Rattling the Pastoral Scene

LHD-8 Santiago, Chile October 23, 1966

While parliament in this capital prepared a law of agrarian reform, peasants on farms to the south proved this month that a revolution already is under way in rural Chile -- they went on strike at the height of spring planting.

Ten years ago the peasants of Colchagua Province would not have dared nor even considered defiance of their employer-patrons. For that matter, the state of agriculture would not have been a likely topic in the national Congress. But the traditional pattern of farm life here -- a tenant system conferring absolute power on the landowner -- has been subjected to the judgment of a new generation and found to be an economic and social failure.

The economic charge is sustained by the fact that this onetime not exporter of food is spending $100 million per year, nearly a tenth of the national budget, on net imports -- of milk, meat, wheat and even potatoes, products that most experts feel could be grown in surplus. The social accusation is that 2 million peasants among the nation’s 9 million people have remained virtually outside the money economy, proscribed by the educational, political, health and housing inadequacies of the old system.

Now agriculture’s future is to be determined by politicians and technicians and perhaps even organized peasants, rather than by the big farmer who has ruled so long. Passage of President Eduardo Frei’s land reform bill is expected before the rains of another winter. His Christian Democratic Party’s majority votes in the lower house and plurality in the Senate are expected to be augmented by those of the Marxist Popular Front opposition.

Rightwing parties that once predominated have led a delaying opposition that seems remarkable since only 3000 landowners are expected to lose any property. And compensation may well be complete. But while recent elections have seen dissolution of much of the landowners’ political power, enactment of the law calling for deferred -payment expropriation of extensive holdings signals a definitive assault on the Chilean oligarchy’s ultimate redoubt -- the land. The debate now laid out across Chile’s, vibrant political spectrum is thus a crucial one, loud if not always enlightened, and rarely with the benefit of unimpeachable statistical support. Even within the heavy majority calling for agrarian reform there are wide disagreements over what form it should take. Foreign and domestic experts differ between and among themselves over the causes of the agricultural malaise as well as its proper cure.

One of the most piquant arguments of the opposition in this land of free and hard politics is that the agrarian reform issue is being used for political ends. Similar accusations are rife in the related matter of the peasants’ organization. The charges are easily verified but would seem to prove only that on these points the politics reflect the Issues of basic concern to the country. In Colchagua, for instance, the landowners and the government as well denounced the peasants’ strike as a political maneuver of the Socialist-Communist Popular Front that controlled the union in conflict. If this is true, it is also true that the strike signifies the emergence of a new peasant: a man who feels he has a role in the national life at last and who wants to stand firm in self-defense. Perhaps the politicians are using him, but there is more to the story than that. And the Communists’ was not the only union on strike. But first a description of the current Chilean agriculture and rural society, how it got this way, and how it is expected to change.

The Skinny Cornucopia

Chile’s agricultural geography reads like this: The northern third of the country is desert. While there are interesting experiments in reclamation that might one day be important, and while there is some valuable farming along the transverse rivers running the 100 miles or so from the Andes cordillera to the sea, production is relatively high-cost and insignificant.

In contrast, the central zone, beginning just north of Santiago and continuing south for about 300 miles, produces almost half of the farm output. It comprises only 12 percent of the total territory but its central valley, lying between the Andes and lower coastal rings, endows the zone with 40 percent of the total arable land. Since there is virtually no rain during the long summer growing season, irrigation is a necessity. But there is sufficient water running to the Pacific from the Andes. The soil is often rich and the result is production of wondrous fruits and vegetables, grains and cattle, but on a scale far smaller than the valley is thought to be capable of.

Chile’s southernmost sector comprises considerably more than a third of its great length. Rain is abundant, with dairy and wheat farming favored in the southern extreme of the central valley, this giving way to forest in a region of lakes and finally, in the extreme south, to extensive sheep herding.

In all, according to the Minister of Agriculture, Chile offers over 13 million acres susceptible to cultivation -- but not half actually are used. When this figure is combined with others that indicate low production per acre, per man, and per unit of capital, the frustrating image of an attenuated agriculture emerges. For years production increases have failed to keep up with the annual population increase of about 2.5 per cent.

What’s Wrong

Explanations of how this situation occurred are diverse, most of them probably true in part but none of them unchallenged.

PRICES -- Large landholders tend to blame Chile’s pricing system. They cite lack of incentive to produce when the state fixes prices at a level too low for profit. Price fixing is rampant and usually has been during the long years of the unwon battle against inflation. Through mistakes or mischief, products often have been undervalued in the past and they continue to be. One example is milk. Few doubt that Chile could produce enough to meet domestic demand and export as well.

Twenty years ago, when supply more nearly equaled demand, the price per liter --approximately a quart --that was paid the producer equaled about 8 U.S. cents. (Chilean currency prices are converted here and throughout the article by using a figure midway between the official exchange rate and what the dollar brings on the black market. The economies are so different that any attempt at conversion is bound to be inaccurate.) Over the years the inflation outran the increase in milk prices until in 1964 the producer received only 5 cents. The consumer was paying only 6 cents, indicating a subsidy. Over the last 15 years domestic production of milk dropped from 111 liters annually per inhabitant to 92, according to the Ministry of Agriculture. The herds shrank, and annual milk imports doubled in five years.

These imports are of dried milk, which upon arrival is mixed with imported butter fat to form an unenjoyable fluid that is marketed in an often unhealthy, and slow hand way through the streets, Lately many families are mixing their own from a box. In May, the government moved to save the industry. It raised the producers’ price by 50 per cent; standardized two now milk styles, roughly equivalent to whole and skimmed milk; and raised consumer prices. The whole milk still costs only about 10 cents and the “poor man’s” 8 cents. The Communists profess to sea in this a plot to under nourish the working man, and the satirical Topaze had a circus of cartoons -- such as that of a mother carting twins, one a bounding round in the Chilean tradition, beside his skin-and-bones brother, and she explaining that the family could only afford luxury milk for one.

The government feels that with the new price level the dairy farmers will have the incentive to rebuild the herds and that eventually some of the $10 million in imports can be home-grown. A critical test will be whether milk prices are raised annually to offset entirely the rise in the cost of production.

As plausible as is the price argument for explaining the atrophy of some production, it does not serve as a general explanation. Studies have shown that in other products, where demand was increasing, a profit incentive seemed assured, and readjustment for inflation was complete, production nevertheless failed to increase or did so slowly. Figures of the Agriculture Ministry indicate that as a whole the food price index has actually become increasingly favorable to the farmer over the last five years.

The example of milk prices illustrates a more specialized price argument heard here as elsewhere -- that free or low-cost agricultural imports sap national initiative to fulfill needs. Much of the milk, and wheat, imports have come from U.S. surplus stocks under assistance programs that offer terms far more attractive than any national producer could match. However, the trend of national stagnation seems to have run ahead of the resorting to aid imports.

CREDIT -- Another legacy of the inflationary economy, and no doubt a stimulant to it simultaneously, has been the high cost of credit. Sometimes it has scarcely been available at any cost, and usually it has come only to those patient or resourceful enough to conquer the inertia of a bureaucracy-minded society with a passion for form filing. The same has been true in the imports credit field.

On the other hand, attempts to break this pattern have resulted occasionally in lines of credit through the official bank that, after inflation, have resulted in loans at negative interest rates. For varying reasons, even these loans often were scarcely subscribed except by a few producers who had access to funds anyway. Credit at reasonable terms for financing of annual crops as well as that for expansion of plant seems to have gone to large landholders in the main. Such loans as were available to smallholders were usually at usurious rates. The present government has expanded activity of agencies extending credit to workers of small tracts.

OTHER GOVERNMENT PROGRAMS -- Explanations for the poor performance of the farmers also include the following: inadequate provision of current statistics on prices and plantings -- the government has failed to announce at what level it will fix the purchase price of crops until after their planting season passes, thus denying the farmer information basic to his rational planning; corrupt and antiquated marketing facilities that drain profits; inefficiency resulting from low-performance farm labor, which in turn results from lack of investment in basic services such as schools and hospitals in rural areas.
While these allegations imply weak government institutions, Chile in said to be far better endowed and more sophisticated institutionally than most underdeveloped countries. When weaknesses are observed, foreign experts often have been called in. Few countries have received more foreign advice and aid for agriculture (these programs will be discussed later).

TAX POLICY -- This is the classic argument that had taxes on the farmers been higher, they would have produced on their land or sold it. Some progressive taxation of unused land is being imposed. But this has not been accepted as a sufficient corrective policy because the land sales thus forced would not be likely to fulfill the social end of aiding the landless peasant, and the pressures from the taxation would build up at too slow a pace for the need.

A related detail on taxation is the finding that agriculture contributes far less than its share of taxes, based on its proportion of national income.

There is an undocumented feeling that recently production has taken a sharp tumble because of uncertainty created by the campaign for agrarian re-form. On the other hand, some experts had hoped that the threat of the reform would spur the farmers to greater production. There is no evidence of this either.
LAND TENURE--Since the farmer has failed to respond to incentives as would be expected given his resources, would-be reformers looked for flaws and found them in the land tenure system. Most of the endless fragmentary studies have long indicated the excessive concentration of land ownership. Early this year a group called the Inter-American Committee on Agricultural Development (called CIDA for the initials in Spanish) published a massive study that collates all previous findings in this area and adds a great deal of now material. The sun of the 400 pages of facts, findings and Interpretations is a strong argument for redistribution of Chile’s land. CIDA is one of the acronymical offspring of the Alliance for Progress, formed from such international organizations interested in Latin American agriculture as the Food and Agriculture Organization, the Organization of American States, the Inter-American Bank and the United Nations Economic Commission for Latin America. Though such an august international group would seem to be above polemics, its report has become both a weapon and a target in the battle of agrarian reform.

CIDA’s study illustrates that a great deal is, and is not, known about the anatomy of farming in Chile. It points out clearly that much of the source material is of questionable accuracy and it seems to take this into account when drawing conclusions. But some respected critics of the study have attacked not only individual conclusions. They have questioned the methodology. In turn, the influential Mercurio newspaper chain has used these criticisms in the almost daily chapters of its campaign against agrarian reform. Mercurio has gone a step further to question the objectivity and qualifications of the CIDA investigators, and to suggest that the group -- which included several North Americans --took a Marxist leaning in the study.

Disinterested observers are in short supply here on this question of agrarian reform, and thus on the CIDA report as well. But an informal survey of independent readers indicates: by a narrow margin, that the CIDA effort is a reasoned and not polemical presentation; by a wide margin, that the report is more objective than the bulk of its critics, certainly including Mercurio.

Some of the findings include the following:

• Figures of the 1955 agricultural census indicate that the active farm workforce consisted of 577,000 people, but that the agricultural output of that year should have been accomplished with 363,000. One of the complaints about the study is that it used ‘55 figures, but the ‘65 census figures were not then available. CIDA officials say that the new figures indicate little substantive change on the farm in 10 years.

• Tenant farmers in the central valley provinces work an average of 265 days per year, and workers of the hired hand variety work 185.

• Very small holdings of land comprise less than 10 per cent of the usable land, but support 25 per cent of the active farm population and produce 15 to 20 per cent of the total value of farm output. The minifundia is farmed intensively with high yield per acre but low yield per man, and little attempt is made to prevent soil deterioration.

• Of 1.2 million acres of irrigated land in the central provinces, 15 per cent was planted in cereals at the time of the 1955 census, 17 per cent in artificial pastures, 10 per cent in vegetables, 8.2 per cent in fruits including vineyards, and 41.5 per cent in natural pasture. An undetermined amount of the last category pertained to land with irrigation problems, but the figure is generally interpreted as showing an ineffective use of prime land.

• Three per cent of the farm families received 37 per cent of the total farm income in 1960. Their average income was 12 times the overall farm average and 26 times that ct the typical small landholder.

• A study by Nicholas Kaldor 18 quoted as finding that “in Chile the personal consumption of property owners absorbs 21.2 per cent of the national resources, while in the United Kingdom it only represents 7.4 per cent.” A study in 1960 of 20 large landholders suggests that this class spends 84 per cent of its disposable income on consumption, and that “if they only spent 50 per cent of their disposable income, and invested the rest . . . the not national investment would almost double.”

Through the massing of such material, the report supports the thesis that the large landowner is not responsive to normal incentives. He in unlikely to respond to the challenge of introducing more efficient forms of exploitation because the present methods, though offering small profits per unit, provide cumulative income sufficient by his lights. His retention of the land freezes smallholders in their tracts and even encourages further subdivision of under the pressure of population.

A difficult-to-measure contributing factor is the social structure of the countryside. It has centered on the owner of the big farm, the fundo. Prestige seems to have been measured more by the extent of a man’s fundo than by the efficiency with which he exploits it. His workforce consists of peasants who live on the farm in housing provided by the patron. The housing is said to be below minimum health standards in over 80 per cent of the cases. Often it is unbelievably poor. The peasants often work a small portion of land allotted to them, while they spend most of their time tending the owner’s crops. Historically they have been dependent on the owner for all their needs, a relationship that has nurtured a paternalism that not only continues on the farm but has carried over into urban life as well. In addition to the tenants, the fundos might also support workers with other relationships to the patron -- a larger portion of their income in land, or in cash -- but the pervasive pattern is for pay to be at a subsistence level, with productivity likely to be equivalent.

Down through the central valley there are countless exceptions to this picture -- fecund lands laid out in the manner prescribed by the best agronomy texts, ordered orange groves that are a glimpse of Valencia, occasionally decent worker housing, fat cattle under the sun -- but the old order is still the writ. This has not been broken up by the flux to the city, though 70 per cent of Chileans now are urban. It has not changed sufficiently to thwart a drop in the average national calorie intake from 2577 daily in 1935 to 2200 today.

The conclusion of the CIDA report is that the old agricultural order must be replaced. This was also the conclusion of the Christian Democratic government that was voted into power two years ago with a decisive majority.

The Legislation

A constitutional amendment altering property rights was approved this month by the Congress, with only the conservative National Party voting in opposition. This was a necessary first step toward broad agrarian reform. It would allow expropriation of farmland with virtually no cash payment and compensation by bonds of at least 25-year maturity. It also would establish that water resources belong exclusively to the national government. President Frei vetoed the version passed because it left to Congress the right to determine the rates pf payment for expropriated land. From the start the President has pressed a more moderate approach to land reform than has a goodly portion of the Congress. He will insist on re-passage of the amendment in a form placing power in the executive, and he doubtless will get what he wants.

Legislation already approved forbids further land subdivision without approval, a means of avoiding the future law’s intent through paper sales.

The agrarian reform bill itself is entering the last stages of the convoluted legislative process and is still subject to amendment. But the feeling seems to be that the law will be substantially as the Frei government proposed in November of last year. It reflects a year of detailed drafting and six years of position formulation on the part of the Christian Democrats.

Three of its principal drafters are key people in present-day reform politics in Chile:

• Hugo Trivelli, Agriculture Minister, who as executive director of CIDA in 1962 organized the seven national studies that included the book titled Chile: Tenencia de la Tierra y Desarrollo Socio Economico del Sector Agricola.

• Rafael Moreno, 30, executive vice president of the agency that will manage the land and the settlers on it under the new bill. It is called the Corporacion de Reforma Agraria (CORA). He in a Party militant who led the Christian Democrats to important victories among the university youth in the late 1950s.

• Jacques Chonchol, executive vice president of the agency that offers credit and technical assistance to smallholders. It is called the Instituto de Desarrollo Agropecuario (INDAP), meaning Institute of Agricultural and Cattle Development. He is an author and agriculture expert formerly with the Food and Agriculture Organization.

President Frei campaigned on the issue of agrarian reform in 1964, although it was not in his platform in his losing 1958 contest. The first Christian Democratic-proposed bill on agrarian reform was submitted from the Party’s then opposition bank in 1961, and Frei has been a strong supporter of the concepts ever since. As in many reform issues, the Christian Democrat proposals have not differed greatly from the Marxist Popular Front’s in the area of agricultural reconstruction.

Under the legislation now before the Congress, land would be redistributed by fixing a maximum-size farm and expropriating lands hole beyond that limit. The basic limit of 200 acres (80 hectares) of top-grade, irrigated land would be kept flexible, with actual acreage running higher or lower according to local conditions. By one estimate, the farm which big owners would be allowed to retain would thus be worth $50,000 to $80,000. If the owner should meet fixed social and economic standards that, for Chile, are extraordinary -- such as payment of profit sharing and high wages to workers and use of soil conservation and high-output practices -- he can keep 800 basic acres. Though the standards for the extra allocation do not seem particularly demanding, a Chilean agronomist estimates that no farm here presently could muster. The bill also would provide that abandoned or very ill run farms could be expropriable in full.
Court procedures are to allow ample appeal of decisions taken by a council in charge of expropriations. But the law is to specify that land can be taken at the outset, with settlement later according to the terms approved by the courts. Payment is to be for the full-appraised value of the land and fixed improvements. But the percentage paid in cash will be determined by a scale descending from 10 per cent to 1 per cent, with account taken of the reason for expropriation. A farm with little tilled land would bring only 1 per cent cash payment. The owner will receive long-term bonds for the remainder. The total value of the bond will be met in annual payments, which will be partially readjusted for inflation. The readjustment will be for 70 per cent of the inflation rate, or lose, depending again on the reason for expropriation. If these conditions are met, and if the Frei government succeeds in its goal of lowering inflation from the present 25 per cent annually (versus 50 per cent in years past) to 5 per cent or so, the owners will receive what is broadly considered an equitable payment for their property. If inflation runs uncontrolled, the bonds will be worthless before their 25-year span.

The next stop in the transformation will consist of a 3-yr.”Settlement” (asentamiento) period for the expropriated farm. The peasants that pertained to the farm, or others when appropriate, will form a committee that with the assistance of the national government’s technicians will run the property. The hopes for the settlement period are many; it is seen as a means to avoid complete disruption of production on the farm while the ordeal of reaching agreement on its subdivision takes place. The government will use the period for educating the peasants in betterment programs. The sufficiency of technical assistance is considered both critical and conjectural over the five-year period during which 100,000 peasants are to be provided land.

Chonchol of INDAP, the assistance agency, feels there will be enough practical technicians to lead the asentamientos, as many of the fore men on present big farms could they will need extensive training and orientation, he adds, of a type more social than technical. They must learn that they are to follow the general guidelines set by the settlers’ committee, not tell the committee in which direction it should go. The more complex job of guiding the asentamientos will usually require agriculture school graduates or the equivalent. International agencies are helping to operate training centers, and their output is expected to increase.

The settlement period is to last three years. During that time the settlers are expected to have eliminated any non-producers from their midst. If the land, or the men, present particularly difficult problems, the asentamiento halfway house can be extended two years. The most important decision that the settlers will take is that which will fix the form of the farm’s future exploitation. At the end of the period the peasants will be given land titles.

On the form of titling, the bill again is flexible, allowing fox settlers’ cooperatives to take joint-title, for each peasant to obtain his own plot for his personal exploitation, or for individual land titles but joint exploitation of the farm. The decision will be up to the settlers, though the geographic conditions and crop specialization are expected to dictate. The norm is generally foreseen as subdivision into family farms, the size varying according to crop and soil, from 10-20 acres upwards.

The plot size is key and much debated. U.S. experts advising Chile in one agricultural capacity or another often argue from their own experience, saying that the United States has only with difficulty increased the size of its farms. Why does Chile want to break up its farms as it approaches the mechanized era? A persuasive counterargument is offered by one U.S. economist with FAO here. He cites figures indicating that in fact the U.S. trend also is toward the family farm, the size again varying with the crop. But the U.S. farm family can exploit a larger acreage in most cases because of mechanization; nevertheless the family unit is maintained as the most efficient from the standpoint of farm management. Of course the U.S. capital investment runs far higher, 8 to 10 times higher than the $8000 per family that the Chile plan envisions.

Even if Chile had such capital, it is felt that the agricultural future here is not in crops amenable to great mechanization, anyway. Chile would be content to import much wheat, for instance, if it could export wheat quantities of more labor-intensive fruits, nuts and vegetables that are grown at good profit on smaller units. Chonchol stresses that in such cases as orchards and vineyards, the farms would be exploited as a unit -- with the settler holding title to his acres but not physically detaching them from the others.

Peasants will receive the obverse credit of the bonds given to owners of expropriated farms: long-term payment, only partial readjustment for inflation. Eventually there is to be housing, provided at reasonable terms. The only outright subsidy that the settlers will receive, says CORA, is in interest rates below the commercial cost of borrowing. The new land titles will carry provisos: non-producers are to be evicted and their land resold, further subdivision of distributed land will be forbidden, and mortgages are to be allowed only through approved lenders. The bill proscribes non-peasants from participating.

No one can say how much it all will cost, nor just how effectively it will be financed. The original goal of resettling 100,000 families during Frei’s 6-year term has now been pushed off two years to 1972. A drop in the price of copper, or even a drop in agricultural production, could cause further slow up. Advocates are betting that farm output will rise faster than costs from the outset, though this is rot considered a prerequisite for overall success. Much of any production increase initially will and should go into the stomachs of the peasants.

There are about 250,000 peasant-family candidates for the land. The government estimates that each will cost $8000 over 25 years. Most of the expense will come in the first six years, the cost over that period estimated at $350 million, in national currency. CORA planners figure land costs at on* third of the overall outlay, and they rely heavily on peasants’ payment for the land in order to meet obligations. This creates a potential government interest in allowing inflation to run at a high rate -- land could be paid for with depreciated currency. On the other hand, such a policy would probably be damaging to the government’s total financial program. And bondholders will have a vested interest in keeping inflation down.

Although settlement will continue beyond the first six years, not all peasants can receive land. The expectation is that with the great expansion of the money economy, opportunities will open in the countryside for processing, small industry and services, which will absorb the landless. One determinant of the amount of land available for distribution is the ability to bring water to it. The irrigation system is known to be inefficient, but no one knows what must be spent to bring it up to requirements.

The Template

The Frei agrarian reform law actually will be Chile’s second this decade. Its predecessor has proven far more helpful to a true rural revolution than its designers ever intended. That law was passed in 1962, during the regime of conservative Jorge Alessandri. It provided for land expropriation but required cash payment in full on acquisition. Accordingly, almost no land was taken; the little that was redistributed went to people financially sound enough to have bought it without the help.

But the law did create a bureaucracy concerned with the land. When the Frei agrarian reformers came to power they had the tools, in the CORA land reform agency and the INDAP technical assistance agency, to begin work while the legislature debated (INDAP is actually the revival of an institution through which Chile participated in a now-forgotten U.S. program of farm assistance during the ‘50s). With land that the government already owned, CORA got some settlements underway that are beginning to pay statistical dividends as laboratories of agrarian reform. Manned by the Frei team, CORA carried out some expropriations. As the big landowners weigh the likelihood of their being affected by the impending law, many are coming to CORA to sell out under the old law. CORA says that it has taken about 250 fundos comprising 200,000 acres of irrigated land and over a million dry acres. And the other result is that the number of anticipated expropriations has been lowered from 4000 to at least 3500 and probably 3000.

On The Asentamiento

About 4000 families live on asentamientos now, some with 200 together, others with only 6, CORA offers figures that show so far not only net profits but higher income per head than on the same farms before. It is still too early to say where the wins and losses are, but visits to the budding settlements give a vivid impression of what the future here may look like.

Ono of the least imposing, smallest, but surely most full of hope is La Monica, less than 20 miles from Santiago by highway but a century away in sophistication. It takes its name from the expropriated farm; most seem to, without rancor. I visited it on a Saturday morning, unexpected, when a cold wind was blowing a last bit of winter rain into the end of September.

The settlers were planting potatoes, in long rows cut through the turned dirt by a plow that was made from the trunk of a tree. A big bay pulled it. One settler went down the row scattering fertilizer from his apron, and the others followed with the seed potatoes. The 20 one-time tenant farmers and hired hands worked down the rows in their bare feet, or sandals cut from old tire bodies. The settlement leader stood in the cold with red ears, answering the visitors’ questions. He had been overseer on a fundo nearby, had come over to CORA because the asentamiento idea sounded good to him.

This was their first season, and they were betting all they had on those potatoes. CORA had provided the seed spuds, the imported fertilizer (Chile has a monopoly on natural nitrates, but phosphates needed in the central valley must come fro abroad), the money to buy the horses. The peasants had beard about some CORA wheat seed that turned out to be bad. They couldn’t afford to lose this one. The 400 acres of La Monica had been pruned off the original farm really, the old owner keeping the house and the other capital investments -- except for the peasant houses, and it was easy to see why he hadn’t bothered. They were made of straw and mud, and the” only running water was in the irrigation ditch nearby.

In one of the two-room houses there were 14 people. The mother and father had five children, two of them working with the father in the settlement. One of the girls lived in town, worked at a factory, and brought her illegitimate children back to her parents. All of the endless children of this family attended school, five miles away by bus, “but not every day, not when it rains.” A few more than half of the heads of family were said to be able to read and write. The same ratio is thought to hold overall for Chile’s peasants.

One building, a sort of pretentious tool shed, was the meeting hall and headquarters of the settlement. The records were there, in a table that sat on the dirt floor, notebooks with neat entries of purchases and sales. Right now it was all purchases. The consumer committee learned that it could buy cheaper in Santiago than at the stores nearby, so it rides in via a CORA truck now. In the old days they bought from the fundo store. Just about everything is better now than then, according to most of the settlers, but one old woman disagreed. “He was a good patron -- cigarettes were cheaper then, and so was beer.”

Asked if any of the settlers belonged to a peasant union, the leader looked startled. “Why should we want a union? We don’t have a patron.” The committee had met formally twice since June. Some people didn’t say anything at the meetings, but they all came. The asentamiento leader is directly responsible to a man called the chief of the asentamiento --a trained technician assigned by CORA. The chief had visited only twice since June. He had nowhere to live there, but CORA was building him a modest house that was almost finished. The workers seemed to respect him, too, but they said that their biggest problem was the lack of a plan for exploiting the farm, and that was the responsibility of the chief.

Outside the meeting hall was a big new and very green tent property of CORA, where the adult settlers met at night under the bare light bulbs to learn to read, or to learn how to coax more potatoes from a hectare, or to find out how to buy more protein on the same family budget.

The settlement had only one-piece of major capital really, a tractor, and the settlers treasured it. Two drivers and a mechanic kept it running daily from 6 in the morning until 10 at night.

There was no marketing cooperative or any kind of cooperative, but the idea was beginning to occur to the settlers. Each who was asked whether he was satisfied with the joint exploitation of the asentamiento said yen, but each also said that he wanted his own land after the three years. Studies indicate that the pattern runs 9-1 on this question among all the settlements.

As soon as they got their land, or before if possible, the settlers want housing. Or at least they want help in fixing up what they have. In a couple of houses the wind came unimpeded through gaps opened an earthquake or two ago. The rats entered the same way. One woman busy cleaning her hovel had come with her husband from another fundo just to join the asentamiento. She saw opportunity in those sagging walls and she was out to reap it, and she was a little disdainful of her neighbors with their dirty yards. At the next house an old bachelor was weaving furniture from reeds in his off hours. He sold among the settlers, and business was good. They were making about a dollar a day now for eight hours’ work. Before they were paid about 35 cents a day, plus the right to use a small plot of land. Most of them seemed to be retaining their family garden under the settlement system.

At midmorning a young priest walked along the settlement path, surrounded by enough boys to form a soccer team. He was a pickup-truck circuit rider, coming to La Monica’s area for a few days each month, teaching a little religion in an abandoned shed of a neighboring fundo, sleeping on its floor at night. He was the first priest to have visited the fundos so often. His superior had asked him to come to the countryside, so after much reflection he gave up his post teaching languages in Santiago, and he has not regretted the decision.

The priest was in favor of agrarian reform, but warned too, that it was a dangerous thing. He recalled that the first real Chilean experiment in agrarian reform and asentamientos was instigated by the church, with its own land. He thought that was good, but dangerous for the same reason. He had visited another, bigger CORA settlement that was dominated by the Communists now. He saw that as the danger, and he feared that it might come to La Monica. But he felt that it would have to be brought there; it would not grow indigenously, as these people were farmers not politicians. He felt that the peasants deserved the opportunities denied them, especially education, but he wondered if the government could meet the expense of providing it.

But by then the boys would wait no more. That morning a patron was lending them horses and the boy’s were going for a ride. The horse is still the main local transportation in the fundo world, even for the patron, who often wears a black cape, of all things. Occasionally he carries a revolver and he always jangles spurs.

At La Monica life depends for now on CORA loans. But from what little one can learn of a cold Saturday morning, the settlers seem determined to pay their way. And they just may do it with those potatoes. By one account, Chile is the only land where the potato is native. But it has been importing them for years now. This year they came from Belgium. As usual they were just in time for the government to throw them on the market in order to prevent a price rise of this item that weighs heavily in the cost of living index. But in a twist that Chileans say is the fate of their agricultural endeavors, the Belgian potatoes were blighted. Now the hapless government importing office is washing down the tubers to prevent infection of the national crop -- and that ought to take too long to save the market price.

La Monica makes it on the strength of its potatoes; it will have vindicated the faith of some strong-backed settlers. But even should it fail, it will have served an important role by helping to teach CORA lessons for large-scale application soon.


If the asentamiento is a promise, the peasant unions are a proof that rapid change is coming to the Chilean farmland. The Colchagua strike illustrates the sometimes-haphazard course of the peasants’ progress.

Colchagua is an absolutely rural province 70 miles south of Santiago. It is known for its rich farms, backward labor policies and “problem” unions. The Communist daily El Siglo calls it “the kidney of the oligarchy.” Nearly 2000 peasants from 45 fundos struck for two weeks demanding more money and a larger square of land on the farm for their family use. To be sure, there were other interests involved. The government contended that the demands were out of bounds. It held the line, and the strike ended.

These 45 big farms were organized by the Federation of Peasants and Indians (Indians are a lesser concern of the Federation, and another story). This union is led by members of the Socialist-Communist Popular Front, and the real leader of the strike was a Socialist Deputy from the province, a bright, hard, pistol-packing Marxist.

Competing with the Federation for preeminence among the provincial farm workers is the Christian Peasant Union, which, though Christian-social in its origins, is in no way tied to the Catholic Church. At the same time it is also independent of the Christian Democratic Party of President Frei. It is very sensitive to the allegation that the Party directs the Union, and the sometimes-strained relations between the two are evidence that this is true.

In any case, in Colchagua the interests of the Christian Union, the government and the group that those two often find anathema -- the fundo owners -- temporarily were in tandem. The Union has organized fewer farms in the province than has the Marxist-led Federation; although nationwide the Christian syndicate is generally considered the larger. Several months ago the Union peasants submitted their collective annual petition. The petition itself is relatively now to the countryside, and a collective one until the last couple of years was unthinkable. The labor code actually forbids peasant collective bargaining, though the law is unenforced and in the process of being changed. The Christian Union, after tough bargaining and a strike of one day, signed a contract that by the pay standards of Chile’s countryside was quite liberal. It came to n daily wage of $1.75 all considered, about double the official minimum. The government helped pressure the reluctant landowners’ organization into accepting the package. The owners did accept, and nearly all of the over 800 Union men were working -- as were the still-predominant unorganized peasants among the active population of about 50,000.

The Marxist-led Federation asked for about 20 cents per day more, depending on the weight given to non-monetary demands. After bargaining from May to October, the Federation struck. Peasants took up station at their fundo gates, ate their meals at soup lines, and cheered when the Federation leaders rode by to see how they were holding out. Whatever the larger political meaning of the strike, many of the peasants clearly saw their own interests involved. Many in the soup lines were old men, who looked as though the wind and the rain have worn them down, as if social change, coming so late, might more easily pass them by, but they were on strike, and their fathers would not have dared that.

Many were better informed and more adamant about the land privileges that the Federation was seeking than about the cash raise. The peasant seems to voice his desire for the land at every opportunity, perhaps because the land is all he knows. The Communists and thus more extreme left partners in the Popular Front, the Socialists, have attached themselves to this sentiment. They thus find themselves in the anomalous position of backing private property. In personal conversation, however, they often will say this is wasteful and they argue for collectivization, for state farms. Sometimes visiting Russians will speak of these things. But Marxist politicians and their press never take such views to the farms.

This is one of the subtler senses in which the strike was political. At a more obvious level, the Federation sought a contract better if only by a fraction than that of the Christian Union. The struggle to organize the peasantry is so intense that the union, which wins the bigger pay jump, may also win overall dominance. The Marxist Front also saw the opportunity of casting the government as in opposition to betterment of the peasants.

A large part of the Frei program has in fact been aimed at revolutionizing standards of the countryside. By encouraging unionization, raising wage minimums and adjusting wages favorably in the annual reckoning- for inflation, Frei has taken real steps toward monetizing and improving rural life. His planners declare that this actually has gone too fast on the money side, to the point that a strong inflationary pressure has been created. They cite this as a reason for the government’s losing ground to inflation recently after a long favorable trend.

Therefore the government worked through and beside the chief public official in the province, appointed by the Frei government under Chile’s highly centralized system. The national police assured that any peasant on a struck farm who wanted to work could do so. Toward the end, many did and this probably caused the Federation to give in. The government also successfully sought to prevent the landowners from breaking ranks to sign individually at the Federation’s terms, though many could have afforded to do so. With any signings the precedent would have been set.

Probably with reason, the government argues that the nationwide purpose of the Marxist Front is to defeat the Frei campaign against inflation. Government officials said that the Colchagua raise, spread up and down the country, would be inflationary. This intangible argument won.

There is some feeling that inflationary pressures in the farmlands are especially acute. The peasant never had money, and when he gets it now he is less adept at spending it wisely, more a target for the ubiquitous merchant of over-priced unessentials. It is this kind of spending that results in inflation, because Chile has proven itself unable to expand production to meet new demands even for essentials.

While the government’s inflation argument may be valid, it is set in a frustrating arena in Colchagua. The lands seem so rich there, the best-tended of the fields appear so productive, that a, productivity rise to compensate for the wage demand would seem a simple task, and almost a patriotic duty. For ages the flat valley has collected all the best soils of the mountain ranges that mark it off. There along the streams the vineyards grow closed-cropped and fecund in fields bordered with wild roses. And in the center, a manor house that often will look more like Newport than Santa Cruz.

Some of the landowners and all of the government workers and unionists are trying to rearrange the factors of production so that there will be more to share and more will be more to share it. Even attributing to all of them the best of intentions, it is clear that the most efficient patterns are yet to evolve.

INDAP, the government credit and technical assistance agency, stands accused of trying to preempt the field of the unions by organizing competitive units itself. It is also accused of using its activities to corner the peasant vote for the Christian Democrats. INDAP has begun unions, and committees of smallholders. But its very persuasive director, Chonchol, argues that organization is so woefully needed in the countryside that his agency cannot wait for the unions to do the job, especially since they waste much valuable time arguing among themselves. He refers to the fact that there are two other unions with more or less similar orientation to the Christian Union, but in competition with it.

Driving the closest thing to the national auto, a Citronetta, the government technician sows the symbol of the Christian Democratic Party -- as seen by the conservative PEC weekly.

All of these organizations have come into the farmland since 1960, and nobody knows except in vague terms just which is the strongest where, why, and what changes are occurring. The government has been no less tardy getting into the field than the unions, evidenced in such ways as the fact that neither the Labor nor the Agriculture Ministries have facilities even to keep tab on peasant strikes -- the national police phone in when one occurs on their beat. The governmental confusion took an ironical turn in Colchagua when -- before the strike threat -- the government’s popular action wing decided to mount a unionization drive in that province. But after much party-government-union bickering the campaign was called off. This reportedly was because the government felt that the inevitable benefactor of the drive, the Christian peasant Union, “ought to be taught a lesson.”

If the government feels that the unions are disunited or contentious, the unions complain that the government tends to smother diversity by attempting to accomplish all in its own Christian Democratic image.

The Christian Peasant Union favors the government’s agrarian reform bill while disagreeing with some particulars. In a sense it threatens itself with obsolescence as it encourages land redistribution. None of the unions has found a role in the asentamientos. They feel that property-owners-to-be have different interests than hired hands or the even less organized tenant farmers. Nevertheless, the Union is wholly for family ownership of the land, and as soon as possible. “The members prefer that,” is the way one leader explained it. The Union hopes to foster militant cooperative movements that could be a counterbalance to the government’s permeation and at the same time improve settlers’ marketing or purchasing power.

Organization of the peasants in general and of the fledgling asentamientos in particular is still in flux. A settlement 150 miles north of Santiago is in the birthplace of Communist peasant organization activity. The tight organization there resulted in the unions actually dictating asentamiento policy to the settlers’ committee. It is notable that even here the prime demand is for individual land ownership. With the advent of the asentamiento committees in other areas, established unions withered.

There is ferment today in a field of national life that was fallow and isolated -- so isolated that INDAP workers have encountered peasants who have never seen a newspaper, who do not even understand the concept of organization, but who want to, and who often prove rapid learners indeed. There are whole provinces whose weekly supply of publications, inevitably from Santiago, would fit neatly in one U.S. Rural Route mailbox. With the ferment there seems to be an accompanying leaven of diversity. The Christian Union decries the political orientation of the Marxists’ Federation, but the workers are free to choose. The Union is less than in the government’s keep, and ready to stand firm for its members. The Union has struck for collective contracts also, and two of its fundo units in Colchagua have been out twice as long as the Federation’s, in a struggle to have fired workers reinstated.

Since politics are free in Chile, there are many brands to choose from. Most other wants are costly, and the selection limited. At this early stage of an unfamiliar experiment in agrarian reform and peasant organization, diversity -- maintained by conflicting interests -- may be the best policy. The more philosophical of the warriors for the peasants’ welfare point out that the peasants themselves ought to decide on the form of their organization. And if their leap from subservience to collective bargaining is any measure, they just may be on the way toward doing it.

Foreign Farmers

There is no famine of diversity in the advice that foreigners give to Chilean farmers. New Zealand cattle ranchers would put Chile back on the beef standard (New Zealand grows 17 times as many animals per unit of equivalent land and undercuts on price outlandishly); California Imperial Valleyists would transform the central valley into the produce basket for the continent; Israeli kibitzers would make the desert bloom with water the Chileans now waste. Minnesota sends milkmen. Australia offers wheat farmers.

Worthy assistance, fellowships and research are sponsored by U.S. AID and its subcontractor, the Chile-California program; the Food and Agriculture Organization, the U.N. Special Fund; World Bank; Inter-American Bank; Ford, Rockefeller and Guggenheim Foundations; Peace Corps; West Germany, Japan. AID and Rockefeller have built and equipped most of the country’s experimental stations. The University of California, sub-contractor of the Chile-California program, is sponsoring a broad technical assistance program aimed at introducing the market reporting concepts and overhauling market practices generally. The University of Minnesota, under a Ford grant, has a project under which it teaches the methods of getting the agricultural research, sponsored by Rockefeller, out to the extension agents -- who got the word out to the men on the dirt.

Just about the only thesis that these polyglot and often very urbane helpers agree upon is that agriculture here isn’t like in the old country. Some find this frustrating; they can’t understand why it differs so. Others are pretty sure they know why, and only wish the Chileans would leave them alone so that they could get on with setting matters right. The less sophisticated often conclude that the fault is inherent, that Chileans are indolent and irresponsible. Some efficiently run national programs prove that this is not or need not be true. The more experienced often declare that Chilean problems seem trifling compared to the last underdeveloped country that they tried to assist. There are variations on this theme: one agronomist complained that “In Ethiopia it was different. You told them what to do and they did it. The King saw to that. But these Chileans are so parliamentary, so refined. They want to know why, and then they just may decide not to do anything.”

Often the critics look homeward, as well. An Iowa wheat technician put it this way: “Our farming fits our needs. We’re so mechanized that in one more generation there just won’t be any hand farmers left. There aren’t many now. How are we going to tell Chile the best way to farm, when it wants to use excess labor instead of capital?” The U.S. agricultural specialists still like to think they can get their hands dirty. One who watched peasants planting potatoes declared that the need potatoes ought to be quartered, that the Chilean style is wasteful. Not so, according to a compatriot agricultural economist, “the Chileans are right. The uncut jacket protects the innards from the cold, and the knives used to cut the spuds would probably spread virus anyway."

Chilean experts have their conflicts, too. Many of the most highly trained specialists studied in the United States and learned methods not necessarily applicable to Chile (the rightwing of Santiago insists that agronomists come back from U.S. universities as convinced Marxists).
As for official U.S. participation, the AID Mission has lent considerable money to the agricultural sector, may put up as much as $25 million next year for imports of machinery, seeds and fertilizer. But it has meticulously avoided allocating any funds directly in agrarian reform, even under the conservative hill now operative, despite the strong U.S. commitment to agrarian reform in the Alliance for Progress. “We’re not authorized to buy land,” was the dry-as-dust comment of one AID official. “Thank heaven.” He had just tallied up the loss or a big shipment of fertilizer that washed off the pier in the rain because the Chileans could not store it nor get it out into the field soon enough.

The AID Mission employs no agricultural specialists, and sometimes this shows. In April Ambassador Ralph Dungan demanded some effective action in agricultural aid. Having heard of a proposal that would increase wheat yields dramatically, he suggested a crash program. The wheels were spinning madly until someone discovered that this year’s crop was already in the ground. And it turned out that the dramatic proposal was not altogether applicable anyhow.

One recipient locally of U.S. AID funds is an institute of the Catholic University that has offered considerable criticism of agrarian reform plans. More globally, AID-Washington sponsors the University of Wisconsin’s Land Tenure Center, which operates a research center in Santiago. Its reports have included some of the strongest arguments for land redistribution here, thus calling down the wrath of the landowners upon the embassy.

Private U.S. industry is participating in agricultural change, too. Hybrid corn seed producers have promised to increase yields with better seeds. They have, but not as sharply as expected. For their part, the companies often complain of profit-remittance problems. The Purina Company offered to build a modern chicken farm, a veritable poultry factory, in order to cut through Chile’s difficulties in expanding production of alternatives to beef. The agricultural community was divided on the virtues of this. No one doubted the system’s efficiency but many felt that better use could be made of Chile’s scarce capital, and that with so little local know-how involved the result would really be akin to importing chickens. The deal has now gone through, and could be a spur.

The occasional confusions in administration of foreign aid and investment in Chilean agriculture in no way indicate a failure of the country to benefit from it all. There is some indication that the givers and receivers could coordinate efforts. Specialists have been brought away from well-paying U.S. university posts to advise Chilean institutions that showed no indication of ever having desired any help in the first place.

Undoubtedly Chile’s agriculture would be worse that just stagnant today, and less prepared to shake loose tomorrow, but for foreign aid. But such aid has been given, and very much obviously remains undone. These facts may mean that a revision upward is necessary in the usual assumptions about the amount of foreign aid needed to expand agricultural output in underdeveloped countries.

Chile soon will have the legislation necessary to carry out agrarian reform, barring a total and unexpected defeat for President Frei (one view is that Frei vetoed the property rights amendment so that, using an obscure constitutional provision, he can take the issue directly to the public in a plebiscite -- and thus demonstrate the great backing he is sure he retains). The new laws will establish the guidelines but will not accomplish the work. No one can say how the peasants will perform in this regard, but the fact that the experimental settlers have consistently paid off their government loans ahead of schedule is just one of many encouraging signs of industry and interest.

The heat of the debates and the differences over how it all should be accomplished seem to portend well for Chileans eventually shaping their program to suit the best interest. Even among the more adamant doom-criers of the opposition there are signs that they see a future not too dim. The powerful family of Mercurio owner Agustin Edwards has made real efforts on its agricultural holdings to show that the industrial approach to farming holds much for the production-short country. Edwards’s interests provided a fifth of the capital and much of the initiative in bringing in the Purina chicken project as a demonstration that private enterprise and the country can profit simultaneously in farming. The peasants would agree -- if their awakened social and political awareness can be taken as an omen. They would only add that a goodly amount of that private enterprise will be their own. If 250,000 peasant families can for the-first time feel that they have an interest in Chile’s future, the machine may have been found for repairing the country’s rundown agriculture. This is the basic premise of Frei’s more dedicated planners.


Mr. Diuguid is a 1965 Alicia Patterson Fund fellowship award winner on leave from The Washington Post. Permission to publish this article may be sought from the Foreign Editor, The Washington Post.

Received in New York October 28, 1966.