Rural Development Can’t Be Resolved in Secret

This long-time leader of the rural cooperative movement discusses his grave concerns about the new government’s rural policy and about international cooperation for rural development.

Sinforiano Cáceres

I’m talking as a farmer and a representative of a good part of Nicaragua’s rural cooperatives. We’re active farmers, convinced that our heads aren’t just for putting hats on; we can also use them to think. How does our sector view the government of Daniel Ortega? I don’t want to analyze figures; I want to share with you the concerns we’re discussing among ourselves on a daily basis after four months of the new government and on the threshold of a new agricultural cycle.

Has this silent government
learned the lessons of the eighties?

The main gap we’re sensing is that the government has no policies for the rural sector, which leads me to think that the FSLN wasn’t ready to govern. In fact I’m actually certain of it, given the level of information and knowledge I have access to. That would explain the high levels of improvisation we’re seeing, which logically makes the govern-ment’s behavior erratic.

One of the biggest mistakes is its silence. If you’re faced with someone who doesn’t say anything, you don’t know whether he or she is deaf as well, meaning you run the risk of not being listened to.

We feel like we’re dealing with a multicolored government of the Left, with nuances of a “lite” Left, a social Left and a pretty ideologized political Left whose thinking is frozen in the eighties. There’s a desire to transfer a lot from that era, as if 16 years hadn’t gone by since then. That strong tendency to re-live the eighties leads to mistakes because many of us from back then are no longer the same. We think and act differently today because we’ve lived through times that have forced us to change.

We can also see that while the government is leftist thinking, it’s running the country with rightwing rules, which has it trapped in a labyrinth. That could also be what’s forcing it to keep quiet. The new government hasn’t made the changes in the institutions forged by the previous rightwing governments that are requied to create mechanisms that favor small and medium producers. The institutionality is still being organized to respond the medium and large ones. There are no institutions with arenas for debate, concertation, discussion and consensus-seeking. There continue to be relations among friends, not institutions. The only change is that it’s now among “different” friends; people who weren’t in government in recent years. The public sector in general and the rural sector in particular are still uncoordinated, with little coherence. There is no program and there are no policies. And we still don’t even know where we’re heading.

What has the government done
in its first 100 days in office?

We know there are funds for other things, but precious little for the rural sector. There are just promises, which we hope will be honored, fine-tuning the mechanisms for distributing resources and the criteria for their assignation. So far we’ve only heard a load of speeches, but no resources have reached us in the countryside yet. And they use the speeches to tell us that there aren’t any resources, which is convincing no one. This government can’t allow itself the luxury of viewing the peasant sector as a political object that’s easy to manipulate at election time. That would be a real mistake.

On April 19, the government presented its plan for initiating the agricultural cycle, but what it presented for the first sowing period [which before the recent spate of droughts started in early May] doesn’t stand up to even minimal analysis. I had the opportunity to see the document, the essential part of which is limited to six pages, four with tables indicating what the sector’s institutions have and two containing twenty sentences at the most. I don’t think this could be attributed to skilled synthesis. I think the government needs to have the courage to accept that it lacks policies and call on all the agricultural sectors to help put them together.

We still don’t know the mechanisms and bodies through which we can talk to the government and tackle the problems affecting our sector. The government talks about consultative councils for “direct democracy,” but we’ve already let the government know that we don’t want consultative mechanisms, whether they’re called councils, bodies or commissions. We want effective operational mechanisms that respond to our problems. The government didn’t deliver clear and precise information regarding the first planting. There were figures, but figures say nothing if they’re not accompanied by mechanisms, procedures and institutionality.

The government has five different credit-issuing entities. And what has it done during the first hundred days? It could have rearranged the resource allocation mechanisms, but it didn’t. The same old mafia still monopolizes the allocation of state resources and controls the consultancies and advisory services. Admittedly something was done in the case of the Agricultural Technology Institute (INTA). Four NGOs had been prescribing themselves over US$150,000 a year in “private technical assistance,” so the INTA director, without violating the established norms, obliged that “cartel” to compete on an equal footing with other service providers. As a result, most of these mafiosos didn’t even present offers. It’s a shame that other public sector agricultural institutions don’t act with the same firmness.

A lot of problems need resolving
but we have to break the silence

There are a lot of problems to resolve. The Pound for Pound program is going to be markedly reduced. Historically speaking the cooperatives have gotten 4,500 coupons for Nueva Guinea, and now they are giving us just 900 coupons for the whole municipality. They previously gave us 1,200 just for rice and now we’re getting 200 for the whole municipality. We ask what’s going on and they tell us they’ll explain later. But they don’t explain anything. The government hasn’t reviewed the “Pro Rural,” which is supposedly the instrument for coordinating and lining up the public agricultural sector. We know that certain things will be adopted from Pro Rural, but we don’t know which. We also know that other aspects will be incorporated, but we don’t know what they’ll be either.

There are also problems with the seed program. In February an Agriculture Ministry technician in the northwestern department of Madriz told our delegates there that Totogalpa and Palacagüina were no longer included in the Pound for Pound program due to a seed shortage. So our cooperatives set themselves up to produce seeds, but technicians from INTA and the ministry sent us to do some assessments instead. When we had the reports ready, they told us that there wasn’t any seed for the first sowing period and that perhaps they’d get them for us by the third period, which starts in mid-to-late August. Such informality and sloppiness is very serious in agriculture, dramatic even.

We could lose this entire agricultural cycle. We watch government officials flip back and forth between what’s urgent and what’s important. They only focus on urgent matters when we complain: “What about the planting, production, inputs, credit!” But the next thing you know they get a call, stop looking at what’s urgent and go over to what’s merely important. And they end up doing nothing. It’s like an attention deficit disorder.

So what’s urgent and what’s important and who defines it? It’s defined in secret, which causes immobilization and what we least expected: a silent government. Because the biggest problem facing ministers today is that they don’t know how far their authority stretches. If they talk they get fired and if they don’t say anything they’ll be called incompetent.

We have to break the silence; that’s the first task. If we can find out what’s going on, then we can think and discuss how to re-focus the projects and programs and establish the kind of relations we’re going to have with the government. We don’t want a top-down, subordinated relationship with it, one in which we’re considered an appendix. We want a horizontal relation in which we’re treated as subjects of the social economy, people with things to say in politics, economics and social matters, people who are gambling on certain things and who have proposals to offer and need to be heard because we need to produce.

We cooperatives were already thinking that way in the eighties, but we justified being seen as a second class citizens because of the war and because people working in the state-owned Area of People’s Property (APP) were being given priority. The theory during those years was that the big state-owned agricultural companies of the APP would flood us all with well-being and would even benefit the cooperatives. There’s no war now and no APP, so we should have an advantage because we’re well organized. But they don’t even look at us.

We’re also worried about the mafias acting in our sector; they have to be purged. There are many cartels in Nicaragua: the urea cartel, the land cartel, the lumber cartel… They’re institutionalized mafias. What wouldn’t we give to have the Police go after all of those cartels! How many Sinaloas [the Mexican drug cartel operating in Nicaragua and recently hit hard by the National Police] would have been discovered, broken up and jailed. But there aren’t many around like [Chief of Police] Aminta Granera.

Replacing one urea monopoly with another

In the case of the chemical fertilizer called urea, we see no point in taking away one monopoly only to encourage another. The big urea distributors, grouped together in ANIFODA, have traditionally had a monopoly involving a handful of families. But we can’t get rid of them just to create another monopoly with Venezuelan urea. When the ANIFODA bigwigs recently said that they weren’t going to import any more urea, at least not this year, because the unfair competition from Venezuelan urea was bankrupting them, the government decided to directly negotiate with Venezuela to import more urea through a “cooperative” and store the Japanese urea that wasn’t sold last year.

They told us they were doing it to sell the urea to the producer associations and other groupings and that all cooperatives would be supplied exclusively by Nicaraocoop. They said this decision had been made by three top officials from the public agricultural sector and one non-Nicaraguan. When we asked what policies and terms would be employed for distributing the new Venezuelan urea, the government representatives told us that all of this would be decided by a private individual delegated by the government to sell the urea given the “urgency” of the situation.

But exactly what kind of a cooperative is Nicaraocoop if the idea of cooperatives is to be collective, associative and organize to operate on a larger scale, yet a single person is making the decisions? And what’s all this about the government transferring its responsibilities to private individuals? Those of us in the cooperative movement oppose monopolies of any kind, even if they operate under the legal guise of a cooperative or association.

ANIFODA was engaging in vulgar blackmail and threats and affecting productivity, food production and food security. But there was no firm response from the government, which acted tepidly. We thought the government would take this opportunity to democratize the economy and urea importation rather than foster a new monopoly.

Perhaps we were too timid and didn’t know how to make demands or raise our voices enough to make ourselves heard. ANIFODA is using an economic resource like urea for political blackmail and the government is using it as patronage to ensure political support from certain sectors. That’s what’s really going on, because so far they’ve established three prices for the Venezuelan urea: a price for distributors with party affiliations; a price for the leaders of privileged trade associations; and the price they set for common mortals. And that’s not fair; it’s not educational, it isn’t correct and it introduces a series of deformities.

In short, it’s a hotbed of corruption. The government is once more promoting a policy of reward and punishment in which you’ll get more at a better price if you behave yourself and less at a higher price if you don’t. Is that what the government means by peace and reconciliation? The Venezuelan urea is more than a fertilizer; it’s been turned into a political instrument. That’s how many of our associates perceive it. On the rural level there’s so much ideology that some territories reject Venezuelan urea “because it’s Hugo Chávez’s” and only want to use Japanese urea, even if it’s more expensive. And then there are territories that say they want Chávez’s urea, not the Japanese stuff.

What relation should the social sectors
have with this new government?

Despite all of this, the government does have a more social focus, at least in health and education. We recognize that and it pleases us enormously. It also has greater capacities and skills than former governments to achieve social goals and negotiate better with international organizations. Its great challenge is to achieve credibility and confidence among peasants, while the peasant sectors also have the pending task of regaining confidence in a Sandinista government.

For this to happen we have to insist that the government not repeat the same mistakes it made with the peasants in the eighties. There are so many long unattended problems in the countryside that it will be hard for the government to win that confidence and some balance if it keeps playing the many demands of the impoverished off against the many voracious interests of the big investors, as it seems to want to do.

I think that from the triumph of the 1979 revolution to the present day we’ve moved from “utopian backpacking” to “scientific tie-wearing.” My use of such flip terms may be an attempt to ward off the tears. In the 1980s we idealistically wore our agrarian reform backpacks, our “new man” backpacks, our literacy crusader backpacks and our backpacks of utopian dreams. Starting in 1990, we passed over to “scientific tie-wearing.” It was the era of suits, of college degrees and PhDs; a time of distinction. During that time they always told us that we had a “luxury” Cabinet, when actually it was only a lucrative one.

I believe that from 2007 to 2011, when this administration comes to an end, there will tend to be a tug of war between utopian backpacking and scientific tie-wearing, because we now have some ministers in suits and ties and others in T-shirts and baseball caps. Utopian backpacking is good, but not for everything. The same goes for scientific tie-wearing. I think we have to seek the right clothes for this country and this people: neither backpacks nor suits, neither baseball caps nor ties. We have to find the clothes Nicaragua needs in order to be governed with our own identity.

The government has posed the social sectors an enormous challenge. And this has triggered an impassioned debate among their leadership. How should we respond to this government? We find ourselves with a social grass roots organized by sectors that has expectations to the nth power; and with a government whose real capacity to respond to those expectations is n-1. This contradiction could generate social resentment or disenchantment, a social base that either buttresses its trade associations when it clashes with reality or just hunkers down.

For their part, both the longstanding and the more recent rural leaders of the different peasant and social organizations have demonstrated three kinds of behavior in response to the new government. Some shift between trade association loyalty and party submission; others between trade association loyalty and cooptation; and others between trade association loyalty and political negotiation based on their own identity. We’re debating what to do in response to this range of positions. I believe we need a relationship with the government that’s not based on perks. What we’ve been seeing so far is that the leadership willing to renounce trade association loyalty for party submission is being benefited with resources. All of this generates uncertainty.

What’s at stake is our autonomy and identity, the right to be what we are and represent those who elected us. Maintaining trade association loyalty will have its costs, but some of us recognize that it isn’t healthy and won’t help build citizenship if the relationship between the trade associations and the government is based on perks and blackmail. We’ve told the government we want relations based on respect, complementarity, collaboration and the search for consensus.

We believe the government should support the associative movement, the cooperative movement and small and medium businesses without discriminating by party affiliation or ideology. Big business doesn’t need policies, it needs politicians. And it normally doesn’t need the government, but rather those who govern. That’s enough to resolve any problems. That’s why we’re demanding institutionality, because we can’t resolve our problems on the personal level; we have no individual power and there are too many of us.

One challenge for our sector’s leadership and grassroots base is to recover representation and dialogue with the state. That’s why we were very discouraged during the first talk we had with the government in early February when it explained that we’re all “President,” the people are the government and we don’t have to do any advocacy or lobbying, but just dedicate ourselves to thinking and working as if we’re the government. But we don’t want to be a para-state organization or act as “transgenic” leaders who are both government officials and trade association leaders. That confuses both sides and makes both inefficient. We don’t want the politicians to see us just as potential votes and we’re going to continue making that clear to the government as long as we have to.

The government’s electoral promise
of a development bank is still pending

We still have pending the important promise of a development bank to channel long-term resources to the rural sector. There’s been no news yet. The government announced that a commission of three parliamentary representatives will start to discuss the bill for the creation of such a bank. But we already shut ourselves up with the legislators and discussed the bill in 2006 and were told that they’d approve it during the first hundred days of the new government. The two parties that promised that bank—the Constitutionalist Liberal Party (PLC) and the Sandinista National Liberation Front (FSLN)—have enough votes to pass the bill. So why aren’t they doing it? The reality is that groups within the government are linked to the private banks, which are arguing that all rural credit should be channeled through the private banking system rather than a state-run development bank. The private banks are arguing that they have the capacity to help small business. But if that’s true, why didn’t they ever do so during the past 16 years? We know that all the funds managed by the private banks become inaccessible to small businesses because of all the requirements they establish. The delay in passing the bill and all the hobbles are because many interests are at stake, and they wear all political colors.

The issue of the development bank is putting the government to the test. It has to discuss what kind of economic model it’s going to adopt and how it’s going to implement economic democracy. In Nicaragua, various non-conventional financial intermediaries are supporting thousands of peasants and micro businesses that the private banks have never attended, and in that universe of non-conventional finance companies there are community funds, community banks, cooperatives, micro-financing institutions and associations, and there are good ones, regular ones, bad ones, eligible ones… Some could be improved and trained to achieve an institutionality that would allow us to break away from the handful of mafioso bankers who make the decisions in parliament even though they aren’t legislators. Why is nothing starting to happen? Has the government thought through the political cost of not honoring its electoral promise of a development bank? That cost that could be very high, with the 2008 municipal elections just around the corner.

There could be a lot of social pressure and mobilization. The government’s position in the urea case demonstrates a tendency to encourage monopolies through non-national front men—I prefer to call them cooperation mercenaries—and using any associative or business figure as a façade. The government has to handle its cooperation with Venezuela better. When President Chávez came to Managua he said the Venezuelan funds were to promote cooperatives and workers’ companies. But many fly-by-night cooperative businesses have sprung up and been given millions of dollars in credits even though they can’t provide guarantees covering even 10% of the loan. They’re using and abusing the associative concept. You can’t help wonder whether Hugo Chávez simply doesn’t know about this or he and the government agree on it. Is this what we’re being asked to defend? We desperately need communication and information! When will the silence be broken and who will break it? In the time of the Spanish conquistadors, they traded us mirrors for gold. Are they now trying to buy our docility with urea? Why wasn’t the Venezuelan urea operation proposed in the Agricultural Round Table, where all the agricultural associations are represented in a plural group with a minimum agenda that has been built up with great effort? We could have used that arena to establish and fine-tune prices, criteria and distribution mechanisms among us all. It would have been healthier than what’s happening now, with just one person making the decisions.

Will Venezuelan cooperation reach the neediest
and will it foster a new form of dependency?

The US$10 million that President Chávez announced he was going to earmark to small and medium rural production through the Venezuelan development bank BANDES was parceled out to four or five businesses before the money even reached Nicaragua. When we went to ask about the criteria for accessing the funds, we were told that they had already been defined. When we asked who defined them, they repeated that they had been defined and there was nothing more to discuss. The government needs to analyze what’s going on: who’s deciding, how the aid received by the country as cooperation or credit is being assigned, what qualities or characteristics are required of those receiving it, and what technical criteria are being applied. We believe that the rural segment corresponding to cooperatives and associations should be prioritized because it’s the most fragile and needs support so it won’t disintegrate. Beyond that, support should be given to those that are more developed and stable, which also need resources to consolidate their development.

What we see happening is that the organizations receiving most resources aren’t the neediest ones, but rather those headed by legislators or high-level cadres from the party or government structure or nomenclature. We can’t encourage or endorse this kind of practice. We already have enough plagues in Nicaragua. Egypt suffered seven, but I’ve identified eight here: caudillismo, corruption, cartels of all kinds, influence peddling, disrespect for the institutionality, absolute abuse of power, and disrespect for and ignorance of the citizens’ participation law. The eighth is a new evil: the cooperation mercenary, someone who uses development aid to manipulate the poor, exploiting their poverty.

Cooperation with the rural sector is also affected by other factors. In the case of Taiwanese cooperation we have seen and are suffering from a very clear incoherence between national policy and foreign policy. With the change of government in January 2007, the President of Taiwan visited Managua and promised over US$480 million for the next five years, almost 70% of which was for agriculture. The government informed us that the priority areas would be coffee, rice, vegetables, pigs and seed production and that we should prepare programs and projects to execute those funds. So we did. Officials in the Taiwanese Embassy then told us that the only thing needed to start the disbursement process was for the government of Nicaragua to go to Taiwan and sign the bilateral government agreement. Our government announced that Foreign Affairs Minister Samuel Santos would go to Taiwan in March, but he didn’t. Then he said that he’d go in the middle of April, but he still didn’t. And when we ask government officials why, they tell us they don’t know, that we should wait and see. They also tell us they’re negotiating with mainland China, which is imposing conditions. So what can we do?

The government wants us to foster production, but its foreign policy isn’t helping this effort. What in fact is the priority, because Venezuela is giving a lot less to agriculture than Taiwan is offering? The most important Venezuelan credit is for the urea, which has now risen from 40,000 to 70,000 tons as a result of the fight with ANIFODA. Taiwanese rural development cooperation is broader and would enable us to make a gigantic diversified first push towards reactivating and fostering agriculture. How do we know if we’ll free ourselves from the IMF in five years, as President Ortega has announced? Let’s hope we don’t fall straight into the HMF—the Hugo Monetary Fund. Because it’s just another form of dependency, as both “funds” politicize and condition the resources.

The Zero Hunger Program
should also consult the poor

Are 75,000 families really going to be brought out of poverty in five years under the Zero Hunger Program? This program consists of giving the poorest families a “food production bond” worth $2,000, including a pregnant cow and sow; four hens and a rooster; construction materials for housing the animals; seeds; and a “biodigestor” that will both serve as a latrine and replace the wood-burning stove. This package is based on the local experiences of CIPRES—an NGO run by Orlando Nuñez, the brains behind the Program—which have been good, albeit with problems and difficulties. We’ve talked to the Program’s designers and operational chiefs and suggested that it’s very risky to universalize a controlled experiment overnight, applying it to the whole of Nicaragua. The food production bond project that is the heart of the Zero Hunger Program is now going to be very exposed to the elements, among other reasons because none of the Program’s operating costs are included in the budget approved by the National Assembly.

Not everybody is going to be able to assimilate this bond. Two thousand dollars all at once! If you suddenly throw 36,000 córdobas [the equivalent of $2,000]—which is quite an investment—at poor people who have no business experience, no organizational experience and no knowledge of how to manage funds, what will happen? What are they going to do? How are they going to administer it, bearing in mind the high levels of illiteracy in the countryside? Inexperienced and uneducated people need a learning period to gradually assimilate how to handle this.

Another problematic element is the idea that 300 cooperatives a year will be installed through this Program and the bond, making cooperatives a precondition for accessing the aid. I reminded the organizers that over 3,000 cooperatives were organized in the course of the eighties and now they’re planning to set up half as many in five years with a tenth of the resources they had back then. And why give everyone a cow if many people prefer goats or a pelibuey—[a short-haired sheep]. We also believe the poor should be consulted about what kind of organization they want, asked how they think they could be helped out of poverty.

When we asked the Program organizers why they defined the model and all its details beforehand, they answered, “We want to implant a model to break out of poverty.” We find that very rash from any point of view, particularly when the supposed beneficiaries weren’t even consulted. Breaking out of poverty isn’t something mechanical. This program should be based on an assessment conducted with the people, asking them how they think their development program should be to see how gradually it should be implemented and what kind of investment they need. It must take the people’s own opinion into account. Right now that’s not happening. They’re not asking anyone and are only telling everyone what they’ve decided to tell them. I honestly don’t want this project to fail, but judging by the way they’re going about it I think it’s going to have a high level of failure, because you can’t just impose a cooperative or a model.

There have to be feasibility studies and there are principles to consider. The cooperative movement has the principles of gradualness and voluntariness, neither of which they are respecting right now. It was demonstrated in the eighties that people only joined cooperatives to access land. And now people are going to set up cooperatives just to get hold of their bonds, which distorts their awareness, attitude and behavior.

There’s also the problem of selecting who’s going to benefit from the productive bond. They offer a selection methodology and procedure that effectively sets up parallel bodies to the existing municipal and departmental development councils. Now would be a good opportunity to make these already existing bodies—which were established by tooth and nail, against thousands of difficulties—function better. But creating other bodies alongside them that are only going to last as long as the project will negatively affect the existing institutionality and social capital, both of which must be encouraged if we really want to benefit the poor.

The government wasn’t prepared to govern,
but it must start talking and listening

After taking a good look at everything that’s happening, I’m forced to conclude that the government wasn’t prepared to govern, but it doesn’t want to recognize the fact. It should open itself up to a process of concertation because the issues involved in rural development can’t be resolved in private or in secret. You can’t make the same policy mistake as President Bolaños, who had three illuminati formulate a plan and then we were all supposed to admire what they were telling us during workshops or “consultation forums.” Let’s hope this isn’t going to be the trend with the new government. We believe that the issues involved in rural development can’t be resolved using cooperation the way they’re currently using it, making the kind of blunders they’re making.

We trust that the government can change and expect the cooperation from Europe, Japan and the other organizations to contribute to economic democracy and people’s well-being, rather than making the same errors being made with the generous Venezuelan cooperation, which is being politicized, exploited and used to encourage monopolies. The government is just taking its first steps. We hope that the path trodden so far will help it review the situation, start telling us clearly what is and isn’t possible and start listening to us. That’s how to break the silence. If that happens, the government will truly be one of reconciliation and national unity.

Sinforiano Caceres is president of the National Federation of Cooperatives, which includes 620 rural cooperatives representing over 41,000 peasant families.

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