Three key findings stand out from this research. Firstly, land titles had significant symbolic value among farmers but were not essential for their access to loans to invest in alternative legal uses of their land. Secondly, relatively few farmers wanted land titles to obtain loans and many of those who took out official loans using their land as collateral, did not use these to invest in their land. And thirdly, in several cases where farmers accessed loans with the use of their land titles, this did not reduce their dependence on the revenues of coca leaf crops, and counterintuitively, some of them paid off their loans with profits from farming coca leaf crops elsewhere. Let us look at each one of these findings in greater detail.
Wanting vs needing a title
There was very little resistance to land titling in these areas. When asked if they wanted a land title, most interviewees said they did. The main reason referred to was “peace of mind” and that “now no one can take it away”. They associated land titles with the guarantee that their heirs would be able to own their land problem free. The desire for land titles also came from the satisfaction of being able to transform their relationship with the state. Farmers, who once perceived the state as their enemy, wanted to feel it would be on their side and backing them up. And land titles seemed increasingly sought after from a sense of the fear of missing out on something important. As more people were applying for land titles, more people without them felt they needed to secure one.
This was not surprising. It does not take an insider to appreciate that in a context of historical conflict over agrarian reforms, land titles have become a symbol for justice. They symbolise the state’s reparation of damages to the rural landless, who have for decades tried to make a living with no state support and many have turned to FARC, among other armed groups, to pressurise the state to redistribute land more equitably. Land titles beckon state presence and signal the end of the conflict. Land titles in areas formerly controlled by FARC, invite people to be loyal to the rule of law.
But wanting, or even meriting, a land title is not the same as needing one to access a loan. Famers still did not perceive land titles as essential for borrowing money per se. There were multiple sources of credit available to farmers without land titles. Besides private loan companies (e.g., Contactar), there were charitable organizations (e.g. Fundación Mundo Mujer) and farming associations from which farmers could borrow money to invest in their land. Perhaps most surprisingly, even the Agrarian Bank issued small loans to farmers who owned land informally. Overall, there was a sense that land titling in itself was creating a new culture of banks asking for land titles as a prerequisite in loan applications.
Undeniably, farmers in Cauca, Nariño, and Putumayo, felt land titles were now essential to access bigger bank loans than what they could get with as informal land owners, as this farmer explained: “with a COL$12 million [about $3,775 USD] loan I took out from the Agrarian Bank I began to produce pepper. That is the maximum they will lend you without a land title. With a land title, you can re-mortgage your land to access a higher credit, up to COL$50 million [about $15,730 USD]. I did not need a land title because it wasn’t a big loan I was after” (Pedro, 42).
Land Assets not deemed fit for collateral or large investment
But farmers did not want to take out the bigger loans, just because they could. About half of the farmers that I interviewed did not intend to take out loans once they obtained their land title. They felt that becoming eligible for bigger loans was an end in itself, and possessing a land title would somehow make it easier to sell their land if ever, they wished to do so. But they were mostly uninterested in applying for large bank loans, as this farmer described: “I was offered a land title for free, among many others from around here. I’d never had any land problems or had to defend my right to land from neighbours or others. But I was happy to get the land title even if I still owed money to the owner, who lives locally…yes the title helps me access credit, but I haven’t wanted to get a loan as I’d prefer to not get into debt” (Arturo, 55).
Dry soil in a vereda in Mercaderes, Cauca
Farmers were averse to long-term debts, for various reasons. Sometimes they lived in poorer land and lacked the confidence they could turn the loans to profit, such as this farmer: “I have never taken out a loan because I do not like being in debt. We live in such uncertainty with regards to employment and water that any income we have will go towards our children’s education. We cannot afford debts… we have serious water shortage problems” (Mirta M, 42). Sometimes farmers were older, and therefore less inclined to take the risk of having to repay loans with shorter life expectancy. In some cases, they had had bad experiences from loan sharks and informal financiers and preferred to avoid being in debt. And some feared that if they used their land, often their only asset, as collateral, they might have it repossessed, as was the experience of this farmer: “I became very indebted as I used much of my credit to pay for my healthcare and for my daughters’ university education. They now live in Pasto, one of them is an accountant and the other one a businesswoman but is unemployed. Last year I sold my land to pay my debts” (Sabalon, 60).
There was an interesting revelation about the other half that did want land titles to take out bigger loans. This was that they tended to be in a good position to invest in things other than for their immediate consumption. They had accrued better and bigger land assets, often with savings from the coca leaf days. Or they lived in places that were already well adapted to legal alternatives to coca leaf. These included places that were close to road infrastructure, or in areas that were well suited.
Home of a wealthy former coca leaf farmer in Putumayo
For example, in Esperanzas del Mayo, Mercaderes, farmers had access to dry soil and were close to the road, so they were positive that loans would help them grow profitable lemon trees. In Linares, Nariño, were there had previously been large-scale investment in milling machines, farmers who were close to the road wanted loans to grow sugar cane. In Santiago de la Selva, where there had been private investment in transport and storage infrastructure, all farmers were keen to buy milk cows with their loans and felt this would earn them a living.
In other places, like in Balboa, Cauca and Los Andes, Nariño, farmers were hopeful that loans would render their coffee crops sufficiently profitable to get by, but some still had some doubts as this farmer described: “Coffee production is costly, and I am new to coffee production. One sack of fertilizer costs COL$110,000 [about $34.50 USD] and one arroba of coffee costs COL$70,000 [about $22 USD]. You need two sacks of fertilizer to yield three arrobas of coffee. I’ve taken out a loan and had to sell some parts of my land as the price of coffee is too low to pay for production supplies. If the price of coffee does not rise, I would have to find another way to repay my loan… I am losing my morale as a coffee producer. I think the solution is for the state to increase the price of coffee” (Fernando, 48).
However, many other farmers had altogether a different set of priorities on how to spend the money. About two thirds of those who had taken out official loans using their land as collateral, or were intending to, did not want the loan to invest in their land. Instead, they wished to spend the borrowed money on home improvement, on food, on healthcare or on their children’s education. In some tragic cases, farmers had chosen to invest their disposable income, as well as loans, in fraudulent financial pyramids.
Now this raises a critical assumption we are making about the use of land titling in facilitating Alternative Development. Agriculture is not always considered the most productive form of investment in some of these former coca leaf growing communities. Farmers identified many reasons for this. There were the most obvious macro-barriers to alternative forms of trade and agriculture, such as remote geographical location and infrastructure marginalization. The climate and quality of soil was deemed inadequate for alternatives. Farmers partly explained this by climatic changes, by the erosion that had resulted from intensive coca leaf production and glyphosate spraying. Indeed, the effect of additives and surfactants on soil is well documented.26 Most of these farmers owned less than two hectares of land which had worked for growing coca leaf but not to compete with agroindustry.27
A person walking in a dirt road in a former coca leaf growing vereda in Putumayo
Farmers further complained that the production costs for anything other than subsistence farming were too high. This was partly due to the increased cost of food and of day labourers, and an increased need for pesticide to make the soil fertile. Farmers described that many people had abandoned the countryside and moved to urban areas since the coca leaf bonanza days so there were fewer farmers around. It was also interesting to learn through the interviews, how much smaller families had become in just a generation, possibly adding to an increased demand for day labourers to help work the land. And finally, farmers referred to common investment risk factors such as the uncertainty of crop prices, the effect of smuggled agricultural goods and poor health as explanations for why it was bad business to invest loans in their land.
Hence for those farmers with nothing but subsistence farming as the most realistic alternative to coca leaf crops, a loan-based land investment is pointless. Rather than freeing up money for coca leaf growers to become successful farmers in legal alternatives, title-based loans may be used for consumption. And, alarmingly, instead of increasing farmers’ income, they can expose them to debt that some cannot afford to repay.
Ongoing dependence on drug crops
This point brings me to the last finding: land titles may not reduce farmers’ reliance on coca leaf income, and in the worst scenarios they may help to perpetuate it. For fast and easy money, coca leaf remained the preferable option for many. As mentioned above, there were multiple reasons why famers felt debt averse. And coca leaf was a quick way to supplement their incomes or pay for their children’s’ education or clear their debts. As such, there were farmers, even some with land titles, who openly expressed their decision, or intention, to return to illegal drug production, as this one described: “With no agricultural opportunities at home, what other kind of work can we realistically get? [I work as a raspachin] and go for two weeks at a time and come back for a one-week break. I go to various places depending on where there is work … My monthly outgoings are about COL$800,000 [about $255 USD] including my children’s education. …. I don’t work out of greed, buy out of need…. At home, I would be paid COL$15,000 to COL$20,000 [about $4.8 to $6.3 USD] as a day labourer whereas as a raspachin I earn from around COL$100,000 to COL$120,000 [about $31.8 to $38.2 USD] a day. That’s why I have gotten used to doing this work… I’m also producing coffee and sugar cane at home, but the fertilizers are very expensive. Sugar cane earns me about COL$300,000 [about $95.6 USD] per month, for half the year. The rest of the year it makes no profit. One arroba of panela costs COL$17,000 [about $5.4 USD] to produce and is sold for COL$35,000 [about $11 USD] and it takes a whole year to process that arroba, so it’s not worth the effort when coca leaf grows even on stones (Meregildo, 38).”
Without coca leaf crops, some farmers were not able to make a living from their land alone, so they complemented their new legal local occupation with earnings from coca leaf elsewhere. This farmer described her situation: “Coca leaf crops used to be my main source of income and I am a single mother and the sole breadwinner. I spend about COL$50,000 [about $16 USD] on shopping per week. I also used to have a job in a local restaurant but as the coca production shifted, the business went broke. So, I try to earn money selling yoghurt locally but mostly I have continued working as a raspachin” (Hortencia, 45).
Farmers who chose to resume their work with coca leaf would do so either by growing their own crops elsewhere, or by working as raspachines. Growing coca leaf far from home, protected their food crops from possible aerial spraying of glyphosate, and reduced the risk of bringing violence connected to armed groups close to home. Working as raspachines was a less financially risky occupation because it offered a daily wage and did not require an investment, but it also paid less money and was harder work and involved risky journeys.
Often younger people preferred the latter option, as this farmer described: “Those that remain in the vereda feel strongly tempted to start growing coca again, about five or six already do. About 20 young people continue to work as raspachines and domestic workers in temporary placements. One of my sons took out some loans and has a small internet café. The other one works in a supermarket. Every two to three months they go to pick coca to earn some extra money to pay back their loan. People [from coca leaf plantations] sometimes come here looking for workers, it is not always people who go out looking for jobs” (Carmen, 43).
Remote areas in Nariño where farmers grow coca leaf away from their homes
It has been estimated that 0.6% of farmers in receipt of Alternative Development subsidies resume their work with coca leaf.28 I would suggest this figure underestimates the number of farmers in this position, as it is based on those “caught” working with illegal crops, and not on those who are considering returning to farming coca leaf again, or who are not “caught” doing so.
The point is that a fraction of the farmers I interviewed admitted they had repaid their land title-based loans with income from coca leaf, as this farmer explicitly described: “INCORA [former land agency] offered me a land title. They said that this would help me access loans from banks… So, I took out a loan for cattle, as this was the only thing, they would lend money for. I remember it was the World Bank that loaned me 14 beef cattle head and 1 bull. Then I started growing coca in three hectares of my land. With this I quickly paid the loan back” (Hipolito, 72).
As discussed above, the purpose of land titles for Alternative Development, is to offer farmers access to bigger loans so that they can profit from their land in legal substitutes to coca leaf. But sometimes loans do not perform as expected. So, it should not come as a surprise that if farmers who are offered land titles, use them to take out bigger loans but are still unsuccessful in their investments, they will simply accrue bigger debts. There are two outcomes for farmers in this situation. They either file for bankruptcy, or they seek a more lucrative occupation to pay off their loans. For many, the latter will be to resume their work with coca leaf crops elsewhere.