2014-Fletes Ocon and Bonanno - The Processing of Palm Oil in Chiapas, Mexico Resistance and...

CHAPTER 11

THE PROCESSING OF PALM OIL IN CHIAPAS, MEXICO: RESISTANCE AND ALTERNATIVES

Hector B. Fletes-Oc6n and Alessandro Bonanno

INTRODUCTION

Historically, the relationship between farmers and the processing sector has been asymmetric (Bonanno & Cavalcanti, 2012; Bonanno & Constance, 2006). In recent decades, this asymmetry of power has increased as corporations have expanded their control over all facets of agri-food (Bonanno & Constance, 2008; Burch & Lawrence, 2007; Busch & Bain, 2004). Resistance to agribusiness, however, has also been a traditional component of the evolution of the sector. Some observers have noted that social relations under neoliberal globalization are characterized by conditions that give overwhelming power to corporations and leave farmers - as well as other subordinate groups - with limited options of resistance (Constance, 2008; Heffernan, Hendrickson, & Gronski, 1999; Hendrickson, Wilkinson, Heffernan, & Gronski, 2008). Others have contended that not only resistance has emerged in a variety of settings (i.e., consumption, alternative production, civil society), but that the evolution of agri-food is better

Labor Relations in Globalized Food Researcl! in R111'81 Sociology and Development, Volume 20,247-167 Copyright 2014 by Emerald Groap Publishing Limited AU righbi of reprodnction in any form resened ISSN: IOS7-1922jdoi:10.1108/S1057-192220140000020010

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248 HECTOR B. FLETES-OCON AND ALESSANDRO BONANNO

described by the expression "contested terrain" as contestation emerges in every facet of agri-food (Bonanno & Cavalcanti, 2011; Bonanno & Constance, 2008; Fletes, 2013).

In this context, particular attention has been placed on the role that the state plays in the relationship between agribusiness and agricultural workers. According to some authors, state intervention in agri-food is always necessary because of the natural characteristics of the sector. DweUing on the classical work of Marx (Marx & Engels, [1885] 1992), they stress that the lower rate of profit in agriculture compared with higher rates in other economic sectors requires state intervention. The state is called to attract capital in agriculture that otherwise would have not been invested. Emphasizing the strategic importance of food, they contend that the state is interested in promoting the productivity and efficiency of agri-food (Ianni, 2004; Mann, 1990; Mottura & Pugliese, 1980). This structuralist account is contrasted by views that see the state as a complex institution that, while it cannot be considered fully autonomous, it can be affected by the struggle of, and may act in favor of labor. The state can be simultaneously an entity that supports the domination of powerful economic actors, but also an emancipatory force that aids the struggle of subordinate groups (Bonanno & Constance, 1996}.

Addressing this debate and the process of resistance to agribusiness, this chapter probes the issue of farmers' resistance to the processing sector in agri-food in a less developed region of the global South. In particular, it investigates the process by which farmers resisted the power of processing firms in the production of Palm Oil in the state of Chiapas, Mexico. We employed a case study methodology that is developed through the examination of existing documents, interviews with key informants, and site visits. Data were analyzed through the use of techniques of saturation and negative cases whereby the conclusions were confronted with alternative interpretations that were not selected. The chapter is divided into five sections. After the introduction, the second section analyzes of the historical context of the case. It discusses Fordism, its crisis, and the development of neoliberalism with specific reference to Mexico. The evolution of agriculture in Mexico under the neoliberal regime is discussed in the third section, along with specific information on the state of Chiapas. The fourth section illustrates the case study, documents the expansion of the African Palm culture for the production of palm oil, and discusses the contradictions and resistance associated with this process. The concJuding sections reviews the characteristics of the case in regard to relevant literature introduced at the outset if the chapter (Fig. 1 ).

The Processing of Palm Oil in Chiapas, Mexico 249

Fig. 1. Example of African Palm Production in Chiapas, Mexico. Source: Photo by authors.

CONTEXT

Fordism and Neoliberalism

This physical space for this investigation is the state of Chiapas in Mexico while Neoliberal Globalization is its historical context (Crouch, 2011; Prasad, 2006). Neoliberal measures were first introduced in Mexico in the early 1980s (Merrill & Mir6, 1996; Morton, 2003; Otero, 2004). This move was part of the international process of transition away from Fordism and an attempt to address its crisis (Aglietta, 1979; Bonanno & Constance, 2008; Harvey, 1989, 2005; Stiglitz, 2002). During a significant portion of the twentieth century and, more evidently, after World War II, Fordism was the system of organized capitalism that coordinated mass consumption and mass production and engendered steady accumulation, provided democratic legitimacy, created unparalleled economic growth and abundance,


and established a dominant consumer culture (Bonanno & Constance, 2008). In advanced societies of the North, the "management-labor accord" allowed finns to enhance their control over the labor process and production, while labor - highly represented by unions - was granted collectivebargaining power which was used to effectively negotiate salaries, benefits, and work conditions. The result was that labor enjoyed much increased benefits and remuneration that paralleled gains in productivity. The parallel between increased productivity and labor remuneration was so strong that was understood as a basic law of economic (Samuelson & Nordhaus, 2009). Decisively impacting political outcomes, unions' claims and actions shaped labor legislation and socioeconomic planning. Through the application of Keynesian policies and direct intervention, the Fordist state was able to regulate the economy and society and enhance workers' benefits in health, education, and welfare. The middle class grew significantly, and many people improved their living conditions and enjoyed varying levels of mass consumption. Postwar High Fordism signified the inclusion of many formerly marginal groups in mainstream society, more opportunities and equality of condition. This was particularly the case in the advanced social democracies of the North. These changes, however, did not eliminate inequality and its complexity. Socioeconomic differences remained accompanied by sharp racial, ethnic, and gender inequalities. The power of unions allowed for disparities between unionized and nonunionized workers while differences increased between production workers and professionals. As growth occurred in the developing South, the economic distance between developed and developing countries could not be resolved through the application of modernization strategies and bureaucratization.

In advanced societies, Fordism was criticized for its totalizing domination. State intervention was viewed as oppressive and a process that required the submission of the masses to an over-controlling capitalist state. Individuality, reason and the ability to dissent were dissolved into mass consumption and the requirement for people to become "clients of the state" (Habermas, 1975; Marcuse, 1964; Offe, 1985). For developing countries, Fordism was seen as a system that further subordinated them to the power and control of advanced countries and their multinational corporations. Dependency and domination rather than development were viewed as the ultimate results of the expansion of capitalism (Frank, 1969).

During the 1960s and 1970s, Fordism was broadly criticized and the a1ienating, depoliticizing, regimenting, homogenizing consequences that it had on society were recognized by progressive and conservative critics alike. Conservative intellectuals denounced the political and distorting


nature of state interventionism. Their argued about its ineffectiveness and inefficiency and stressed a long list of unintended negative consequences that it produced. In his now classical book, Capitalism and Freedom, Milton Friedman sharply attacks the application of Fordism in agriculture by criticizing commodity price support programs (1982 [1962], pp. 181-182). Created to support the income of farmers, and that of small and family farm holders in particular, correct the overtly cyclical trends of agricultural prices, and address to the constant surplus of agricultural labor, for Friedman, they represented instances of wasteful bureaucratization, unnecessary expenses, and inefficiency that ultimately helped the powerful few but damaged the majority. In Friedman's analysis, these types of Fordist programs altered the free functioning of the market and neutralized those mechanisms that would control unwanted surpluses and distortions. Because marked mechanisms were replaced by state intervention farmers were kept on the land despite low income and limited hopes for an economically meaningful future; food prices soared to the detriment of consumers and, paradoxically, little funds were distributed to those small family farm holders who really needed them. In his view, the Government established a system based on political negotiations and compromises that inevitably was controlled by powerful special interests. Discussing the case of the US, Friedman concluded that the creation of price support programs in agriculture was the result of the overrepresentation of rural areas in the electoral system and Congress (1982 [1962], p. 181).

A critique of price support programs was also produced by left leaning authors writing not only about US but other parts of the world including the European Union (then European Economic Community) Japan and Australia (Butte] & Newby, 1980; Johnson, 1973; Mottura & Pugliese, 1980; Rodefeld, Flora, Voth, Fujimoto, & Converse, 1978). Employing both populist and Marxian postures, these intellectuals viewed price support programs as ineffective and inefficient, and measures that wasted resources, distributed them unequally and is so doing discriminated against poor segments of society. Sharply disagreeing with neoliberalism analyses, the left leaning authors stressed the need for the democratization of state intervention and the importance of establishing substantive equality and freedom (Carnoy, 1984; Jessop, 1982; Offe, 1985).

In developing countries like Mexico, the impact of Fordism appeared less visible. Despite this lack of visibility and the numerous contradictions associated with state intervention, the application of Fordist policies redistributed resources and created necessary infrastructure that resulted in increased production and productivity but also in the continuous


persistence of the numerous peasant class on the land (Hewitt, 1999 [1976]; Otero, 2004, 1999). The availability of modest but sustainable living standards and the regulation of the outflow of immigrants to urban areas and to the United States were promoted by Fordist policies that included price support programs, land redistribution, and entitlements. It can be argued that, during this time, peasant agriculture was supported and its development encouraged (Hofman, 2000; Weller, 1998). In this context, however, social inequality and instability remained high and the urban elites increased their power and wealth by managing state intervention and appropriating funds through widespread corruption. Import substitution strategies were introduced in Mexico in the 1950s. This step increased industrial output and productivity and exports were promoted. The economy grew at a fast rate and, by end of the 1960s, Mexico virtually achieved self-sufficient in food crops and basic consumer goods (Merril & Miro, 1996; Pechlaner & Otero, 2010). In agriculture, investment and the strengthening of state intervention in technical assistance and extension increased the amount of cultivated land and improved the quality and quantity of production (Galarza, 1964; Hewitt, 1999 [1976]; Merril & Miro, 1996; Otero, 2004).

By the early 1970s, Fordism had initiated its final crisis. Enhanced international competition, the high cost of state intervention, economic recession, and political instability were among the causes of this crisis (Bonanno & Constance, 2008). Neoliberals charged that the Fordist system was the reason for the prolonged economic crisis and the social pathologies that emerged at the time. Their ideology and discourses promoted the replacement of Fordism by a system based on a reduced welfare state, reforms of the tax system that privileged the wealthy, the weakening of labor unions, the deregulation of the private sector and measures that would increase capital mobility, augment profit but reduce wealth redistribution. Fundamental in this change was the Neoliberal design to define market forces as "neutral" and to suggest that they should replace the politically driven and, therefore, intrinsically imperfect state intervention (Habermas, 1975). Friedman and like-minded Neoliberals contended that state intervention cannot escape the clout of powerful interest groups. The outcomes that it generates favor these groups against the needs of intended recipients. Simultaneously, they argued that the market functions independently from any particular group and/or individual and, therefore, its outcomes benefit those who are rightly meritorious (Fredman, 1982 [1962], pp. 180-185}. The proposal gained significant support as it was interpreted as a legitimate alternative to the discredited state intervention and its wasteful costs, large bureaucracy, and frequent abuses (Friedman, 1982 [1962]).


With the establishment of Neoliberal Globalization and its redirected state intervention, political decisions became increasingly subordinate to the economic interests of the ruling class. In this context, the economization of politics became the defining characteristics of this system (Bonanno and Cavalcanti, 2011; Harvey, 2005, 2003). Profit levels soared. Yet class polarization and socioeconomic problems, not only were not addressed, but increased. In this context, solutions were sought not though the application of market mechanisms but, paradoxically, through state intervention (Helleiner, 2010; Raulet, 2011; Underhill & Zhang, 2008). Contending that additional market liberalization is, nevertheless, necessary, conservatives viewed state intervention as the most appropriate solution to crises. Mimicking them, but contending that state intervention should restore a new type of Fordism (Neo-Fordism), members of the progressive left also called for similar policies (Fletes & Bonanno, 2013). As state intervention to address crises was introduced it translated into two general measures: economic austerity and increased state spending. Austerity measures -generally promoted by conservative groups - engendered economic stagnation, augmented unemployment rates, limited productive investment, and reduced public services. The general public protested this declining socioeconomic conditions and the uncertain future that austerity promoted. They called for alternatives. Corporate forces also opposed austerity lamenting the limited state support that they received in a context in which the enhanced freedom to operate in the market that they desired never materialized (Lapavitsas, 2012; Habermas, 2012). State spending - the preferred strategy of members of the progressive camp (Krugman, 2012) -has been similarly ineffective (Byrne, 2012; K.rippner, 2011; Raulet, 2011; Underhill & Zhang, 2008; Van Gelden, 20 l l ). While significant resources were mobilized by the state, they were often appropriated by a handful of super wealthy individuals and corporations. As problems remained, this distorted appropriation of public resources was reminiscent of the unfairness of the old F ordist regime.

THE SETTING

Mexico

The implantation of neoliberalism in Mexican agriculture consisted in the progressive elimination of highly valued state sponsored programs. Programs that historically supported peasant agriculture, local food production and


consumption, and land redistribution were targeted for elimination. The process accelerated in the 1990s and this acceleration is symbolized by two actions: the reform of Article 27 of the Mexican Constitution that abolished the ejido system in 1992, and the signing of North American Free Trade Agreement (NAFTA) that became operational in 1994 (Cornelius & Myhre, 1998; Morton, 2003; Otero, 1999, 2004). Established by actions directly derived from the Mexican Revolution of 1910-1920, the ejido system provided the use of public land to peasants. It was designed to support peasant agriculture and improve the lives of peasants. Through the years, it permitted the existence of networks of local food production and distribution that benefitted campesinos. The end of the eijdo system transformed the destination of this public land that became available for commercial use. Simultaneously, the Mexican state withdrew its support to the large peasant class de-facto accelerating the migration of Mexican agricultural workers to the US (Bartra, 2004). The implementation of NAFT A in 1994 allowed US and Canadian agricultural commodities to enter the Mexican market. Without the protection of Fordist programs, Mexican farmers could not withstand competition and local production suffered. A primary result of this situation was that Mexico had to increase its imports of basic food stuff in rapidly and negatively impacting ways (Gonzalez Chavez & Macias Macias, 2007}. A primary consequence of the opening of the once highly protected agricultural markets was that farmers were forced to specialize in the production of high value commodities for export. Among such products, fruits and vegetables assumed prominence. Concomitantly, fanners also had to reduce the production on basic food items such as com. This situation created an increase in prices and shortages that primarily affected the lower classes and their ability to purchase com for the production of tortillas.

An additional significant result of this change was the abandonment of the Fordist policy of "food security" in favor of the neoliberal policy of "market opportunities." The availability of sufficient agricultural production that would address the needs of the country and, in particular, those of the poor and working population in urban and rural areas was one of the Fordism Mexican state primary objectives (Bartra, 1974; Merril & Miro, 1996; Ramirez Silva, 1989). The shift to "market opportunities" decoupled socially relevant goals - such as economic assistance to the lower strata and the regulation of outmigration - from economic objectives. It centered the national agricultural policy on the market driven search for profit. A relatively low number of producers benefited from this change and the consequent expansion of the export market. Yet, the vast


majority of farmers suffered from the tough competition and their income and living conditions deteriorated. Campesinos lost most of their ability to produce food for self-consumption and lower and middle classes urban consumers were hurt by food prices increases (Gonzalez Chavez & Macias Macias, 2007; Pechlaner & Otero, 2010). This process engendered an impoverishment of the Mexican peasantry and small and medium producers that could not be corrected by the free functioning of the market. Simultaneously, the remaining programs designed to alleviate the negative consequences of the functioning of the market were poorly funded and inadequate to improve production structures and productivity (Otero, 2004). As a result, immigration increased (Bartra, 2004). Defined as "the import of food and the export of farmers" (Bartra, 2004), the free market oriented agricultural policy worsened the conditions of many segments of the Mexican society (Pechlaner & Otero, 2010}.

Chiapas and Resistance to Neoliberalism

Located the southern tip of Mexico bordering Guatemala, Chiapas is one of the poorest states in the country known for its physical beauty and heritage but also its poverty and social marginalization. This state is also known for its high concentration of indios (indigenous population) that covers about one third of the entire population. Agriculture remains the primary economic activity of the state. However, it has been characterized by stagnation resulting in a decrease the size and number of local farms (INEGI, 2007}. Following patterns common to the rest of the country, a greater proportion of production has been directed toward fruits, vegetables and industrial crops, such as the Mrican Palm, and less toward food crops destined to local consumption.

Concomitantly with the date of the implementation of NAFT A (January 1, 1994), the Zapatista Army of National Liberation (or EZLN) initiated a rebellion against the Mexican state. As their claim of "land, freedom and self-determination for the indigenous people and the dispossessed" echoed around the worJd, the Zapatistas opposed what they saw as the exploitative nature of Neoliberal Globalization. This campesinos driven protest movement quickly achieved global recognition and forced the Mexican Government to grant local residents significant autonomy. To combat the insurgency the Mexican Government introduced a poJicy of socioeconomic intervention in Chiapas that involved the overt objectives of combating poverty and promoting development and the latent goals of


social control and the appeasement of the large pro-Zapatista international public opinion. (Collier, 2008; Harvey, 1998; Morton, 2011; Ramor, 2011). As a result, the state of Chiapas was granted a privileged status and the Mexican Government maintained a continuous flow of economic resources to Chiapas that, in 2011 alone, resulted in the budgeting of the equivalent of 0.5 billion US dollars for government sponsored programs for this state (Sabines, 2011 ).

THE CASE

The Implantation and Growth of African Palm Production for Biofuel

The expansion of the cultivation of the African Palm was among the public programs initiated in Chiapas. Through this programs, the Mexican Government intended to make more visible its actions to address political instability and the poor economic conditions of the region. In light of the global attention received by Chiapas, the negative international public opinion about the Mexican Government's actions in the state and the visibility of local poverty, it was important for the Government to show that it was doing its outmost to address the situation (Morton, 2011; Ramor, 2011). Simultaneously, the Mexican Government saw in the African Palm project an attractive solution to the mounting controversy that involved the use of food crops for the production of biofue1s. The growing protest against increases in corn prices involved concerns over the practice of the use of food crops for the production of alternative energy. In this context, the Mexican Government sought to curb the use of fossil fuel through the expansion of renewable energy sources that did not involve food crops and com in particular. Due to its very desirable agronomic performance, the production of the Mrican Palm appeared as an effective and safe source for the production of biofuel (Pineda Morales, 2009; Ramirez Zamora, 1991). As the reduction of the quantity of food crops employed for energy production achieved significant support, the Mrican Palm project was also supported by the local government.

The Mrican Palm is native of West Mrica and was imported to South and Central America in the early portion of the twentieth century. In Chiapas, it appeared for the first time in 1952 when 30,000 seeds were imported and planted on 200 hectares (Pineda Morales, 2009; Ramirez Zamora, 1991). New and improved seeds were later introduced as production covered 700 hectares (Ferrera Velasco, 2010; Ramirez Zamora, 1991).


Despite its steady growth, this cultivation remained relatively limited throughout the 1960s. In was in the mid-1970s that the National Commission for the Cultivation of Fruits (CONAFRUT) initiated a campaign for the production of this crop that included the import of more than one million seeds from Indonesia - the largest world producer of Mrican palm oil - Mrica and other parts of Latin America. Equipment for also imported to increase the productivity of the nascent yet expanding crushing industry in the area. Presently, the oil is widely used as ingredient in the manufacturing of a great number of products including food, house, cleaning, and cosmetics products (Pineda Morales, 2009; SlAP, 2012).

In the mid-1990s, the political and economic conditions described above created impetus for the government led expansion of the industry. In 1996, palm oil domestic production covered only 3 percent of the demand prompting the Mexican Government to propose the cultivation of 2.5 million additional hectares: a significant portion of which was located in Chiapas (Pineda Morales, 2009). This process continued in the following decade as the Ministry of Rural Development of Chiapas established the "Palm Oil Production System" in 2004 that was implemented under the name of the Palm Oil Program in 2006. In the following years, and under the Administration of President Calderon (2006-2012), it was proposed to continue the expansion of production yet employing only marginal land. This posture was adopted in order to meet the need to increase biofuel production without compromising food production (Calderon, 2008, pp. 266, 267; Sabines, 2007, p. 219).

The February 2008 the act "Promotion and Development of Bioenergy" gave further support to this strategy by promoting diversification and sustainable development in order to guarantee the growth of rural areas. Additionally, in May 2008, the government introduced the "Inter-sectorial Strategy for Bioenergy." This program called for "the promotion and expansion of production lines of biomass inputs and the production of bioenergy that would promote energy security through the diversification of energy sources. It would generate and integrate synergies and provide support for sustainable rural development" (Calderon, 2008, p. 209). The government further introduced the "Sustainable Production of Inputs for Bioenergy and for Scientific and Technological Development" program that aimed at increasing production for bioenergy (Calderon, 2008, p. 209). The Calderon Administration described this "productive reconversion" in these terms: .. [Our objective] is to promote the substitution of traditional crops, such as com for self-consumption that affects the environment, with others that are sustainable and that maximize profit" (Government of Chiapas, 2009, p. 1).


In recent years, the cultivation of African Palms continued to be supported by state and federal funds. The state of Chiapas introduced the "Chiapas Solidarity Development Plan" in 2007 and in the same year established three palm nurseries that supplied plants to producers at no cost (Pineda Morales, 2009). Ultimately, the land devoted to the production of palms increased by 24,000 hectares from 2008 to 2011 (Fig. 2).

THE FARMERS' STRUGGLE AGAINST PROCESSING PLANTS

The Power of Extractoras

One of the issues that characterized the expansion of the cultivation of African Palms was the relationship between farmers and crushing plants. Accordingly and over the years, processing plants, or extractoras, enjoyed

Fig. 2. African Palm Fruits Ready for Delivery to Processing Plant (Extractoras). Source: Photo by authors.

The Processing of Palm Oil in Chitlpas, Mexico 259

a position of power over fanners. This power was the result of both structural conditions and industrial strategies. Structurally, there has been a limited number of extractoras in the region. Throughout the 1990s only two plants were in operation. In the following two decades, this number slowly increased but never kept pace with the growth of production and, above all, with expectations and plans to expand output. By 2013, there were a total of seven plants. This gap between production and processing capacity allowed plant managers to purchase palm fruits at convenient conditions and to discriminate among suppliers. Ultimately, only those farmers who displayed positive attitudes toward management were invited to do business. Farmers' comments about prices, delivery conditions, and the overall interaction with the extractora often translated into termination of the business relationship. Some of the consequences of this asymmetric power consisted of the inability of farmers to take advantage of state programs to expand production, a general uneasiness toward the state invitation to increase output, distrust toward extractoras, and frequent economic losses. Also frequent were instances where farmers were forced to leave their crops to rot in the fields. Eventually, a climate characterized by division and discontent among farmers emerged.

Farmers' discontent was controlled through industrial strategies that contemplated instant payments for the purchase of crops. The system of instant payment consisted of checks issued to farmers upon delivery of fruit to receiving facilities - or recibas. Direct delivery to processing plants commanded higher prices than those paid at delivery points. Recibas removed from processing plants paid lower prices. This system was an immediate success as cash-strapped farmers could use their checks instantly or, given their popularity, could circulate them as local currency. Managers also presented the purchasing prices as tied to market mechanisms. This discourse stressed that prices were set by the market and, therefore, were "neutral" and ''just" and, above all, they were removed from the control and/or manipulations of middlemen. Intermediaries have been heavily involved in the determination of prices of other local crops: a practice disliked and opposed by farmers. In reality, while crude prices are set by the international market which is driven by the world's largest producer Malaysia, 1 the price paid to producers is set by an organization of owners of processing plants: the ANIAME (National Association of Manufacturers of Edible Oils and Butters). It reflects the world price of crude, but it is not necessarily tied to the supply and demand of fruits. Yet, the fact that this price is published at plants and updated periodically allows farmers to know exactly how much they will receive for their crops. This situation

260 HECTOR B. FLETES-OOON AND ALESSANDRO BONANNO

created an image of transparency that enhanced managers' control of the production process and created division among farmers. The price paid in early 2013 was about 100 US dolJars per metric ton.

The Resistance of Farmers

The power of extractoras is recognized and resisted by most farmers. They view plant managers' ability to choose among a relatively large number of producers as counter-productive and the sector as an unleveled playing field. Additionally, the sector's power asymmetry is identified as a source of uncertainty and mistrust. Processing plants are viewed as entities that want to take advantage of producers. Often, farmers have asked for the support of local state officials to address the sector's problems. However, state intervention has lacked as mediation between the parties has not materialized. In many instances, local officials took the side of extractoras engendering further resistance and mistrust on the part of farmers. Ultimately, farmers charged the state with promoting programs that favor extractoras rather than enhancing the overall socioeconomic conditions of the region as officially claimed.

Farmers' struggle against extractoras is not recent. Since the 1990s, there have been instances of struggles directed against the power of processing plants. In 1999, these actions culminated with the decision to draw plans to establish a farmers-owned processing plant. Dissatisfied with the difference in power and the limited support received from the state, farmers viewed the possibility to own a plant as a move that could emancipate them. A number of producers joined forces and formed an association that included 300 members and about 2,500 hectares of land. Based on the principle of "cada socio es duefio .. (each member is an owner), the association adopted the principle of collective ownership of the plant and a participatory management strategy. One of the components of this strategy was the notion that members should deliver their entire production to the plant in order to guarantee a steady supply of fruits, ensure farmers that their products would be sold, and control competition. This plan drew immediate attention from extractoras. Their reaction consisted primarily in a set of technical and economic incentives to discourage farmers from participating in the project. As this strategy worked well and further divided farmers, additional problems stood on the way. In particular, initially the association lacked the needed financial resources, technical expertise, and managerial personnel to run a processing plant. In this context, the project was eventually aborted.


Despite this setback, mobilization to achieve the goal of owing a plant continued. The turning point occurred in 2009 when the society was able to recruit a local engineer with background in the sector and work experience in the United States. Under the leadership of this individual, the society was able to recruit and train a sufficient number of technicians and workers to staff a plant. More importantly, this association was able to negotiate the use of an older facility that was built in the 1970s and, later, was placed out of production. The negotiation was particularly successful d generated favorable conditions. Among these conditions the association was able to lease the plant at no cost for two years. This plant became fully operational in 2009. Financial problems remained and important was the intervention of the state. Counting on state programs (such as the Tropico Humedo program), the growing demand for crude oil, effective management, and support from farmers and the community, this group was able to generate sufficient capital and credit to build a new plant within two years from the beginning of operations. Construction initiated in 2011, and the new plant was completed in June 2012 (Fig. 3).

Fig. 3. View of the Farmers-Owned Processing Plant as One of the Chapter's Authors (Far Left) Interviews Local Fanners. Source: Photo by authors.


The Struggle Continues

Privately owned extractoras continued their struggle to maintain their position of power over fanners. They responded to the association moves by reintroducing programs in support of producers such as programs for the direct collection of harvested fruits in the field, sale of inputs at discounted prices, and technical assistance. Furthermore, they increased the price paid for crops. The latter was a direct countermove to offset the association decision to increase the price paid to farmers. The net result was an increased competition in the region and a relatively limited supply of fruits for the plant. Paradoxically, the success of the association ignited a price war which continued to divide farmers. Some remained loyal to the association. But a growing number sold to extractoras that paid higher prices. As indicated by a leading member of the farmers' association, "the supply of fruits is one of the most significant problems faced by the plant .... Even our own members sell to the private sector as the competition is tough."

The association also provides technical assistance to farmers. Designed to respond to the initiative of extractors, this move is, above all, part of a broader project in which the association sees the plant and fanners as components of the same organization. Additionally, it is part of an effort to support the sustainable and socially just production of palm oil. This commitment involves procedures that support the environment, the conservation and reproduction of natural resources, and the support of labor and its rights. Strong has been the campaign against the use of child labor. No minors have been allowed to work in the plant.

Despite the accomplishments, problems remain. The competition from the extractoras has created economic problems for the association. In particular, reduced cash flow has prevented prompt payments to fanners. This situation created resentment among producers who responded by delivering their crops to the competition.2 Additionally, limited financial resources prevent the improvement and/or replacement of equipment. While extractoras purchase state of the art equipment from international firms, the association often resorts to domestic and/or local companies and repairmen to acquire and service its equipment. This situation limits the productivity of the plant. The good practices followed by the association, however, have allowed participation in governmental programs that reward best practices. The association plant has received state support as part of these programs.


CONCLUSIONS

The recent social history in Chiapas is marked by local struggles, mobilization, initiatives for the establishment of alternative social arrangements, and solidarity. The case of the production of palm oil fits within this tradition as it demonstrates the persistent struggle of farmers, their continuous search for initiatives that stand in alternative to the status quo and, more importantly, that bring equality and justice to society. Indeed, the establishment of a farmer-owned processing plant is an example of the ability of local farmers to mobilize available resources, create new and effective forms of organization, and propose locally generated plans for socioeconomic development. The additional benefits of this empowering initiative are many and include the generation of added value that is kept in area, the harmonization of key facets of the production process, farmers' control of the production process, the reduction of differences in power between farmers and the processing industry, and the strengthening of local social bonds and solidarity. The manner in which farmers handled the transition to the palm monoculture is telling of the ability of local residents to generate solutions to emerging problems. Simultaneously, it is also an indication of the limits that local initiatives may encounter in the absence of autonomous institutions of coordination and planning and the persistence of the power of agribusiness. This is particularly the case in a context characterized by strong centralized state action. While it was relevant for farmers to continue food production on land devoted to palm production, the co-existence of the two cultures was neither productively efficient nor environmentally sustainable. It appears, therefore, that the presence of local institutions that would coordinate these activities and that would allow a more direct participation from all stakeholders could represent a beneficial tum.

The persistent power of extractoras and their ability to counter farmers' moves and resistance highlighted in this case speak directly to pertinent literature. While extractoras continue to be powerful, the opposition and resistance of farmers indicate that theories that stress the overwhelming power of agribusiness over producers do not fully explain the characteristics of this case. More explanatory power rests in those accounts that see in the ability of subordinate groups to resist agribusiness. The case of palm oil production in Chiapas, therefore, can be viewed as an illustration of the "contested terrain" of agri-food under neoliberal globalization. The case is also illustrative of the role of the state in agri-food. In the case, local and federal state agencies have been unable to adequately support farmers in


a context in which their support for agribusiness has been open. As the state claims to promote development that benefits all parts, events point to different conclusions. In this respect and despite ideological pronouncements to the contrary, the local and federal state agencies acted as a class state whose support of agribusiness is ofprimary importance. However, the difficulties that the state encountered in mediating between all parties are telling of its limited power in contemporary agri-food. Accordingly, the state lacks those requirements that would have allowed it to find sustainable solutions to the crisis.

As the state lacks power, market mechanisms can hardly be described as neutral and efficient as agribusiness representatives often claim. The limited number of processing plants and the various actions of extractoras are indicative of a socially constructed and controlled market. Furthermore, they indicate that this construction of the market has not been a viable solution to the problems that emerged in the development of the sector and region. In this context, the struggle and initiatives of farmers represent positive and promising solutions that can open new and more equitable patterns of development in agri-food.

NOTES

1. There was an increase in price in 2007 when it reached about 750 US dollars per metric ton. During the following two years, the price declined but subsequently rose steadily. By 201l crude sold at about 1,100 USD per metric ton. In early 2013, the price declined again and stood at about 850 USD.

2. This situation has been partially addressed by creating a network of suppliers that includes farmers from other states.

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