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The I n s t i t u t e l s Occasional Papers a r e intended mainly a s
working papers produced a t an e a r l y stage of a research p r o j e c t ,
t o communicate with and i n v i t e reaction from colleagues elsewhere.
They can, however, a l s o afford an opportunity t o publish a lengthy
piece of finished research which i s too long f o r an a r t i c l e , y e t
The majority of the Occasional Papers
s h o r t e r than a monograph.
w i l l be the mrk of members a f s t a f f , research fellows and p a d u a t e
students a t Glasgow University, p a r t i c u l a r l y within the I n s t i t u t e .
Since i t i s hoped t o make the Occasional Papers representative of
ongoing research i n Scotland on Latin American t o p i c s i n the
d i f f e r e n t d i s c i p l i n e s , i t i s envisaged t h a t members of s t a f f with
L a t i n American i n t e r e s t s i n o t h e r S c o t t i s h u n i v e r s i t i e s w i l l be
A t the same time, i t i s n o t our i n t e n t i o n
i n v i t e d t o contribute.
t o be exclusive and we should l i k e colleagues elsewhere t o f e e l
f r e e t o o f f e r contributions.
We intend t o publish at l e a s t s i x papers i n each academio
year and these w i l l , a s f a r a s possible, be s e n t out i n two issues.
The Occasional Papers are d i s t r i b u t e d f r e e of charge, mainly t o
n a t i o n a l and u n i v e r s i t y l i b r a s l e s , other i n s t i t u t e s o r centres
similar t o our own, c e r t a i n u n i v e r s i t y departments and other
interested institutions.
I n view of the d i v e r s i t y of d i s c i p l i n e s
involved, i t i s not owr normal policy t o send a l 1 i s s u e s t o
individuals.
However, we are always pleased t o answer requests
f o r s p e c i f i c numbers and we hope t h a t anyone i n t e r e s t e d w i l l
contact u s d i r e c t ,
I n the back of the present number w i l l be f m d
a l i s t of papers already printed and those i n preparation.
Any
correspondence r e l a t i n g t o the Occasional papers should be addrGssed to:
The Editor, Occasional Papers,
Ins ti t u t e of Latin American Studies,
The University,
Glasgow. G12 8QFI
Scotland.
EL COLEGIO DE MEXICO
lJKEKDWELOED C OUI~iTRIES BY TEiE INDUSrRIAL
ITATI ONS f l I D TEIEIR !,TULTIIUTI OPTAL C OT~CERlTS
E r n e s t Feder
I n troduc t i o n
1.
The p q o s e of t h e f o l l o l - ~ i n gparagraphs i s t o d e s c r i b e s u c c i n c t l y m
i s s u e which by m d l a r *
has been overlooked by s o c i a l s c i e n t i s t s , p o l i t i c i a n s
and o t h e r s concerned w i t h the growth and t h e economic and p o l i t i c a l impact of
multinational coqorations.
T h i s i s s u e i s t h e new p e n e t r a t i o n by t h e i n d u s t r i a l c o u n t r i e s
F r m c e , Germnuiy, Japan and above a l 1 t h e USA
underdeveloped countries.
c m c i a l role.
- England,
- i n t o t h e a g r i c u l t u r e s of
the
I n this process, the n u l t i n a t i o n a l concerns play a
But ~ t h e ya r e p a r t and p a r c e l of a world-wide s t r a t e g y of tlle
i n d u s t r i a l c o u n t r i e s i n ~111ichm a n y o t h e r 'lagen ts" besides t h e m u l t i n a t i o n a l
fims ~articipate.
I n t r y i n g t o analyse t l d s new process, i t would seem important t o explain
b r i e f l y i n what h i s t o r i c a l . context i t occurs; how i t n a n i f e s t s i t s e l f ; &nd what
i n p a c t i t pronises t o have on t h e underdeveloped c o m t r i e s m d t h e i r rural
~eople.
2.
IIhy has t h i s i s s u e a t t r a c t e d s o l i t t l e a t t e n t i o n s o f a r ?
There seem t o
be t h r e e reasons: f i r s t , beczuse it i s of q u i t e r e c e n t o r i g i n , s t a r t i n g
approximately i n t h e e a r l y 1960's; second, because t h e a c t i o n of t h e d t i n a t i o n a l co-porations has been most " ~ i s i b l 6on
~ ~t h e i n d u s t r i a l and f i n a n c i a l
f r o n t s ; m d t h i r d l y , because of the vide-spread and perlxips h i t h e r t o n o t
e n t i r e l y unfounded, b u t s u r e l y now erroneous b e l i e f t h a t a g r i c u l t u r e cannot be
very a t t r a c t i v e f o r t h e m u l t i n a t i o n a l concerns o r o t h e r i n v e s t o r s s i n c e r a t e s
of r e t u r n s on agricultural
investments a r e n o t s p e c t a c u l a r and s i n c e agcicul-
tural producers a s a group a r e n o t a n a s s market f o r consumer goods and f o r
1
t h e ag-ricultural ' i ~ p u t s produced and s o l d by t h e m u l t i n a t i o n a l concerns.
!?hy h v e i n d u s t r i a l n a t i o n s r e o r i e n t e d t h e i r a , ~ i c i ~ l t u r a
s tl r n t e m ?
whi
3.
wiet
Two portentous ty-pes of even-ts Irlave c o n t r i b u t e d t o r e o r i e n t i n g t h e
s t r a t e g y of t h e i n d u s t r i a n a t i o n s t o t ~ a r d sunderdeveloped a g c i c u l t u r e s ~rlzich
the
have t r a d i t i o n t z l l y supplied then c e r t a i n foods and f i b e r s , p r i n c i p a l l y plantat i o n crops, f o r the production of x~hichthey have c l i m a t i c and economic (cheap
labour) advm tages :
(a)
the con tinuously de t e r i o r a . t i n g perf o;.mmce
of t bese
a y r i c i ~ l J ~ u r iens t e m s of output and of tlzeir a b i l i t y t o
provide e m p l o p e n t t o t h e i r rural population; ,md
(b)
the success of zu,yzrian r e v o l u t i o n s and land r e f o m s i n
C 01
s e v e r a l socT?,list countries.
it
inc
th:
L?
0
In a r a c t i c a l l y a11 ~ m d e ~ d e v e l o p enon-socialist
d
countries apiculture
has
been unn5le t o resnond e f f c c t i v e l y t o t h e i n c r e ~ s e ddemand f o r food r e s u l t i n g
I ~ o nno2ulntion po~,rth.
Tlle rensons a r e c o m l e x , but undoubtedly the m j o r
l o ~ g reason
- ~
i s the i n f l e x i b i l i t y of t r a d i t i o n a l land tenure s t r u c t u r e s ,
~ h ~ r s c t e r i s eby
d otmerchip concentration of f arm l m d i n t h e h m d s of a small
l-2ded e l i t e , on one s i d e , ~ n da lar@ smallholder s e c t o r nnd a l a r e 1,mdless
n ~ r n lxSour
l
f orce, on t h e o-k;ler.
The a,parican s t r u c t u r e i s t h e major deter-
~ L n c n tof t h e l ~ n duse p a t t e r n 2nd hence of output perfomzrlce.
The most out-
s t x ~ d i n gEezture of this r e l s t i o n s h i p i s t h a t when land ormership i s concentrated
i n tne hXlds of a few l a g e lmdotme-rs, t h e r e i s l i t t l e o r no i n c e n t i v e t o
c u l ~ i v a t ez l l tlie land or t o enploy a l 1 t h e a v a i l a b l e manporrere2
l a z d has t h e pu- ose
- md
the r e s u l t
- of
To monopolise
preventing t h e peasants from having
access t o la-uid; n o t t o c u l t i v a t e i t f u l l y has t h e e f f e c t of keeping f a , m wages
and incories
101~
2nd
peasants and r u r a l rrorlcers i n a s t a t e of dependency.
" T r a d i t i o n a l " :t;riculturcs
a r e une-ployment agricultures.
A l t e r liorld !lar 11, nore and nore widerdeveloped c o u n t r i e s have been
obliged t o imgort s t a p l e foods, although they have adequate resources f o r more
thm m n l e food produc-tion,
The s e c t o r producing food f o r domestic consupgtion
s u f f e r e d from an almost t o t a l l a c k of c a ~ i t a investments
l
f o r l o n g - m improvements ( o r even n a i n t e m n c e ) of i t s output p o t e n t i a l and thereby became unable t o
increlrse output i n tune w i t h po~ul-a,tiong ~ o w t hwhile paradoxically the small
exr,ort s e c t o r ('8small'1i n t e m s of l m d a r e a ) i n which l o c a l o r f o r e i g n c a p i t a l
bfas concei7t r a t e d con tinu.ed t o supply indus tris1 n a t i o n s i n c r e a s i n g l y T J
t h~f oods
and f i b e r .
An e q u a l l y s e r i o u s consequence has been world-wide agrarian u n r e s t , t h e
t o p o w by l e a p s and bounds.
i n t e n s i t y oi" which has tended
-
There a r e todzy few
c o u n t r i e s i n xrhich t h e peasauits a r e not actual-ly engaged i n a c t i v e o r passive
r e s i s t a n c e ~ g a i n s tt h e landed e l i t e o r t h e governments which defend i t o r i n
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reform might end up i n aligning an underdeveloped country with the s o c i a l i s f bloc.
A[T;
A revolutionary agrarian reform must therefore be avoided a t al1 costs.
the
by
of
The s t r e n g t h e n i n ~of-e
landed e l i t e s i n underdeveloped countries
OPP
For this reason i t would seem t o be no coincidence whatever t h a t under the
wor
leadership of the USA the i n d u s t r i a l nations engiged i n a two-pronged s t r a t e g y t o
eco
7
control the development of the agricultures of the t h i r d world, beginning i n the
e a r l y 1960's.
One aspect of the s t r a t e g y w a s t o f o s t e r I1rationalu, l e g a l l a n d
re1
reforms which were t o show the underdeveloped rural population t h a t something w a s
£ec
being done f o r them, but a t the same time encourage, o r a c t u a l l y p a r t i c i p a t e in,
ned
the systematic elimination and stranguiation through m i l i t a r y action of peasant
tk
organisations and movements.
0P
T h i s successful world-wide move has resulted i n
strengthening s i g n i f i c a n t l y the already powerful landed e l i t e , both economically
*a
and p o l i t i c a l l y .
tra
The e l i t e could now c m t on both national and international
military, p o l i t i c a l and (as we s h a l l r e l a t e more amply below) financia1 support,
ben
and as a r e s u l t , ownership concentration of f m land by the landed e l i t e has
=Y
onl
increased.
The governments of the underdeveloped countries c a r r i e d and s t i l l
carry out small-scale l m d tenure reforms, including i s o l a t e d s e t t l e m n t schemes
mod
(euphemistically called reforms) i n old farming communities o r i n v i r a n areas.
Their purpose was t o pacify the r u r a l population.
In e f f e c t i t a l s o served t o
inc
divide it p o l i t i c a l l y , and peasant repressions continue,
m&
thé
For a l 1 p r a c t i c a 1
piirposes, land reforms a r e now a dead issue.
I n a sense, this vas however only a negative strategy.
t o introduce a more constructive propamme.
It w a s neceisary
This was t o be a broad and
systematic assistance scheme intended t o "modernize" agriculture i.e.
of the lar@ landholdings.
1 am using the t e m modernization i n the sense t h a t
the physicai. productive processes of the e s t a t e s
farming practices, use of technology
S tandards
the sector
- management,
- were to be modernized
land uses,
i n accordance with
used i n highly developed a p i c u l t u r e s , but t h a t the a g r a r i m
'
s t r u c t u r e as such (the d i s t r i b u t i o n of land and agcicultural wealth, labor
r e l a t i o n s and other land tenure conditions) remained e s s e n t i a l l y the same.
In order t o make this modernization a t t r a c t i v e t o the l a r e landholders
a, whoJe gammut of inducements (incentives) was employed which amoimted i n
essence t o an enormous process of subsidization.
8
Of course the expression "the a g a r i a n s t r u c t u r e remains e s s e n t i n l l y the
sanen must not be taken too l i t e r a l l y .
The modernization process t o ~ r h i c h
reference hzs been made does have an impact on t h e agrarian structure.
i s f a r from having the same impact as an agt-arian ref orm
But
it
- quite tlie con tr:iry.
C or
am
new crops c u l t i v a t e d í n the i r r i g a t i o n a r e a s ; subsidized the importation and
)
r
spread of modern, f o r e i g n technology and of o t h e r modern a g r i c u l t u r e i n p u t s and
sponsored the establis1,ment of a Rockefeller ( ~ o r d )Foundation p r o j e c t t o develop
high y i e l d i n g v a r i e t i e s of mai-ze, wheat and sorghum which could. only be g r o m
under I1optimum" conditions
, i.e.
w ith
t h e "package" of expensive modern
technological i n p u t s which can only be applied e f f e c t i v e l y i f t h e i n s t i t u t i o n a l
structure
- land
t e n m e , c r e d i t , markets, I.aws e t c .
- f a c i l i t a t e t h e i r use. 3
This w a s ( t o r e p e a t ) achieved a t the expense of the peasant land r e f orm s e c t o r
t.
which vas i n c r e a s i n g l y being s t a r v e d of funds and whose i n s t i t u t i o n s were
s y s t e m a t i c a l l y bljing coopted m-d p u t a t the s e r v i c e of the smll b u t powerful
new modern s e c t o r , 4
10.
It i s extremely important t o understand t h e Nexican process of
moderniza,tion in agr5culture i f one i s t o comprehend o r p r e d i c t the outcome of
s i r n i l ~ rprocesses elsewhere i.n the world.
mdny
Mexico p r e s e n t s today i n a new form
of t h e problems which besiege the imder-developed a g r i c u l t u r e s
respecis even i n i n t e n s i f i e d f o m .
- i n some
S-.
As was t o be expected, Mexican agriculture-:
memirig the h e a v i l y subsidized inodern s e c t o r producing s t a p l e foods and
s p c c i a l i z e d crops f o r expo:rts
- responded quickly t o the
enormms i n j e c t i o n of
c a p i t a l 2nd t e c h n o l o , ~ ~ . During t h e 1950's and p a r t of the 19601s, Mexico
showed r a t e s of g ~ o w t hof a g r i c u l t u r a 1 output u n p a r a l l e l e d anywhere i n t h e underdevelo?ed n o n - s o c i a l i s t wor1.d.
From a food importing country, Mexico became a
food e r g o r t e r , n o t only of t h e prod.ucts f o r which c l i m a t i c conditions were
e s p e c i a l l y s u i t e d , such a s c e r t a i n t r o p i c a l products, but even s t a p l e foods
such as wheat and. maize,
I n f a c t , Iood exports were f o s t e r e d even thou*
the
d i e t of t h e Mexican working population remained u t t e r l y inadequate, because t h e
d i s t r i b u t i - o n of t h e output of food w a s obviously regulated by t h e purchasing
power of the domestic and i n t e r n a t i o n a l markets.
Tkle output s i t u a t i o n i s such
*
t h a t Mexico has become t h e most i m p o r t m t source of c e r t a i n f r u i t s and vegetables
f o r t h e United S t a t e s , t o a p o i n t where Mexico now provides two-thirds of the
winter vegetables required i n t h e USA.
\!hile
t h e new e s t a t e s e c t o r perforrned extremely well, t h e peasant
s e c t o r d i s i n t e g r a t e d a t g r e a t speed.
This means t h a t t h e l a r g e s t p o r t i o n of
Nexican a g r i c u l t u r e i n terms of land a r e a and population, s u f f e r s from an acute
problem of poverty, inadequate d i e t , unemployment and s o c i a l u n r e s t , al1 of
which have increased s t e a d i l y t o a p o i n t where s o c i a l m d p o l i t i c a l peace
becomes harder m d harder t o maintain.
T h i s d i s i n t e g r a t i o n was n o t only
C
caused by t h e w i t h d r a ~ r a lof adeqimte p o l i t i c a l and f i n a n c i a 1 support from t h e
peasant (land reform) :ector, but was a l s o t h e d i r e c t consequence of t h e
modernization process
- the
replacement of labour by machinery and t h e
d e t e r i o r a t i o n of t h e terms of ernployment on modern farms which r e q u i r e seasonal
manpower.
A s w a s a l s o t o be expected (and indeed t h e s e processes were predictable),
t h e green r e v o l u t i o n llmiraclell of Mexico soon turned out t o be a f a i l u r e from
t h e p o i n t of view of production i t s e l f , as f a r as s t a p l e foods were concerned.
Rates of gcowth s t e a d i l y declined s i n c e the l a t e 1960's and Mexico now imports
very large q u a n t i t i e s of i t s s t a p l e foods s o as t o avoid famines.
the consequence
- as
some people might argue
- of
This i s n o t
c l i m a t i c r e v e r s e s , although
i t i s obvious that a g r i c u l t u r a 1 output i s always a f f e c t e d i n t h e s h o r t e r run by
t h e weather.
There seem t o be f i v e s p e c i f i c reasons f o r this development.
The f i r s t : t h e l a c k of adequate and broad programmes and support f o r developing
and improving and then d i v e r s i f y i n g peasant a g r i c u l t u r e , beginning with the
b e t t e r production of maize, t h e s t a p l e food of the Mexicam population.
Wze
y i e l d s i n the peasant s e c t o r have n o t improved adequately, i f they have improved
at all.
Most of t h e maize acreage i s c u l t i v a t e d i n rain-fed &reas,
with low
l e v e l s of technology and inadequate e f f e c t i v e government assistance.
D i v e r s i f i c a t i o n i s s t i l l in i t s i n f a n t stage.
The second: t h e amount of land
devoted t o the production of s t a p l e foods under i r r i g a t i o n has become
i n c r e a s i n g l y i n s u f f i c i e n t t o f e e d a r a p i d l y growing population and y i e l d s t h e r e
cannot p o w i n d e f i n i t e l y .
er-
~
B
This i s p a r t l y due t o the t h i r d reason: i n c r e a s i n g
amounts of f e r t i l e i r r i g a t e d o r rain-fed a r e a s a r e devoted t o t h e production of
more remunerative crops which are e q o r t e d and which cannot be absorbed
6
The f o u r t h reason i s t h a t the
domestically because of low purchasing power.
land-monopolizing producers
i n the i r r i g a t i o n d i s t r i c t , i n t h e i r d e s i r e t o
maximize t h e i r- i n d i v i d u a l p r o f i t s , can s h i f t a b r u p t l y from a s t a p l e crap f o r
domestic o r f o r e i g n consumption t o a more remunerative crop which may f o r e x m e
be s u i t a b l e only f o r c a t t l e f e e d (as occurred r e c e n t l y i n Mexico on a lar@
1
Les
"'?
s c a l e when they s h i f t e d from maize and wheat t o sorghum), thereby l e a v i n g t h e
domestic food s i t u a t i o n i n a chaos (and i n c i d e n t a l l y f o r c i n g t h e government t o
r a i s e support p r i c e s f o r t h e s t a p l e foods).
n o t a d e s i r a b l e development.
From a s o c i a l view p o i n t t h i s i s
The f i f t h reason i s t h e d e c l i n e i n c a p i t a l
investments on t h e farm l e v e l , a s w i l l be explained i n paragraph 11 below.
A l 1 t h i s has been t h e consequence of a p o l i c y of highly unbalanced
growth which has p u t too much r e l i a n c e on a s m a l l c a p i t a l i s t e l i t e s e c t o r ,
i n s t e a d of p u t t i n g rural development on a broad peasant basis.
Perhaps the most s i g n i f i c a n t f a c t o r has been the development of f o r e i g n
domination over important s e c t o r s of Mexican a g r i c u l t u r e which i s a s s o c i a t e d
w i t h t h e e x p m s i o n of t h e land a r e a and of t h e output of s t a p l e and export
crops,
And t o '.llis, we must now t u r n our a t t e n t i o n b r i e f l y .
Nodernization of landed e l i t e a g r i c u l t u r e
l e a d i n g t o domination
of f o r e i g n c a p i t a l and technology i n a g r i c u l t u r e and a l l i e d i n d u s t r i e s .
The high y i e l d i n g v a r i e t i e s of seeds developed by t h e Rockefeller-Ford
11.
Foundations have o f t e n been r e f e r r e d t o by the p u b l i c r e l a t i o n s e x p e r t s of t h e
teo
agr
Foundations as "miraculous" because of t h e impulse they gave lilexico's output i n
t h e i r r i g a t i o n d i s t r i c t s dominated by large-scale producers.
miraculous
be@
ind
Much more
i.s however the impetus they llave given the import and s a l e s and
l a t e r the " l o c a l " manufacture o r assembly of t h e s o p h i s t i c a t e d i n p u t s (such as
tractors
, fertilizers,
seeds
, f eeds,
tlie "package deal" r e q u i r e d by the new modernization p r o g r a m e and which can be
afforded only by t h e lar*?,
r i c h e r producers and those who have a c c e s s t o
c r e d i t ( ~ r h i c hi s u s u a l l y the same)..
The expansion of i n t e n s i v e farming has
served t o expand the requirements of i n p u t s o r i g i n a t i n g i n c o u n t r i e s o t h e r than
Mexico, p a r t i c u l a r l y i n t h e USA, w i t h the exception of f e r t i l i z e r s most of which
ase produced and s o l d by t h e govemment.
The consequence has been a v e r i t a b l e
invasion of both products produced p r i n c i p a l l y by m u l t i n a t i o n a l corporations and
imported by Mexico and of m u l t i n a t i o n a l f i r m s i n a v a s t gammut of f i e l d s and a&
al1 l e v e l s of the economy.
\!itiiout
exaggeration i t can be affirmed t h a t the
bulk of t h e modern i n p u t s required by t h e modernized a g r i c u l t u r a 1 s e c t o r are
proviQed by t h e non-Plexican f irms, p r i n c i p a l l y US e n t e r p r i s e s . 7
IJhat i s more:
i - b i s c h a r a c t e r i s t i c f o r t h e modernization process
in
a g r i c u l t u r e alded by f o r e i g n investments and technology t h a t t h e expansion of
foo6 output l i m i t e d t o a d e f i n i t e and f i n i t e s e c t o r a t t r a c t s i n i t s wake an
ever-increzsing amount of a d d i t i o n a l f o r e i g n c a p i t a l and technology f o r al1
Icirids of a g r i c u l t u r e - r e l a t e d i n d u s t r i e s and services.
Once t h e process i s e e t
i n motion, i t "snowballs", s o t l m an i n c r e a s i n g proportion a l s o of the
z g i c u l t u r a l output ( i t s mos t important i tems) and i t s d i s t r i b u t i o n i s c o n t r o l l e d ,
a t el1 l e v e l s , by non-local i n v e s t o r s .
8
The s h i f t of c a p i t a l and technology t o t h e a g r i c u l t u r e - r e l a t e d
i ~ d u s t r i e sand s e r v i c e s i s without doubt one of the reasons why a s t r a t e g y
focused on the r a p i d development of a geographically l i m i t e d s e c t o r i s bound' t o
r e s u i t i n a 1evelling.-off
of production.
A f t e r t h e i n i t i a l r a p i d growth of t h e
llpz~~per-edlt
s e c t o r , upper production limits a r e reached and production l e v e l s
o f f , n o t only because of t h e p h y s i c a l l i m i t a t i o n s , but a l s o because no f u r t h e r
inflwc of c z p i t a l and technology w i l l occur i n t o a g r i c u l t u r e on the previous
scale,
l
i r r i g a t i o n equipment e tc. ) which make up
Since p o p d a t i o n continues t o i n c r e a s e , production again w i l l n o t keep
i^p with population ero~.rthand t h e f ood s i t u a t i o n r e t u r n s t o "normal".
9
me1
No-
C 01
in,
tr,
de
12.
So it comes t h a t an important s e c t i o n of Nexican a g c i c u l t u r e and of
a g r i c u l t u r e - r e l a t e d indu-stries i s now d i r e c t l y dominated by f o r e i g n c a p i t a l and
technoloa.
Few Plexicaas seem t o r e a l i z e how f a r t h e "encirclement" of t h e i r
a g c i c u l t u r e has gone.
Once the f o r e i m s u p p l i e r s of a g r i c u l t u r a 1 i n p u t s were
begirming t o be e s t a b l i s h e d , thay and o t h e r c a p i t a l i s t s from t h e US and o t h e r
i n d u s t r i a l countrlea ventured d i r e c t l y i n t o t h e production, marketing, processing
and export of a g-reat new v a r i e t y of food products, ranging from the s t a p l e foods
t o cotton, sugar, and t h e most important f r u i t s and vegetables destined f o r t h e
US m d o t h e r f o r e i m markets. lo
The predominant economic f a c t o r i n t h i s develop-
ment i s the l a r e c o s t advantage, mainly due t o the low wages of Mexican labow'.
Not only do US f i n m c i a l e n t r e p r e n e u r i a l i n t e r e s t s monopolize, and t h e r e f o r e
c o n t r o l , t h e t r a d e channels, the f i n a n c i n g of production, processing and market-
m
i n g ( i n c l . e x p o r t s ) and t h e technology a s s o c i a t e d with the production, handling,,
ich
t r a n s p o r t a t i o n , processing and warehousing etc.,
!e
b u t they a l s o are a b l e ts,
determine d i r e c t l y o r i n d i r e c t l y t h e q u a n t i t y of output and t h e a c r e a p needed
lnd
t o produce, inasmuch as t h e US (and o t h e r £oreign). demand has become an
ti
important, and i n some cases t h e major f a c t o r i n the a l l o c a t i o n of Mexico's
asicultural
resources f o r t h e products involved.
I n f a c t , the f o r e i g n
i n t e r e s t s have obtained thereby a power of d i r e c t o r i n d i r e c t c o n t r o l over the
i s , C t t s e l f md the producers because the foreign-omed p l a n t s (i.e.
the p l a n t s
1ri.t-h f o r e i g n c z p i t u l ) con-t;r.act d i r e c t l y with t h e producers and f u r n i s h them v i t h
c r e d i t and i n p u t s i n r c t u r n f o r t h e i r output. 1 2
-
This nerJ process of c o n t r o l over 14exican a g ~ i c u l t u r e . which i s t y p i c a l
f o r the t r e n d s which now a r e v i s i b l e i n many, i f not most underdeveloped
- i s t h e r e f o r e c h a r a c t e r i z e d by the f a c t ' t h a t i t
t r a d i t i o n a l p l a n t a t i o n (enclave) s e c t o r s - su=,
bananas,
c o w t r i e s throughout t h e world
not only involves the
coffee, t e a etc.
- but
a h o s t of o t h e r products, i n c l u d i n g t h e s t a p l e foods.
A s a r e s u l t , f o r e i m i n t e r e s t s a r e a b l e t o determine t o an even larger e x t e n t
the a g r i c u l t u r a l ctnd a g r a r i a n p o l i c i e s of t h e host country.
2 .
1
e
-I
1
I
1
i
15.
The pene t r a t i o n of f oreign c a p i t a l and technology i n PIexican
a G i c u l t u r e has created conditions of domination and economic d i s t o r t i o n s which
resenble tiiose brought about i n indus try.
There are economists, businessmen
and p o l i t i c i m s tiho would claim t h a t r d t h o u t f o r e i g n c a p i t a l and technology, an
underdeveloped a p i c u l t u r e cannot progress
a t all.
blhile these claims have a
g r e a t d e a l of jWtiFicaYion, they overlook important disadvantages which a r i s e
-4
1
l
out of t h e conditions under which this t r a n s f e r occurs.
The major disadvantages
\
a r e t h e r e s u l t of
(a) the i n a b i l i t y
- la.ck
of bar,&ning
power
- of
the underdeveloped governments
o r l o c a l entrepreneurs, not t o speak about organised o r unorganised labour, t o
e f f e c t i v e l y c o n t r o l t h i s t r a n s f e r and t h e terms under which i t t a k e s place;
(b) t h e highiy i n e q u i t a b l e d i s t r i b u t i o n of b e n e f i t s from t h i s t r a n s f e r : the
b e n e f i t s flow t o a t i n y c l i q u e of l o c a l rural and non-rural c a p i t a l i s t s , a
small'group of t h e a v a i l a b l e r u r a l manpower and a s m a l l s e c t i o n of the
consuming public, in conrparison w i t h t h e total. popuiation and the a w e g a t e
p r i v a t e and p u b l i c resources used t o implement this t r a n s f e r ;
( c ) t h e highly u n e q u d d i s t r i b u t i o n of b e n e f i t s a t t h e i n t e r n a t i o n a l l e v e l : a
high proportf'on of the a p i c u l t u r a 1 r e t u r n s f low back t o t h e indus t M a l
countries and i n c r e a s e the d e b i l i t y o£ t h e f o r e i g n exchange s i t u a t i o n ;
(d) the i n t e r f e r e n c e of f oreigh c a p i t a l i s t s d i r e c t l y o r through t h e i r governments i n domestic a p i c u l t u r a 1 and aparian p o l i c i e s and programmes;
( e ) the i n c r e a s e i n s o c i a l m d p o l i t i c a l c o n f l i c t s a r i s i n g i n t h e a r e a s of
c o m e r c i a l food and f i b e r production and spreading throughout t h e country which
ackompany growing income discrepancies and worsening conditions of land t e n m e
and of t e m s of employment f o r a g r i c u l t u r a 1 labour i n t h e modernized sector.
A birdseye view of t h e implications of tle- t r a n s f e r of c a p i t a l and
fechnology i n t o underdeveloped a g r i c u l t u r e s .
Unfortunately n o t m c h i s known about t h e p r e c i s e a s p e c t s of the
t r a n s f e r of c a p i t a l m d technology i n a g c i c u l t u r e even i n Mexico t h e r e new
l e g i s l a t i o n has @ven t h e Piexican governuí?nt f o r the f i r s t time t h e r i g h t t o
i n s p e c t and c o n t r o l some of the more formal a s p e c t s of i t
- f o r example t h e
ri&t t o i n s p e c t and a d j u s t c o n t r a c t s f o r t h e t r a n s f e r of technology between
But t h e i i t t l e t h a t i s now known i s a l r e a d y highly
f o r e i g n and Mexican firms,
revealing,
According t o one e x p e r t who, as a government o f f i c i a l , has access
t o t h e r e l e v a n t m a t e r i a l , the f o l l o w i ~ l gs i t u a t i o n and p r a c t i c e s can be found i n
1.lexica.n a g r i c u l t u r e and agriculture-related
industries:- 13
(1) The extremely s c a r c e information a v a i l a b l e f o r a g r i c u l t u r e r e f e r s
exclusively t o innovations and t h e f u n c t i o n i n g of r e s e a r c h m d = i c u l t u r a l
extension s e r v i c e s ;
( 2 ) t h e v i s i t s of independent f o r e i g n t e c h n i c a l a s s i s t a n c e e x p e r t s and those
sponsored by producer a s s o c i a t i o n s ( u s u a l l y mee t i n g s h e l d l o c a l l y ) benef it .
almost e x c l u s i v e l y the lar* producers and l i v e s t o c k gcowers who can a f f o r d t h e
cos ts ;
(3) t e c h n i c a l a s s i s t a n c e furnished as a r e s u l t of c o n t r a c t s between f i m
e s t a b l i s h e d i n Mexico and f o r e i g n f i r m s have important technological and
economic consequences, as shown by a study of over 30 such contracts:
( a ) t h e firms e s t a b l i s h e d i n Mexico a r e almost al1 s u b s i d i a r i e s
of t h e f o r e i g n f i r m s and r e c e i v e technology from them and
manufacture a g c i c u l t u r a l inputs, process a g r i c u l t u r a 1
products o r merchandise f i n i s h e d products
(b) besides know-how, t e c h n i c a l assis tance and i n d u s t r i a l
p r o p e r t y r i g h t s f o r manufacturing, the l i c e n s e d fim i n
Mexico rece-lve i n t h e g r e a t majority of cases the v i s i t s
of f o r e i g n e x p e r t s who supervise t h e t e c h n i c a l a s s i s t a n c e
@ven a g r i c u l t u r a 1 producers
( c ) two grave problems a r i s e o u t of t h e t r a n s f e r of technology
(d)
i n a p i c u l t u r e : intliscriminate meckiar~ization r e s u l t i n g
from t h e i n i t i a t i v e of the inmufacturers of a g r i c u l t u r a 1
equipment m d exclusive considerations of p r i v a t e
p r o f i t a b i l i t y of l a r g e producers; and the use of machinery
which i s n o t adapted t o t h e p r i v a t e m d s o c i a l needs of
Mexico s i n c e this technology i s adapted t o the needs of
t h e i n d u s t r i a l c o u n t r i e s m d designed t o save labour
t e c h n i c a l a s s i s t a n c e i s o r i e n t e d p r i n c i p a l l y towards
i n c r e a s i n g the s a l e of t h e f irms manufac t u r i n g a g r i c u l t u r a l
i n p u t s which provide t h e a s s i s t a n c e ; hence i t i s not always
adapted t o the producersl needs and i s o r i e n t e d towards
l a r e producers i n i r r i g a t e d o r rain-fed ( r i s k l e s s ) areas.
-
ich
re
-
(4) Technical a s s i s t a n c e received by processing p l a n t s p r i n c i p a l l y f r u i t m d
vegetable canning o r milk processing
o b t a i n from t h e i r p l a n t s ( i n the
i n d u s t r i a l c o u n t r i e s ) advice on t e c h n i c a l a s p e c t s of tkieir purchases of
a g r i c u l t u r a 1 products, involving
development of product v a r i e t i e s adapted t o the processing
q u a l i t y c o n t r o l and product staridardization
c ) p l a n t i n g , f e r t i l i z e r usa@, techniques of harvesting and
preservation
d ) p e s t c o n t r o l and d i s e a s e s
e ) f e e d i n g and breeding techniqiles f o r l i v e s tock
(5) The a s s i s t a n c e furnished i s focused on c e l e c t i n g v a r i e t i e s needed by t h e
Tliis s e l e c t i o n does not conform always t o t h e p r o f i t
p l a n t s t o minimize c o s t s ,
needs of t h e producers, alt8hough the l a t t e r b e n e f i t í'rm e r t a i n s e c u r i t i e s ,rit h
r e g a d t o the s a l e of t h e i r production.
i n vicw of the f a c t t h a t a 1arg-e
p r o p o r t i o n of the p l a n t s l output i s exported, t e c h i c a 1 a s s i s t ~ m c efurnished
promotes c e r t a i n t-ypes of a p i c u l t u r a 1 o u t ~ u ti.~llichw i thout the export would
probably n o t e x i s t.
a1
usual l y f u r n i s h a s s i s t,mce in
( 6 ) The f irns ~shich.purchase agriccl. t ~ ~ r prodiicts
t k f o r m of a packa:;e deal.
This inciildes m a\-rcernent t o purchnse the lisrvest,
t o f u r n i s h c r e d i t and a p i c u l t u r a 1 inputs.
As a r e s u l t , t h e " f r e e " t e c h n i c a l
a s s i s t a n c e i s amply compensated by vasious ineckL-,rinisrris(from the p l a n t s ' p o i n t of
view)
(7) The most d i r e c t t r a n s f e r of t e c h r l c l o ~ yt o I,Iexicm a g r i c u l t u r e r e s u l t s Erom
c o n t r a c t s between f oreign firms and ii :-?S c s t a b l i s h e d i n ilexico which purchase
The l i c e n s o r s a r e f oreign
a g r i c u l t u r a 1 products f o r marketing; ;.xnrL 'Jroccss iny;.
firms engaged i n developing and marlceting improved v a r i e t i e s of seeds, and
through t h e i r c o n t r a c t s
(a) se11 t h e i r seeds m d a p e e t o f u r n i s h the l i c e n s e e s new
v a r i e t i e s devel oped by them
( b ) f u r n i s h know-how and t e c h n i c a l a s s i s t a n c e t o t h e "Mexican"
firms and occasionally t o the Mexican producers of seeds
permit
t h e use of t h e i r r e g i s t e r e d names
(c)
occasionally
purchase p a r t of t h e seeds produced i n Mexico.
(d)
The l i c e n s e d f i r m s i n Mexico, which a r e u s u a l l y s u b s i d i a r i e s of t h e f o r e i g n
f i r m s , make c o n t n c t s with Mexican producers t o purchase t l l e i r harvests (cotton,
e.g, f o r the manufacture of vegetable o i l s e t c . ) o r t h e i r s p e c i f i c seed output.
111
.
(8) The payments which correspond t o the use of r e g i s t e r e d names, know-how, and
t e c h n i c a l assistauice a r e i n the f o m of a percentage on s a l e s ; f i x e d payments
I n addition,
p e r t o n of seeds produced and s o l d o r processed o r i n o t h e r ways.
t h e r e i s a charg-e ~ n e r a l l yf o r the f e e s , t r a v e l expenses and l i v i n g c o s t s of
t h e f oreign experts.
p r i o r t o the Law on the T r m s f e r of Technology, such payments represented about
6, 8 o r up t o 1 0 percent of the n e t seed s a l e s , although the e x a c t magnitude of
I n any event they represent
of t h e s e p a ~ m e n t si s not ,yet kno~tmwith accuracy.
payments which a r e very h i c h i n r e l a t i o n t o t h e averaffe payments i n the
i n d u s t r i a l s e c t o r which g e n e r a l l y a r e a l s o excessive,
( 9 ) Some of t h e more complex c o n t r a c t s r e l a t e d t o the handling and p r o c e s s i n ~
of l i c e n s e d seeds c o n t a i n r e s t r i c t i v e provisions, such as
( a ) o b l i g a t i o n by t h e l i c e n s e e t o u t i l i z e t h e seed furnished by
t h e l i c e n s o r uniquely f o r p l a n t i n g and t o provide mnual
r e p o r t s regarding t h e unused seed
( b ) o b l i g a t i o n by t h e l i c e n s e e t o se11 t h e surplus seed back t o
t h e l i c e n s o r at t h e termination of the c o n t r a c t
( c ) o b l i w t i o n t o submit ts the l i c e n s o r annually, f o r h i s
approval, a d e t a i l e d r e p o r t regazding the acreage t o be
seeded w i t h each seed v a r i e t y
( d ) p r o h i b i t i o n t o p l a n t approved rented land with sced v a z i e t i e s
o t h e r than those of the l i c e n s o r
( e ) o b l i g a t i o n t o process f o r o i l from the harvested seed al1 the
seed which does n o t conform t o t h e l i c e n s o r s ' s p e c i f i c a t i o n s
( f ) p r o h i b i t i o n t o export the seed produced i n ~ e x i c o . 1 4
This preliminarry view of only a srnall corner oí' the t r a n s f e r of
technology i n Mexican a g c i c u l t u r e
- t h e remainder being s t i l l urilmown becauae
of
t h e t o t a l l a c k of r e s e a r c h i n t h e area o r the i m p o s s i b i l i t y of o b t a i n i n g
information on the transac,tions of m u l t i n a t i o n a l f i m s
of the impact and the mechanisms which operate there.
- perrnits
a p a r t i d view
(i11viou::ly ninxly aspecta
b o t h of the t r m s f e r of f 0 r e . i ~tcchno:logy md of capi.tal nrVeimaccaimtt?d f o r r
the arrangements regarding the manufacture of agricu1tu1:a.l t-quiprnent; t h e sale
and d i s t.ribution of imported inpu ts ; the rnmif icntioric oí'
I;).i(-!
f'inancing of
exports t r i t h f o r e i g n c a p i t a l ; t h e r a ~ ~ i f i c n t i o nofs fj.rinno.irit; of the production
and processing of a g r i c u : l t u r a l exports; the pa,ynents cbf r o y ~ t l t i e s , l i c e n s e a etc.
f o r the manufacture o r s a l e of f o r e i g n , but l o c a l l y produ(:ad
02:
aasernbled equip-
ment m d o t h e r iriputs, an& rnany rnore.
14.
I t is iny jud,pnent, which
by Mexicni-~ot)mrvcrs, that
f o r e i g n c a p i t a l and. techno1oi:y have l i k r , a apider spwi n web oí.' rric.cI~n.raisrns
j . ~shared
sround the most i m p o r t m t s e c t o ~ sof Mexicm a g r i c u l t u r s al; al1 Pevels of
production, processing, rnorch:uiili.sing, fincmcing e t c . so tlwt a la?-@ e e c t o s of
-
Mexican a , ~ i c i r l t l u c e i t s "rnost modern, productive, dyi:un2.0tt s e c t a s
but an extension of US a g r i c u l t u r e , US f i n m c i n g ,md bnnlciri,q, m d of
apiculture
- r e l a t e d industrias o r inciils trj.es pro(iucing inputn,
- -in now
IR
wM.c,h al1
operatc i n connivance rrith 1;he Mexican (~overnmentand p a r t of tha p r i v a t e
( c s p i t a l i s t ) s e c t o r t o e x p l o i t Tilexican r u r a l labour, Mexicm 1m1d and w ~ t a r
resources ,md Mexicm pri.vate and p u b l i c c a p i t a l fo.r t h e p r i n c i p a l b e n o f i t of
US entrepreneurs.
Given t h i s developrnent, i t
ir;
hi f;kily doubtful t h a t %he
belated e f f o r t s of the Mexican (;overnment t o c o n t r o l the t~.:msfe.r of f o r e i e n
c a p i t a l and t e c h n o l o , ~more e f f e c t i v e l y wil.1 have tuny but mar{$nal r e s u l t s f o r
Mexicol S dependence on t h e i n d u s t r i a l n a t i o n s
.1 5
App1.yi.n~the Mexican s t r a t e g y on a world-wide b a s i s
15.
\le now r e t u r n t o t h e world scene.
The i n i t i n l success i n Mexico
of the spread of the high y i e l d i n g v a r i e t i e s of seed consisted i n r a i s i n g out-
i
b u t of
St a p l e
and f eed crops under' "optimwn" i n s t i t u t i o n a l , e c o l o g t c a l and
t e c h n i c a l conditions, and i n s h a r p l y i n c r e a s i n g the s a l e of s o p h i s t i c a t e d
a g r i c u l t u r a 1 i n p u t s ( i n a package d e a l ) produced and s o l d by m u l t i n a t i o n a l
corporations.
Hence nothing seemed e a s i e r and more d e s i r a b l e than t o apply the
Mexican "lesson" on a world-wide basis.
The 1960's have witnessed a
tremendous onslaught on tkle non-socialist underdeveloped c o u n t r i e s p r i n c i p a l l y
0
1
by t h e US business community i n cooperation w i t h t h e large Foundations and t h e
US government through a new world s t r a t e g y of " a g r i c u l t u r a 1 developmentu, which
l a t e l y has become nore and more complex.
The s t a t e d reasoning behind this new s t r a t e g y was both simple and
p l a u s i b l e : The "netr technologytl based on t h e use of the new seeds would
3f
i n c r e a s e mimculously t h e output of food and at the same time be good f o r US
v
1
business, and t h e US i s b e s t equipped t o provide t e c h n i c a l and f i n a n c i a 1
i[
a s s i s t a n c e t o t h e poor c o u n t r i e s ; t h e underdeveloped c o u n t r i e s should o b t a i n
i
t h e necessary know-how from t h e m u l t i n a t i o n a l corporations; and i f the
flfarmersll (producers) of t h e underdeveloped c o u n t r i e s would only a c t l i k e US
fzrmers, i.e. l i k e c a p i t a l i s t entrepreneurs, they would be a b l e t o purchase
b i l l i o n s of d o l l a r s worth of s o p h i s t i c a t e d and l e s s s o p h i s t i c a t e d i n p u t s
manufactured and s o l d by t h e m u l t i n a t i o n a l corporations.
The a p o s t l e s of
modernization made t h e r e f o r e no bones about the economic advantages of t h e
16
modernization of underdeveloped a g i c u l t u r e s f o r t h e United S t a t e s .
The unstated argument behind this new s t r a t e g y w a s t h a t t h e I1green
revolution" , while spreading f ood, would prevent the spread of a p a r i a n
c o n f l i c t s and t h e r e f o r e of socialism.
16.
The e f f e c t s of the new s t r a t e g y a r e now too well knom t o need much
a d d i t i o n a l comment here.
A l 1 over the world t h e p e e n r e v o l u t i o n as a symbol
of "modernization" turned o u t t o be an e n t i r e l y p r e d i c t a b l e economic, p o l i t i c a l
and s o c i a l f a i l u r e , a pure m d simple catastrophy f o r the p e a s m t masses,
although n o t f o r the m u l t i n a t i o n a l corporations producing a g r i c u l t u r a 1 inputs.17
The impetus given t h e e s t a t e s e c t o r through i n t e r n a t i o n a l and n a t i o n a l
f i n a n c i a l , p o l i t i c d and i n s t i t u t i o n a l support has, without any doubt, been a
windfall f o r these corporations.
G n t h e o t h e r s i d e , however, the modernizatiai
s t r a t e g y has not kept i t s promise of p l e n t i f u l foods m d i t has aggravated
dramatically t h e a-rian
c o n f l i c t s wherever i t has been applied.
It i s use-
f u l t o speculate why lfmodernization'f i s bound t o f a i l :
(1) one reason 1 s the technocratsl approach t o the problems of underdeveloped
a g r i c u l t u r e s , ~ r h e t h e rthey be economic, s o c i a l o r p o l i t i c a l .
The p r e v a i l i n g
i d e a among technocrats i s t h a t i t i s s u f f i c i e n t t o t r a n s f e r modem know-how from
i n d u s t r i a l countries t o the underdeveloped a g r i c u l t u r e s t o achieve r e s u l t s
i d e n t i c a l t o those achieved i n the former.
It is
T h i s i s a fundamental error.
necessary t o comprehend the s o c i a l system i n t o which modern techniques are
injected.
I f they a r e t r a n s f e r r e d t o a r i g i d s o c i e t y mainly composed of a
r e l a t i v e l y small e l i t e and baulgeoisie and a lar*,
p a r t l y unemployed p r o l e t a r i a t ,
the e f f e c t s must l o g i c a l l y be e n t i r e l y d i f f e r e n t from those of an i n d u s t r i a l
country where labour i s r e l a t i v e l y scarce, s o c i a l and geographical mobility high
and a l t e r n a t i v e employment opportunities available;
(2) under most
- and perhaps under any - conditions the
spread of new technologies
r e s u l t s i n f o r c i n g s o c i e t y t o ad,iust t o these iiew technologies.
The w i d e s p r e a argument t h a t there a r e technologies which are, o r can
be, adapted t o a (technologically i n f e r i o r o r u n d e r d e ~ e l o ~ e dr )u r a l s o c i e t y
so-called intermediate technologies
- seems t o me t o be based on a f a l l a c y .
would seem t h a t p r a c t i c a l l y any change i n technology
used i n the productive processes18
- i.e.
-
It
i n the techniques
- has t o r e s u l t i n more o r l e s s s i g n i f i c a n t
changes regarding the s o c i a l r e l a t i o n s h i p s and the q m t i t y o r q u a l i t y of
employment regardless of the degree of s o p h i s t i c a t i o n of the new technology
introduced, l9
There seem t o be few, i f any, exceptions t o this r u l e ,
p a r t i c u l a r l y i f one keeps i n mind t h a t a t r a n s f e r of technology seldom, i f ever,
involves a single technique,
By t h e very nature of things i t must involve a
sequential technologi.ca1 package.
For example, t h e introduction of a high
y i e l d i n g v a r i e t y of seeds draws i n i t s wake, as i f by f o r c e , the use of new
f e r t i l i z e r s and p e s t i c i d e s , hanresting methods, on
storage f a c i l i t i e s e t c , 20
- and
off farm pmcessing,
The most v i s i b l e case i s thk introduction of
sophisticated inputs, such as mechanized equipment.
Tractors obviously replace
rnanpower9*' and i f the replaced manpower i c t o be employed elsewhere, employment
progranmes must be i n i t i a t e d , unless there i s a s c a r c i t y of labour in other
sectors.
The e f f e c t s are even broader, since the e n t i r e r e l a t i o n s between
enrployers and workers and between workerst groups can be affected, such as the
terms of employment, the amount of time f o r which employment i s a v a i l a b l e etc.
But i t i s even v i s i b l e i n the case of very simple technology.
In
Indonesia recently, the spread of high y i e l d i n g v a r i e t i e s of r i c e was accompanied
by the introduction of the s i c k l e (nothing more complicated
tm
t h a t ) and i t
r a i s e d havoc among the communities and the workers who had previously c u t r i c e
with a small knife, each r i c e s t a l k indi;idually:
"The use of the s i c k l e i s thus a l o g i c a l consequence of t h e
new r i c e technology, but the reduction in labour requirements
by means of t h i s technique c_ould not be accomplished by the
f a m e r without the penebast [a t r a d e r who buys a producerts
r i c e crop and sends his own harvesters t o harvest the r i c e
w i t h the- s i c k l e , d i s p l a c i n g the l o c a l harves ters-]l a b i l i t y t o
limit the number of h a r v e s t e r s m n22
3
from
I n c o n t r a s t t o the a u t h o r s ' opinion, t h e r e i s nothing l o g i c a l about t h i s
consequence, except under conditions i n which a p r i v a t e profit-seeking
entrepreneur, i n this case t h e penebas, i s allowed t o u p s e t the labour market
without s a n c t i o n by s o c i e t y and without a compensating mechanism t o absorb the
displaced manpower.
This s o c i e t y a l r e a d y plagued by un- o r underemployment
has n o t even considered the d e s i r a b i l i t y of employing more labour t o take care
of t h e g r e a t e r h a r v e s t
- which seems t o be
t h e p o i n t of view of the workers.
the more l o g i c a l consequence from
The same author r e f l e c t s t h e p e r v e r s i t y of
t h e system when he continues t o s t a t e t h a t
"The penebas system appears t o be a response of t h e
l a n d o ~ m e r st o t h e lar@ groups of h a r v e s t e r s both
l m d l e s s l o c a l people ,md i t i n e r a n t labourers who
descend on the v i l l a g e s .
The penebas system
emerms a s a method of p r o t e c t i n g t h e i r incomersic 3
znd alloTm them t o b e n e f i t more froin the use o f high
y i e l d i n g v a r i e t i e s ."23
The phil.osophy behind t h i s system and t h i s argument i s then t h a t the
r i c h e r must defencl ttiemselves a@ns t the poor, o r , what cones about t o the
snme, t h a t t h e poor a r e m o b s t a c l e t o development!
A s t i l l more i n c i s i v e chnnge i n the q u a n t i t y and consequently a l s o the
q u a l i t y of emplo,yment stemmed from the i n t r o d u c t i o n i n Indonesia of mechanised
ver,
ricu-hullers
.
Tne econoniis ts of t h e A p i c u l ttiral Development Council a r e now
nr;;uing w h e t h e r the i n trodilction of t h i s 1500-2000 d o l l a r piece of equipment
r e s u l t e d i n t h e unemployment of 100 000 o r 1 200 000 people!
Hence i f s o c i e t y (e.G. an ag-ricultural community, o r t h e a g r i c u l t u r a 1
s e c t o r a s a tihole) must a d j u s t i t s e l f t o changes i n technology (and not vicev e r s a ) , t h i s adjustment w i l l b r i n g advantages t o some and h m t o others.
If
h a m i s t o be avoided, t h i s must be achieved through adequate s t r a t e g i e s .
In
a s o c i e t y in which the " f r e e e n t e r p r i s e " system operates, such s t r a t e g i e s are
n o t expectecl t o be forthcoming u n l e s s g r e a t p r e s s u r e i s exerted by those who
=e
haarmed.
Thus the r e a l problem with reference t o changes i n technology i s n o t
vrhether t h e technology i s adapted t o s o c i e t y , but whether s o c i e t y is
'
s t r u c t u r a l l y i n a p o s i t i o n t o absorb a change i n techno1oe;g without any, o r a t
l e a s t any si,mificant,
h a n b e f a l l i n g any of i t s groups;
(3) t h e attempt t o s o l v e the a g r i c u l t u r a 1 and a p r i a n problem merely through
a s e c t o r a l ( a L i r i c u l t u r a l ) propamme.
179
*
The US-led s t r a t e g y t o modernize t h e underdeveloped a ~ c u l t u r e shas
l c d t o a complex and far-reaching p e n e t r a t i o n of foreign, mainly US, c a p i t a l
This p e n e t r a t i o n i s achieved i n cooperation
and technology i- many countries.
vnth l o c a l businessmen throug11 t h e a c t i v i t i e s of the d t i ~ a t i o n a lcorporations,
1
the l a r e Founda,tions, t h e l a r g e banks of the i n d u s t r i a l c o u n t r i e s and through
busi
t h e i n t e r n a t i o n a l lending agencies, such as t h e World Bank.
appears a l s o a t t h e farm l e v e l .
A s i n Mexico i t
For exaqple, new information r e v e a l s t h a t US
and o t h e r i n d u s t r i a l n a t i o n s l i n v e s t o r s apparently now i n v e s t h e a v i l y i n farm
land i t s e l f
- a t l e a s t i n some s e l e c t e d c o u n t r i e s - o r o b t a i n c o n t r o l over v a s t
a r e a s of farm land and i t s population through o t h e r ways, i n c l u d i n g through
nconcessionsll on land f o r n o n - a p i c u l t u r a l purposes, such as f o r o i l o r minerals.
Obtaining such concessions a f f e c t s t h e s t r u c t u r e and f u n c t i o n i n g of t h e
a g r i c u l t u r e s of t h e concession-areas.
An example i s Brazil.
It has been reported on t h e b a s i s of a
parliamentary enquiry i n B r a z i l t h a t s i n c e t h e military coup of 1964 US i n v e s t o r s
have purchased 32-35 m i l l i o n h e c t a r e s of farm land i n some 7 o r 8 a p i c u l t u r a 1
a t a t e s of B r a z i l
h e c t a r e s o24
-
the average a c q u i s i t i o n of land being about 400,000
T h i s implies t h a t about 1@of t h e t o t a l f a m land of B r a z i l i s
d i r e c t l y o~rnedand c o n t r o l l e d by f o r e i g n e r s and c l e a r l y t h i s c o n t r o 1 . h ~f a r
reaching economic m d p o l i t i c a l i m p l i c a t i o n s which need not
be s t r e s s e d here.
But what needs t o be s t r e s s e d i s that i t implies, a s i n the case of Mexico, an
extension of US a g r i c u l t u r e and a g r i c u l t u r e - r e l a t e d i n d u s t r i e s (of t h e mltin a t i o n a l type) i n t o f o r e i g n t e r r i t o r y , almost a s i f the "foreign" a g r i c u l t u r e
tras being operated as " a t home".
Unquestionably this process tends t o r e i n f o r c e
the s t z t u s of the l o c a l l r a d e d and urban e l i t e s i n c e the f i n a n c i a l , s o c i a l and
a VZ
tha
tm
the r
Wor
4
a
com
or
f or
PU
by
dev
tha
inf
inc
con
fal
S(
ber
p o l i t i c a l i n t e r e s t s of t h e f o r e i g n landowners become i d e n t i c a l o r almost
i d e n t i c a l t o those of t h e l o c a l luided e l i t e .
1 am not claiming t-hat B r a z i l i s a t y p i c a l case, but the t r e n d tormrds
a i n c r e a s i n g f o r e i g n c o n t r o l over f,um land through t h e various methods which 1
have enumerated i s e a s i l y recognizable i n the various regions of t h e t h i r d world.
The p r o l i f e r a t i o n of f o r e i g n ( n a i n l y US) c a p i t a l and technology at o t h e r
l e v e l s , such a s processing o r marketing ( i n c l u d i n g exports and imports) , i s
e-ally
d i f f i c u l t t o demonstrate s t a t i s t i c a l l y and would r e q u i r e country-by-
comtry research,
Nonetheless t h e r e i s l i t t l e doubt, from widely s c a t t e z e d
z v a i l a b l e evidence, t h a t very lar&- q u a n t i t i e s of both c a p i t a l and technolopy
a r e involved.
lfherever a g r i c u l t u r a 1 production, processing and marketing i s
" r n o d e r c i ~ e d ~there
~,
i s a 99 percent p r o b a b i l i t y t h a t foreigm c a p i t a l and
t e c h o l o g y a r e ec@ged in t h e process, rcith r e s u l t s i d e n t i c a l t o those we have
e;~lxi.ced f o r the case of 1.lexico. 25
Here a r e some examples of t h e forms i n
~ . i ~ i ct hki s trc'nsfer takes place: imports o r assembly of f o r e i g n machinery and
equipment ( t r a c t o r s , i r r i g a t i o n equipment e tc. ) ; imports o r l o c a l manufacture of
f e r t í l i z e r s m d a m i c u l t u r a l chemicals; imports o r c u l t i v a t i o n of seeds;
p m c e s s i n g p l a n t s w i t h imported machinery m d equipment; s a l e s o u t l e t s f o r famn
i ~ p l e r n e n t sand machinery and o t h e r a g r i c u l t u r a 1 i n p u t s ; p u b l i c r e l a t i o n f i m s ;
managment c o n s u l t m t s and l a w firms; export and imports firms, d d short-term
de3
agc
( 5:
po:
t hl
thc
of
mo
re
tb
of
av
th'
business or technical experts o r consultants.
I n the aggregate, this involves
a very large investment, much of i t concentrated more heavily 4n.some countries
than i n others, and regiments of foreign personnel t o man the jobs which the
t r a n s f e r of c a p i t a l and technology generates.
A . idea of the importante of
these t r a n s f e r s now and i n the future can be obtained from the f a c t t h a t the
World Bank has begun t o increase i t s agricultura1 lending a c t i v i t i e s t o between
4 and 6 b i l l i o n d o l l a r s i n the 1974-79 period,"
-
( i t might even becorne l a r g e r ) ,
complementing and bolstering the c a p i t a l t r a n s f e r s stemming from other agencies
o r business f i m .
A large proportion of the Bank funds i s bound t o be used
f o r inputs i n agriculture or agriculture-related industries and t o finance the
purchases of various types of consumer goods, most of them produced or marketed
by the multinational firms established i n one way o r another i n the under-
developed countries and " ~ e r v i n gt ~
h e~i r agricultures.
It i s thus undeniable
t h a t we are witnessing a massive process which i s bound t o have a profound
influence on third world agz'iculture.
1ts main f e a t u r e i s the rapidly
incxeasingly control over the production and d i s t r i b u t i o n of agricultura1
commodit i e s by indus t r i e s w i t h head-quarters i n the i n d u s t r i a l nations ( o r
fake-headquarters i n small countries offering tax and other advantages) and a
growing market f o r consumer goods produced by multinational firms f o r the
benef i t of the higher income earning groups.
C a p i t a l i s t expansion i n the smallholder sector: a subphase of
modernization
18.
My l a s t paragraphs deal with a phase of the modernization strategy,
the o r i g i n of which i s quite recent: we may c a l 1 i t the attempt t o reinforce
capitalism i n the smallholder s e c t o r of the underdeveloped agricultures.
It has escaped n e i t h e r the businessmen of the i n d u s t r i a l and u n d e r
developed countries nor the i n t e r n a t i o n a l technical and financia1 assistance
agencies including the large Foundations, t h a t the green revolution
(symbolizing the modernization schemes) has created more economic, s o c i a l and
p o l i t i c a l problems tham i t solved.
the privileged sectors.
It i s t r u e t h a t i t has raised output in
But innumerable reports and studies have confirmed
the existence of.increased unemployment, poverty, land invasions, destruction
of agricultura1 machinery, mal s t r i f e and k i l l i n g s a s a d i r e c t consequence of
modernization.
The i n d u s t r i a l nations, again l e d by the US, have therefore
recently come t o the conclusion that more must be done t o "help the pooru in
the underdeveloped agcicultures.
Their s t r a t e g y i s t o i n j e c t l a r g e r amounts
of money i n t o the smallholder sectors of these agricultures in order t o make
available t o them the inputs required t o increase t h e i r outputs and presumably
t h e i r incomes.
The f i r s t stage of this assistance t o the r u r a l poor involved, and
continues t o involve, l a r g e p r i v a t e , p r i n c i p a l l y f oreign, business f i m s (e. g.
b i g f ood processing f i r m s
, a g r i c u l t u r a 1 machinery manuf a c t u r e r s
them :
or dealers)
which
i t p h i l m t h r o p i c l t foundations and o t h e r a i d agencies which undertook "projects"
nothii
designed t o h e l p groups of smallholders adopt modern technologies by o f f e r i n g
theni limes of c r e d i t under supervision.
of thc
The main o b j e c t i v e was t o make of the
rural
s e l e c t e d peasants w a g r i c u l t u r a l entrepreneurs" and thereby expand the markets
S chemi
f o r a g r i c u l t u r a 1 i n p u t s produced p r i n c i p a l l y by t h e m u l t i n a t i o n a l corporations.
power
The sum t o t a l of t h e s e p m j e c t s i s now beginning t o be q u i t e s i g n i f i c a n t although
super:
t h e i n d i v i d u a l p r o j e c t s a r e small, given the resources which these firms o r
agencies a r e w i l l i n g t o r i s k p u t t i n g at t h e d i s p o s a l of t h e r u r a l poor.
of thi
The
being
second s t a g e nar involves a l s o t h e World Bank and t h r e a t e n s t o become a massive
or ne:
scheme t o expand c a p i t a l i s t a g r i c u l t u r e i n the smallholder s e c t o r of al1 t h e
that
wnderdeveloped c o u n t r i e s members of t h e World Bamk.
schem
The World Bank scheme was o u t l i n e d i n t h e address of t h e p r e s i d e n t of
the Bank, McNamara, t o t h e Board of Governors i n Nairobi i n September 1973.
input
It
S truc
proposed t o double t h e output of 100 m i l l i o n smallholders by t h e end of t h e
century in order t o p u t an end t o t h e i r dismal poverty.
a-vis
The B a n k o f f e r e d t o
l.Jorld
f inance this enormous scheme by a l l o c a t i n g "a componen t u of i ts a g r i c u l tural
m i ght
loans t o t h e r u r a l poor, although i t d i d not s p e l l out how much money t h i s
o r ri
v'component'' would a c t u a l l y involve and whe t h e r t h i s "component:' would match the
enormity of the task.
The reason w h y McNamara s a w himself o b l i ~ e dt o come t o the a i d óf the
r u r a l poor was t h a t i n c r e a s i n g rural poverty dile j n p a r t t o t h e e f f o r t s of t h e
g-reen revolution could no longer be wholly ignored even by the World Bank, and
mtc
t h a t the governments of underdeveloped coun t r i e s have li t t l e incen t i v e t o modify
t h e r u r a l income and wealth d i s t r i b u t i o n p a t t e r n (i.e.
r u r a l poverty) on t h e i r own accoru.
t h i s gap.
By waving what m i & t
alleg
solve the problern of
reali
EIZcNamaraís proposal i s p r e c i s e l y t o f i l l
now u
be hundress of m i l l i o n s of d o l l a r s before t h e
impro
hungry eyes of governments i n underdeveloped c o u n t r i e s s h o r t of f o r e i g n exchange,
he t r i e s t o supply them w i t h t h e l a c k i n g i n c e n t i v e t o help t h e i r rural poor.
From the p o i n t of view of t h e poor, NcNamara's scheme must appear a
p o l i t i c a l absurdity.
To no one but the poor would E4cNamara dare propose a plan
whereby t h e poor would be b e t t e r off "by t h e end of t h e centurytt, a l 1 the more
a s McNamara confessed himself t h a t he >ras not q u i t e s u r e t h a t he knew hotr t o
ttlTeither we at t h e Bank, nor anyone e l s e [ s i c 2 have very
c l e a r answer on how t o b r i n g the improved technology and
especially
o t h e r i n p u t s t o over 100 m i l l i o n small farmers
t o those i n dry-land a r e a s
But we do understand enough t o
get starteí. sic]
Admittedly we w i l l have t o take some
1Je ~ r i l have
l
t o improve an experiment. And i f some
risks.
of the experiments f a i l , we w i l l have t o l e a r n from them and
start anew."
(i4y emphasis)
..
natio
- lik
the e
small
small
solve the m a l poverty problem:
r
the c
f
-
-
min
to th
and i
>r ould
T h i s would no doubt be economically and p o l i t i c a l l y unacceptable t o
them if the p l a n were t o be o f f e r e d them d i r e c t l y and n o t t h e i r governments
which do n o t r e p r e s e n t them.
;Stt
The poor would s e e i n t h e World Bank scheme
nothing but a programme t o c o n t a i n them and t o preserve the power and p r i v i l e g e s
w3
the
ts
ons
.
though
of the well-to-do.
r u r a l poor
The p o l i t i c a l a b s u r d i t y l i e s p r e c i s e l y i n t h e f a c t t h a t t h e
- t h e small-holders,
scheme i n t h e i r t o t a l i t y
- will,
and t h e l a n d l e s s whom McNamara leaves o u t of t h e
under t h e McNamara scheme, continue t o f a c e t h e
power, p r e s t i g e and overwhelming economic s u p e r i o r i t y of t h e landed e l i t e whose
s u p e r i o r i t y i s p r e c i s e l y based on t h e e x p l o i t a t i o n of t h e former,
The problem
of t h e r u r a l poor i s not only l a c k of money, b u t a l s o t h e i n s e c u r i t y of t h e i r
being a b l e t o e a r n the l i t t l e income a c c r u i n ~t o them t h e next day, next month
o r next year
- t h e i n s e c u r i t y of t h e i r jobs
and l i v e l i h o o d s and t h e i r knowledge
t h a t jobs do n o t match the a v a i l a b i l i t y of manpower.
On t h i s ~ o r e ,McNamara9s
scheme has nothing t o o f f e r t h e smallholders because the t r a n s f e r of money and
i n p u t s t o t h e smallholder s e c t o r changes l i t t l e , i f amything, i n the a g r a r i a n
s t r u c t u r e o r i n t h e economic, s o c i a l and p o l i t i c a l s t a t u s of t h e r u r a l p o o r visa-vis t h e lamded e l i t e .
They would no doubt g l a d l y swap a t l e a s t p a r t of t h e
World Bank money f o r t h e c e r t a i n t y which a new, more e q u i t a b l e s o c i a l system
m i g h t provide s o t h a t they and t h e i r c h i l d r e n would know where tomorrow's bread
the
the
the
tnd
o r r i c e w i l l come from, and t h a t i t w i l l be forthcoming.
I n f a c t , t h e McNama scheme provides continued i f not v a s t l y enhanced
u n c e r t a i n t i e s f o r t h e r u r a l poor, as i s e a s y t o demonstrate.
Ostensibly McNamara j u s t i f i e d his a s s i s t a n c e scheme f o r the rural poor
as being a Itmoral i s s u e t l , as one should n o t continue t o ignore "the worldfs
wretched v i c t i m s of a b s o l u t e povertytt, t o use his own words.
But what
a l l e g e d l y i s a World Bank welfare scheme a t f i r s t s i g h t , t u r n s out t o be in
r e a l i t y a hard-boiled f i n a n c i a l , banking operation t o b r i n g smallholders who are
now unable, because of t h e i r low and u n c e r t a i n incomes, t o acquire outputimproving i n p u t s o r t o make c a p i t a l investments f o r long-run improvements, i n t o
the c a p i t a l i s t i c a g r i c u l t u r a 1 markets f o r i n p u t s produced p r i n c i p a l l y by rmiltiL
plan
cre
1
n a t i o n a l corporations,
- like
This becomes c l e a r when McNamara c a l c u l a t e s p o s s o modo
o t h e r a p o s t l e s of modernization, c a p i t a l i s t s t y l e , c a l c u l a t e d before him
-
t h e economic i m p l i c a t i o n s i n t e m s of i n p u t purchases of a c r e d i t progmmme f o r
smallholders.
1 have e ~ t i m a t e dt h~a~t t h e World Bank scheme t o help 100 m i l l i o n
smallholders would imply a d d i t i o n a l s a l e s of p r i n c i p a l l y m u l t i n a t i o n a l
corporations of perhaps
7.4 t o 10.7 b i l l i o n d o l l a r s over a 1 0 y e a r period
- not
m
, i n s i g n i f i c a n t i n c e n t i v e t o wave before those who have t o a u t h o r i z e and agree
t o t h e NcNamara scheme: t h e World Bankfs Board of Governors and t h e f i n a n c i a 1
and i n d u s t r i a l i n t e r e s t s they represent.
I n f a c t , even i f the.McNamara scheme
would n o t work o u t as p l m e d as f a r as b e n e f i t s t o smallholders are concerned,
the sWns disbursed by the Bank i n the forms of loans would d e f i n i t e l y f i n d
al1
t h e i r way i n t o the "pocketstl of the producers and salesmen of agriculturail
be1
inputs.
fo1
So what the World Bank has a c t u a l l y proposed i s a two-pronged
strat'egy t o I1developI1the a g ~ i c u l t u r e sof the underdeveloped countries: the
iF'
continuation of the modernization of the l a r g e landholdings through the
lo;
continued t r a n s f e r s of mainly foreign c a p i t a l and technology p a r t l y financed,
thi
a s i n the past, a l s o by the World Bank i n order t o f o r t i f y the l o c a l landed
th
O
e l i t e economically and p o l i t i c a l l y ; and t o begin t o modernize ( o r t o
of
p a r t i c i p a t e i n the already e x i s t i n g s t r a t e g y t o bring f u r t h e r i n t o the
of
c a p i t a l i s t i c o r b i t ) the small<oldings, although at a s i g n i f i c a n t l y lower leve1
be
of technological sophis tication.
a&
The great question i s whether this new scheme w i l l r e a l l y help the
ca
r u r a l poor o r whether i t w i l l b e n e f i t only the multinational corporations and
fl
the financia1 i n s t i t u t i o n s involved i n the monetary aspects of the scheme.
SI
My answer t o this question i s t h a t i n a l 1 likelihood, and even with a
high degree of c e r t a i n t y , the McNamara programme w i l l have economic s o c i a l and
SE
politicaL r e s u l t S which w i l l make the adverse ef f e c t s of the 'Igreen revolution"
type rnodernization look l i k e childsplay.
T h i s means: sharply increasing
p r o l e t a r i z a t i o n and marginalization of the peasant masses, p o l a r i z a t i o n of the
r u r a l c l a s s s t r u c t u r e and a m c h more highly d i s t o r t e d d i s t r i b u t i o n p a t t e r n of
wealth and income.
Gne of the main reasons i s t h a t an infusion of money i n t o the s e c t o r
of the r u r a l poor w i l l not, and cannot, go t o the r o o t of the causes leading t o
poverty and un- o r underemployment
- no more
than the p r i v a t e c h a r i t y of do-.
gooder l a d i e s i n 19th century i n d u s t r i a l i z i n g England ( o r elsewhere) could do
away with the misery of the urban p r o l e t a r i a t .
The existence side-by-side
of
a powerful e l i t e and innumerable numbers of smallholders and landless i s an
almost iron-clad p r a n t e e t h a t whatever benefits accrue t o the poor v i a the
lqorld Bank scheme w i l l , over the s h o r t e r o r longer m, be syphoned off by the
landed e l i t e ,
The e x i s t i n g land tenure s t r u c t u r e even, o r p a r t i c u l a r l y , i n
i t s modernized form, where the existence, survival and growth of a f o r t i f i e d
and modernized landed e l i t e depends on the continued e x p l o i t a t i o n of the rural
labour force o r i t s increasing marginalization o r exclusion from the rural
society, w i l l continue t o be the basis f o r the competitive struggle f o r the
ownership and control over land, including of course the l m d of the smallholders, and other agnTicultura1 resources.
I n t h i s struggle the p e a s m t masses
as a group w i l l become increasingly more irnpotent.
The t r a n s f e r of c a p i t a l and technology i n t o the smallholder s e c t o r w i l l
perhaps delay the process of the decay md decomposition of the peasant s e c t o r
i n some, b.ut i t w i l l accelerate i t i n other respects.
The f i r s t impa,ct w i l l in
el
SU?LBS x q n d o d ay$ s y
*xood TE^ ayq uo L l a ~ r t u aaq x ~ p iayoC ay$ :saoS
a2
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I
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sa
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NOTES
Although t h e r e i s as y e t l i t t l e s t a t i s t i c a l evidence, i t appeam t o
be evident t h a t overseas a g r i c u l t u r a 1 investments have become much
more p r o f i t a b l e than i n t h e p a s t - both f o r investments a t t h e farm
l e v e l and a t the processing, m x k e t i n g and farm-input production
level
i n comparison t o investments i n muiufncturing o-r mining, f o r
example, most l i k e l y a s a r e s a l t of t h e tleclininc rrxte of exnnnsj on
i n the l a t t e r .
One v i s i b l e evitionce i s tlle exc):uir,ion o{' "a. :ribusinesst1.
-
2.
This has been f u l l y described f o r A s i a by Gunnar llyrdal, h i a n D r t t m a ,
(1968) m d f o r L a t i n America by Ernest Feder (Hrsg.), Gewalt und
Ausbeutung (1973).
3.
Normally one spenks about "optimum" conditions, uncier which t h e high
y i e l d i n g v a r i e t i e s have t o be used, by r e f e r r i n g t o t h e s o p h i s t i c a t e d
use of farm mana,pment methods and p r a c t i c e s , technology and the
ecology.
This i s obviously too narrow a view.
4.
i-or an a n a l y s i s s e e Cynthia Hewitt A., Die Geschichte d e r grünen
Revolution: Die Erfahnmgen i n PIexico, i r ] Feder, op.cit. K a p i t e l
26, rrnd the f orthcoming p u b l i c a t i o n on FTexico by UTlJHISD ( ~ e n e v a )
5.
The Mexican government i s now spending very s u b n t a n t i a l funds,
p a r t i c u l a r l y i n the most c o n f l i c t i v e a r e a s t o p a c i f y the peasants
m d besides uses a s o p h i s t i c a t e d r e p r e s s i v e apparatus t o prevent
large-scaie p e a s m t uprisings.
But t h i s s t r a t e g y obviously cannot
do axiay with the root-causes of the peasant problems.
6.
It could be arg-ued t h a t t h e r e i s no harm i n devoting land t o crops
vrhich e a r n f o r e i g n exchm~gewhich i n tmn can be used t o purchase
s t a p l e foods, and the country would be b e t t e r off as a consequence.
But t h i s argument i s f a l s e i n t h e case of underdeveloped c o u n t r i e s
which a r e i n c r e a s i n g l y s h o r t of f o r e i g n exchaage t o p m v i d e f o r a l 1
t h e i r needs, i n c l u d i n g of c o m s e the need t o develop o t h e r s e c t o r s
A s m a t t e r s stand, an i n c r e a s i n g
of t h e economy (eog, industry).
p i o p o r t i o n of the f oreign exchange i s used 'f o r buying luxury
I n case of Nexico o r 'any country with a
c o n s q t i o n goods.
tleveloping cor:mercial a t ~ i c uture
l
dominated by f o r e i gn c a p i t a l
and technology, a l a r & p o r t i o n of the f o r e i g n exchange earnings
flow back t o the i n d u s t r i a l c o u n t r i e s , s o t h a t the g a i n from
See
s p e c i a l i z a t i o n i n export crops i s more apparent than r e a l .
t e x t below,
.
?
7.
1 am including under "non-Mexican firms" many f i m of mixed
c a p i t a l , which i s of course not an orthodox pmcedure,
Under
the l a w , the majority c a p i t a l of mixed firms (51%) must be
T h i s l a w i s by-passed i n many instances by the use
Mexican.
of so-called "presta-nombres", Mexicans who allow t h e i r names
t o be used t o "frontWf o r US o r o t h e r f o r e i g n c a p i t a l i s t s .
Besides, control of such llMexicanwf i m i s obtained not only
through c a p i t a l , but through c r e d i t f o r operating c a p i t a l , the
t m s f e r of technology and the organisation of the administration,
So-called Mexican firms a r e often a s f u l l y controlled by foreign
i n t e r e s t s as i f they were mere subsidiaries.
8,
T h i s w a s predicted by the apostle of the Green Revolution, Lester
Brown ( ~ e e d sof Change, 1970) when he s a i d (P.56) t h a t "investment
l i n agribusiness] must grow f a s t e r than agricul t u r a l production
i t s e l f w . Brown i s therefore not only the apostle of the Green
Revolution, which i s meant t o feed the hungry, but a l s o of the
multinational concerns, whose s a l e s he i s determined t o see increase
What Brown does not te11 us i s t h a t from a
by leaps and bounds,
s o c i a l viewpoint many of these investments are not needed, o r are
n o t needed i n the q u a n t i t i e s recommended by him,
Many of them are
conspicuous investments (emg. p l a n t s with enormous excess capacity,
p r o l i f e r a t i o n of middlemen etc. ) t h a t the underdeveloped countries
would do b e t t e r without,
They a r e oriented towards foreign markets
o r the p a r t i c u l a r needs of the concerns, not the s a t i s f a c t i o n of the
n u t r i t i o n a l needs of the l o c a l population.
They a r e instruments t o
channel the surplus produced i n these a g r i c u l t u r e s back t o the
i n d u s t r i a l n a t i ons
.
9.
t
10,
The g r e a t e r the c o n t r o l of foreigners over production and distribution,
the more d i f f i c u l t it becomes f o r the governments t o c a r r y out broad
a g r i c u l ~
development progranmes independently, not t o speak about
needed s t r u c t u r a l reforms, and the g r e a t e r becomes t h e i r dependency on
In f a c t , this &ves r i s e t o a
the whims of multinational concerns,
p o t e n t i a l l y more unstable food s i t u a t i o n than i f food production were
dependent mainiy on the weather f l u c t u a t i o n s because food can be withhe141 from the market i n periods of r i s i n g p r i c e s i n expectation of
higher p r o f i t s , production can be s h i f t e d t o more p m f i t a b l e comodities
which may not be food items (as we mentioned e a z l i e r in the t e x t ) o r food
The multinational food enterprises
can be diverted t o o t h e r maxkets.
are then playing the same ( o r a s i m i l a r ) function a s the l o c a l hoarders
o r food speculators, but on a world-wide not the l o c a l scale.
Some of the products, such a s cotton, have been dominated by US
i n t e r e s t s f o r a long time, but the control has apparently been
i n t e n s i f i e d over the p a s t few years.
To give one small example: strawberry production, p r a c t i c a l l y
a l 1 of which i s exported t o the US, and from there to a few
The export of f r e s h strawberries i s controlled
o t h e r m'wkets.
by a few brokers, mainly i n Texas; the export of frozen s t r a w b e r r i e s by a few brokers, some of whom a r e the same who a l s o
control p a r t of the f r e s h f r u i t exports.
Most of the financing
of the production of the crop i s estimated t o come from the US.
The processing p l a n t s are %o a lar* degree financed wlth US
c a p i t a l (some of i t probably stemming from the brokers) and theref o r e p a r t l y owned by US c a p i t a l i s t s .
There i s a high degree of
monopolization of the p l a n t s (multiple ownership), and an
apparent s i g n i f i c a n t i n t e r l o c k i n g control system of the various
l e v e l s of S trawberry produc tion, nrocessing and marke tine;.
The
strawberry p l a n t s (seedlin-)
a r e imported from the UnAted S t a t e s
(mainly ~ a l i f o r n i a )and Mexican research on new p l a n t v a r i e t i e s i s
discouraed.
12.
For more i n s i g h t s i n t o t h i s process see S. W i l l i a m s m d J.A. Miller,
Credit Systems f o r Small-Scale Famers, Studies i n Latin Arnerican
Business, No. 14, Bureau of Business Research, Graduate School of
~ u s i n e s s ,~ n i v e r s i of
t ~ Texas, Austin, 1973.
13.
See I h w i c i o de Maria y C ~ O S ,La p o l i t i c a mexicana sobre transtransferencia de t e c n o l o d a , una evaluación preliminar,
Comercio
This i s the f i r s t a r t i c l e which
Exterior, May 1974, PP. 546-76.
has appeared anyr~here, t o my knowledge, about this subject with
reference t o agriculture.
1 a m reproducing a nwnber of paragraphs
of t h i s a r t i c l e i n the t e x t because of i t s s i g n i f i ~ ~ m c e .
14.
The author concludes t h a t i t i s i r o n i c a l that high y i e l d i n g
v a r i e t i e s developed i n I"1exico have been d i s t r i b u t e d by the
Foundations f r e e l y throughout the e n t i r e world, but t h a t Mexico
receives from the i n d u s t r i a l countries im-paoved seeds a t such
disadvantageous conditions.
15.
I t should be recorded t h a t t h i s opinion i s not shared by everyone
of course, and t h a t some observers see a gradual tendency f o r lfexico
t o develop g r e a t e r independence.
1 myself believe t h a t the opposite
Mexico's financia1 s i t u a t i o n is s e r i o u s
tendency i s more plausible.
( l i k e t h a t of most underdeveloped countries),
According t o the New
York Times (2/8/74) Mexicofs externa1 debt i s now in excess of 1 0
b i l l i o n d o l l a r s , and the trade def i c i t i s growing a t 4% annually and
may reach a record 2.8 b i l l i o n d o l l a r s by the end of 1974.
Obviously
therefore Mexicols bargaining power f o r g r e a t e r independence shmnks,
even consddering recent o i l discoveries, which may a l l e v i a t e Mexicols
foreign exchange situation.
16.
These "advanta@s" have been most c l e a r l y s t a t e d i n Lester Brownls
The
Seeds of Chanm, op.cit.,
f o r example pp. 59, 61, 173.
publication of this technocratic volume was auspiced by US b i g
business (see Preface and p. xv).
il
.)
'
.r
re-
e
17.
There a r e s t i l l a few economists who because of t h e i r
technocratic views regard the green r e v o l u t i o n as a model
f o r underdeveloped a g r i c u l t u r e s .
One such economist i s
P e t e r v. Blanckenburg.
For a c r i t i c i s m of h i s c h i l d i s h
views, s e e Gewalt nnd Ausbeutung, Lateinamerikas Landwirtschaft
( ~ o f f m a n nuna Cmpe, 1973) c h a p t e r 27, f o o t n o t e s 16 and 17.
18,
I n E~IontagueYudelmam e t al., Technological Change i n
Amicul-ture and Employment i n Developing C o m t r i e s , OECD,
P a r i s 1971, p. 38, a d i s t i n c t i o n i s made between "changes i n
technologytl and "changes i n technique" on the b a s i s t h a t the
The
l a t t e r does "not involve t h e use of a new resource".
authors give as exauple of a chme;e i n technique t h e t r a s p l a n t i n g of r i c e i n s t e a d of t h e t r a d i t i o n a l broadcasting of
The authors go on t o say t h a t t h i s does not
seed by hand.
r e q ~ u r enew resources u m l e s s t h e c a r e of seedlings can be
s a i d t o r e q u i r e a new s k i l l " , although they previously a l s o
mention tl-ie need t o ~ O I rJ i c e s e e d l i n m i n nurseries.
This
d i s t i n c t i o n i s i n c o n t r a d i c t i o n t o t h e i r d e f i n i t i o n of
teclmology, " t h e employed o r operative knodedge of means of
production, of s p a r t i c u l a r group of goods o r services".
19.
I n Edw,rd P. Ha~qthorne'S i n t e r e s t i n g The Transf e r of Technology,
OECD, P a r i s 1971, pp. 21 f f . g r e a t s t r e s s i s placed on t h a t
' t t e c l m o l o ~ c a development
l
i n e v i t a b l y l e a d s t o c l ~ n g e si n the
s t r u c t u r e of industry", including, i t i s implied, i n the s t m c t u r e
of employment.
I f t h i s i s t r u e f o r t h e manufacturing sector,
xihy should i t n o t a l s o be t r u e f o r a p i c u l t u r e ?
kndrew Pearse,
i n m U;RISD r e p o r t e n t i t l e d The Social and Economic Implications
of the L3,r,ye-Scale I n t r o d u c t i o n of Hi,yh Yielding V a r i e t i e s of
F o o d c ~ a i n , ( ~ e n e v e ,4 l ~ h r c h1974, d r a f t f o r p u b l i c a t i o n ) noteq
t h e following.
"It i s t h e d r a n a t i c e f f e c t of the spreading
kno~.rledget h a t t h e new a g r i c u l t u r e [i. e. t h e i n t e n s i f i e d crop
s e c t o r , u s i n g bAgh S e l d i n g v a r i e t i e s and modern technologies
o f f e r s a p r o f i t s b l e investment which s e t s i n motion deep currents
of change i n t h e r e l a t i o n s between land, l a b o u r and c a p i t a l ,
between o ~ m e r s tenants and labourers, be tween a g r i c u l t u r e ,
commerce and i n d u s t r y and b e h e e n town and countrytl. (p. 18).
ler,
n
f
1
,
ico
site
ious
New
and
msly
&S,
:o's
'
20.
Sorne technology i s , i n c i d e n t a l l y , alwayS b e t t e r adapted t o some
s e c t o r s of a g x i c u l t u r e than others.
For example t h e b i g ;tractor
may be acceptable t o large landholdings, but n o t t o smallholdings.
The reason why modern technologies used i n advanced a g r i c u l t u r e s
a r e s o e a s i l y t r a n s f e r r e d t o t h e underdeveloped a g r i c u l t u r e s is
T h i s does
p r e c i s e l y t h a t some s e c t o r s a r e a b l e t o absorb them.
n o t i n v a l i d a t e , of course, our argument t h a t this w i l l cause
The
changes i n t h e s o c i a l r e l a t i o n s h i p s
q u i t e the contrary.
important t h i n g i s t h a t the c o s t s of these change a r e not borne
by those who adopt them.
I n this context i t i s u s e f u l t o r e f e r t o the discussion of U r s
ITÜller-Plantenberg ( ~ e c h n o l o g i eund Abhangigkeit, in D. Senghaas,
Ed., I r n ~ e r i a l i s m u sund S t r u k t u r e l l e Gewalt, Suhrkamp, 1972) who
shows convincingly t h a t f o r p u r e l y economic reasoqs, manufacturers
have no i n c e n t i v e t o produce "intermediate technologies", L e .
technology which i s n o t adapted t o t h e conditions p r e v a i l i n g in
developed e p i c u l t u r e . "
T - i s i s no doubt e n t i r e l y correct. But
we a r e going one s t e p z"urther i n owc discussion by e x m i n i n g the
impact of changes in techno13sr on tn<r social s t r u c t u r e *
-
/
21.
,
See Gewalt und Ausbeutuncy, op.cit,
chapter 11.
Andrew Pearse, op.cit., pp. 17 f . argues t h a t i n the wake of the
introduction of high y i e l d i n g v a r i e t i e s , accompanied by higher
y i e l d s and d t i p l e cropping, employment may increase, p a r t i c u l a r l y
seasonal employment.
He concludes as follows:
"On balance, f i e l d s t u d i e s show t h a t a t the moment, new technology
i n A s i a bas been accompanied by a marginal increase i n the use of
human labour p e r u n i t of land, and a decrease i n human labour p e r
u n i t of production"
(~mphasisadded)
But even i f there was a marginal increase i n employment, the q u a i i t y
of enployment d e t e r i o r a t e s , as more peasants a r e drawn i n t o seasonal
wage labour at considerably worse terms of employment.
Pearse continues:
"Moreover the p r o f i t a b i l i t y of the new a g r i c u l t u r e inevitably
f o s t e r s mechaniaation of a labown-saving character".
I n other ~rords, the outlook i s f o r more unemployment,
It i s not
quite c l e a r whether Pearse r e l a t e s the "marginal increase" i n the
use of humasi labour only t o the new agriculture.
I f he does (as
1 think he does), then the marginal increase i n employment i n the
modern s e c t o r might well be o f f s e t by a sharply decreasing
employment i n t h e remainder of agciculture.
.
22.
m
t
*
V.L.
C o l l i e r and G.lt!.
Soentoro, Recent Changes i n Rice Harvesting
Me thods, Agricultural Development Council, Staf f Paper 73-3, J u l y
1973, PP. 44 f. These conservative authors of an organization,
which maintains close r e l a t i o n s h i p s with the Ford and RockefelJ.er
Foundations are apparently unaware of the deeper implicationr~ of
t h e i r findings.
,
23.
See previous footnote.
24.
This does not include concessions.
25.
I n many cases, l o c a l f i m s are purchased by foreign investors m d
subsequently f i t t e d out with transferred technology,
26.
See McPTamara's addresses t o the Board of Governors i n 1973 and 1974.
The Bank is a l s o able t o draw on other i n t e r n a t i o n a l p r i v a t e ' o r
public lending i n s t i t u t i o n s and l o c a l resources t o b o l s t e r ehese
c a p i t a l transf ers.
27.
On the b a s i s of McNamara8s utterings.
28,
For a more d e t a i l e d examination of the World Bank proposal, see
m y forthcoming a r t i c l e McNamara: The Pied Piper of Washington.
m
3
!
Alre:~dyP r i n t e d :
aiity
kc
-
Occnsi onrtl P:tper No. 1 1971,
Tlie llodernizntion of t h e I?:,-riculturnl Sector ,md
Il-iiral-Urbm 1,:i::~ation i i - i Colombia, by:
Ro{_rer J. Sandil.ands, (IJcct w e r i n Economics,
U n i v e r s i t y of S t r n t h c l y d e , forxrierly Research
Fellow, ILAY, Glns:;ow niv ver si ty).
Occasional Paper No. 2 - 1971,
C h n n , ~ si n h , ~ i c u l t u r e,md Settlement i n CO:LS t a l
Chiapas, Southern 19exic0, by:
P h i l i p B. E l l i s , (formerly L e c t u r e r i n Geography,
ILAS Glasgow niv ver si ty ) ,
,
-
he
26
tie
Occasional Paper No, 3
1971,
P l a m n i n ~f o r :ldminis t r a t i v e Hef orm i n L a t i n America:
t h e A r m n t i n e and B r a z i l i a n Cases, by:
F r a n c i s J.D. Lambert, ( ~ e c t u r e ri n History, I U S ,
Glasgow ~ n i v e r s i t )y
.
-
Occasional Paper NO. 4
1971,
The P e c u l i a r i t i e s of t h e 1JIexica.n North, 1880-1928, by:
Barry C a r r , ( ~ e c t u r e ri n IIistory, La Trobe University,
A u s t r a l i a , formerly Research Fellow, ILAS, G l a s ~ o w
~ n i v e risty) ,
-
Occasional Paper No. 5
1973,
A Quechua Legend of Peru: YAKü RUNA o r 'RIVER WLN' by:
Douglas W. Howkins, (formerly L e c t u r e r , Department of
Hispanic S t u d i e s , Glasgow ~ n i v e r s i t ~ ) .
-
Occasional Paper NO. 6
1973.
~ á n c h e zc e r r o and Peruvian ~ ó lt iic s 1930-1933
B.W. Loveday, (Graduate r e s e a r c h s t u d e n t , ILAS,
1974.
'
by:
-
~ c c a s i o n a lPaper No. 7
1973,
The Role of Conp~ressi n t h e ~ c u s d o r i a nP o l i t i c a l
System and i t s c o n t r i b u t i o n t o t h e Overthrow of
P r e s i d e n t Velasco I b a r r a i n 1961, by:
P e t e r Pyne, ( ~ e s e a r c hFellow a t the I n s t i t u t e of
con t i n u i n g - ~ d u c a t i o n ,New Universi t y of Kis t e r ) ,
-
Occasional Paner NO. 8
1973.
- . - .
The rilexican ~ á h i n e t :An Indicatoi- of P o l i t i c a l Ckm@, by:
David E. S t a n s f i e l d , ( ~ e c t u r e ri n P o l i t i c s , ILAS,
-
1973,
Occasional Paper NO. 9
B r s z i l i a n ~ i c t i o n1950-1970, by:
John 1.2. P a r k e r , ( ~ e n i o rL e c t u r e r i n L i t e r a t u r e , I b l S ,
Glasí~ow niv ver si ty).
Already P r i n t e d
-
Occasional Paper No. 1 0 1974,
ttCambio de P i e l w o r The Myth of L i t e r a t u r e , by:
Michael Gonzalez, (Lecturer. D e ~ a r t m e n tof
Hispania St u d i e s , ~ l a s g o wu k i v e k i ty, f o m e r l y
Research Fellow, ILAS, Glasgow u n i v e r s i t ~ ) .
-
Occasional Paper No. 11 1974,
Aboli t i o n a n d t h e Economics of - Slaveholding i n
North Eas t B r a z i l , by:
Jaime Reis, ( L e c t u r e r i n Economic History,
Universi t y 01Leices t e r , formerly ~ e s e a r c hFellow,
ILAS Glasgow ~ n i v e r s i t y )
*
.
,
-
Occasional Paper No. 1 2
1974,
A C r i t i q u e of L a t i n American Theories of Dependency, by:'
P h i l i p O'Brien, ( ~ e c t u r e rin Economics, ILAS,
Glasgow ~ n i v e r s i t ~ ) .
-
Occasional Paper No. 13
1974,
"CHILE: An Appraisal of Popular U n i t y t s Amarian
Ref o m t l by:
c r i s t ó b a l Kay, ( ~ e c t u r e r ,Department of I n t e r n a t i o n a l
Economics, Glasgow University : V i s i t i n g Professor,
1974 U, Glasgow
,
niv ver si^).
-
Occasional Paper No. 14 1974,
A g m r i a n P o l i c y i n t h e Popular Unity Government, by:
ILAS,
I a n Roxborough, ( L e c t u r e r i n Sociology,
-Glasgow niv ver si ty)
.
-
Occasional Paper No. 15
1975,
Ideolog5cal Roots of t h e Cuban Revolutionaqy
Movemen t
by :
t r o f e s s o r i n History,
Nelson P. ~ a l d é s ,( ~ s s i s t a n P
Louisiana S t a t e University, U.S.A. : V i s i t i n g
Prof e s s o r 1973, ILAS, Glasgow ~ n i v e r s i t y )
,
.
-
PP
1 4
Occasional Paper No. 1 6
1975,
Regional D i s p a r i t i e s and P o l i c y i n Modern Argentina, by:
Arthur S. Morris, (Lecturer i n Geography, Dept. of
,Geography, Glasgai niv ver si t y )
.
-
Occasional Paper No. 17
1975,
S q u a t t e r Settlements, P o l i t i c s and Class C o n f l i c t , by:
Alastair iv'hite, Research O f f i c e r , I n s t i t u t e of
Developmen t tid di es, Universi t y óf Sussex.
-
Occasional Paper No. 1 8 1975,
The C ~ i b mPre-Revolution of 1933: An Analysis,
David L. Haby, University of 'Toronto.
F
by:
1/--pages
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