On Guatemala’s Pacific Coast, key drivers of migration are connected to the US

The US market for sugarcane and bananas has encouraged plantation owners on Guatemala’s Pacific Coast to drain rivers and grab land. This is causing land and water shortages for small farmers already struggling with intense droughts linked to climate change and corn from the US that devalues their harvests. Meanwhile, I Squared Capital—a US private equity firm that sells electricity in Guatemala—is bankrupting rural families. Faced with these pressures, some farmers are migrating, and others are fighting back.

Article and photos by Richard Brown – Editor / EntreMundos. January, 2018.

Ricardo Gómez is a farmer from Nueva Cajolá, a rural Maya Mam community on Guatemala’s Pacific Coast. His grandparents and other Mayan laborers were ordered to dig a highway tunnel in the 1920s, and in return they were granted a fertile piece of land on the coast that was quickly seized by a European landowner.

Ricardo Gómez.

Eventually, the community ended up on land that had been exhausted by intensive cotton production. Decades of hard work made their land fertile again, but now they are being surrounded by huge, growing sugarcane plantations that are sucking wells and rivers dry. “The sugarcane fields have destroyed small farmers’ produce,” Gómez told EntreMundos. “The fruit on the trees doesn’t ripen, it bruises, it falls. Before, you could go to the market with the fruit and make a little money…but not anymore.”

“We’re screwed” said Catarino López. He explained that the water table has fallen 30 feet in the last few years as the plantations have spread, and that in nearby rivers he no longer finds the fish, crab, and shrimp that were plentiful just 20 years ago.

Catarino López.

Víctor Alvarado, the Red Cross coordinator for the region, told EntreMundos that several years of severe drought linked to climate change have affected small farmers, but that expanding sugarcane plantations have also had a dramatic impact, deforesting huge swaths of land and diverting or draining entire rivers. “These things together are why people lose their harvests,” Alvarado said.

The US encourages the spread of these plantations by buying more of their sugarcane than any other country in the world, turning much of it into biofuel. After Guatemala ratified the Central America Free Trade Agreement (CAFTA) in 2005, sugarcane exports to the US rose, in part because US biofuel legislation mandates increasing amounts of biofuel in the US gasoline supply.

A plantation burns sugarcane for harvest as an irrigation machine waters the seven-foot crop.

Much of the Pacific Coast’s fertile farmland is already controlled by the 2% of farms that use 70% of Guatemala’s arable land, and land ownership is becoming yet more concentrated as powerful plantation owners drain and divert rivers and struggling small farmers see little choice but to sell their land.

Many Pacific Coast African palm and banana plantations cause the same problems. Despite concerns about sourcing, the US buys 87%—over $900 million—of Guatemala’s fruit exports, mostly bananas, every year. Since CAFTA came into effect, the amount of land covered by banana plantations has more than tripled to over 70,000 hectares, and sugarcane has spread to 270,000. Most plantation profits go to the Guatemalan investors who control most sugarcane and African palm operations and the US companies that dominate the banana business in Guatemala.

Graph from the 2018 USDA Guatemala Sugar Report.

Guatemala produces almost $1 billion of sugarcane every year, but the farmers of Nueva Cajolá say that jobs on the plantations surrounding them are seasonal and pay little, about Q12 ($1.63) per ton of cane cut and collected. They say that a sugarcane cutter working from before dawn until after dark with his children might collect five tons in a day, earning about $8. The Guatemalan government estimates that basic nutrition for a family of five costs $483 per month.

Graphic from the World Bank’s Economic DNA of Guatemala report. It states, “Prosperity has not been shared. Despite economic growth, Guatemala is the only country in Latin America in which the income of the bottom 40% fell between 2003 and 2012.”

The success of these plantations at the expense of underpaid workers and nearby communities illustrates why Guatemala’s steady GDP growth has not reduced poverty. The World Bank reports, “Despite economic growth, Guatemala is the only country in Latin America in which the income of the bottom 40% fell between 2003 and 2012.” To make matters worse, food prices have risen steadily as more and more land that once grew food for Guatemalan markets is used to grow crops for export. This is part of why 49% of Guatemalan children under six suffer from chronic malnutrition, one of the five highest rates in the world.

Guatemala’s last major attempt at land reform to address poverty and food insecurity was halted in 1954, when the US deposed Guatemalan President Jacobo Árbenz and replaced a democratic government with a series of US-backed strongmen, in large part to protect the interests of United Fruit, the US banana company that was Guatemala’s largest landowner. This led to the outbreak of an armed conflict in 1960 that lasted 36 years and crescendoed in a genocide of Mayan people in the early 80s. Through it all, export crop plantations owned by a handful of wealthy Guatemalans and foreign companies remained the basis of Guatemala’s economy.

The farmers of Nueva Cajolá are lucky enough to have an average of four acres each to work, and most grow corn, a crop central to Mayan culture. But the US hands billions of dollars in subsidies every year to US corn growers, and CAFTA caused a tide of cheap industrial corn from the US to flood Guatemala.

Prices have plummeted, and farmers earn less and less for their harvests. In September, 2017, farmers from Nueva Cajolá and other nearby communities blocked roads to protest the low price of corn. Catarino López said, “And what did they do? They brought out all those riot police.”

A sugarcane truck exits a plantation. Shortly after this photo was taken from a public highway, guards approached the photographer and his guides and ordered them to leave.

The farmers of Nueva Cajolá are trying to adapt by growing sesame, a cash crop. Each farmer can hope to make just $1,000 in profit per year, however, for lack of land and water.

Many Pacific Coast farmers are leaving their land to migrate either to swelling Guatemalan cities or to the US. Those unwilling to migrate are joining peaceful but combative peasant mobilization groups to confront the pressures condemning them to poverty.

Farmers from Nueva Cajolá recently joined one of the most controversial: the Committee for Peasant Development (Codeca), a national organization that fights for land rights, labor protections, and the nationalization of electricity distribution. Its leaders are routinely arrested and its members face intimidation and threats. In just four weeks in 2018, four Codeca members were killed for their activism.

In Nueva Cajolá, Elisia López said that families like hers have joined Codeca because they now have to choose between sending their children to school and paying increasing electricity bills to Energuate, an electricity distributor owned by I Squared Capital, a US-based private equity firm. She said, “We’re with Codeca so we can make ends meet, so we can support our families. We’re going to give our kids an education…we can’t make it like this, supporting the [electricity] company with all this money.”

Elisia López and her children.

With Codeca’s support, Nueva Cajolá farmers connected themselves directly to the power grid to bypass meters and force Energuate to the negotiating table. Then, Energuate cut off their electricity, as it has to towns and cities throughout Guatemala during similar disputes. Sometimes the ensuing negotiations resolve differences quickly, and sometimes the darkness lasts for months. Elisia López and her family of five haven’t had electricity for eight weeks. “We’re buying candles,” she said.

Catarino López said that his community isn’t after free electricity. “We were fine with Q50 ($6.80). Q50 is normal…but it got up to Q150. Up to Q200…and that’s when I said, I’m with Codeca. They cut off our electricity, but the fight will go on,” he said. The community is waiting to meet with Energuate representatives to negotiate a lower price. Otherwise, community members say, they will find new ways to tap into local power lines illegally.

Photo: An Energuate bill for Q122 ($16.50). It was sent to a resident of Nueva Cajolá for the month of November, 2017, during which the resident used 69 kilowatt hours of electricity, enough to light five 100-watt lightbulbs for four hours a day. The resident owes a total of $156.

At the national level, Codeca campaigns for the nationalization of electricity distribution. Electricity distribution was privatized along with other public services in the 1990s as part of a structural adjustment policy package pushed by the US and financial institutions like the IMF. Since then, two companies have controlled electricity distribution in Guatemala. One is Energuate, which was bought in 1996 by Spanish conglomerate Unión Fenosa, which sold it in 2011 to British private equity firm Actis Capital, which sold it in 2017 to Israeli conglomerate I.C. Power, which sold it to I Squared Capital that same year.

The other is Eegsa, owned by Empresa Pública Medellín (EPM), the public utility of the City of Medellín in Colombia. EPM is celebrated for driving the “Medellín Miracle[i],” the city’s wildly successful revitalization. The Wharton School of Business recently wrote:

[EPM] has funded huge projects throughout the city, including the Planetarium, the Botanical Gardens, the Museum of Water, a children’s interactive museum, libraries, urban parks, and the 16,000-hectare Arví Park just outside the city limits. It also runs the Fondo EPM para la Educación Superior (EPM’s University Education Fund), which benefits more than 3,000 students from Medellín and Antioquia annually.

Codeca cites EPM as a model for publicly-owned electricity distribution that reinvests revenue into community development, except for one detail: Its social programs are partially funded by the hundreds of millions of dollars it makes off of its operations in Guatemala, off of people like the farmers of Nueva Cajolá.

Energuate and Eegsa together regularly bring serious charges against Codeca activists who support communities like Nueva Cajolá. In December, two Codeca leaders were acquitted of “undermining national security” and other crimes after a years-long trial. One of the accused, Edvin Amado Sánchez, told EntreMundos outside the courtroom, “It is curious that a public company [Eegsa] is prosecuting us for trying to make electricity distribution public.”

Edvin Amado Sánchez (center) and Vicenta Jerónimo Jiménez on trial in December, 2017, with their lawyer.

The pressures that farmers like Ricardo Gómez face are multifaceted and powerful. But Gómez says he’s not going to migrate, because he sees peasant organizations making gains. He takes a long view common in Mayan communities facing obstacles that seem insurmountable to outsiders:

What future are our children going to have? What are we going to leave them? If we have problems now, how are they going to make it in 10, 15 years? We’re going to have to look for a solution. And there’s still time.

That’s why this peasant organization Codeca is seeing, planning how the Guatemalan people can organize themselves to defend their rights… For 500 years they’ve been exploiting us. [But] every day we’re stronger. We won’t support these injustices any longer.

November, 2017.