Identifier
Created
Classification
Origin
06LAPAZ1337
2006-05-17 20:18:00
UNCLASSIFIED
Embassy La Paz
Cable title:  

GOB PROMISES LAND REFORM

Tags:  EAGR ECON SMIG SOCI BL 
pdf how-to read a cable
VZCZCXYZ0008
PP RUEHWEB

DE RUEHLP #1337/01 1372018
ZNR UUUUU ZZH
P 172018Z MAY 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 9236
INFO RUEHAC/AMEMBASSY ASUNCION 5854
RUEHBO/AMEMBASSY BOGOTA 3157
RUEHBR/AMEMBASSY BRASILIA 7015
RUEHBU/AMEMBASSY BUENOS AIRES 4262
RUEHCV/AMEMBASSY CARACAS 1555
RUEHPE/AMEMBASSY LIMA 1534
RUEHMN/AMEMBASSY MONTEVIDEO 3790
RUEHQT/AMEMBASSY QUITO 4195
RUEHSG/AMEMBASSY SANTIAGO 8737
RHEHNSC/NSC WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
UNCLAS LA PAZ 001337 

SIPDIS

SIPDIS

STATE FOR WHA/AND
TREASURY FOR SGOOCH
ENERGY FOR CDAY AND SLADISLAW

E.O. 12958: N/A
TAGS: EAGR ECON SMIG SOCI BL
SUBJECT: GOB PROMISES LAND REFORM

REF: A. LA PAZ 680

B. LA PAZ 1157

C. LA PAZ 1288

UNCLAS LA PAZ 001337

SIPDIS

SIPDIS

STATE FOR WHA/AND
TREASURY FOR SGOOCH
ENERGY FOR CDAY AND SLADISLAW

E.O. 12958: N/A
TAGS: EAGR ECON SMIG SOCI BL
SUBJECT: GOB PROMISES LAND REFORM

REF: A. LA PAZ 680

B. LA PAZ 1157

C. LA PAZ 1288


1. Summary: The GOB announced on May 8 that it planned to
distribute between 11 and 14 million hectares of land to
farmers, indigenous communities, and the landless through
eight supreme decrees and a revision of the 1996 Agrarian
Reform Law. On May 17, the GOB told the press that President
Morales would sign six decrees that day for distributing
between 2 and 4.5 million hectares of state land to
indigenous people and small farmers, speeding up the land
titling process, and centralizing the structure of the
National Land Reform Institute (INRA) to weaken local
government control over the titling process. Additional
details of the reform will reportedly be announced as part of
the GOB's National Development Plan on May 31. The Minister
of Agriculture plans to speed up the process of land titling,
which has been carried out by INRA for the past decade but
has only reached a small portion of the country. NGOs and
social groups welcomed the GOB announcement, while farmers,
particularly Brazilian soy farmers, and cattle ranchers in
the eastern lowlands were worried that the government's
proposal threatened their lands, as well as Bolivia's food
security and exports. The GOB appears to be following the
same tactic in land reform as in hydrocarbons nationalization
and combating corruption (ref B and C) -- issuing decrees
that overstep existing laws, usurping Congress' function, and
promising to negotiate with interested sectors and resolve
the legal mess later. End summary.

Land Reform Background
--------------

2. Beginning in the early 1950's, land reform was carried out
in the western half of Bolivia. The reform divided large
landholdings into smaller plots and eliminated the mandatory,
unpaid service obligations of the indigenous people, who had
lived on those large estates, to their feudal landlords. The
land redistribution process largely bypassed the eastern
regions, which saw the increasing concentration of land in
fewer hands, particularly during Bolivia's military
dictatorship period in the 1970's, when large tracts of land
were given to those with political connections free of

charge. In 1996, Congress passed the National Institute of
Agrarian Reform Law (INRA),which included a term of ten
years, expiring in October 2006, for the adjustment of
property rights through verification that landholdings
fulfilled social and economic functions. The Agrarian Reform
Institute, with international financing, has given titles to
those who actually work the lands. However, INRA has only
titled around a tenth of the country's land, and according to
Vice President Alvaro Garcia Linera and NGOs such as
Fundacion Tierra, it has failed in its task of land
redistribution. Fundacion Tierra President Miguel Urioste
welcomed the GOB's announced reform plan as necessary,
particularly the ability for the GOB to recoup land that was
idle or obtained illegally, as the INRA law had only
frustrated the indigenous, farmers, and business owners and
led to conflict.


3. Violent conflicts between large landholders and landless
migrants in the East have frequently broken out during the
last decade. A group known as The Landless Movement
(Movimiento Sin Tierra),at times backed by Evo Morales' MAS
party, has invaded lands, confronted the owners, and forcibly
taken them over. These confrontations between landless
migrants and landholders have at times resulted in deaths on
both sides of the disputes.

GOB Announces Land Reform
--------------

4. The GOB announced via press reports on May 8 that it
planned to distribute between 11 and 14 million hectares of
land to farmers, indigenous communities, and the landless
through eight supreme decrees and a revision of the 1996 INRA
Law that would return to the state all land that did not
"fulfill a social function", that was unproductive, or for
which the titles had been obtained through fraud. On May 17,
the GOB told the press that President Morales would sign six
decrees that day for distributing between 2 and 4.5 million
hectares of state land to indigenous people and small
farmers, speeding up the land titling process, and
centralizing the structure of INRA to weaken local government
control over the titling process. Additional details of the
agrarian reform will reportedly be announced on May 31, as
part of the GOB's National Development Plan. The GOB has
already begun land audits in two provinces of Santa Cruz with
the intention of redistributing non-productive properties
within six months, according to the press. Press reports
indicate that land in western Bolivia that was redistributed
during the 1953 agrarian reform would not be affected.

Agriculture Minister to Speed Up Land Titling
--------------

5. Minister of Agriculture Hugo Salvatierra told the
Ambassador in a previous meeting (ref A) that the GOB would
implement expedited land titling procedures, particularly in
the eastern and northern parts of the country, "where cattle
have more land than human beings." According to Salvatierra,
land redistribution and titling had been going on for the
past ten years, but even though USD 87 million had been spent
on the process, only 14 percent of the national land had been
titled. He explained that the current titling procedure
required 704 days on average if there was no opposition, and
that the law provided for an expedited procedure that had
never been used. He said the government would implement an
expedited procedure, focusing on conflictive areas with
large, unproductive land holdings, particularly Santa Cruz,
the Beni, and the Chaco, and that this would help achieve a
"legal, economic, and social solution" to Bolivia's land
conflicts.

Santa Cruz Farmers Worried
--------------

6. The Eastern Agriculture Chamber of Santa Cruz (CAO) told
the press that it would not allow land reform to hinder
productive farming, putting Bolivia's food security and
exports at risk. Farmers in eastern Bolivia produce 22
percent of Bolivia's exports and the majority of the food
that is consumed domestically, including rice, sugar, oil,
and beef. CAO General Manager Edilberto Osignaga told us on
May 16 that the CAO supported the current INRA Law, which
contained mechanisms for resolving problems related to
non-productive lands and for land titling, but that the CAO
would not tolerate unilateral GOB actions that put the
productive capacity of the region at risk. He acknowledged
that INRA's land redistribution goals had not been fulfilled,
but claimed that this was because of poor administration
rather that defects in the law itself. He added that
whatever reforms the GOB enacted should guarantee the legal
security of production and incorporate the opinions of the
producers.


7. Because of the GOB's threats, producers were already
having difficulty securing credit, and the few investors in
the sector were beginning to look for options elsewhere,
Osignaga said. He lamented that if the GOB carved up the
eastern, large, productive farms into small parcels, the
agricultural sector would be destroyed, because small farms
did not have the necessary capital to successfully compete in
export markets.


8. The soy industry, which accounts for roughly seven percent
of Bolivia's GDP and provides around 150,000 jobs, might be
particularly hard hit. Brazilian Embassy Economic Officer,
Octavio Cortes, told Econoffs on May 12 that approximately
115 Brazilian-owned farms produced 60 percent of Bolivia's
soy and held 40 percent of Bolivia's soy-producing land.
Press reports indicated that Brazilian soy farmers had
invested around USD 1 billion in Bolivia during the last
decade. According to Cortes, few of these farms were within
50 kilometers of the Bolivian border. (Note: Operating a
foreign enterprise within 50 km of the border is generally
illegal without a special waiver from the GOB; thus,
Brazilian farms within such a radius would be particularly
vulnerable to expropriation. End note.) Furthermore, Cortes
added, these farms were productive and properly documented,
so the Brazilian Embassy was not worried that the GOB would
expropriate them. That said, the farmers were concerned.
Press reports on May 11 indicated that the National Agrarian
Reform Institute was investigating 250 rural properties owned
by Brazilians that were located less than 50 km away from the
Brazilian border with the goal of redistributing those lands.

Beni Cattle Ranchers Concerned
--------------

9. General Manager Carmelo Arteaga of the Beni and Pando
Cattle Ranchers Federation (FEGABENI) told us on May 16 that
the federation did not agree with the unilateral imposition
of GOB policies which might hurt the productive sector. He
said that the GOB's plans to redistribute land could impact
Beni's 8,000 cattle ranchers, as well as its farmers and
harvesters of brazil nuts, wood, and rubber. Arteaga
expressed his disappointment with Vice President Garcia
Linera's failure to fulfill his campaign promises to foment
production, stating that the GOB had done nothing to support
the productive sectors of Beni and Pando, but had rather made
their conditions worse through threats of land
redistribution. Garcia Linera asked producers to "calm
down," the press reported on May 17.


10. Arteaga explained that many people who worked the land
did not have titles because of the failure of INRA to
complete the titling process due to a lack of personnel and
resources. The lack of titles, he feared, would make those
land owners vulnerable to having their land taken away as a
result of the (still unclear) proposed GOB policies of
redistribution. The federation planned to urge the GOB to
complete the process of titling without taking land from
those that were using it to benefit the Bolivian economy, he
said. He feared that the GOB was looking for any
justification for which to expropriate land, and thus, the
federation had declared a "state of emergency" and planned to
hold a meeting with various social and business sectors to
formulate a response on behalf of the north-eastern
departments of Beni and Pando. According to Arteaga, the
majority of the population of those departments were opposed
to land redistribution.


11. Comment: Land is one of the most controversial issues in
Bolivian society and will be a focus of the Constituent
Assembly. The GOB's agrarian reform plans could shore up
support for the MAS administration from its bases prior to
Constituent Assembly elections, while further increasing
tensions between the western highlands and eastern lowlands.
The reform seems aimed, at least in part, at taking away the
basis of power, i.e., land, from the ruling party's strongest
regional rivals. The GOB appears to be following the same
tactic in land reform as in hydrocarbons nationalization and
combating corruption (ref B and C) -- issuing decrees that
overstep existing laws, usurping Congress' function, and
promising to negotiate with interested sectors and resolve
the legal mess later. End comment.
ROBINSON