Bolivia - Crops

Crops

Potatoes, the basic staple of highland Indians since pre-Inca times, remained the most important food crop in the late 1980s. In 1988 approximately 190,000 hectares, mostly in the highlands, produced 700,000 tons of potatoes. These figures compared unfavorably, however, with 1975, when 127,680 hectares provided 834,000 tons of potatoes, indicating that yields were dwindling. Bolivia was generally self-sufficient in potatoes (over 200 varieties were grown), but imports were needed during occasional periods of drought or freezing. Bolivia also exported some of its harvest to Brazil. The lack of new seed varieties, chemical fertilizers, and irrigation systems, together with the continued exhaustion of the highland soils, was responsible for the low yields. In the late 1980s, the lack of financial credit at planting time represented the greatest impediment facing potato growers.

Corn was the second major food crop, and its importance was growing. Corn covered more hectares than any other crop. In the late 1980s, approximately 300,000 hectares provided more than 475,000 tons of white corn, the traditional corn of Bolivia. Yellow Cuban corn, grown in the tropical areas of Santa Cruz, was becoming more common; 160,000 hectares produced 350,000 tons of yellow corn in 1988. Sixty percent of the corn (both white and yellow) was grown by small farmers in the valleys, with the remaining 40 percent planted by medium-to-large farmers in Santa Cruz. Small farmers used at least half of their corn for human consumption, as animal feed, or for brewing chicha, the primary intoxicating beverage consumed by Bolivian Indians. The other half of their production and most of the commercially farmed corn were sold to Bolivia's forty private animal-feed plants, which bought 50 percent of the country's annual corn output. Many corn farmers were members of the Corn and Sorghum Producers Association (Productores de Maíz y Sorgo--Promasor). Promasor was particularly active in Santa Cruz, where its members also produced 20,000 tons a year of sorghum, a drought-resistant crop, from some 6,000 hectares of land.

Rice was an increasingly popular crop in Bolivia. Eaten by people in the lowlands and valleys since the 1950s, rice became the focus of government import-substitution policies beginning in the 1960s. In the late 1980s, the country was generally selfsufficient in rice, some years importing and other years exporting. Bolivia's rice, however, was not of high quality by international standards, thus limiting export markets. In 1988 some 90,000 hectares of land, mostly in Santa Cruz and Beni departments, produced 140,000 tons of rice. Bolivia imported onefifth of its total consumption of rice in 1988. Approximately 20,000 small farmers produced the bulk of the country's paddy rice and, in turn, sold it via truckers to thirty private rice mills.

Barley was a common crop in the highlands and was particularly well suited for the high altitudes. In 1988 the cultivation of 80,000 hectares by 300,000 highland farmers produced 75,000 tons of barley, which was used primarily in the country's robust beer industry. About 10 percent of the barley was consumed on the farm as fodder. Bolivia imported about one-quarter of its total consumption of barley in 1988.

Quinoa, the "mother grain" of the Incas, was the only food crop in the highlands that experienced sustained growth during the 1970s and 1980s. Cultivation of quinoa, which grows only above 2,000 meters, jumped from 15,640 hectares producing 9,000 tons in 1980 to 45,800 hectares producing 21,140 tons in 1984, and production continued to expand in the late 1980s. High in fiber and rich in protein, quinoa was a potential health food in industrialized countries.

Despite repeated attempts by the government's National Wheat Institute (Instituto Nacional del Trigo) to make the nation selfsufficient in wheat production, Bolivia produced only about 20 percent of the wheat that it consumed in the late 1980s. In 1988 about 88,000 hectares produced 60,000 tons of wheat. In the same year, 280,000 tons of wheat were imported. In 1988 the United States Agency for International Development (AID) provided 180,000 tons of wheat through its Public Law 480 (PL-480) Food for Peace Program. Western Europe and Canada operated programs similar to the AID program but on a smaller scale. Argentina provided wheat in exchange for Bolivian natural gas. Smuggled wheat flour from Peru and Argentina represented a serious menace to domestic wheat production. In 1988 analysts estimated that 60,000 tons of smuggled wheat had entered Bolivia annually. Small traditional farmers in the highlands and large soybean farmers in Santa Cruz provided most of the country's 1988 wheat harvest, which was roughly equivalent to output in 1978, but only wheat from the Santa Cruz area was used for commercial milling. Analysts believed that wheat would produce higher yields when the proper tropical seeds, fertilizer, and irrigation methods were used.

Bolivians produced a wide range of vegetables, fruits, and other food crops, mostly for local consumption. The principal vegetable crops included kidney beans, green beans, chick peas, green peas, lettuce, cabbage, tomatoes, carrots, onions, garlic, and chili peppers. Also common were alfalfa, rye, cassava, and sweet potatoes. Some of the most popular fruits were oranges, limes, grapes, apples, quince, papayas, peaches, plums, cherries, figs, avocadoes, pineapples, strawberries, bananas, and plantains. Fruits increasingly competed with coca cultivation in the 1980s.

Cash Crops

Soybeans were the most lucrative legal cash crop in Bolivia in the 1980s. Soybean production began in earnest in the early 1970s, following a substantial increase in the crop's world price. By the late 1980s, soybeans represented the country's most important oilseed crop. In 1988 soybeans covered 65,000 hectares, and annual production amounted to about 150,000 tons, compared with 19,430 hectares producing 26,000 tons a decade earlier. About one-third of the soybean harvest was used domestically in the form of soybean meal for the poultry industry. Other soybean meal was shipped to Peru and Western Europe, and raw soybeans were exported via rail to Brazil. In order to process soybean oil for the local market, the country maintained a crushing capacity of 150,000 tons in 1988. Locally manufactured soybean oil also competed with contraband products from neighboring countries. Most of Santa Cruz's soybean farmers were members of the wellorganized and powerful National Association of Soybean Producers (Asociación Nacional de Productores de Soya--Anapo). Anapo, with assistance from AID, built new storage facilities that permitted continued expansion of the crop. Because of the dynamism of their crop, soybean farmers enjoyed the best availability of credit for all legal cash-crop producers.

Coffee, another principal cash crop, was the second most important agricultural export after timber. As the primary substitute crop offered to coca growers under the eradication program, coffee was of particular importance. Coffee production reached 13,000 tons in 1988, nearly double the 1987 output, which was damaged by disease in western Bolivia. Over 20,000 hectares were devoted to coffee. Bolivia consumed 25 percent of its coffee crop locally in 1988, with the balance exported both legally and clandestinely. Legal exports of 102,000 bags, sixty kilograms each as measured by the International Coffee Organization (ICO), were equivalent to Bolivia's export quota for 1988, which was over US$15 million. An ICO member since 1968, Bolivia was permitted to export 170,000 of the sixty-kilogram bags in 1989. Approximately 25 percent of coffee exports left the country illegally in the late 1980s. Most coffee was grown by small farmers in the valleys or by large farmers in the lowlands. Most commercial farmers were members of the Bolivian Coffee Committee (Comité Boliviano del Café--Cobolca), which allocated ICO quotas. The coffee industry also received technical assistance from the Bolivian Institute of Coffee (Instituto Boliviano de Café), an autonomous government agency established in 1965 to run model farms and help control disease.

Bolivia had been self-sufficient in sugar production since 1963, although sugarcane had been grown since the colonial era. Sugarcane in the 1980s was a cash crop of significance for both the domestic and the export markets. In 1988 cultivation of sugarcane on 62,000 hectares produced 140,000 tons of sugar. These figures represented a sharp decline from 1986 figures. The price of sugar had skyrocketed in the mid-1970s, doubling the number of hectares under sugarcane cultivation in a few years. As sugar prices declined, however, farmers opted for more lucrative crops, such as soybeans. The decline in the sugar industry also was caused by poor management, dwindling yields, and poor quality control. In 1988 the country's six sugar mills operated at only 37 percent capacity. Sugarcane also was processed into methanol for the domestic and export markets. Continued controls on imports of sugar constituted one of the few exceptions to the import liberalization policies of the late 1980s.

Although cotton was a boom crop in the early 1970s, production had waned since 1975. Grown mostly in Santa Cruz, cotton covered 54,000 hectares in 1975 but only 9,000 hectares in 1988. Production declined from 22,000 tons to 3,700 tons over the same period. Price was the primary reason for the decline, but insect problems, disease, and the lack of credit also contributed. Because Santa Cruz cotton farmers represented an important constituency, they had traditionally received highly favorable terms of credit. When cotton growing was no longer profitable, however, many cotton farmers defaulted on their loans, leaving the government's Agricultural Bank of Bolivia (Banco Agrícola de Bolivia -- BAB) in a poor financial position in the late 1980s. Because of the precipitous decline in the industry, the country's ten cotton mills were operating at under one-half of their capacity by the late 1980s.

Cash crops of lesser importance included tobacco, tea, cocoa, and oilseeds, such as sesame, peanuts, castor beans, and sunflowers. Approximately 1,000 tons of tobacco for the Bolivian market were grown on about 1,000 hectares. Tea was grown as a secondary crop in the Yungas, Alto Beni (Upper Beni), and Santa Cruz areas. Eighty percent of the country's cacao trees, from which cocoa is derived, were grown in the Alto Beni by a network of cooperatives that were increasingly involved in processing cocoa and exporting chocolate products. Oilseeds were an important part of both the agricultural and the manufacturing sectors. The growing dominance of soybeans, however, diminished the role of other oilseeds in the economy.

Coca

Bolivia's most lucrative crop and economic activity in the 1980s was coca, whose leaves were processed clandestinely into cocaine. The country was the second largest grower of coca in the world, supplying approximately 15 percent of the United States cocaine market in the late 1980s. Analysts believed that exports of coca paste or cocaine generated from US$600 million to US$1 billion annually in the 1980s, depending on prices and output. Based on these estimates, coca-related exports equaled or surpassed the country's legal exports.

Coca has been grown in Bolivia for centuries. The coca plant, a tea-like shrub, was cultivated mostly by small farmers in the Chapare and Yungas regions. About 65 percent of all Bolivian coca was grown in the Chapare region of Cochabamba Department; other significant coca-growing areas consisted of the Yungas of La Paz Department and various areas of Santa Cruz and Tarija departments.

Bolivian farmers rushed to grow coca in the 1980s as its price climbed and the economy collapsed. Soaring unemployment also contributed to the boom. In addition, farmers turned to coca for its quick economic return, its light weight, its yield of four crops a year, and the abundance of United States dollars available in the trade, a valuable resource in a hyperinflated economy. The Bolivian government estimated that coca production had expanded from 1.63 million kilograms of leaves covering 4,100 hectares in 1977 to a minimum of 45 million kilograms over an area of at least 48,000 hectares in 1987. The number of growers expanded from 7,600 to at least 40,000 over the same period. Besides growers, the coca networks employed numerous Bolivians, including carriers (zepeadores), manufacturers of coca paste and cocaine, security personnel, and a wide range of more nefarious positions. The unparalleled revenues made the risk worthwhile for many.

Government efforts to eradicate the rampant expansion of coca cultivation in Bolivia began in 1983, when Bolivia committed itself to a five-year program to reduce coca production and created the Coca Eradication Directorate (Dirección de la Reconversión de la Coca--Direco) under the Ministry of Agriculture, Campesino Affairs, and Livestock Affairs. Bolivia's National Directorate for the Control of Dangerous Substances (Dirección Nacional para el Control de Substancias Peligrosas-- DNCSP) was able to eradicate several thousand hectares of coca. These efforts, however, put only a small dent in the coca industry and were highly controversial among thousands of peasants. Under the joint agreement signed by the United States and Bolivia in 1987, which created DNCSP, Bolivia allocated US$72.2 million for the 1988 to 1991 period to eradication programs, including a wide-ranging rural development program for the Chapare region. The program was aided by an 88 percent drop in the local price of coca caused by the fall in cocaine prices in the United States.

The economics of eradication were particularly frustrating. As more coca was destroyed, the local price increased, making it more attractive to other growers. Bolivia, however, was seeking additional funds from the United States and Western Europe to proceed with an eradication plan that was supposed to provide peasants US$2,000 per hectare eradicated. In 1988 coca growing became technically illegal outside a specially mandated 12,000- hectare area in the Yungas. A four-year government eradication campaign begun in 1989 sought to convert 55 percent of coca areas into legal crops. Coffee and citrus fruits were offered as alternative crops to coca despite the fact that their return was a fraction of that of coca.

The cocaine industry had a generally deleterious effect on the Bolivian economy. The cocaine trade greatly accelerated the predominance of the United States dollar in the economy and the large black market for currency, thereby helping to fuel inflation in the 1980s. The escalation of coca cultivation also damaged the output of fruits and coffee, which were mostly destined for local consumption. Coca's high prices, besides being generally inflationary, also distorted other sectors, especially labor markets. Manufacturers in the Cochabamba area during the 1980s found it impossible to match the wages workers could gain in coca, making their supply of labor unreliable and thus hurting the formal economy.

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