The “push” factor: Central American farmers, free trade, and migration

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New Security Beat | 17 April 2019

The “push” factor: Central American farmers, free trade, and migration

By Kyla Peterson

The number of migrants traveling from Central American countries (particularly El Salvador, Guatemala, and Honduras) destined for the United States has rapidly increased in recent years. In 2018, 87 percent of Central American immigrants came from those three countries, which account for most of the migrants at the U.S. southern border. Their numbers will likely only increase considering the Trump administration’s plan to cut around $700 million in aid to these three countries. The absence of aid will reduce countries’ ability to confront the violence, crime, and government instability within their borders—which act as some of the more notorious drivers of the movement north.

Besides these factors, the increasing predominance of trade liberalization, or the free market system, in this region is driving farmers and agricultural laborers to search for better opportunities abroad. While free market trade encourages macro-level economic growth and development, the benefits are often unequally distributed, with small-scale and subsistence farmers as the biggest losers. Due to this inequality, out-migration rates are projected to increase—as much as 8 percent in El Salvador— despite the fact that agricultural exports from this region to the United States more than doubled to $5.8 billion in 2017.

Growth of Trade Liberalization in Central America: The Dark Side of the Story

Trade liberalization, or the reduction of trade protections such as import/export tariffs, within Central America began occurring in the 1990s. As the free market system expanded within the region, trade relations were consolidated and made permanent with the creation and establishment of CAFTA, the Central American Free Trade Agreement, an extension of NAFTA. CAFTA incorporated the states of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua into the free trade market with the United States.

With increased market access, the United States began to flood Central American countries with heavily subsidized agricultural exports, such as maize and grain. While these cheap imports resulted in lower food prices for consumers, they increased competition for food producers in the region. Even though the agricultural sector only contributes 9 percent of regional GDP, it employs roughly 30 percent of the region’s working population, which is directly affected by this increased competition. In particular, the “Northern Triangle” countries—El Salvador, Guatemala, and Honduras—started experiencing significant price shocks in their agricultural sectors.

Landless, subsistence, and small-scale farmers bear the brunt of the influx of competitive crops and price shocks. Without sufficient financial resources, these types of farmers do not have the capital to invest in vital inputs to increase production or to change land usage to more competitive crops. Commercial farmers, which employ many Central American agricultural workers, do possess the financial assets to make these investments, and often transmit the impact of price shocks to subsistence farmers through reductions in wages. With declining wages and an inability to compete with U.S. agro-food imports, these small-scale farmers and agricultural laborers are presented with fewer and fewer opportunities within the agricultural sector and ultimately within their respective countries.

The Push Factor: Links to Migration

This lack of opportunity in the agricultural sector is a significant driver of migration for farmers and laborers seeking alternative livelihoods. Two additional drivers of migration are the lack of land tenure security, and a youthful population.

While subsistence farmers represent almost 60 percent of the farmers in Central America, they own only 7 percent of the growing surface. Without physically, legally, or financially owning the land they work on, these farmers see little to no incentive to stay. The monopolization of land by a few rich landowners or foreign investors exacerbates the inequality of agricultural benefits created by trade liberalization.

Central America is a relatively young region, demographically speaking. The median age of the population is 26.9 years old. The presence of a young, physically able, and relatively healthy population without potential opportunities for employment or betterment creates a situation where out-migration is the best-case scenario. Many of the sons and daughters of these struggling farmers see the hardships of working in an unstable agriculture sector, and they are opting for better options elsewhere.

These mobile and young migrants set their sights on the United States not only for the promise of a better future but also due to the absence of opportunity in their cities. For many of these countries, the Northern Triangle particularly, the majority of crime and violence is consolidated in and around the cities. Many residents of urban and suburban areas in the region have been forcibly displaced due to violence and organized crime. Therefore those urban areas are not viable options.

Poor agricultural conditions, exacerbated by the growing free market system, are not the only drivers of this increased migration. But in this environment of poor governance and threats to human security, these farmers and laborers face few options when searching for alternatives to the crumbling agriculture sector. This is particularly evident in the Guatemalan highlands, an area with deep inequality and vulnerability within the agrarian communities. The farmers and laborers who work in this region lack access to resources necessary to increase their resiliency and productivity. Recently, the U.S. southern border experienced a large increase of immigrants from this area due to the harsh living conditions and lack of opportunity.

The Environmental Factor

Increasing extreme weather patterns and poor resource management further inhibits farmers’ ability to properly adapt and compete in the free market context. The region experienced a severe drought in 2015 which was one of the worst droughts recorded in Central America. With little to no surplus capital, irrigation infrastructure, or governmental support, these small-scale farmers can be completely devastated by one season with poor rainfall. Extreme weather is predicted to continue; one study on climate change in Central America found that by the end of the century “the estimated regional decreases would be: 35 percent, 43 percent and 50 percent for corn, beans and rice, respectively,” considering growing emissions and global inaction.

The free market system only encourages further degradation of natural resources as it forces farmers to heavily rely on toxic inputs. Farmers who are able to compete in the free market must increase their yields by depending on fertilizers and pesticides. These types of inputs not only harm the ecosystem by tainting local water sources, but also reduce the fertility and utility of the soil. This, ultimately, creates a cycle of poor soil and intensification of chemical use, which destroys the natural environment and disenfranchises poor, small-scale farmers.

Another way that farmers adapt to the increased competition of the free market is by changing their staple crops—corn, bean and grain—to focus more on cash crops—coffee, bananas, and other vegetables. While this switch enables the farmers to continue selling produce for profit, it removes their subsistence food base. In order to compensate, farmers—who are able to—cut down forested areas to produce crops for home consumption. Additionally, some farmers leave farming for ranching or herding, which also incentivizes them to deforest lands for animal grazing. The increased pressure to deforest is highly detrimental, as deforestation is responsible for approximately 75 percent of total greenhouse gas emissions in this region. Therefore, any additional policies that encourage deforestation should be reconsidered.

Uncertain Future for Farmers

Considering the negative impact of the free market system, how can these farmers adapt? In order to protect farmers, reforming agricultural public spending is more important than ever in this context of trade liberalization, volatile international food markets, and climate change. Prioritizing spending and development of agrarian communities within Central America can provide farmers the capital and infrastructure to properly produce goods for the international market and for themselves.

When asked about negative impacts of NAFTA on small-scale farmers in Mexico, Luz Maria de la Mora Mexico’s Undersecretary for Foreign Trade, emphasized the importance of rural development. Mora highlighted the necessity of strong domestic policy in the face of international trade, especially “rural development, social development, and agricultural development.”

While it’s easy to say in theory, creating strong domestic policy proves difficult in Central America. Currently the region suffers from high political instability and poor governance. Guatemala, particularly, faces many challenges as democracy in the country crumbles and the government deploys targeted violence against human rights and environmental defenders. These types of groups, focused on agrarian and indigenous communities, deeply threaten the Guatemalan government by challenging the status quo. Activist efforts in Honduras, in addition, have experienced violent backlash.

Moving forward, the international community needs to support movements that empower farmers and agricultural workers and condemn governments that oppress rural populations for macro-level economic gain. Additionally, we must consider if the free market system is the ideal trade network in the face of climate change. While scientist and environmentalists argue for moving toward more sustainable food production processes, such as agroforestry and other integrative methods, where does trade liberalization fit in? These are crucial questions that must be asked and conclusively answered in the face of extreme weather patterns, increasing integrated economies, and unstable market prices.