CIA) THE COFFEE INDUS5RY
adoption on2omprehensive agrarian program foreshadows significant sociological, economic and political changes in Guatemala. Full implementation of the law would free thousands of agrarian workersenturies-old dependence upon the privileged landholding class, but would subject them to close control by the state through supervisionirtually autonomous National Agrarian Departmenthrough limitation on land usage, through population concentrations and through the extension of technical and other assistance.
Full and rapid implementation of the law would be likely to produce serious economic repercussions. Thus far uncertainty and confusion have depressed business activity, particularly in Guatemala City. To date, however, agricultural productionhas not been affected.
Implementation of the law will be difficult because of theof suitably located landa, became of the long-standing customs and prejudices of the largely Indian agrarian population, and because of the probabilityompetent and uncorruptorganization cannot be perfected. Furthermore, the cost of establishing the necessary organization for administering the law will probably be very high and may deter the progress of Its
The Agrarian Reform Law, which was enacteds notrogram of the Arbenz administration, but had Us origin in the Guatemalan revolutionary policy introduced The groundwork for this legislation was laid inhich provided for state direction of the national economy, expropriation of unused private lands with priorincorporation of such lands into the national patrimony, rental and granting of nationalized lands, formation of agricultural communities, collective farming, protection of cjidal and communal lands and state technical and* other assistance to agricultural
stitution and the enactment of the Agrarian Reformumber of land proposals were advanced. Almost all of them advocated theand division of large privately-owned estates. Except for the passage of the compulsory land rental legislationo positive action was taken by the Arevalo. President ARBENZ,irmly committed himself to agrarian'reform, and repeateoly stressed the inequity of land ownership, the scml-feudal nature of tenancy and laboring arrangements, and thecultivation methods employed on small holdings. One submitted to the National Congress the draft legislation which became law the following month. In the final preparation and enactment of the bill Communistsrominent
C. Provisions for Redistribution of Land
Under the provisions of the law, certain land is specifically designated for redistribution and certain land is exempt. Land to be redistributed includes uncultivated land, land not cultivated directly by or for the owner, land rented in any form, land needed torural farm settlements, state farms and certain other national lands, certain municipalland* and excess lands determined by new surveys prior to expropriation. Excluded are farms of lesscres whether or not cultivated, farms ofcres ii at least two thirds of these lands are cultivated, land belonging to Indian or farm communities, land of agricultural enterprisesessential crops--COFFEE, cotton, citronclla, lemon grass, bananas, sugar cane, tobacco, rubber, quinine, fruits, feedgrass, beans andland not directly used by the enterprises or exploited by systems established by this law, lands used for cattle raising, all legal forest reserves and land within fiveof Guatemala City and in the immediate vicinity of other municipalities.
Expropriated land may, at the discretion of the administrative authority, be granted to small farmers and agricultural workers in plots not to exceedcres, or it may be nationalized. Nationalized lands may be rented to agricultural capitalists, or the department may grant the use of small parcels to farmers and agricultural workers for the duration of the grantee'ssers of the land will pay an annual rental fee of three per cent of the value of the annual harvest to the National Agrarian Department.
Nationalised lands may be rented to any person who cannot less thaner cent or more thaner cent of thenecessary to develop the land. No person may rent morecres nor pay more than five per'cent of the annual harvest as rental. Contracts may be cancelled at the end of two years if the renters have not made good use of the
The state-owned fincas will be included in the program under the following conditions:
If the majority of the workersinca so desire. In such event, the land would be divided among the workers, each toarcel for use during his lifetime. If any land is left over after the distribution among the workers, it will be made available to small farmers.
ajority of the workers so desire, they may operate the farmooperative.
The equipment and supplies of the fincas that becometo this program will be turned over to the National Agrarian Department, which will make them available,
at its discretion, to the small farmers and cooperatives.
Natural Guatemalans may obtain up tocres of grazing land in the Department of El Peten. The land will be rent free for six years, after which, if it is properly developed, in the judgment of the DAN, the user mayease under terms to be established by the department. The department may recapture the land at the end of the second year, however, if it believes the land is not being properly used.
The National Agrarian Department is authorized to set up agricultural corporations to operate the state-owned fincas which are notart of the reform program. The state would holder cent of the shares, and Guatemalan capital would holder cent. Private shareholders would manage the
D. Availability ot Land (or Redistribution
Of the land available for redistribution under the law,mall part is desirably located. In the most productive sections of the country, principally the highlands, the privately-owned farms generally are small or for other reasons exempt from expropriation. Those that are larger arc situated almost entirely in thelowland regions or in inaccessible parts of the highlands. Much of the suitably located and available land is that comprised in the state farms. This situation and the reluctance of the largely Indian agrarian population to migrate to the lowlands probably influenced the administration during August and2 to make the first actual distributions of landational plantation and other holdings. Inrrangements were being completed for the breakup oftate farms, and several have since been distributed. Effective2 the Departmcnto de Fincas Rusticasntervenidas (Department of National aadFarms) was legally dissolved, and its properties transferrediquidating commission pending distribution of the land under the Agrarian Reform Oncheduled completion date of liquidation of the National Farms, those farms not yetwere transferred to the National Agrarian Department.
In the last week of June, Congress approved an amendment to Articlef the Agrarian Reform Law transferring the commercial and industrial establishments administered by the National Farms to the Production Development Institute (INFOP) and providing for the dissolution of any government-private companies formed to operate such establishments under that article. As originallyto Congress by the Executive in March, the amendment would have transferred to INFOP only those installations-not taken over by government-private companies before the scheduleduneof Fincas Nacionales. But no applications for mixedwere approved and Congress has now eliminated the possibility of participation by private business. Beforeune, approximatelypplications had been made to operate thend sugar mills located on the National Farms, but an INFOP official said confidentially that the government was afraid private operators might take advantage of farmers when buying greenand sugar cane and that this might cause conflicts between them. ew sound business men were interested inin which the government wouldontrolling
E. Administration of the Law
Authority for implementing the law restsheof the Republic; he National Agrarian Department; he National Agrarian Council;he Departmental Agrarian Committees and (S) the Local Agrarian Committees.
According to the law the president is the "supreme andinstrument, empowered to resolve definitely all questions arising under the law. The National Agrarianependency of thes authorized to prepare regulations for implementing the law, the indemnification of thefor expropriated properties and to grant titles to new owners or leases to Major Alfonso MARTINEZ, close friend and former private secretary to President ARBENZ, is chief of the National Agrarian Department. He is described as "unscrupulous, corrupt, and shrewd. "
Local Agrarian Committees take inventory of land subject to expropriation under the law, process applications for denunciation of affected land and award the use of such land.
Departmental Agrarian Commissions have been set up tothe acts of the local committees, and the National Agrarian Council is the high court of review, although its decisions may be reversed by the As originally set up, theCommittees were composed of five members, two of whom were representatives of the Communist-dominated laborCGTG, and small farmers and tenants union, CNCG. Onongress passed an amendment to th* AgrarianLaw reducing the representation of the Departmentalfrom five to three members: the departmental governor and one representative each from the CGTG and the CNCG. This legislation, which has yet to be approved by the president, was proposed to Congress by its Special Committee on Agrarian Reform headed by Communist leader Victor Manuel GUTIERREZ. GUITERREZ' successheck for Major Alfonso MARTINEZ, chief of the DAN, who originally proposed the elimination of CGTG and CNCG representation on the commissions ln apparent hope for more orderly implementation of the law,
F. Procedure for Acquisition of Lund Subject to Expropriation
The law establishes that land expropriated or subject towill be granted by the state through the National Agrarian Department to peasants, farm hands, other agricultural workers and agricultural capitalists who request it. The first three groups may acquire it in usufruct for life or in lease for the periodin each case. Agricultural capitalists may acquire it only under lease. The National Agrarian Department also may grant to the peasants, farm hands and other agricultural laborersof parcels of land of not more thanectares. The law also provides that any person, agriculturer or not, with capital will have the right to request under lease upectares of nationalized lands provided he guarantees not less thaner cent or more thaner cent of the investment necessary to develop the land.
To acquire land, any of these persons may file with the local Agrarianerbal or written denouncement of the land subject to expropriation. Within three days the committee will inspect the land covered by the denouncement, sending its findings and recommendations to the Depa rtmental Agrarian Committee. After the departmental committee's receipt of the claim, the owner of the denounced land will be granted five days to submit his legal objections. If the owner requests, the committee will grant him an additional eight days to submit evidence to support his objections. Within three days of the end of this period, the departmentalwillesolution approving, modifying or rejecting the local committee's recommendation.
The landowner may appeal this resolution to the National Agrarian Council, which will grant himays to make hisand will give its decision within the following three days. The decision may be appealed to the president of the Republic. If the landowner accepts the resolution of the Departmental Committee or if his recourses arc denied by the president, the claim will be submitted to the Executive which will thenecree ofcountersigned by the minister of interior. The decree will be forwarded to the National Agrarian Department for its application* and enforcement, and the Local Agrarian Committee will be empowered to give possession of the land affected by the expropriation to thementioned therein.
Requests for leases of nationalised lands muat be filed with the National Agrarian Department, which will resolve the request withinays from the filing date. If the resolution is acceptable, the department will grant the requestor the lease contract. If the request is denied, the solicitor may take the legal recourse off the recourse is denied, an appealinalmay be made to the
mplementation of the law proceeded slowly and produced some confusion and controversy. Many misinformed rural workers evidenced great disappointment when informed that lands exempt from expropriation could not be distributed to them. The program was accelerated In the pre-electoral periodn the course of the accelerated land distribution program, "squatting" and forced seizures by the peassntry have taken place, and aome have been upheld by the
On the first anniversary of the enactment of the law, theAgrarian Department announced that during that pastcres of uncultivated private lands had been expropriated and were to be dividedarm laborers. The DAN also claimedcres ofational farms had0 workers,rganized in cooperatives;0 head of cattle had been distributed, andn credits had been extended the new Landholders through the National Mortgage
Geographic distribution of the lands expropriated and delivered to campesinos through3 was outlined in theayof the pro-government Nuestro Diario. The paper reportedrivate fincasotalanzanasanzana is approximately2 acres) have been redistributed; owners of these lands have been indemnified with agrarian bonds valued at
The expropriated fincas are distributed throughepartments as follows: Guatemala,anzanas, indemnified with bonds valued; Chimaltenango,an-aanai, at; 1 manzanas,; El Progreso,anzanas. Escuintla.1 manzanas,; Santa Rosa, anzanas, at
olola,anzanas,; Suchitepequez,7 manzanas.; Sanan. zanas,; Baja2 manzanas, at; Altaanzanas,, and7 manzanas.
The percentage of coffee growing lands included in thesehas not been reported, but according to an official Guatemalan radio report ofhe finca Velazquez, belonging toompania, one of the important coffee exporters, was scheduled to be distributed within'
If the Agrarian Law is fully implemented, the impact uponlandholders will be borneelatively small group. TheGeneral Directorate of Statistics estimates that private agricultural holdings,ould be affected. oldings, however, comprise more than half of the total private acreage. Their owners would notrastic loss of cultivated land, but would be prevented from expanding future operations byof their uncultivated lands. For owners whose lands have been condemned, provision exists for indemnification based upon the generally low tax valuations as Compensation is to be in bonds bearing three per cent interest, redeemable inears or less.
H. Financial Provisions
The National Agrarian Department established an Agrarin Debt Fund from which owners of expropriated lands were to be indem- nified and financial and technical assistance and credit madeto small farmers and workers to whom land has been awarded.
The department is authorized to issue Agrarian Reform .bonds upuetzals. The bonds are guaranteed by the state and pay three per cent interest. Payment is to be made from revenue received from the rental and leasing of expropriated land, from fines and from other means.
The bonds are to be used to indemnify the owners of expropriated property. The bonds will be redeemedliding scale ranging fromer cent annually for properties valued
The law also provided for the creationational Agrarian Bankhich was approved by the Congress and the president in July The BANew type of financialfor Guatemala. The National Mortgageovernment agency, has been furnishing nominal credits to beneficiaries of the Agrarian Reform Law but has not been in the position to meet the requirements of agrarian reform. Theapital for the BAN was provided inublic works bond Issue authorized by Congress in
The bank is authorized to extend agricultural credit, and the Agrarian Debt Fund will be used to give necessary technical and economic assistance to the users and lessees of the expropriated land. Economic aid is to consist of supplyingust price and in the most favorable conditions ofeeds, work animals, tools and agricultural
Leftist influence in the operations of the BAN was insuredrovision in the Organic Law giving the Communist-dominated CGTG and the Communist-oriented CNCG one seat each on the board of directors. Their representatives are to serve at the pleasure of the organizations nominating them and hence may be removed at any time if their actions are displeasing to their96/
1. Economic Repercussions
Thuserious business recession, particularlyGuatemala City, has been the major economic repercussion of implementation of the reform program. Rapid and immoderate implementation of the law may well affect agricultural production, the basis of Guatemala's economy, but this has not yet taken place. Landholders greatly fear that labor shortages, loss of land, the depreciation of land valuesecline in credit will beharmful to their
J. Sociological Implications
Inherent in the law is the far-reaching social change ofthousands of agrarian workersenturies-old dependence upon the privileged, large landholding class. Existing forms of
servitude, such as the leading, by one landowner to another of the personal services of farm laborers, the forced distribution of Indians and the payment of land rental in labor arc now prohibited.
Under the agrarian program the rural classes would beto rather close control by the state. This would be exercised through the National Agrarian Deportment, which is responsible for enforcing certain limitations upon those using redistributed land. Because the great bulk of the land expropriated would be incorporated into the public domain, holdings could be acquired only on the basis of life grant or by rental. Another feature of the law facilitating state control is the provision for concentration of the agrarian workers on each private plantationingle village. Further control may be exercised through the National Agrarian Bank and the Agrarian Debt Fund, which may arbitrarily extend or deny credits or technicalOriginal document.