Venezuela: Creating an Endogenous Cooperative Culture

Since 1998, the government of President Hugo Chavez has embarked on wide ranging projects to redistribute Venezuelan resources and services. He has promised radical change to the eighty-three percent of Venezuelans who live below the poverty line in a country that is one of the world’s largest exporters of oil.[1] Chavez has redirected oil income from a large and wealthy management to a multiplicity of projects designed to improve social welfare. The scope of these projects range from programs aimed to address health and educational needs to organic gardens, which are designed to change the modus operandi of the Venezuelan economy.

Chavez’s energy policies have also brought him just criticism from environmentalists. Though his administration has banned genetically modified seeds and created an indigenous seed bank,[2] Center on Global Prosperity director Alvaro Vargas Llosa, argues that anti-capitalist environmentalists should oppose Chavez because his "government owns scores of refineries and cashes in big time on the processing of sulfur-heavy crude."[3] Chavez’s oil contracts with Brazil’s Petrobras, and Chevron Texaco caused environmental journalist Hanna Dahlstrom to warn that Chavez’ big oil projects could destroy the Amazon."[4] 

When Chavez was elected in 1998, it was with a clear popular mandate to follow through on his promise to rewrite the constitution. During his presidency, "active participation" has been a large part of the government’s rhetoric. Article 61 from the Constitution of the Bolivarian Republic states: ¨All citizens, women and men, have the right to participate freely in public affairs… the people’s participation in the formation, execution and control of public negotiation, is the necessary means to achieve the leadership that guarantees their complete development, both individual and collective…" Articles 118 and 308 declare that the state must "promote and protect" cooperatives.

Images from Mission Che Guevara

This constitutional right was augmented in 2001 by a Chávez decree that facilitated the cooperative forming process. According to former Cooperative Superintendent (SUNACOOP) Carlos Molina, the Special Law of Cooperative Associations "transformed cooperatives into a fundamental tool of social inclusion." The government supported coops economically through the Ministerio de Economía Popular (Ministry of Popular Economy- MINEP) which chooses cooperative businesses for government contracts, provides low or no interest loans, and even eliminated income taxes for the coops. [5]

Part of Chavez’s program in Venezuela has been to award land titles to landless and squatter communities, who in some cases are already occupying unused or pasture land on large estates. Although Venezuela’s urbanization process occurred earlier and with more gradual displacement than the current situation in Paraguay, it resulted in the same forced migration to city slums as in Paraguay, while tenacious communities occupied land on large estates. In Venezuela, the Land Law passed in 2001 allowed cooperatives to occupy "unused" land. However, some communities have faced violence from private land owners. Campesino organizations report that over 150 campesinos have been assassinated by landowners, and cooperative members, like Miguel Basabe of the Bevere Cooperative, have been frustrated with a government bureaucracy that has not convicted assassins. In July of 2005, nearly 6,000 campesinos protested through out the country.[6]

Once the land is successfully transferred, farmers must form cooperative communities according to government regulations. The total number of associates in 2004 was 945,517, up from 215,000 in 1998, and represented more than 5 million acres distributed to 116,000 families in cooperatives.[7] The result, writes Edward Ellis of Venezuela Analysis, "has been a fortification of allegiances as new agricultural collectivities and communities grow up on these expropriated lands and earlier sacrosanct ideas regarding private property, entitlement, citizenship, and individual rights have become contested cultural terrains."[8] 

The government’s next step was creation of Mission About Face! [Misión ¡Vuelvan Caras!] in the spring of 2004. The month or year-long classes give students scholarships, and often health and housing assistance while they take higher education classes in technology, management, history and cooperative values. In September of 2007, the program changed its name to "Mission Che Guevara," to focus attention on its educational aspects, including the Social Production Enterprise (EPS) model, defined as "economic entities dedicated to the production of goods or services in which work has its proper and authentic value, with no discrimination associated with any type of work, no privileges related to certain positions or hierarchies and with equality between its members, based on participative planning."[9] Though Mission Che Guevara graduates are not legally bound to cooperative service, Camila Piñeiro Harnecker writes that it is "made clear that cooperatives [are] a preferable form of organization . . . prioritized for state support." According to the government, the program had over 670,000 graduates between March 2004 and August 2007, and those alumni created more than 10,000 new cooperatives, almost a third of them involved in agriculture.

The National Superintendence of Cooperatives (SUNACOOP) is in charge of administering state aid to these organizations. According to SUNACOOP, the number of coops in Venezuela grew exponentially from 910 in 1999 to more than 228,004 at the start of 2008. SUNACOOP says that cooperatives, mostly in the service (61.29%) and production (27%) sectors, now account for about 18% of employment in Venezuela and represent approximately 14% of the national GDP.[10]

Endogenous Development

A main focus of change is the agricultural sector. Currently, less than 2% of the population owns 60% of the land. Because of the success of the oil industry, Venezuela’s agricultural sector has been long neglected and is the "least productive in all of Latin America."[11]. As a consequence, Venezuela today imports 80% of food consumed, causing particular trouble for the poorest sections of society and small farmers.[12] In terms of creating a sovereign nation, this has presented a challenge to the Chavez Administration.

At the same time as the government promoted cooperatives it began to use the phrase ‘endogenous development’ as a counterstrategy to the model neoliberal of development. Whereas neoliberal "development" in the 1990s promoted the privatization of government-owned businesses and services by selling them to often foreign owners, endogenous development, when defined by its roots, means "inwardly creating."

In theory, an endogenous Venezuelan economy would be more self-sufficient and would favor products made in Venezuela by Venezuelans. "We have been exporters of raw materials and consumers of manufactured goods. One of the first objectives . . . is to put a stop to that game," says Carlos Lanz, an endogenous strategist for the Bolivarian Revolution.[13] Endogenous development has become a term encompassing nearly all the goals of the Bolivarian Revolution, and government definitions wax long and rosy.

The government owned oil company PDVSA, describes the Endogenous Development Policy as

"oriented towards the eradication of poverty, improvement in the quality of life and the creation of a new economic and social model of development. This is promoted by the National Executive which promotes the active participation of the entire population in the destiny of the nation, the democratization of oil resources, the creation of a fair society, and the improvement of living standards for historically neglected communities." [14]

More concrete details provided by Mission Che Guevara:

"Endogenous Development is a means to achieving the social, cultural and economic transformation of our societies, based on the revitalization of traditions, respect for the environment, and equitable relation of production. This would allow us to turn natural resources into products which may be used, distributed and exported to the whole world.

It is through Endogenous Development that organized communities are given power to develop the potentials of every region, in the areas of agriculture, industry and tourism. The project aims to put State infrastructure which had been neglected (industrial sites, machinery and unproductive land among others) to the service of the people, in order to generate goods and services.

It is, definitively, transforming ourselves to transform society."[15]

These all encompassing goals are made manifest in the 130 Nuclei of Endogenous Development (NUDEs) that have been set up throughout the country. While the guidelines on the organization of an NDE (Nucleus of Endogenous Development) originate from the Ministry of Popular Economy, according to the Mission, a NUDE is created

"when the organized community discovers potential that could be taken advantage of to benefit the collective. The connection of an organized community and the possibility of local development makes a zone a Nucleus of Endogenous Development.

It is when the collective has a consciousness of common good, working together in a cooperative and democratic scheme, when the resources of the area allow a group of activities to occur, in which the entire collective participates, without leaving anyone out. When all those conditions are present, the community receives the backing of the State through financial support, training for work and the adoption of cooperative and participatory values."

According to the Mission, the five "Battle Fronts" on which the war for endogenous development is to be fought are Agriculture, Tourism, Industry, infrastructure and services. Coops exist on all of these "fronts," and in rural and urban settings. On the agricultural "front," which contains approximately a third of registered cooperatives,[16] the government sees endogenous development as

"destined to fulfill the fundamental task of reactivating the agricultural work of the country. It reunites the Nuclei of Endogenous Development focused in said labors, giving power to ancestral practices in the cultivation and raising of crops that were at one point of national importance (such as the case of cacao), in combination with technology and mechanized industry, such as silos, irrigation systems, with the goal of achieving an equilibrium between human presence and the environment, with urbanism programs and recuperation of green spaces submitted to clear cutting, fires and erosion. For all this, the About Face! Mission bases itself in small scale agriculture, the Zamorano Farms [Fundos Zamoranos][17] [cooperatively run on redistributed land] and the design of a Special Planting Plan [Plan Especial de Siembra][18] created by the Ministry of Agriculture and Land [designed to diversify and streamline crops].

In addition, urban gardening programs have brought the idea of food sovereignty to the city. At the NUDE pilot center in western Caracas, the Fabricio Ojeda Nucleus of Endogenous Development, worker-collectives share space with government administrated health, education and nutritional Missions, as well as an urban garden.[19] 

Greening the City

Across the city from the Fabricio Ojeda NUDE, a lush 1.2-acre plot of organically grown vegetables is tucked into the rectilinear Caracas city center. The garden was created in 2002 as a cooperative that mimicked some garden cooperatives in Cuba. However, there were organizational problems; the 10 cooperative workers quit. It was then converted into a government project and, in 2003, President Chávez inaugurated it in honor of his hero, Simon Bolivar, as the Organopónico Bolivar I. It was the first urban, organic garden in Caracas.

Norali Verezuela in the Bolivar I (Photo: April Howard)

According to the FAO, 92 percent of Venezuelans currently live and work in urban centers and a mere 8 percent in rural areas, [20] which means that, were Venezuela to need to feed itself, the vast majority of the population would be in better shape if cities were also a viable option for food production. Unlike rural farmers who occupied land, organic urban gardens like the Organoponico Bolivar I haven’t sprung up ‘organically,’ but rather through the structured implementation of government programs.

At the Organopónico Bolivar I, garden director Noralí Verenzuela pointed out that the idea of urban gardens was a radical one for many Venezuelans. "We are showing people that a garden is possible in a city," she told me in 2005. Anti-Chavez Caracans derided the president’s suggestions that poor residents "should raise crops and chickens on their balconies and rooftops."[21] To Verenzuela, the garden represents a shift in the ways that Venezuelans get their food. "People are waking up," she told the press. "We’ve been dependent on McDonald’s and Wendy’s for so long. Now people are learning to eat what we can produce ourselves."[22] Now the seeds, tools and supplies used in the Organoponico Bolivar I garden are paid for by the government. In addition to the regularly paid staff, the garden accepts drop-in unemployed workers from nearby barrios, such as Caricuao, who can work and take home vegetables. Most produce is sold at a stand at a near-by busy intersection.

The garden is supported by a variety of governmental and international ministries that make up the Special Program for Food Security (SPFS) for Venezuela. Though the Venezuelan SPFS is supported in part by the FAO, it is nationally owned and funded and "has been designed, planned and implemented by the Venezuelan government and the country’s rural communities."[23] The main foci of the program are: management of water resources; intensification of crop production; production diversification and analysis of constraints faced by small farmers. As a part of the SPFS, Chavez and the program directors have set a target of supplying 20% of Venezuela’s vegetable production from these urban gardens.[24] 

Cuban specialists and funding have also helped run the organoponicos. However, program directors are quick to insist that the gardens are made for a Venezuelan, not Cuban reality. "It’s not a Cuban model," said Cojedes state governor Jhonny Yanez, a Chavez ally leading the land reform charge. "It’s a Venezuelan model based on an oil economy that can feed itself."[25]

Although the Organopónico Bolivar I garden has become an established part of the city, they city hasn’t always met it with open arms. The garden project has been criticized as a hypocritical publicity stunt by both Caracans and international environmentalists. Some nearby Caracans have complained about the smell of manure and opposition-experts have claimed that the exhaust laden air of the center of the city center "contains concentrations of carbon monoxide and lead that could contaminate growing plants."[26] While the garden might be seen by environmentalists as a nice gesture, they cite Chavez as a threat to the environment, due to his dependency on the oil industry and the refining of Venezuela’s sulfur-heavy crude. Government contracts with oil companies Petrobras and Chevron Texaco have focused on drilling in the Amazon.[27] Rural farmers from the national farmers’ federation Fedeagro have been suspicious of the urban program, wanting more help for their sector.[28]

The Bolivar I has become one of the Bolivarian Revolution’s pilot projects, which guarantees its existence for the duration of at least the Chavez Administration. "As a pilot project," Verenzuela noted, "it can’t be allowed to fail."[29]Other cooperatives receive aid for the state, but aren’t guaranteed success.

Zamorano Cooperatives – Framed By the State

Newly formed cooperatives have faced the multitude of challenges that any business, let alone a collectively run one, faces. Successful cooperatives have had to use all the governmental resources at their disposal to continue as productive, democratic entities.

The Bevere Cooperative is made up of nearly 50 families who farm nearly 500 acres of land which they have occupied in the state of Mérida since 2003. Though the land was privately owned, in was reverted to state control after a technical inspection by the government subsequent to the enaction of the Land Law. Bevere is part of the Zamorano Farms policy.

Farmers from the Veroes Fundos (Photo: Colectivo Tierra Nuestra)

Edward Ellis of Venezuelanalysis interviewed Bevere Director of Education and Pulblic Relations Miguel Basabe in 2007. Basabe defines endogenous development as giving

"potential to the vital capacities of the human being to improve his/her social wellbeing and after that, production coming from the resources that he/she has. . . . Water, land, all of the resources that we have in this space. For example, . . . for me endogenous development of Bevere is the transformation of the human being. Changing ideas, the way of thinking, ways of behaving, starting from the inside and with our potentialities – knowledge, ancestral knowledge, and diversifying production. In the case of Bevere, how does that translate? A diversified production with fruits, cereals, animal husbandry, with production of organic fertilizer, production of organic products, managing the ecology of cultivation promoting ancestral knowledge like artisanal works and culture that’s to say all the knowledge that will let us create from the inside. For me, this is endogenous development – creating from the inside towards the outside."[30]

Bevedere was nominally a social association cooperative before Chavez’s election, but Basabe says that before the community occupied the land, "we did practically nothing as an organization. Everybody was in a different place and others worked. We began to function as an organization when we occupied the land. We began to live together and to learn how to live together because before we didn’t know."

While Basabe says he is happy with the way that the cooperative has developed, he sees its formation as a pragmatic tool of survival, rather than a patriotic vision. "For us, one of the first things we had to do was accept the reality that we have now – that there is a process of change and that as a social organization we have to be framed or directed by the policies of the state," He said. "The Fundos Zamoranos are a policy of the state so as we are a Fundo, we have to put into practice what the policies of the state are telling us." Basabe sees the directors’ work at maintaining the cooperative as a necessary commitment in order for the community to be able to take advantage of the land given to them by the government.

In Bevere, Basabe says, there was little knowledge of cooperative farming, but using the state’s cooperative structure has increased participation of community members. Responsibilities are delegated to every member, who must account for and record materials and labor. "It has permitted us to increase the level of commitment from every compañero," says Basabe, "so that every compañero takes up a protagonistic role and is a principal actor, not a secondary actor."[31] 

A more industrial example is available in the Ezequiel Zamora Agro-Industrial Sugar Complex (CAAEZ), which was inaugurated in November of 2006. The complex has been in the works since 1975, but corruption schemes of monumental scale, the most recent of which was uncovered in early 2006,[32] have seen the disappearance of billions of USD and left small farmers in the lurch. The government created a new administrative board and Chavez personally attended the opening celebration of the Complex, calling it "a part of Latin American integration, cooperation, collaboration and exchange," as many of the machines came from Argentina in exchange for oil. Chavez added that the machines and loans awarded to the 1,400 farmers and producers are part of the program of support that The Bolivarian Revolution is giving to the Venezuelan Campesinos when it secures the recuperation of lands and makes them productive. "It is the revolution for the liberation of food," said Chavez. [33]

A Bust in the Cooperative Boom

Though government incentives have brought hundreds of new coops into existence, journalist Michael Fox writes that documentation of the "cooperative boom" might be misleading. According to a census taken two years after the initiation of Mission About Face!, more than 60 percent of registered cooperatives were not in operation.[34] Fox attributes this statistic to "businesses that registered and either never got off the ground or failed to comply with the cooperative law." However, he also mentions rare cases of "so-called "ghost cooperatives" [that] registered and received loans from the government before disappearing with the cash."[35] Other businesses registered as cooperatives to take advantage of the income tax exemption. The government upped auditing infrastructure to try to address this problem, but in September of 2008, SUNACOOP officials were still asking for data from the now 248 thousand cooperatives across the country to confirm data to cooperatives that operate as defined by Special Law of Cooperative Associations from those only cooperative in name.[36] They are also continuing overtures to members of cooperatives that formed before Chavez became president.

The Traditional Cooperative Movement

About eight hundred Venezuelan cooperatives were formed before the Chavez Administration and haven’t been entirely happy with the Bolivarian model of cooperative. While they have used the government’s protection and tools, successful cooperatives have their own identities and know-how. According to Camila Piñeiro Harnecker, who visited over 25 cooperatives,

"When talking to members of Venezuela’s traditional cooperative movement, I noted that although they had been invited to participate in the writing of the Law of Cooperatives, they felt excluded from policymaking. They argued that the government’s promotion of cooperatives is irresponsible and opportunistic because they have made it too easy to create a cooperative (the requirement of proving feasibility was eliminated), and that they are been used for political agendas. Most new cooperatives are doomed to failure, critics say, because they are dependent on state resources and they lack management and administrative skills. They also criticize MINEP for creating cooperatives with members who don’t share the cooperative values and for corrupting them by providing easy credit and too much paternalistic aid."

A Cecosesola Feria (Photo: Silvia Leindecker)

One well established pre-Chavez cooperative is the Central Cooperative for Social Services of Lara, known as the CECOSESOLA. It now has an enormous infrastructure that employs more than 300 associated workers, 20,000 associated members, and contains over 80 cooperative that provide services including grocery, agricultural, savings, production, and a puppet crew. While their weekly sales of $800,000, (about $40 million annually), are from the low-priced groceries and fresh produce they buy from affiliated cooperative producers and sell to over 55,000 families, they also provide funeral services, an appliance consignment program and a hospital.[37]

An integral part of the CECOSESOLA produce program is ensuring that the residents of poor neighborhoods have access to inexpensive produce. They take busses of vegetables to poorer neighborhoods, and help residents set up a local market if there is demand. This occurs all without government or charity financing. Long-time CECOSESOLA organizer, Gustavo Salas Romer, told journalist Michael Fox in May of 2007, "The goal is transformation. The economy is secondary." [38]

When CECOSESOLA was founded in 1967, there were no government programs to support them. In fact, in the 1970’s, members were branded as subversives, and government spies infiltrated the cooperative as members. Local government looted their transportation cooperative because they were offering services cheaper than private companies. CECOSESOLA was bankrupt for fifteen years before it managed to pull a profit again. When Chavez took office, CECOSESOLA lobbied to have cooperatives included in the constitution.[39] 

However, when journalist Justin Vela visited CECOSESOLA for two days in the spring of 2007, he observed "nobody I encountered in two days was a Chavista," which he interpreted as "a significant and sharp critique of Chavez." He had assumed that CECOSESOLA members would be "among Chavez’s most ardent supporters," but when he talked to workers, they described the government programs as slow and lacking in materials.[40] 

Since Chavez’ election, CECOSESOLA has protected its independence and unique infrastructure. While government organized cooperatives have elected leaders and management, all CECOSESOLA workers are considered equal, jobs are rotated, and decisions are made through the consensus process.[41] "We are a-political and a-religious," Salas Romer told Fox. "We have been called a lot of things, but we stay with our own process. That is our strength. If we were to get caught up in politics and religion, it would create divisions and we would fall apart."[42] 

As Vela observed "CECOSESOLA doesn’t believe their systems is the best. What they do believe is that you cannot export a structure for a cooperative. It is a matter of internal relations and changes that a cooperative has to go through until they reach the point where they can be successful."

Members of decade-old cooperatives that fought for rights during the administrations of decidedly non-cooperative friendly presidents might well look down on cooperatives like the Fabricio Ojeda NUDE, and the Organopónico Bolivar I, which are the pilot projects of the Bolivarian Revolution, and are therefore carefully cultivated as models for success.

In May of 2006, representatives from the "traditional" and Bolivarian cooperative sectors met at the first meeting of the National Executive Cooperative Council (CENCOOP) took place in an attempt to "articulate and integrate Venezuela’s thousands of cooperatives into a united cooperative movement." [43]

In the first half of 2008, food prices rose globally in what the United Nations World Food Program has called a "silent tsunami." This past spring, the presidents of Bolivia, Nicaragua and Venezuela and Cuba’s vice-president met at a summit in Caracas, where they agreed on a $USD 100 m plan to offset the shock of rising prices on their countries’ poor. Summit host Hugo Chavez called the food crisis "the biggest demonstration of the historic failure of the capitalist model."[44] One thing has become clear: by any name, endogenous development or food sovereignty, leaders across the world would do well to focus on feeding their citizens. So much the better if the citizens themselves are already leading the way for state.

Notes: