Reactions to the Market: Small Farmers in Nicaragua, Cuba, Russia and China

Laura Enríquez

Part of the Fall 2010 Bay Area Latin America Forum

October 25, 2010


Laura Enríquez is a professor of Sociology at UC Berkeley. She spoke for CLAS on October 25, 2010.

Tiffany Linton Page is a graduate student in the Sociology Department.

Event Summary

The Future of Small Farmers Depends on State Policy

By Tiffany Linton Page

The last 50 years have seen a steady decline in the number of small farmers in Latin America. For UC Berkeley Professor Laura Enríquez, this trend is not inevitable and should be a cause of concern for people in both the Global South and the Global North. 

As food producers, small farmers are integral to national food security. With the recent increases in food prices, countries dependent on food imports have found themselves vulnerable to the vagaries of international markets. In addition, when small farmers are displaced from the land, they end up migrating to urban areas where there are insufficient economic opportunities. This in turn leads to an increase in urban poverty and the proliferation of shantytowns ringing cities around the world. With limited employment opportunities domestically, some people end up migrating to the Global North in search of work, which raises a number of other social and economic issues that countries in the Global North are grappling with today.

In her recent talk at UC Berkeley’s Center for Latin American Studies as well as in her new book, Reactions to the Market: Small Farmers in the Economic Reshaping of Nicaragua, Cuba, Russia and China, Enríquez presents her findings from years of fieldwork in Nicaragua and Cuba and compares them with existing research on Russian and Chinese agricultural sectors. All four countries transitioned away from a socialist agricultural model toward a more market-based model, but Nicaragua and Russia took a different path from Cuba and China, and this had distinct implications for small farmers. 

In both Russia and Nicaragua post-1990, the state pursued what Enríquez calls a “rapid retreat from socialism.” Likewise, the Chinese case post-1978 mirrors the approach taken in Cuba to the economic crisis of the 1990s, what she calls a “reconfiguration of socialism.” In the Nicaraguan and Russian cases, small farmers were displaced from the land and inequality in rural areas increased dramatically. In the Cuban and Chinese cases, small farmers were integral to the national development strategy and fared better. The growth of inequality that went along with the expansion of market mechanisms was also more limited. 

In 1990, Nicaragua embarked on a rapid retreat from the socialist-oriented programs put in place by the Sandinista government of the 1980s. The new government pursued a neoliberal economic program focused on producing agricultural goods for export markets. Small farmers were not expected to play a role in this new model. State farmland was privatized; cooperatively-owned lands were divided into individual parcels, which in many cases were eventually sold. Farmers had less access to agricultural inputs and other resources, and what resources the government provided went to large farmers. Unable to compete with food imports, many small farmers ended up being pushed into subsistence production. Rural poverty and inequality increased dramatically. Families were torn apart as members went in search of income, taking work as seasonal farm workers on export plantations, seeking jobs in Nicaraguan cities and emigrating to the Global North. 

There was one sector of small farmers in Nicaragua that fared better than the others under the new agricultural model. These were the dairy farmers who found a new market for their products in El Salvador. However, in 2006 the Nicaraguan government signed DR-CAFTA, the free trade agreement between the U.S., Central America and the Dominican Republic. This agreement opened the way for Parmalat, an Italian company that previously purchased milk from Nicaraguan producers, to import powdered milk. In other countries such as Jamaica, the entry of subsidized powdered milk has had the effect of running domestic dairy producers out of business. The implementation of DR-CAFTA has most likely undermined the market foothold the Nicaraguan dairy farmers in Enríquez’s study had found following the reorientation of Nicaragua’s agricultural sector.

Russia also engaged in a rapid retreat from socialism post-1990. In 1991, Boris Yeltsin implemented what has been called “neoliberal shock therapy” in an effort to rapidly transition to capitalism. State investment in agriculture declined; agricultural subsidies were eliminated. As a result, input prices increased and demand for produce decreased as consumer purchasing power fell with the removal of consumer subsidies. The result of this shock therapy was a de-mechanization of agriculture and an exodus from the countryside, particularly among the younger population.

In Cuba and China, the state took a very different approach — a reconfiguration of socialism. Both Cuba and China downsized production. In Cuba, this involved moving away from large state farms and increasing the size of the cooperative sector as well as providing land to individual farmers. The organization of China’s agricultural sector moved from large-scale communes to household production. 

In addition, the Cuban government prioritized the agricultural sector in its allocation of scarce resources because it needed to ensure food for the population. New housing was constructed in rural areas, and there was a general move to improve living standards in the countryside. With these incentives, the Cuban government was able to expand the agricultural sector by attracting people from urban areas, a stark contrast to the exodus from the countryside that occurred in Russia. 

The Chinese and Cuban governments also legalized farmers’ markets to provide an incentive to farmers to increase production. Although inequality increased with the expansion of market mechanisms, it was much less dramatic than in the cases of Nicaragua and Russia. Moreover, both countries succeeded in increasing agricultural production.

Enríquez’ study highlights how the disappearance of small farmers is neither inevitable nor desirable. The countries that emphasized the indispensable economic role small farmers could play in the national development strategy — Cuba and China — were able to increase agricultural production and ensure employment for a substantial sector of the population. The countries that excluded small farmers from the development of the agricultural sector — Nicaragua and Russia — experienced dramatic increases in rural poverty and inequality as well as the social dislocation of families.