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«Post-Conflict Reconciliation and Development in Nicaragua The Role of Cooperatives and Collective Action Peter Utting, Amalia Chamorro and Chris ...»

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Working Paper 2014-22

Post-Conflict Reconciliation

and Development in Nicaragua

The Role of Cooperatives and Collective Action

Peter Utting, Amalia Chamorro and Chris Bacon

December 2014

UNRISD Working Papers are posted online

to stimulate discussion and critical comment.

The United Nations Research Institute for Social Development (UNRISD) is an autonomous

research institute within the UN system that undertakes multidisciplinary research and policy

analysis on the social dimensions of contemporary development issues. Through our work we aim to ensure that social equity, inclusion and justice are central to development thinking, policy and practice.

UNRISD, Palais des Nations 1211 Geneva 10, Switzerland Tel: +41 (0)22 9173020 Fax: +41 (0)22 9170650 info@unrisd.org www.unrisd.org Copyright © United Nations Research Institute for Social Development This is not a formal UNRISD publication. The responsibility for opinions expressed in signed studies rests solely with their author(s), and availability on the UNRISD Web site (www.unrisd.org) does not constitute an endorsement by UNRISD of the opinions expressed in them. No publication or distribution of these papers is permitted without the prior authorization of the author(s), except for personal use.

Contents Acronyms

Summary

Acknowledgements

Introduction

The Rise of the Cooperative Sector in Revolutionary Nicaragua

Tensions Affecting Cooperative Development

Counter-Reform under Neoliberalism

The Double Movement

Civil and armed resistance

The Las Tunas conflict

Structuring a cooperative movement

The rise of fair trade

El Bono: The productive food parcel

Concluding Remarks

References

Interviews

i Acronyms ALBA Alianza Bolivariana para los Pueblos de Nuestra América (Bolivarian Alliance for the Peoples of Our America) ATC Asociación de Trabajadores del Campo (Association of Rural Workers) BND Banco Nacional de Desarrollo (National Development Bank) CAFENICA Asociación de Pequeños Productores de Café de Nicaragua (Nicaraguan Association of Smallholder Coffee Cooperatives) CAPSM Central American Peace and Solidarity Movement CARUNA Cooperativa de Ahorro y Crédito, Caja Rural Nacional (Rural Savings and Credit Cooperative, National Rural Fund) CAS Cooperativas Agrícolas Sandinistas (Sandinista Agrarian Cooperatives) CCS Cooperativa de Crédito y Servicio (Credit and Service Cooperatives) CECOCAFEN Central de Cooperativas Cafetaleras del Norte (Coffee Cooperatives Central Association in the Northern Regions) CENIDH Centro Nicaragüense de Derechos Humanos (Nicaraguan Centre for Human Rights) CIPRES Centro para la Investigación, la Promoción y el Desarrollo Rural Social (Center for Research and Promotion of Rural and Social Development) CLAC Coordinadora Latinoamericana y del Caribe de Comercio Justo (Latin American and Caribbean Network of Smallholder Fair Trade Producers) CMR Coordinadora de Mujeres Rurales (Network of Rural Women Producers) CONACOOP Consejo Nacional de Cooperativas (National Council of Cooperatives) ENABAS Empresa Nicaragüense de Alimentos Básicos (Nicaraguan Basic Food Company) FECAMPO Federación de Cooperativas Campesinas (Federation of Rural Cooperatives) FECODESA Federación de Cooperativas para el Desarrollo (Federation of Cooperatives for Development) FEDECARUNA La Federación de Cooperativas de Ahorro y Crédito de Nicaragua (Federation of Savings and Credit Cooperatives of Nicaragua) FEDUBONIC Federación de Dueños de Bosques de Nicaragua (Federation of Forest Owners) FEMUPROCAN Federación Agropecuaria de Cooperativas de Mujeres Productoras del Campo (Agricultural Federation of Women’s Producer Cooperatives) FENACOOP Federación Nacional de Cooperativas Agropecuarias y Agroindustriales (National Federation of Farming and Agroindustrial Cooperatives) FENIAGRO Federación de Cooperativas Agroindustriales de Nicaragua (Federation of Agro-Industrial Cooperatives of Nicaragua) FLO Fairtrade International FSLN Frente Sandinista de Liberación Nacional (Sandinista National Liberation Front) FUAC Frente Unido Andres Castro (Andres Castro United Front) GDP Gross domestic product ICA International Cooperative Alliance INFOCOOP Instituto Nicaragüense de Fomento Cooperativo (Institute for the Promotion of Cooperatives) MAF Mesa Agropecuaria y Forestal (Agricultural and Forestry Platform) MEFCCA Ministerio de Economia Familiar, Comunitaria, Cooperativa y Asociativa (Ministry of Family, Community, Cooperative and Associative Economy) NGO Non-governmental organization PRODECOOP Promotora de Desarollo Cooperativo de Las Segovias (Promoter of Cooperative Development of Las Segovias) SCAA Specialty Coffee Association of America UCA Unión de Cooperativas Agropecuarias (Unions of Agricultural Cooperatives) UNAG Unión Nacional de Agricultores y Ganaderos de Nicaragua (National Union of Farmers and Ranchers) UNAPA Union Nacional Agropecuaria de Productores y Asociados (National Union of Associated Agricultural Producers) US United States ii Summary This paper examines how cooperatives affected and were affected by the profound political, economic and social transitions that have occurred in Nicaragua in recent decades. It pays particular attention to the shift from the post-revolutionary Sandinista regime of the 1980s to the “neoliberal” regime of the 1990s and early 2000s. In the early 1990s, a peace accord ended years of civil war and the Sandinista government was voted out of office by a coalition of Centrist and Right-wing parties. This meant that policies supporting state and cooperative forms of production were replaced by those favouring privatization, the rolling back of the state and the freeing up of market forces.





Cooperatives and the agrarian reform process initiated by the Sandinista government were heavily impacted by this process, often in contradictory ways. Land redistribution to landless peasant farmers and cooperative organizations continued as part of the process of peace-building prior to the elections. Demobilized military and other security personnel were given land after the elections. Workers in state-owned farms and agroindustrial enterprises also acquired assets when part of the state sector was converted to worker-owned and managed enterprises. But the neoliberal era ushered in a process of decollectivization and dispossession and heavily constrained access to credit and support services for cooperatives and small-scale farmers.

Agricultural workers and producers were not passive bystanders in this process. Their responses conformed to a Polanyian-type “double movement” where societal forces mobilize in myriad ways to protect against the negative social effects of economic liberalization and the dominance of market forces. The pro-market strand of the double movement centred not only on economic liberalization but also an agrarian counterreform centred on decollectivization and returning lands to former owners. The societal reaction or “protective” strand of the double movement consisted of diverse forms of contestation, collective action and social innovation.

Divided in three parts, this paper first outlines the rapid rise of the cooperative sector and its strengths and weaknesses during the post-revolutionary period from 1979 to the electoral defeat of the Sandinistas in 1990. Part 2 examines the uneven trajectory of agrarian reform and cooperative development during the neoliberal 1990s, consisting of counter reform and ongoing redistribution to the landless. Part 3 examines four manifestations of the “double movement” by agricultural workers and producers. They include (i) the proliferation of civil and armed resistance in the early 1990s; (ii) the structuring of a cooperative movement; (iii) efforts to empower small coffee producers via the fair trade movement and the “quality revolution”; and (iv) the drive to reactivate the smallholdings of poor rural women and organize them in pre-cooperative groups.

A concluding section distils the main findings for the addressing the challenge of postconflict reconciliation and development, and refers briefly to the implications for the cooperative movement of the return to power of the Sandinista National Liberation Front in 2007. The main policy lesson for governments engaged in processes of peacebuilding and ‘post-conflict’ reconstruction would seem to be: ignore the issue of inclusive agrarian development at your peril! If a disabling policy environment exists, and if demands for land and employment on the part of subaltern groups are not met, various forms of resistance will ensue, with the possibility of renewed violent conflict and the inability to govern effectively. And when a political party seemingly supportive of the cooperative sector regains the reins of power, renewed support may come at the cost of dependency and loss of autonomy of the cooperative movement.

iii Peter Utting was Deputy Director, United Nations Research Institute for Social Development (UNRISD) until August 2014 and is currently International Co-ordinator, Centro para la Economía Social (CES), Nicaragua. Amalia Chamorro is National Coordinator, Centro para la Economía Social (CES). Chris Bacon is Assistant Professor, Santa Clara University, California.

Acknowledgements This paper was prepared for a panel on the role of cooperatives in post-conflict settings that was organized for the 2014 research conference of the International Cooperative Alliance (ICA), held in Pula, Croatia, 25–28 June. The authors would like to thank Milford Bateman for his encouragement in preparing the paper.

iv Introduction This paper examines how cooperatives affected and were affected by the profound political, economic and social transitions that have occurred in Nicaragua in recent decades. Particular attention is paid to the shift from the post-revolutionary Sandinista regime of the 1980s to the “neoliberal” regime of the 1990s and early 2000s. At the end of the 1980s and early 1990s, a peace accord ended years of civil war, a democratic election saw the Sandinista government voted out of office by a coalition of Centrist and Right-wing parties, and the country’s development orientation abruptly changed course.

Policies supporting state and cooperative forms of production were replaced by those favouring privatization, the rolling back of the state and the freeing up of market forces.

Cooperatives and the agrarian reform process initiated by the Sandinista government were heavily impacted by this process, often in contradictory ways. Land redistribution to landless peasant farmers and cooperative organizations continued as part of the process of peace-building prior to the elections. Demobilized military and other security personnel were given land after the elections. Workers in state-owned farms and agroindustrial enterprises also acquired assets when part of the state sector was converted to worker-owned and managed enterprises. But the neoliberal era ushered in a process of decollectivization and dispossession and heavily constrained access to credit and support services for cooperatives and small-scale farmers.

Agricultural workers and producers were not passive bystanders in this process. Their responses conformed to a Polanyian-type “double movement” where societal forces mobilize in myriad ways to protect against the negative social effects of economic liberalization and the dominance of market forces. In the case of Nicaragua, the promarket strand of the double movement centred not only on economic liberalization but also an agrarian counter-reform centred on decollectivization and returning lands to former owners. The societal reaction or “protective” strand of the double movement consisted of diverse forms of contestation, collective action and social innovation. 1 Divided in three parts, this paper first outlines the rapid rise of the cooperative sector and its strengths and weaknesses during the post-revolutionary period from 1979 to the electoral defeat of the Sandinistas in 1990. Part 2 examines the uneven trajectory of agrarian reform and cooperative development during the neoliberal 1990s, consisting of counter reform and ongoing redistribution to the landless. Part 3 examines four manifestations of the double movement. They include (i) the proliferation of civil and armed resistance in the early 1990s; (ii) the structuring of a cooperative movement; (iii) efforts to empower small coffee producers via the fair trade movement and the “quality revolution”; and (iv) the drive to reactivate the smallholdings of poor rural women and organize them in pre-cooperative groups. A concluding section distils the main findings of the analysis for the addressing the challenge of post-conflict reconciliation and development, and refers briefly to the implications for the cooperative movement of the return to power of the Sandinista National Liberation Front (FSLN) in 2007.

The Rise of the Cooperative Sector in Revolutionary Nicaragua The Sandinista revolution of 1979 that overthrew the Somoza regime brought about a profound transformation in land ownership and control. More than a quarter of 1 The term social innovation refers to innovations in ideas, strategies, organizations and networks that aim to meet social needs or strengthen civil society.

–  –  –

agricultural land—often the best in the country—that had been owned that by the Somocistas, was confiscated and placed largely in the hands of state enterprises and different types of cooperatives. During the early 1980s, state-owned enterprises and cooperatives controlled 67 per cent and 31 per cent of this land, respectively.

The commitment of the FSLN to cooperative development derived from both socialist and Sandinista ideology. The latter had been informed by the practices of the national revolutionary leader, Sandino, who in the early 1930s had organized some 3,000 producers in cooperatives in liberated areas in the north of the country. Following the Cuban revolution, US aid policy under the Alliance for Progress had promoted a limited degree of cooperative development as a part of “third way” approach between exclusionary development and revolution. In 1978 there existed 42 cooperatives with about 9,000 members (Chamorro and Fitzgerald 1987:90). More than 300 agrarian communes were formed during the insurrection of 1978 and 1979 that resulted in the overthrow of the Somoza regime in July 1979 (Nuñez et al. 1995). Within three years of the revolution, 2,849 cooperatives, of different types, with 65,820 members, had been established (Rocha 2010).



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