In the last two decades, the best agricultural lands in Bolivia have been put into commercial production by large-scale producers closely linked to foreign investors, particularly Brazilians. Foreigners now control more than one million hectares of prime agricultural and ranching lands in Bolivia, primarily in the eastern lowland department of Santa Cruz, an important agro-export region dominated by transnational corporations.
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In the last two decades, the best agricultural lands in Bolivia have been put into commercial production by large-scale producers closely linked to foreign investors, particularly Brazilians. Foreigners now control more than one million hectares of prime agricultural and ranching lands in Bolivia, primarily in the eastern lowland department of Santa Cruz, an important agro-export region dominated by transnational corporations.
While the initial migration of Brazilian investors to Bolivia began in the 1980s, Bolivian liberalization policies in the 1990s facilitated access to inexpensive and fertile lands. The department of Santa Cruz has been the primary target for Brazilian investors, where they achieved a much higher profit margin than in Brazil because of the low price of land; the low price and easy convertibility of the US dollar as the currency of transaction; and the extremely low rate of taxation on land and exports. State subsidies and the “freezing” of the price of diesel for the last two decades were also central to the expansion of the agricultural frontier in Santa Cruz.
Since 1990, the area of cultivation in Santa Cruz has expanded from slightly over 400,000 hectares to more than two million hectares in 2011. Since 2005, a new round of Brazilian land investments in Santa Cruz has emerged, this time for ranching. There are currently approximately seven million head of cattle in Bolivia, three million (or 40 percent) of which are located in Santa Cruz. Pressure is mounting to expand both soybean production and ranching operations into forested areas.
According to the Regulatory Agency for the Social Control of Forests and Lands, 3.3 million hectares of forest have been illegally deforested in Bolivia between 1996 and 2009 alone. The environmental degradation of the eastern lowlands has caused several micro-climatic changes in the region, increasing water stress. In the Santa Cruz province of Velasco, water is often controlled by cattle ranchers who dam brooks to water their cattle. Indigenous farming communities living downstream claim that their streams no longer run except in very wet years, leaving them without water.
Despite President Evo Morales’ political discourse against the latifundio (large landholdings), the state has not done much to hinder foreign direct investment in land. And foreign agribusiness has found ways to circumvent existing regulations, influence political power within Bolivia, and tap into longstanding discrimination against indigenous people in the name of regional development.
Existing regulations regarding land rights and titling in Bolivia—including the Law of Community Reorientation of Agrarian Reform of 2006 and the new constitution of 2009— permit the free sale and purchase of lands between private parties, irrespective of their nationality as long as the area does not exceed 5,000 hectares. However, in order to bypass regulations and obtain bank loans (which require a proven permanent presence in the country) many of Brazilians have married Bolivian citizens or created companies through associations of Bolivian citizens that (for the most part) exist only on paper.
Foreign investors also benefit from underlying forms of regionalism and discrimination that are pervasive in Bolivia. For example, Bolivian and Brazilian large-scale producers in the eastern lowlands have a kind of “ethnic pact” which identifies indigenous (Quechua and Aymara) peasant settlers from the highlands as their common enemy. Peasants are blamed for various social ills, including cocaine production and narco-trafficking; deforestation; and indiscriminate “slash and burn” agriculture.
These negative perceptions—particularly among the middle classes of Santa Cruz—are mirrored by a favorable view of foreigners. Indeed, the foreign presence in Santa Cruz is highly regarded and even sought-out as a means of making lands more “productive” and attracting capital, technology, employment, market knowledge, inputs and genetically modified seeds.
Foreign control over land and resources for industrial agriculture and ranching is also undermining regional and national food security. Despite increased agricultural production in the eastern lowlands—and the Morales administration’s attempts to promote greater domestic food production—Bolivia’s food supply remains precarious. The country imported a record $1.1 billion in food between 2006-2010 (over 600,000 tons in 2009 alone). While food imports maintain domestic price stability and satisfy the increasing urban demand, they discourage domestic production, in particular, that of smallholder farmers.
Meanwhile, the great majority of the profits obtained by foreigners in the commercial soy and ranching sectors are repatriated to their country of origin—particularly Brazil and Argentina—while little is reinvested in Bolivia. The benefits of the great soy expansion in Bolivia are concentrated in the hands of a small population of mostly foreign agrarian elites, with substantial environmental and social costs and arguably few benefits to the country.
Miguel Urioste F. de C. is Senior Researcher at Fundación Tierra