LOWER HOUSE APPROVES FRAMEWORK FOR LAND REFORM

UNCLAS LA PAZ 003041

SIPDIS

SIPDIS

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

E.O. 12958: N/A
TAGS: EAGR ECON KJUS SMIG SOCI BL
SUBJECT: LOWER HOUSE APPROVES FRAMEWORK FOR LAND REFORM

REF: LA PAZ 2600


1. (SBU) Summary: The framework of the Morales
administration's controversial bill to modify the 1996
agrarian reform (INRA) law (reftel) was approved by the lower
house on November 7, after a week-long march by several
hundred indigenous people in the eastern lowlands. The
chamber of deputies must now approve each article of the bill
before passing it to the senate. The conflictive bill is
opposed by cattle ranchers in the East, who worry that the
bill could create legal uncertainty over land title, which
could lead to disinvestment, diminished production, and
violent conflicts. The bill is supported by social groups
and NGOs who believe that land reform is needed to resolve
social conflict, produce a more equitable distribution of
scarce resources, and rectify past injustices, such as large
tracts of land given unfairly to political cronies. End
summary.

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Indigenous March for Land Reform
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2. (SBU) The Morales administration presented a bill to
congress in September to modify the 1996 National Agrarian
Reform (INRA) law, in line with campaign promises to
implement an "agrarian revolution", and mobilized marches in
October to pressure congress to pass the bill (reftel). The
GOB has already redistributed some state-held lands, but has
taken little action thus far to revert privately-held lands
to the state. The press reported on November 1 that around
300 indigenous people from the eastern lowlands had begun a
march to La Paz, demanding congressional approval of the
reform bill and expropriation of lands that did not fulfill
an economic or social function. The march was projected to
last for 45 days, but ended on November 7 in Yapacani, Santa
Cruz after the lower house of congress approved the framework
for land reform. Opposition leaders claim that the
government staged the march in order to pressure congress.

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Lower House Approves Land Reform Framework
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3. (SBU) According to press reports, the chamber of deputies
approved the framework for land reform on November 7 but must
now approve the details before passing the bill to the
senate. Opposition Senator Walter Guiteras told the press
that 30 of the bill's 42 articles had been agreed upon by the
lower house. The framework agreement was approved after
agricultural producers from the eastern lowlands abandoned
the negotiations between the executive, legislature, and
social groups prior to the vote, complaining that the reforms
would not provide legal security to the productive sector.

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Cattle Ranchers Opposed to Reforms
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4. (SBU) In a meeting on October 31, members of the cattle
ranchers association of the Beni (Fegabeni) told Econoff that
President Morales is an enemy of the Beni, so there are no
GOB aid projects for the region. They had come to La Paz to
attend a meeting with Vice President Alvaro Garcia Linera and
other organizations on land reform. According to Fegabeni,
the meeting was a failure, with only about ten percent of the
reform proposals agreed upon by those in attendance. They
said that the GOB's land reform plan took away legal security
from land owners, because the GOB would be able to review at
any time, even after titling, if the land was being used in a
socially or economically beneficial way. If the government
determined that the land was not being used productively, the
land would revert to the state. They are worried that the
bill could create legal uncertainty over land title, which
could lead to disinvestment, diminished production, and
violent conflicts.

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NGO in Favor of Reforms
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5. (SBU) The General Manager of Fundacion Tierra (Land
Foundation),Jaime Burgoa, told Econoff on November 6 that he
was not sure why the government was pushing the INRA reform
bill since the law currently in place already gives the
government the legal basis that it needs to take over land
that is not fulfilling an "economic and social function."
Thus, the GOB is unnecessarily putting obstacles in its path,
he said. He was also uncertain why the government had
proposed a reform bill to congress, when it had initially
said the matter would be settled by the Constituent Assembly.
He speculated that the government had decided to confront
its political rivals in the east -- landholders in Santa
Cruz, Beni, and Pando -- sooner rather than later because it
felt strong enough to win the fight and also wanted to
maintain its popularity with its bases. Burgoa doubted that
even if the land reform bill was passed, the government would
have the institutional capacity to enforce it. He said that
lack of enforcement and institutional capacity were the main
problems with the current law. Because of a lack of
resources, the National Agrarian Reform Institute, which was
supposed to have completed the land titling process
nationwide within ten years (by October 2006),failed in its
mission. Its mandate was extended for another seven years in
October.


6. (SBU) Although Burgoa admitted that some of the opposition
worries were justified, he said that his NGO supported the
government's intentions regarding land reform, which was
needed to resolve social conflict, produce a more equitable
distribution of scarce resources, and rectify past
injustices, such as large tracts of land given unfairly to
political cronies. However, he thought that some of the
articles of the reform bill should be modified to improve
their effectiveness. For example, he said, if the government
were to compensate land owners for expropriated land, it
should calculate the amount of compensation based on the land
value used to calculate tax payments, which is low, rather
than the higher market value. He also suggested that the
size of cattle estates be limited to 10,000 hectares rather
than 50,000, that currently minimal land taxes be increased,
and that the government create a new form of title that
recognizes both the community and individual property rights
of indigenous people rather than just one or the other, in
accordance with the reality of indigenous areas. The NGO has
also proposed that land owners regularly file land plans to
be reviewed by the government to determine if land is
fulfilling a social and economic function as required by the
law.

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Comment
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7. (SBU) The passage of the land reform framework by the
lower house, although the devilish details remain to be
resolved and the law is likely to be blocked by the
opposition-controlled senate, will further boost President
Morales' popularity with the masses. However, the INRA law
reform debate and reversion of privately-held lands to the
state are likely to engender explosive conflicts and increase
regional hostilities during the next several months. Post
will continue to monitor the issue closely. End comment.
GOLDBERG