The sugarcane industry in Colombia

During the first decades of the 20th century, industrialization began in Colombia. The fast expansion of the sugarcane market allowed for the implementation of industrial plantations. At that point plantations arose such as Riopalia of the Caicedo family, Providencia of the Cabal family, and Mayagüez of the Hurtado Holguín family, and these continue to be the primary producers of sugarcane in the country.

Afterwards, the plantations of Valle del Cauca province greatly expanded in the period known as “La Violencia” between 1946 and 1958, leading to the consolidation of their control over the sugarcane market in Colombia. During this period, two million people were forcibly removed from their lands and together lost 350 thousand properties. Valle del Cauca was the department with the largest number of forcibly removed families. Close to one million people lost 98,400 properties in the province.

Currently, the conglomerate Ardila Lülle is one of the largest producers of sugarcane in Colombia. Its origins are in the soda industry, which it monopolized to such an extent that currently only Coca-Cola is able to compete with the company, since Lülle bought out the Colombian Pepsi Co. subsidiary. Ardila Lülle also owns textile companies and the radio and television company RCN, one of the two media companies that control Colombian communications. The company fully owns the Cauca sugarcane plantation, 52% of the Providencia plantation, and 35% of the Risaralda plantation, which was founded in 1979 with investment from the Coffee Growers’ Foundation, the Colombian state, and the Western Financial Corporation, which is dominated by Citibank.

Ardila Lülle is the principal promoter of ethanol production in Colombia. Their Cauca, Providencia, and Risaralda plantations produce 65% of all Colombian sugar-based ethanol, while Manuelita plantation and Mayagüez plantation produce the remaining 20% and 15% respectively.

Ethanol production in the country is the result of the large capacity for bureaucratic capitalism to maneuver in the country. (1) Law 693, passed in September 19, 2001, determines that, beginning in September of 2006, gasoline in Colombian cities larger than 500 thousand inhabitants must be mixed with ethanol. The cost of ethanol production is higher than that of gasoline, and despite ecological and social motivations, the law was a decisive imposition that allowed Ardila Lülle to profit from the price of ethanol at US$2.40 per gallon, much more profitable than gasoline produced by state oil company Ecopetrol, sold at US$1.26 per gallon (Serrani, 2007).

Law 788 in 2002 exonerated ethanol producers from state taxes and taxes on fuels, incentives that cost the state US$100 million per year. The government’s program of “oxygenated gasoline,” which promoted gasoline that contains a 10% mix of ethanol, began in November 2005 in the Southwest of the country and in the coffee-growers’ zone, and in February 2006 in Bogotá.

How can Ardila Lülla and other large sugarcane corporations impose these kinds of mega-profits?

The company has strong ties with the state. Ardila Lülle supported the elections of Pastrana and Uribe, as well as Congress members.

Ardila Lülle has a strong influence over media through RCN. The media company has, over the past couple years, been publicly apologetic for paramilitary groups that have assassinated close to 4000 union workers, while controlling extensive areas of land.

The United States seeks to increase ethanol production and other agrofuels as a solution to their energy crisis, while receiving low cost petroleum from Colombia. It is convenient to the United States that Colombia consumes agroenergy, since its cost is higher than gasoline, allowing for a larger quantity of Colombian petroleum to be exported to the United States at a cheaper price.

The situation of workers

Thirteen sugarcane plantations are composed of 30 thousand workers without contracts. The previously strong unions have been reduced to minimal strength. Contracts are forged through so-called “cooperatives” that were created to conceal labor relations within the plantations.

Nonetheless, the sugarcane “cooperatives” began to strike since 2003, when 1600 operators shut down the La Cabana plantation. More recently, beginning in May of 2005, more than 2700 sugarcane cutters from the Cauca plantation stopped work. Following that, an additional 7000 workers went on strike at Mayagüez, Manuelita, and other plantations. The lack of regulations of worker relations impeded the authorities from declaring that the strikes were illegal, and the structure of “cooperatives” was used against their inventors.

However, working conditions for sugarcane cutters continue in shambles. Edison Arturo Sánchez, organizer of the strike in Castilla, was assassinated. At the La Cabaña plantation, the accords reached on working conditions were completely disrespected and the strikers were demoted.

The sad history, and future, of palm oil

Palm oil was originally produced in Colombia by large landowners that took advantage of the land they accumulated in regions such as Magdalena Médio after the displacement of peasants during the period of “La Violencia”, from 1946 to 1958.

Palm companies, the largest of which was Indupalma of the Gutt family, imposed super-exploitation of workers. Unions achieved some space for workers’ rights, but the response to worker’s organization was repression, the criminalization of strikes, and violence against union leaders. Losses within union organizing were expressed by the weakness of the organizations, and large numbers of workers left unions to form “cooperative associations,” established to conceal labor relations.

Palm oil companies prefer to cultivate lands belonging to others, externalizing degradation to those lands, which also allows the companies to avoid taxes and establish supposed “strategic alliances” or “productive associations” with peasants and indigenous peoples who hand over their lands. Beyond giving up their lands, these smallholders also “offer” their labor with no working contract, as so-called “business partners” to the companies.

These companies have forged an exceptional situation that allows them to evade the cost of land and taxes, to substantially reduce wages, and to eliminate the payment of social programs. Meanwhile, society assumes the environmental costs of palm exploitation, as the companies amass profits.

Transnational corporations in the vegetable oil industry, such as Unilever, are the principal benefactors of this business, stimulating the growth of palm oil plantations throughout the tropical world. Beginning in Malaysia and Indonesia, they grew and expanded into Cameroon, Nigeria, and other countries in Africa, Central America, and South America. This tended to lower the price of palm oil on the international market, which benefited corporations that use it in their products.

More recently, as the price of palm oil has declined, the extraordinary increase in petroleum costs produced a new impulse for the expansion of palm oil plantations for the production of agrodiesel. The business is presented as one of the most extraordinary markets in history, and one which will guarantee magnificent ecological impacts for the world.

Nonetheless, for citizens in countries and regions of production, the effects could be devastating. Tropical forests and native vegetation will be destroyed, reducing biodiversity; soils will be degraded as palm plantations continue their productive cycles and utilize chemical inputs; and food sovereignty will be placed at risk as plantations expand, exchanging food production for fuels which, for the most part, will be exported.

Legislation over palm oil establishes that its production must be exempt of taxes. Plan Colombia and the World Bank have established special programs for the production of palm oil. State laws currently in progress foresee subsidies and state investments in the industry.