CHAPTER 11

THE PROCESSING OF PALM OIL

IN CHIAPAS, MEXICO:
RESISTANCE AND
ALTERNATIVES
Hector B. Fletes-Oc6n and Alessandro Bonanno
IRODUCTON
Historically, the relatonship betwen farmers and the pros ing stor has
been asymmetric (Bonanno & Cavalcanti, 2012; Bonanno & Constanc,
2006). In recent deades, 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 com
ponent 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 goups - with limited options of resistanc (Constance,
2008; Heferan, Hendrickson, & Gronski, 1999; Hendrickson, Wilkinson,
Hefferan, & Gronski, 2008). Others have contended that not only resis
tanc has emerged in a variety of settings (i.e., consumption, alterative
production, civil society), but that the evolution of agri-food is btter
Labr Relaton in Globalized Fo
Rearc i R1Siolog and Deelopent, Volue 20,247-167
Copyrigt 2014 by Emerald Groap Pblish Liite
A rigb of repron i any form resned
ISSN: IOS7-1922jdoi:10.1108/S1057-1922201402010
247
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 placd on the role that
the state plays in the relationship between agribusiness and agricultural
workers. Acording 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 agiculture compared with higher rates
i other economic setors requires state intervention. The state is called to
attract cpital i agculture 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 efciency of agi-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 afeted by
the struggle of, and may act in favor of labor. The state can b simulta
neously an entty 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 resistanc to agribusiness, this
chapter probs the issue of farmers' resistance to the processing sctor in
agi-food in a less developed region of the global South. In particular, it
investigates the procss by which farmers resisted the power of processing
fs in the production of Palm Oil in the state of Chiapas, Mexico. We
employed a case study methodology that is developed through the exami
naton of existing documents, interviews with key informants, and site
visits. Data were analyzed through the use of technique of saturation and
negative cases whereby the conclusions were confronted with altertive
interpretations that were not selected. The chapter is divided into five sec
tions. After the introduction, the second secton analyzes of the historical
context of the case. I discusses Fordism, its crisis, and the development of
neoliberalism with specific reference to Mexico. The evolution of agicul
ture in Mexico under the neoliberal regime is discussed in the third section,
along with spc 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 Pal Oi in Chiapas, Mexico 29
Fig. 1. Example of Africn Palm Production in Chiapas, Mexico. Source: Photo
by authors.
CONX
Fordism and Neoliberalism
Tis 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 frst introduced in Mexico in the
early 1980s (Merrill & Mir6, 1996; Morton, 2003; Otero, 2004). This move
was part of the interational 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 signifcant 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 demo
cratic legitimacy, created unparalleled economic growth and abundanc,
250 HECTOR B. FLETES-OCON AND ALESSANDRO BONANNO
and establishe a dominant consumer culture (Bonanno & Constanc,
2008). In advanced societies of the North, the "management-labor acord"
allowed fnns to enhance their control over the labor process and produc
tion, while labor - highly represente by unions - was granted collective
bargaining power which was used to efetively negotiate salaries, benefts,
and work conditions. Te result was that labor enjoye much increased
benets and remuneration that paralleled gains in productivity. The paral
lel betwen increased productvity 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 socioeonomic planning. Through the applica
ton of Keyneian policies and direct intervention, the Fordist state was
able to regulate the economy and soiety and enhance workers' benefts in
health, eduction, and welfare. The middle class gew sigcantly, and
many people improve their living conditions and enjoye varying levels of
mass consumption. Postwar High Fordism signifed the inclusion of many
formerly marginal groups in mainstream society, more opportunities
and euality of condition. This was particularly the case in the advanced
social demoracies of the North. These changes, however, did not eliminate
inequality and its complexity. Socioeconomic diferences remained accom
panie by sharp racial, ethnic, and gender inequalities. The power of unions
allowe for disparities between unionizd and nonunionize 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 moderization strategies and bureaucratization.
In advanced societies, Fordism was criticized for its totalizng domi
nation. State intervention was viewed as oppressive and a proess that
reuired the submission of the masses to an over-controlling cpitalist state.
Individuality, reason and the ability to dissent were dissolved into mass con
sumption 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 1970, Fordism was broadly criticized and the
a1ienating, depoliticizing, regmenting, homogenizing consequencs that it
had on society were recognized by progresive and conservative critic
alike. Conservative intelletuals denounced the political and distorting
The Processing of Palm Oi i Chiapas, Mexico 251
nature of state interventionism. Their argued about its ineffectiveness and
inefciency 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 agri
culture by criticizng commodity pric support progams (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 tends of
agicultural prices, and address to the constant surplus of agicultural
labor, for Friedman, they represented instancs of wasteful bureaucratiza
tion, unnecessary expense, and inefciency 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 neutra
lized those mechanisms that would control unwanted surpluses and distor
tions. Beuse marked mechanisms were replaced by state intervention
farmers were kept on the land despite low income and limited hopes for
an economically meaningul future; food prics 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 Goverent
establishe a system based on political negotiations and compromises that
inevitably was controlle by powerful special interests. Discussing the case
of the US, Friedman cncluded that the creation of price support programs
in agiculture was the result of the overepresentation of rural ares in the
electoral system and Congress (1982 [1962], p. 181).
A critique of pric 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 intelletuals viewe pric
support programs as ineffetive and inefcient, and measures that wasted
resourcs, distributed them unequally and is so doing discriminated against
poor segents of society. Sharply disagreing with neolibralism analyse,
the left leaning authors stressed the need for the democratizton of state
intervention and the importance of establishing substantive equality and
freedom (Caroy, 1984; Jessop, 1982; Offe, 1985).
I developing countries like Mexico, the impact of Fordism appared
less visible. Depite 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
252 HECTOR B. FLETES-OCON AND ALESSANDRO BONANNO
persistence of the numerous peasant class on the land (Hewitt, 1999 [1976];
Otero, 2004, 1999). Te availability of modest but sustainable living stan
dards and the regulaton of the outfow of immigrants to urban areas and
to the United States were promoted by Fordist policies that included pric
support programs, land redistribution, and entitlements. It can b argued
that, during this time, peasant agriculture was supported and its develop
ment 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 managng 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-sufcient in food
crops and basic consumer goods (Merril & Miro, 1996; Pehlaner & Otero,
2010). In agriculture, investment and the strengthening of state intervention
in technical assistanc and extension increased the amount of cultivated
land and improved the quality and quantity of production (Galarz, 1964;
Hewitt, 1999 [1976]; Merril & Miro, 1996; Otero, 2004).
By the early 1970s, Fordism had initiate its fal crisis. Enhance
inteational comptition, the high cst of state intervention, eonomic
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 prolonge ecnomic crisis and the soial pathologies
that emerged at the time. Their ideology and discourses promoted the
replacement of Fordism by a system based on a reducd welfare state,
reforms of the t system that privileged the wealthy, the weakening of
labor unions, the deregulation of the private sector and measures that would
increase capital mobility, augent proft but reduce wealth reistribution.
Fundamental in this change was the Neoliberal design to defe market
forces as "neutral" and to suggest that they should replace the politically
driven and, therefore, intrinsically imperfet state intervention (Habermas,
1975). Friedman and like-minded Neoliberals contended that state inter
vention cannot escap 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 beneft
those who are rightly meritorious (Fredman, 1982 [1962], pp. 180-185}.
The proposal gained signifcant support as it was interpreted as a legtimate
alterative to the discredited state intervention and its wasteful costs, large
bureaucracy, and frequent abuses (Friedman, 1982 [1962]).
The Processing of Pal Oi i Chiapas, Mexico 253
With the establishment of Neoliberal Globalizaton and its redirected
state intervention, political decisions became increasingly subordinate to
the economic interests of the ruling class. In this context, the eonomiza
tion of politics became the defning 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 appli
cation of market mechanisms but, paradoxically, through state intervention
(Helleiner, 2010; Raulet, 2011; Underhill & Zhang, 2008). Contending that
additional market liberaliztion 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 progessive left also
called for similar policies (Fletes & Bonanno, 2013). As state intervention
to address crises was introduced it translated into two general measures:
eonomic austerity and increased state spending. Austerity measure -
generally promote by conservative goups - engendere economic stagna
tion, augented unemployment rates, limited prouctive investment, and
reducd public services. The general public protested this declining socio
eonomic conditions and the uncrtain future that austerity promote.
They called for alteratives. Corporate forcs also opposed austerity
lamenting the limited state support that they receive in a context in which
the enhancd freedom to oprate in the market that they desired never
materialized (Lapavitsas, 2012; Habermas, 2012). State spending - the
preferred strateg of members of the progressive camp (Krugman, 2012) -
has ben similarly ineffetive (Byre, 2012; Kippner, 2011; Raulet, 2011;
Underhill & Zhang, 2008; Van Gelden, 20l l ). While signifcant resources
were mobilized by the state, they were often appropriated by a handfl
of super wealthy individuals and corporations. A problems remained,
this distorted appropriation of public resources was reminiscnt of the
unfaiess of the old F ordist regime.
T SETG
Mexico
The implantation of neoliberalism in Mexican agiculture consisted in t
progressive eliminaton of highly valued state sponsore progams. Progams
that historiclly supported peasant agiculture, locl food production and
254 HECTOR B. FLETES-OCON AND ALESSANDRO BONANNO
consumption, and land redistribution were targeted for elimination. The
process accelerated i the 1990s and this acceleration is symbolized by
two actions: the reform of Artcle 27 of the Mexican Constitution that
abolished the eji system i 1992, and the signing of North Americn Free
Trade Ageement (NAFTA) that became operational in 1994 (Corelius &
Myhre, 1998; Morton, 2003; Otero, 1999, 2004). Established by actions
directly derived from the Mexican Revolution of 1910-1920, the ejido
system provide the use of public land to peasants. It was desiged to
support peasant agriculture and improve the lives of pasants. Through the
years, it permitted the existenc of networks of locl food production
and distribution that benefi tted capesios. The end of the eido system
transformed the destination of this public land that became available for
commercial use. Simultaneously, the Mexicn state withdrew its support
to the large peasant class defacto aclerating the migration of Mexican
agicultural workers to the US (Barta, 2004). The implementation of
NAFT A in 1994 allowed US and Canadian agricultural commodities to
enter the Mexicn market. Without the protection of Fordist programs,
Mexican farmers could not withstand comptition and local production
suffered. A primary result of this situation was that Mexico had to increase
its imports of basic food stuff i rapidly and negatively impacting ways
(Gonzalez Chavez & Macias Macias, 2007}. A primary consequence of the
opening of the once highly protected agicultural markets was that farmers
were forced to specialize i the producton 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 prics and shortages
that primarily affected the lower classes and their ability to purchase com
for the production of tortia.
A additional significant result of this change was the abandonment of
the Fordist policy of "food seurity" in favor of the neoliberal policy of
"market opportunities." The availability of sufcient agricultural produc
tion 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 objetives (Bartra, 1974; Merril &
Miro, 1996; Ramirez Silva, 1989). The shift to "market opportunities"
decoupled socially relevant goals - such as eonomic assistanc to the
lower strata and the regulation of outmigation - from economic obje
tives. It centered the national agicultural policy on the market driven
search for profit. A relatively low number of producers benefted from this
change and the consequent expansion of the export market. Yet, the vast
Th Processing of Palm Oi in Chiapas, Mexio 255
majority of farmers sufered from the tough comptition and their income
and living conditions deteriorated. Campesinos lost most of their ability to
produce food for self-consumpton and lower and middle classe urban
consumers were hurt by food prices increases (Gonzalez Chavez & Macias
Macias, 2007; Pehlaner & Otero, 2010). This procss engendered an
impoverishment of the Mexican peasantry and small and medium produ
crs that could not be corrected by the free functioning of the market.
Simultaneously, the remaining progr desiged 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, immigraton increased (Bartra, 2004). Defned as "the
import of food and the export of farmers" (Bartra, 2004), the free market
oriented agricultural policy worsened the conditions of many sgent of
the Mexican society (Pechlaner & Otero, 2010}.
Chiapas and Resitance to Neolberalim
Locted the souther tip of Mexico bordering Guatemala, Chiapas is one
of the poorest states in the country known for its physical beauty and heri
tage but also its poverty and social margnalization. This state is also
known for its high concntration of idios (indigenous population) that
covers about one third of the entire population. Agriculture remains the
pr enomic activity of the state. However, it has been characterized
by stagation resulting in a decrease the s and number of local farms
(INEGI, 2007}. Following patters 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 locl consumption.
Concomitantly with the date of the implementation of NAFT A
(January 1, 1994), the Zapatista Army of National Libration (or EZLN)
initated a rebellion against the Mexican state. As their ca of "land, free
dom and self-determination for the indigenous pople and the dispos
sessed" ehoed around the worJd, the Zapatstas oppose what they saw as
the exploitative nature of Neoliberal Globaliztion. This campesinos driven
protest movement quickly achieved global recognition and forced the
Mexican Government to grant local residents signifcant autonomy. To
cmbat the insurgency the Mexican Goverment introduced a poJicy of
socioeconomic intervention in Chiapas that involved the overt objectves
of combating poverty and promoting development and the latent goals of
256 HECTOR B. FLETES-OCON AND ALESSANDRO BONANNO
social control and the appeasement of the large pro-Zapatista interational
public opinion. (Collier, 2008; Harvey, 1998; Morton, 2011; Ramor, 2011).
As a result, the state of Chiapas was ganted a privileged status and the
Mexican Goverment maintaine a continuous fow of economic resources
to Chiapas that, in 2011 alone, resulted in the budgeting of the equivalent
of 0.5 billion US dollars for goverent sponsored programs for this state
(Sabines, 2011 ).
T CAE
Te Implatation ad Growth of African Palm Prodction for Biofuel
The expansion of the cultivation of the African Palm was among the public
programs initiated in Chiapas. Through this programs, the Mexican
Goverent intended to make more visible its actons to address politcl
instability and the poor eonomic conditions of the region. In light of the
global attention received by Chiapas, the negative inteational public
opinion about the Mexican Goverent's actions in the state and the visi
bility of loal poverty, it was important for the Goverment to show that it
was doing its outmost to address the situation (Morton, 2011; Ramor,
2011). Simultaneously, the Mexican Goverent 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 cor prices involved concers over the practice of the
use of food crops for the production of altertive energ. In t context,
the Mexican Goverent sought to curb the use of fossil fuel through the
expansion of renewable energy sourcs that did not involve food crops and
com in particular. Due to its very desirable agonomic performanc, the
production of the Mrican Palm appared as an effective and safe sourc
for the production of biofuel (Pineda Morales, 2009; Ramirez Zamora,
1991). As the reduction of the quantity of food crops employed for energy
production achieve significant support, the Mricn Palm project was also
supported by the local goverent.
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 frst 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 produc
tion covered 700 hectares (Ferrera Velasco, 2010; Ramirez Zamora, 1991).
The Processing of Palm Oi in Chiapas, Mexico 257
Despite its steady growth, this cultivation remained relatively limited
throughout the 1960s. In was in the mid-1970s that the National
Commission for the Cultvation of Fruits (CONAFRUT) initiated a cam
paig for the production of this crop that included the import of more than
one million seeds from Indonesia - the largest world producr of Mricn
palm oil - Mrica and other parts of Latin America. Euipment for also
imported to increase the productivity of the nascent yet expanding crushing
industry in the area. Preently, the oil is widely used as ingredient in the
manufacturing of a geat number of products including food, house, clean
ing, and cosmetics products (Pineda Morales, 2009; SlAP, 2012).
In the mid-1990s, the political and economic conditions described above
create impetus for the goverent led expansion of the industry. In 1996,
palm oil domestic production covered only 3 percent of the demand
prompting the Mexican Goverment to propose the cultivation of 2.5 mil
lion additional hectares: a sigifcant portion of which was loate in
Chiapas (Pineda Morales, 2009). This procs continued in the following
deade as the Ministry of Rural Development of Chiapas etablished the
"Palm Oil Production System" in 2004 that was implemented under the
name of th 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 margnal land.
This posture was adopted in order to meet the need to increase biofuel pro
ducton without compromising food production (Calderon, 208, pp. 266,
267; Sabines, 2007, p. 219).
The February 208 the act "Promotion and Development of Bionergy"
gave further support to this strateg by promoting diversication and sus
tainable development in order to guarantee the gowth of rural areas.
Additionally, in May 208, the goverent introduc the "Inter-setorial
Strategy for Bionergy." This progm cl for "the promotion and exan
sion of production line of biomass inputs and the production of bioenerg
that would promote energy surity throug the divercation of energy
sou. It would generate and integate synergies and provide support for
sustainable rr development" (Calderon, 208, p. 209). The goverent
further introduced the "Sustainable Production of Inputs for Bioenerg and
for Scientifc and Technologcal Development" progam that aime at
increasing production for bioenergy (Calderon, 208, p. 209). The Calderon
Administraton describd this "productive reonversion" in thee terms:
.. [Our objetive] is to promote the substitution of traditional crops, such as
com for self-consumption that afets the environment, with others that are
sustainable and that maximize proft" (Government of Chiapas, 2009, p. 1).
258 HECTOR B. FLETES-OCON AND ALESSANDRO BONANNO
In reent years, the cultivation of African Palms continued to b supporte
by state and feeral funds. The state of Ciapas introducd the "Chiapas
Solidarity Development Plan" in 207 and in the same year established thre
palm nurseries that supplie plants to producrs at no cost (Pineda Morale,
2009). Ultimately, the land devote to the production of palms incd by
24,000 hectares from 2008 to 2011 (Fig. 2).
TH FARMRS' STRUGGLE AGAIST PROCESSIG
PLATS
The Power of Extractora
One of the issues that characterized the expansion of the cultivation of
African Palms was the relationship between farmers and crushing plants.
Acordingly and over the years, processing plants, or extractoras, enjoyed
Fig. 2. African Palm Frts Ready for Dlivery to Procssing Plant (Etractoras).
Source: Photo by authors.
The Processing of Palm Oil in Chipas, Mexico 259
a position of power over fanners. This power was the result of both struc
tural cnditions and industrial strategies. Structurally, there has been a lim
ited number of extractoras in the region. Throughout the 1990s only two
plants were in operation. In the following two deades, this numbr slowly
increased but never kept pace with the growth of production and, above
all, with expetatons and plans to expand output. By 2013, there were a
total of seven plants. This gap between production and procssing capacity
allowed plant managers to purchase palm fruits at convenient conditions
and to discriminate among suppliers. Ultimately, only those farmers who
displaye positive attitudes toward management were invite to do busi
ness. Farmers' comments about prices, delivery conditions, and the overall
interaction with the extractora ofen translated into termination of the
business relationship. Some of the consequences of this asymmetic power
consisted of the inability of farmers to t advantage of state programs to
expand production, a general uneasiness toward the state invitaton 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 charactd by division and
discontent among farmers emerge.
Farmers' disontent was controlle through industrial strateges that
contemplated instant payments for the purchase of crops. The system of
instant payment consisted of cheks issued to farmers upon delivery of fruit
to receiving facilities - or recias. Diret delivery to procsing plants com
manded higher prices than those paid at delivery points. Recibas removed
from processing plants paid lower prics. This system was an immediate
sucss as cash-strapped farmers could use their cheks instantly or, gven
their popularity, could circulate them a local currency. Managers also pre
sented the purchasing prices a tied to market mechaniss. T 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 ben heavily involve in
the determination of prics of other local crops: a practc disliked and
opposed by farmers. In reality, while crude prices are set by the intea
tional market which is driven by the world's largest producer Malaysia, 1
the price paid to producers is set by an organizaton of owners of proces
sing plants: the ANIAME (ational 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 periodiclly allows farmers to
know exactly how much they will receive for their crops. This situaton
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.
Th Resistace of Farmers
The power of extractoras is recognized and reisted by most farmers. They
view plant managers' ability to choose among a relatively large number of
producers as counter-productve and the setor as an unleveled playing
feld. Additionally, the sector's power asymmetry is identifed as a source of
uncertainty and mistrust. Processing plants are viewed as entities that want
to take advantage of producers. Ofen, farmers have asked for the support
of locl state ofcials to address the sector's problems. However, state
intervention has lacked as mediation btween the parties has not materia
lized. In many instances, local ofcials took the side of extractoras engen
dering 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 soioeonomic conditions of the regon
as ofcially claimed.
Farmers' struggle against extractoras is not recent. Sinc the 1990s, there
have been instanc of struggles direted against the power of prosing
plants. In 1999, thee actons culminate with the decision to draw plans to
establish a farmers-owned processing plant. Dissatisfed with the difference
in power and the limited support reived from the state, farmers viewed
the possibility to own a plant as a move that could emancipate them. A
number of producers joined forcs and formed an association that included
300 members and about 2,500 hectare 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 man
agement 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 atten
tion from extractoras. Their reaction consisted primarily in a set of tehni
cal and economic incntives to discourage farmers from participating in the
project. As this strategy worked well and further divided farmers, addi
tional problems stood on the way. In particular, initially the association
lacked the needed fancial resources, technical expertise, and managerial
personnel to run a procssing plant. In this context, the project was even
tually aborted.
The Processing of Palm Oi in Chipa, Mexico 261
Despite this setback, mobilization to achieve the goal of owing a plant
continued. The turng point occurred in 2009 when the society was able to
recruit a local engneer with background in the sector and work experience
i the United States. Under the leadership of this individual, the soiety
was able to reruit and train a sufcient number of technicians and workers
to staf a plant. More importantly, this association was able to negotiate
the use of an older facility that was built i the 1970s and, later, was placed
out of producton. 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 beame 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, efetive manage
ment, and support from farmers and the community, this group was able
to generate sufcient capital and credit to build a new plant within two
years from the begnning of oprations. Construction initiated in 2011, and
the new plant was completed in June 2012 (Fig. 3).
Fig. 3. View of the Farmers-Owned Procssing Plant a One of the Chapter's
Authors (Far Lef) Interviews Locl Fanners. Source: Photo by authors.
262 HECTOR B. FLETES-OCON AND ALESSANDRO BONANNO
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 progams 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 ofset
the association decision to increase the price paid to farmers. The net
result was an increased competiton in the regon and a relatively limited
supply of fruits for the plant. Paradoxically, the success of the association
ignited a pric war which continued to divide farmers. Some remaine
loyal to the association. But a growing number sold to extractoras that
paid higher prics. As indicate by a leading member of the farmers'
association, "the supply of fruits is one of the most sigifcant problems
faced by the plant .... Even our own membrs sell to the private sector as
the compettion is tough."
The association also provides technical assistance to farmers. Desige
to respond to the initiative of extractors, this move is, above all, part of
a broader projet in which the association s s the plant and faners as
components of the same organization. Additionally, it is part of an efort
to support the sustainable and socially just prouction of palm oil. This
commitent involves procedures that support the environment, the consr
vation 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 ben allowed to work in the plant.
Despite the accomplishments, problems remain. The competition from
the extractora has created eonomic problems for the association. In
particular, reduced cash fow has prevented prompt payments to fanners.
This situation created resentment among producers who responded by
delivering their crops to the competition.
2
Additionally, limited fnancial
resources prevent the improvement and/or replacment of equipment.
While extractoras purchase state of the art equipment from interational
frms, the association ofen 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 associa
tion, however, have allowed participation in goverental programs that
reward best practices. The association plant has recived state support as
part of these programs.
The Processing of Palm Oil in Chiapas, Mexico 263
CONCLUSIONS
The recent social history in Chiapas is marked by local struggles, mobiliza
tion, initiatives for the establishment of alteratve soial arrangements, and
solidarity. The case of the production of palm oil fts within this tradition as
it demonstrates the persistent struggle of farmers, their continuous search
for initiatives that stand in alterative to the status quo and, more impor
tantly, that bring equality and justice to soiety. 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 efective forms of
organization, and propose loally generated plans for socioeconomic devel
opment. 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 proces, farmers' contol of the production
procss, the reduction of differences in power btween 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 indiction of the limits
that local initiatives may encounter in the absence of autonomous institu
tions of coordination and planning and the persistence of the power of
agibusines. This is partcularly the case in a context characterized by
strong centralized state acton. 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 efcient nor environmentally
sustainable. It appars, therefore, that the presenc of local institutions that
would coordinate these activities and that would allow a more diret partici
pation from all stakeholders could represent a beneficial tum.
The persistent power of extractoras and their ability to counter farmers'
moves and resistanc highlighted in this case speak diretly to prtinent lit
erature. 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 characteris
tics of this c. More explanatory power rests in those acounts that se in
the ability of subordinate groups to resist agribusiness. The c 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 ag-food. In the case, local and
federal state agencies have ben unable to adequately support farmers in
26 HECTOR B. FLETES-OCON AND ALESSANDRO BONANNO
a context in which their support for agribusiness h ben opn. As the
state claims to promote development that benefts all parts, events point to
different conclusions. In this respect and despite ideological pronounce
ments to the contrary, the loal and federal state agencies acte as a class
state whose support of agibusiness is ofprimary importance. However, the
difculties that the state encountere 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 fd
sustainable solutions to the crisis.
As the state lacks power, market mehanisms can hardly be describd as
neutral and efcient as agibusiness representatives often claim. The limited
number of procsing plants and the various actions of extractoras are indi
catve of a socially constructed and cntrolled 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 regon.
In this context, the struggle and initiatives of farmers represent positive and
promising solutions that can opn new and more equitable patter of
development in agi-food.
NOT
1. There was an incres in prc in 2007 when it reached about 750 US dollars
p metric ton. During the following two years, the price deline but subsequently
rose stedily. By 201l crude sold at about 1,100 USD pr metric ton. In early 2013,
the price declined again and stood at about 850 USD.
2. This situation has be partially addresse by creating a network of suppliers
that includes farmers from other states.
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