Guerilla Group Seen Blocking Colombian Farmland Overhaul

Photographer: Alejandra Parra/Bloomberg

Colombia, the top palm oil producer in the Americas and the world’s second-largest arabica coffee grower, is seeking to lure investment to its farm industry by loosening restrictions on formerly state-owned land known as baldios. Close

Colombia, the top palm oil producer in the Americas and the world’s second-largest... Read More

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Photographer: Alejandra Parra/Bloomberg

Colombia, the top palm oil producer in the Americas and the world’s second-largest arabica coffee grower, is seeking to lure investment to its farm industry by loosening restrictions on formerly state-owned land known as baldios.

A Colombian government plan to help investors from Cargill Inc. to airline magnate German Efromovich develop more land for crops was stopped in its tracks days ago.

The reason, according to a farming organization: it was killed by the country’s largest rebel group, meeting with officials for peace talks 1,400 miles away in Havana. The government says it was withdrawn because of time constraints.

The bill, crucial for oil palm plantations of the type Efromovich envisions, was removed from Congress on Dec. 3 just 13 days after it was first put forward. The Revolutionary Armed Forces of Colombia, or FARC, complained it contravened agreements made in talks held in the Cuban capital, said Rafael Mejia, president of the Colombian Agriculture Society.

“The FARC didn’t like several articles,” Mejia said in an interview from Bogota, citing personal discussions with senior government officials. “There was a meeting in the presidential office and its withdrawal was requested because it went against what was discussed in Havana.”

Colombia, the top palm oil producer in the Americas and the world’s second-largest arabica coffee grower, is seeking to lure investment to its farm industry by loosening restrictions on formerly state-owned land known as baldios. Currently investors can only buy one unit of the land parcels, which together cover an area bigger than Israel and are largely farmed by small operators.

No Time

The bill proposed by the government was withdrawn because there wasn’t enough time to vote it in this legislature and will be resubmitted next year, Agriculture Minister Ruben Lizarralde said in a Dec. 3 statement. The Office of the Presidency referred questions on the bill to the Agriculture Ministry, which in turn referred to previous statements when asked whether complaints by the FARC influenced the decision.

A report published by development charity Oxfam in September accused Cargill, the largest closely held U.S. company, of using shell companies to buy baldios, sidestepping ownership limits aimed at protecting small farmers.

Cargill, which produces corn and soybeans in Colombia for the local market via its Black River Asset Management unit, said in an e-mailed response to questions that “any further investments would only be made after clarity is provided with regard to legislation on land reforms.” The Minneapolis-based company said its actions in Colombia complied with the law.

Inhospitable Land

The government’s bill would increase competition for land in a country where distribution is already the most unequal in Latin America after Paraguay, according to Oxfam. Cargill says its infrastructure investments are opening up new farming areas.

Land in Colombia’s eastern Llanos plains needs levels of investment that are beyond most small-scale farmers, said Mejia.

“It’s very far from anywhere and inhospitable,” he said. “If the landholdings aren’t large enough, the use of modern machinery and technology isn’t viable.”

Efromovich and other investors had 1,160 hectares (2,866 acres) of oil palm plantations confiscated by rural development agency Incoder earlier this year because former owners allegedly acquired the lands illegally, according to Jhenifer Mojica, former sub-director of lands at the agency.

Anita Rojas, a spokeswoman for Efromovich, declined to comment on Incoder’s decision.

Investors Leaving

“At the moment there is no legal security in the country and investment is being blocked by these discussions,” Mejia said. “Investors, not only foreigners but also Colombians, are leaving to invest in Brazil, Peru and Costa Rica. Colombia has returned to a fight over land.”

Before the government turned the tide in a five-decade war against cocaine-funded rebels, illegal paramilitary groups would acquire land by driving farmers off their property or forcing them to sell cheaply, said Adam Isacson, a Colombia specialist at the Washington Office on Latin America.

The armed conflict has affected productivity throughout Colombia, not only in areas where it takes place, Alfredo Molina, a ruling party congressman and member of the lower house agriculture committee, said in an interview from Bogota.

“If there is a peace agreement, there will be changes,” Molina said. “Small farmers will control their land and the state will be able to better plan production.”

Food to Fuel

The oil extracted from palm, used in everything from food to fuel, has surged 14 percent this year and reached the highest level in more than 14 months this month on speculation that rains in Malaysia, the world’s second-largest producer, may hamper production. Other crops including coffee, sugar and corn have slumped this year amid rising global output.

The FARC’s message against the bill was transmitted via the government’s chief negotiator Humberto de la Calle, said Mejia. De la Calle and senior FARC representatives have reached agreement on two out of six points on an agenda that aims to halt a 50-year war between the Marxist rebels and the government.

Agrarian reform is one of the points where agreement has been reached, although details haven’t been disclosed. Unequal land distribution in Colombia is at the heart of the FARC’s war against the state.

Juan Lozano, a ruling party senator, criticized the government for allowing FARC demands on land reform to interfere with legislation before a peace agreement is sealed.

“If a peace deal isn’t signed, why are the FARC legislating in advance?” Lozano told Radio Caracol on Nov. 22, following calls to withdraw the bill. “The government is making a big mistake in allowing the bill to be filtered through the negotiators.”

To contact the reporter on this story: Andrew Willis in Bogota at awillis21@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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