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NICARAGUA: Fragility and limits of agrarian reforms

The antecedents

During the colonial period, a small social group made up of mestizos began to form, although the laws in place only recognised “Spanish” and “Indian” members of the population. However, this new group was to make up the greater part of Nicaragua’s peasantry. After the country’s independence (1821), the only way the oligarchy in place and the new dominant classes could maintain their control was to gain possession of most of the land. They achieved this by developing coffee plantations, privatising virgin land in their favour and by putting a halt to the pioneer frontier 1. The rebellion led by A. C. Sandino in the thirties expressed the peasants of the North’s reaction to this process and the forced introduction of capitalist farming. The revolt was crushed, auguring a long period of dictatorship 2 that lasted until the Sandinista National Liberation Front (FSLN) came to power in 1979.

Nicaraguan agrarian reform

Like many Latin American countries, Nicaragua had an early “agrarian reform” in the 60s. Heavy crackdowns prevented any sort of rural unionisation. The reform had basically zero impact, if we set aside the projects for extending the farming frontier onto virgin lands, which had been misnamed as agrarian reform projects.

When the Sandinista Front took over in 1979, there was no national farmers’ organisation capable of representing small farmers. The ATC 3, a recently founded association for poor peasants and farm workers, took advantage of the prevailing mood and political context to extend its influence over the entire country, although it remained weak. Instead of supporting farmers’ movements and land invasions, the revolutionary government confiscated lands held by the Somozists and turned them into government farms, thereby forcing the poor farmers who had taken them over to become, or return to being, farm workers. Only the small groups succeeded in keeping control of their land by adopting the status of co-operative farms. In 1981, fearing that the wealthy peasants would turn to the opposition, the FSLN backed the creation of the UNAG 4, which united small- and medium-sized farmers with part of the pro-Sandinista rural middle class. The ATC therefore only represented the farm workers and the poor peasants, whose belligerence and demands were considered as incompatible with national unity and defence. For this reason, they had no more room for real organisation of the civil society. Therefore, it was the government that directed the agrarian reform via the INRA and then the MIDINRA 5.

The agrarian reform law (1981) allowed for the gradual allocation of insufficiently exploited land that is part of big estates. The beneficiaries were State companies and cooperative farms. Farmers must agree to work on these cooperative farms in order to have access to the land affected by the agrarian reform.

The State sector quickly grew to represent 20% of the country’s agricultural production. An interventionist policy gave absolute priority to a few major agro-industrial projects with the aim of fulfilling a macroeconomic scheme to meet the immediate needs of the urban population. From 1981 to 1984, the UNAG took no initiative to further the agrarian reform 6. The government managed the technical support, finance, technical assistance and cooperatives management training. Whereas the State took care of “organising”, it did not have the means to question the form it had inherited. Different types of farming were set up in the cooperative farms, but the farmers themselves could not become landowners nor ensure the security of their tenure. While the FSLN was in power, the agrarian reform beneficiaries were not allowed to sell the land they had received at no cost.

This division of tasks hindered the emergence of a genuine peasant movement. The cooperative movement did not structure itself into a Cooperative Federation until 1990, after the electoral demise of the FSLN. Peasant resistance began to materialise in the face of unfavourable economic and agrarian policies (1980-1984: priority given to government farms, price controls, disorganisation of commercial channels)7.

The political and military situation became critical at the end of 1984. In order to rebuild the alliance with the peasantry, the revolutionary government reintroduced the right to trade, improved the conditions of exchange between urban areas and the countryside and modified its agrarian policy 8. Land redistribution increased and the beneficiaries were left to organise themselves as they pleased. The number of individual plots assigned increased, though the title deeds issued through the agrarian reform were non-negotiable and were more than often assigned collectively. From 1985 to 1987, nearly half the State sector had been redistributed to cooperatives and small farmers. These measures helped the government to regain control of the situation. Food production increased and the advance of the « Contras » was stopped, but the rift in the peasantry remained. Softening the agrarian policy from 1984 onwards did not bring about any radical revision. Once the country had emerged from its crisis, the FSLN stopped agrarian reform from going further.

Changes in the structuring of the farm sector in the late 1980s

By 1988, the way land was organised had been transformed, albeit in a limited way. The large farms (over 350 ha) only represented 19% of cultivated farm surface area (7% private, 12% government farms), instead of 36% in 1978. The cooperative farms occupied 12% of the land while the rest remained in the hands of individual peasant farmers and the lower middle classes of the countryside. Land was given to 70,000 peasant families, about one peasant family out of two. However, the portion of land given for individual use only amounted to 5% of the country’s cultivated land.

The political context changed radically in 1990 when the opposition won the elections. Under pressure from the farm workers, the lands occupied by cooperative farms were divided up and individual farms became the rule in only a few years 9. The organisation of the farm sector had been radically modified by successive and often contradictory reforms before the changes desired by previous governments came to fruition. Nicaragua had become initially one of the Latin American countries with the least unequally distributed land tenure systems. 70% of the country’s farmland was occupied by farms smaller than 140 ha as opposed to 47% in 1979, whereas farms over 350 ha decreased from 36% to 17%. However, the situation remained very fragile.

The 1990s: insecurity and concentration of land ownership

Violeta Chamorro’s government began to work for national reconciliation. The return to peace revived farming on the pioneer frontier, which had declined during the armed conflict. Regarding land, the new administration set up compensatory mechanisms for former owners affected by the agrarian reform, and started revising reform-period title deeds.

It privatised the State farms to the benefit of both sides’ soldiers 10, former owners and private purchasers. After having fought for it, State farms’ workers earned the right to continue farming part of the land. Workers’ companies were established, which were supposed to buy the land after several years.

From 1990 to 2000, a series of laws were passed to deal with what is known as the « ownership problem ». However, these laws have been applied only partially. By creating or maintaining maximum land insecurity for those who use the reformed land, as well as through discourses about the supreme respect of the law, the successive governments actually promoted a restructuring of the national agricultural landscape that privileges the strongest.

In addition, there was a situation of economic insecurity: the structural adjustment policy 11 has led to a brutal change of rules by eliminating a large number of subsidies for farmers.

Because of high tenure insecurity resulting from pending legal problems, the people who work on the new small farms or for recently privatised former State companies suffered from pressures coming from former landowners and the police. Also, both the reduced possibilities for obtaining credit and the shortcomings in the processes of renegotiating prior debts incurred by the companies or cooperatives were economically suffocating. Under these conditions, the advantages of more equal distribution of property as a means for increased economic development were rather difficult to see.

At the same time, the compensations of former owners 12 were reaching exorbitant amounts that cannot be handled by the country on the macroeconomic level.

In spite of easily bypassed legal conditions, large expanses of reformed lands are being sold at prices far below the market price, due in part to their imperfect legal status. These sales mostly concerned the best lands and those with the highest value in terms of urban and tourist construction 13. If a balance sheet were to be made taking into account the assets (e.g. land awarded to veteran soldiers) and losses (sales, restorations to former owners), it would be clear that the beneficiaries of the reforms have lost a running total of 400,000 ha of land between 1990 and 2000!

The farmers’ organisations did not find any solutions to prevent this reversal of the agrarian reform land distribution. In 1993-1994, UNAG and FENACOOP admitted that the division of cooperatives was the rule although they maintained a predominantly collectivist discourse, still refusing to consider systems that allow the legalisation of individual plots, and even establish mechanisms that would have permitted the control of latter transactions by a community authority.

Globally, agricultural colonisation, land markets and agrarian reform had mixed results. This is especially the case if one considers the economic and human cost of the transformations that have occurred in Nicaragua over the past few decades. There was some improvement concerning access to land 14, but the 2001 survey confirmed what empirical observation had shown: the arrangement of the country’s farm sector is evolving rapidly towards dramatic polarisation.

Tab.1 : Progression of the distribution of land in Nicaragua: 1963 to 2001
Category% owners% surface area
< 0.7 ha2500
0.7- 7 ha483943
7- 140 ha44523754
140 - 350 ha331821
> 350 ha114122
Totals (000)1022003,8236,254

Source: Survey 2001 CENAGRO.


Whereas 44% of farmers still own less than 3% of the land, 1% continues to control nearly a quarter of the country’s farmland 15.

The sale of land affected by the agrarian reform has continued to benefit a small minority of Nicaraguans and foreign purchasers.

Although large farms are now in crisis, for example, with the fall of coffee prices on the international market, a coherent agricultural policy capable of placing small commercial farming at the heart of the national development strategy is not yet a component of the programme promoted by the decision-makers or any major opposition party.

Given the unfavourable political spin on new proposals within the agrarian reform, other land polices are possible. However, the only programmes that receive massive support from international institutions (World Bank, European Union, etc.) concern the legalisation of land, along with modernisation of the land and ownership registries 16.

Farm size policies coupled with regulations of the land market and of modes of access such as sharecropping, which would be consistent with an agricultural policy that supports the development of small- and medium-sized farms, is nevertheless vital to the country’s economic development.

This is the essential condition for developing the country’s very rich natural potential so that it can be used for sustainable growth and the elimination of poverty.


1 Late 19th and early 20th centuries

2 Somoza father and son.

3 Asociación de Trabajadores del Campo. In 1979, it existed in only a localised form.

4 National Union of Farmers and Livestock Breeders

5 Nicaraguan Institute of Agrarian Reform then the Ministry of Agricultural Development and Agrarian Reform.

6 Its leaders, whose interests were often contrary to those of the poor peasants, did not claim more equal access to land.

7 In the central region of the country, unable to find channels for expression in recognised organisations, the peasant opposition was recruited by the counter-revolution, which received massive financial and military assistance from the USA. In the Pacific region, peasant resistance took other forms: resorting to the black market, setting up rather secretly individual plots or herds within the farm cooperatives, demanding land from service cooperatives, joining protests linked to the Catholic Church.

8 Here again, the role of the UNAG in applying these measures was only secondary.

9 By 1994, 80% of the cooperatives had been parcelled out.

10 The officers received much more than the ordinary soldiers.

11 Started by the Sandanisto government and continued by its successor.

12 Often immigrants to the USA during the revolution and having acquired American nationality, which « justified » the pressure exerted by the American government and the blackmail of international aid for the compensation of « its » nationals.

13 In the communes of San Juan del Sur and Cardenas, with high tourist potential, 91% of the lands belonging to cooperatives had already been sold in 1994.

14 Since 1963, the GINI coefficient has decreased from 0.79 to 0.71 at present. CENAGRO agricultural survey, 2001.

15 The method used in the survey systematically underestimates the concentration of land ownership, since it reasons in terms of farms and not owners, which often have several farms in different regions.

16 Nonetheless, with the support of the indigenous communities of the Atlantic coast to draw boundaries and gain recognition for the land.


IRAM [MERLET M., POMMIER D. et al.] Estudios sobre la tenencia de la tierra. OTR. Banque Mondiale. Septembre 2000.

Merlet, Michel. Réformes agraires, marchés fonciers, organisations paysannes: échecs et défis. Les cas du Nicaragua et du Honduras. Communication au Séminaire International Transitions foncières et changement social. CIESAS - IRD. Mexico. Mars 1999.

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