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Recurso localizado en: Regularización de los Derechos de Propiedad
Título Agricultural property rights and political change in Nicaragua
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Agricultural property rights and political change in Nicaragua

 

Latin American Politics and Society

 

Everingham, Mark

 

Fall 2001

 

Key words: land policy, política de tierras, property rights, derecho de propiedad, agriculture, agricultura, tenure, tenencia, land dispute, conflictos de tierras, Latin American Politics and Society

 

 

Link: http://www.findarticles.com/p/articles/mi_qa4000/is_200110/ai_n8959781

 

 

ABSTRACT

 

This study focuses on Nicaragua's transition from a revolutionary state to one oriented toward democracy and the market, through the political lens of agricultural property rights. The national agenda on property rights after 1990 was dominated by elaborate arrangements to accommodate kinship-based factions of the agroindustrial elite, core Sandinista constituents, rural labor groups, and demobilized peasant combatants. Bargains, legislative initiatives, and constitutional reforms failed to clarify legal ambiguity over coveted assets. Persistent conflict thereby became embedded in official efforts to design a robust property regime. The case of Nicaragua suggests comparisons with other countries where protracted confrontation and social violence over property rights pose serious threats to unconsolidated democratic institutions.

 

Modern nation-state building in Latin America has traversed dramatic episodes of violent clashes between the exercise of elite privileges and individual rights and the collective demands for citizenship and autonomy. The legacy of Spanish colonial rule, the selective application of liberal principles, and the imposition of legal injustice destined the institution of property to be a contested sociopolitical arena. Genuine experiments with agrarian reform registered an inconsistent record in diverse national contexts across Mexico, Central America, Brazil, and the Andes (Thiesenhusen 1995). The Sandinista Front of National Liberation (FSLN) forged a mixed economy in Nicaragua through the redistribution of agricultural assets expropriated and confiscated from an array of elite families and political enemies; but a decade of civil war left the countryside in a desperate state of economic decline and social decay. Under these circumstances, the FSLN could not withstand the pressures of international isolation and national electoral competition.

 

The conjuncture of electoral democracy and neoliberal ideology requires a fresh analytical perspective on the significance of property rights. This study focuses on Nicaragua's transition from a revolutionary state to an electoral democracy and a neoliberal economy through the political lens of agricultural property rights. The privatization of millions of acres and hundreds of enterprises after 1990 reflected political preferences for the unbridled market. Sudden political change and economic reform elicited intense responses from public and private actors during the centrist administration of Violeta de Chamorro (1990-97) and the Liberal government of Arnoldo Aleman (1997-2002). This analysis navigates the interaction between elite prerogatives for restitution and compensation and popular demands for the defense of acquired rights.

 

The national agenda on property rights has been dominated by elaborate arrangements to accommodate kinship-based factions of the agroindustrial elite, core constituents of the dismantled Sandinista state, rural labor groups, and demobilized peasant combatants. The assertion of family privilege, the preservation of revolutionary accomplishments, and the anxiety of economic uncertainty shaped individual and common forms of private ownership and intervened in the decisions of diverse producers and workers to participate in lucrative agroexport sectors. Ultimately, short-term negotiation among embattled Sandinista leaders, resurgent confiscated interests, and rejuvenated elements of the Liberal Party fostered an unstable institutional order and rampant legal ambiguity.

 

The central argument of this study is that persistent conflict became embedded in official efforts to design a robust property regime. The case of Nicaragua, furthermore, suggests a comparative perspective on other countries in Latin America and elsewhere, where lingering disputes over property rights prevent the consolidation of democracy and exacerbate the severity of poverty among rural populations.

 

AGRARIAN STRUCTURE AND POLITCAL CHANGE IN CENTRAL AMERICA

 

Comparative historical approaches to the study of political change recognize the role that modern capitalism played in redefining property rights in diverse geographic regions. A strong capitalist impulse among landed elites in Europe and North America caused fortuitous power shifts that altered the feudal mode of production, freed peasants from servitude, and facilitated democratic revolutions. A liberal social order underpinned a market economy confers no special privileges on account of birth or inherited status, security for the rights to property [and] the elimination of barriers inherited from the past on its use" (Moore 1966, 429). Overwhelming evidence from Latin America, by contrast, demonstrates that capitalist modernization did not lead to the rise of a landed elite who advocated the redistribution of land and the expansion of citizenship, but rather to a convergence of the modern enterprise and the servile plantation (Huber and Safford 1995; Zeitlin and Ratcliff 1988; Midlarsky 1992).

 

The bonanza of export agriculture in Central America after World War II neither subverted hereditary principles of land ownership nor broke the ties that bound the rural poor to precarious cultivation and marginal employment (Rueschemeyer et al. 1992, chap. 6). Landlords relied on military coercion to force peasant farmers to abandon communal land and exerted exclusive control over commercial export operations (Durham 1979; Bulmer-Thomas 1987; Williams 1986). TorresRivas describes succinctly the social basis of economic privilege across the region.

 

Land tenancy embraced the legal means of land acquisition .... Sanctioned by the state and derived from old usages and customs, the legal norms for private property grew out of [traditional] social relations of production, thus constituting the structure of [modern] rural society. (1993, 81)

 

Recent comparative analyses of Central America focus on how elite relations influenced regime change in the second half of the twentieth century. Gudmundson (1995) evaluates Moore's thesis by examining the variety of rural class structures and elite factional infighting that led to "radically divergent political outcomes" (1995, 171). Yashar (1997) identifies enduring democracy in Costa Rica and brutal dictatorship in Guatemala with the opportunity to form a multiclass coalition. The breakdown of elite political unity and the mobilization of popular sectors in the late 1940s vaulted Costa Rica into an uninterrupted period of democracy. The subversion of genuine agrarian reform in Guatemala in the early 1950s, like the repression of peasant uprisings in El Salvador in the early 1930s, was the antecedent to low-intensity class and ethnic warfare that lasted until the 1990s (Dunkerley 1988; Paige 1993; Handy 1994; Gleijeses 1991; Brockett 1998, 1992; Booth 1991).

 

Internecine skirmishes among Liberal and Conservative factions in Nicaragua subsided after World War II with the convergence of the traditional plantation and the modern enterprise in the coffee, cotton, sugar, and cattle sectors. Consequently, Liberal and Conservative clans spawned distinct business groups: the Somoza family and the clique of the National Liberal Party, the Banco de America (BANAMER) of the Conservative families from Granada and Carazo, and the Banco Nicaraguense (BANIC) of Liberal factions from Leon and Chinandega (Vilas 1992). The encroachment of the agroexport economy on farmers engaged in the cultivation of basic grains, and the hardships of the seasonal harvests suffered by rural workers, exacerbated class tensions, particularly on the rich Pacific plains (Biderman 1982; Paige 1985; Gould 1990).

 

Although the FSLN recruited reliable supporters among peasants and rural labor in the late 1970s, the revolutionary movement assumed a multiclass character from 1977 to 1979. The desire for electoral democracy and economic freedom inspired dissidence within the elite toward dynastic legitimacy, but popular resistance to repression and injustice destroyed dictatorial rule (Everingham 1996; Chehabi and Linz 1998). The revolutionary coalition's balance of power tilted steeply in favor of Sandinista mass organizations that wanted to dispense with traditional authority and economic hierarchy.

 

The Government of National Reconstruction (1979-84) intended to eradicate the legacy of neopatrimonial dictatorship (Snyder 1992). In July 1979, Decree 3 ordered the confiscation of property of the Somoza family, National Guard officers, and Somocista civil servants. In August, Decree 38 justified state intervention in the financial transactions, real estate, and enterprises of individuals with direct ties to the dynasty. The Ministry of Agricultural Development and Agrarian Reform (MIDINRA) claimed it would redistribute about 23 percent of the arable land without impinging on the integrity of remaining private property. But the popular stampede toward land ownership trampled heavily on the property rights of a privileged but divided elite.

 

In July 1981, the government announced Decree 760 to permit the confiscation of assets deemed abandoned or idle for at least six months. In the same month, Agrarian Reform Decree 782 charged MIDINRA with the responsibility to transfer and title all public land under the broad parameters of Decree 760. High officials of MIDINRA were members of Conservative clans with whom Sandinista guerrillas had had close ties during the insurrectionary period. Thus, expropriation and confiscation did not have a dramatic impact on the family networks underlying the private property and financial interests of the BANAMER group (Vilas 1992, 330).

 

State actions under Decrees 760 and 782 affected more than 1,500 properties and an additional 10 percent of arable land between 1981 and 1988. The majority of non-Somocista land was seized from BANIC and prominent leaders of the High Council of Private Enterprise (COSEP) (CIERA 1989; Spalding 1994, 1998; Colburn 1986). Appendix 1 presents a chronology of executive and legislative actions and constitutional reforms that affected agricultural property rights from 1979 to 2000 (see also Ministerio de Finanzas 1995).

 

The overall program of agrarian reform affected 34 percent of arable land, but only 12 percent fell under the control of public corporations. Colburn (1990) investigated how the desire for political legitimacy outweighed the necessity of economic efficiency in the Sandinista management of state enterprises that produced cotton, coffee, sugar, beef, banana, rice, and tobacco. The expected benefits of the "revolutionary mentality" caused state officials to ignore the dismal performance of the mixed economy. The Sandinistas acknowledged this stark reality by implementing, in 1988, a series of austerity measures designed to revive the confidence of large private producers (Ryan 1995, 229-37).

 

The redistribution of confiscated property signified a revolutionary break with the past, but the logic of the Cold War and administrative ineptitude prevented the Sandinista government from achieving the consolidation of popular democracy in the countryside (Kurtz 1999; Berntzen 1993). Although the 1987 Constitution guaranteed the "democratic coexistence" of public, private, communal, and cooperative property, the Sandinista government failed to secure formal tenure for individual small producers and cooperative members who represented critical components of the revolutionary alliance (Enriquez 1991; Martinez 1993).

 

When the FSLN imposed austerity measures in 1988, members of the Sandinista Agricultural Cooperatives (CAS) expressed concern for the precarious legal status of reformed areas; only 55,000 of the 120,000 households located in cooperative zones had received private titles. Before the FSLN relinquished executive power in April 1990, it attempted to protect land expropriated by Decrees 3 and 38 and property affected by the Agrarian Reform Decree 782. Still dominated by Sandinista deputies, the national legislature passed the Law of Protection of Agricultural Property in March 1990. Law 88 guaranteed land rights acquired by individual producers, cooperatives, and indigenous communities that had received titles between 1980 and 1989, and granted the full disposition of ownership through agrarian reform. The hasty formulation of the law, however, exposed serious flaws in the titling methods.

 

The literature treats elite responses to dramatic political change as a matter of historical contingency, but an understanding of the dominant ideology of the upper classes goes much farther to explain it. The agroindistrial elite in Nicaragua defined liberty primarily in terms of the protection of private property (Paige 1998, 279-80). Confiscated groups complained about the lack of democracy in the face of seemingly arbitrary decisions. The perceived lack of respect for individual rights motivated a variety of elites to support counterrevolutionary forces in the 1980s much as COSEP members affiliated with BANIC and BANAMER had opposed the Somoza regime in the 1970s. Embittered former landowners saw the apparent Sandinista failures as an opportunity to rectify the illegal and immoral acts perpetrated against their entire families. Of course, Paige considers "the sinews of property and blood" in Central America, as Moore (1966) saw aristocratic privilege in Europe, to be obstacles to liberal democracy (1998, 320).

 

THE POLITICS OF AGRICULTURAL PROPERTY ROGHTS AFTER DEMOCRATIC TRANSITION

 

Democratization in Latin America over the past 15 years has highlighted the capacity of prodemocratic elites to reach consensus on new institutional arrangements (Higley and Gunther 1992). Careful institutional design enhances the ability of new democracies to overcome authoritarian legacies (Remmer 1997; Snyder and Mahoney 1999; Lijphart and Waisman 1996). External pressures for market reform have accompanied democratic pacts that secured the property rights of economic elites who withdrew support for military dictatorships.

 

The neoclassical school considers the absolute protection of property rights as essential to an efficient market economy. Secure property rights constitute the foundation of credible institutions and the rational behavior of self-interested actors that facilitate the accumulation of capital and economic growth (North 1990). The institution of private property becomes contested if competing interests do not recognize existing and acquired rights to ownership (Getzler 1996).

 

The return to democracy under the neoliberal ethos kindled the desire among large capitalists to guarantee the legal protection of property rights (Huber and Stephens 1999). At the same time, the urban working classes and the rural poor expressed collective demands for the defense of tenuous rights of citizenship (Yashar 1998; Becker 1996; Thompson and Wilson 1994). Therefore, the definition and the protection of property rights have a complex political dimension (Fligstein 1996). Modifications to property regimes are contingent on the interaction among organized groups of capitalists, labor, farmers, and government agencies, which may not automatically promote economic efficiency (Caporaso and Levine 1992; Stein 1994; Przeworski and Limongi 1993; Goldsmith 1995). Recent studies of the former Soviet Union and Eastern Europe illuminate how asymmetric bargaining power had distributional consequences in the privatization of state assets Who et al. 1996; Appel 1995; Comisso 1991). The construction of democracy in Nicaragua after 1990 rested squarely on the issue of property rights (Williams 1994; Everingham 1998).

 

The recommendations of international financial institutions guided the Chamorro government in privatizing prime agricultural land and related assets that were nationalized between 1979 and 1988 (BCN 1990). In May 1990, the Chamorro government created the institutional wherewithal to liquidate state corporations. The National Corporations of Public Administration (CORNAP) published the details of more than 1,500 decisions to privatize 351 enterprises of 23 state corporations in a document released in early 1996 (CORNAP 1995).'

 

A mechanism of accountability was invoked after privatization was nearly complete. Constitutional amendments in July 1995 strengthened the ability of the Comptroller General of the Republic to evaluate the financial transactions of state corporations. The comptroller conducted a series of certifications in 1995 and 1996 on the validity of financial arrangements made by private entities to purchase state assets. The results were issued only to Dayton Caldera Solorzano, who served as CORNAP president during the Chamorro term, but they would become the subject of public scrutiny and political debate in the late 1990s.2

 

The initial stage of privatization was rife with "spontaneous" acts that benefited close allies of the Somoza regime. A 6,800-hectare banana plantation was returned to Alfonso Callejas Deshon, vice president for Anastasio Somoza Debayle's first term as president (1967-72). In the mid-1970s, Callejas organized Liberal dissidents against Somoza (CORNAP 1995, 2 BANANIC, 9). Five coffee farms of 4,800 hectares in Matagalpa were returned to Daniel Somarriba Padilla, a former legislative deputy of the National Liberal Party (CORNAP 1995, 3 CAFENIC, 21). Ten properties, including pastures and equipment in the Department of Managua, were returned to James Spencer Matus. His father, Donald Spencer, was the director of the Somocista cattle finance agency founded in the early 1960s. A 5,300-hectare ranch in Boaco was returned to Fernando Aguero Rocha, a Conservative politician, who struck a deal with the Somoza dictatorship in 1970 to accept minority representation in the legislature that emasculated the National Conservative Party (CORNAP 1995, 17 HATONIC, 296, 298, 299). Harvesting equipment, a cotton gin, and 4,000 hectares were retrieved by the Arguello Cardenal family, a prominent Liberal player in the politics of cotton cultivation in Leon from the 1950s to the 1970s (CORNAP 1995, 1 AGROEXCO, 2, 4, 6, 7).

 

The National Commission of Review of Confiscations (CNRC) opened a concurrent comprehensive investigation that brought a barrage of claims against Decrees 3, 38, 760, and 782. The success of several Somoza family members and associates in achieving the immediate return of coveted property led Sandinista legislators to challenge the CNRC's jurisdiction (Bar?Icada 1991a). The Supreme Court declared unconstitutional an executive decree that allowed the CNRC to transfer property rights without judicial review. Nevertheless, the voice of the confiscado resonated with the anti-Sandinista members of CNRC, who responded rapidly to the claims filed by prominent business leaders (Barricada 1991b). The initial agenda focused on those properties that could be returned intact, or in large portion, to non-Somocistas (Barrycada 1991 c, d).

 

Ramiro Gurdian, a former COSEP president, retrieved 75 percent of the Nicaraguan Banana Company and a share of an extensive plantation devoted to export cultivation in Chinandega. Several investors, including Gurdian, reestablished a joint venture with the Standard Fruit Company that had been suspended in 1983 (CORNAP 1995, 2 BANANIC, 8). Nicolas Bolanos, an original member of the CNRC, retrieved 3,500 hectares and the industrial complex of the Agroindustrial Systems of Masaya, Inc. (SAIMSA). SAIMSA was constructed with stateof-the-art technology during the cotton bonanza of the 1960s; but the FSLN converted the plantation and processing plant to a basic grain project after SAIMSA was confiscated in 1985 (CORNAP 1995, 17 HATONIC, 285).

 

El Rosario cattle ranch in Leon was returned to the Arguello Teran family as part of the privatization of 41 properties of the Agropecuaria La Union in March 1991. The family received expedited treatment during the CORNAP and CNRC reviews, which found no reasonable explanation for confiscation (CORNAP 1995, 17 HATONIC, 292; CGR 1996a). Carlos Knoepffler Wheelock, a descendant of German immigrant coffee growers who had emigrated in the late nineteenth century, regained control of the largest coffee-processing plant in the country, the Industria Grano de Oro. He is a member of a prominent Conservative family related to former Sandinista commander and agrarian reform minister Jaime Wheelock Roman (CORNAP 1995, 3 CAFENIC, 23; CGR 1996c).

 

The specter of intractable disputes motivated the Chamorro government to seek compromise between elite constituents and Sandinista opponents. In August 1991, Sandinista labor unions and former military officers, the Sandinista National Union of Farmers and Ranchers (UNAG); and former landowners associated with the conservative Nicaraguan Union of Agricultural Producers (UPANIC), negotiated 8 separate agreements to privatize more than 80 state enterprises. The Economic and Social Agreements of the Concertacion provided Sandinista workers and managers the opportunity to acquire up to 25 percent ownership of total assets and to establish livelihoods in numerous agroindustrial enterprises (CIPRES 1992a, 82-89). The Concertacion influenced the CORNAP process, circumvented claims in the CNRC, exacerbated tensions among competitors located on polar opposites of the political spectrum. In early 1994, the National Assembly designed a new law to fortify the integrity of property as an important individual right. Law 209 guaranteed the legality of titles granted to peasants under agrarian reform before February 25, 1990, sanctioned the indemnification of former owners, and recognized the legitimacy of the 1991 commitments.

 

The law passed through a constituent assembly engaged in wholesale constitutional reform. The democratic coexistence of multiple forms of property in Article 103 remained intact. But the objectives of agrarian reform were modified to prevent the abuse of private property through arbitrary confiscation and to establish the right to indemnification for expropriated owners (Constitution politics 1996a, 15-16, 1996b, 28-31). The constitutional overhaul did not mollify many confiscated Nicaraguan Americans or about two hundred U.S. citizens in Miami, who pursued a dual strategy of litigation and compensation. Under pressure from the U.S. State Department, the Chamorro government convened an international conference to formulate a "definitive" solution to disputes over large properties and to discuss bond compensation for former owners. When an executive decree implemented subsequent modifications to Law 209 in January 1996, the Association of Confiscated Persons, the Association of Confiscated Americans-Nicaragua, and the Association of Bondholders argued that the "illegitimate" acts perpetrated during the process of privatization still had not been addressed (La Nacion 1995; Carter Center 1995; IDB 1995).

 

As CORNAP dispensed with state assets, divided bureaucratic loyalties and contradictory administrative procedures jeopardized the critical phase of titling. The Nicaraguan Institute of Agrarian Reform (INRA) was founded in September 1991 as a component of the National Program of Land Measurement, Titling, and Registration. INRA provided technical support to the CNRC between 1992 and 1996 in the reconsideration of 10,600 titles to 615,000 hectares of land affected by Law 88 (INRA 1997, 73-90, 107; Nunez Salmeron 1994, 5-8). INRA also attempted to deal with legal insecurity in the countryside by issuing 32,000 titles to nearly 700,000 hectares that benefited more than 39,000 families (INRA 1997, 114-18). The recipients were required to complete onerous procedures, any one of which could elicit legal challenges given the prior existence of valid titles (Argiiello Vega 1997). An independent study estimated that more than 160,000 rural households had some kind of title defect (Stanfield 1995, 12-22).

 

Arturo Harding Lacayo, who replaced a Sandinista as INRA director in July 1995, and independent experts noted that despite the expenditure of $650 million on bond compensation and dispute mediation, the magnitude of the property problem still overwhelmed state capacity to resolve disputes (Harding Lacayo 1998; Trackman et al. 1999, 2; Ministerio de Finanzas 1996). Executive decree, legislative action, and constitutional reform resulted in rampant legal ambiguity rather than solid institutional stability.

 

LAND TENURE AND ECONOMIC GROWTH AFTER PRIVATIZATION

 

Table 1 accounts for the evolution of land tenure from 1988 to 1996. The data do not necessarily indicate a complete reversal of agrarian reform in the 1980s. The minor change in the percentage of the largest land holdings attests to the infrequency of wholesale returns of large plantations and to the success with which the FSLN protected the sanctity of Decrees 3 and 38. Farms in the private sector of over 140 hectares constituted less than 23 percent of arable land in 1996, compared to 52 percent in 1978. Medium and small private producers maintained control of nearly 50 percent of farmland during the tumult of the revolution and the transition to democracy. The politics of agricultural property rights, however, generated a unique transformation of the reformed sector. The preference for individual ownership and the defense of cooperative and workers' rights to land necessitated creative arrangements in the most lucrative agricultural areas.

 

Intense competition over the distribution of agricultural property rights shaped the postrevolutionary political landscape in the department of Chinandega. Chinandega had been a crucible for the modern agroindustrial elite and the awakening of popular activism in late 1950s and early 1960s. Sugarcane plantations and cotton estates dominated the region during the export boom after World War II. The liberal meaning of property rights contradicted the popular struggle for autonomous community in the Pacific zone. Somocista Liberals and BANK cotton barons manipulated the definition of private property to a degree that sparked fierce peasant resistance and labor mobilization. The Association of Rural Workers (ATC) established its revolutionary credentials in 1978 with a series of disruptions of agroexport operations on cotton and sugar plantations in Chinandega (Gould 1990, chap. 12). The ATC leadership organized 60,000 peasants into the Sandinista Agricultural Cooperatives (CAS) on large estates seized from the Somozas and other landed interests after 1979 (CIPRES 1995, 7-8). In September 1989, CAS and ATC leaders advocated the creation of a land registry for the entire reformed sector, but the government did not seriously pursue the proposal (Brockett 1998, 181; Enriquez 1997, 49-57; Martinez 1993, 481; Ryan 1995, 229-37; Stahler-Sholk 1990, 55-88).

 

This situation substantiates Gould's insight that "a failure to fully understand the evolving campesino notion of private property . . . led some FSLN militants to stumble over their own ideological rigidity while politically educating people who have risked their lives in the struggle for land and national liberation" (1990, 304). The ATC responded to the privatization of the AGROEXCO corporation in Chinandega and Leon with the creation of the National Agricultural Union of Associate Producers (UNAPA). Common property rights are collectively managed by an associated membership of not necessarily coequal owners (Quiggin 1993, 1126-27; Stein 1994, 1835-37). UNAPA partners cultivate peanuts, sesame, and tobacco for export and sorghum and rice for domestic markets, on land previously devoted to cotton (see table 2). ATC and UNAPA president Edgardo Garcia, a prominent Sandinista legislator, facilitated the titling of common private property between 1991 and 1995 (CIPRES 1994a, 1995, 59-62, 77-79).

 

The breakup of enterprises allowed elite families who dominated the erstwhile cotton empire and sugar and banana production to reassert control over export operations (ATC 1990, 16-17; CIPRES 1994b, 52; Joankin 1996). The sons of BANK cofounder Jaime Montealegre Montealegre reacquired three large cotton farms and a processing plant; Arturo Montealegre Seydel retrieved five hundred hectares and harvest machinery. Carmen Deshon Cabrera and Enrique Mantica regained eight cotton properties between the villages of El Viejo and Tonala (CORNAP 1995, 1 AGROEXCO, 7; Gould 1990, 161-81). But former soldiers and demobilized peasants were granted eight thousand hectares and harvesting equipment confiscated from the GasteazoroMontealegre clan of former BANK cotton growers (CORNAP 1995, 1 AGROEXCO, 3, 4).

 

Carlos Pellas Chamorro, son of BANAMER cofounder Carlos Pellas Benard, negotiated the return of the Ingenio San Antonio and its 20,000hectare sugar plantation in Chichigalpa. The sugar refinery is the heart of the Nicaraguan Sugar Estates Limited and a pillar of the commercial investments of the Pellas family. By the mid-1960s, it was the largest producer of raw sugar for export in Central America, but it was confiscated in 1988 because of declining production and deteriorating facilities. The Sandinista government had agreed to compensate the Pellas family, but failed to meet annual installments. The Monterosa refinery in El Viejo was seized from the Lacayo-Montealegre clan in January 1980 and nationalized under the abandonment law in February 1982. The CNRC issued a favorable decision to four siblings in February 1991, and CORNAP arranged the return in July 1992 (CORNAP 1995, 10 CONAZUCAR, 170, 173; CGR 1995a). Alfonso Callejas Deshon and Ramiro Gurdian own majority stock of the only banana plantations in the country under the Concertacion agreement with UNAPA workers (CIPRES 1992b, 91-95; CORNAP 1995, 2 BANANIC, 8, 9).

 

Shared ownership and common property were typical in other regions where poor farmers and rural workers faced the elimination of state employment and subsidies. Sandinista workers acquired approximately two thousand hectares of prime pastureland and ranching equipment in Rivas that was previously owned by principal BANAMER investors. Carlos Holmann and two brothers were among the few BANAMER members whose property became part of the Sandinista state. The Holmann family left Nicaragua in late 1978 after the FSLN attacked strategic military installations in several urban areas (CORNAP 1995, 17 HATONIC, 285; Everingham 1996, 154-55).

 

Sandinista workers and managers acquired collective ownership rights to the Nicaraguan Meat Corporation in Rivas, Esteli, Managua, and Chontales. But Jose Argiello Cardenal negotiated a compromise with CORNAP officials and Sandinista workers for the return of 93 percent of the Matadero Amerrisque in Juigalpa (CORNAP 1995, 6 CNC, 51, 56, 57, 60; CIPRES 1992a, 104-8; CGR 19966). Sandinista interests also established a substantial foothold in the lucrative sugar industry with total ownership over the Benjamin Zeledon, Javier Guerra, and Victoria de Julio refineries. Sandinista workers founded a finance cooperative, the FONDOAZUCAR, to coordinate planting and harvesting with sugarcane growers (CORNAP 1995, 10 CONAZUCAR, 168, 172, 174; CIPRES 1992b, 98-100).

 

In addition to these large properties, thousands of private commercial farmers who supported the revolution joined UNAG in the 1980s. Many prominent members came from Conservative families whose farms and ranches were not affected by agrarian reform (Vilas 1992, 327-33; Paige 1998, 298-302). With a current membership of more than 60,000 private producers and cooperative farmers, UNAG continues to represent a formidable counterbalance to the large landowners of UPANIC. Several UNAG leaders own 87 percent of the Nuevo Carnic, the largest exportoriented slaughterhouse in the country. Although UNAG terminated its formal alliance with the FSLN in the early 1990s, the UNAG-sponsored Nicaraguan Union of Coffee Growers maintains strong ties to coffee cooperatives in Matagalpa, Carazo, Managua, Jinotega, and Granada and sesame growers in Chinandega. Of total export production, UNAG farmers produced 60 percent of beef and milk and, together with UNAPA enterprises, 56 percent of coffee and 90 percent of sesame by 1996 (Miami Herald 1997a; Spalding 1997, 258-64; Edelman 1998).

 

The neoclassical faith in market forces anticipates greater efficiency and accumulation on achieving stable property rights. Once the Chamorro administration imposed strict neoliberal discipline, agriculture and related industry were essential to the success of market recovery. But the political turmoil of privatization inhibited the growth of gross domestic product and hampered the performance of key agroexport sectors between 1991 and 1993. The dismantling of state corporations accelerated during 1994 and 1995 as Sandinista and other elite capitalist interests reached political settlements on private ownership.

 

Table 3 indicates robust overall growth during the period 1994-97, spurred by rejunvenated agricultural production in key export sectors. Consequently, agriculture as a percentage of GDP climbed to 33.8 percent in 1997 from 20.8 percent under Sandinista rule in 1988. In that year, the Sandinista government provided export incentives to large private producers, which led to postive growth in agricultural GDP in 1989. This trend was short-lived, however. Clear signs of recovery were not evident until the Chammoro government demonstrated its ability to sustain the momentum of privatization in 1994 and 1995.

 

The Central Bank of Nicaragua was sanguine about the continued expansion of traditional export crops. Bananas, coffee, sugar, tobacco, and meat slaughter accounted for nearly two-thirds of total export value and 42 percent of the economically active population (BCN 1998). The coexistence of large individual capitalists, producer cooperatives, and worker enterprises in these sectors appeared to auger well for the national economic health. In addition, ground nuts and sesame became more important as UNAPA and other growers substituted these staples for cotton in the Pacific zone. New business groups also founded the Nicaraguan Association of Producers and Exporters of Nontraditional Products and successfully promoted fruits and vegetables that amounted to 6 percent of total exports by 1998 (Miami Herald 1997b; Spalding 1998, 164-65).

 

The revitalization of export operations, however, occurred in the midst of the elimination of state credit. Elite families associated with the former BANIC and BANAMER groups repatriated some capital in response to the surging demand for credit. Lending for the biannual agricultural cycles gravitated from insolvent public institutions to new private banks between 1991 and 1995. By 1997, nearly 80 percent of all financing came from six private lenders (BCN 1998).

 

The vagaries of climate and the fluctuations of international prices unfortunately revealed the vulnerability of export-agriculture in the late 1990s (see tables 4 and 5). The warm Pacific current El Niio and Hurricane Mitch dashed optimism for unabated growth during critical planting and harvesting cycles in 1997 and 1998. The lack of sufficient rain caused by the former and the massive flooding instigated by the latter had catastrophic effects in Chinandega, Leon, and Esteli. These regions endured damage of more than two hundred thousand hectares and 70 percent of the delayed or lost harvests, valued at $52 million. Some cooperatives engaged in the production of sesame, ground nuts, and basic grains suffered the loss of entire harvested areas, forcing the government to relocate ten thousand producers (La Prensa 1998j, k).

 

The sugar and banana industries felt the effects of Mitch in the form of lower yields and complications related to transportation. Because the sugarcane fields were widely dispersed, the area harvested remained relatively constant as five refineries expanded operations. But the San Antonio and Monterosa refineries and 11 banana plantations in Chinandega did not recover full capacity to serve the export and domestic markets until late 1999 (La Prensa 1999b, c, d).

 

Substantial drops in export prices for traditional and nontraditional crops exacerbated the impact of bad weather on a broad range of large and small producers across the country. Export earnings for bananas, beef, coffee, and refined sugar fell by an average of 20 percent between 1998 and 1999. The export value of fruits and vegetables dropped 30 percent in the same period, even though the area harvested remained constant (La Prensa 1999b; BCN 2000). Cyclical rebounds in sugar, sesame, ground nuts, and coffee in late 1999 and early 2000 enabled the agricultural sector to recover some of the massive setback (IDB 2000a, b). The inconsistency of macroeconomic indicators certainly entailed negative consequences, as much for resurgent elites in traditional sectors as for new participants in the marketplace. The data on land tenure and economic performance should not disguise the complexity of the problems that small-scale individual farmers, cooperative members, and agricultural workers, who received land and other assets from the privatization of the reformed sector, encountered with regard to the legality of titles and the inaccessibility of credit.

 

PERSISTENT CONFLICT OVER RIGHTFUL OWNERSHIP

 

The outcome of the 1996 national election exacerbated existing political conflict over rightful ownership and intensified the struggle over viable livelihood. The victory of Arnoldo Aleman and the Liberal Alliance in October 1996 raised optimism among thousands of claimants who were disappointed with the Chamorro government's willingness to accommodate Sandinista objectives. Confiscado constituents considered the inauguration of Enrique Bolanos as vice president a clear signal that past injustices would soon be corrected (La Prensa 1997). The Liberal transition team quickly indicated its intention to pursue full return or compensation for U.S. citizens and Miami-based Nicaraguan elites, who pressed more than 1,500 pending claims. This attitude inspired the Confederation of Associations of Confiscated Persons to file multiple recursos against Law 209 with the Supreme Court.

 

Soon several relatives of Anastasio Somoza Debayle filed simultaneous claims with the CNRC and the Appeals Court to retrieve 50 properties, including the Julio Buitrago/Montelimar sugar refinery in San Rafael del Sur and a cattle complex near Managua (Alarid 1997; El Nuevo Herald 1997; La Nacion 1997c). A Sandinista leader, Bayardo Arce Castano, commented,

 

The Aleman government revived the problem of property by announcing that it was going to return everything. That is the problem of property ... to incite the whole world to issue claims and at the same time to refuse to grant titles and formalize property rights which were created by the Revolution and the Chamorro government. (La Nacion 1997d)

 

The claims of some prominent figures of the Miami contingent were particularly complicated by the inadequacy of the titling and registration systems inherited from previous regimes. For example, the Sandinista government issued a cooperative title, and the Chamorro government issued an individual title, to a 1,600-hectare cattle ranch near Managua, seized from an American, William Walker. Walker refused to accept a bond and continued to press his claim with the CNRC (INRA 1997, 189). Curtis Hentgen, president of the Association of Confiscated Americans-Nicaragua, insisted that he obtained a favorable decision from the CNRC for the return of a 4,200-hectare cattle ranch in Boaco; but a Sandinista cooperative retained a title granted by Law 88 (INRA 1997, 187; Committee to Recover Confiscated American Properties, 1995). Luis Cerna, president of Nicaraguan Bondholders Association, continued to pursue the return of a 3,400-hectare cattle ranch in Juigalpa, Chontales, while he held a bond that suffered a series of devaluations between 1993 and 1996. The ranch is linked to the Amerrisque slaughter facility, where the Arguello Cardenal family struck a compromise on ownership with Sandinista workers in 1992 (Cerna 1994; CORNAP 1995,17 HATONIC, 299).

 

The groundswell of political pressure for a legal remedy prompted the Liberal administration and the FSLN to negotiate new property legislation. The Law of Reformed Agricultural Urban Property (Law 278) was promulgated in February 1998 to replace the "flawed" Law 209 of 1996 so that effective mediation and adequate compensation could resolve protracted disputes over more than one hundred thousand titles. Vice Minister of Finance for Property Matters Guillermo Arg0ello Poessy appealed to the confiscados in Miami for patience (Miami Herald 1997c; La Nacion 1998a; El Nuevo Herald 1998). He advocated centralizing administrative procedures into a single agency that could expedite the work of the CNRC (Argiello Poessy 1997). Just after Law 278 went into effect, in April 1998, however, the Supreme Court issued an order to disband the CNRC, when it found that the agency had authorized the return of properties already titled to other parties and for which the previous owners already had received indemnification. The decision forced claimants to pursue their cases exclusively through the courts (La Prensa 19981).

 

The Interamerican Development Bank estimated that the $2 billion necessary to compensate three-fourths of the original owners, whose large estates could not be returned in their entirety, would jeopardize the national economic health. Instead, it was more practical to focus on the remaining one-fourth of the claimants whose plantations had not been broken into smaller plots. Consequently, the bank provided a $200 million loan to bolster the budget for bond indemnification (La Nacion 1998b; La Prensa, 1998a; IDB 1998).

 

Over the next two years, the steadfast promises of the Liberal leadership to make compensation more attractive increased the number of claims from Nicaraguans living in the United States. Nearly five hundred Nicaraguans holding either U.S. or dual citizenship appealed to their senators and representatives in Florida and other states for to help them regain confiscated property or compensation for it. But the burgeoning workload overwhelmed the Nicaraguan courts and administration. Despite bond payments in 1999 equivalent to 22 percent of exports and 31 percent of debt service, the number of pending cases reached nearly 1,600 by March 2000. As a result, Republican and Democratic leaders in the U.S. Congress decided to tie further official assistance to Nicaragua to faster results on the property issue (La Prensa, 1998b, 2000e, 2000f; La Nacion 2000a).

 

The Aleman administration also mounted a simultaneous assault on the credibility of the state privatization carried out by the previous government. The new CORNAP director and Liberal and Conservative deputies in the National Assembly revisited the certification project initiated by the former comptroller general, Arturo Harding Lacayo, in October 1995. They argued that CORNAP had disposed of over 90 percent of state enterprises strictly on the basis of political favoritism and bogus financial commitments.

 

In the first stage of the certification process, for example, Harding Lacayo had focused on the privatization of large assets, especially the sugar refineries. Contrary to what the titleholders claimed, his investigation of Victoria de Julio did not find any written evidence that a consortium of Sandinista entrepreneurs and French investors paid the full price of the refinery, valued at $14 million.3 He also did not discover any evidence of the ability of the refinery's workers, who organized themselves separately as La Empresa Azucarera de los Trabajadores, to meet the amortization schedule on a loan to purchase part of the plantation (CGR 1995c; La Naci6n 1997b; Interview with Harding, 1998).

 

The case of the Julio Buitrago/Montelimar refinery, one of the Somoza family's 1997 claims, was also controversial. The Azucarera Lacayo Montealegre and Swiss investors made the only bid, in March 1993. A tentative agreement was reached with the government in April 1993 to sell 75 percent of the refinery for $3 million. The original CORNAP decision, however, was superseded by executive decree in June 1993. The majority portion was sold to the Desarrollo del Pacifico Nicaragdense, and 25 percent went to the Sandinista Empresa de los Trabjadores Azucareros for a total payment of $4 million (CGR 1995b).

 

Attorney General Julio Centeno G6mez asserted that the 1991 Concertacion agreements on the Victoria de Julio, Javier Guerra, and Benjamin Zeledon refineries were a false pretense to cede majority control of the sugar industry to Sandinista elites. Ironically, he requested the annulment of titles to the Zeled6n and Guerra refineries on the basis of protests by several hundred plantation workers and cane growers, who contended that the Sandinista finance cooperative, FONDOAZUCAR, excluded them from profit-sharing arrangements. This position caused severe acrimony between the Liberal administration and the comptroller general, Agustin Jarquin Anaya, a Social Christian who replaced Harding with the support of the Sandinista legislative bloc. Harding left his post in April 1996 after criticizing irregular bidding policies on state assets between 1991 and 1995 (La Prensa 1996). Jarquin consistently refused to perform audits on the financial statements of the sugar refineries, and a Managua district judge threw out the attorney general's request for a court order that would have forced Jarquin to do so in early 1999 (Centeno Gomez 1998; CIPRES 1994a, 17-18; La Nacion 1997a; La Prensa 1998c, g, h, m, 1999a).

 

The Liberal administration exploited the dubious nature of Sandinista de facto proprietary concerns, partnerships, and cooperatives. The multipronged investigation touched entrenched Sandinista operations, including a former AGROEXCO enterprise in Chinandega. The original owner, Angel Molieri Baca, appealed to the attorney general with regard to Santa Cristina and Llano Verde properties that were expropriated in 1979 and granted to a UNAPA enterprise in 1995. Molieri Baca claimed that the UNAPA partners did not comply with the payment schedule of a state lease to grow peanuts and sesame. Ironically, the president of the UNAPA concern, Elias Jiron Baca, is the nephew of the original owner (La Prensa 19984; CORNAP 1995, 1 AGROEXCO, 7; CIPRES 1994b, 1-2). The genesis of the dispute dates to violent clashes between the Molieri and Deshon families and peasant activists who invaded the former cotton plantations in June 1977 (Gould 1990, 279).

 

In the wake of El Nino and Hurricane Mitch, CORNAP revealed that the owners of 42 sugar, sesame, and ground nut enterprises, 37 coffee farms, 15 tobacco plantations, and 59 cattle ranches in the Pacific zone, valued at a total of $30 million, had failed to comply with payment schedules on state leases in conjunction with the Concertacion accords. The bulk of their assets were located in Chinandega, Leon, and Esteli where UNAPA partners were active. The report also referred to land controlled by former military officers and Contras, a counterrevolutionary military and political organization that the Reagan administration supported in an effort to overthrow the Sandinista regime, in Managua, Matagalpa, and Chontales.

Aleman personally charged the Chamorro regime with perpetuating the myth of "ghost cooperatives" and violating a 1995 law that prohibits the sale of state assets worth more than $25,000 without prior legislative approval (La Prensa 1999e). Former minister of the presidency Antonio Lacayo, in turn, defended the Chamorro government.

 

It is very unjust to say that we gave away the country. There was a revolution here and the Sandinistas seized the country, including the farms of (President] Aleman. A democratic government came to office in 1990 that tried to bring about justice and returned property that it could. (La Prensa 2000b)

 

The rancor even stirred dormant animosity between former ideological enemies over a 1,500-hectare estate and 17,000 head of cattle in Chontales. The property was expropriated, by Decree 38, from Alejandro Montiel Argaello, who had served as Anastasio Somoza Debayle's foreign minister and ambassador to the United States from 1967 to 1979. The land and herd were divided among Sandinista workers and former military officers through the privatization of a HATONIC enterprise in 1994. In 1996, several hundred former Contras and local squatters established de facto occupation of a large portion of idle pasture. The occupants insisted that they had received promises of legal title from CORNAP and INRA as part of a compensation program for demobilized combatants. A group of Contras subsequently appealed to the Liberal administration without satisfaction. In August 1998, armed assailants stormed the area and killed four people, ostensibly at Sandinista behest. Ensuing reports suggested that the Argiiello Montiel family was bitter about the Chamorro government's willingness to cede control of the property to Sandinistas, and therefore encouraged the former Contras (CORNAY 1995, 17 HATONIC, 286; La Prensa 1998e, f).

 

Violent clashes and legal gridlock relegated the question of rightful ownership to a bargaining chip between the most powerful political forces. The FSLN could balance the stigma of illegality against the reluctance of Liberal officials to give special consideration to the property claims of Somocista interests. When the surviving children of the SevillaSomoza clan filed 342 claims for property restitution in 1999, Sandinista legislators enjoyed the support of their Liberal rivals on a vote to ratify the enforcement of Decrees 3 and 38. The attorney general stated, moreover,

 

For reasons of a historical and political nature, we consider the Somozas to be the only persons properly affected [by Sandinista confiscation]. From a moral and historical perspective, we reached an administrative decision that the Attorney General for Property Matters would not indemnify any member of the Somoza family. (La Prensa 1999f, 2000c)

 

Meanwhile, the FSLN used the issue of debt on leased property to negotiate with Liberals on constitutional reforms. The package modified legislative powers over the selection of magistrates, changed the eligibility criteria for the national and municipal elections of 2000, and required only 35 percent of the vote to win the presidential election of 2001 (La Prensa 2000a). This gamesmanship created a context in which the government sought to amend Law 278. Aleman's proposal stipulated a strict timetable for debt cancellation and"lease compliance by 2002, at the risk of seeing titles granted by the Concertacion invalidated (La Prensa 2000d).

 

Neither official agencies nor independent researchers have identified a systematic distributional shift in land tenure from 1997 to 2000. But we could surmise that the credit crunch, legal weariness, and price volatility generated momentum in favor of large owners and constraints on private actors from the reformed sectors in agroexport production. Diverse representatives championed the cause of demobilized peasants and rural workers who suffered the insecurity of title and the inaccessibility of credit. Striking a cautionary chord about "the rebirth of the servile plantation," the ATC sponsored a legislative initiative to establish new sources of public finance to fill the void left by the liquidation of the National Development Bank in February 1999 (La Nacion 2000b).

 

Of course, the ATC represents a constituency limited primarily to the UNAPA organization. The unpaid debt on state leases and public loans, and high interest rates and title provisions for private loans, disqualified cooperatives and workers' enterprises from critical sources of additional credit necessary to meet planting schedules after 1998 (La Prensa 19980. The imperatives of the marketplace, moreover, limited the ability of many rural producers to sustain their livelihood. The National Federation of Agricultural Cooperatives discovered that several members had abandoned cooperatives around Managua and illegally had sold idle land at discount prices. Other individual farmers succumbed to the relentless legal onslaught of the younger members of elite families in pursuit of their birthright (La Prensa 2000g; New York Times 2000).

 

CONCLUSIONS

 

The breakdown of traditional agrarian structure and the disruption of established patterns of land tenure in Nicaragua opened new space for the mobilization of peasants and rural labor. The FSLN's victory in 1979 certainly hastened an abrupt departure from neopatrimonial rule, but it did not lead down a direct path to popular democracy. The multiclass character of the Sandinista revolution and the intervention of the Cold War preserved the complex network of elite kinship ties to agricultural property rights in the 1980s; but a decade of ideological conflict and economic decline and subsequent competitive elections brought the contrast between elite liberal ideology and popular social exigency into full relief. The sudden convergence of electoral democracy and neoliberal principles thrust the institution of property into a contest between resurgent confiscated interests and embattled Sandinista constituents.

 

The political dimension of property rights reflects the uncertainty of regime change when new governments are compelled to define the meaning of ownership and to advocate the interests of strategic constituents. Elite appeals to protect individual rights, and popular will to defend rights acquired from revolutionary sacrifices, both shaped the political arena. Alternative forms of private property established a precarious balance between the reformed sectors and the reconstituted estates of traditional elites in lucrative agroexport markets. The distributional consequences of privatization enabled diverse producers and workers to make significant contributions to real growth after 1994. The bargains, legislative initiatives, and constitutional reforms sponsored by the Chamorro government, however, failed to clarify the legal ambiguity hovering over coveted assets. Persistent conflict became embedded in the institutional weaknesses that left thousands of farmers and workers vulnerable to economic uncertainty and relentless legal challenges. Thus, official efforts to design a robust property regime failed to reconcile the protection of individual freedom and the social benefits of ownership (Henry 1999; Thiesenhusen and Hendrix 1995; Hendrix 1996-97).

 

The transformation of politics in Latin America placed a premium on durable institutions, given the unpredictability of democratic elections. Lingering problems, such as civilian control of the military, the extension of citizenship, and human rights violations, prevented the consolidation of democracy in posttransition settings (Vilas 1996; AgOero and Stark 1998). The rejuvenation of Liberal politics after the 1996 election ignited a firestorm against Sandinista proprietors, workers' enterprises, and cooperatives.

 

The pressures of electoral timetables and the subjectivity of political considerations often lead to "the negotiation of extra-institutional arrangements [that] promise to be more profitable than following institutional rules" (Lechner 1998, 31). The willingness of the Liberal administration and the FSLN to use property rights as bargaining chips in the late 1990s indicates that the resolution of legitimate ownership hinged on short-term electoral advantage rather than on the long-term objective of institutional durability. The case of Nicaragua suggests comparisons with other countries where protracted confrontation and social violence over property rights pose serious threats to unconsolidated democratic institutions.

 

The negative social impact of neoliberalism, furthermore, is apparent in Central America less than a decade after the cessation of civil war and the transition to democracy (Paige 1998, 360-61). The alarming rate of poverty in the Nicaraguan countryside verifies that large portions of the economically active rural population cannot withstand the imperatives of the marketplace (World Bank 1998). The volatility of international prices and the inaccessibility of credit have shifted economic power in favor of large capitalists with secure titles. The globalization of the neoliberal orthodoxy has eclipsed previous regimes around the world that placed high priority on the problems of distribution and inequality (Huber et al. 1997).

 

At the Second Summit of the Americas, held in Santiago de Chile in April 1998, heads of state and international policy experts agreed that the insecurity of property rights contributes directly to the severity of poverty in Latin America (ISPI 2000). Official consensus at the interamerican level dramatizes how contemporary disputes over the meaning of property rights affect the quality of democracy and the prospects for shared prosperity in the neoliberal era (Lustig and Deutsch 1998).

 

NOTES

 

1. The document is organized by numbered sections for each corporation and its corresponding enterprises. The sections contain information on the beneficiaries of each act of privatization. The document is cited hereafter with the corporation's number and acronym and the number of the enterprise.

 

2. An executive assistant to the comptroller general, Agustin Jarquin Anaya, provided access to the certification archive in May 1998. The reports will be cited hereafter as CGR.

 

3. The Cuban government had donated the Victoria de Julio refinery to the FSLN as a gesture of revolutionary solidarity in 1980. Because machinery and equipment that were confiscated from Cuban and U.S. proprietors after Fidel Castro took power in 1959 constituted the refinery, and because it was always listed as state property in Nicaragua, the Aleman government insisted that the refinery could not be sold to Nicaraguans or foreign interests.

 

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Mark Everingham is an associate professor of political science and social change and development at the University of Wisconsin, Green Bay, and an associate member of the Center for Latin American and Caribbean Studies, University of Wisconsin, Milwaukee. He wrote Revolution and the Multiclass Coalition in Nicaragua (1996). His current research explores the connections between property rights, poverty, and democratic citizenship in contemporary Latin America.

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Contribuido por: Paola Alfaro
Fecha de Publicación 2001
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