Remberto Nolasco
Edgardo Mira

El Salvador has been historically characterized as a country with an axis of accumulation oriented towards agriculture, based on exporting a single crop, initially indigo. Then over the course of the 19th century, coffee was introduced, and then in the 20th, this was complemented by the production of cotton and sugarcane. In the country’s economic structure, these three crops are considered traditional exports, although cotton stopped being produced or exported after the 1980s.

The agricultural economy of El Salvador has been structured around the hacienda¹ system since the Colonial Era, based on a significant concentration of land. Some 73% of land passed through the hands of 5.6% of owners, while 50% of the less-privileged population had to content itself with 3.4% of the communal land for production of food and cash crops, in addition to the forced relocation of indigenous workers by the colonial establishment.

During the hegemony of indigo production as the engine of capitalist accumulation (1878-79), farmworkers’ situations allowed for the production of food crops for self-consumption on communal lands; this allowed them to supplement that part of their food supply that was not covered by their poor wages.

However, the introduction of coffee (1850) was accompanied by the expropriation of communal lands (1881-82) and a greater proletarianization of the workforce as a consequence of the lack of land available for self-consumption. This led to the farmers, in order to protect themselves from having their lands plundered, being forced to sell their labor to the owners of large haciendas and, as a consequence, becoming dependent on wages.

After the expropriation of common lands to be used for coffee, there came the conditions that slowly increased vulnerability to natural threats, as the amount of agricultural land increased towards the mountains and changed the forested parts of the country. The disappearance of common property to make way for coffee growing involved expelling farmworkers from the best land.

Since 1860, the agro-exporting model based on growing indigo incited greater degredation of these lands by accelerating erosion and causing more flods and droughts. With the loss of communal lands, large segments of the population had to use land not fit for purpose to grow food, and to settle in higher-risk areas or concentrate in urban centers.

It is worth noting that, although coffee cultivation has made up the majority of El Salvador’s economic structure, after the 1950s, growing cotton (a crop that, together with sugar, formed a part of a strategy of diversification for export in that period) was also an agent of population removal and exploitation of the last agricultural frontiers.

The cultivation of cotton imposed new pressure on the deterioration of the environment and the changes in property ownership; however, this crop experienced a significant decline in the 1960s. We observe that in 1960-61, 58,165 hectares were cultivated and 114,136 hectares in 1963-64 when the decrease in area devoted to cotton began, a process that accelerated during the 1980s due to, on the one hand, an increase in imports from the United States and on the other, the civil war that broke out during those years.

The “agrarian modernization” of the 1950s, which basically consistent in expanding cotton growing and then that of sugarcane, completed the trend towards proletarianization of the rural workforce and monetization of lease-holding relationships. As a result, a growing proportion of the rural population began to depend directly and exclusively on salaried employment.

At the same time came the model of Industrialization through Substitution of Imports (ISI), which affected the agro-export model by creating a contradictory process in the sense of pushing for rural development based on crop diversity focused on the exterior on the one hand versus the pressures of the ISI on the other. This saw an increase in the demand for workers that was satisfied by the surplus of the rural workforce, which in turn caused increased migration from the fields to the cities.

This process of “agrarian modernization” or “green revolution” pushed forward during the 1960s sought diversification in terms of crops, and promoted various programs designed to increase agricultural production, primarily of foodstuffs. To this end, there began the large-scale use of fertilizers, improved seeds, pesticides, monocultures, irrigation, etc., which succeeding in significantly increasing the production of basic grains. However, this also meant an increase in dependence on imported agrichemicals, which in turn severely impacted agricultural diversity, above all in terms of native or Mesoamerican crops. For examples, of six varieties of maize, some parts of the country only grow two, predominantly a hybrid; the same thing occurred with beans, from ten varieties to three (those the most commercial), and with fruts (annona, star apple, sincuya, cocoa, etc.) that have been replaced by fruits from other regions.

Nonetheless, despite the green revolution, the agricultural sector began to lose its importance in the country’s economic structure, which began to be reconfigured at the end of the 1960s with the implementation of an import-substitution model, worsened by armed conflict, to create conditions such that in the context of the implementation of neoliberalism, there would be a period of outsourcing after the beginning of the 1990s, years during which the agriculatural sector ceased to be one of the most dynamic in the Salvadoran economy. As can be seen in table 3.1 below, agriculture in 1970 was 18.7% of GDP and in 2008 was barely 13 percent.

Table 3.1. Change in GDP in El Salvador

Structure of the economy (percentage of GDP)

Figure 3.1

The above is also confirmed by the levels of foreign currency from exports:

Until the end of the 1970s the economy depended for its functioning on the foreign currency coming from traditional agro-exports (coffee, cotton, sugarcane, shrimp), to the degree that of the total foreign currency income generated by the main sectors, 80% came from traditional agro-exports in 1978. By 1996, agro-exports generated less than in 1978, and its share of the total from the main sectors had reduced to 21%.²

As has been shown, after the 1990s there was a decline in the relative importance of the agricultural sector (table 3.1 and figure 3.1). In this decade in El Salvador, changes were put in motion to the economic structure in order to adapt to the demands of global capitalism, and a historically agrarian economy was reconfigured into an economy with an agricultural sector that was entirely broken up and in a state of permanent crisis.

At the same time, the socio-political structure of El Salvador, as Rubén explained, could be described “as the sum of oligarchic interests based on an integral concentration of economic control in the agricultural, commercial, agro-industrial, and manufacturing sectors. The primary industries are at the same time huge landholders, acquiring a substantial part of their income from agriculture” [citation omitted].

Finally, the implentation of a neoliberal dimension, which contributes to the insertion of El Salvador into the new global economy characterized by globalization, the primacy of the market, and as a consequence, the abolition of secional policies, did not allow true development in the country, which ##### Table 3.1. Change in GDP in El Salvadorgenerates–as has been said–a process of migration, first from the field to the city and then abroad, mainly to the United States, in search of the “American dream,” which in turn set up a new way of surviving, which became the lifeline for the Salvadoran economy through the present: remittences from abroad.

As found by Argueta [citation omitted], remittences by Salvadorans living abroad, which passed 12.2% of the GDP in 1997 and 14.1% in 2003, remain the “most important life preserver for the country’s economy, and also for dollarization. For example, they are equivalent to 67.8% of exports.”

Ownership and Uses of the Land

As shown by the IV Agricultural Census (2009), the potential natural resources for agriculture in El Salvador is 2.1 million hectares, of which 55% are being used for productive agriculture, essential grasses (22.5%), permanent grasses (5.8%), reflecting pools (0.1%), fallow or resting (6.4%), buildings (1.6%), not appropriate for agriculture (2.1%), and forest (47%).

The data regarding land ownership warrant special consideration. According to the Agricultural Census in 1971, there were 270,868 agricultural producers, of which 92.5% used 27.1% of the ariable land, these being considered mini-farms. At the other extreme are 1,941 producers, which is to say that 0.7% used a total of 561,518 hectares, which represented 38.7% of the ariable land; in this group of large-scale users, more than 202 were greater than 500 hectares, possessing a total of 218,641 hectares, that is 15% of usable land. There were only 15 possessions of more than 2,500 hectares, thus it is obvious that “these agricultural producers bought up the best lands for the three main agricultural exports: coffee in the highlands, sugarcane and cotton in the coastal plains and valleys” [citation omitted].

In the present, land ownership remains in the same condition, albeit with certain changes from phases I and III of the agrarian reforms, a program of land transfers resulting from the Peace Accords and the constitutional limitation on properties of more than 245 hectares, although this last has been avoided by some landowners by “dividing” lands beyond this amount among family members, thus keeping some plots their original size.

As shown by table 3.2, it may be seen that the portion of the population that possesses up to four blocks³ of land contains 225,727 producers, representing 88.6% of the total. They are considered mini-groups, with resources that are structurally incapable of producing enough to escape from poverty.

At the other extreme is the stratum of properties of more than 20 blocks, of which there are 20,463 producers, or 7.6%, confirming that a small number of producers own most of the ariable land. This is confirmed by Arias [citation omitted], who made a study on land concentration in El Salvador [in 2009], and who found that 75.3% of the land (1,335,166 hectares) is controled by 7.6% of producers with more than 14 hectares. This estimate clearly demonstrates the problem of land concentration, which remains serious and worsening in El Salvador.

In terms of the use of land for agriculture, this is measured at 1,619,930 hectares, of which almost 23.5% are used for the production of grains, primarily maze and beans, which are fundamental to the Salvadoran diet. Meanwhile, for the production of coffee and sugarcane, which are the traditional export crops, a total of 310,123 blocks are in use, which represents 13.4% of the lands used for agricultural activities (table 3.3).

The negative impact on the quality of farmland has been attributed to the uses and ownership of the land, which has mainly affected small farms, who grow most of their basic grains on land with questionable quality, mainly classes V, VI, and VII. They also make extensive use of agrochemicals which nonetheless do not help in obtaining better harvests, resulting in insufficient income for them to invest in conservation and the deterioration that results.

Table 3.2. Agricultural producers by area worked (in hectares) per department (2007)

On the other hand, the large land-holders cultivate the best farmland of classes I, II, III, and IV (see appendix 1), mainly with crops of sugarcane and coffee destined for export, and by the same token use a great deal of agrichemicals, with which they affect the quality of the earth on a large scale.

As a consequence, the nation’s farmland has suffered significant decline in recent years, such that 64% of the farmland is considered class V, VI, or VII, which means it should only be devoted to permanent crops such as forests, fruit trees, or coffee, which prevent erosion. With erosion, there has been a loss of the capacity to absorb water, as a result of which the availability of same for human consumption and even for these same productive activities has been impacted.

Table 3.3 Surface area by sector (2006)

Movement of Farm Labor and Agrarian Reform

Throughout the 19th and 20th centuries, an agrarian oligarchy has consolidated, maintaining high levels of exclusion and exploitation of the farm-working class. This inequality created organizing tendencies, movements, and uprisings among farm workers, with the goal of ending the levels of rural poverty, the exclusion of rural populations, and above all, a distribution of land that ensures access to it for most farmers. The uprising of 1932 was in this context, including the participation of a majority of farmers and indigenous peoples and, to a lesser degree, of other workers, resulting in the killing of at least 32,000 people and the consolidation of military power.

In the 1960s, there was a resurgence of an organized movement as much in the city as the countryside: labor unions and organizations of teachers, students, and others. In rural areas, there was an important movement of agricultural workers and farmers, with the most relevant expressions being the Christian Federation of Salvadoran Farmers (CFSF) and the Union of Farm Workers (UFW), plus other agrarian groups that developed throughout the east, center, and west of the country, whose agenda was focused on: access to land, to credit, cheap agricultural supplies, free organization or unionization, better pay, improvements to food, and a reduction in working hours.

As popular discontent and the demands of farm-labor organizations for reform became increasingly energetic, the U.S. government designed an agrarian policy from a standpoint of counter-insurgency in Latin America in order to avoid these countries from becoming “satellites of international communism” (per the Santa Fe Report, 1980). This U.S.-designed reform had as its goal stripping sympathy and rallying points from revolutionary movements, headed by the organizations that would go on to form the Farabundo Martí Front for National Liberation (FMLN). These reforms were accompanied by the persecution and murder of leaders that the government suspected were “subversive.”

The design of these reforms was made up of three phases. Phase I (Decree 154) consisted of transferring lands expropriated from owners of more than 715 blocks, organizing cooperatives, and financial assisstance. In this first phase, it was recognized that in the first years of its implementation until 1989, it affected an area of 228,135 hectares, distributed in 333 cooperative associations, which in total were made up of 36,558 direct beneficiaries.

Phase II sought to resistribute the land of those owners of 214 to 714 blocks. This phase has still not yet been completed; however, a phase III has nonetheless begun (Decree 207), in which owners of less than 143 blocks are obligated to transfer those parecels that they previously rented, prioritizing individual ownership of at most ten blocks, which resulted in a significant increase in small farms. According to the World Bank, under this phase a total of 80,000 hectares were distributed to 84,000 beneficiaries (see table 3.4).

Thus phases I and III cover between 15 and 20% of the total agricultural lands, while the remaining 85% were not, and if we include lands from the Land Transfer Program from the peace accords the total is 23%. This 77% of land that is in the hands of landowners show that there remains a high concentration of land in few hands. Many land owners, to guarantee that their lands were not transferred, divided them and put them under the names of others people, be they family members or close friends. For their part, Chávez asserts that:

The failure of the agrarian reforms may be attributed to three main reasons: first, the reforms were focused on reducing social discontent, which is to say, that it was a counter-insurgent reform, which beyond seeking to transfer lands to farmers had an underpinning of political stability. Second, the political nature of the initiative did not respond to the needs of the rural population, since it was an imposition by the State. Finally, the reforms created a conflict of interest between the economically-dominant class and the State, and so could not be completed.

Table 3.4. Redistribution of land under the agrarian reforms.

The Peace Accords

Peace negotiations between the government of El Salvador and the FMLN between 1990-1992 coincided with the start of the implementation of the neoliberal model, pushed by the first government of the Nationalist Republican Alliance (“Arena”) under the direction of the World Monetary Fund, the World Bank, and the Interamerican Development Bank (IDB). This created the tension that since then had characterized the peace process in El Salvador, that is to say, the contradiction generated in the setting of a neoliberal model and the needs of a lasting peace that eliminated the causes of the war lays the foundation for development with social justice (something that is in itself a contradiction).

As part of the Peace Accords signed in 1992 between the FMLN and the government of Alfredo Cristiani, the agrarian issue was considered, and the government agreed to complete the mandates set forth in articles 104, 105, and 267 of the Constitution of the Republic in regards to land ownership, which required the transfer of lands in excess of 245 hectares per owner via the Program of Land Transfer, known as PTT,⁴ and to actively provide credit and technical assistance to new land-owners.

To address the problem of land, the Peace Accords established three actions: (1) distribute lands to farmers without it, giving preference to the ex-combatants of both sides; (2) provide a satisfactory legal solution to land ownership in conflict zones for the benefit of land-holders; and (3) transfer lands occupied by farmworkers’ organizations in other geographical areas, outside of the conflict zones, at the time of the treaty. This treaty would be known later as the July 3 Accord.

As a result of the implementation of these actions, and according to the World Bank, under the auspices of the PTT implemented between approximately 1992 and 1995, a total of 78,000 hectares were distributed to a total of 30,000 beneficiaries, and 1,473 hectares to a total of 1,000 beneficiaries (see table 3.5).

It is important to note that the beneficiaries of the PTT received land pro indiviso,⁵ which created possibilities for the development of a significant process of farmworker organization; however, for various reasons, this opportunity was not taken, and moreover this pro indiviso was ended under the auspices of a program financed by the IDB, which resulted in taking by individual ownership, and the end of the story of mini-groups in the country.

Table 3.5. Program of Land Transfer (PTT), 1992-1995

Nonetheless, despite the data offered by the World Bank, the Farmworkers Democratic Alliance (FDA) believes that the PTT and July 3 Accord have not been wholly complied with, above all with respect to land holdings exceeding 245 hectares, to the extent these were no distributed according to treaty, since the owners divided the excess among relatives to ensure that they were not affected. By the same token, the FDA maintains that the information on 361 landowners that have more than 350 blocks (245 hectares) has disappeared from the archives of the property registry.

The Neoliberal Model and its Impact on the Cooperative Movement

In the 1980s, after the global economic crisis, successive governments with the help of the International Monetary Fund and the World Bank imposed the Economic Stabilization Programs (ESP) and the Structural Adjustment Programs (SAP).

The supposed foundation for implementing these programs was at its base the neoliberal doctrine that part of the cause of the economic crisis was excessive state intervention in economic activity. Which is to say, a state that has a monopoly on the production and sale of services, with the ability to control the market, as much internal as external.

In this context, the economic programs impemented by the Arena governments starting in 1989, had as their objective the modification of economic structure and the creation of conditions for re-entering the global economy by setting out a new economic model based on non-traditional exports, mainly industrial, and reducing protectionism to re-insert the economy in the global marketplace. In other words, the objective was to configure a new model of accumulation of capital, oriented primarily towards the most profitable sectors of the economy, which also privileged the market as the distributor of resources.

With this goal, actions were completed such as the privatization of most public companies, including in banking, and the liberalization of the economy, meaning the liberalization of exterior trade, of prices, etc.

With respect to the agricultural sector, a series of measures were adopted that without any doubt caused its later deterioration, and in a few years converted it to one of the least dynamic sectors of the national economy, which primarily affected the production of basic grains.

Furthermore, the privatization of the banks with the exception of the Agricultural Development Bank and the Mortgage Bank, saw the reduction in credit for agricultural production, particularly for small and medium-sized farmers. According to the agricultural census by the Ministery of Agriculture and Income in December 2009, only 40,578 producers obtained loans, which is 10% of the total number.

At the same time, the State’s monopoly on exports of coffee and sugar was eliminated, the Regulatory Institute of Supply was closed, which was the institution that would buy basic grains from farmers at better prices; in its place was created the Agricultural Products Fund.

Exterior trade was liberalized, and as a result the import of goods and services, including agricultural products, creating private monopolies with the ability to control the commercialization of agricultural tools, including seeds.