador at a price nearly half the market value, making the Nicaraguan state one of the country’s biggest bean exporters – a policy that has been criticized as bean prices climb domestically.
The government has also been exporting cattle to Venezuela, and has taken over the importation of discounted fertilizer, making it a state-to-state deal.
Critics question why ENABAS, an entity that is supposed to control domestic food prices and supplies, is now in the business of selling beans for export. They warn that the government, through the state food bank, is controlling an increasingly large share of the agricultural sector.
“We’re totally opposed to any price controls,” said José Adan Aguerri, president of Nicaragua’s Superior Council of Private Businesses.
But for Ortega, ENABAS is helping local producers by eliminating profit-seeking middlemen.
“Commercializing agents seek to profit by selling fertilizers at higher prices to campesinos. They don’t come with fertilizer with the objective of helping producers. No! They come to make big profits,” Ortega said last week.
Rodríguez said he appreciates the government’s attempt to reduce costs, but hopes it doesn’t lead to nationalization like in the 1980s.
“The government c an’t do again what itdid in the 1980s; there’s still negative sentiment over that. I believe the government has its experts and aides who know it’s not possible to have a 100 percent centralized economy hat is totally controlled (by the government),” the federation leader said.
Corea, who helped coordinate Ortega’s Hambre Cero program before going to work for Nicaraocoop six months ago, said he’s tired of talk about a return to the 1980s.
“People say, ‘Oh my God, it’s going to be a state-controlled economy, Oh My God, we’re going back to the Soviet Union, back to Castro,’” he said.
In reality, Corea said, the state plays a less paternalistic role under Ortega’s “21st century socialism” than it did in the past.
21st Century Socialism
When he worked for the Hambre Cero program – which is scheduled to benefit 75,000 families by 2010 – Corea used to deliver a package of goods to rural families to help jump-start productivity. The package included a pregnant cow, a pregnant pig, five gallons of fertilizer, a rooster, and seeds for animal feed.
“The idea is that they begin to produce cows, milk, so we can feed a population in which a third of the people are malnourished,” he said.
For Corea, that’s the basic concept of the Sandinistas’ agrarian revolution under the banner of 21st century socialism – hardly something to be afraid of.