Tuesday, January 6, 2015

Palm in Colombia

This is a good TV bit and accompanying article about palm oil cultivation in Colombia, from the Washington Post.  I have often discussed the violence associated with this crop in Colombia, the inherently poor economics of palm oil and large-scale plantation crops in general, and compared the economics of small-scale vs. large-scale farms.  Anyone who is interested in or aware of Colombia's conflict and its farm economy will be familiar with the themes touched on in the Washington Post coverage, but it is nice to see these issues explored in mainstream international media.  I just wanted to add a few comments, criticisms, and clarifications to the mix.

  • The Post describes the paramilitaries (Self-Defense Forces of Colombia) as being formed to fight the FARC and other leftist rebels.  While this is technically true, because the right-wing murder squads were indeed formed as a response to the guerrillas, it is misleading, because the paramilitaries quickly evolved (or devolved) into something very different from a simple "self-defense force", as their name would have us believe.  For most of their history they have been a ruthless engine of nefarious, extractive economic activities, from drug production to palm oil plantations to smuggling to mining.  The paramilitaries, and the criminal groups that have arisen from them since their formal dissolution, have a self-sustaining logic of expoliating other people's resources in order to profit from them, which is what has driven these groups to take over large swathes of territory and expel the inhabitants.  Their arrival in a town like Mapiripan was not driven by mere defensive objectives of controlling an adversary, but rather a mix of expansionist ambitions, both political, territorial, and economic.
  • Just as the Posts seems too benign in its description of the paramilitaries, it also is too timid when it claims that the palm oil sector benefited from war.  This is true, but I would go one step further, and say that the logic of palm oil plantations and other such large-scale extractive activities has been one of the very causes of the war.  Without cheap land, and landless people too terrified to demand decent working conditions (or the return of their former land, for that matter), a large-scale agroindustrial plantation is not viable in Colombia.  This said, I think it is somewhat beside the point to focus as the Post does on the culpability or not of the palm oil companies currently operating in places like Mapiripan.  Many of them did indeed arrive on the scene long after the major bout of violence and displacement occurred.  While they must have known that the land had been stolen a decade before, it's not as if a specific company like Poligrow arranged for the land to be "cleansed" in the 90s in order to buy it in the 2000s.  No, my argument is not necessarily the culpability of a specific company (though there are also plenty of cases in which companies were indeed tied to paramilitary groups from the beginning), but rather that the entire model of "modern" agroindustrial plantations inherently engenders violence, or at least needs violence and oppression in order to function.
This last point is a pretty major claim.  I don't mean to be radical or incendiary in saying that large-scale plantations aren't a good thing.  I'm just drawing the logical conclusion from my training as a systems agronomist.

Let's look at the numbers to bolster my case.  According to the Washington Post's article and video, the palm oil value chain employs some 100,000 people in Colombia.  It sounds like a lot on its own.  But when you compare that to the hundreds of thousands of people displaced in just the past few years (I've heard 400,000 in 2012 and "only" 200,000 in 2013 or 2014, when the conflict is simmering down), and you consider that many if not most of the displaced are from palm oil production areas (I'd estimate that almost 100% of the displaced are from areas with rapid expansion of some type of extractive activity, be it large-scale plantations, mining, logging, etc.), those 100,000 jobs "created" by the palm industry don't look so good.  Before being displaced, those families were either farming or otherwise employed in economic activity.  If the new activity imposed on an area, palm production and processing in this case, creates 100,000 jobs but destroys many times that number in existing livelihoods, then that activity represents a net shrinkage of the economy and the job market, not a growth factor.  In the case of Mapiripan, the article and video speak of 500 palm jobs created by Poligrow, vs. 10,000 people fleeing the area.

While we're on the subject of jobs, let's look at palm's job creation potential from another angle.    According to the company spokesman interviewed in the video, Poligrow is employing 500 people on 17000 acres (about 7500 hectares).  This means it takes 15 ha of palm plantation to create one job.  I would imagine that most of the diplaced farmers were farming a lot less than 15 ha apiece, and supporting multiple jobs on that farm (husband, wife, and older children all employed all or most of the year).  So if I'm correct in my assumptions here, we see that the economic productivity of each hectare, its capacity to support livelihoods, shrunk when the area went from family farms to palm plantations.

What about total wealth created on the palm plantation?  Maybe there are fewer jobs, but perhaps that's just because production processes are highly efficient and most of the benefits accrue not to employees but rather to company owners.  Such unequal distribution of the fruits of labor would in itself be perverse and sociopathic if it were true.  But it's not even true!  Palm oil just isn't that productive!  Again according to the article itself, each hectare (2.2 acres) can produce some $4500US worth of palm oil every year, with annual profit margins between 20 and 30 percent.  This means that the net wealth produced by the land (after subtracting out inputs) would be at most $1500US/ha.  This would amount to about $125US a month per hectare.  Whatever peasant production existed on the land before it was stolen and converted to palm must have been more productive than that, since otherwise it would have required 5 ha or more per family just for farmers to earn the equivalent of minimum wage.  Even in the Plains region, where landholdings tend to be larger than elsewhere in Colombia, I assume the average farm size was less than 5-10 ha per family, which would imply that, unless they were starving, farmers must have been making a more productive use of their land before the palm arrived.  My suspicions seem to be confirmed by the article's presentation of the family coop that jointly manages a 450-acre palm plantation.  According to the article, it takes 7 or 8 ha of plantation per family to assure a decent living, again far more than most peasants likely needed to make a living before the palm took over.  In the specific case of Mapiripan, the article tells us that many families were producing coca.  I assure my readers that coca production nets a hell of a lot more than $1500US/ha.

In the end, the only thing palm plantations and other such displacement-driven industries have to recommend them is a specious claim of "cleanliness", an idealized "formality".  Multiple times in the video the palm oil reps spoke disparagingly of the supposed informality that formerly prevailed in the zones where they now operate.  They say there were no stable or formal jobs, and used "informal" almost as a dirty word.  Sometimes they make a Freudian slip and even imply that there were no jobs period, which makes you wonder what the hell everyone was doing all day before the palm oil plantations arrived.  (Though at the same time, part of the palm oil companies' perceptions of widespread poverty and joblessness is probably based on the 2008 panorama, after Mapiripan had endured 10 years of brutal war and destruction, as opposed to the 1997 panorama, when there were 10,000 more people and presumably that many more jobs in the area).  The palm supporters contrast this with the formal, stable jobs they offer.  But I think that any sane economist or politician would take tens of thousands of independent livelihoods (farms, small businesses, etc.) over 500 jobs, formal or not.  And if we are so enamored of the admitted benefits formality can bring, then perhaps providing support to peasant farmers and small businesspeople in the form of social security safety nets, health insurance options, credit access, marketing promotion, public infrastructure, etc., would make more sense than driving out 90% of the population from an area and re-hiring the remaining 10% as agricultural peons on land they used to own.

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