The Chilean Road to Socialism


CHAPTER 26

Agriculture and Agrarian Reform

Chilean agriculture has traditionally been organized in latifundia, a system of large estates. The system is highly inefficient economically and engenders grave social injustices. For many years Chile, potentially rich in agriculture, has had to import hundreds of millions of dollars in food supplies, while the rural social structure is polarized between a few thousand rich and powerful landowners and several million impoverished and oppressed campesinos. The Popular Unity government has given a very high priority to a total transformation of agriculture and agrarian social structure and has made rapid progress in doing so.

Solon Barraclough's article is a rather complete treatment of land tenure systems, agricultural problems, and the need for and the nature of agrarian reform in Chile.


AGRARIAN REFORM IN CHILE

SOLON BARRACLOUGH
A Spanish version of this article was published in Cuadernos de la Realidad Nacional II, Nº. 7, March 1971;
the English language article was prepared by the author and abridged by the editor.

As President Allende's new popular-front government begins its six-year mandate, tensions are high in rural Chile. . . . Groups of armed landlords have killed one and threatened other agrarian-reform officials and say they will defend their properties by force if necessary.

The agricultural workers' federations, on the other hand, are demanding better wages and a rapid acceleration of expropriations. Many thousands of unorganized farm workers, rural unemployed, and small, subsistence farmers are expecting the new government to take immediate measures to improve their lot. During the electoral campaign the new government had promised a profound agrarian reform that would expropriate all the latifundia, turning the land over to the benefit of the campesinos; the popular front said it would also provide necessary technical assistance and credit and would completely transform the existing marketing and processing systems.

Background of the Problem

Frei was elected in 1964 with a solid majority of the popular vote. The Christian Democrats promised revolution with liberty, including an agrarian reform that would grant land to one hundred thousand of the country's some three hundred thousand landless families of farm workers and smallholders (campesinos). Frei's major opponent, Socialist-and-Communist-supported Salvador Allende, had received 38 per cent of the popular vote and had promised an even more drastic reform program. The moment seemed propitious to initiate profound rural changes.

Population growth had been outdistancing food production ever since 1945. Imports of agricultural products had doubled in spite of abundant land resources and a favorable climate, similar to California's. Only one fourth of the Chilean work force was employed in agriculture in 1954, which makes it one of the most urbanized of all Latin American countries. Per-capita agricultural income averaged less than one half the national average, however; the poorest 70 per cent of the peasants had incomes averaging less than one hundred dollars annually per person, even including the value of home-grown produce consumed. (This was still more than double the incomes of the majority of campesinos in the Andean highlands of Peru, Bolivia, and Ecuador, in northeastern Brazil, or in most of the Caribbean and Central America.) Underemployment was prevalent and one third of the farm labor force was estimated to be economically redundant. This poorest million and a quarter of the farm population bought few industrial goods. Diets were deficient, housing was miserable, and infant mortality high. Although illiteracy in rural areas was officially only 18 per cent, surveys showed that about half of the adult farm workers and "minifundistas" in central Chile were unable to read or write.

Over three fourths of the agricultural land held was in large estates (‘latifundia’) employing more than twelve workers or tenants. Many permanent laborers received most of their pay in kind, principally the use of a small parcel of land. These inquilinos could be evicted at will and depended on the owners (patrones) for credit, markets and employment. Unions were practically prohibited and peasant political participation was minimal. Land use on the latifundia tended to be extensive. Despite their vast area the latifundia employed only 40 per cent of the agricultural work force and accounted for only 60 per cent of the value of all agricultural production. Smallholders (minifundistas) with one fourth of the farm population, were crowded onto 2 per cent of the arable land.

Chilean agriculture had been sluggish since the twenties, when the bottom fell out of the Chilean nitrate market and the world began skidding into the Great Depression. The growing urban population forced successive governments, radical and conservative alike, to keep food prices down and to favor urban investments. A few landlords had been modernizing their operations and were replacing a potentially troublesome labor force with machinery. Others neglected their farms and concentrated on urban activities. Many newly rich merchants and industrialists bought estates not to farm them but as a hedge against the persistent inflation and as an entry into the landed aristocracy. Some haciendas had been subdivided among heirs, small producers, tenants, or sharecroppers. A rural proletariat of wage laborers with no rights to land was increasing. Between 1955 and 1965 the number of inquilinos dropped by one half, the area in sharecropping increased, and the number of smallholders and landless laborers rose sharply.

An agrarian-reform law promulgated by Jorge Alessandri's administration in 1962 in response to the "Alliance for Progress" had done little to change agrarian structure. From 1928, when the first agrarian resettlement legislation was adopted, until 1964 only about five thousand beneficiaries received land.

The Christian Democrat Reform

In 1965 the new government announced its agrarian reform objectives as being (1) to grant land to thousands of campesinos, (2) to increase agricultural production, (3) to increase campesino incomes and living levels, and (4) to obtain the campesinos' active participation in the national society. Immediately upon taking office a committee of technicians headed by Minister of Agriculture Hugo Trivelli began drawing up new legislation. It required nearly three years, however, before the new agrarian reform law and a necessary constitutional amendment were approved by the Congress.

The law permitted expropriation not only of poorly worked estates but also of corporately owned properties and lands under single ownership of over eighty "basic" hectares (equivalent in value to eighty hectares of good irrigated land near Santiago). Compensation was set at tax-assessed values. In most instances payment would be 10 per cent in cash and the balance in 25-year bonds.

The government adopted new labor legislation encouraging farm workers' unions and declared it would enforce minimum farm wage regulations. The President said agricultural prices would be permitted to rise substantially and that credit and services would be redirected to support reform. A young agricultural economist highly influential in shaping the party's agrarian program, Jacques Chonchol, was put in charge of the agricultural development institute (INDAP). (Chonchol had been briefly in Cuba as an FAO expert and was considered too controversial to take charge of the Agrarian Reform Corporation (CORA) and expropriations.) INDAP immediately announced plans to promote unions and co-operatives among farm workers and smallholders.

By September 1970, CORA, under the Frei government, had expropriated 1,364 estates with a total area of nearly 3,433,774 hectares, 282,374 of which were irrigated. This amounts to some 18 per cent of the nation's irrigated and nearly 12 per cent of its non-irrigated agricultural lands. CORA estimates about twenty-five thousand beneficiaries are being settled with rights to land on this expropriated area—one fourth of the original goal.

CORA has discouraged subdivision into small farms, and most of the land so far has been assigned wholly or in part to co-operatives.

Production on most asentamientos (farms affected by the agrarian reform) undoubtedly increased. But costs were high. Cash outlays the equivalent of six to ten thousand dollars per family were made to cover investments in land, improvements, working capital, and administration, and to finance annual operating costs.

An even more serious problem was the small number of persons benefited. Over one third of the asentamiento labor force has no rights to the land; many of these hired workers are sons or other relatives of the beneficiaries. Only about one tenth of the potential number of beneficiaries from agrarian reform have as yet been given access to expropriated lands. Even if the present law had been enforced to the limit, well over two thirds of the campesinos would have received no land under the Frei government's program if the CORA had maintained its same criteria for assigning land to beneficiaries.

Probably the most far-reaching consequence of the reform was the organization of over half the campesinos into unions and co-operatives. Campesino unions hardly existed in 1964. They now claim nearly a hundred thousand members and are grouped in three national federations. Strikes are common and increasing in frequency. Daily farm wage rates in real terms are nearly double those of six years ago.

At the same time, another one hundred thousand small producers and farm workers have formed co-operatives and pre-co-operative committees with INDAP assistance. A few have gone into intensive chicken and hog production. A structure of regional marketing and processing cooperatives is beginning to emerge. One co-operative is exporting onions and garlic, previously a lucrative private monopoly.

The basis already exists for a vigorous campesino-controlled co-operative system. The campesino organizations could dominate Chilean agriculture in the future if sufficient political support were forthcoming.

The challenge of agrarian reform forced the old guard out of control of the National Agricultural Society (SNA). The new leadership is encouraging its members to modernize. The SNA no longer blindly opposes the expropriations of badly managed large estates. Many of the large landowners have responded to threats of expropriation and strikes by producing more, discharging temporary workers, purchasing labor-saving machinery.

Criticisms and Conflicts

In spite of some success in augmenting agricultural production, the government goals of increasing campesino incomes and participation were only partially met. Over half the country's irrigated land remains in large private estates. Smallholders' incomes have improved little, and their co-operatives are in a precarious situation. Unionized workers have higher wages. But many campesinos are less fully employed than before. Non-unionized workers, who number well over a hundred thousand, face especially severe employment problems and have lost most of their traditional rights to land and pasturage on the large estates. While some campesinos now work harder and more productively than previously, others who received work and income under the old system are now openly unemployed.

The campesinos in the asentamientos have higher average incomes than previously and more participation in management and political affairs. In some respects they constitute a new rural middle class. Many of them now feel the envy and resentment of their poorer neighbors. In spite of these difficulties, however, agrarian problems would undoubtedly have been worse without the reform.

Campesino aspirations have risen greatly during the past few years. But resentment and disillusionment threaten to divide them into conflicting groups manipulated by landlords, the government, and other outside interests unless reform is quickly accelerated and consolidated. The large commercial farmers have been quick to take advantage of this situation. Many large producers are attempting to create a common front with their workers, land-reform beneficiaries, and small farmers to oppose a more radical reform that would eliminate the remaining large private estates and benefit the poorer campesinos.

The biggest obstacle to meeting reform goals was the divergence of interests and objectives within the governing Christian Democratic Party itself. The rhetoric of profound agrarian reform and the Party's ideology of non-capitalist development were apparently never taken very seriously by the majority of middle- and upper-class businessmen, professionals, and politicians who were highly influential in the Party and government. When Chonchol and a group of Party technicians drew up a report in 1967 outlining what "non-capitalist" development would imply, it was accepted by the Party's governing council, but it was promptly disavowed by the government and resulted in the election of a new Party directorate. Later, under strong pressure from the Right, which was alarmed by the rapid progress being made in organizing the campesinos, the Minister of Interior, who was a wealthy industrialist and contractor, sharply curtailed INDAP's promotional activities in the countryside. In late 1968 Chonchol was forced to resign.

One cannot suppose, however, that merely because all the major parties supported agrarian reform of some kind during the campaign the new government will be able to implement its announced program with relative ease. On the contrary, political opposition to radicalizing the program will be strong both from the Alessandri forces and from at least a considerable part of the Christian Democrats. Moreover, even if these political problems with the opposition parties can be overcome, the Allende government confronts many similar difficulties to those the Frei government faced in implementing a major structural reform that would provide Chile's nearly three hundred thousand poor campesino families with land, productive employment, participation, capital, and markets.

The Allende Governments Program

The new government's goals as they have been spelled out in some detail in the popular front's program are apparently more explicit than Frei's were. Moreover, as the popular front is committed to transform Chile into a socialist society, it should be easier to agree internally on a general strategy of action. But the fact that it is made up of a coalition of six political parties, each with its own ideological peculiarities, its own organization, and each to a certain extent representing different social classes, may present great difficulties in obtaining agreement on specific issues, especially as there will very likely be much jockeying among the parties for patronage and relative influence. Moreover, the new government lacks a parliamentary majority and has inherited a public administration with all its old interests and clienteles. The task of translating the popular front's goals into effective government policies is formidable, to say the least.

The new government's agrarian reform strategy is already partly defined in broad outlines. In the first place, agrarian policies should be made within the context of an over-all strategy transforming the entire society along socialist lines. Among the twenty points specifically dealing with agrarian reform in this program, the most important include a resolve to extend reform benefits to all groups of campesinos and to mobilize them through their organizations to be integrated into a more unified campesino front to strengthen the reform. The government plans to create democratically elected campesino councils at local levels and also regionally and nationally to participate together with government officials in planning and carrying out agrarian programs. At the same time, it hopes to make the Ministry of Agriculture responsible primarily for campesino development and agrarian reform, doing away with the current wasteful duplication of functions for different clienteles.

In the future, according to the program, agrarian reform is to be planned and executed by areas instead of on an estate-by-estate basis. The intention is to benefit all the campesino groups who do not have sufficient productive land or by creating alternative employment opportunities in agricultural processing industries or in related activities.

In the creation of new tenure systems the program states that preference will be given to co-operative farming. Each family, however, would have the right to an individually owned house and garden plot. There will be national and zonal production plans with the aim of increasing both production and campesino incomes; many lines of intensive farming will be reserved for smallholders and other land-reform beneficiaries. The program promises to provide the necessary credit, technical assistance, and training for all the campesinos to fulfill their part of the national plan. Working capital on the large estates, such as livestock and machinery, would be expropriated in the future along with the land, to avoid the present problem of decapitalization by the former owners, leaving nothing but the bare land for the campesinos.

The program contemplates nationalizing existing agricultural supply, marketing, and processing "monopolies"; these are to be managed directly by the state or by cooperatives. As the private banks will also be nationalized, the entire marketing and credit structure could he adapted to achieving agrarian reform goals. In addition, the program proposes guaranteed markets and prices for all the campesinos' products that are produced in accordance with the national agricultural plan.

The program offers a series of social benefits to the campesinos. All would have Social Security coverage in the future instead of only the workers on commercial farms, as at present. There would be a national program to improve campesino housing. Recreation centers and hostels for the use of campesinos would be constructed in provincial towns. At the same time, special attention is promised for forest lands, natural-resource conservation, and irrigation problems.

The popular front proposes to initiate this strategy by a thorough enforcement of the existing agrarian-reform law. Meanwhile the new legislation necessary for completing the program would be drawn up, discussed, and approved as rapidly as possible.

Problems Facing the New Government's Agrarian Reform

The popular front's program obviously falls far short of being a clear strategy for agrarian reform. Numerous concepts will have to be clarified and many problems resolved before the twenty points just summarized can be considered a political plan of action. Even if all these issues were resolved, however, the strategy would not be complete. The essential part of any political plan must always be who (i.e., which political groups) do what, when, and how.

A. Priorities In the first place, the government's agrarian-reform strategy will have to give a high priority to overcoming political obstacles. The most important of these will be encountered not in the agricultural sector but in the established system of power relationships in the entire society. The success or failure of the new government's agrarian-reform program will depend primarily upon how well it is able to carry out its over-all plans for transforming the social and economic structure of which agrarian reform is only one part.

In the agrarian field, the campesinos will have to be mobilized at once so that they and their organizations may become active supporters and participants in the process. Otherwise the superior organization and economic power of the large landowners and allied groups will inevitably direct the reform into populist channels without changing the old power structure very much. At the same time, agricultural marketing, credit, and industrial structures, in addition to the whole public administration, must be put at the service of the reform and the campesinos as rapidly as possible.

The government should attempt to complete all the expropriations of latifundia permitted under the present law within the first few months of the new administration. Preliminary estimates indicate that from three to four thousand estates remain to be expropriated under the present law. [1] Subsequent legislation could then more easily be adopted to consolidate the transformation. A rapid completion of expropriations, accompanied by guarantees to small and medium-sized farmers that they would not be expropriated, at least for the present, would reduce political opposition from this quarter. The difficult tasks of economic, social, and political reorganization could then proceed more effectively.

The new government's immediate agrarian-reform priorities then should be: (1) to push ahead resolutely and rapidly with its over-all program of transforming the entire society; (2) to mobilize the campesinos; (3) to put the country's agricultural marketing, supply, processing, and credit institutions and its public administration at the service of the national development plan and the campesinos; (4) to complete all expropriations quickly under the present law.

B. Institutional Structures A second problem will be to define how the proposed new structures of credit, marketing, and public administration should be organized and operated in practice. Simply nationalizing agricultural industries and private banks, for example, will not necessarily change the present power relationships very much until the state becomes much more representative of the campesinos and their interests.

Many agricultural industries are already largely government-owned but are nonetheless the instruments of private commercial interests. The state bank and the state Development Corporation (CORFO) have not had a much better record than private lenders when it comes to strengthening the economic base of campesino agriculture. Many of the present agricultural co-operatives serve primarily the interests of large commercial producers. [2]

Vigorous action will have to be taken to assure that these banking, commercial, and industrial institutions have programs and structures that really support the government's agrarian-reform strategy after they are nationalized.

The establishment of an agrarian development fund would combine the advantages of geographic decentralization, democratic participation, campesino control, and purposeful national planning. It would also permit the use of the market for ensuring efficient resource allocation within the limits imposed by the development plan. This scheme would be perfectly consistent with a system of national marketing boards and state enterprises for certain key commodities, especially those important for exports and imports.

Similarly, public administration in agriculture will have to be completely transformed if it is to be an effective instrument for reform and development. Campesino participation in planning and carrying out reform programs will have to be real and not merely a formality. The system of individual agency clienteles will have to be abandoned—no easy task, considering that each party in the new government coalition grew up within this system and has its own clienteles with powerful interests. At present there are several agencies with overlapping functions, each serving their separate clienteles. This could be done by making the Ministry of Agriculture in effect the Ministry of Agrarian Reform and Rural Development.

Functionally, however, the public administration should become much more unified and centralized nationally and in each zone and area. The campesino organizations would participate in planning and in plan execution at the area, zonal, and national levels. The present situation, in which several national programs such as COPA's, INDAP's, CORFO's, etc. operate independently and often in competition with each other, would no longer prevail. In fact, these semi-independent agencies would tend to disappear.

C. Guaranteed Prices and Distribution Thirdly, a national system of guaranteed prices and markets for production in accordance with the development plan, as proposed by the popular front, is highly necessary for an effective agrarian-reform strategy. On the one hand, it is required in order to guarantee the campesinos markets for their products at reasonable prices so that they will have the possibilities and economic incentives to increase their production in accordance with national plans. On the other hand, such a program would help to ensure adequate distribution of essential foodstuffs to low-income groups.

In this way everyone could be guaranteed at least a minimum level of consumption; at the same time some of the most obnoxious aspects of direct rationing could be avoided while the free market could still perform its function of equating supply with demand.

D. A National Land Policy A fourth problem is the lack of a national land and water policy. One of the most telling criticisms of the latifundia system has been the irrational land-use patterns associated with it. Logically a national land policy to achieve more desirable land use in the future should be an integral part of any land-reform strategy. Little or no attention has been given to controlling the use of lands that have not been expropriated. In general, the broad land-use patterns and practices of the old latifundia systems have been perpetuated and sometimes even further consolidated by reform.

Water and land use should be planned in broad outline both on a national scale and for each area. These plans should be based on foreseeable needs, soil resources, and economic and ecological considerations. There will have to be adequate controls to make this planning effective in practice. Carrying out the reform by areas, as proposed in the popular front's program, would greatly facilitate such a land policy. So would the vigorous implementation of present water legislation.

E. Land-Tenure Systems A fifth problem is that the new land-tenure systems resulting from reform must be adequate for attaining national development goals. Land tenure is fundamentally the institutionalized system of relationships among groups and individuals in the use of land and labor and in the control of their products. It is much broader than mere legal ownership.

The new government faces the problem of devising tenure systems adapted to Chilean conditions. At the same time, these systems should: (1) ensure at least minimum acceptable levels of security, welfare, employment, and income for all campesinos; (2) provide for the greatest possible direct participation of the campesinos in decision making at every level; (3) facilitate the formulation and execution of national development plans; and (4) provide incentives for high economic performance— i.e., productivity, efficiency, investment, and growth.

The asentamientos formed under the Frei administration did not meet any of these criteria in an entirely satisfactory manner. They were particularly deficient in facing the equality issue. The permanent laborers on expropriated estates, and a few others who received land, obtained security, welfare, employment, and income. But more than two thirds of the campesinos who are mini-fundistas or unattached landless laborers had no prospects of benefiting from the reform, and many became even worse off as a result. Those few who received land had more participation in decision making than previously, although this was limited by excessive paternalism on the part of CORA, but the majority were as much excluded from political and management decisions as before. The conflicts of interests among the diverse campesino groups have tended to grow.

Secondly, the difficulties of administering a large-scale centralized system of state or collective farms are immense in the best of circumstances and probably insurmountable in the short run. This is in part because of a lack of experienced and adequately trained personnel; moreover, such a system could easily become inconsistent with the objective of greater campesino participation in decision making. In addition, many campesinos, especially inquilinos, sharecroppers, and smallholders, place a high value on land ownership as such, and it would be exceedingly difficult to convince many of them to accept willingly a system of state ownership.

In view of these objectives and limitations, the new government's proposals to carry out the agrarian reform on an area basis (presumably each area would include one or more comunas—roughly counties—depending on ecological factors and the farm population) and to give preference to co-operative farming enterprises not only makes sense but appears to be the most viable short-term policy. The promise to provide every campesino family with sufficient land for a house and garden plot of its own would ensure a bare minimum of security now lacking for the majority. The degree to which the other criteria for a desirable tenure system could be met would depend on the quality of planning and the type of cooperative organizations that evolve.

But while this proposal for agrarian reform organization by areas would mitigate the problems now created by the reform's organization on an estate-by-estate basis, it would by no means solve them. Some areas will be much poorer in resources and markets than others. Some will be relatively overpopulated and others short of workers. The problem of providing more equal opportunities for all campesino groups will merely be removed to the area level. Its solution nationally will require national planning and the virtual socialization of the income derived from land and capital on a national scale if the objective is really to provide the greatest possible equality of opportunities for all the campesinos.

F. Financing A sixth problem is how to finance the reform. This is not mentioned in the popular front's program but will obviously present immediate problems for the new government. On the one hand, additional resources must be mobilized to finance a massive reform. On the other hand, per-family costs of implementing the reform must be reduced considerably from what they have been during the past six years.

Mobilizing the necessary resources present a problem of fiscal policy going far beyond the agrarian sector. If agrarian reform really has a high priority, however, some way can be found to obtain the necessary funds. The agrarian development fund proposed above could prove very useful in this respect.

One simple measure that could be taken quickly to increase revenues would be to increase real-estate taxes sharply.

A second, complementary revenue-raising measure, which was also suggested above, would be to charge land-reform beneficiaries a tax or rent on the value of the land and capital turned over to them by reform.

The proposed nationalization of the banking system and reform of the nation's credit structure should make it feasible for the government to mobilize other, additional resources for agrarian reform. Moreover, it should explore the possibilities of obtaining new international credits to support its reform and development programs. Both the World Bank and the Interamerican Bank, for example, have on various occasions expressed their interest in making important loans to support well-planned, large-scale agrarian reforms. They may never be presented with a better opportunity to demonstrate their good intentions. [3]

Of course, the most important thing for both reducing costs and increasing revenues for the agrarian reform will be to increase efficiency and productivity at all levels in the process. There can be no adequate substitute for good management, rational accounting, and wise economic decisions.

G. Campesino Participation, Training, and Education A seventh problem that has been implicit in all the previous discussion is the necessity for full campesino participation. This participation presupposes effective and united campesino organization at all levels. As seen earlier, in spite of impressive progress during the Frei period in the creation of campesino organizations, really effective campesino participation in the reform process was not achieved.

A fundamental requirement for such campesino participation is to ensure that they have an important role in all stages of the reform process, making it their reform. They must participate at all levels in planning and execution. The public administration, marketing, credit, and processing institutions should be controlled by the campesinos to the extent consistent with carrying out national development plans. The campesinos should actively participate in the management of the agrarian reform production units; in fact, these should normally be campesino cooperatives. Campesino unions will have to be strengthened and there will have to be more grass-roots participation in union affairs. Moreover, the unions will have to work together in support of the reform. All these objectives have been foreseen in the popular front's program and touched upon in the preceding sections of this paper. The problem is how to make this participation truly effective.

One simple measure would be for the technicians who provide assistance to reform beneficiaries to be directly responsible to the campesino organizations for their salaries and performance. Technicians should be recruited from among the campesinos and trained to provide the necessary skills for the reform's success. [4] There is usually no need to have university-trained professionals working directly with the campesinos; in fact, this usually creates a difficult social and communications barrier.

In addition to these institutional problems, however, are those of training and education. The campesinos can never participate as effectively as they should if they are not provided with sufficient knowledge and skills to handle their own affairs in an increasingly complex society.

Obviously, literacy and basic education should have a high priority. No one can participate effectively if he has not learned to read, write, and master simple arithmetic. Chile already has one of the lowest illiteracy rates in Latin America. Practically every campesino would become literate in a relatively short period if a crash program were launched. The experience already gained shows this could be done rapidly and effectively with modern methods and the full use of mass communications media.

This education cannot be devoid of ideological content. It must be consistent with the country's development goals. This implies a cultural revolution. The new government will have to mount a massive campaign to change the campesinos' traditional attitudes and values formed by a latifundia-dominated. rural society.

Training in farm management, accounting, and cooperative and business management is also essential. The campesinos often complain now that the government technicians make all the important decisions. The only way this can be avoided even after structural reforms is to train enough campesinos in these skills so that they can participate in decision making as equals.

H. A National Policy of Employment and Technology An eighth problem is that a strategy of agrarian reform should be co-ordinated with a national policy of employment and technology. It is unrealistic in the extreme to hope that agrarian reform alone could provide adequate employment for the entire rural work force. Historically, agriculture has been the principal employer of last resort. Chile, however, is already so far urbanized that farming is beginning to lose the possibility of fulfilling this rudimentary function.

Like previous governments, the Frei administration never faced up to the rural-employment problem. Disguised agricultural unemployment and underemployment were already estimated by CIDA at nearly 30 per cent of the agricultural labor force in 1964. Rural unemployment is almost certainly as high now in spite of the fact that agricultural production has gone up by over one fourth, while the farm labor force has remained almost stationary. Outright rural unemployment has unquestionably increased.

Full employment for the campesino work force will require an over-all strategy embracing the whole society. Income redistribution in urban areas would accelerate demand for many lines of labor-intensive agricultural production. This would increase farm employment, at least in the short run. Accelerated industrial production and investment would also absorb some rural labor, especially if some of the new industries could be located in heavily populated rural areas. Investment in public works of all kinds is required in rural areas. But these cannot be financed wholly or even largely from agricultural income. Schools, roads, new irrigation works, and reforestation should have a high priority in any agrarian strategy, but financing these investments is a problem for the entire economy.

A national technological policy could assure that capital and scarce foreign exchange are used to obtain the new capital goods that have the highest priorities for the success of the national development plan. These may not include some kinds of expensive labor-saving agricultural machinery now being imported until a later stage in Chile's development. The importation of many consumer durables such as private cars, etc. will probably have to be further restricted. There will have to be a well-planned policy of national industrialization, with the eventual local manufacture of many goods, especially capital goods and machine tools that are now imported.

It is idle to hope that individual farmers, co-operatives, or state farms will adopt "intermediate" agricultural technologies, even in situations in which there is a clear economic advantage for the country in their doing so if they can obtain highly modern labor-saving machinery on such favorable terms that it is profitable for them to use it. A principal aim of a national technological policy should be to make sure that the technologies that are available and most profitable for individual economic units coincide with those that would contribute most to achieving national development goals. This is a responsibility of the government and cannot be left to the vagaries of unregulated market forces.

A national employment and technological policy as part of a national development plan should make it possible to eliminate rural unemployment within a relatively short time. Labor shortages might even become a problem in the near future. But there is no way of solving the rural employment problem within the confines of the agrarian sector alone. It requires an imaginative national strategy. This implies dynamic planning at every level. Perhaps the greatest immediate obstacle to a successful agrarian reform is that neither the mechanisms nor the substance of this planning has yet been developed.

Prospects

The key to the future of the new government's agrarian reform will not be encountered in the agricultural sector but in the system of power relationships in the entire society. The fate of the agrarian reform will inevitably be determined in large measure by the relative success or failure of the government's over-all strategy of structural change.

Whether a freely elected "socialist" government can carry out a profound program of structural change leading to a socialist society, all within a framework of democratic institutions, remains an open question. Many maintain that it can't be done. Historical experience is not very encouraging in this respect.

The Allende government has a unique opportunity to show that an elected government can make a peaceful transition to a democratic and humanitarian social structure. Chile is one of the few countries in the world with its rural areas still dominated by a traditional latifundia system where a profound agrarian reform, incorporating the campesinos fully into a dynamic, modern, and democratic society, has some possibility of success.

If, in the end, the new government should prove to be socialist in name only, it still could carry out an important agrarian reform, rapidly expropriating the remaining latifundia. It would be an important "populist" reform that prepared the way for further economic growth even though it did not greatly alter the power relationships in society. Under Latin American conditions, however, without equally far-reaching reforms in the rest of the economy the reform would leave unfulfilled the requirements of the majority of poor campesinos for markets, credit, technical assistance, employment, and true participation.

If, on the other hand, the proposed reforms in land tenure and in the broader society are carried out rapidly and effectively, the new government could consider itself successful in carrying out a profound "structural" agrarian reform. The campesinos could acquire real participation in development. It would mark a milestone in the history of social change in Latin America.


Notes:

1. In the first two years of the Allende government, these latifundia were ended by the agrarian reform.

2. Antonio García, Las Cooperativas y el Desarrollo Agrícola de Chile, ICIRA, 1970. (Preliminary)

3. All international agencies under U.S. influence have suspended all forms of aid and development assistance to Chile.

4. See, for example, Jan Myrdal, Report from a Chinese Village (New York: Random House, 1963); William Hinton, Fanshen (New York: Monthly Review Press, 1966); and Gerard Chaliand, The Peasants of North Vietnam (Baltimore: Penguin Books, 1969).


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