Development & Aid, Economy & Trade, Food and Agriculture, Headlines, Human Rights, Latin America & the Caribbean

CENTRAL AMERICA: Taxing Land to Improve Distribution

Danilo Valladares

GUATEMALA CITY, Sep 26 2011 (IPS) - Taxing large landholdings in Central America could help curb the heavy concentration of land ownership that characterises the region, and contribute to rural development, experts say.

Rafael González, the leader of the Campesino Unity Committee (CUC), told IPS that an initiative of this kind in Guatemala would permit the creation of a “land bank” to help subsistence farmers lacking land of their own.

He also considers it a priority to approve the Law on Integral Rural Development, which seeks to reform, democratise and expand access to the means of production, as well as guarantee and strengthen food and nutritional security among indigenous people and campesinos (small farmers).

But it is an uphill task because large landowners, through their associations, staunchly oppose any and all farm taxes, complaining they are “Marxist” and violate the right to private property. One land tax bill has been tied up in parliament since 2009.

Nearly 80 percent of productive land is in the hands of just five percent of Guatemala’s population of 14 million, while half the population lives in poverty and 17 percent in extreme poverty, according to United Nations figures.

Meanwhile, the country’s agribusiness sector, which produces sugar, African oil palm, banana, coffee and other export products continues to expand in power, while the risks of food insecurity increase, aggravated by extreme weather phenomena, campesino leaders say.

For example, the land planted to sugarcane, the second most important crop in the country after coffee, grew from 84,000 hectares in 1985 to 220,000 hectares in 2009, according to a 2010 study published by Action Aid, an international anti-poverty agency.

At the same time, Guatemala was unable to supply the annual demand of 40 million quintals of maize, the staple food of the population, and had to rely on imports.

“The countries of Central America are being invaded by new transnational corporations that are buying up land for biofuel production and mining, and there is no room left to grow foods like maize and beans,” González complained.

Campesino organisations are demanding state action to enable access to land for subsistence farmers.

In June, leftwing Uruguayan President José Mujica raised the subject of the social responsibility of large landowners in Latin America when he presented a proposal to his cabinet for a tax on owners of over 2,000 hectares, of between eight and 16 dollars per hectare per year, according to the bill.

The goal, according to Mujica, is to discourage land concentration and invest the resources in rural roads. The idea of the tax, which has yet to be debated and approved by Congress in Uruguay, has been praised by many in Central America.

“A tax of this kind would undoubtedly have a positive effect on the country,” Ricardo Barrientos, of the Central American Institute for Fiscal Studies (ICEFI), based in Guatemala City, told IPS.

However, it would be impossible to implement it at this time, the expert said. “It would not be politically viable, for historical reasons. Several studies have found the private sector in this country to be the most rigid and closed-minded,” he said.

Barrientos recalled that the peace accords between leftwing guerrillas and the government, which brought an end to 36 years of armed internal conflict in 1996, included an agreement for the introduction of a land tax, which has yet to be established.

“It would be an annual tax with higher rates for idle or under-utilised land, and exemptions for small farms. But the traditional oligarchy carried out a campaign with distorted arguments that convinced even the small farmers to oppose the measure,” he said.

Mujica’s initiative “is a recognition of what is perhaps the main social problem of the entire region, that is, inequality,” said Barrientos.

The secretary of the Coordinating Council of Campesino Organisations in Honduras (COCOCH), Santos Cornelio Chirinos, told IPS that in order to establish a farm tax in the region “there must be political will and a permanent campesino struggle.”

He said that in his country, some 300,000 campesino families have no land to farm, which causes “poor quality of life and high levels of illiteracy.”

Land conflicts have recently given rise to violent clashes in Central America, mainly in Honduras and Guatemala.

In Honduras, the fertile valley of Bajo Aguán, 600 km northeast of Tegucigalpa, has been the scene of bloody clashes between landowners producing palm oil and landless campesinos who occupied parts of their plantations. Nearly 50 people have been killed in just two years.

Meanwhile, in Guatemala, violent evictions of campesinos from land they had occupied or farmed without official title for years has displaced thousands of families from their homes and resulted in at least four deaths so far this year, mainly in sugarcane-growing areas in the northeast of the country.

Chirinos believes the issue of recovering land for campesinos should be taken to the Central American Parliament (PARLACEN), where “the struggle, and lobbying, would be essential” for that purpose and also to create a Rural Development law to promote productive use of land.

“Large landowners should employ campesinos in their fields, and put the land they aren’t using into the hands of small and medium producers,” he said.

Amy Ángel of the Salvadoran Foundation for Social and Economic Development (FUSADES) told IPS that a tax on land could act as a deterrent against leaving land idle and against concentration of land ownership.

In El Salvador a major land reform process in the mid-1980s set a constitutional limit for land ownership at a maximum of 245 hectares, she said. “Only three percent of the area under crops is on farms of over 100 hectares, while 87 percent of farmers each own 1.5 hectares or less,” she said.

“But we don’t necessarily have better results in terms of living conditions, because most farmers grow staple grains for subsistence, which improves their food security but does not bring in much income,” she said.

In Ángel’s view, efforts should continue to diversify production “into more profitable crops, like fruit and vegetables,” although staple grains should be kept for family food security.

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