Nicaragua, CAFTA, & CIPRES
by Mike Nuess
Z mgazine, June, 2006
Nicaragua is almost the size of Washington
state with a similar population density. Its greatest physical
resource is its rich land, with about five acres of good farmland
per person. Agriculture is the cornerstone of the economy, providing
over 60 percent of Nicaragua's export income and over 40 percent
of its jobs. Half of Nicaraguans live on small-to-medium sized
farms and produce 80 percent of Nicaragua's food.
Life is still hard in Nicaragua, as it
has been for centuries, first under conquest by the Europeans,
then the North Americans. There was a brief period of hope after
the Sandinista revolution overthrew the U.S.-backed Somoza in
1979. Literacy grew swiftly from less than 50 percent to over
90 percent. Effective agrarian reform policies returned stolen
land to farmers and farm cooperatives, provided affordable loans,
technology, and technical support, and partially shifted production
from export (for profits to foreign capital) to internal food
production for sustainable self-sufficiency. Infant mortality
dropped, the death penalty was eliminated, and labor and agricultural
unions were accepted.
Reports from the Inter-American Development
Bank, Oxfam, and others highlighted Nicaragua as an example of
effective social and economic progress on behalf of the poor majority.
By 1990 Reagan's contra war had destroyed
this shining example. Exhausted, terrorized, and embargoed-back-to-poverty,
Nicaraguans "elected" the U.S.-designated client government
and the trends once again began to reverse:
0. Literacy rates are in decline and malnutrition
0. Nicaragua is the second poorest country in the Western Hemisphere
0. About 70 percent of Nicaraguans earn no more than $2 per day,
the World Bank's definition of poverty, and 20 percent live in
extreme poverty, earning less than $1 per day
0. The average monthly wage is $36
0. One out of every three children is malnourished
0. Over half of the 900,000 schoolage kids cannot afford school
0. 45 percent of all income goes to the richest 10 percent of
the population, while only 14 percent goes to the poorest
0. Since the end of the Sandinista period of the 1980s, farmers
have received negligible credit, technology, and technical assistance
In October 2005 I joined a Witness for
Peace delegation to Nicaragua composed of a dozen citizens from
Washington and Oregon. We met with several stakeholder groups,
such as the National Union of Farmers and Ranchers (UNAG), the
Rural Workers Association (ATC), the Center for Rural & Social
Promotion, Research & Development (CIPRES), a coffee producers'
union for small farmers (CECOCAFEN), a fair trade association,
research groups, and an economist from the Center for International
We visited agricultural cooperatives in
the campo (the rural countryside). We also saw sophisticated,
diverse, yet complexly integrated, sustainable agricultural models
operating at the family-farm scale with appropriately selected
technology for the current economic conditions. At a CIPRES research
facility, for example, we saw effective grey-water treatment systems
generating nutrient-rich water for plants and worm beds generating
Under the CIPRES model, these sustainable
family-scale farms aggregate into cooperatives, which in turn
aggregate into larger organizations that can both disseminate
information and represent them as political stakeholders.
Since 1998, a CIPRES project has rebuilt
the lives of 5,000 rural families, providing animals, seed, irrigation
equipment, grain silos, and training to produce both sufficient
food, as well as bio-gas and fertilizers from animal waste.
Project results were: increased production
of eggs, dairy products, chickens, fruit, and vegetables; improved
health and diet; sufficient bio-gas for cooking fuel and a 50
percent drop in firewood consumption; revolving credit cooperatives;
reforestation; and more pasture. Extension of the CIPRES model
to 75,000 families could lift them out of extreme poverty, sustainably,
at a cost of about $30 million.
Rich land and sophisticated knowledge
of biologically wise, holistic solutions to food security were
in abundant evidence.
Obviously Nicaragua is quite capable of
sustainably feeding its people well. But there are no jobs, so
nearly 20 percent of the people have migrated abroad, sending
$600 million per year to families at home, an amount equal to
one fourth of Nicaragua's GDP. These funds are Nicaragua's greatest
source of vital foreign exchange. For many, only material aid
from church groups, NGOs, and Nicaraguans working abroad make
it possible to meet their basic survival needs.
The stakeholders we met strongly opposed
CAFTA. Already World Bank-imposed structural adjustment programs
designed only to insure debt service have resulted in the privatization
of public services, such as communication and electricity (and
have attempted to do so for water). The promised "efficiency
of privatization" has not occurred. The only "efficiency"
realized has been profits to private multinationals resulting
from price increases, cutbacks in labor, reduced maintenance quality,
and cutoffs of a growing sector with less and less ability to
pay. Long-term economic stability has been sacrificed.
Coffee production has long been critical
to Nicaragua's vital foreign exchange, accounting for 27 percent
of Nicaragua's exports and one-third of its agricultural employment.
Over 300,000 livelihoods depend on it. Coffee, then, comprises
part of Nicaragua's "comparative advantage," according
to the World Bank's neoliberal framework for the developing world.
But World Bank structural adjustment programs have encouraged
other countries, such as Vietnam, to export more coffee (as they
had encouraged Nicaragua to do in the past). The resultant glut
on the world coffee market has been devastating for Nicaraguan
coffee producers. Prices dropped drastically in 2002 to well below
production costs. Yet consumer prices in the U.S. did not drop
as large, transnational coffee distributors benefited.
CAFTA will require eventual removal of
the tariffs that now slightly protect Nicaraguan farmers and subject
them to unlimited dumping of subsidized products from the U.S.
It will be just like NAFTA in Mexico where income drastically
dropped for 15 million small producers and forced over a million
families off the land and into Free Trade Zone (FTZ) sweatshops.
Mexican agricultural production has halved in the decade of NAFTA.
Though some of it looked good on paper-a tripling of foreign investment
into FTZs, a doubling of exports from FTZs, and 800,000 new jobs
after 7 years- this "trade" was merely "paper transfers"
that contributed povertylevel wages to the Mexican economy. Raw
materials were "imported" into the FTZs, assembled products
were "exported," but the dollars and profits passed
right through to multinationals. Even the poverty-level wages
were short term: most of those 800,000 jobs are gone, as the multinationals
"found" cheaper labor in other depressed and desperate
There are proven alternatives, for example
the CIPRES program that could sustainably lift 75,000 families
from extreme poverty for $30 million-$400 per family- about a
tenth of Nicaragua's annual debt service on a principal already
paid several times over. This unjust debt was built by U.S.-imposed
governments, war, and economic embargo.
Today's new "trade" agreements
are really "protectionist policies" for multinationals
and their investors. They usurp local, regional, and even national
sovereignty, the very backbone of democracy.
Meanwhile, in agriculture we produce enough
to feed everyone, but have not yet applied the technical, social,
and economic tools to insure this wealth is sustainable (by moving
from fossil-fuel-based inputs of over five calories for each calorie
yielded to organic methods that reverse the ratio), distributable
(diversified regional production) and accessible (affordable to
the poor, too).
Hating the corporations and governments
who serve them resolves nothing. Changing them into transparent,
accountable, and responsible servants of a democratic humanity
resolves everything. We can easily predict they will be the last
to see that resource scarcity is obsolete and we no longer live
in world of "either us or them."
We may soon realize that we need our Nicaraguan
sisters and brothers as badly as they need us.
Mike Nuess is an educational consultant,
primarily in the fields of energy and building science. He is
the author of General Plenty: Always and Only the Path to Peace.