Agricultural Modernisation in Colombia 1936-1990: Markets, Institutions and Technology in Sugar, Banana and Potato Production Tamara Claudia Belt Rodriguez PhD London School of Economics and Political Science UMI Number: U615789 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U615789 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 x -21 ! 7 <S'5 vS 6 8 To my mother and father Abstract This study analyses the factors associated with rural modernisation between 1936 and 1990 and places them in an international context. It focuses on the production of three commodities-sugar, bananas and potatoes. The approach departs from orthodox neo-classical analysis, which maintains that markets are the central agency responsible for change, and argues that institutions, the nature of the crop, technology, labour and land tenure as well as markets determined the path of agrarian transformation. This argument is sustained by considering scale- and capital-bias in agrarian technology, patterns of land usage and the changing role of labour in the productive process. The three commodities studied are regionally specific, sugar in the Cauca Valley, bananas in the Magdalena Valley and the Gulf of Urabd and potatoes in the departments of Boyaca and Cundinamarca. Developments within these regions are presented with reference to appropriate national and international trends. For the sugarmill owner, informal institutions and political links assisted in obtaining machinery and inputs. For the banana exporter, links with international markets and capital availability allowed them quickly to establish production and trade. For potato growers, private local initiative and indirect state programmes fostered development. With bananas and sugarcane most changes to the productive process were labour and land saving. Nonetheless, labour remained an important aspect of cultivation and harvesting and some methods reverted to more labour intensive production with the passage of time. Moreover, low-cost techniques played an important role for all three crops throughout the modernisation process. The research proves that though relative prices have an influence on production, existing land usage structures, institutional arrangements, technical change absorbtion, and capital-bias distorted market prices and resulted in paths to modernisation that were less than optimal. Acknowledgement This thesis represents four years of research which was primarily taken on in Colombia and England. Although the people who supported and encouraged my work throughout this period are too numerous to mention, I hope to acknowledge those who have been crucial to the completion of the study. First, my gratitude extends to the Banco de la Republica for financing three years of my work—both in Colombia and England. Particularly Jose Antonio Camacho and Gloria de Fonseca deserve commendation for their attentiveness, understanding, flexibility and efficiency when dealing with my urgent requests. My colleagues at the Universidad Externado de Colombia, especially Roberto Hinestroza, must be thanked for they supported me before embarking on this study and when I returned for field research. In Colombia, the remaining list of people who have assisted me is massive ranging from librarians at the SAC, FEDESARROLLO, and CENICANA to those who guided me towards potential sources of primary data. Ricardo Villaveces, president of ASOCANA, facilitated my contact with the sugar mill of my choice, Manuelita. Many of the people at Manuelita went beyond their call of duty, especially Alberto Anzola, the President, who quickly permitted my research, provided me accommodation in the casino, allowed me to roam freely through the field and factory archives and conduct interviews. Banana research would not have been possible without Camilo Penalosa who slipped me into a training programme so that I could travel to Medellin and Uraba. I also owe a great deal to Ricardo Vargas, Mariano Arango, Ricardo Chica and Gabriel Martinez for their input and generosity. Lastly, my sister and brother-in-law, Jordana and Alvaro Robledo, will be remembered for their hospitality and more importantly, their optimism and humour which was so needed after returning from many trips down blind alleys. In London and otherwise, I am indebted to my supervisor Colin Lewis, who gently guided the direction of the study and patiently read through excessively long rough drafts. Without his feedback I would have had a difficult time to see the forest for the trees. Also, the departmental secretary, Linda Sampson, must be thanked not only for her affection but for her help during the ’crunch* period. I also am thankful to my friends Rosa Bernal, Patti Londono, Marie Eve Detouf, Jyoti Patel, Abe Selassie, Sheila Findley, Massimo Quatrocchi, Sylvia Schwaag and Ramona Dzinkowski who were enthusiastic about this study and believed that it would be completed (at times when I doubted). Additionally, I am indebted to Noreen Beg who generously called me overseas during the majority of the time when we were living in different continents. Gunnar Klum also deserves my gratitude for his comfort, concern and encouragement, particularly after hearing that yet another redraft was necessary. I am especially grateful to my mother and father who were a incessant source of support (emotional, intellectual and financial) and advice which helped me keep things in perspective. I am also thankful for their steady stream of good vibes which were able to keep my spirits high, a vital ingredient to any long-term research. Finally, I take full responsibility for all errors of logic and facts. Contents List of tables Page vii List of figures and maps x List of appendices xi List of acronyms and abbreviations xii Maps xiv I. Introduction 1 A. Elements of Agricultural Modernisation 3 i. Markets 4 ii. Institutions 5 iii. Technology 8 B. Case Studies 16 II. Sugarcane 20 A. Part I 22 i. Crop Characteritsic, Processing and Markets 22 ii. Technical Change: discontinuous adaption patterns and reasons for adaption 31 iii. Land Usage and Production Biases 46 iv. Labour: proletarianization, contracting and the effect of technical change 57 v. Conclusion 67 B. Part II: La Manuelita Sugar Mill 70 i. Markets: domestic demand and the shift to modern methods 71 ii. Institutions and Land Usage: the development of organisations, the evolution of land tenure and formal institutions 80 iii. Technical Change: industrial concentration, foreign technology, and discontinuous adaption patterns 113 iv. Labour: changes in the use of, cane cutters, the effect of technical change and Manuelita analysis 139 v. Conclusion 171 II. Banana A. Part I 178 i. Crop Characteristics 182 ii. Institutions and Markets: international trade, producers, exporters and TNCs 184 iii. Technical Change: indicators, production-biases and patterns of diffusion 208 iv. Labour: the effect of technical change 226 v. Conclusion 234 B. Part II: Santa Marta and Uraba Bananas 237 v i. Institutions, Markets and Technology: modernisation in Santa Marta 238 ii. Institutions, Technology and Labour: late modernisation in Uraba 265 iii. Conclusion 295 III. Potato A. Part I 299 i. Crop Characteristics and Technology 300 ii. Markets and Institutions: expansion, product markets and pre-famine Ireland 303 B. Part II: Boyaca and Cundinamarca Potatoes 312 i. Markets and Institutions: the development of domestic markets and organisations 313 ii. Land Usage: land distribution and tenancy 323 iii. Technical Change: expansion, adaption and credit 335 iv. Labour: characteristics of, and the effect of technical change 359 v. Conclusion 367 IV. Conclusion 371 Appendix 384 Bibliography 401 vi List of Tables 51.1 Productivity of Burnt Cane Versus Non-burnt Cane at Manuelita, 1990. 51.2 Cost of Production and Level of Employment in Sugar Processing, 1975. 52.1 Per Capita Panela and Sugar Consumption in Seven Colombian Cities 1953, 1970 and 1984-5 (Kg/year). 52.2 Principal Regions of Cane-Panela Cultivation, 1959/1986. 52.3 Panela: Output Evolution for the Most Dynamic Regions, 1959, 1986 (tonnes/year). 52.4 Crops Displaced by Cane-Sugar between 1901 and 1952 in the Cauca Valley. 52.5 Dates of Foundation and Closure of Modern Mills in the Cauca Valley, 1900-1990. 52.6 Land Under Cane Cultivation in the Cauca Valley, 1915-1990. 52.7 Manuelita Land Use in 1918. 52.8 Valle del Cauca Gini Coefficient for Land Concentration, 1960-1986. 52.9 Distribution of Land in Valle del Cauca, 1960-1986, Number of Plots and their Respective Percentages. 52.10 Total Land Area in Valle del Cauca, 1960-1986 and their Respective Percentages. 52.11 Changes in Cane Acquisition Modalities in Valle del Cauca, 1960- 1988. 52.12 Evolution of Forms of Manuelita Cane Acquisition, 1976-1990. 52.13 Manuelita Land Usage Data, Number and Plot Size of Cane in Supply, 1985-1989. 52.14 Manuelita Land Usage Data, Number of Cane in Participation Shares, 1985-1991. 52.15 Mechanisation Intensity According to the Most Mechanised Geographic Zones, 1959, 1972. 52.16 Benchmarks of Increases in Manuelita Milling Capacity, 1953-1990. 52.17 Distribution of Sugarcane Area According to Variety Cultivated for Mill Processing in Colombia, 1988. 52.18 Labour Structure of Sugar Mills, 1960-1990. 52.19 Displacement of Harvest Labour Force in Manuelita Upon Introduction of Mechanical Lifting, 1977-1978. 52.20 Most Labour Intensive Tasks in the Agricultural Process in Manuelita, 1939-1990 (workers employed/week). 52.21 Tractor Operators in Manuelita, 1946-1976. 52.22 Comparison of Colombian Agricultural Basic Wage Rates and Manuelita, 1945-1970.