PLANTATIONS FOR AGRO FUELS AND LOSS OF LANDS FOR THE PRODUCTION OF FOOD IN GUATEMALA

Guatemala, August 2008.

Research and report: Laura Hurtado Photographs: Laura Hurtado Maps: Francisco Rodas

Plantations for agro fuels and loss of lands for the production of food in Guatemala

ActionAid Guatemala Guatemala, August 2008

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Contents

Introduction/ 4

1. The expansion of plantations for the production of agro fuels/ 6 2. Concentration of the production of agro fuels in a few economic groups/ 10 3. The concentration of agrarian property/ 12 4. The case of the San Roman farm/ 14 5. The case of Fray Bartolomé Las Casas township/ 16 6. Plantations for agro fuels in the Polochic Valley/ 19 7. Methods used by agro-industrial entrepreneurs to get land/ 21 8. The State and international financial institutions that support plantations/ 22 9. The change in the use of land and loss of forests and biodiversity/ 24 10. The reduction of land for food production/ 26

Conclusions/ 28

3 Introduction

The current food crisis has placed the issue of access to food at the core of world concerns and discussions; and, as a result, the elemental right to food and life. Several analysis have accurately stated that the current availability crisis and increased prices of food are the result of multiple factors, among which the following can be highlighted: the high price of oil and the consequent increases in energy-related costs, transportation, fertilizers and other agricultural resources; the reduction in harvests in some countries that export grains, which are now changing the use of their lands to the production of agro fuels1; and the reduction of lands that used to be destined to the production of food increasing those destined to the production of agricultural fuels; and the increased demand for grains and food worldwide, triggered mainly due to the high consumption by large population groups in the so-called “emerging” countries, such as Brazil, India and China2. Food has become a commodity quoted in the stock exchange, and is the object of national and international financial capital, which volatility is increased in the framework of the climate change and the increasingly frequent “natural” disasters.

The issue of this investigation, in the case of Guatemala, is the loss of lands previously destined to the production of food, due to the expansion of plantations destined for the production of agro fuels, especially African palm and sugar cane. This loss of lands destined to the production of food entails a considerable reduction in the national production of basic grains and food, production that has been weakened systematically due to the neo-liberal policies of past years. In the last decade, Guatemala, which used to be a self-sufficient country in terms of food, has become a country that depends on the importation of yellow corn, rice, wheat and soy from the United States, subject more and more to the conditions of international food prices and dependant on availability of food at international level3.

In addition to the loss of lands by a significant amount of peasant families, is, at the same time the loss of remaining forests and degradation of diverse natural resources in those areas, which contribute significantly to fulfil the basic needs of this population through their integrated productive systems, beyond cultivated foods. In other words, the loss of agricultural lands for the production of food occurs hand in hand with the change of the use of the soil in large areas that, so far, were kept as forests and wetlands, providing the local population with diverse renewable natural resources that constituted a part of their total income.

In this investigation, we use the term “agro fuels”, selecting the option adopted by the Social World Forum on Food Sovereignty (Mali, 2007), rejecting the association that the term “bio fuels” attempts to do with life (“bio”) and the idea of the “sustainability” of the

1 Currently, the United States earmarks 10% of the world production of corn, for the production of ethanol. 2 See: Maluf, Renato S. Elevaçao nos preços dos alimentos e o sistema alimentar global. In: Observatory of Public Policies for Agriculture. No. 18, April 2008. www.ufrrj.br/cpda 3 According to FAOSTAT data, from 1990 – 2005, the national production of wheat decreased 80.4 %; beans’ production, 25.9 %; rice production, 22.7 % and corn production, 22.2 %.

4 processes associated to them. In our country, the setting up of mono-product plantations for the production of agro fuels, far from contributing to the sustainability of the life of Guatemalans and their natural resources, is becoming a new threat for the lives of thousands of peasant families and communities, and for the food and nutritional security of the Guatemalan population.

Agro-industrial companies focused on the production of bio diesel and ethanol have been focusing their efforts for the past five years, in using “suitable” land – according to technical criteria – for cultivating African palm and sugar cane. In their expansion process, they are monopolizing lands that are property of large, medium and small owners in important zones of the country. The production of ethanol from sugar cane started in 1983. On the other hand, companies focused on cultivating and processing the fruit of the African palm, are getting ready to start producing bio diesel at a large scale by the end of 2008. The State and international financial entities, through their policies, have facilitated and supported these purposes, without taking into account the implications this modern occupation entails, not only in terms of the agrarian structure, but also in regard to the population’s right to food, and the future possibilities for human development in the country.

Upon addressing this issue, we have faced the lack of national statistics, maps, images and updated data that show the results of these recent and current phenomena. Nevertheless, based on available information, data from municipal authorities, interviews to qualified stakeholders, recent investigations and first-hand information collected in the field, we decided to perform this study with the objective of drawing the attention to this phenomenon of great proportions and deep implications for the future of the country. Despite the aforementioned limitations, we make some soundly-supported comparisons and considerations, although still of an indicative character. We expect that specialized institutions and entities assume the challenge of generating specific, updated information as detailed as required, to derive from its analysis public policies that address such threats and the food crisis already existing among us. As Renato Maluf, President of the CONSEA4 of Brazil, states: “Several answers to the current crisis are possible, except that of ignoring its seriousness and depth”.

4 National Council of Food and Nutritional Security of Brazil.

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1. The expansion of plantations for the production of agro fuels

National statistics still do not reflect the most significant phenomenon that is occurring in the Guatemalan agro in the past five years. The unprecedented expansion of mono- product plantations destined to the production of agricultural fuels, mainly African palm and sugar cane, are changing at an accelerated pace the physiognomy of the Guatemalan agricultural field5. Neither the IV Agricultural Census (NSI6, 2003) nor the last published Agricultural Survey (NSI, 2007) reflect the dramatic change in the use of the soil that has become evident since 2003 in the lower lands of the north, especially in the municipalities of Ixcan (department of Quiche), Sayaxche and San Luis (Peten), Chisec, Fray Bartolomé Las Casas, Chahal and Panzos (Alta Verapaz) and El Estor (Izabal)7. The plantations of these products had been previously established in the southern coast of the country, but since 2003, encouraged by the boom of the global market of agro fuels, observing an accelerated expansion both in the southern coast and in new areas in the northern region of the country.

5 Press sources have diffused the investments that some entrepreneurs, the Guatemalan government and the government of the United States are making for setting up plantations of other agricultural products destined to the production of agricultural fuels, such as pine nuts (Jatropa Curcas). The entrepreneur Ricardo Asturias has already set up a pine nut nursery in 700 hectares, with an investment of 75 million Quetzales, in order to establish, by 2009, a 50,000 hectare-plantation of this product. This same entrepreneur is already producing now 3,000 gallons of bio diesel a day. The production of pine nuts could extend to 200,000 hectares, through the association with small producers, articulated as a cluster for the exportation of agricultural fuel to Mexico and the United States. USAID, through the Fundaserve Foundation, and in alliance with the Ministry of Agriculture, Food and Livestock (MAGA for its name in Spanish) will provide funding for this project, as well as setting up an oil and bio diesel processing plant. Prensa Libre, July 14th, 2008. 6 National Statistics Institute 7 The IV Agricultural Census (NSI, 2003) highlights the departments of Escuintla, Izabal, Quetzaltenango, San Marcos Suchitepequez and Retalhuleu, as those that concentrate more surface destined to the production of African palm; and the departments of Escuintla, Suchitepequez, Santa Rosa and Retalhuleu as the departments that concentrate more surface destined to the production of sugar cane. The 2007 Agricultural Survey does not document the phenomenon either, despite that it was already in place; nor does it predict its development.

6 Map 1. Municipalities where monocultures of African palm and sugar cane are being expanded.

According to the National Statistics Institute, until 2003, 49 large farmsteads were dedicated to the production of African palm, with a total surface of 31,185 hectares8, rendering a production of 7,040,225 quintals9, basically destined to the production of essential oils and fats for the food and soap industry. The 2007 Agricultural Survey established that the number of large farmsteads destined to this product had increased to 1,049 for that year and the surface cultivated with African palm had extended to 65,340 hectares10, which means that the latter has duplicated in just four years and the production has increased 2.5 times. Calculations made by the author in June 2008, result in an estimate of 83,385 hectares planted or in process of being planted with African palm, destined to the production of bio diesel. Estimates published by mid July 2008, foresee that by 2010 the area planted with African palm could reach 100,000 hectares.11

Graph 1. Area planted with African palm, in hectares.

120,000

100,000

80,000

60,000

40,000

20,000

0 2003 2007 2008 2010

Source: Elaborated by the author.

8 The IV Agricultural Census reports 44,358 manzanas (1 manzana = 1.43115 hectares), equivalent to 693 caballerías (1 caballería = 95 acres). 9 1 quintal = 46 kilograms or 100 pounds 10 Equivalent to 92,947 manzanas or 1,452 caballerías. 11 el Periódico, July 15th, 2008.

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On the other hand, the sugar cane production, traditionally concentrated in the southern coast, is also showing a considerable expansion, both in terms of an increase in the Guatemalan sugar quota as a supplier of the United States12, as well as for the growing demand of ethanol in the international market. In 2003, the national production of sugar cane comprised a total extension of 188,775 hectares13. The department of Escuintla alone, concentrated 87% of the production, with a total of 154,620 hectares, followed by Suchitepequez with 8.25% of the production and a planted extension of 20,970 hectares. In 2003, these two departments concentrated over 95% of the national production. By 2007, the Agricultural Survey estimated that the sugar cane production had increased by 1.55%, increasing, at national level, the surface destined to this product to 260,896 hectares, which means that in these same four years, sugar cane producers included 72,000 hectares more for the production of this product. The production of ethanol from sugar cane in 2006 was of 49 million litres, taking the 19th place in the production of ethanol at world level14.

Graph 2. Area planted with sugar cane, in hectares.

300,000

250,000

200,000

150,000

100,000

50,000

0 2003 2007 2008

Source: Elaborated by the author.

The following Table 1 summarizes available15 information and estimates of the author made as of June 2008, of the surface planted with African palm and sugar cane between 2003-2008.

12 Guatemala is the third supplier of sugar for the United States, following the Dominican Republic and Brazil. 13 Equivalent to 268,508 manzanas. or 4,195 caballerías. 14 REBRIP. Agrocombustíveis e a agricultura familiar e camponesa. Subsídios ao debate. Rio de Janeiro, 2008. 15 NSI. 2003 Agricultural Census, 2007 Agricultural Survey

8 Table 1. Surface cultivated with African palm and sugar cane, 2003-2008

Total cultivated area per product (in manzanas) African palm Sugar cane 2003 Agricultural Census 44,358 268,508 2007 Agricultural Survey 92,947 370,926 Additional area in the Polochic valley 1,422 7,680 2007 (1) Additional area in Izabal n.d. n.d. Additional area in Fray Bartolomé (3) 3,555 n.d. Additional area in Ixcán (4) 5,688 n.d. Additional area in Sayaxché (5) 14,976 5,000 Estimated Total as of 2008 118,588 383,606 Estimated total as of 2008, expressed in 1,853 5,994 cab. (1) Information from INDESA and IUSI Office in Panzós. (2) Information from PADESA and IUSI Office in Fray Bartolomé Las Casas. (3) Information from Palmas del Ixcán, El Periódico July 1st, 2008. (4) Estimated information based on a tour and field interviews.

On February 2007, after having practically concluded the occupation of the Polochic valley in the department of Alta Verapaz, by the owners of the “Chabil Utzaj”, S.A. Sugar Refinery, the sugar sector seemed to be reaching its limit. On that date, Armando Boesche, the CEO of the Association of Sugar Producers of Guatemala, stated to the press that there was no more available land. Nevertheless, a subsequent additional expansion has been observed also in the municipalities of Sayaxché and Ixcán, and the possibility of setting up sugar cane plantations in the municipality of Fray Bartolomé Las Casas.

On the other hand, agro-industrial entrepreneurs dedicated to the cultivation of African palm in 2007, were confident of their fast growth, realising the possibility of still expanding to lands, big or small, owned by private persons in the lower lands in the north. Eduardo Castillo, director of oils of the Professional Association of Food Manufacturers, declared to the press: “We still have not found a limit of lands to plant African palm; nevertheless, we could still reach that extreme in approximately ten years”16.

Thus, we are witnessing the accelerated occupation by agro-industrial entrepreneurs dedicated to the production of agro fuels, of lands suitable for its production, in detriment of significant extensions of land that used to be destined to peasants’ production, to the production of food in general and remaining forests. This expansion of plantations is representing, in terms of the agrarian structure of the country, the vertiginous progress in the process of concentration and re-concentration of agrarian property, processes diametrically opposed to the spirit and wording of the Accord on Socio-economic Aspects and Agrarian Situation, subscribed within the framework of the Peace Accords in 199617, aimed at the democratization of tenancy of land and favouring peasants’ access to land and natural resources.

16 el Períodico, July 13th, 2008. 17 The Accord on Socio-economic Aspects and the Agrarian Situation

9 2. Concentration of the production of agro fuels in a few economic groups

The production and processing, both of the African palm and sugar cane, are highly concentrated in very few companies and corporations (see Table 2). The cultivation of African palm is concentrated mainly in six great producers, which have plantations in expansion and plants for processing essential oils and edible fats. Until recently, the production of African palm was destined only for the production of essential oils and fats for the food industry, both for the national market, and mainly for exporting it to El Salvador and the United States. It is after the boom of agro fuels in the global market, within the framework of the energy crisis, that the entrepreneurs of this sector prepared to expand their plantations and set up and start operating bio diesel processing plants.

Table 2. Main producers of African palm

Company or Geographic location of their Commercial Alliances at national, agricultural plantations brand of Central or Latin entrepreneur edible oil American level and trans- national corporations Group HAME/ Escuintla Olmeca REPSA Coatepeque (Quetzaltenango), Hugo Armando Molina Ocós (San Marcos), Espinoza Sayaxché (Petén) INDESA/ PADESA El Estor (Izabal), Panzós, Chisec, Capullo • Unilever, El Salvador Juan Maegli Fray Bartolomé Las Casas and • Ignacio González, Chahal (Alta Verapaz) Costa Rica AGROCARIBE/ Finca Berlín, Morales (Izabal) • Propalma, Mexico Extractora del Acapetahua, Acacoyagua, • Green Earth Fuel Atlántico Mazatán, Mapastepec and Villa • Palmas del Ixcán Torrebiarte Group and Comaltitlán, in the region of Arriola Fuxet Soconusco and Chiapas (Mexico) Palmas del Ixcán Ixcán (Quiché), Rubelsanto and • Green Earth Fuel Playitas, Chisec; y Lachúa, Cobán • Carlyle Group, (Alta Verapaz) Riverstone Holdings & Goldman Sachs • AGROCARIBE • Private Natural Reserves in Ixcán Kong Group Sayaxché (Petén) Ideal • Colombian producer Agroforestadora • Agrobosques Raudales “La • Cementos Progreso Cachimba” Beltranena Orive Pineda Rossell Campollo Source: Inforpress Central America and el Periódico.

On the other hand, the sugar cane industry is concentrated in fifteen sugar refineries, some of which have, in turn, concentrated in larger corporations that extend their radio of operations to other productive sectors and geographically to Central and South America.

10 The main sugar refinery at national level is “Pantaleón”, which has been implementing an ongoing process not only of expansion but also of concentration within the same sector. In 1984, it assumed the management and control of the operations of the “Concepcion” Sugar Refinery. In 1988, it acquired the “Monte Rosa” sugar refinery, the second most important in Nicaragua, enabling it to position as one of the most important in Central America. In the year 2000, these three companies (Monte Rosa-Concepción-Pantaleón) integrated as subsidiaries of the corporation known as Pantaleón Sugar Holdings, absorbing “El Baúl” sugar refinery afterwards, as well as the production of “Tierra Buena”. In 2005, this same corporation made an alliance with the Manuelita Group from Colombia and UNIALCO from Brazil, to build a plant for producing sugar and processing ethanol in Vale do Pará, Brasil18.

Table 3. Guatemalan Sugar Refineries

Ingenio Location (municipality, department) Owners / Alliances at Central and corporation South American level Pantaleón* Santa Lucía Cotzumalguapa, Escuintla Pantaleón Sugar • Monte Rosa sugar Concepción Escuintla Holdings refinery, Nicaragua El Baúl • Manuelita Group, Colombia • UNICALCO, Vale do Pará, Brasil Magdalena* Escuintla Leal Santa Ana Santa Lucía Cotzumalguapa, Escuintla Botrán Palo Gordo* San Antonio, Suchitepéquez De la Hoz, Bonifasi, Abascal Los Tarros Santa Lucía Cotzumalguapa, Escuintla Aparicio Bros. La Unión Santa Lucía Cotzumalguapa, Escuintla Madre Tierra Mazatenango, Suchitepéquez Campollo Codina San Diego Escuintla Fraterno Vila Trinidad Escuintla Guadalupe Escuintla Widmann** Chabil Utzaj (in construction) Panzós and La Tinta, Alta Verapaz El Estor, Izabal El Pilar Retalhuleu Campollo Weissemberg Santa Teresa Villa Canales, Guatemala Escamilla La Sonrisa Cuilapa, Santa Rosa Pivaral Source: ASAZGUA, el Periódico and Business Strategy Magazine. (*) Ethanol producers and exporters. (**) The Widmann Group is also a shareholder of the Madre Tierra and Concepción sugar refineries.

18 Strategy & Business. Guatemala, 2007.

11 3. The concentration of agrarian property

Linked to the expansion of these plantations of mono-products for agro fuels, the processes of concentration, as well as re-concentration of agrarian property occurs, are worsening the issue of access to land for peasants, either in property or in leasing19.

The process of concentration of agrarian property refers to the concentration of peasant parcels and/or small and medium agricultural workers and stockbreeders, in larger lands destined to setting up mono-product plantations. This model of monopolization of land is mainly observed in the municipalities of Ixcán, Chisec, Fray Bartolomé de Las Casas and Sayaxché. In these municipalities, palm companies are buying land from individual owners and communities, which members are co-owners in pro indiviso. Most of these small owners are peasant families who had access to land within the framework of Colonization Programs promoted by the Guatemalan State in the 60s and the 70s; or groups of families who were displaced due to the repression and violence that prevailed during the internal armed conflict. All these owners were able to regularize the tenancy of their land and received property deeds after the signing of the Firm and Long-Lasting Peace in 1996.

On the other hand, the process of reconcentration of agrarian property refers to the concentration of old estates, extensive in themselves, into even larger properties. These are large farmsteads that were created through a long historical process of private appropriation, which are currently being purchased by agro-industrial entrepreneurs with national and trans-national capital, for expanding their plantations. This process takes place, for example, in the valley of the Polochic River, in the municipalities of La Tinta and Panzós (Alta Verapaz) and El Estor (Izabal), where the “Chabil Utzaj” S.A. sugar refinery has purchased almost all of the old farms, with variable extensions from two to 30 caballerías (between 90 to 1,350 hectares), to set up sugar cane plantations in them20. This sugar refinery expected to concentrate 5,400 hectares in this region alone. Likewise, the African palm producers are re-concentrating large livestock estates and private unproductive lands in the municipalities of Chisec, Fray Bartolomé de Las Casas and Chahal, in the Franja Transversal del Norte (Northern Transversal Strip).

Agro-industrial entrepreneurs seek, first, to acquire privately owned lands to ensure optimum conditions for their investment. Nevertheless, when land owners refuse to sell, leasing contracts are entered into, under variable conditions. Through these contracts, agro-industrial entrepreneurs ensure dominion over the land for long periods of time, which coincide with the life span of the plantation. Thus, for example, in the case of the African palm, leasing contracts are signed for 25 years, period that coincides with the life span of the plant, and the costs of an eventual breach of contract are so burdensome for land owners that it could translate into the loss of lands by small owners.

19 Hurtado, Laura. Dinámicas agrarias y reproducción campesina en la globalización (Agrarian Dynamics and Peasant Reproduction in Globalization). Guatemala, F&G Editors, 2008. To be printed. 20 This process, in the case of the Polochic Valley, has been documented in detail by Hurtado, L. 2008. Op. Cit.

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The models and mechanisms implemented by agro-industrial entrepreneurs for purchasing land in the process of concentration and re-concentration of agrarian property are diverse and have a significant impact both in the perception of peasants who used to own land, and its immediate economic impact. The following examples show differences observed in this regard, among different regions of expansion of plantations for agro fuels.

13 4. The case of the San Román farm

One dramatic case of concentration of agrarian property in the hands of agro-industrial entrepreneurs dedicated to planting African palm, is the case of the San Román farm, located at the south western end of the municipality of Sayaxché, in the department of Petén. This farm, with an extension of approximately 90,000 hectares, was occupied during the internal armed conflict by Q’eqchi’ populations from different locations in the department of Alta Verapaz. Many of the first settlers were survivors of the Panzós Massacre, that took place on May 1978, who fled in order to save their lives. Others joined them at different times, being forced by the repression and violence conditions, or seeking a piece of land to survive. In 1983, the farm was awarded to the Ministry of National Defence, through Government Agreement 91-83. In 1995, due to the biodiversity that it sheltered in some of its areas, it was declared a Biological Reserve through Decree 64-95 of the Congress of the Republic of Guatemala, locating at the centre of this same zone, the core zone under the management category of “Wildlife Refuge”21.

Through the years, 34 communities settled there, out of which 14 were acknowledged as internally displaced persons due to the internal armed conflict, and they started performing the proceedings required for legalizing awarded lands, through the National Council of Displaced Persons of Guatemala (CONDEG for its name in Spanish). The first step for file their lawsuit was to demand the de-ascribing of the farm from the Ministry of Defence, which was achieved on December 1998. After long and intense advocacy efforts developed by the interested communities and the CONDEG, through Governmental Agreement 880-98, the San Román farm returned to the national patrimony, while most of its extension was to be managed by the National Institute for Agrarian Transformation (INTA for its name in Spanish). Four polygons (Pozo Uno, Pozo Dos, Caribe Rubeltzul and Las Pozas), with a total extension of approximately six caballerías22, were ascribed once again to the Ministry of Defence.

Returned as a national farm, in 1999, the San Román farm was transferred to the Fund for Lands, an entity that substituted the INTA after the signing of the Peace. This entity started working to regularize lands located in the Buffer Zone in favour of peasant communities, for which it received significant funding from the Inter American Bank for Development through the Proselva23 project. The latter subcontracted the private

21 The category of “Wildlife Refuge” is included within the Type III Category defined by Governmental Agreement 759-90 or Regulations of the Law for Protected Areas: “These are relatively large areas, generally covered by forests. They may contain zones fit for the sustainable production of forestales products, water, forraje, wild flora and fauna, without affecting negatively and permanently the diverse eco-systems within the area. These are areas that might have been altered by human intervention, but still maintain a good portion of natural landscape.” 22 One caballería = 95 acres. 23 The Proselva Project was implemented from 1999 through 2001, with a budget of USD 1,209,080 financed by the IBD. It entailed the regularization of land for a total of 4,500 families settled in the Protected Areas in the South of Petén and the sustainable management of the buffer zones in those areas. Check: www.catie.ac.cr and Roger Hamilton, Gente en Petén: Una fórmula para preservar la paz y el

14 company Albora, S.A. to perform technical measurement and deed recording tasks. At the end of the process in 2001, the Fund for Lands had delivered individual (family) deeds to 2,113 beneficiary families. Only three (3) communities had to be relocated outside of the core zone of the protected area, mobilization that was performed with the accompaniment of CONDEG. On the other hand, the Interamerican Institute for Cooperation on Agriculture (IICA) invested a considerable amount of resources for carrying out several studies aimed at providing technical assistance to the new owners, to make their productive processes feasible, but these were just proposals in writing that did not translate into action.

Immediately after delivering the first deeds to the owners, an intense purchase-sale of parcels started. It was reported then to the Fund for Lands that the purchasers were present at the events where deeds were delivered to the beneficiaries, to offer them money in exchange for the deeds of their parcels. The lack of fulfilment of commitments set forth not only in the Peace Accords but also in the Law of the Fund for Lands, which had to accompany the regularization phase of tenancy of land, plunged the new owners into abandonment and, in many cases, contributed to their decision to sell the land. This process was also encouraged by the disposition of releasing the State tutelage over awarded lands, disposition that was included in the content of the Law for the Fund for Lands, promoted by the World Bank24, and due to the individual (family) manner in which deeds for lands were formulated. It is estimated that, as of June 2008, 60% of the farms had been concentrated by the African palm entrepreneurs.

ecosistema (People in Petén: A Formula for Preserving the Peace and the Ecosystem). IBD America. www.iadb.org/idbamerica/archives. 24 This disposition referred to the prohibition of selling awarded lands for a period of 10 years, which was enforced until 1962, through the Law of the Institute for Agrarian Transformation or Decree 1551, and was suppressed by the Law of the Fund for Lands in 1999.

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5. The case of Fray Bartolomé Las Casas township

The company Palmas del Polochic/INDESA, which was already dedicated to the production of essential oils and edible fats through the company Grasas y Aceites S.A. (GRASA), and had a processing plant in Escuintla under the commercial brand of “Capullo”, concluded its expansion in the municipalities of El Estor and Panzós, until it reached 6,000 hectares. In 2006, it planned the expansion of its plantations and setting up a new processing plant in the municipality of Fray Bartolomé Las Casas, in the northern area of the department of Alta Verapaz. Technical studies showed that the Fray Bartolomé Las Casas township was the suitable place for setting up the plantation, according to its climate, geographic characteristics and soil composition. In addition, they considered the fact that the highway that connects the municipality with the Santo Tomás de Castilla Port in the Atlantic coast would soon be paved, and the existence of basic infrastructure, which made it advisable to set up the processing plant in that location.

After classifying the lands within the township as suitable and not suitable for cultivating African plan, with the support of one of the original parcel owners, the company summoned the parcel owners to propose the purchase of their parcels. This would be the preferential option of the company. Since some of the parcel owners refused to sell their land, the company is now offering the alternative of leasing the land for 25 years, implementing three different models, which are still enforced (see table 4). Most of the owners of parcels of half or one caballería (22.5 to 45 hectares) have invariably preferred the first option, which represents a fixed annual income of Q.27,806.63 and Q.21,049.88 for the owners of parcels of half a caballería and around Q.55,613.25 and Q.42,099.75 to the owners of parcels of one caballería, income that is –for now- higher or equal to the average income resulting from their production, which represents an appealing immediate income, despite future risks due to the loss of purchasing power, increased prices, and the degradation of the soil by the end of the leasing period.

16 Table 4. Land leasing options offered by PADESA in Fray Bartolomé Las Casas, 2008 (figures in USD)

Option Term of the Annual Annual Amount per Total annual Total amount lease amount per amount per hectare amount per by the end of hectare hectare phase 3) 45-hectare the period, (phase 1) (phase 2) parcel 45-hectare parcel Option 1 25 years 150 - - 6,750 168,750 (fixed amount) Option 2 25 years 125 150 175 5,625 180,000 (years 1-5) (years 6-10) (years 11- 6,750 25) 7,875 Option 3 25 years 150 125 - variable (years 1-3) (years 4-25) + bonus + bonus + additional amount for productivity and average price Source: PADESA, 2008.

The lack of juridical certainty on some of these parcels has not hindered the sale-purchase process. During the time it takes to regularize the parcel the company intends to purchase, it signs a “sale-purchase commitment” with the land owner. The company makes an advance payment of Q.25,000 to the parcel owner and he/she commits, on his part, to ensure that the parcel will be duly registered under his/her name in three years. In case of nonfeasance, the parcel owner shall reimburse the palm company twice as much as the deposit he/she received. Usually, the risks for the company are related to the lack of interest or nonfeasance of the owner in completing all the documents required by the Fund for Lands to regularize the parcel. Nevertheless, the company states that the highest latent risk could come from the political collapse of FONTIERRAS25.

As of June 2008, the company PADESA had already achieved its goal for the year with 2,500 negotiated hectares and in process of planting in Chisec, Fray Bartolomé Las Casas and Chahal. As of that date, it had a total of 6% of suitable lands acquired through purchase, 52% had been leased by its owners and the remaining 42% were in process of planting by the owners as independent producers, under an agreement to deliver the product to the processing plant of PADESA. To ensure adequate yield and product quality in the last case, the company provides technical assistance and a technological package to independent producers. (See Map 2).

25 The Fund for Lands has been reducing activities and overall investment. The Sub-directorate of Access to Land suppressed the component of purchase of lands in a collective manner in 2008, replacing it with the Land Leasing Program.

17 Map 2. Fray Bartolomé Las Casas Township and plantations of Chisec and Chahal. Progress in sale-purchase and leasing for African palm plantations, as of June 200826

On May 2007, the nursery of the company was set up in the Yalcobé farm, hiring mainly women from neighbouring villages and the municipal capital of Fray Bartolomé Las Casas. Plants are distributed from this nursery to the plantations owned by PADESA, as well as to farms of independent producers who have signed an agreement with the company. In order to sell or lease farms, farm owners have carried out evictions to former tenant farmers who used to work for the farm. As of June 2008, the former owner of the Yalcobé farm had foreseen to evict eight families of former tenant farmers who were still in the farm.

26 Tierras NO APTAS PARA PALMA (descartadas) – Lands NOT SUITABLE FOR PALM (discarded); Tierras APTAS PARA PALMA con propietarios indecisos o problemas para arrendar o comprar – Lands SUITABLE FOR PALM with undecided owners or problems for leasing or parchase; Tierras APTAS PARA PALMA arrendadas por PADESA o de siembra de terceros – Lands SUITABLE FOR PALM leased by PADESA or planted by third parties; Tierras APTAS PARA PALMA propiedad de PADESA – Lands SUITABLE FOR PALM owned by PADESA.

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6. Plantations for agro fuels in the Polochic Valley

The re-concentration of land for planting sugar cane and African palm in the valley of the Polochic River, in the municipalities of La Tinta and Panzós, Alta Verapaz, has been documented, not only by the press, but also by recent academic studies27. Farm owners in this zone, like the ones in Fray Bartolomé Las Casas, have started to “reorganise” their farms before selling them to agro-industrial companies (“Chabil Utzaj” S.A. Sugar Refinery and Palmas de Desarrollo S.A., PADESA). In most of the cases, the re- concentration process has entailed the eviction of former tenant farmers from those lands and the suppression of important areas previously destined to the production of basic grains and food in general, either produced by peasants within the farm, which was for internal purposes. In many cases, former tenant farmers have negotiated small extensions of land in return for payment of fringe benefits and adequate wages by farm owners. But many other peasants who used to lease parcels for the cultivation of their basic grains, will not be able to do so anymore. Map 2 illustrates progress of sugar cane and African palm plantations in the valley as of June 2007. As of 2008, the occupation of the valley with these mono-products has been completed.

27 El periódico and Hurtado, Laura. Op. Cit. 2008.

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Map 3. Re-concentration of agrarian property in the Polochic Valley, for sugar cane and African palm plantation

Source: From Hurtado, L., 2008. Lago de Izabal – Izabal Lake; Reserva de biosfera Sierra de las Minas – Sierra de las Minas Biosphere Reserve; Lugares poblados – Populated locations; Límite departamental – Department Limit; Carretera asfaltada – Paved Highway; Carretera de terracería – Dirt road; Río Polochic – Polochic River; Cultivo de caña de azúcar – Cultivation of sugar cane; Cultivo palma africana – Cultivation of African palm; Reserva de vida silvestre Bocas del Polochic – Wildlife Reserve Bocas del Polochic.

20 7. Methods used by agro-industrial entrepreneurs to get land

The methods used by producers of African palm and sugar canes to acquire and concentrate land vary. In Petén, purchasing entrepreneurs have implemented mechanisms that range from the offering of immediate money at prices higher than the local price of land, to threats, coercion, and violence. The usual appearance of buyers has been one of armed persons who drive crew cab pick-ups. Moreover, the gradual purchase of parcels has been quite frequent, in an enfolding process, closing access paths and access to water sources for peasants, until they are able to surround the owner who is not willing to sell, to “choke” him and force him/her to sell his/her land.

In Fray Bartolomé Las Casas, the sale and purchase takes place in a different manner. The company producing African palm has sought to persuade small owners through a native parcel owner with an influence over them. In case owners do not agree to the sale, the entrepreneur offers different leasing options. In all of the cases, the price paid by the company – both in the case of purchase and leasing – is immediately appealing for some peasants. Up to now, the consequences of total dependence of peasants and inhabitants in job offers and income are not evident to them: the loss of currency value, increased prices of basic foodstuff, nor the degradation conditions of the soil upon the termination of the contract. It should also be highlighted that the total annual income for a peasant family is made up by the result of all of its economic activities: agricultural, livestock, handcrafts, trade and extraction.

In the valley of the Polochic River, agro-industrial entrepreneurs purchase land from large estate farmers, the latter are those who are in charge of evicting former tenant farmers or redefining the terms of their relation disguising them as fringe benefits and/or transferring small extensions of marginal land to the large farms.

Some initiatives of conversations among agro-industrial entrepreneurs of palm have occurred in relation to the growing demand for land and the variations of its price in the regions. Land purchasers in the department of Petén are a little more reluctant to this approach, which coincides with the more aggressive and violent methods used to force the purchase. It is also evident that a certain “informal” distribution of the territory among the companies dedicated to cultivation of African palm, has taken place. Thus, for example, the Santa Isabel River would be “the limit” between the companies HAME and PADESA. The latter is making progress, on its part, in alliance with individual producers, towards lands located in the municipalities of Chahal and Chisec, while the trans-national Green Earth Fuel would do so from the municipality of Coban towards Ixcán.

21 8. The State and international financial institutions that support plantations

As other investigations28 have shown, the process of regularization of tenancy of land undertaken by the Fund for Lands in the lower lands of the north, has favoured and accelerated the sale-purchase of recently regularized parcels (See Map 4). The Law of the Fund for Lands, formulated according to the guidelines of the World Bank that expressly sought to “create and/or make the land market more dynamic”, eliminated the dispositions related to the 10-year tutelage of the State on the lands delivered to families and peasants’ groups. At the beginning of the process of purchase of the land, farm owners and agricultural entrepreneurs would attend the events where deeds were delivered by the agrarian entity, to approach the new owners and convince them to sell their parcels. In the cases where the purchase is made over the rights within a co- ownership (lands registered in favour of a group of families integrated in communities), usually when making the transfer of rights and registering it in the General Real Estate Registry, the proceedings for releasing tutelage have not been completed pursuant to the legal procedures29.

At the present time, due to the increased demand for lands, entrepreneurs have hired specific staff to carry out the proceedings for the regularization of the parcels that are of interest to them, before the Fund for Lands. The efficiency and promptness with which State entities have responded to the demand of the entrepreneurs, have no comparison with the response they gave to peasants’ demands in more than three decades. It should be highlighted that most of the land owners that are being regularized were not able to get property deeds for over 30 years. After the signing of Peace in 1996, the process implemented by the Fund for Lands and several non-governmental organizations that accompanied and supported demanding communities, lasted an average of two and a half years until getting deeds for the land, in favour of beneficiaries. The duration of proceedings that are currently carried out by palm producers is of six months (See Table 5). The staff in charge of this function within the company used to work for FONTIERRAS, and accompanied entrepreneurs in their first visits to the area. At the beginning of 2008, in order to speed up the process even further, the manager of FONTIERRAS ordered the staff of this entity to prioritize parcels being negotiated by said company30.

In other words, the agrarian entity of the State knows the dynamic that has been imposed in the areas where the program for regularization of land tenancy has been implemented; not implying that it has adopted policies that enable peasants who benefit from this program to keep their lands and make them productive. On the contrary, they have made the process even easier for agro-industrial companies to perform the purchase-sale transactions in the least time possible. In addition, it has exonerated the company from performing the Survey on Capacity and Use of Land (ECUT for its name in Spanish), one of the previous requirements for awarding lands. Coincidentally, Fray Bartolomé Las

28 Hurtado, Laura. Op. Cit. 2008 29 Juridical Department of the Fund for Lands. 30 Interviews held in June 2008.

22 Casas has been declared a “Municipality in Cadastral Process”, which entails the concentration of staff, technical personnel and financial investment in the Office of the Registry of Cadastral Information in that municipality, facilitating the localization, location and regularization of lots that are of interest for the palm company.

Table 5. Steps in the proceedings for regularization of lands in Fray Bartolomé Las Casas, 2008

Legal step Pre-requisites Who performs it Time Location and application Stock of documents to PADESA or individual make up the file owner Application Letter Performing studies Real and physical FONTIERRAS 3 months Socio-economical FONTIERRAS Capacity and Use of Exonerated Land (ECUT for its name in Spanish) Elaboration and registry FONTIERRAS 1.5 months of deeds Registering in the FONTIERRAS 1.5-2 months GRER Average time for 6 months proceedings Source: FONTIERRAS, Fray Bartolomé Las Casas, June 2008.

Map 4. Area of regularization of land and potential land for palm plantation.

23 9. The change in the use of land and loss of forests and biodiversity

During the tours performed throughout the areas where plantations for agro fuels are being established, the drastic change in the use of soil is evident. As a result of the expansion of mono-products, companies are eliminating the remaining forests, moving land, turning away rivers, have drained and dried up swamps, lagoons and other water sources in these zones. These alterations represent a higher fragmentation or else the total elimination of eco-systems and the loss of biodiversity in those areas. Satellite images from March 2004 – year in which the highest number of fires in the protected areas and the natural patrimony in the department of Petén occurred -, the CEMEC (for its name in Spanish) highlighted that the main source of heat came from the burning at ground level performed in the south of the department to set up African palm plantations. Nevertheless, neither the Environment Ministry (MENR) nor the National Council on Protected Areas (CONAP) have demanded agro-industrial companies to carry out environmental impact studies nor to request permits for changing the use of the soil31. Despite the lack of updated information and images, map 5 elaborated as an example, superimposing forest coverage reported in 2006 (UVG) over the San Román farm in Sayaxché, where 60% of land is destined to African palm, enables observing the loss of forest coverage, and thus, loss of biodiversity.

31 For the case of the valley of the Polochic River, the Nature Defenders’ Foundation (Fundación Defensores de la Naturaleza), environmental entity co-managing the Sierra de las Minas and the Wildlife Reserve called Bocas del Polochic. In the case of African palm plantations in the northern lands, the regional office of the National Forest Institute (INAB for its name in Spanish) was consulted, and they stated that they are only processing one request for the change of use in the municipality of Cobàn. As of June 2008, the company PADESA had not negotiated any license for changing the use of the soil.

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Map 5. Finca San Román. Areas foremerly destined to production of food and remaining forests being lost by palm plantation

25 10. The reduction of land for food production

The extension of mono-product plantations for the production of agro fuels entails, in addition to the loss of forest coverage, fragmentation of eco-systems and loss of biodiversity, a considerable loss of the area previously destined to food production.

In the areas where agro-industrial companies purchase land that has been recently regularized by the Fund for Lands, either through acquisition or leasing, the loss of lands for the production of food occurs due to the loss of lands by small and medium agricultural owners, who will stop producing their family sustenance, as well as different products destined for the internal market. These small and medium owners have generally leased fractions of their parcels to other peasant families who have no land, or without enough land for the production of basic grains. Thus, upon accounting for the loss of areas destined to the peasants’ production of food, it will also be necessary to account for a sector of peasants who lease land in parcels from other small and medium owners. Upon losing their land, these peasant families lose, simultaneously, the access to other resources from the forest, such as firewood, timber-yielding and non timber- yielding products, cynegetic species, medicinal plants, and other resources they drew on within their parcels, according to their particular productive systems.

When agro-industrial entrepreneurs acquire old large estates or pre-existing farms, either through sale-purchase or leasing or other models of integration into productive chains, the loss of areas for the production of foods occurs in a two-fold manner. On one hand, most of these farms used to destine a variable area for the production of basic grains (rice, sorghum, corn and beans), dairy products and meat for the internal market, as used to occur in the farms in the valley of the Polochic River or in some farms of the northern transversal strip. But, on the other hand, in order to negotiate the farms, their owners have had to end labour relations with their workers (former tenant farmers), most of the times forcing them to evict the farm, without having the possibility of access to a small parcel for their self-consumption production, as they used to do so in the farm. Even in the cases in which former tenant farmers manage to keep one or two manzanas32 as payment of fringe benefits by the owner of the farm, a higher significant number of peasants that used to go to farm and lease similar extensions of land for their self- consumption production will no longer be able to have that possibility.

Thus, a double loss of food production occurs: the suppression of farms’ production destined to the internal market and the loss of land destined to peasants’ production, where the latter, at the same time, face an impoverishment situation, upon having to uproot from their usual place of residence, to re-locate in a more precarious manner, in a different place.

32 One manzana equals 1.43115 hectares.

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Map 6. ParcelamientoFray Bartolomé Las Casas. Areas foremerly destined to production of food and remaining forests being lost by palm plantation

27 Conclusions

1. The production of bio diesel and ethanol from the cultivation of African palm and sugar cane, promoted by the increased worldwide demand for agro fuels, is monopolizing lands in Guatemala at an accelerated process of concentration and re-concentration of agrarian property, contrary to the spirit and wording of the Peace Accords, signed on December 1996. Through the Accord on Socio- economic Aspects and the Agrarian Situation, the Guatemalan state committed to promoting democratization of tenancy of land and access to land by peasants.

2. The process of acquisition of lands by agro-industrial entrepreneurs for the production of agro fuels, is verified not only through the process of concentration, but also through the process of re-concentration of agrarian property. The first refers to the concentration of small and medium properties, mainly owned by peasant families, in larger estates. Re-concentration refers to unifying farms that already were extensive large estates in the past, into even larger estates, never seen before in the country.

3. The expansion of mono-products for the production of agro fuels takes place hand in hand with the loss of areas for food production. This loss of lands that used to be destined to food production occurs not only through the sale of parcels by peasant families, but also through the sale of old farms (large estates) that used to be destined – totally or partially – to the production of foods for the internal market (corn, sorghum, rice, meat, dairy products, among others).

4. After selling their land, peasant families start depending absolutely on monetary income. This change in their economies entails serious consequences for their food and nutritional security, since, in the past, their income was integrated by the sum of the product of a series of economic activities carried out in the parcel: agricultural, livestock, handcrafts, trade and extraction.

5. The owners of parcels in areas impacted by the expansion of plantations of African palm, especially in the department of Petén and the northern transversal strip, generally lease variable extensions of land to other peasant families living in the region, who do not own land, who do not own enough land, or which, due to the characteristics or location of the land, does not enable them to have two harvests per year. These leased lands are no longer available. This implies that the population who does not have access to land, after the sale of peasant parcels, is not exclusively reduced to owners who have sold their land, but it also includes those who stop having access to land through leasing. The same situation occurs in those cases in which farms used to lease small parcels to peasants from neighbouring communities and their own tenant farmers.

28 6. The expansion of mono-products is translating, simultaneously, into the change in the use of the soil in large extensions of land, the elimination of remaining forests, movement of land, drying up water sources and wetlands, with the subsequent fragmentation or elimination of ecosystems and loss of biodiversity.

7. For now, the economic impacts of the expansion of mono-products are perceived in a differentiated manner by peasants who are losing access to land. Unlike the sale of land, the leasing of land –for now- represents a monetary extraordinary and immediate income that is perceived as long-lasting. Nevertheless, the consequences of dependence on this income, throughout time, will be felt in terms of: increase in the prices of basic products, loss of purchasing power, degradation of soil and water sources, loss of access to other natural resources, the offer of local employment, salaries and labour conditions.

8. The role played by the State in this process of commoditisation and concentration of agrarian property in the hands of agro-industrial entrepreneurs, on one hand; and the loss of access to land by peasants, supported by policies and financing from international financial entities, has facilitated this situation. The State and international financial entities have aligned their institutional policies and resources with the interests of agro-industrial companies.

9. The setting up and expansion of plantations for the production of agro fuels, promoted by agro-industrial entrepreneurs and supported by the Guatemalan state and international financial institutions are carried out in detriment of peasant family economies, placing at risk the food and nutritional security of this population and violating their right to food.

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