AI3000                0626216
CW3                Dissertation

Module Leader:                         Meera Tiwari        

        Seminar Tutor:                         David Durkee

        Submission Date:                         18 May 2009

        Word Count:                                 8126

Table of Contents

Executive Summary                              3

List of Abbreviations                              4

Introduction                                         5

Colombia's political economy                  5

▪ Overview                                        8

Chapter 1: Colombia's Drug Problem                                                      9

▪ The Consumers                                                                                9

▪ Plan Colombia: A Six Year Militarized Operation of Aerial Fumigations                11

▪ Colombian Armed Forces and US Sponsorship                                                12                

▪ Eradication Efforts                                                                                      13

Chapter 2:  Colombia's agricultural economy                                          15

▪ Colombia's farmers                                                                            15

▪ Colombia's traffickers                                                                            16

▪ Time for change                                                                                      17                      

Chapter 3: Colombia's Bio-economy          20

▪  The Coca Substitute                             20                

▪ Colombia's Existing Bio-economy             21

▪ Colombia's Future Bio-economy                 22

▪ Jatropha Social Enterprises                         24                    

Chapter 4: Conclusions                                27                

▪ Conclusions and Recommendations                        27

▪ Findings                                                28

Bibliography                 31

Executive Summary

Twentieth century visionaries such as Henry Ford and Rudolf Diesel advocated the production of fuels be made from biological materials.  However, at the time public policy favoured cheap fossil fuels, thus, research and development into bio-industries never came to fruition.  The oil crisis in 1973 revived ethanol (alcohol) and biodiesel (oil seed extracts) as a line of research.  Colombia's neighbour, Brazil, has become a leader in producing sugarbased alcohol for fuel.  Simultaneously, the United States has become a leader in corn-based alcohol.  Both types are blended with gasoline with the aim to combat climate change whilst becoming energy independent.  Jatropha has received recent attention as a potential feedstock for biodiesel.  The plant can be grown in poor soils, survive severe droughts, requires little maintenance and is easily refined to produce biodiesel.   This work illustrates the extent of global R&D investments into jatropha plantations and argues that this crop could play an important role in concluding the drug wars.

Thus far, US intervention in Colombia has not led to a decrease in the supply of narcotics, nor has it aided development.  This work advocates that a strategic shift in US aid could serve in shaping Colombian public policy and create strong jatropha research programs.  Colombia's existing bio-economy is expected to flourish due to its climate and low cost of land and labour.  Therefore, US aid could initiate further development into the renewable energy source that marginalised farmers could easily cultivate as an alternative to coca.  Poverty reduction could then accompany diminishing the supply of narcotics.

However, it is not suggested that supply-control objectives alone will conclude the drug wars.   The consumers are argued to be the core of the drug problem.  Therefore, in conjunction with crop substitution programs, prevention and treatment programs that seek to diminish demand could bring victory to the war on drugs.  Further, crop substitution programs would require an accomplice in order to reduce political violence in Colombia.  Negotiations and consideration of power sharing systems should remain the essence of Colombia's peace process.

List Of Abbreviations

AUC: (Spanish acronym) Autodefensas Unidas de Colombia  (The United Defence Force of Colombia)

DNP:  (Spanish acronym) Departamento nacional de la Planificación República de Colombia (National Planning Department Republic of Colombia)

EIU: Economist Intelligence Unit

ELN: (Spanish acronym) Ejército de Liberación Nacional  (National Liberation Army)

FARC: (Spanish acronym)  Fuerzas Armadas Revolucionarias de Colombia (Revolutionary Armed Forces of Colombia)

M19: Movimiento 19 de Abril (April 19th Movement)

UNOCD: United Nations Office Drugs and Crime

Introduction

▪ Colombia's Political Economy                        

Colombia's warfare derives from the time of Spanish occupancy when two political parties were born from colonization, the conservatives and the liberals.  The conservatives claim to  originate from supporters of Simon Bolivar; the Venezuelan general that ended Spain's rule over Colombia in 1819.  In practice, however, this group are thought to be defenders of the Spanish-bred privileged and Catholicism.  The Liberals formed in support of the rebellious Venezuelan vice president Francisco de Paula Santander and represent the “Americas-born”.  (Kirk, 2004, p. 15)  The bipartisan system functioned for years, and in doing so, excluded any other political movements.  This, combined with the marginalization of the rural poor, socialist influences and a weak judicial system allowed the emergence of left-wing guerrillas.  Political hostility resulted in two major conflicts.  The Guerra de los Mil Días (one thousand day war) where the death toll is believed to have been 100,000 and La Violencia where those that were previously were neighbours and friends became swept in a frenzy of violence that left some 300,000 dead. (EIU, 2007, p. 4)

The main guerrilla groups are FARC and ELN, which due to their occupation of rural regions and their lack of state presence who are often assumed to have a direct relationship with the narcotics trade.  Yet in fact, both emerged throughout La Violencia.  Pedro Marin was forced into hiding because of his liberal affiliations, in response he became intent on murdering conservative leaders in the name of justice.  The establishment of the largest guerrilla network in Colombia followed as throughout the 1960s, Marin, with his friends and family, began the Fuerzas Armadas Revolucionarias de Colombia (FARC).  (Kirk, 2004, p. 9)  

While not as large as the FARC, the Ejército de Liberación Nacional (ELN) was born from similar circumstances during La Violencia.  The ELN is a much smaller group of about 5,000 fighters.  (EIU, 2007, p. 5)  Likewise, another small group, the Movimiento 19 de Abril (M19) was formed by a later generation of city dwellers in 1972.  They marketed their formation with a series of advertisement campaigns which climaxed when M19 members stole Simon Bolivar's sword from a museum.  They declared they were continuing Bolivar's heroic fight against the exploiters of people. (Kirk, 2004, p. 64)   A career as a guerrilla became among the standard choices.  Guerrilla activities further intensified in response to state recession and economic crisis during the 1980s and 1990s.   Many of the rural poor and urban unemployed were recruited.  Thus there has been significant expansion as exemplied by “FARC... [which now has] an estimated 18,000 active combatants and 5,000 urban militia members.” (EIU, 2007, p. 5)

To finance their activities, the guerrilla groups have traditionally collected revenues from kidnapping.  At present, the FARC is still held most responsible for the majority of kidnappings, which occur in Colombia.  Wealthy landowners, tourists and influential officials tend to be targeted and the money collected from ransoms appears to have gone to feed, clothe and train the numerous guerrillas.  While kidnappings provide a certain amount of income to the guerrilla groups, there is also a significant link to the drug industry and further to the US “war on drugs”.

As Peceny and Durnan (2006) point out, “The principal impact of US antidrug policies... shift[s] the balance of power among combatants based on whom the United States decides to punish, or not to punish, for participating in the drug trade.” (p. 111)  President Nixon of the United States declared the first war on drugs in 1968, during the Vietnam war because soldiers were returning home with addiction problems.  By 1971 drugs had been categorised as a national security problem and in 1973 America formed its Drug Enforcement Administration (DEA).  The allegation that the illicit industry constituted as a national security threat is still maintained by the US primarily due to rehabilitation cost for addicts.

The Reagan administration used the rationale of security during the Cold-War to maintain a powerful US presence in the hemisphere, through the drug trade it supported guerrilla groups.   In hearings from became known as the Iran-Contra affair, it emerged that persons in the US had developed a system for supplying Weapons to the Contras and, in the process, built a road for drug traffickers to smuggle narcotics into the US.  While Ronald Reagan under oath claimed he could not quite recall, records from the trial indicate that funds were channelled through the trafficking of drugs to finance weapons used to overthrow the leftist Sandinista government in Nicaragua.

Colombia is strategically placed between other coca-producing regions and the trafficking routes that lead to the large markets of North America and Europe. (Thoumi, 1992, p. 39)  When eradication efforts of the United States conducted in Peru and Bolivia throughout the nineteen-nineties rapidly displaced coca cultivation to Colombia, the Guerrillas initially opposed the growing of illicit crops for both moral reasons and a fear of a rising rich class of farmers.  The vast forests and isolated regions offered concealment for the laboratories that process coca leaves into a paste.  As such, the regions in which the FARC and the ELN had dominated for decades were perfect for the cocaine industry to flourish.

The guerillas soon learned to coexist with the drug traffickers and benefit from drug trafficking.  FARC and ELN found they could tax the trade and offer protection to laboratories in exchange for money. (Livingstone, 2004, p.53)  Yet, the M19 could not easily tax the drug trade as they operated within the city, as such they began to kidnap and sometimes murder family members of drug lords and traffickers.  When drug lords created an armed group with the capacity to fight the guerrilla threat, right-winged paramilitary groups were established from the 1980s.  The locals - that often made their money from the cocaine industry - donated capital and men to form and strengthen paramilitary forces. (Kirk, 2004, 104)  Paramilitary organisations later united under the Autodefensas Unidas de Colombia (AUC) that was formed throughout the nineties and proclaimed in 1997.  The AUC acts as an umbrella body that organised an estimated 8,500 members.  (EIU, 2007, p. 5)  Right-winged paramilitaries kill anyone with affiliations to the left and conduct 'street cleansing' regimes.

In sum, both sides are closely related to the drug industry in Columbia and the war on drugs in the Americas by the United States.  As the drug industry expanded the leftist groups came to see a flourishing cocaine industry as a key revenue source, whilst the right-winged groups emerged from the industry's elite being willing to pay for protection. (Kirk, 2004, p. 103)  Both sides are thus dependent one, a demand for cocaine. To emphasize the point, taking just the example of FARC, drug related activites account for over half of the annual income; an estimated $200 - $300 million US dollars.  (Hanson, 2008)  The money is used to purchase weapons and by extension funds the ambiguous war.

Overview

The work is comprised of four chapters.  Chapter one provides a detailed discussion of Colombia's drug problem.  The consumers of coca's by-product are introduced to the reader as the stimulus for the proceeding overview of past US anti-drug policies.  It is seen that policies implemented throughout the drug wars have so far failed to reduce the supply, poverty and violence in Colombia.  Chapter two analysis Colombia's agricultural sector and the motivations for coca growing.  Having been subjected to aerial spraying and military intensification, a situation appears that necessitates change.  The peasant population could benefit to have access to a less risky livelihood.  Improving public infrastructure could provide a new source of economic growth that could act as a catalyst for the biofuel's industry.  

Chapter three details Colombia's bio-economy and provides a profile of Jatropha as a viable alternative for coca growers.  The palm oil industry is recognised as pivotal to the success of Jatropha social enterprises.  Together the biodiesel feedstocks could seek to meet mandated targets for domestic consumption and future exports.  Chapter four offers recommendations that could facilitate Jatropha in concluding the drug wars.   It is found that initiatives aimed at the level of consumption and a revival of Colombia's ailing peace process could also contribute towards finishing the tenacious war.

Chapter 1: Colombia's Drug Problem

No-one suggests that the answer to alcoholism is uprooting the vineyards of France and California, but the answer to cocaine addiction is military campaigns... [and] aerial spraying. (Spedding, 1989, p.6)

▪ The Consumers

Of the production chain illustrated below, the coca grower gains most attention in efforts to curtail the drug problem.  Although the DEA has made attempts to locate and interdict cocaine from forest factories, this proves to be timely and costly in application.  Colombian drug traffickers have also been targeted, some being extradited and imprisoned in US penal institutions.  American legal infrastructures are further burdened with uncovering drug distribution networks on its own soil and sentencing the dealers accordingly.  However, significant attention is yet to be paid at the level of consumption.

 

Source: Author’s Illustration

The intensity and complexity of the drug problem is actually caused by very few members of the global community.  Illustration 2 demonstrates that the global demand for narcotics out of the 4,177 million of the world's population aged between 15-64 stands at a mere 10%.   Further, illustration 3 presents the primary consuming countries as the United States and some parts of western Europe.  America's political will with which to fight the war on drugs derives primarily from national security concerns.  Facilitated by trans-border trafficking chains, Colombia has become directly accountable for 90% of the American cocaine supply.  The war on drugs, maintained by such a minority, continues to absorb large quantities of government spending.

Source: Author’s Illustration.  Data Source: UNODC, 2007, p. 9

 

Source: UNODC, 2007, p. 93

▪ Plan Colombia: A Six Year Militarized Operation Of Aerial Fumigation

Plan Colombia, the official document that specified America's financial commitment to eradicating supply, became active between 2000 and 2006.  In 1999 the Colombian president-elect Pastrana established the first draft.  The original version addressed issues of economic inequality whilst paying little tribute to the issues of drug trafficking or security.  Pastrana recognised that the country's political conflict and problem of illicit drugs was deeply rooted in the context of inequality, poverty, and economic and political exclusion.  Disappointingly then, Murillo (2004) explains that after Pastrana's first trip to Washington “he made a sudden about-face.” (p. 127)  Although Colombian leadership had not proposed the solutions of military aid or fumigations, the reconstruction strategy became heavily militarized.  The US pinned drug trafficking and security issues as the root cause of Colombia's conflict, dismissing any rural development efforts.  In sum, Pastrana asked America for $7 billion in aid for poverty relief, however, he emerged with $1.3 billion, of which 70% was to be directed into the military.  (Chomsky, 2000)  Although, social aspects of Pastrana's plan were neglected and under-funded, there was no shortage of US military aid.  US special forces train Colombia's military to pursue enemy leadership in order to prevent a disruption to regional trade.  Colombia is America's ninth largest supplier of oil so the protection of the 772-mile pipeline that is under constant attack from guerrillas is essential.  (Hill, 2003)  

America's austere policies were perhaps also thought a rapid solution to Colombia's economic recession.  (Livingstone, 2004, p. 63)  Redeeming Colombia's prestige in international markets and maintaining its position as America's fifth largest trading partner became an imperative. (Hill, 2003)  During the recession in 1999, Colombia's economy contracted by 4.5%, official unemployment rates rose to 20% and the banking sector was thrown into crisis.  For decades the business community appeared almost immune to the violence that havocked the countryside.  However, the political violence within the country became a calculated risk for lenders and Colombia was consequently stripped of its investment grade rating.  

Public support for extremist solutions to the violence, such as paramilitary-led authoritarianism and US interventionist efforts, consequently increased. (Livingstone, 2004, p. 63)  Already, the US had extradited influential drug traffickers in order to punish them appropriately within the American judiciary system.  However, America's involvement remains highly sensitive as politicians that give authorisation for US policies continue to be targeted by traffickers.

Nonetheless, public support for US interventionism allowed America's version of Plan Colombia to be easily disguised as a Colombian initiative and bilateral agreement.  Therefore, multilateral organisations were powerless to intervene in the relations between the two sovereign states.  The World Bank, the interAmerican Development Bank and the Andean Development Corporation remained sceptical of America's militarised approach and contributed little.  Their donations combined with those from Japan and Canada totalled at just $876 million within the six year period.  The European Union did not want to associate itself at all with the militaristic nature of the initiative and so made contributions to aid Colombia through different avenues. (Chomsky, 2000)  

International scepticism co-occurred with national resentment.  Aerial spraying, practiced and criticized since 1986, organized strong opposition from Colombian environmentalists, the FARC and the peasantry. (Thoumi, 2002, p. 113)  Livingstone (2004) examples that intensive spraying in Guavaire in 1997 and again in Caqueta in 1998 outraged small farmers.  Protest marches were consequently organised in which 216,000 people participated.  “The security forces reacted brutally, killing 12 marchers.”  (p. 117)  Human Right activists and NGOs working in Colombia report that the Colombian military either directly become involved in massacres organized by Paramilitary forces or deliberately fail to prevent the violence.  (Chomsky, 2000)

▪ Colombian Armed Forces and US Sponsorship

Despite such reports, America devised a militarised strategy of fumigation that stated guerrilla-controlled regions would be a primary focus.  Putumayo, a FARC controlled bordering region that contains oil, became the first haven of Plan Colombia.  However, it was paramilitary forces that announced plans to recover the region from FARC domination.  The AUC threatened to assassinate anyone who applauded the guerrillas or criticised Plan Colombia.  From 1999 to the end of 2000, Paramilitaries proceeded to either assassinate civilians or lock them inside their homes whilst burning them to the ground.  The atrocities severely weakened the community and affirmed peasant protests unlikely.  The lack of government response to this massacre made the collusion of right-winged terrorist groups with the government obvious to the United Nations. (Chomsky, 2000)  Therefore, the money injected into Colombia's military becomes a frightening complexity.

Alvaro Uribe came to office in 2002 and, as expected, contests accusations that directly link the state's security forces to the atrocities carried out by the AUC.  However, peace talks between the government and paramilitary forces in 2003 were criticized to be lenient in bringing the perpetrators to justice.  Although the talks resulted in 30,000 combatants parting with their weapons, the peace attempt flamed allegations of a correlation between paramilitaries and officials. (EIU, 2007, p. 6)  The links remain disproved, hence, Uribe can be depicted as fighting his civil war in accordance with democratic values and human rights.  The government does not publicly appear to be resorting to peasant round-ups, massacres or any other tactic usually enjoyed by enemies of states.

The annual aid from the United States, which amounts to US$16.2 million, has shown some success in strengthening Colombia's legal infrastructures and public authorities.  In 2007 Uribe was able to create an additional 712 staff positions that would assist in strengthening human rights policies and witness protection schemes.  In addition, protection programs of vulnerable persons statistically displays that from the 123 union members that were murdered in 2001, a decline occurred, leaving a number of 8 in 2007.  (DNP,2008, p. 5)  Violence indicators, which share a similar time scale with that of Plan Colombia, are demonstrative of a weakening in illegal insurgencies.  “between 2002 and 2007 homicides have decreased by 40%, kidnapping dropped 84%, and for the same period terrorist attacks declined by 76%” (DNP, 2008, p. 4)    Although a reduction in violence has been statistically demonstrated, death threats still apply to influential leaders. “Uribe's personal safety is a concern; he has already survived several guerrilla assassination attempts.” (EIU, 2007, p.10)

 Eradication Efforts

The fumigation campaigns that began in Putumayo by late 2000 represent the first significant spraying campaign under Plan Colombia.   However, despite eradication efforts, by 2003, Putumayo had experienced an increase of 23% in coca cultivation.  (Livingstone, 2004, p. 110) Within the six years of Plan Colombia, a sum of 974,533 hectares of coca-producing land was sprayed throughout the country.  This led to a 52% decrease in the land used for coca cultivation, however, it did not lead to a decline in coca production.  Despite eradication and military attempts to diminish the supply, “coca cultivation in Colombia has proven to be relatively stable at around 80,000 hectares since 2003.” (UNODC, 2007, p. 205)

Source: Author’s IIlustration.  Data Source: UNODC, 2007, p.69

Steinberg (2000, p. 265) illustrates that fumigation missions were thought to serve a dual process by reducing coca production whilst defeating the FARC dependant upon that land.  Rather, the fumigation missions, carried out by the Colombian government and its US sponsor, primarily targets peasant farmers.  Since 1986, the most commonly used herbicide has been glyphosate, manufactured by Monsanto.  The chemical is harmful to the environment, wildlife, surrounding food crops and has been tested in laboratories to cause lung disfunction, infertility and cancer.  Further, Livingstone (2004, p.112) warns that once the fertility of the soil is destroyed, farmers are forced to move deeper within the Amazon and FARC territory.  The worst affected often have little alternative but to join FARC groups that can provide them with shelter and food.  Thus, further strengthening criminal networks that challenge the liberal agenda and threaten a return to authoritarian regimes.  

Chapter 2:  Colombia's Agricultural economy        

“[farmers] are as much hostages of the drug trade as is the junkie on New York Times Square or the Colombian judge with a death threat hanging over his head from the cocaine cartels.” (Smith. et al, 1992. p. 18)

▪  Colombia's Farmers    

The hard-line strategy of Plan Colombia was designed to beat down guerrillas whilst combating the drug problem.  However, despite counter-narcotic policies, coca acreage has prevailed in Colombia.  Forced into coca leaf cultivation as the only way to enter the modern cash economy, the peasantry face the heavy burdens of losing their land, belongings and civil rights.  The attractiveness of coca growing is deputed to the low initial start up costs that are often facilitated by traffickers, familiar farming techniques that are not interfered with by outside agronomists, and a constant market that ensures regular financial returns. (Smith. et al, 1992, p. 18)  

The coca leaves produce every 3-4 months and are stripped from the bush, dried in the sun and packed into sacks ready to be transported.  (Spedding, 1989, p. 4)  The farmers financial gains are illustrated below.  The horizontal axis of the diagram reflects the time period of one year.  The arrows demonstrate that the farmer is the annual recipient of up to US$ 3/kg every 3 months.  This illustration represents the annual cycle of coca for as long as the crop can withstand aerial spraying.  The initial investment to begin cultivating the crop in the first year is often compensated by the trafficker to entice farmers into the industry.

Source: Authors Illustration.

As a tradition, coca leaves are grown in the highlands and chewed in order to combat fatigue.  The effect of chewing the leaf being much like drinking a large cup of coffee.  Coca leaves cultivated in the highlands for traditional use grow to a size that fits comfortably in the mouth and would be sweet in taste.  Coca grown in the lowlands is only adequate for conversion into cocaine as the leaves grow to a large size, bitter to taste. (Spedding, 1989, p.5)  Coca-cocaine is feasible in sustaining livelihoods as there is a constant demand and the peasants only have access to fragile soils in which the crop grows well.  Eradication methods succeed only in eradicating livelihoods without offering any compensation for the loss.  After fumigation missions, the coca plant is the first crop that can be re-harvested within the further damaged soil.  Hence, the farmer has little alternative but to re-harvest the cash crop respective of a quick profit.  Moreover, an increased volume of damaged lands are effective in forcibly increasing the number of farmers that cultivate coca.

▪ Colombia's Traffickers

Illustration 6 conveys traffickers can afford to raise the price paid for coca in order to compete with a crop substitution program.  “Doubling or tripling the farm gate price can occur with a barely perceptible influence on the retail price in North America and Europe.” (Moreno-Sanchez. et al, 2002, p.4)

Authors own.  Data Source: UNODC, 2008, p. 68 and 82

In 2006 fumigation campaigns eradicated 213,371 hectares of coca plantations, yet Colombia still accounted for 61% of the world's production.  In the same year, the annual farm-gate price of coca paste was US$879/kg, whilst the annual wholesale price of cocaine was US$1,762/kg.  This provided the drug trafficking chain with a potential profit of just over a 100%.  Therefore, even with the loss of 127,326kg due to seizures of cocaine, a substantial profit was still made.

Therefore, efforts of crop substitution could make coca growing more attractive as traffickers forcibly raise the farm-gate price paid for coca leaves.  To further emphasize, the illustration below presents only the farm-gate prices of the following year.  In 2007 the farmer received US$ 2.5/kg from traffickers for one harvest.  The difference in price paid for the refined coca paste, which was US$ 946/kg, indisputably offers a margin that can seek to better compensate the farmer.

Source: Authors Illustration.  Data Source: UNODC 2008, p.68

▪ Time for change

Thoumi (2002, p.113) further observes that crop substitution has been unsuccessful in the past due to peasant farmers having uneasy access to realistic markets.  Hence, the attractiveness of coca growing can be further maintained due to the circumstance that traffickers collect the crop.  The current global financial crisis requires countries to increase their domestic consumption by improving living standards.  Countries are advised to use retained profits and surpluses to raise the living standards of their people whilst offering the assurance of fair wages.  Schwenninger (2009, pp. 8-10)  Government investments made into improving public infrastructures could become a new area of economic growth.  One that could provide employment and better connect rural areas to markets.  

In 2003 the Colombian government intended to build 5,000km of new secondary roads before 2006.  This goal failed to materialise, however, Uribe is expected to proceed with plans to improve major roads and create new infrastructure throughout his current term in office.  (EIU, 2007, p. 19)   Improvements that create faster transportation of perishable goods to markets could encourage farmers from central and northern regions, where the soil is more fertile, to grow a variety of important agricultural products such as potatoes, bananas, flowers, tropical fruits, vegetables, palm oil or sugarcane.  In addition, better market access could assist in establishing Colombia's aquaculture and fishing industries.  Further, public infrastructures could assist Colombia's prospective biofuel industry as the feedstocks became more feasible to trade.  On the other hand, an acceleration in a global demand for biofuels could act as a catalyst for investments into infrastructure as both farmers and drug traffickers became inspired to cultivate and trade them.  Traffickers that expanded their business influences into the biofuel market could prevent the expected blockades to crop substitution.

Illustration 8 displays that currently coca cultivation flourishes in the Pacific and Central regions regardless of being in closer proximity to markets.   An explanation could be that 85% of Colombia’s 115,000 km of existing roads remain unpaved. (EIU, 2007, p. 19)  Therefore, both improvements and new roads could seek to reduce cultivation in central and rural areas.  In sum, as demand for cocaine remains, “the most the Colombian government could hope to do would be to displace the industry out of the country... and ... push Colombian nationals out of the industry.”  (Thoumi, 1992, p. 55)

Source: UNODC, 2007, p. 208

Chapter 3: Colombia's Bio-economy 

“The Colombian government believes that biofuels production is an effective way of increasing the living standards of agricultural producers and reducing rural poverty.”   (DNP, 2008, p.1)

▪ The Coca substitute

Jatropha has emerged as a focal point for the biofuels industry as it is unlikely to distort food prices and is amendable to grow on the poorest of lands with little maintenance.  “The oil of the jatropha tree is easily processed and only needs to be modified slightly to produce biodiesel.” (Keeney and Nanninga, 2008, p.10)  When crushed, the jatropha seeds produce a high oil yield of up to 40% oil content.  Dissimilar to some other biofuels, jatropha can generate clean energy whilst reducing CO2 emissions.  Prairie grassland, for example, has a greater impact on the climate over its life cycle than fossil fuels. (Jatrophabook, 2008 a, p.10)   Hence, rapid R&D investments are flowing into jatropha projects, the areas of production are illustrated below.  Currently, Colombia has dedicated 8, 935 hectares to jatropha cultivation, which is expected to increase to 50,400 hectares within the next 3 years. (Jatrophabook, 2008 b)  However, Rajagopal (2008, p. 8) informs further research on the equipment required for second generation biofuels remains a challenge for the future.  In order to proceed towards second generation biofuels, it is fair to recommend investments be maintained into first generation biofuels.

Source: Agroils, 2008

Colombia's Existing Bio-economy

Trade in biofuels is predicted to expand rapidly.  Some countries have created biofuel consumption targets that domestic production can not yet meet, whilst other countries strive to export biofuel feedstocks.  (Keeney and Nanninga, 2008, p. 16)  This creates a sustainable driver for biofuel growth and trade.  Colombia, although well known for coffee and coca, is a significant producer of sugarcane.  The processed-sugar industry produces 2.7m tonnes/year with 316,000 tonnes being deviated into ethanol production. Current ethanol production has reached 1.05 million litres/day. (EIU, 2007, p. 30)  Colombia's biodiesel production, a derivative of palm oil, is expected to reach 550 million litres/year by the end of 2009.  Colombia currently mandates to have a 10% ethanol blend with petrol and a 5% blend with diesel.  However, production in Colombia does not yet cover these targets.   The biofuels industry is advocated as a means for the country to reduce its surpluses as it is already a net supplier of sugar and palm oil.  This is argued to be positive for incomes dependent upon agriculture whilst not being harmful to the countries food security. (DNP, 2008, p. 2)

The official document, Conpes 3510, approved on the 31st of March 2008 is a combined work under the coordination of the national planning department.  The document sets forth policy guidelines for Colombia's biofuel production, specifically requesting production to be socially responsible and compels a state response to combat impunity.  So far, Colombia only produces 20% of the estimated requirement of 839,000 litres/day.  (Colombia's Biofuels Annual Report, 2008)  As attempts are made to meet with palm oil production targets, further links between officials and paramilitary forces are hypothesized.  Allen-Mills (2007) claims that biofuel conglomerates, some financed by the US, are reportedly collaborating with Paramilitary troops.  The terrorist forces, with the use of threats and disappearances, force families to leave their land in order to create space for palm oil plantations.  It is, therefore, uncertain how many of the estimated three million displaced were victims of recent interests in the palm oil business.  

In an act to disprove connections, Uribe extradited 14 members of the paramilitary forces to America for sentencing on 13th May 2008.  In addition, Colombian authorities claim that 29,000 hectares that were fraudulently taken have been returned to their rightful communities with more recovery attempts being exercised. (DNP, 2008, p.5)  A Colombian national gallup poll conducted in January 2008, demonstrates national public opinion of the forces at conflict in Colombia.  The image of the Colombian armed forces was 80% positive and 15% negative, and the image of the illegal groups was 3% positive and 93% negative.  This data suggests that the alleged links between Colombian leadership and insurgent groups does not appear to be a popular notion within the country. (DNP, 2008, p. 4)

Further, unrest in the biofuels industry is predicted within the current climate.  Coons (2008) predicts falling oil prices will threaten biofuel research and plant closures should be expected.  Although many producers remain optimistic of the viability of renewable fuels, plummeting oil prices and a slowdown in the ethanol market signal concern.  In times of a global economic downturn, investments made into alternative fuels could be dismissed as an unnecessary and expensive luxury.  Brazil examples this, as after the oil crisis in 1973 the Brazilian government accelerated R&D initiatives into ethanol.  Since, the program has slowed and ricochetted in conjunction with oil prices that have slumped and recovered.  However, despite inconsistency, Brazil has emerged an international leader in ethanol production. (Keeney and Nanninga, 2008 , p. 24)  Therefore, Colombia's president continues to push for ethanol production in preparation for increasing global demand.  Nevertheless, without strong credentials, Colombia's bio-economy and coca substitute may not produce rapid results.

▪  Colombia's Future Bio-economy

Colombia statistically displays that, excluding protected lands and forest areas, there are 17 million hectares still available for agricultural production.  In addition, a further 28 million hectares, currently used for livestock growing, could be utilized in biofuel production.  Colombia is the worlds 13th largest meat producer and 4th largest in the Americas, however, reports claim this provides relatively low levels of food production and employment within the country. (DNP, 2008, p. 2)  It is suggested that palm oil plantations be integrated with cattle rearing in order to make optimum use of the land.  In addition, plantation owners that rear cattle can reduce the cost of field maintenance by saving on herbicides. (Pride, 2006)

Thus far, Malaysia and Indonesia are the largest palm oil exporters and between them produce 85% of the worlds supply.  The thirst for palm oil is illustrated below of which Colombia could take part in satisfying.  The WTO categorizes biodiesel as an industrial product, therefore, the biodiesel industry is not subject to the Agreement on Agriculture, rather the Agreement on Subsidies and Countervailing Measures.  Consequently, biodiesel faces low tariff barriers in industrialized countries.  (Keeney and Nanninga, 2008, p.16)  However, before exports be permitted, the Colombian government should enforce compliance with both industrial and environmental standards.  This strategy could begin to encourage ethical palm oil production.  

Source: Keeney and Nanninga, 2008, p. 14

Large-scale plantations specializing in palm oil could prevent Jatropha, a biodiesel feedstock, from being appropriated to the best lands due to the pressures of commerce.  In the case of Jatropha, yields will be higher on good quality soil and with sufficient watering than on marginal arid lands and low water usage.”  Rajagopal (2008, p. 7) Large-scale industrialized plants could produce a minimum of 200 tons of seeds/day, whereas a decentralized plant could be expected to produce only a maximum of 150 tons of seeds/day.  In addition, large-scale projects with access to good soil could cultivate seeds with an oil content of 38% as opposed to 30-32% when harvested in degraded soil.  (Agroils, 2008)  Therefore, commercial pressures could undermine social motivations.  However, Jatropha projects carried out on central lands would require an intensification of large-scale irrigation.  Irrigated agriculture was introduced in the 1950s and transformed central regions into prosperous farming lands.  Agribusiness and agriculture has thrived in numerous towns due to the 900,000 hectares of irrigated agriculture.  24% of the 38% of agricultural land is irrigated through gravity irrigation systems, which has the potential to expand further under the private sector.  However, Colombia is vulnerable to the anticipated impacts of climate change and irrigation is expected to stimulate hydrological temperature changes.  

The main goal of the afore mentioned document, Conpes 3510, is to achieve sustainable biofuel production that will not harm either the environment or the population. (DNP, 2008, p. 1)  Hence, environmental and social aspects of the projects would need to remain measurable against capitalist gains.  Rajagopal (2008, p. 7)

▪  Jatropha social enterprises  

Social enterprises that seek to produce Jatropha could assist palm oil plantation owners in meeting mandated targets.  A socio-economic perspective must disregard the traditional cost benefit analysis in order to determine a profitable and sustainable project that relates to rural employment.  In order to ensure a sustainable socio-economic model, national policy would need to regulate a framework that could assist social enterprises.  Guidelines for quality standards, favourable tax regimes and price mechanisms, capacity building, infrastructure and logistics implementation should all become policy-making imperatives.  The creation of local value chains is equally important.  Rural involvement and utilization of the green energy source could motivate farmers to cultivate the crop as they begin to appreciate Jatropha oil.  The feedstock can also be used as organic fertilizer, animal feed, or as briquettes it can be used to run generators, stoves and lamps.  (Rajagopal, 2008, p. 9)

Western Australia banned Jatropha cultivation in 2006 on the grounds that it replaced native vegetation and reduced biodiversity.  (Keeney and Nanninga, 2008, p,10) However, the case of Colombia varies, as Jatropha cultivation would be intent on replacing native vegetation.  However, pressures would need to be put on Colombian leadership to protect the Amazon by enforcing logging bans.  Conpes 3510 has outlined that protected areas and rainforests should not be affected and a zoning process be applied.  A thriving industry would be expected to intensify the use of land that has already been cleared.  Therefore, Jatropha plantations could participate in reforestation.  

So far, alternative development projects have been unsuccessful.  Reports show that agronomists failed to teach new farming techniques and the affordable loans disappeared.  The farmer has no other source of income and so forcibly he reverts back to coca growing.  (Kirk, 2004, p. 241)  Therefore, a system that allows time to learn new techniques and see tangible returns before the eradication of existing livelihoods are key elements to success.  

Illustration 11 highlights Jatropha's annual returns.  The Colombian government would require funding from its US sponsor to implement the alternative development project.  Hence, the farmers output would be only that of manual labour.  Further, this diagram is reflective of the following 20-25 years of Jatropha's lifespan.

Source: Author’s Illustration 

As Jatropha only produces one harvest a year and has a two-three year gestation period, phasing out coca growing could successfully maintain the farmers participation in the cash economy.  The phase out period must be accommodating of the gestation period as it is infeasible not to.  The diagram below illustrates how a transition could work.  The farmer would sustain a livelihood through coca cultivation whilst beginning to harvest the new crop.  After the first year of significant harvest, the returns of Jatropha production would be tangible, therefore, the farmer would, by agreement, begin to dedicate more land to Jatropha and less to coca.  The differing arrow sizes reflects that the financial gains for coca are small but frequent, rather than one large annual return for Jatropha.  Further, the diagram is also illustrative of  financial support given to the coca grower for the Jatropha initiative.

Source: Author’s Illustration

In sum, a variety of business models that range from larger palm oil plantations to smaller rural jatropha plantations need to be explored.  This could optimize Colombia's biodiesel industry whilst developing its rural economy and infrastructure.

Chapter 4:  Conclusions                                                 

“Colombians... find the image of the all-powerful Americans sucking up Colombian cocaine darkly pleasing.  It shows that the gringos have a weakness.”

(Kirk, 2004, p.100)

▪ Conclusions and recommendations

This work has highlighted that militarized aerial spraying campaigns is not at the essence of concluding the drug wars.  Plan Colombia indisputably examples the failures of supply control objectives, therefore, America's war on drugs remains unresolved.  This proves that non-territorial trans-border drug trafficking systems or the coca growing farmers should not remain the focus of intervention.  Internal social dimensions are pivotal to the research agenda that seeks to theorise a resolution to this tenacious conflict.  In times of global economic crisis, investments that provide a new source of economic growth are crucial.  Public investments into roads and railways that better connect marginal lands to the market are crucial in creating jobs and developing rural communities.  A global demand for biofuels could motivate such developments and produce a less risky livelihood for Colombia's poor.

The palm oil industry has thus far provoked murders, disappearances and displaced families in efforts to meet with the emerging global demand for biodiesel.  Therefore, multilateral organisations should hasten to advise Colombian leadership on a trade policy that seeks to generate ethical palm oil production.  These trade policies, in turn could be applied in order to engineer the social benefits of Jatropha substitution.  Colombia should endeavour to  effectively train the farmers in the correct farming techniques.  Funding for the Jatropha innovation would need to compensate the farmers labour throughout the gestation period.  However, after the first significant harvest the crop could attain self-sufficiency for the following 20-25 years.  As global and local demand spirals, more farmers and traffickers could begin to profit from the renewable energy source.

The success of Colombia's narco-entrepreneurs remains individual as profits are not injected back into the economy.  Hence, the creation of black money continues to fund the guerrillas ambiguous war.  Legalizing the financial gains of the underground industry could allow black money to accrue to the economy for the greater collective good.  Drug Lords could be required to invest their black money into government bonds whereby the owner could access a return on their interest and upon maturity the amount would be released as white money.  (Rasul, 2009)  Dissenters of legal money laundering advocate it as encouraging criminal networks to maintain their involvement in illegal activity.  Nonetheless, the funds collected throughout the process of monetary legalization could assist US social and economic aid in financing public infrastructures and Colombia's expansion of the biodiesel industry.

The drug wars have so far been fought heavily in supplying countries.  Commitments to crop substitution would be expected to be more productive than fumigation missions in reducing coca production.  However, previous attempts to eradicate supply only led to a displacement of cultivation.  Therefore, victory in the drug wars requires drug policy objectives to also intervene at the level of consumption in form of treatment and preventative measures.  If each part of the production chain were considered a battle in the war on drugs, diminishing the supply would only be one achievement in the tenacious war.

▪ Findings

“Drug trafficking is driven by the demand for drugs and... reducing that demand, to the extent that it is feasible and fair to do so, will have a greater effect on the drugs-crime connection than reducing the supply.” (Wilson, 1990, p.542)  Heavy drug use is widely accepted as starting as a social activity usually instigated through peer pressure.  Prevention programs are, therefore, aimed at dissuading youths from succumbing to peer pressure.  Prevention programs have been introduced in early years with a wide spectrum of social skills training that prepares children for the pressures of peer influences.  This technique has already statistically begun to reduce alcohol consumption and teenage pregnancy.  (Wilson, 1990, p. 536)  In part, dissuading youths is a battle against the media.  It is imperative that would-be users are forced to meet with the sorry reality of a typical user, rather than the often glamorized world of celebrity drug use.  

Further, Wilson (1990) cogitates that randomly testing civilians throughout adult life would send a message to the youth that “society was serious about drug abuse and thus, would be less inclined to regard drug use as a pro forma evil.” (p. 541)  The feasibility of this method is measured in the value of public safety over individual privacy.  Random drug testing already proves effective in deterring use amongst employees of the military or the judiciary system.  Thus, a civil commitment to random drug testing could play a lead role in reducing demand.  As state-controlled privileges already exist over drivers in form of sobriety tests, non-intrusive drug testing at the roadside could be an addition.  

For users, treatment programs, which vary from short-term detoxification to long-term residential programs, are thought effective in reducing the rate or quantity of consumption.  The demand for cocaine-related treatment programs in North America has remained stable, yet the service renders as insufficient.  (UNODC, 2008, p. 31)  Effective treatment services could lead to a reduction in demand and the patients health and low labour-productivity could improve.  “Treating those who suffer from drugs is an investment in the health of our nations as much as treating HIV, diabetes or TB.” (UNODC, 2007, p. 2)   The drug wars, first declared in 1968, was in response to high-costing treatment programs and consequential low labour-productivity as soldiers were returning home from Vietnam as addicts.  Thus, it has taken four decades to realise drug addiction is an illness that needs to be treated and prevented.

The US distributor is another important battle that needs to be tended to in order to conclude the drug wars.   The distributors are often the urban underclass that make their livelihoods from the sales of drugs on America's streets.  Children raised on drug pushing estates where this is socially acceptable behaviour often grow up to be poorly educated and unskilled.  Thus, they engage in a life of crime throughout adulthood as legitimate jobs that are realistically available to them are badly paid.  “The increased demand for advanced education and high skills... have left them behind” (Jacobs, 1999, p.159) Therefore, stimulating social welfare systems with anti-poverty measures aimed at the bottom class is another key element of the drug wars.  

A reduction in US demand and distribution could facilitate crop substitution initiatives by negatively impacting the farm-gate price for coca.  This could then further detract farmers from coca growing, making Jatropha cultivation more attractive.  Should all battles be  targeted throughout the production chain and the intended impact upon one another occurred, the drug wars could be concluded.  

Colombia engages in coca reduction techniques in an effort to minimize the county's political conflict.  However, neglecting the internal context of the conflict has proved inadequate in resolving it.  Therefore, as much as diminishing supply is only one battle in the drug wars, it is also only a symptom of Colombia's political war.  Crop substitution, although useful in developing the rural economy and diminishing the supply of cocaine, is not expected to deliver peace to the country.  From a theoretical perspective, the income of the FARC and the Paramilitaries could be negatively impacted by a reduction in coca.  However, thus far, insurgencies have adapted with the emergence of a new status quo.  Insurgencies shifted towards coca funding after the end of the Cold War and paramilitary groups are already reported as active players in palm oil cultivation.

Therefore, peaceful negotiation and a balance of power could more effectively reduce Colombia's violence.  “The more extensive the power-sharing arrangements... the more likely it is that peace will endure in the long run.”  (Hartzell and Hoddie, 2003, p. 322)    Thus far, negotiated settlements though direct talks remain unsuccessful in achieving demobilization in Colombia.  Peace talks with the paramilitaries have been heavily criticized and negotiations with the FARC have been strongly opposed by Uribe since he blamed the combatants for a bombing attack in 2006.  Uribe maintains the belief that a military focus and coca reduction will effectively defeat the enemy.  (EIU, 2007, p. 6)  In order to establish economic security within times a global recession, Uribe could be encouraged to devise a peace plan that attracts the interest of both guerrillas and paramilitaries whist maintaining widespread public support.  

Divisions within the bipartisan system have already led to the emergence of new parties. (EIU, 2007, p. 6) How this system may expand to guarantee that all political groups have a share of state power requires a new line of analysis.  After years of fighting, the Marxist guerrillas lack both a political project and credibility.  Therefore, the serious inclusion of this group within a political system, intent on reducing violence and creating economic stability, would not be expected to threaten the existing government or the liberal agenda.

The sovereign state remains at the core of the Westphalian world order system.  However, Colombia's political system, although democratic and not collapsed, is weak in ensuring public safety and should hasten an international rescue from the powers of global governance.  The financial crisis has provoked movements away from unilateralism as America begins to re-engage with multilateral organisations to ensure collective responsibility and participation in a global recovery program.  From this perspective, the international community could now begin to increase social and economic aid to Colombia and facilitate political development.  

US anti-drug policies have so far deteriorated relations between Colombia's neighbours.     Border-states concern that fumigation campaigns will succeed in displacing coca growing into their countries, and with it an influx of refugees, conflict and US intervention. Further, Venezuelan and Ecuadoran leaderships have recently been criticized of providing material support to the FARC and the ELN.  (Hanson, 2008)  The Bush administration delivered military aid in 2002 to Colombia's neighbours, Peru, Bolivia, Ecuador, Brazil, Venezuela and Panama.  An international commitment to this Andean Regional Counter Drug Initiative could seek to reunite Andean democracies with economic and social funding.  Thus, strengthening weak democracies and reducing regional tensions and internal social unrest.  

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